Map of Burswood
ABN 28 008 984 049 Notice of meeting Time: 2.00 pm Date: Thursday, 15 November 2007 Place: Grand Ballroom, Burswood Convention Centre, Great Eastern Highway, Burswood, Western Australia Notice is hereby given that the 26th annual general meeting of Wesfarmers Limited will be held in the Grand Ballroom, Burswood Convention Centre, Great Eastern Highway, Burswood, Western Australia on Thursday, 15 November 2007 at 2.00 pm. BUSINESS OF THE MEETING 1. Financial statements and reports To receive and consider the financial statements and the reports of the directors and of the auditors for the year ended 30 June 2007. 2. Ordinary resolutions (a) Election of Directors To elect four directors, each of: (i) Mr Colin Carter, (ii) Mr James Graham, (iii) Mr David White, who retire by rotation in accordance with the company s Constitution and, being eligible, offer themselves for re-election; and (iv) Mr Anthony (Tony) Howarth, who, having been appointed as a director of the company since the last annual general meeting, retires in accordance with the company s Constitution and the ASX Listing Rules and, being eligible, offers himself for election. (b) Adoption of Remuneration Report To consider and, if thought fit, to pass the following resolution as an ordinary resolution: That the Remuneration Report for the year ended 30 June 2007 be adopted. Note: The vote on this resolution is advisory only and does not bind the directors or the company. (c) Increase in Remuneration Pool for Non-executive Directors To consider and, if thought fit, to pass the following resolution as an ordinary resolution: That, with effect from 1 January 2008, the total amount that may be provided to the non-executive directors by way of remuneration for their services as directors of the company be increased by the amount of $750,000 to $3,000,000 (inclusive of statutory entitlements) per financial year. Voting exclusion The company will disregard any votes cast on resolution 2(c) by: any director of the company; and any associate of a director of the company. The company need not disregard a vote if it is cast by: a person as proxy for a person who is entitled to vote in accordance with the directions on the proxy form; or the person chairing the meeting as a proxy for a person who is entitled to vote in accordance with a direction on the proxy form to vote as the proxy decides. 3. Special resolutions (a) Financial Assistance Approval To consider and, if thought fit, to pass the following resolution as a special resolution: That the shareholders approve Coles Group Limited (ABN 11 004 089 936) and its wholly-owned subsidiaries financially assisting the acquisition of the shares in Coles Group Limited by Wesfarmers Retail Holdings Pty Ltd (ACN 126 199 022), by acceding as guarantors to a Guarantee Deed Poll granted by the company and certain of its wholly-owned subsidiaries as guarantors. (b) Changes to the Constitution To consider and, if thought fit, to pass the following resolution as a special resolution: That, with effect from the close of the meeting, the Constitution be amended to allow for direct voting by making the amendments contained in the document to be tabled at the meeting and signed by the Chairman of the meeting for the purposes of identification. By order of the Board Linda KENYON COMPANY SECRETARY 8 October 2007 Wesfarmers 2007 Notice of meeting 1
IMPORTANT INFORMATION MEMBERS ENTITLED TO ATTEND AND VOTE AT THE MEETING In accordance with the company s Constitution and the Corporations Regulations 2001, the Board has determined that the members entitled to attend and vote at the meeting will be those persons who are recorded in the register of members at 6.00 am on Wednesday, 14 November 2007. PROXIES Appointing a Proxy Where a member is unable to attend the meeting, we encourage that member to complete and return the enclosed proxy form. Each member is entitled to appoint a proxy. A proxy need not be a member. A member who is entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes that each proxy is appointed to exercise. If the appointment does not specify the proportion or number of the member s voting rights, each proxy may exercise half the votes. Lodging a Proxy To be effective, duly completed proxy forms, together with any relevant power of attorney, must be received not less than 48 hours before the time for holding the meeting (that is, by 2.00 pm (Perth time) on Tuesday, 13 November 2007). Please direct proxy forms and any relevant power of attorney to the company s share registry (Computershare Investor Services Pty Limited): at Level 2, 45 St George s Terrace, Perth WA 6000 or GPO Box 242, Melbourne VIC 3001 by fax on (08) 9323 2033 (within Australia) or (+ 61 8) 9323 2033 (outside Australia) Members can also submit their proxy voting instructions online at www.computershare.com/au/proxy/wes. Please refer to the enclosed proxy form for more information about submitting a proxy vote online. BODY CORPORATE REPRESENTATIVES A body corporate member or proxy may elect to appoint a representative, rather than appoint a proxy, in accordance with section 250D of the Corporations Act 2001 (Cth). Where a body corporate appoints a representative, the company requires written proof of the representative s appointment to be lodged with, or presented to, the company before the meeting. EXPLANATORY NOTES Item 1 Financial statements and reports The Corporations Act 2001 (Cth) requires the company s financial statements and reports for the last financial year to be laid before the annual general meeting. The financial statements and reports are contained in the company s 2007 Annual Report, a copy of which accompanies this notice (unless you have elected not to receive a copy of the report). The 2007 Annual Report is also available from the company s website (www.wesfarmers.com.au). While no resolution is required in relation to this item, shareholders will be given the opportunity to ask questions and make comments on the financial statements and reports. The company s auditor, Ernst & Young, will be present at the meeting and shareholders will have an opportunity to ask the auditor questions in relation to the conduct of the audit, the auditor s report, the company s accounting policies, and the independence of the auditor. Item 2(a) Election of Directors Messrs Colin Carter, James Graham and David White retire by rotation and offer themselves for re-election. Mr Anthony (Tony) Howarth was appointed as a director since the last annual general meeting. Under the company s Constitution and the ASX Listing Rules, he holds office only until this meeting and therefore offers himself for election. The Board supports the re-election of Messrs Colin Carter, James Graham and David White, and the election of Mr Anthony (Tony) Howarth. The experience, qualifications and other information about the candidates appear below: Profiles Colin Carter OAM Non-executive Director, age 64 Joined the Board in 2002. Colin holds a Bachelor of Commerce degree from Melbourne University and a Master of Business Administration from Harvard Business School. He has had extensive experience advising on corporate strategy and corporate governance and his consultancy career has included major projects in Australia and overseas. The other listed companies of which he is or has been a director in the last three years are Origin Energy Limited (appointed February 2000 resigned April 2007), SEEK Limited (appointed March 2005) and Foster s Group Limited (appointed March 2007). He is also Chairman of Indigenous Enterprise Partnerships, a member of the Board of The Cape York Institute, a Commissioner of the Australian Football League, and an adviser to, and former Vice President of, The Boston Consulting Group. James Graham Non-executive Director, age 59 Joined the Board in 1998. James holds a Bachelor of Engineering in Chemical Engineering with Honours from the University of Sydney, a Master of Business Administration from the University of New South Wales and is a Fellow of the Australian Academy of Technological 2 Wesfarmers 2007 Notice of meeting
Sciences and Engineering. He has had an active involvement in the growth of Wesfarmers since 1976 in his roles as Managing Director of Gresham Partners Limited and previously as a director of Hill Samuel Australia Limited and Managing Director of Rothschild Australia Limited. In addition to his investment banking activities, James is Chairman of Rabobank Australia Limited, Rabo Australia Limited, Rabobank New Zealand Limited, the Advisory Council of The Institute for Neuromuscular Research and Gresham Technology Management Limited, which was the responsible entity of the Technology Investment Fund until August 2005. He is also a director of Wesfarmers Federation Insurance Limited, Lumley General Insurance Limited, Australian International Insurance Limited and Riviera Group Pty Ltd. James is also a member of the Fundraising Committee for the Australian Olympic Committee (NSW) for Beijing 2008 and a Trustee of the Gowrie Scholarship Trust Fund. In the period from 1989 to 1995 he was Chairman of the Darling Harbour Authority in New South Wales. David White Non-executive Director, age 59 Joined the Board in 1990. David holds a Bachelor of Business degree from Curtin University and is a fellow of CPA Australia. He is Chairman of the Wheatbelt Area Consultative Committee, a member and Treasurer of Parkerville Children and Youth Care (Inc) and a member of the Australian Institute of Company Directors. He was formerly the Treasurer of The Royal Agricultural Society of Western Australia (Inc). Anthony (Tony) Howarth AO Non-executive Director, age 55 Joined the Board in July 2007. Tony is a Senior Fellow of the Financial Services Institute of Australia and has over 30 years experience in the banking and finance industry. He has held several senior management positions during his career, including Managing Director of Challenge Bank Limited and CEO of Hartleys Limited. The other listed companies of which he is or has been a director in the last three years are, Chairman of Home Building Society Ltd (appointed June 2003), Mermaid Marine Australia Limited (appointed July 2003), Alinta Limited (appointed 2000 - resigned July 2006) and a director of AWB Limited (appointed March 2005). He is also Chairman of St John of God Health Care Inc. Tony is also involved in a number of community and business organisations including the Senate of the University of Western Australia, Chairman of the Committee for Perth Limited, a member of the Rio Tinto WA Future Fund and a director of Western Australian Community Foundation Limited, the Australian Chamber of Commerce and Industry and the Chamber of Commerce and Industry of Western Australia (Inc). Item 2(b) Adoption of Remuneration Report The Remuneration Report is required to be considered in accordance with section 250R of the Corporations Act 2001 (Cth). The Remuneration Report, which details the company s policy on the remuneration of non-executive directors, executive directors and senior executives, is set out on pages 125 to 135 of the company s 2007 Annual Report. The Remuneration Report is also available from the company s website (www.wesfarmers.com.au). The vote on the adoption of the Remuneration Report is advisory only and does not bind the directors or the company. Item 2(c) Increase in Remuneration Pool for Non-Executive Directors The sum of $3,000,000 is to cover the total fees that could be paid in a financial year to all non-executive directors of the company (including statutory entitlements), as shared between them in such proportion as the Board agrees from time to time. This is an increase of $750,000 from the total approved by shareholders at the annual general meeting held on 8 November 2004. The new annual fee limit will take effect from 1 January 2008. This increase is to enable the company to maintain directors fees in line with those paid by companies of a similar size and complexity. Analysis of the company s current fees by external consultants has shown that they are below those paid by comparable companies. The increased limit will enable the company to continue to attract and retain new directors with appropriate skills and competencies to contribute to the Board. The increased fee pool will also provide greater flexibility for the Board to appoint an additional director or directors with specialist expertise and experience. It is not proposed to utilise the whole of the increased sum at the present time. The company will disregard any votes cast on resolution 2(c) by: any director of the company; and any associate of a director of the company. The company need not disregard a vote if it is cast by: a person as proxy for a person who is entitled to vote in accordance with the directions on the proxy form; or the person chairing the meeting as a proxy for a person who is entitled to vote in accordance with a direction on the proxy form to vote as the proxy decides. Item 3(a) Financial Assistance Approval Background The company has obtained an A$10 billion syndicated loan facility arranged and underwritten by BNP Paribas, Australia and New Zealand Banking Group Limited and National Australia Bank Limited (the Facility Agreement ), which it may use, among other things, to fund the cash component of the proposed acquisition of Coles Group Limited (ABN 11 004 089 936) ( Coles ) by the company s wholly-owned subsidiary, Wesfarmers Retail Holdings Pty Ltd (ACN 126 199 022) under a scheme of arrangement. As is the case with the company s current funding arrangements, and many similar funding arrangements of other companies, the banks providing the Facility Agreement require that the company s obligations be guaranteed by the bulk of the company s wholly-owned subsidiaries. To comply with that requirement, if the company acquires a new wholly-owned subsidiary, it may need to ensure that the new wholly-owned subsidiary becomes a guarantor after its acquisition. This means that if Wesfarmers 2007 Notice of meeting 3
the acquisition of Coles does occur, then the company is obliged to procure that, after the acquisition is completed, Coles and a number of its wholly owned subsidiaries become guarantors by acceding to a guarantee deed poll. The bulk of the company s existing subsidiaries would already be guarantors to this deed poll. Corporations Act Requirements The accession to the guarantee by Coles and its subsidiaries would constitute financial assistance for the acquisition of shares in Coles. If the proposed acquisition occurs, the company will become the holding company of Coles and Coles subsidiaries. As the company will be a listed holding company, section 260B(2) of the Corporations Act 2001 (Cth) requires that the financial assistance be approved by a special resolution of the members of the company. It is a technical requirement of the Act that such a resolution is required in this situation even though it is the company (through a subsidiary) making the acquisition and is therefore benefiting from the grant of the financial assistance for the acquisition, and even though the financial assistance is clearly in the best interests of the company and its shareholders. The proposed financial assistance comprises Coles and the subsidiaries signing accession deeds acceding as guarantors to a guarantee deed poll granted by the company and certain of its wholly-owned subsidiaries as guarantors. They will accede after the acquisition of Coles is completed. Facility Agreement and Guarantee Deed Poll Under the guarantee deed poll the guarantors guarantee the obligations of the company and each other guarantor under the Facility Agreement and any other document specified as being a guaranteed document under the Facility Agreement. The funds provided under the Facility Agreement will fund the cash component of the acquisition of Coles and related costs, refinance existing debt facilities of Coles and its subsidiaries, refinance other existing facilities of the company (including facilities used to acquire shares in Coles and to make other acquisitions) and will be used for general working capital requirements. It is a requirement of the Facility Agreement that Coles and the subsidiaries give the financial assistance. In the view of the directors, such a requirement was a reasonable and necessary part of obtaining finance on the most favourable terms. Obtaining a facility of this nature without that requirement would have been very difficult, and would have resulted in funding being obtained on terms which would have been more restrictive and expensive. If Coles and the relevant subsidiaries do not give the financial assistance (by entering into guarantees) within a specified period then it would be necessary for the company to refinance the facility or to renegotiate the Facility Agreement, in each case on significantly more restrictive and expensive terms. Failure to do so would be a default under the Facility Agreement and allow the lenders to terminate the facilities and require immediate repayment of the amounts lent. Effect on Company The proposed financial assistance will benefit the company, enabling it to comply with the Facility Agreement and to raise funds under it on the most favourable terms available. The proposed financial assistance will have no adverse effects on the company and is consistent with its practice in previous and existing borrowing arrangements. The Board has unanimously approved this statement and recommends shareholder approval of the accompanying resolution. The Board considers the resolution to be a formal and technical requirement only. Item 3(b) Changes to the Constitution It is proposed that the company s Constitution be amended to allow for direct voting. Direct voting is designed to enhance shareholder participation by allowing shareholders to cast their votes for a meeting by lodging a direct vote without the need to attend the meeting. The proposed amendments will authorise the directors to approve direct voting for a meeting and adopt and vary the rules to be applied in relation to direct voting at meetings. It is proposed that, for each meeting at which direct voting has been approved, shareholders would receive a Direct Voting form and instructions in relation to how the shareholder can choose to exercise a direct vote. The following key aspects of direct voting are proposed: Direct voting will allow a shareholder to lodge a vote directly with the company without having to attend the meeting or relying on another person (as a proxy for the shareholder) to exercise the shareholder s vote at the meeting. A shareholder who submits a direct vote will have their votes counted on a show of hands (as one vote for all shares held) and on a poll (as one vote for each share held). A shareholder who has lodged a direct vote for a meeting will still be able to attend and take part in the meeting. If the shareholder wishes to attend the meeting and vote, the shareholder s direct vote (as previously submitted) will be taken to be revoked and the direct votes will not be counted. Direct voting is intended to be an additional option for a shareholder. Depending on the shareholder s circumstances, the shareholder can choose to attend the meeting in person, lodge their vote(s) by direct voting, or appoint a proxy or attorney (or body corporate representative, in the case of a corporate shareholder). The current Constitution has been marked-up to show the proposed changes and will be tabled at the meeting by the Chairman. A copy of the marked-up Constitution is available from Wesfarmers Limited s website (www.wesfarmers.com.au). You can also request a copy of the marked-up Constitution by emailing the Company Secretary (info@wesfarmers.com.au). 4 Wesfarmers 2007 Notice of meeting
How to Complete the Proxy Form 1. Your Address This is your address as it appears on the company s share register. If this information is incorrect, please mark the box and make the correction on the form. Securityholders sponsored by a broker (in which case your reference number overleaf will commence with an X ) should advise your broker of any changes. Please note you cannot change ownership of your securities using this form. 2. Appointment of a Proxy If you wish to appoint the Chairman of the Meeting as your proxy, please mark the box. If the individual or body corporate you wish to appoint as your proxy is someone other than the Chairman of the Meeting, please write the full name of that individual or body corporate in the space provided. If you leave this section blank, or your named proxy does not attend the meeting, the Chairman of the Meeting will be your proxy. A proxy need not be a securityholder of the company. Do not write the name of the issuer company or the registered securityholder in the space. 3. Votes on Items of Business You may direct your proxy how to vote by placing a mark in one of the three boxes opposite each item of business. All your securities 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 securities you wish to vote in the appropriate box or boxes. If you do not mark any of the boxes on a given item, 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. 4. Appointment of a Second Proxy You are entitled to appoint up to two proxies to attend the meeting and vote on a poll. 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 this form. To appoint a second proxy you must: a) on each of the first Proxy Form and the second Proxy Form state the percentage of your voting rights or number of securities 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. b) return both forms together in the same envelope. 5. 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, all of the securityholders should sign. Power of Attorney: to sign under Power of Attorney, you must have already lodged this document 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. If a representative of a corporate securityholder or proxy is to attend the meeting the appropriate Certificate of Appointment of Corporate Representative should be produced prior to admission. A form of the certificate may be obtained from the company s share registry or at www.computershare.com. Lodgement of a Proxy This Proxy Form (and any Power of Attorney under which it is signed) must be received not later than 48 hours before the time for holding the meeting (that is, by 2.00 pm (Perth time) on Tuesday, 13 November 2007). Any Proxy Form received after that time will not be valid for the scheduled meeting. Documents may be lodged using the reply paid envelope or: IN PERSON BY MAIL BY FAX Share Registry Computershare Investor Services Pty Limited, Level 2, 45 St George s Terrace, Perth WA 6000 Australia Share Registry Computershare Investor Services Pty Limited, GPO Box 242, Melbourne VIC 3001 Australia (08) 9323 2033 (within Australia) or (+ 61 8) 9323 2033 (outside Australia) Members can also submit their proxy voting instructions online at www.computershare.com/au/proxy/wes. To use this online facility, you will need your Shareholder Reference Number (SRN) or Holder Identification Number (HIN) and postcode. You will be taken to have signed or authenticated your proxy form if it is submitted in accordance with the instructions on the internet site. Proxies lodged through the online facility must be received by 2.00 pm (Perth time) on Tuesday, 13 November 2007.