Adcock Ingram Integrated Report 2018

151 ADCOCK INGRAM  Integrated Report 2018 Annual General Meeting – Explanatory notes continued Category Current annual remuneration Proposed annual remuneration payable with effect from 1 December 2018 Board Chairman 1 148 950 1 189 163 Board member 262 900 284 769 Audit Committee Chairman 249 500 249 500 Committee member 124 740 124 740 Risk and Sustainability Committee Chairman 235 370 235 370 Committee member 117 680 117 680 Human Resources, Remuneration and Nominations Committee Chairman 180 000 180 000 Committee member 82 700 82 700 Social, Ethics and Transformation Committee Chairman 165 900 165 900 Committee member 71 230 75 500 Acquisitions Committee Chairman 249 500 249 500 Committee member 124 740 124 740 Non-executive directors are paid an additional R13 000 (thirteen thousand Rand) each when they attend special meetings of the Board and/or sub-committees of the Board which last more than 3 (three) hours. The Chairman of the Board does not get paid any additional amount for attending meetings of sub- committees of the Board. If Special Resolution 2 is approved, the effect would be to authorise the Company to pay the remuneration contemplated in the above table to the non- executive directors of the Company for their services as directors, with effect from 1 December 2018 until the next AGM. Special Resolution 3 – Approval of the Performance-Based Long-Term Incentive Scheme The reason for Special Resolution 3 is that (i) in terms of Schedule 14 of the JSE Listings Requirements, the PBLTIS must be approved by holders passing an ordinary resolution (requiring a 75%majority of the votes cast in favour of such resolution by all holders present or represented by proxy at the general meeting to approve such resolution) and (ii) the directors of the Company consider it to be in the best interests of the Company that a new share incentive scheme be adopted so as to ensure that appropriate incentives are granted to employees of the Company and/or its subsidiaries to attract, retain, motivate and reward selected critical employees to encourage growth and profitability within the Company. Furthermore, to align with what the market considers to be best practice and to satisfy shareholder concerns in this regard. In terms of the Companies Act, the implementation of the PBLTIS may require approval in terms of, inter alia, section 41, 44 and/or 48. If adopted the effect will be to authorise the establishment and implementation of the PBLTIS in terms of the JSE Listings Requirements and the Companies Act. The copy of the share incentive scheme rules is included as a separate insert and these can also be accessed from the Company website: www.adcock.com . In 2019, share incentive scheme participants’ performance shall be measured based on the following financial and non-financial metrics: i) HEPS (50%), ii) Return on Funds Employed (ROFE) (25%) and iii) B-BBEE (25%). These performance metrics will be subject to a minimum threshold, target and stretch requirements. To be approved, Special Resolution 3 requires the support of at least 75% (seventy-five percent) of the voting rights exercised on the resolution. Quorum The meeting of shareholders contemplated herein may begin, and a matter may begin to be debated at that meeting, only if the following quorum requirements are met as required by the Companies Act and the MOI: 1. subject to 2 and 3 below: 1.1 a meeting of shareholders may not begin until sufficient persons are present at the meeting to exercise, in aggregate, at least 25% (twenty-five percent) of all of the voting rights that are entitled to be exercised in respect of at least one matter to be decided at the meeting; and 1.2 a matter to be decided at the meeting may not begin to be considered unless sufficient persons are present at the meeting to exercise, in aggregate, at least 25% (twenty-five percent) of all of the voting rights that are entitled to be exercised on that matter at the time the matter is called on the agenda; 2. once a quorum has been established at a meeting of shareholders, all the shareholders necessary to maintain such quorum must be present at that meeting to consider and vote on any matter; 3. despite the percentage figures set out in 1, as the Company has more than 2 (two) shareholders, a meeting may not begin, or a matter begin to be debated unless: 3.1 at least 3 (three) shareholders are “present at the meeting”(as defined in the Companies Act); and 3.2 the requirements of 1, are satisfied.