PRAEMIUM LIMITED — AGM Information 2015

Sep 17, 2015

Notice & Agenda Praemium Limited - 2015 Annual General Meeting

Notice is given that Praemium Limited, ACN 098 405 826 ("Praemium" or "the Company") will hold its Annual General Meeting (AGM) at 11am (Melbourne time) on 20 October 2015 at Grant Thornton, Level 30 The Rialto, 525 Collins Street, Melbourne VIC, Australia.

If you are unable to attend the meeting you are encouraged to complete and return the enclosed Voting Form which allows you to lodge your vote directly or appoint a proxy to vote on your behalf. You may also lodge your direct vote or appoint a proxy online. The completed voting form must be received by Link Market Services no later than 11am on 18 October 2015.

Business

Praemium Financial Report

To receive the Financial Statements, Directors' Report and the Independent Auditor's Report for Praemium and its controlled entities for the year ended 30 June 2015.

Note: There is no requirement for shareholders to approve these reports.

Resolution 1 – Re-election of Mr Robert Edgley as a Director of Praemium Limited

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

"To elect Mr Robert Edgley, who retires by rotation in accordance with clause 9.1(d) of the Constitution, and being eligible, offers himself for re-election as a director of Praemium Limited."

Resolution 2 - Adoption of Remuneration Report

To consider and, if thought fit, to pass the following advisory resolution:

"That, the Remuneration Report for the financial year ended 30 June 2015 (set out in the 2015 Annual Report) be adopted."

Note: Voting restrictions apply to this Resolution. Details of the restrictions are set out in the Explanatory Statement.

Resolution 3– Approval of the issue of Securities to Directors

Resolution 3.1 – Approval of the issue of Securities to Mr Andre Carstens

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

"That, for the purpose of ASX Listing Rule 10.11 and for all other purposes, Shareholders approve the allotment and issue to Mr Andre Carstens, of such number of fully paid ordinary shares in Praemium Limited determined by dividing $15,000 (calculated using the formula set out in the Explanatory Memorandum) by the share price on the Grant Date (being 20 October 2015)."

Note: Voting exclusions applies to this resolution. Details of that exclusion/prohibition are set out in the Explanatory Materials.

Resolution 3.2 – Approval of the issue of Securities to Mr Michael Ohanessian (Long term incentive)

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

"That, for the purpose of ASX Listing Rule 10.14 and for all other purposes, Shareholders approve the allotment and issue of 625,000 fully paid ordinary shares in Praemium Limited to Mr Michael Ohanessian in under the Company's Directors & Employees Benefits Plan and in accordance with the terms set out the explanatory memorandum."

Note: Voting exclusions applies to this resolution. Details of that exclusion/prohibition are set out in the Explanatory Materials.

Resolution 3.3 – Approval of the issue of Securities to Mr Michael Ohanessian (Short term incentive)

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

"That, for the purpose of ASX Listing Rule 10.11 and for all other purposes, Shareholders approve the allotment and issue to Mr Michael Ohanessian, of such number of fully paid ordinary shares determined by dividing $200,000 (calculated using the formula set out in the Explanatory Memorandum) by the share price on the Grant Date (being 20 October 2015)."

Note: Voting exclusions applies to this resolution. Details of that exclusion/prohibition are set out in the Explanatory Materials.

Resolution 4 - Approval of new Praemium Directors & Employees Benefits Plan

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

"That, for the purposes of Exception 9 of ASX Listing Rule 7.2, section 260C(4) of the Corporations Act 2001 (Cth), and for all other purposes, approval is hereby given for the granting of securities under the amended 'Praemium Directors and Employee Benefits Plan' which has been adopted by the Board to reflect ASIC Class Order 14/1000".

Note: Voting exclusions applies to this resolution. Details of that exclusion/prohibition are set out in the Explanatory Materials.

Resolution 5 – Ratify previous issue of securities for the acquisition of Plum Software Limited

To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution:

"That, for the purpose of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify the allotment and issue of 7,500,000 fully paid ordinary shares issued in March 2015 to the vendors of all the issued capital in Plum Software Limited on the terms and conditions set out in the Explanatory Statement."

Note: Voting exclusions applies to this resolution. Details of that exclusion/prohibition are set out in the Explanatory Materials.

Resolution 6 – Approval to issue up to a further 10% of the Company's issued capital over the next 12 months

To consider and, if thought fit, to pass the following special resolution:

"That, for the purposes of Listing Rule 7.1A and for all other purposes, Shareholders approve the issue of up to 10% of the issued capital of the Company (at the time of the issue) at any time in the next 12 months, calculated in accordance with the formula prescribed in Listing Rule 7.1A.2."

Note: Voting exclusions applies to this resolution. Details of that exclusion/prohibition are set out in the Explanatory Materials.

Please read the Explanatory Statement

Information regarding the Resolutions, including important information regarding voting exclusions and prohibitions where applicable, may be found in the accompanying Explanatory Statement, which form part of this notice of meeting.

By Order of the Board

Paul Gutteridge CFO & Company Secretary 18 September 2015

EXPLANATORY STATEMENT

This Explanatory Statement have been prepared for the information of shareholders of the Company (Shareholders) in relation to the business to be conducted at the Company's 2015 Annual General Meeting.

The purpose of the Explanatory Statement is to provide Shareholders with information that is reasonably required by Shareholders to decide how to vote upon the Resolutions. The Directors recommend that Shareholders read this Explanatory Statement before determining whether or not to support the resolutions.

All of the Resolutions to be voted on are ordinary resolutions with the exception of Resolution 6 which is a special resolution. An ordinary resolution requires a simple majority of votes cast by Shareholders entitled to vote on the resolution. A special resolution requires at least 75% of the votes cast by members entitled to vote must be in favour of the resolution for it to be passed. This includes voting via proxies.

Questions and Comments

The Chairman will give Shareholders a reasonable opportunity to ask questions about or comment on the management of the Company.

The Chairman will also give Shareholders a reasonable opportunity to ask the Auditor questions relevant to:

• the conduct of the audit;
• the preparation and content of the Independent Audit Report;
• the accounting policies adopted by the Company in relation to the preparation of the financial statements; and
• the independence of the Auditor in relation to the conduct of the audit.

Shareholders who would like to submit a written question to the Company's auditor, should post questions to the Company Secretary or fax it to +613 8622 1200. Written questions must relate to the content of the auditor's report to be considered at the Annual General Meeting or the conduct of the audit. All qualifying questions will be addressed at the Annual General Meeting.

Please note that all questions must be received at least five business days before the Annual General Meeting; that is by no later than 12 October 2015.

Unless the Company's Share Registry has been notified otherwise, Shareholders will not be sent a hard copy of the Annual Report. All Shareholders can download the Annual Report, which contains the Financial Statement for the year ended 30 June 2015, from the Company's Website at www.praemium.com.au/financial-reports.html.

Resolution 1 – Election of Directors

Mr Robert Edgley

It is a requirement of the Company's Constitution, that subject to ASX Listing Rule 14.4 at least one Director must retire from office, excluding the Managing Director and in addition to a director appointed by the directors under rule 9.1 (d).

Accordingly, Mr Robert Edgley retires by rotation and, being eligible, offers himself for re-election as a Director.

Information about the experience, skills and qualifications of all of the Directors, including Mr Edgley, are set out in the Company's 2015 Annual Report. Copies of the Annual Report can be downloaded from the Company's Website at www.praemium.com.au/financial-reports.html.

Recommendation

The Directors, with Mr Edgley abstaining, recommend that Shareholders vote in favour of Resolution 1.

Section 250R(2) of the Corporations Act 2001 (Cth) requires the Shareholders to vote on an advisory resolution that the Remuneration Report (Remuneration Report) be adopted.

The Remuneration Report details the remuneration policies for Praemium Limited and each of its incorporated subsidiaries including those incorporated in the United Kingdom, Jersey, Armenia, Hong Kong and China (the 'Group') and reports the remuneration arrangements for Directors and Key Management Personnel (identified for the purposes of the Accounting Standards). The Remuneration Report is set out on pages 20-25 of the 2015 Annual Report to Shareholders.

The vote on this Resolution is advisory only, and does not bind the Directors or the Company. The Board will however consider the outcome of the vote and comments made by Shareholders on the Remuneration Report at the meeting when reviewing the Company's remuneration policies. Under the Corporations Act 2001 if 25% or more of votes that are cast at the meeting are voted against the adoption of the Remuneration Report at two consecutive AGM's, Shareholders will be required to vote at the second of those AGMs on a resolution (a "Spill Resolution") that another meeting be held within 90 days at which all of the Company's Directors (other than any Managing Director) must go up for re-election.

Shareholders will recall that not more than 25% of the votes cast were cast against the 'remuneration resolution' at the 2014 AGM and therefore, there will be no requirement at this AGM for a Spill Resolution.

The Chair will give Shareholders a reasonable opportunity to ask questions about or make comments on the Report.

Voting restrictions

Key Management Personnel (KMP) and their closely related parties are not permitted to vote on this Resolution. KMPs of Praemium are the Directors of Praemium and those other persons having authority and responsibility for planning, directing and controlling the activities of Praemium, directly or indirectly. The Remuneration Report identifies Praemium's KMPs for the financial year ending 30 June 2015. 'Closely related parties' are defined in the Corporations Act 2001, and include certain of their family members, dependents and companies they control.

However, a KMP may cast a proxy where the proxy specifies in writing how the KMP is to vote (except proxies cast on behalf of another KMP). The Chair is permitted to vote undirected proxies where the shareholder expressly authorises the chair to exercise the proxy.

Accordingly, if you have appointed the Chair as your proxy you must either direct the Chair how to vote or you must tick the box on the proxy form expressly authorising the Chair to vote undirected proxies notwithstanding that the Chair or KMP may benefit.

If you do not direct the Chair how to vote or you do not mark the box authorising the Chair to vote undirected proxies, the Chair will not cast your votes on Resolution 2 and your votes will not be counted in calculating the required majority if a poll is called on this resolution

If you choose to appoint a proxy, you are encouraged to direct your proxy how to vote on Resolution 2 by marking either "For", "Against" or "Abstain" on the Voting Form for that item of business.

Resolutions 3.1 – Approval of the issue of Securities to Directors

In accordance with the terms of his appointment to the Board in May 2014, Mr Andre Carstens, was offered fully paid ordinary Shares in the Company to be issued in two tranches.

The first tranche of fully paid Shares to the value of $15,000 vested on 30 November 2014 based on an issue price of $0.19 per share (First Tranche). Shareholder approval for the issue of the First Tranche was obtained at the 2014 AGM.

The second tranche of fully paid Shares to the value of $15,000 is due to vest on 21 October 2015 (Second Tranche), based on the closing share price on the day of the Company's 2015 AGM (Grant Date)

Accordingly, Shareholders should note that the approval being sought under this Resolution is in relation to the Second Tranche only. As the Shares will not be issued under the Company's Directors & Employees Benefits Plan, Shareholder approval under ASX Listing Rule 10.11 is required.

It is a requirement of ASX Listing Rule 10.13 that Shareholders be provided with the following information:

The Name of proposed allottee

Mr Andre Carstens is a Director and therefore a related party of Praemium.

Maximum number of securities that may be issued

The maximum value is $15,000, in relation to the Second Tranche as disclosed above.

The number of Shares to be issued shall be determined by diving $15,000 by the share price on the Grant Date.

The date by which the Company will issue the securities

In accordance with ASX Listing Rule 10.13, securities are required to be issued within 1 month after the date of meeting (being 20 November 2015). If approved, the Shares the subject of this Resolution will be issued on 21 October 2015.

The Price or formula for calculating the price

The Shares will be issued for no consideration.

Intended use of the funds raised

No funds will be raised from the issues as the purpose of the issues is to remunerate Mr Andre Carstens in a form other than cash.

The Directors have determined that the issue is reasonable remuneration for the purposes of Chapter 2E and therefore, Shareholder approval for the purposes of the related party provisions set out in Chapter 2E of the Corporations Act is not required.

Where approval is obtained under ASX Listing Rule 10.11, approval is not required under ASX Listing Rule 7.1.

A voting exclusion applies in relation to this Resolution. See below for details.

Recommendation

The Directors, with Mr Andre Carstens abstaining, recommend that Shareholders vote in favour of Resolution 3.1.

Resolution 3.2– Approval of the issue of Securities to the Managing Director

Long Term Incentive (LTI)

Mr Michael Ohanessian's employment contract, as disclosed to the market in August 2011 provides a long-term incentives, made up of a combination of performance rights and options. On 9 August 2011, Mr Ohanessian as Managing Director was issued 5 million performance rights under Praemium's Directors & Employees Benefits Plan. Performance rights are able to be converted into fully paid ordinary Shares in Praemium Limited.

Assessment of performance targets commenced in the 2013 financial year for a period of 3 years and provided targets are achieved, performance rights vest on the basis of 50% in year one, 25% in year two and 25% in year three. The vesting of performance rights are directly linked to achieving the targeted EBIT per share (EBIT Target) as set by the Board.

The EBIT Target is subject to 'baseline' and 'outperformance' hurdles to the effect that:

• where the baseline hurdle is not met, no entitlements will vest;
• where the baseline hurdle is met, 50% of the performance rights available for vesting in respect to that year will vest; or
• where the outperformance hurdle is met, 100% of the performance rights available for vesting in respect to that year will vest.

With FY15's baseline EBIT Target of 0.28 cents per share exceeded by 57% based on audited financial results, Mr Ohanessian is entitled to 625,000 fully paid ordinary Shares, or 50% of the performance rights available for vesting for the FY15. As the FY15 outperformance hurdle has not been achieved, 625,000 performance rights or 50% of the performance rights available for vesting automatically lapse.

In accordance with ASX Listing Rules 10.14, any issue of securities to a Director under an employee share plan requires shareholder approval. Upon Shareholder approval being obtained, 625,000 ordinary fully paid Shares in the capital of Praemium Limited will be issued to Mr Ohanessian as a LTI.

It is a requirement of ASX Listing Rule 10.15 that Shareholders be provided with the following information:

The Name of proposed allottee

Mr Michael Ohanessian is a Director and therefore a related party of Praemium and is also entitled to participate in the Company's Directors & Employees Benefits Plan.

Maximum number of securities that may be issued

625,000 fully paid ordinary Shares, in accordance with the CEO terms of appointment announced to the market on 9 August 2011 (representing 50% of the performance rights entitlement allocated for the FY2015).

The Price or formula for calculating the price

The Shares will be issued for no consideration.

The names of all persons under rule 10.14 who have received securities under the scheme since the last approval date

Since the scheme was last approved in 2014, the following related parties have been issued fully paid ordinary securities under the Company's Directors & Employees Benefits Plan:

• Mr Michael Ohanessian (1,446,053 performance rights, converted to fully paid ordinary securities)
• and Mr Andre Carstens (78,947 fully paid ordinary securities).

All securities to Directors received shareholder approval prior to issue.

All related parties entitles to participate is scheme

In addition to Mr Michael Ohanessian, the other related parties who are entitled to participate in the Company's Directors and Employees Benefits Plan are Mr Bruce Loveday, Mr Robert Edgley, Mr Peter Mahler and Mr Andre Carstens.

The date by which the entity will issue the securities

In accordance with ASX Listing Rule 10.15, securities are required to be issued within 12 months after the date of meeting (being 20 October 2016). If approved, the Shares in relation to this resolution will be issued on 21 October 2015.

Where approval is obtained under ASX Listing Rule 10.14, approval is not also required under ASX Listing Rule 7.1.

The Directors have determined that the issue is reasonable remuneration for the purposes of Chapter 2E and therefore, Shareholder approval for the purposes of the related party provisions set out in Chapter 2E of the Corporations Act is not required.

A voting exclusion applies in relation to this resolution. See below for details.

Recommendation

The Directors, with Mr Michael Ohanessian abstaining, recommend that Shareholders vote in favour of Resolution 3.2.

Resolution 3.3– Approval of the issue of Securities to the Managing Director

Short Term Incentive (STI)

In accordance with the terms of appointment announced to the market on 9 August 2011 Mr Ohanessian as Managing Director, has the opportunity to be issued with fully paid ordinary Shares by way of a short term incentive (STI).

Under the terms of the STI, Mr Ohanessian is entitled to:

• up to 30% of his base salary where the budget EBIT is achieved; and
• where budget EBIT exceeds 100%, the bonus shall increase by an amount equal to 1% of base salary for every 5% that the actual EBIT exceeds the budgeted EBIT for that financial year with a cap of 100% above budget. Therefore the total aggregate STI value that can be earned is 50% of base salary.

As disclosed in Praemium's 2015 Annual Report, with FY2015's annual result exceeding budget EBIT by 1647% and accordingly, Mr Ohanessian is entitled to such number of shares determined by dividing 50% of his base salary ($200,000) by the share price on 20 October 2015 (Grant Date).

These Shares will not be issued under the Company's Directors & Employees Benefits Plan and accordingly, the issue requires shareholder approval under ASX Listing Rules 10.11.

It is a requirement of ASX Listing Rule 10.13 that Shareholders be provided with the following information:

The Name of proposed allottee

Mr Michael Ohanessian is a Director and therefore a related party of Praemium.

Maximum number of securities that may be issued

The maximum value of STI is $200,000, as disclosed in Praemium's 2015 Annual Report.

The number of Shares to be issued shall be determined by diving $200,000 by the Share price on the Grant Date.

The date by which the Company will issue the securities

In accordance with ASX Listing Rule 10.13, securities are required to be issued within 1 month after the date of meeting (being 20 November 2015). If approved, the Shares the subject of this resolution will be issued on 20 October 2015.

The Price or formula for calculating the price

The Shares will be issued for no consideration.

Intended use of the funds raised

No funds will be raised from the issues as the purpose of the issues is to remunerate Mr Michael Ohanessian in a form other than cash.

Where approval is obtained under ASX Listing Rule 10.11, approval is not required under ASX Listing Rule 7.1

A voting exclusion applies in relation to this resolution. See below for details.

The Directors have determined that the issue is reasonable remuneration for the purposes of Chapter 2E and therefore, Shareholder approval for the purposes of the related party provisions set out in Chapter 2E of the Corporations Act is not required.

Voting exclusions apply to this Resolution. See below for details

Recommendation

The Directors, with Mr Michael Ohanessian abstaining, recommend that Shareholders vote in favour of Resolution 3.3.

Resolution 4 – Approval of the updated Praemium Directors & Employees Benefits Plan (the Plan)

(a) Background

On 26 August 2015, the Board adopted amendments to the Praemium Directors and Employees Benefits Plan (Plan) to align it with the conditions of ASIC Class Order 14/1000 (Class Order).

By way of overview, the amendments are:

• (i) to change the Restraint Period to "such period as the Board determines". Previously, participants under the Plan were prohibited from disposing of their Shares within 12 months of the issue date. The Class Order allows eligible participants to dispose of Shares prior to the expiration of 12 months from the issue date provided that the eligible participants are covered by the Class Order. The amended wording gives the Board the ability to control the Restraint Period which may be a greater or lesser period than the previous 12 months restriction; and
• (ii) the definition of Eligible Person is extended to include 'casual employees' and 'prospective participants'. For the purposes of the Class Order:
  • a 'casual employee' is an individual who is or might reasonably be expected to be engaged to work the number of hours that are the pro-rata equivalent of 40% or more of a comparable full-time position; and
  • a 'prospective participate' means a person to whom the offer (of securities) is made but who can only accept the offer if an arrangement has been entered into that will result in the person becoming an Eligible Person.

In all other respects the Plan remains unchanged. A copy of the amended Plan rules is available to members on request from the Company Secretary.

(b) Reasons for seeking approval

ASX Listing Rule 7.1 limits the number of equity securities the Company may issue within any 12 month period without shareholder approval to 15% of its issued capital (15% Limit), unless an exception applies. A specific exemption applies for securities issued under an employee incentive scheme that has been approved by shareholders (Exception 9 to Listing Rule 7.2). Accordingly, approval is being sought for the purposes of ASX Listing Rule 7.2 (Exception 9).

The effect of the approval sought will be, that for 3 years from the approval date, the issue of securities under the Plan will not be included in the calculation of the 15% Limit, thus increasing the number of equity securities that may be issued by the Company without further shareholder approvals.

Importantly, the issue of any securities (including options or performance rights) to any related party of the Company will still require shareholder approval under ASX Listing Rule 10.14.

The issue of securities under the Plan continues to remains subject to the issue limits under the Plan.

For the purposes of ASX Listing Rule 7.2 Exception 9, a total of 3,570,417 securities have been issued, or agreed to be issued, under the current Plan since its approval by members in 2014. A summary of the status of those securities is set out below:

• 395,000 have lapsed or been cancelled;
• 666,667 performance rights (or, for UK resident employees, EMI Options), have vested and have converted to fully paid ordinary Shares or are capable of being so converted at the election of their holder; and
• 2,508,750 performance rights are currently outstanding and capable of vesting on achievement of performance conditions over a period spanning 2015 through to September 2017.

The Company has no plans to issue large numbers of securities under the Plan at this time. The Company's Remuneration Report sets out the Company's policies in respect to remuneration and the way in which it uses the Plan to achieve those policy objectives.

A Voting exclusions apply to this resolution. See below for details.

Resolution 5 - Ratify previous issue of securities for the acquisition of Plum Software Limited

Under ASX Listing Rule 7.4, a company may seek subsequent Shareholder approval to ratify an issue of securities provided that the issue did not breach the 15% Limit contained in Listing Rule 7.1 at the time of issue.

The Company announced on 4 March 2015, that it had acquired Plum Software Limited. Part of the consideration was satisfied by the issue of 7,500,000 fully paid ordinary Shares in the Company. This issue was effected on 4 March 2015 at an issue price of $0.285.

The Company confirms that the issue and allotment of the Shares above did not breach Listing Rule 7.1.

Listing Rule 7.5 sets out the requirements as to the contents of a notice sent to shareholders for the purpose of Listing Rule 7.4 and the following information is included in this Explanatory Memorandum for that purpose

Number of securities issued

7,500,000 fully paid ordinary Shares

The price at which the securities were issued

The Shares were issued as part consideration for all the shares in Plum Software Limited. The value at which the Shares were issued was based on the date of issue (4 March 2015) at $0.285 per share.

The terms of the securities

Shares issued are identical to existing fully paid ordinary shares in the Company

The names of the allottees or the basis for determining allottee

The vendors of Plum Software Limited.

The use of the funds

The Shares were issued to the allottees as part consideration for all the shares in Plum Software Limited. No funds were actually raised as the issue was made in lieu of cash payments to the vendors of Plum Software Limited.

A voting exclusion applies in relation to this Resolution. See below for details.

Recommendation

The Directors recommend that Shareholders vote in favour of Resolution 5.

(a) Introduction

On 1 August 2012, new ASX Listing Rule 7.1A was introduced to allow 'eligible entities' to obtain the approval of Shareholders at an annual general meeting to issue up to 10% of its issued capital (Additional Placement Facility), in addition to the 15% available to the Company under ASX Listing Rule 7.1 (which allows the issue of up to 15% of its issued capital without Shareholder approval). The Company is an eligible entity as it has a market capitalisation of less than $300 million. The Company's current market capitalisation is $119.2 million (at 10 September 2015).

If passed, this Resolution would effectively allow the Company to issue up to 25% of its issued capital in the next 12 months without seeking any additional Shareholder approvals. The Shares the subject of the Additional Placement Facility (Additional Placement Shares) must be an existing class of security currently quoted on the ASX may be issued at any time during the 12 month period from the date of this Resolution.

This Resolution must take the form of a special resolution. A special resolution requires at least 75% of the votes cast by members entitled to vote must be in favour of the resolution for it to be passed. This includes voting via proxies.

Shareholders are advised that it is a condition of approval under ASX Listing Rule 7.1A that the issue price for the Additional Placement Shares must not be less than 75% of the VWAP calculated over the 15 trading day immediately before:

• (i) the date on which the price is agreed; or
• (ii) if the securities are not issued with 5 trading days of the date referred to in subparagraph (i) the date on which the securities are issued.

(b) Notice requirement under ASX Listing Rule 7.3A

It is a requirement of ASX Listing Rule 7.3A.1 that shareholders be given the following information when seeking approval under ASX Listing Rule 7.1A:

The minimum price at which the Additional Shares may be issued.

It is the intention of the Company that the Additional Placement Shares will not be issued for a price less than 5% of the VWAP calculation referred to at paragraph (a) above. In any event, the issue price of the Shares cannot exceed the 25% discount referred to in paragraph (a) above.

Risk of economic and voting dilution of existing shareholders

An issue of shares under Listing Rule 7.1A involves the risk of economic and voting dilution for existing ordinary security holders. The risks include:

• a) the market price for shares may be significantly lower on the issue date than on the date of the approval under Listing Rule 7.1A; and
• b) the equity securities may be issued at a price that is at a discount to the market price for the shares on the issue date.

Should the full Additional Placement Shares be issued during the next 12 month period, this will have a dilutive effect on Shareholders. It is a requirement of ASX Listing Rule 7.3A that shareholders be provided with examples of the possible dilutive effect further issues can have on a Shareholder's economic and voting rights. Information under Listing Rule 7.3A.2:

• The table below shows the dilution of existing Shareholders on the basis of the current market price of Shares as at 10 September 2015 and the current number of ordinary securities for variable "A" calculated in accordance with the formula in Listing Rule 7.1A(2) as at the date of this Notice.

• In particular, it assumes that "A" is calculated upon resolutions 3 to 5 inclusive being approved at the Annual General Meeting.

The table also shows:

• two examples where variable "A" has increased, by 50% and 100%. Variable "A" is based on the number of ordinary securities the Company has on issue. The number of ordinary securities on issue may increase as a result of issues of ordinary securities that do not require Shareholder approval (for example, a pro rata entitlements issue or scrip issued under a takeover offer) or future specific placements under Listing Rule 7.1 that are approved at a future Shareholders' meeting; and
• two examples of where the issue price of ordinary securities has decreased by 50% and increased by 100% as against the current market price.

Variable A in ListingRule 7.1A.2		Dilution$0.1525 issue price50% decrease inIssue Price	Dilution$0.305Issue Price	Dilution$0.61 issue price100% decrease inIssue Price
Current Variable A390,820,845 shares	10% voting dilution	39,082,084 shares	39,082,084 shares	39,082,084 shares
	Funds raised	$5,960,018	$11,920,036	$23,840,072
50%increaseincurrent variable A	10% voting dilution	58,623,126 shares	58,623,126 shares	58,623,126 shares
586,231,267 shares	Funds raised	$8,940,027	$17,880,053	$35,760,107
100%increasein	10% voting dilution	78,164,169 shares	78,164,169 shares	78,164,169 shares
current variable A*781,641,690 shares	Funds raised	$11,920,036	$23,840,072	$47,680,143

*This example is specifically required by ASX. The Company advises that it has no current intentions to double the number of shares on issue in the next 12 months.

The table has been prepared on the following assumptions:

• The Company issues the maximum number of Shares available under the 10% Listing Rule 7.1A approval;
• No options are exercised to convert into Shares before the date of the issue of the Shares available under Listing Rule 7.1A.
• The 10% voting dilution reflects the aggregate percentage dilution against the issued share capital at the time of issue. This is why the voting dilution is shown in each example as 10%.
• The table does not show an example of dilution that may be caused to a particular Shareholder by reason of share issue under Listing Rule 7.1, based on that Shareholder's holding at the date of the Meeting.
• The table shows only the effect of issues of Equity Securities under Listing Rule 7.1A, not under the 15% placement capacity under Listing Rule 7.1.
• The issue of Shares under Listing Rule 7.1A consists only of Shares. If the issue includes listed options, it is assumed that those listed options are exercised into Shares for the purpose of calculating the voting dilution effect on existing Shareholders.
• The issue price is $0.305, being the closing price of the Shares on ASX on 10 September 2015*.*

The date by which securities approved under this listing rule will be issued.

Securities issued with approval under this ASX Listing Rule, must be issued within 12 months from the date of the resolution being 20 October 2016, or earlier if Shareholders subsequently approval a significant transaction for the purposes of ASX Listing Rule 11.1.2 or ASX Listing Rule 11.2.

The purpose for which the securities may be issued including for non-cash consideration.

It is the Board's current intention that any funds raised pursuant to an issue of securities will be applied towards any potential acquisitions, in accordance with the Company's growth strategies. The Board may also issue shares for non-cash consideration. In the event securities are issued for non-cash consideration, the Company will provide for release to the market a valuation of the non-cash consideration in accordance with Listing Rule 7.1A.3.

The issue of any Additional Placement Shares would be subject to the Directors satisfying themselves of the viability of such acquisition. At the time of this Explanatory Memorandum, the Company has not formed an intention in regards to any strategic acquisitions.

Details of the Company's allocation policy for securities issued under this listing rule.

The Company's current allocation policy in respect of the Additional Placement Facility is to make the Additional Shares available to a mix of existing and new shareholders. A final determination as to the suitability of the allocation of the shares will depend on the needs and requirements of the Company at the relevant time.

The Company's allocation policy is dependent on the prevailing market conditions at the time of any proposed issue pursuant to Listing Rule 7.1A. The identity of the allottees will be determined on a case-bycase basis having regard to the factors including but not limited to the following:

• (i) the methods of raising funds that are available to the Company including but not limited to, rights issue or other issue in which existing security holders can participate;
• (ii) the effect of the issue of the Listing Rule 7.1A shares on the control the Company;
• (iii) the financial situation and solvency of the Company; and
• (iv) advice for corporate, financial and broking advisers (If applicable).

Additional Information required by ASX Listing Rule 7.3A.6

As the Company has previously obtained approval under Listing Rule 7.1A, the following additional information is required to be provided to Shareholders:

(i) Total equity securities issued in the 12 months preceding the date of the Annual General Meeting and the percentage they represent of the total number of equity securities on issue at the commencement of that 12 month period:

9,691,667 fully paid ordinary shares, representing 2.48% total equity securities; and

• (ii) Details of all issues of equity securities by the Company during the 12 months preceding the date of the Annual General Meeting are as follows:
  • 1,446,053 fully paid ordinary shares issued to Praemium's CEO, as approved at 2014's AGM. The shares were issued for nil consideration, however based upon the Company's closing Share price on 10 September 2015 were valued at $441,046;
  • 78,947 fully paid ordinary shares issued to Praemium directors, as approved at 2014's AGM. The shares were issued for nil consideration, however based upon the Company's closing Share price on 10 September 2015 were valued at $24,079;
  • 666,667 fully paid ordinary shares issued to Praemium staff under the Company's employee share plan. The shares were issued for nil consideration, however based upon the Company's closing Share price on 10 September 2015 were valued at $203,333; and
  • 7,500,000 fully paid ordinary shares issued to the vendors of Plum Software Limited to acquire their business. The shares were issued for nil consideration, however based upon the Company's closing Share price on 10 September 2015 were valued at $2,287,500.

Voting exclusions apply to this Resolution. See details below.

Recommendation

The Directors recommend that Shareholders vote in favour of Resolution 6.

OTHER INFORMATION

Entitlement to attend and vote

In accordance with Reg 7.11.37 of the Corporations Regulations 2001 (Cth), the Board has determined that persons who are registered holders of Shares in the Company as at 7pm (Melbourne time) on 18 October 2015 will be entitled to attend and vote at the AGM as a Shareholder.

If more than one joint holder of Shares is present at the AGM (whether personally, by proxy, or by attorney, or by representative) and tenders a vote, only the vote of the joint holder whose name appears first on the register of Shareholders will be counted.

Voting Exclusion/Prohibition Statements

The Company will, in accordance with the Listing Rules, disregard any votes cast:

• On Resolution 3.1 by Mr Carstens and his associates
• On Resolution 3.2 by all Directors of Praemium Limited and their associates;
• On Resolution 3.3 by Mr Michael Ohanessian and his associates
• On Resolution 4 by Directors of Praemium Limited and their associates;
• On Resolution 5, by a person who participated in the issue and their associates; and
• On Resolution 6, by a person who may participate in the proposed issue and a person who may obtain a benefit, except a benefit solely in the capacity as holder of ordinary securities, if the resolution is passed, and their associates.

However, the Company need not disregard a vote if:

• It is cast by a director 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 directions on the proxy form to vote as the proxy decides.

Special voting restrictions in relation to Resolution 2:

• In addition to the voting exclusions set out above (which relate to the ASX Listing Rules), special voting restrictions are imposed in relation to Resolution 2 by the Corporations Act. Further details are set out in the notes to Resolution 2 in this Explanatory Statement.

Direct Voting

In accordance with rule 8.7(j) of the Company's Constitution, where a Shareholder is entitled to vote, and cannot attend personally and does not wish to appoint a proxy, the Shareholder may vote directly on Resolutions to be considered at the AGM by mailing their vote(s) to the Company's share registry, Link Market Services Limited, by 11.00am (Melbourne time) on 18 October 2015.

The direct voting form may be:

Mailed / delivered to the Company's share registry, Link Market Services Limited at:

Street Address: Level 12, 680 George Street, SYDNEY, NSW 2000 or 1A Homebush Bay Drive, Rhodes NSW 2138

Postal Address: Locked Bag A14, SYDNEY SOUTH, NSW 1235

Faxed to Link Market Services Limited on Fax: 02 9287 0309

Online Direct Voting – Direct votes can be lodged online at www.praemium.com.au by using the following steps.

• Step 1 select Investor Relations from the top menu;
• Step 2 click on Shareholder Communications;
• Step 3 click on the link at the end of the webpage titled Praemium online share registry.
• Step 4 enter your Holder Identification Number (HIN) or Shareholder Registration Number (SRN) (which appears on your proxy form or a statement previously received), your surname or company name (as registered), your postcode and then select validate;
• Step 5 select Voting from the top menu;
• Step 6 after selecting the meeting and declaration and then clicking on OK, select the third option titled Direct Vote;

Step 7 – complete the steps to lodge your direct vote.

You will be taken to have signed your direct vote form if you lodge it in accordance with the instructions given on the website.

Corporate Representatives

A corporation may elect to appoint an individual to act as its representative in accordance with section 250D of the Corporations Act 2001 (Cth) in which case the Company will require a Certificate of Appointment of Corporate Representative executed in accordance with the Corporations Act 2001 (Cth) to be provided. The Certificate must be lodged with the Company before the AGM or at the registration desk on the day of the AGM. The Company will retain the certificate. A form of this certificate may be obtained from the Company's share registry.

Proxies

In accordance with section 249L(d) of the Corporations Act 2001 (Cth) a member who is entitled to attend and vote at the AGM may appoint a proxy. A proxy can be either an individual or a body corporate. Should you appoint a body corporate as your proxy, that body corporate will need to ensure that it:

• appoints an individual as its corporate representative to exercise its powers at meetings, in accordance with section 250D of the Corporations Act 2001 (Cth); and
• provides satisfactory evidence of the appointment of its corporate representative prior to commencement of the AGM.

If satisfactory evidence of appointment as corporate representative is not received before the meeting, then the body corporate (through its representative) will not be permitted to act as your proxy.

If a Shareholder is entitled to cast two or more votes the Shareholder may appoint two proxies and may specify the percentage of votes each proxy is appointed to exercise. If the proxy appointments do not specify the proportion of the member's voting rights that each proxy may exercise, each proxy may exercise half of the member's votes.

A proxy need not be a member.

The Proxy Form (and, if the appointment is signed by the appointer's attorney, the authority under which it was signed or a certified copy of the authority) must be received by the Company's share registry, Link Market Services Limited, by 11.00am (Melbourne time) on 18 October 2015.

If you choose to appoint a proxy you are encouraged to direct your proxy how to vote by marking either "For" "Against" or "Abstain" for that item of business. If you sign the enclosed voting form and do not mark Box A or Box B, you will have appointed the Chairman of the meeting as your proxy. Where the shareholder expressly authorises the chair to exercise the proxy, your shares will be voted on Resolution 2.

The completed proxy form may be:

Mailed / delivered to the Company's share registry using the enclosed envelope, to Link Market Services Limited at:

Street Address: Level 12, 680 George Street, SYDNEY, NSW 2000 or 1A Homebush Bay Drive, Rhodes NSW 2138

Postal Address: Locked Bag A14 SYDNEY SOUTH, NSW 1235

Faxed to Link Market Services Limited on Fax: 02 9287 0309

Online Proxy Appointment - Proxies can be lodged online at www.praemium.com.au by the following steps.

• Step 1 select Investor Relations from the top menu;
• Step 2 click on Shareholder Communications;
• Step 3 - click on the link at the end of the webpage titled Praemium online share registry.
• Step 4 enter your Holder Identification Number (HIN) or Shareholder Registration Number (SRN) (which appears on your proxy form or a statement previously received), your surname or company name (as registered), your postcode and then select validate;
• Step 5 select Voting from the top menu;
• Step 6 complete the steps to lodge your proxy.

You will be taken to have signed your proxy form if you lodge it in accordance with the instructions given on the website. To be valid, a proxy must be received by the Company in the manner stipulated above. The Company reserves the right to declare invalid any proxy not received in this manner.

Praemium Ltd ACN 098 405 826

	LODGE YOUR VOTE
	ONLINEwww.linkmarketservices.com.au
	 BY MAILPraemium LtdC/- Link Market Services LimitedLocked Bag A14Sydney South NSW 1235 Australia
	BY FAX+61 2 9287 0309
	BY HANDLink Market Services Limited1A Homebush Bay Drive, Rhodes NSW 2138; orLevel 12, 680 George Street, Sydney NSW 2000
	ALL ENQUIRIES TOTelephone: 1300 554 474

*X99999999999*

X99999999999

VOTING FORM

I/We being a member(s) of Praemium Ltd and entitled to attend and vote hereby appoint:

	A	VOTE DIRECTLYelect to lodge my/ourvote(s) directly (mark box)	OR	BAPPOINT A PROXYOR if you are NOT appointing the Chairmanthe Chairmanof the Meeting as your proxy, please writeof the Meetingthe name of the person or body corporate(mark box)
P 1 Please mark either A or BSTE		in relation to the Annual GeneralMeeting of the Company to beheld at 11:00am on Tuesday,20 October 2015, and at anyadjournment or postponement ofthe Meeting.You should mark either "for" or"against" for each item. Do notmark the "abstain" box.		you are appointing as your proxyor failing the person or body corporate named, or if no person or body corporate is named, the Chairmanof the Meeting, as my/our proxy to act on my/our behalf (including to vote in accordance with the followingdirections or, if no directions have been given and to the extent permitted by the law, as the proxy seesfit) at the Annual General Meeting of the Company to be held at 11:00am on Tuesday, 20 October 2015at Grant Thornton, Level 30 The Rialto, 525 Collins Street, Melbourne VIC, Australia (the Meeting)and at any postponement or adjournment of the Meeting.Important for Resolution 2: If the Chairman of the Meeting is your proxy, either by appointment or bydefault, and you have not indicated your voting intention below, you expressly authorise the Chairman of theMeeting to exercise the proxy in respect of Resolution 2, even though the Resolution is connected directly orindirectly 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*			For	Against Abstain*
P 2STE	1	Re-election of Mr Robert Edgley as aDirector of Praemium Limited				3.3 Approval of the issue of Securities toMr Michael Ohanessian (Short termincentive)
	2	Adoption of Remuneration Report			4	Approval of new Praemium Directors &Employees Benefits Plan5Ratify previous issue of securities for theacquisition of Plum Software Limited
		3.1 Approval of the issue of Securities toMr Andre Carstens
		3.2 Approval of the issue of Securities toMr Michael Ohanessian (Long termincentive)votes will not be counted in computing the required majority on a poll.			6	Approval to issue up to a further 10% ofthe Company's issued capital over thenext 12 months* 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
		SIGNATURE OF SHAREHOLDERS – THIS MUST BE COMPLETED
		Shareholder 1 (Individual)		Joint Shareholder 2 (Individual)		Joint Shareholder 3 (Individual)
P 3
STE		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).

PPS PRX1501G

YOUR NAME AND ADDRESS

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.

VOTING UNDER BOX A

If you ticked the box under Box A you are indicating that you wish to vote directly. Please only mark either "for" or "against" for each item. Do not mark the "abstain" box. If you mark the "abstain" box for an item, your vote for that item will be invalid.

If no direction is given on all of the items, or if you complete both Box A and Box B, your vote may be passed to the Chairman of the Meeting as your proxy.

Custodians and nominees may, with the Share Registrar's consent, identify on the Voting Form the total number of votes in each of the categories "for" and "against" and their votes will be valid.

If you have lodged a direct vote, and then you attend the Meeting, your attendance will cancel your direct vote.

The Chairman's decision as to whether a direct vote is valid is conclusive.

VOTING UNDER BOX B – APPOINTMENT OF PROXY

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.

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 Voting Form, including where the Resolution is connected directly or indirectly with the remuneration of KMP.

VOTES ON ITEMS OF BUSINESS – PROXY APPOINTMENT

You may direct your proxy how to vote by placing a mark in one of the boxes opposite each item of business. All your shares will be voted in accordance with such a direction unless you indicate only a portion of voting rights are to be voted on any item by inserting the percentage or 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.

APPOINTMENT OF A SECOND PROXY

You are entitled to appoint up to two persons as proxies to attend the Meeting and vote on a poll. If you wish to appoint a second proxy, an additional Voting Form may be obtained by telephoning the Company's share registry or you may copy this form and return them both together.

To appoint a second proxy you must:

• (a) on each of the first Voting Form and the second Voting Form state the percentage of your voting rights or number of shares applicable to that form. If the appointments do not specify the percentage or number of votes that each proxy may exercise, each proxy may exercise half your votes. Fractions of votes will be disregarded; and
• (b) return both forms together.

SIGNING INSTRUCTIONS

You must sign this form as follows in the spaces provided:

Individual: where the holding is in one name, the holder must sign.

Joint Holding: where the holding is in more than one name, either 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.

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.

LODGEMENT OF A VOTING FORM

This Voting Form (and any Power of Attorney under which it is signed) must be received at an address given below by 11:00am on Sunday, 18 October 2015, being not later than 48 hours before the commencement of the Meeting. Any Voting Form received after that time will not be valid for the scheduled Meeting.

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

www.linkmarketservices.com.au

Login to the Link website using the holding details as shown on the Voting 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) or Holder Identification Number (HIN) as shown on the front of the Voting Form).

BY MAIL

Praemium Ltd C/- Link Market Services Limited Locked Bag A14 Sydney South NSW 1235 Australia

BY FAX

BY HAND

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

Level 12

680 George Street Sydney NSW 2000

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