Notice of General Meeting

RNS Number : 0040B

88 Energy Limited

17 September 2018

 

88 Energy Limited

Notice of General Meeting

88 Energy Limited (ASX: 88E) ("88 Energy" or the "Company") announces that it has posted a notice to convene a general meeting of the Company (the "GM") at 10:00 a.m. (WST) on 15^th October 2018 at the Celtic Club, 48 Ord Street, West Perth WA 6005.

Details of the GM and the resolutions to be approved are set out below and a copy of the notice is available at the following link - http://www.rns-pdf.londonstockexchange.com/rns/0040B_1-2018-9-17.pdf.

Media and Investor Relations:

88 Energy Ltd
Dave Wall, Managing Director	Tel: [phone]
	Email: [e-mail]
Finlay Thomson, Investor Relations	Tel: [phone]
Hartleys Ltd
Dale Bryan	Tel: + 61 8 9268 2829
Cenkos Securities
Neil McDonald/Derrick Lee	Tel: + 44 131 220 6939

88 energy Limited

ACN 072 964 179

NOTICE OF GENERAL MEETING

TIME:                    10:00am (WST)

DATE:                   15^th October 2018

PLACE:                 Celtic Club

                             48 Ord Street

                             West Perth WA 6005

This Notice of Meeting should be read in its entirety. If Shareholders are in doubt as to how they should vote, they should seek advice from their professional advisers prior to voting. Should you wish to discuss the matters in this Notice of Meeting please do not hesitate to contact the Company Secretary on [phone].

1.          

CONTENTS

Business of the Meeting (setting out the proposed Resolutions)                                                  4

Explanatory Statement (explaining the proposed Resolutions)                                                      6

Glossary                                                                                                                                    11

Schedule 1 - Vesting Conditions                                                                                                13

Schedule 2 - Performance Rights Plan                                                                                       20

Proxy Form

important information

Time and place of Meeting

Notice is given that a General Meeting of the Company will be held at 10:00am on 15^th October 2018 at:

Celtic Club, 48 Ord Street, West Perth, WA 6005

Your vote is important

The business of the Meeting affects your shareholding and your vote is important.

Voting eligibility

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those who are registered Shareholders at 10:00am (WST) on 13^th October 2018.

DI Holders may attend the Meeting but will not be permitted to vote at the Meeting.  For their votes to be counted DI Holders must submit their CREST Voting Instruction to the Company's agent by 4:00pm (GMT) on 10^th October 2018. Alternatively, DI Holders can vote using the enclosed Form of Instruction in accordance with the instructions below.

Voting in person

If you do not wish to attend the meeting, you may appoint a proxy to attend and vote on your behalf. A body corporate may also appoint a proxy. A proxy need not be a shareholder. If a representative of a corporate proxy is to attend the meeting, you must ensure that the appointment of the representative is in accordance with section 250D of the Corporations Act. The corporate representative should bring to the meeting evidence of his or her appointment, including any authority under which the appointment is signed. A form of the certificate may be obtained from the Company's share registry.

If you are entitled to cast 2 or more votes, you are entitled to appoint up to 2 proxies to attend the meeting and vote on your behalf and may specify the proportion or number of votes that each proxy is entitled to exercise. If you do not specify the proportion or number of votes that each proxy is entitled to exercise, each proxy may exercise half of the votes. If you wish to appoint a second proxy, an additional proxy form may be obtained by telephoning the Company's share registry or you may copy the enclosed proxy form. To appoint a second proxy, you must follow the instructions on the proxy form.

Sections 250BB and 250BC of the Corporations Act took effect on 1 August 2011 and apply to voting by proxy. Shareholders and their proxies should be aware of these changes to the Corporations Act, as they will apply to this meeting. Broadly, the changes mean that:

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

·             any directed proxies which are not voted will automatically default to the chairman of the meeting, who must vote the proxies as directed. 

If the proxy has two or more appointments that specify different ways to vote on a resolution, the proxy must not vote on that resolution on a show of hands.

To be valid, your proxy form (and any power of attorney under which it is signed) must be received at an address given below by 10:00am (WST) on 13^th October 2018. Any proxy form received after that time will not be valid for the scheduled meeting.

Online             At www.investorvote.com.au

By mail           Share Registry - Computershare Investor Services Pty Limited, GPO Box 242, Melbourne Victoria 3001, Australia

By fax             1800 783 447 (within Australia)

[phone] (outside Australia)

By mobile       Scan the QR Code on your proxy form and follow the prompts

Custodian       For Intermediary Online subscribers only (custodians) please visit

Voting             www.intermediaryonline.com to submit your voting intentions

A shareholder that is an individual may attend and vote in person at the meeting. If you wish to attend the meeting, please bring the enclosed proxy form to the meeting to assist in registering your attendance and number of votes. Please arrive 20 minutes prior to the start of the meeting to facilitate this registration process.

Voting by proxy

United Kingdom (CREST Voting Instruction)

DI Holders in CREST may transmit voting instructions by utilising the CREST voting service in accordance with the procedures described in the CREST Manual.  CREST personal members or other CREST sponsored members, and those CREST members who have appointed a voting service provider, should refer to their CREST sponsor or voting service provider, who will be able to take appropriate action on their behalf.

In order for instructions made using the CREST voting service to be valid, the appropriate CREST message (CREST Voting Instruction) must be properly authenticated in accordance with Euroclear's specifications and must contain the information required for such instructions, as described in the CREST Manual (available via www.euroclear.com/CREST).

To be effective, the CREST Voting Instruction must be transmitted so as to be received by the Company's agent (3RA50) no later than 4:00pm (GMT) on 10^th October 2018.  For this purpose, the time of receipt will be taken to be the time (as determined by the timestamp applied to the CREST Voting Instruction by the CREST applications host) from which the Company's agent is able to retrieve the CREST Voting Instruction by enquiry to CREST in the manner prescribed by CREST.  DI Holders in CREST and, where applicable, their CREST sponsors or voting service providers should note that Euroclear does not make available special procedures in CREST for any particular messages.  Normal system timings and limitations will therefore apply in relation to the transmission of CREST Voting Instructions.  It is the responsibility of the DI Holder concerned to take (or, if the DI Holder is a CREST personal member or sponsored member or has appointed a voting service provider, to procure that the CREST sponsor or voting service provider takes) such action as shall be necessary to ensure that a CREST Voting Instruction is transmitted by means of the CREST voting service by any particular time.

In this connection, DI Holders and, where applicable, their CREST sponsors or voting service providers are referred, in particular, to those sections of the CREST Manual concerning practical limitations of the CREST system and timings.

Form of Instruction

DI Holders are invited to attend the Meeting but are not entitled to vote at the Meeting.  In order to have votes cast at the Meeting on their behalf, DI Holders must complete, sign and return the Forms of Instruction sent to them together with this Notice to the Company's agent, Computershare UK, by no later than 4:00pm (GMT) on 10^th October 2018.

business of the meeting

AGENDA

1.           Resolution 1 - APPROVAL OF PERFORMAncE RIGHTS PLAN

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 7.2 (Exception 9(b)) and for all other purposes, approval is given to adopt a Performance Rights Plan (PRP) and to issue securities under that Plan, on the terms and conditions summarised in the Explanatory Statement."

Voting Exclusion Statement:  The Company will disregard any votes cast in favour of this Resolution by any Director, other than any Directors who are ineligible to participate in any performance rights plan in relation to the Company, and any associates of those Directors.  However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Voting Prohibition Statement:
A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

(a)          the proxy is either:

(i)            a member of the Key Management Personnel; or

(ii)           a Closely Related Party of such a member; and

(b)          the appointment does not specify the way the proxy is to vote on this Resolution.

However, the above prohibition does not apply if:

(c)           the proxy is the Chair; and

(d)          the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

2.           Resolution 2 - ISSUE OF PERFORMANCE RIGHTS TO MANAGING DIRECTOR UNDER PLAN

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

"That, subject to and conditional on the passing of Resolution 1, for the purpose of  ASX Listing Rule 10.14 and for all other purposes, approval is given for the Company to grant up to 32,000,000 Performance Rights under the Company's PRP to David Wall (or his nominee) on the terms and conditions set out in the Explanatory Statement."

Voting Exclusion Statement:  The Company will disregard any votes cast in favour of this Resolution by or on behalf of any Director who is eligible to participate in the performance rights plan in respect of which approval is sought, or any associates of those Directors (Resolution 2 Excluded Party).  However, the Company need not disregard a vote if it is cast by a person as a proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form, or, provided the Chair is not a Resolution 2 Excluded Party, it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

Voting Prohibition Statement:

A person appointed as a proxy must not vote, on the basis of that appointment, on this Resolution if:

(a)           the proxy is either:

(i)            a member of the Key Management Personnel; or

(ii)           a Closely Related Party of such a member; and

(b)          the appointment does not specify the way the proxy is to vote on this Resolution.

Provided the Chair is not a Resolution 2 Excluded Party, the above prohibition does not apply if:

(a)           the proxy is the Chair; and

(b)          the appointment expressly authorises the Chair to exercise the proxy even though this Resolution is connected directly or indirectly with remuneration of a member of the Key Management Personnel.

Dated: 10 September 2018

By order of the Board

Michael Evans

Non-executive Chairman

 

EXPLANATORY STATEMENT

This Explanatory Statement has been prepared to provide information which the Directors believe to be material to Shareholders in deciding whether or not to pass the Resolutions.

3.           Resolution 1 - Approval of performaNce rights plan

3.1         General

Resolution 1 seeks Shareholder approval to establish and maintain a performance rights plan (PRP) to provide ongoing incentives to Directors, executives and employees of the Company. 

The Board has adopted a PRP to allow the Directors and employees to be granted performance rights (Performance Rights) to acquire Shares in the Company.

The reason for the adoption of a new PRP is to create a stronger link between employee / executive performance and reward achievement of business objectives and shareholder value creation.

A Performance Right does not have an exercise price and therefore allows a recipient, subject to satisfaction of the relevant vesting conditions and performance hurdles (as applicable), to benefit by their Performance Rights vesting into ordinary shares in the Company. The adoption of such an incentive mechanism which allows the grant of Performance Rights is a current trend among the Company's ASX listed industry peer group.

The objective of the PRP is to provide the Company with a remuneration mechanism, through the issue of securities in the capital of the Company, to motivate and reward the performance of the Directors and employees in achieving specified performance milestones within a specified performance period.  The Board will ensure that the performance milestones attached to the securities issued pursuant to the PRP are aligned with the successful growth of the Company's business activities.

The Directors and employees of the Company have been, and will continue to be, instrumental in the growth of the Company.  The Directors consider that the PRP is an appropriate method to:

(a)          reward executives and employees for their past performance;

(b)          provide long term incentives for participation in the Company's future growth;

(c)           motivate executives and generate loyalty from senior employees; and

(d)          assist to retain the services of valuable executives and employees.

The PRP will be used as part of the remuneration planning for executive directors and employees. The Corporate Governance Council Guidelines recommend that executive remuneration packages involve a balance between fixed and incentive pay reflecting short and long-term performance objectives appropriate to the company' circumstances and goals.

3.2         ASX Listing Rule 7.1

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions, issue or agree to issue more equity securities during any 12 month period than that amount which represents 15% of the number of fully paid ordinary securities on issue at the commencement of that 12 month period.

One of the exceptions to ASX Listing Rule 7.1 is Listing Rule 7.2 (Exception 9(b)), which provides that ASX Listing Rule 7.1 does not apply to an issue under an employee incentive scheme if, within the 3 years before the date of issue, shareholders have approved the issue as an exception to ASX Listing Rule 7.1.

The effect of Resolution 1 will be to allow the Directors to grant Performance Rights to employees and executives of the Company pursuant to the PRP during the period of 3 years after the Meeting (or a longer period, if allowed by ASX), and to issue Shares to those executives and employees if they achieve the performance and vesting conditions of the Performance Rights, without using the Company's 15% annual placement capacity.   

In the case of a Director, no Performance Rights may be issued to the Director without separate Shareholder approval pursuant to ASX Listing Rule 10.14. For this reason, the Company is also seeking approval under Resolutions 2 for the issue of Performance Rights to David Wall (or his nominee) pursuant to the PRP.

3.3         Information required by the ASX Listing Rules - Terms of the PRP

The terms of the PRP are provided in Schedule 2 to this Explanatory Memorandum. 

In addition, a copy of the PRP is available for review by Shareholders at the registered office of the Company until the date of the Meeting. A copy of the PRP can also be sent to Shareholders upon request to the Company Secretary ([phone]). Shareholders are invited to contact the Company if they have any queries or concerns.

No Performance Rights have been issued under the PRP as at the date of the Explanatory Memorandum.  However, subject to the passing of Resolution 1, the Company intends to issue a total of up to 32,000,000 Performance Rights to Managing Director David Wall (or his nominee) pursuant to Resolution 2 of this Notice.

3.4         Directors' recommendation

The Directors recommend that Shareholders vote in favour of Resolution 1. 

4.           Resolution 2 - issue of performaNCe rights to managing director

4.1         Background to Resolutions 2

The Company, subject to the passing of Resolution 1, seeks Shareholder approval for the issue of up to a total of 32,000,000 Performance Rights under the PRP to Managing Director Mr David Wall (or his nominee) who is a related party of the Company by virtue of being a Director of the Company (Related Party).

The full terms of the PRP are set out in Schedule 2. The purpose of the issue of Performance Rights to Mr Wall (or his nominee) is to further motivate and reward his performance as Managing Director in achieving specified performance milestones within a specified performance period.

4.2         Requirement for Shareholder Approval

The grant of Performance Rights to Mr Wall (or his nominee) under Resolution 2 is an issue of securities to a Related Party under an employee incentive scheme and consequently Shareholder approval is required under ASX Listing Rule 10.14.

4.3         Corporations Act requirements

Chapter 2E of the Corporations Act regulates the provision of financial benefits to related parties by a public company. As Managing Director of the Company, Mr Wall is a related party for the purposes of Chapter 2E and the grant of Performance Rights under the Plan will constitute a 'financial benefit'.

The Board (other than Mr Wall, who has an interest in Resolution 2) considers that the grant of Performance Rights to Mr Wall constitutes an appropriate and reasonable component of his remuneration, and that the financial benefit represented by the grant of the Performance Rights falls within the 'reasonable remuneration' exception in section 211 of the Corporations Act. In forming this view, the Board has considered the position and responsibilities of Mr Wall, the Company's reliance on a limited number of executive personnel, the need to effectively incentivise Mr Wall while aligning the incentive with shareholder value, the desirability of preserving cash resources, the remuneration offered to executives in comparable positions at comparable companies, and the terms of the Performance Rights.

4.4         Summary of the material terms of the Performance Rights

It is proposed that a total of up to 32,000,000 Performance Rights be issued to Mr Wall for nil cash consideration.

Each Performance Right will vest as one Share subject to the satisfaction of certain performance criteria (Performance Milestones). In the event that the Performance Milestones are not met, the Performance Rights will not vest and as a result, no new Shares will be issued. There is nil consideration payable upon the vesting of a Performance Right.

The Performance Rights will be issued in five tranches with each tranche subject to its own vesting conditions. Each tranche will be tested and assessed independently of each other. Full details of the vesting conditions are contained in Schedule 1.

4.5         Information required by ASX Listing Rule 10.15A

The following information is provided to satisfy the requirements of the Corporations Act and the ASX Listing Rules:

(a)          the Performance Rights will be issued to Mr David Wall (or his nominee) who is a related party by virtue of being a Director;

(b)          the number of Performance Rights to be granted to Mr David Wall will be determined in accordance with the formula set out in Schedule 1 but will not in any event exceed 32,000,000 Performance Rights, being the maximum number of Performance Rights to be granted.

Notes: Each Performance Rights will vest and convert into one (1) fully paid ordinary share in the Company in accordance with the vesting conditions set out in Schedule 1.

(c)           the Performance Rights will be issued for nil consideration and no consideration will be payable upon the vesting of the Performance Rights on achievement of the performance criteria. Accordingly, no loans will be made in relation to, and no funds will be raised from, the issue or vesting of the Performance Rights;

(d)          the issue of Performance Rights pursuant to the PRP has not previously been approved. Accordingly, no Performance Right have previously been issued under the PRP to a Director, an associate of the Director, or a person whose relationship with the Company, Director or associate of the Director is, in ASX's opinion, such that approval should be obtained;

(a)          as at the date of this Notice, Mr David Wall is the only person covered by ASX Listing Rule 10.14 that the Board has declared to be eligible to be issued Performance Rights under the PRP (i.e. a Director, an associate of the Director, or a person whose relationship with the Company, Director or associate of the Director is, in ASX's opinion, such that approval should be obtained), however, in accordance with the definition of "Eligible Employee" in the PRP, it is possible that in the future, the Board may determine that any of the other Directors may become eligible to participate in the Plan;

(e)          details of any Performance Rights issued under the PRP will be published in each annual report of the Company relating to a period in which such Performance Rights have been issued, and that approval for the issue of such securities was obtained under ASX Listing Rule 10.14;

(f)           any additional persons referred to in ASX Listing Rule 10.14 who become entitled to participate in the PRP after Resolution 2 is approved and who were not named in the Notice will not participate in the PRP until approval is obtained under ASX Listing Rule 10.14;

(g)          the Performance Rights will be issued to Mr David Wall (or his nominee) no later than 3 years after the date of the General Meeting.

(h)          the Board believes that the grant of Performance Rights pursuant to the PRP provides cost effective consideration to Mr David Wall for his ongoing commitment and contribution to the Company in his role as Managing Director of the Company.  Given this purpose, the Board does not consider that there are any opportunity costs to the Company or benefits foregone by the Company in granting the Performance Rights upon the terms proposed. If the Performance Rights are not issued, the Company could remunerate Mr David Wall for an additional amount.  However, the Board considers it reasonable for the remuneration of Mr David Wall to have a cash component and an equity component to further align Mr David Wall's interests with Shareholders and maintain a strong cash position for the Company.

4.6         Directors' Recommendation

(a)          The Directors (other than Mr David Wall) recommend that Shareholders vote in favour of Resolution 2 for the following reasons:

(i)            the purpose set out in Section 4.5(h) above;

(ii)           the issue of the Performance Rights to the Related Party is an appropriate form of incentive to maximise returns to Shareholders; and

(iii)          the terms of the proposed issue of Performance Rights to the Related Party is reasonable to the Company.

GLOSSARY

$ means Australian dollars.

General Meeting or Meeting means the meeting convened by the Notice.

ASIC means the Australian Securities & Investments Commission.

ASX means ASX Limited (ACN 008 624 691) or the financial market operated by ASX Limited, as the context requires.

ASX Listing Rules means the Listing Rules of ASX.

Board means the current board of directors of the Company.

Business Day means Monday to Friday inclusive, except New Year's Day, Good Friday, Easter Monday, Christmas Day, Boxing Day, and any other day that ASX declares is not a business day.

Closely Related Party of a member of the Key Management Personnel means:

(a)           a spouse or child of the member;

(b)          a child of the member's spouse;

(c)           a dependent of the member or the member's spouse;

(d)          anyone else who is one of the member's family and may be expected to influence the member, or be influenced by the member, in the member's dealing with the entity;

(e)           a company the member controls; or

(f)           a person prescribed by the Corporations Regulations 2001 (Cth) for the purposes of the definition of 'closely related party' in the Corporations Act.

Chair means the chair of the Meeting.

Company or 88E means 88 Energy Limited (ACN 072 964 179).

Constitution means the Company's constitution.

Corporations Act means the Corporations Act 2001 (Cth).

DI means a depository interest representing a Share listed (or to be listed) on the AIM Market of the London Stock Exchange.

DI Holder means a holder of a DI.

Directors means the current directors of the Company.

Explanatory Statement means the explanatory statement accompanying the Notice.

GMT means Greenwich Mean Time, being the time in London, United Kingdom.

Key Management Personnel has the same meaning as in the accounting standards issued by the Australian Accounting Standards Board and means those persons having authority and responsibility for planning, directing and controlling the activities of the Company, or if the Company is part of a consolidated entity, of the consolidated entity, directly or indirectly, including any director (whether executive or otherwise) of the Company, or if the Company is part of a consolidated entity, of an entity within the consolidated group.

Managing Director means the managing director of the Company who may, in accordance with the ASX Listing Rules, continue to hold office indefinitely without being re-elected to the office.

Notice or Notice of Meeting means this notice of meeting including the Explanatory Statement, the Proxy Form and the Form of Instruction.

Option means any right, warrant or option to subscribe for or acquire a Share.

Optionholder means a holder of an Option.

Ordinary Securities has the meaning set out in the ASX Listing Rules.

Performance Rights Plan means the Performance Rights Plan the subject of Resolution 1 and attached in Schedule 2

Proxy Form means the proxy form accompanying the Notice.

Resolutions means the resolutions set out in the Notice or any one of them as the context requires.

Section means a section of the Explanatory Statement.

Securities means a Share or an Option or both as the context requires.

Securityholder means a holder of a Security.

Share means a fully paid ordinary share in the capital of the Company.

Shareholder means a registered holder of a Share.

WST means Western Standard Time as observed in Perth, Western Australia.

 

END

 

 

NOGSFLFDWFASEFU