Silex : AGM - Notice of Meeting and Proxy Form

Notice of 2019 Annual General Meeting

Notice is given that the 2019 Annual General Meeting of Silex Systems Limited ABN 69 003 372 067 (the 'Company') will be held in the Hart Room, Amora Hotel Jamison Sydney, 11 Jamison Street, Sydney NSW 2000, on Wednesday, 27 November 2019 at 9.30am (Sydney time).

The Explanatory Memorandum to this Notice provides Shareholders with additional information on matters to be considered at the Meeting. The Explanatory Memorandum and the Proxy Form form part of this Notice. Please consider them in their entirety.

AGENDA

ORDINARY BUSINESS

A. FINANCIAL STATEMENTS AND REPORTS

To receive and consider the financial report of the Company, and the reports of the Directors and of the Auditors for the year ended 30 June 2019. There is no vote on this item of business.

Notes: Except as set out in Resolution 1, there is no requirement for Shareholders to approve these reports. Accordingly, no resolution will be put to Shareholders on this item of business. For those Shareholders who have not elected to receive a hardcopy of the Company's Annual Report, the Annual Report is available on the Silex website at www.silex.com.au.

B. RESOLUTION 1 - ADOPTION OF THE REMUNERATION REPORT

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

"THAT the Remuneration Report for the year ended 30 June 2019 be adopted."

Notes: The Remuneration Report is set out on pages 23 to 32 of the Company's Annual Report.

Voting Exclusion Statement

Pursuant to section 250R of the Corporations Act, a vote must not be cast by, or on behalf of, a member of the Key Management Personnel, or closely related parties of such member (each, an Excluded Person).

However, the Excluded Person may cast a vote on this Resolution if:

1. the vote is not cast on behalf of another Excluded Person and they have been appointed as proxy by writing that specifies the way the proxy is to vote on the Resolution; or

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Silex Systems Limited | ABN 69 003 372 067

Building 64, LHSTC, New Illawarra Road, Lucas Heights NSW 2234

Telephone: [phone] | Facsimile: [phone] | Website: www.silex.com.au

85419234.3

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1. the Excluded Person is the Chair and the appointment of the Chair does not specify the way the proxy is to vote on the Resolution, and expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

C. RESOLUTION 2 - ELECT MR CRAIG ROY AS A DIRECTOR

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

"THAT Mr Craig Roy, being a Director of the Company, who retires as a Director in accordance with Rule 6.1(e) of the Constitution and, being eligible, offers himself for election, is elected as a Director of the Company."

D. RESOLUTION 3 - ELECT MS MELISSA HOLZBERGER AS A DIRECTOR

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

"THAT Ms Melissa Holzberger, being a Director of the Company, who retires as a Director in accordance with Rule 6.1(e) of the Constitution of the Company and, being eligible, offers herself for election, is elected as a Director of the Company."

E. RESOLUTION 4 - RE-ELECT MR CHRISTOPHER WILKS AS A DIRECTOR

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

"THAT Mr Christopher Wilks, being a Director of the Company, who retires as a Director in accordance with Rule 6.1(f) of the Constitution of the Company and, being eligible, offers himself for re-election, is re-elected as a Director of the Company."

F. RESOLUTION 5 - APPROVE EMPLOYEE INCENTIVE PLAN

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

"THAT, for the purposes of Listing Rule 7.2 (Exception 9(b)) and for all other purposes, approval is given for the Company to adopt the employee incentive scheme entitled 'Silex Systems Limited Employee Incentive Plan' and for the issue of options, shares and rights under that Plan on the terms and conditions as set out in the Explanatory Memorandum."

Voting Exclusion Statement

Silex shall disregard any votes cast in favour of this resolution by or on behalf of any Director (except one who is ineligible to participate in any employee incentive scheme in relation to the Company) or any of their respective associates.

The Company will not disregard a vote if:

(a)	it is cast by the person as proxy for a Shareholder who is entitled to vote, in
	accordance with the directions on the proxy form; or
(b)	it is cast by the Chair of the meeting as proxy for a Shareholder who is entitled to	01 V3
	vote, in accordance with a direction on the proxy form to vote as the proxy decides.	256215_

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Voting Prohibition

Pursuant to section 250BD of the Corporations Act, a vote must not be cast by, or on behalf of, a member of the Key Management Personnel, or closely related parties of such member (each, an Excluded Person).

However, the Excluded Person may cast a vote on this Resolution if:

1. the vote is not cast on behalf of another Excluded Person and they have been appointed as proxy by writing that specifies the way the proxy is to vote on the Resolution; or
2. the Excluded Person is the Chair and the appointment of the Chair does not specify the way the proxy is to vote on the Resolution, and expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

1. RESOLUTION 6 - APPROVAL OF LONG-TERM INCENTIVE VIA THE ISSUE OF OPTIONS TO DR MICHAEL GOLDSWORTHY

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

"THAT for the purposes of section 208 of the Corporations Act and the requirements of ASX Listing Rule 10.14, and for all other purposes, approval is given for the Company to issue 100,000 Options, each with an exercise price of $0.35 expiring on or before the date that is five years from the date of issue, to Dr Michael Goldsworthy (or his nominee) on the terms and conditions set out in the Explanatory Memorandum."

Voting Exclusion Statement

Silex shall disregard any votes cast in favour of Resolution 6 by Dr Michael Goldsworthy and by any Shareholder who, at the date of the meeting, is an associate of Dr Michael Goldsworthy. The Company will not disregard a vote if:

1. it is cast by the person as proxy for a person who is entitled to vote, in accordance with the directions on the proxy form; or
2. it is cast by the Chair 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

Pursuant to section 250BD of the Corporations Act, a vote must not be cast by, or on behalf of, a member of the Key Management Personnel, or closely related parties of such member (each, an Excluded Person).

However, the Excluded Person may cast a vote on this Resolution if:

1. the vote is not cast on behalf of another Excluded Person and they have been appointed as proxy by writing that specifies the way the proxy is to vote on the Resolution; or
2. the Excluded Person is the Chair and the appointment of the Chair does not specify the way the proxy is to vote on the Resolution, and expressly authorises the Chair to exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

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ADDITIONAL INFORMATION

1. The Explanatory Memorandum following provides further details of the proposed resolutions.
2. For the purposes of this meeting, Shares will be taken to be held by the persons

	who are registered as Shareholders at 9.00pm Sydney time	on Monday,
	25 November 2019. Accordingly, transactions registered after that time will be
	disregarded in determining shareholders entitled to attend and vote at the Meeting.
3.	A Shareholder entitled to attend and vote is entitled to appoint no more than two (2)
	proxies.
4.	Votes may be cast "For", "Against" or not voted on a resolution ("Abstain"). A
	Shareholder may direct a proxy how to vote on any resolution by placing a mark
	(e.g. a cross) in the appropriate box on the proxy form and their votes may only be
	exercised in that manner.
5.	If a Shareholder is entitled to cast two (2) or more votes at the Annual General
	Meeting, the Shareholder may appoint two (2) proxies and may specify the
	proportion or number of votes each proxy is appointed to exercise on a poll. If the
	appointment does not specify the proportion or the number of the Shareholder's
	votes that each proxy may exercise, each proxy is entitled to exercise half of the
	shareholder's votes on a poll. Fractions will be disregarded. A proxy need not be a
	member of the Company.
6.	The form of proxy must be signed by the Shareholder or the Shareholder's attorney.
	Proxies given by corporations must be signed either under seal or under the hand
	of a duly authorised officer, representative or attorney. In the case of joint holders,
	the form of proxy should be signed by all holders.
7.	To be valid, the form appointing the proxy and the power of attorney or other
	authority (if any) under which it is signed or a notarially certified copy of that power
	of attorney must be lodged at the registered office or the share registry of the
	Company, Computershare Investor Services Pty Limited, GPO Box 242, Melbourne
	Victoria 3001 (or by facsimile to 1800 783 447 within Australia or [phone]
	outside Australia) at least 48 hours prior to the Annual General Meeting (that is, by
	no later than 9.30am Sydney time on Monday, 25 November 2019). A form of
	proxy accompanies this Notice of Annual General Meeting.
8.	Alternatively, you may appoint a proxy using an electronic facility available at the
	website www.investorvote.com.au. At the website, shareholders will be able to view
	an electronic version of the proxy form, which will accept proxy appointments and
	register them accordingly.
9.	Custodian voting - For Intermediary Online subscribers only (custodians) please
	visit www.intermediaryonline.comto submit your voting intentions.
10.	Please refer to the accompanying Proxy Form for further detailed information
	regarding how to vote on Items of Business.	01 V3
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EXPLANATORY MEMORANDUM

This Explanatory Memorandum has been prepared to provide information which the Directors believe to be material to Shareholders to help them determine how to vote on the Resolutions set out in the Notice of Meeting.

FINANCIAL STATEMENTS AND REPORTS

Under the Corporations Act, the Company's 2019 Annual Report to Shareholders, which includes the financial report, as well as the Directors' report (which includes the Remuneration Report) and the Auditor's report, must be laid before the Meeting. The Company's 2019 Annual Report is available on the Company's website at www.silex.com.auand has been sent to those Shareholders who have elected to receive a hardcopy in the mail.

Shareholders are not required to vote on the financial report or the Directors' and Auditor's reports. However, an opportunity for shareholders to discuss these reports will be provided at the Meeting.

RESOLUTION 1 - ADOPTION OF THE REMUNERATION REPORT

The Directors' report for the year ended 30 June 2019 contains the Remuneration Report, which sets out the policy for the remuneration of the Directors and other Key Management Personnel. The Remuneration Report is set out on pages 23 to 32 of the Company's 2019 Annual Report which is available from the Company's website at www.silex.com.au. An opportunity to discuss the Remuneration Report will be provided at the Meeting.

The Company's remuneration strategy is designed to provide a link between the achievement of the Company's strategic objectives and executive rewards. It is designed to reward, motivate and retain the Company's executive team through market competitive remuneration and benefits, to support the success of the Company's business and ultimately to create shareholder value.

The Corporations Act requires that a resolution be put to the vote that the Remuneration Report be adopted. The Corporations Act expressly provides that the vote is advisory only, and does not bind the directors or the Company. The Board of the Company will take into account the discussion on this Resolution and the outcome of the vote when considering the future remuneration arrangements of the Company.

The Corporations Act provides Shareholders with the opportunity to remove the whole board (except the CEO/Managing Director) if the Remuneration Report receives a 'no' vote of 25% or more (Strike) at two consecutive annual general meetings. The Company's Remuneration Report did not receive a Strike at the 2018 Annual General Meeting. If the Remuneration Report receives a Strike at this Meeting, Shareholders should be aware that if a second Strike is received at the Company's 2020 Annual General Meeting, this may result in a reelection of the Board.

Resolution 1 is an ordinary resolution. The Chair intends to exercise all available proxies in favour of Resolution 1. If the Chair is appointed as your proxy and you have not specified the way the Chair is to vote on Resolution 1, by signing and returning the Proxy Form, you are considered to have provided the Chair with an express authorisation for the Chair to vote the proxy in accordance with the Chair's intention, even though the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel of the Company.

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