Announcement PDF RECCE LIMITED ACN 124 849 065 NOTICE OF ANNUAL GENERAL MEETING TIME: 10.00 am AEDST DATE: Tuesday 21 November 2017 PLACE: The offices of K&L Gates Level 31, 1 O’Connell Street SYDNEY NSW 2000 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 the Notice of Meeting please do not hesitate to contact the Company Secretary on +61 8 9253 9800 ________________________________________________________________________________________________________________________ CONTENTS IMPORTANT INFORMATION ............................................................................................................................. 1 BUSINESS OF THE MEETING.............................................................................................................................. 3 1. EXECUTIVE CHAIRMAN’S ADDRESS ...................................................................................................... 3 2. FINANCIAL STATEMENTS AND REPORTS .............................................................................................. 3 3. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT ................................................................ 3 4. RESOLUTION 2 – CONTINGENT SPILL MEETING RESOLUTION............................................................. 4 5. RESOLUTION 3 – RE-ELECTION OF DIRECTOR – MICHELE DILIZIA ....................................................... 4 6. RESOLUTION 4 – RATIFICATION OF ISSUE OF SHARES TO EMPLOYEES .............................................. 5 7. RESOLUTION 5 – RATIFICATION OF ISSUE OF SHARES TO THE AUSTRALIAN SPECIAL OPPORTUNITY FUND, LP ................................................................................................................................................ 5 8. RESOLUTION 6 – APPROVAL OF 10% PLACEMENT CAPACITY ............................................................. 5 9. RESOLUTION 7 – CHANGE OF COMPANY NAME.................................................................................. 6 EXPLANATORY STATEMENT ............................................................................................................................. 7 1. FINANCIAL STATEMENTS AND REPORTS ................................................................................................... 7 2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT ...................................................................... 7 2.1 General .............................................................................................................................................. 7 2.2 Voting consequences ......................................................................................................................... 7 2.3 Proxy voting restrictions .................................................................................................................... 8 3. RESOLUTION 2 – CONTINGENT SPILL MEETING RESOLUTION .................................................................. 8 3.1 General .............................................................................................................................................. 8 3.2 Voting consequences ......................................................................................................................... 8 3.3 Proxy voting restrictions .................................................................................................................... 9 3.4 Recommendation .............................................................................................................................. 9 4. RESOLUTION 3 – RE-ELECTION OF DIRECTOR – MICHELE DILIZIA ............................................................. 9 5. RESOLUTION 4 – RATIFICATION OF ISSUE OF SHARES TO EMPLOYEES .................................................. 10 5.1 General ............................................................................................................................................ 10 5.2 Technical information required by ASX Listing Rule 7.5 .................................................................. 11 6. RESOLUTION 5 – RATIFICATION OF THE ISSUE OF SHARES TO THE AUSTRALIAN SPECIAL OPPORTUNITY FUND, LP .................................................................................................................................................. 11 6.1 General ............................................................................................................................................ 11 6.2 Technical information required by ASX Listing Rule 7.5 .................................................................. 12 7. RESOLUTION 6 – APPROVAL OF 10% PLACEMENT CAPACITY ................................................................. 12 7.1 General ............................................................................................................................................ 12 7.2 ASX Listing Rule 7.1A ....................................................................................................................... 13 7.3 Technical information required by ASX Listing Rule 7.1A ............................................................... 13 7.4 Voting Exclusion............................................................................................................................... 17 8. RESOLUTION 7 – CHANGE OF COMPANY NAME ..................................................................................... 18 8.1 General ............................................................................................................................................ 18 8.2 Corporations Act, section 157(1) ..................................................................................................... 18 9. FURTHER INFORMATION ......................................................................................................................... 18 GLOSSARY........................................................................................................................................................ 19 Appendix – Summary of Funding Agreement ................................................................................................ 21 ________________________________________________________________________________________________________________________ IMPORTANT INFORMATION Time and place of Meeting Notice is given that the Meeting will be held at 10.00am AEDST on Tuesday 21 November 2017 at: The offices of K&L Gates Level 31, 1 O’Connell Street SYDNEY NSW 2000 Your vote is important The business of the Meeting affects your shareholding and your vote is important. Voting eligibility The persons eligible to vote at the Meeting are those who are registered Shareholders at 7.00pm AEDST on Friday, 17 November 2017. Voting in person To vote in person, attend the Meeting at the time, date and place set out above. Voting by proxy To vote by proxy, please complete and sign the enclosed Proxy Form and return by no later than 10.00am AEDST on Sunday, 19 November 2017. Proxies should be returned as follows By Mail to: Online: At www.investorvote.com.au By Mobile: Scan the QR Code on your Proxy form and follow the prompts By Facsimile Transmission to: By Hand to: Computershare Investor Services Pty Limited GPO Box 242 Melbourne Victoria 3001 Australia Custodian Voting: 1800 783 447 (within Australia) or +61 3 9473 2555 (outside Australia) Computershare Investor Services Pty Limited Level 11 172 St George’s Terrace Perth, Western Australia 6000 For Intermediary Online Subscribers only (custodians) please visit www.intermediaryonline.com to submit your voting intentions _____________________________________________________________________________________________________________________ 1 Recce Ltd Notice of Annual General Meeting – November 2017 In accordance with section 249L of the Corporations Act, Shareholders are advised that:  Each Shareholder has a right to appoint a proxy;  The proxy need not be a Shareholder of the Company; and  A Shareholder who is entitled to cast 2 or more votes may appoint 2 proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If the Shareholder appoints 2 proxies and the appointment does not specify the proportion or number of the Shareholder’s votes, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes. Shareholders and their proxies should be aware that changes to the Corporations Act made in 2011 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 Chair, who must vote the proxies as directed. Further details on these changes are set out below. Proxy vote if appointment specifies way to vote Section 250BB(1) of the Corporations Act provides that an appointment of a proxy may specify the way the proxy is to vote on a particular resolution and, if it does:  The proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote that way (ie as directed); and  If the proxy has 2 or more appointments that specify different ways to vote on the resolution, the proxy must not vote on a show of hands; and  If the proxy is the chair of the meeting at which the resolution is voted on, the proxy must vote on a poll, and must vote that way (i.e. as directed); and  If the proxy is not the chair, the proxy need not vote on the poll, but if the proxy does so, the proxy must vote that way (i.e. as directed). Transfer of non-chair proxy to chair in certain circumstances Section 250BC of the Corporations Act provides that, if:  An appointment of a proxy specifies the way the proxy is to vote on a particular resolution at a meeting of the Company’s members; and  The appointed proxy is not the chair of the meeting; and  At the meeting, a poll is duly demanded on the resolution; and  Either of the following applies: o o the proxy is not recorded as attending the meeting; or the proxy does not vote on the resolution, the chair of the meeting is taken, before voting on the resolution closes, to have been appointed as the proxy for the purposes of voting on the resolution at the meeting. _____________________________________________________________________________________________________________________ 2 Recce Ltd Notice of Annual General Meeting – November 2017 BUSINESS OF THE MEETING AGENDA 1. EXECUTIVE CHAIRMAN’S ADDRESS The Executive Chairman will provide Shareholders with an overview of the Company’s performance for the period ending 30 June 2017 and some insights into what lies ahead for the Company. 2. FINANCIAL STATEMENTS AND REPORTS To receive and consider the Annual Financial Report of the Company for the financial period ended 30 June 2017 together with the declaration of the Directors, the Directors’ Report and the Auditor’s Report. 3. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT To consider and, if thought fit, to pass, with or without amendment, the following resolution as a non-binding resolution: “That, for the purposes of section 250R(2) of the Corporations Act and for all other purposes, approval is given for the adoption of the Remuneration Report as contained in the Company’s annual financial report for the financial period ended 30 June 2017.” Note: the vote on this Resolution is advisory only and does not bind the Directors or the Company. Voting exclusion statement: A vote on this Resolution must not be cast (in any capacity) by or on behalf of either of the following persons: (a) A member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or (b) A Closely Related Party of such a member. However, a person (the voter) described above may cast a vote on this Resolution as a proxy if the vote is not cast on behalf of a person described above and either: (a) The voter is appointed as a proxy by writing that specifies the way the proxy is to vote on this Resolution; or (b) The voter is the Chair and the appointment of the Chair as proxy: (i) (ii) does not specify the way the proxy is to vote on this Resolution; and expressly authorises the Chair to exercise the proxy as the Chair sees fit even though this Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel. _____________________________________________________________________________________________________________________ 3 Recce Ltd Notice of Annual General Meeting – November 2017 4. RESOLUTION 2 – CONTINGENT SPILL MEETING RESOLUTION This Resolution 2 will only be considered at the Meeting if at least 25% of the votes are cast against Resolution 1. The Explanatory Memorandum further explains the circumstances in which this Resolution 2 will be put to the Meeting. If the condition described above is satisfied, to consider and, if thought fit, to pass, the following resolution as an ordinary resolution: "That, as required by the Corporations Act: (a) an extraordinary general meeting of the Company (Spill Meeting) be held within 90 days of the passing of this resolution; (b) all of the Directors (excluding Dr Graham Melrose, Executive Chairman) who were in office when the resolution to approve the Directors' Report (as included in the Company's Annual Financial Report for the financial year ended 30 June 2017) was approved and who remain in office at the time of the Spill Meeting, cease to hold office immediately before the end of the Spill Meeting; and (c) resolutions to appoint persons to office that will be vacated immediately before the end of the Spill Meeting be put to the vote at the Spill Meeting." Voting exclusion statement: A vote on this Resolution must not be cast (in any capacity) by or on behalf of either of the following persons: (a) A member of the Key Management Personnel, details of whose remuneration are included in the Remuneration Report; or (b) A Closely Related Party of such a member. However, a person (the voter) described above may cast a vote on this Resolution as a proxy if the vote is not cast on behalf of a person described above and either: (a) The voter is appointed as a proxy by writing that specifies the way the proxy is to vote on this Resolution; or (b) The voter is the Chair and the appointment of the Chair as proxy: (iii) (iv) 5. does not specify the way the proxy is to vote on this Resolution; and expressly authorises the Chair to exercise the proxy as the Chair sees fit even though this Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel. RESOLUTION 3 – RE-ELECTION OF DIRECTOR – MICHELE DILIZIA To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution: “That, for the purpose of clause 14.2 of the Constitution, ASX Listing Rule 14.4 and for all other purposes, Michele Dilizia, a Director, who retires by rotation, and being eligible, is re-elected as a Director.” _____________________________________________________________________________________________________________________ 4 Recce Ltd Notice of Annual General Meeting – November 2017 6. RESOLUTION 4 – RATIFICATION OF ISSUE OF SHARES TO EMPLOYEES To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution: “That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify and approve the issue of 103,913 Shares to two employees on the terms and conditions set out in the Explanatory Statement.” Voting Exclusion: The Company will disregard any votes cast on this Resolution by a person who participated in the issue and any associates of those persons. 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. 7. RESOLUTION 5 – RATIFICATION OF ISSUE OF SHARES TO THE AUSTRALIAN SPECIAL OPPORTUNITY FUND, LP To consider and, if thought fit, to pass, with or without amendment, the following resolution as an ordinary resolution: “That, for the purposes of ASX Listing Rule 7.4 and for all other purposes, Shareholders ratify and approve the issue of 2,753,254 Shares to The Australian Special Opportunity Fund, LP on the terms and conditions set out in the Explanatory Statement.” Voting Exclusion: The Company will disregard any votes cast on this Resolution by a person who participated in the issue and any associates of those persons. 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. 8. RESOLUTION 6 – APPROVAL OF 10% PLACEMENT CAPACITY To consider, and if thought fit, to pass the following resolution as a special resolution: “That, for the purposes of Listing Rule 7.1A and for all other purposes, approval is given for the issue of Equity Securities totalling up to 10% of the issued capital of the Company at the time of issue, calculated in accordance with the formula prescribed in Listing Rule 7.1A.2 and on the terms and conditions set out in the Explanatory Statement.” Voting Exclusion: The Company will disregard any votes cast on this Resolution by any person who may participate in the issue of Equity Securities under this Resolution and a person who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if the Resolution is passed and any associates of those persons. However, the Company will 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. _____________________________________________________________________________________________________________________ 5 Recce Ltd Notice of Annual General Meeting – November 2017 9. RESOLUTION 7 – CHANGE OF COMPANY NAME To consider, and if thought fit, to pass the following resolution as a special resolution: "That, for the purposes of section 157(1) of the Corporations Act and for all other purposes, the name of the Company be changed to 'Recce Pharmaceuticals Ltd'." Dated 20 October 2017 By order of the Board Peter Williams CFO & Company Secretary _____________________________________________________________________________________________________________________ 6 Recce Ltd Notice of Annual General Meeting – November 2017 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. 1. FINANCIAL STATEMENTS AND REPORTS Section 317 of the Corporations Act requires the Company's Annual Financial Report for the financial period ended 30 June 2017, the Directors' Report and the Auditor's Report to be laid before the Meeting. There is no requirement either in the Corporations Act or in the Constitution for Shareholders to approve the Annual Financial Report, the Directors' Report or the Auditor's report. Shareholders will be given the opportunity at the Meeting to ask questions and comment on these reports and on the Company's business and operations. The Company will not provide a hard copy of the Company’s Annual Financial Report to Shareholders unless specifically requested to do so. The Company’s Annual Financial Report is available on its website at www.recce.com.au. 2. RESOLUTION 1 – ADOPTION OF REMUNERATION REPORT 2.1 General The Corporations Act requires that at a listed company’s annual general meeting, a resolution that the remuneration report be adopted must be put to the shareholders and voted on. The vote on the Remuneration Report is advisory only and does not bind the directors or the Company. However the Company will take the outcome of the vote into account in formulating its remuneration policy. The Remuneration Report sets out the Company’s remuneration arrangements for the Directors and senior management of the Company. The Remuneration Report is part of the Directors’ Report contained in the Financial Report of the Company for the financial year ending 30 June 2017. Shareholders will be given a reasonable opportunity to ask questions about, and make or comment on, the Remuneration Report at the Meeting. 2.2 Voting consequences A company is required to put to its shareholders a resolution proposing the calling of another meeting of shareholders to consider the appointment of directors of the company (Spill Resolution) if, at consecutive annual general meetings, at least 25% of the votes cast on a remuneration report resolution are voted against adoption of the remuneration report and at the first of those annual general meetings a Spill Resolution was not put to vote. If required, the Spill Resolution must be put to vote at the second of those annual general meetings. The Company's 2016 Remuneration Report received more than 25% of the available votes cast against it at the 2016 Annual General Meeting. As such, under section 250V of the Corporations Act, if more than 25% of eligible votes are cast against Resolution 1, the Shareholders must then vote on the Spill Resolution (i.e. Resolution 2) at this Meeting. _____________________________________________________________________________________________________________________ 7 Recce Ltd Notice of Annual General Meeting – November 2017 2.3 Proxy voting restrictions If you choose to appoint a proxy, you are encouraged to direct your proxy how to vote on Resolution 1 (Remuneration Report) by marking either “For”, “Against” or “Abstain” on the Proxy Form for Resolution 1. If you appoint a member of the Key Management Personnel whose remuneration details are included in the Remuneration Report (who is not the Chairman) or a Closely Related Party of that member as your proxy, and you do not direct that person on how to vote on Resolution 1, the proxy cannot exercise your vote and your vote will not be counted in relation to Resolution 1. The Chairman intends to vote all undirected proxies in favour of Resolution 1. If the Chairman of the Meeting is appointed as your proxy and you have not specified the way the Chairman is to vote on Resolution 1, by signing and returning the proxy form you are giving express authorisation for the Chairman to vote the proxy in accordance with the Chairman’s intention. Key Management Personnel of the Company are the Directors and those other persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. The Remuneration Report identifies the Company’s Key Management Personnel for the financial year to 30 June 2017. Their Closely Related Parties are defined in the Corporations Act, and include certain family members, dependents and companies they control. 3. RESOLUTION 2 – CONTINGENT SPILL MEETING RESOLUTION 3.1 General In 2011 the Corporations Act was amended to include a "two strikes" rule. Where a company's remuneration report receives more than 25% of eligible votes cast against the advisory resolutions at two consecutive meetings, a further resolution must be put to the Meeting to spill the Board (i.e. Resolution 2) at a further general meeting to be held within 90 days (Spill Meeting). 3.2 Voting consequences The Company received its "first strike" last year when the Company's 2016 Remuneration Report received more than 25% of the available votes cast against it at the 2016 Annual General Meeting. As such, under section 250V of the Corporations Act, if more than 25% of eligible votes are cast against Resolution 1, the Shareholders must then vote on Resolution 2 at this Meeting. Shareholders should be aware that this may result in the spill of the Board. At the Spill Meeting, if required, all Directors (other than Dr Graham Melrose, Executive Chairman) who are in office at the end of this Annual General Meeting will automatically cease to hold office immediately before the end of the Spill Meeting, and so must stand for re-election at the Spill Meeting. This would include automatic cessation of the following directors (unless re-elected at the Spill Meeting): (a) James Graham and Michele Dilizia If less than 25% of the available votes on Resolution 1 are cast against the adoption of the Remuneration Report at this Annual General Meeting, then there will be no requirement for the Meeting to vote on a Spill Resolution and so this contingent Resolution 2 will not be put to the Meeting. _____________________________________________________________________________________________________________________ 8 Recce Ltd Notice of Annual General Meeting – November 2017 3.3 Proxy voting restrictions If you choose to appoint a proxy, you are encouraged to direct your proxy how to vote on Resolution 2 (Contingent Spill Meeting Resolution) by marking either “For”, “Against” or “Abstain” on the Proxy Form for Resolution 2. If you appoint a member of the Key Management Personnel whose remuneration details are included in the Remuneration Report (who is not the Chairman) or a Closely Related Party of that member as your proxy, and you do not direct that person on how to vote on Resolution 2, the proxy cannot exercise your vote and your vote will not be counted in relation to Resolution 2. The Chairman intends to vote all undirected proxies against Resolution 2. If the Chairman of the Meeting is appointed as your proxy and you have not specified the way the Chairman is to vote on Resolution 2, by signing and returning the proxy form you are giving express authorisation for the Chairman to vote the proxy in accordance with the Chairman’s intention. Key Management Personnel of the Company are the Directors and those other persons having authority and responsibility for planning, directing and controlling the activities of the Company, directly or indirectly. The Remuneration Report identifies the Company’s Key Management Personnel for the financial year to 30 June 2017. Their Closely Related Parties are defined in the Corporations Act, and include certain family members, dependents and companies they control. 3.4 Recommendation If Resolution 2 is put to the Meeting, Directors unanimously recommend that Shareholders vote against Resolution 2 on the basis that it would be extremely disruptive to the Company and in the Board's view, it would be inappropriate to remove all the Directors (other than Dr Graham Melrose, Executive Chairman) in the circumstances. 4. RESOLUTION 3 – RE-ELECTION OF DIRECTOR – MICHELE DILIZIA ASX Listing Rule 14.4 provides that a director of an entity must not hold office (without re-election) past the third annual general meeting following the director’s appointment or 3 years, whichever is the longer. Clause 14.2 of the Constitution requires that at the Company’s annual general meeting in every year, one-third of the directors for the time being, or, if their number is not a multiple of 3, then the number nearest one-third (rounded upwards in case of doubt), shall retire from office, provided always that no director (except a Managing Director) shall hold office for a period in excess of 3 years, or until the third annual general meeting following his or her appointment, whichever is the longer, without submitting himself or herself for re-election. The directors to retire at an annual general meeting are those who have been longest in office since their last election, but, as between persons who became directors on the same day, those to retire shall (unless they otherwise agree among themselves) be determined by drawing lots. A director who retires by rotation under clause 14.2 of the Constitution is eligible for re-election. In determining the number of directors to retire, no account is to be taken of a director who has been appointed as an additional director and only holds office until the next annual general meeting and/or the Managing Director. _____________________________________________________________________________________________________________________ 9 Recce Ltd Notice of Annual General Meeting – November 2017 The Company currently has 2 Directors (not including the Managing Director, Dr Graham Melrose) and accordingly one must retire. Ms Michele Dilizia, the Director longest in office since her last election, retires by rotation and being eligible, seeks re-election from Shareholders. In accordance with Recommendation 1.2 of the ASX Corporate Governance Council’s Corporate Governance Principles and Recommendations (3rd edition), the Company provides the following information in respect to Ms Dilizia: (a) Position: Ms Dilizia holds the position of Executive Director of the Company. (b) Independence: Having considered the independence of Ms Dilizia in accordance with the guidelines of the ASX Corporate Governance Council, the Company considers Ms Dilizia not to be an independent Director of the Company. (c) Length of Service: Ms Dilizia was appointed a Director of the C