Adelaide Brighton : Notice of Meeting and Proxy Form for 2017 Annual General Meeting

24 April 2017

The Manager

ASX Market Announcements Australian Securities Exchange Limited Exchange Centre

20 Bridge Street

SYDNEY NSW 2000

Dear Sir/Madam

We attach the Notice of Meeting and Proxy Form for Adelaide Brighton Limited's 2017 Annual General Meeting. These documents accompany Adelaide Brighton Limited's 2016 Annual Report which is being dispatched to shareholders today.

Yours faithfully

Company Secretary

Notice of Annual General Meeting

Notice is given that the 2017 Annual General Meeting of Adelaide Brighton Ltd (the Company) will be held at the Ballroom, Lower Level, InterContinental, North Terrace, Adelaide, South Australia 5000, on Thursday

25 May 2017 at 10.00am Adelaide time, for the purpose of transacting the business set out in this Notice.

ABN 15 007 596 018

Level 1, 157 Grenfell Street Adelaide, South Australia 5000

All communications to: Adelaide Brighton Ltd GPO Box 2155

Adelaide SA 5001

Telephone 08 8223 8000

Facsimile 08 8215 0030

Email adelaidebrighton@adbri.com.au

1. Financial Report, Directors' Report and Auditor's Report

   To receive and consider the financial report, directors' report and the auditor's report for the financial year ended 31 December 2016.

   Note: there is no requirement for shareholders to vote on this item.

2. Election of Mr Z Todorcevski

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

   That Mr Z Todorcevski, being a Director appointed since the last Annual General Meeting, and holding office only until the conclusion of this Annual General Meeting in accordance with rule 7.1(c) of the Company's constitution and, being eligible, is elected as a Director of the Company.

3. Re-election of Mr LV Hosking

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

   "That Mr LV Hosking, being a Director of the Company who retires by rotation under rule 7.1(d) of the Company's constitution and, being eligible, is re-elected as a Director of the Company."

4. Re-election of Mr KB Scott-Mackenzie

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

   "That Mr KB Scott-Mackenzie, being a Director of the Company who retires by rotation under rule 7.1(d) of the Company's constitution and, being eligible, is re-elected as a Director of the Company."

5. Re-election of Ms AM Tansey

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

   "That Ms AM Tansey, being a Director of the Company who retires by rotation under rule 7.1(d) of the Company's constitution and, being eligible, is re-elected as a Director of the Company."

6. Issue of Awards to the Managing Director To consider and, if thought fit, pass the following resolution as an ordinary resolution:

   "That, for the purposes of ASX Listing Rule 10.14 and section 200B of the Corporations Act, approval be given to the grant of 273,188 Awards to Mr M Brydon, the Managing Director of the Company, under the Adelaide Brighton Executive Performance Share Plan on the terms set out in the Explanatory Notes to this Notice of Annual General Meeting."

   Voting exclusion statement

   In accordance with the ASX Listing Rules the Company will disregard any votes cast on Item 6 by or on behalf of the Managing Director,

   Mr M Brydon, or his associates. In addition, the Corporations Act provides that a member of the Company's Key Management Personnel (as disclosed in the Remuneration Report) and their closely related parties are not permitted to cast a vote as a proxy

   on this resolution. However, these restrictions will not apply where the vote is cast by:

7. a person as proxy for a person who is permitted to vote, in accordance with the directions on the proxy form; or

8. a person chairing the meeting as a proxy for a person who is permitted to vote, and the appointment expressly authorises the Chairman to exercise the undirected proxies as the Chairman decides.

10. Adoption of Remuneration Report

    To consider and, if thought fit, pass the following resolution as a non-binding ordinary resolution:

    "To adopt the Remuneration Report for the financial year ended 31 December 2016."

    The Remuneration Report is set out on pages 42 to 60 of the 2016 Annual Report.

    Note: This resolution is advisory only and does not bind the Directors of the Company.

    Voting exclusion statement

    The Corporations Act prohibits any votes being cast on Item 7 by or on behalf of any member of the Company's Key Management Personnel (as disclosed in the Remuneration Report) and their closely related parties. However, the restrictions will not apply where the vote is cast by:

11. a person as proxy for a person who is permitted to vote, in accordance with the directions on the proxy form; or

12. a person chairing the meeting as a proxy for a person who is permitted to vote, and the appointment expressly authorises the Chairman to exercise the undirected proxies as the Chairman decides.

14. Non-executive Director remuneration

15. That the maximum aggregate amount of remuneration which may be paid to non-executive Directors in any year under rule 7.3(a) of the Company's constitution be increased by $300,000 to $1,600,000 with effect from 1 January 2017.

    Voting exclusion statement

    In accordance with the ASX Listing Rules the Company will disregard any votes cast on Item 8 by the Directors of the Company or any of their

    associates. In addition, the Corporations Act provides that a member of the Company's Key Management Personnel (as disclosed in the Remuneration Report) and their closely related parties are not permitted to cast a vote as a proxy on this resolution. However, these restrictions will not apply where the vote

    is cast by:

16. a person as proxy for a person who is permitted to vote, in accordance with the directions on the proxy form; or

17. a person chairing the meeting as a proxy for a person who is permitted to vote, and the appointment expressly authorises the Chairman to exercise the undirected proxies as the Chairman decides.

By order of the Board Marcus Clayton Company Secretary

20 April 2017

Explanatory notes to shareholders Item 1 Financial Report, Directors' Report, Auditor's Report

The Corporations Act requires the financial report (which includes financial statements, notes to the financial statements and directors' declaration), the directors' report and the auditor's report to be laid before the Annual General Meeting.

There is no requirement for a formal resolution on this matter. Accordingly, there will be no formal resolution put to the meeting.

Shareholders will be given a reasonable opportunity at the meeting to raise questions on these reports and to make comments on the business, operations and management of the Company.

Item 2 Election of Mr Z Todorcevski

MBA, BCom, FCPA, FCIS

Mr Todorcevski, 49 years of age, was appointed to the Board as an independent non-executive Director on 22 March 2017.

Mr Todorcevski is an experienced global executive with more than 30 years experience in the oil and gas, logistics and manufacturing sectors gained in Australia and overseas and has a background in finance, strategy and planning. He has previously held the position of Chief Financial Officer with BHP Billiton's Energy business, Oil Search Limited and Brambles.

Mr Todorcevski is President of the Group of 100, the peak body for Australia's Chief Financial Officers from the nation's major private and public business enterprises. He is also Chairman of the Accounting and Auditing Standing Committee of the Australian Securities and Investments Commission.

The Board confirms its support for the election of Mr Todorcevski as an independent Director of the Company, and with Mr Todorcevski abstaining, recommends that shareholders vote in favour

of Item 2.

Item 3 Re-election of Mr LV Hosking

Mr Hosking, 72 years of age, joined the Board as an independent non-executive Director in June 2003 and was appointed Chairman in May 2012. He is a Member of the Audit, Risk and Compliance Committee, Nomination, Remuneration and Governance Committee and Independent Directors' Committee.

Mr Hosking has broad experience in commercial and financial matters with 16 years experience as Chief Executive of the Sydney Futures Exchange and former Chief Executive Officer of Axiss Australia and Managing Director of National Electricity Market Management Company.

Mr Hosking is a Director of AGL Energy Ltd and was a former Director of Australian Energy Market Operator Ltd, and Carbon Market Institute Ltd.

The Board has considered the performance of Mr Hosking as well as the skills, knowledge and experience he brings to the Board and his contribution to Board discussions.

The Board notes that the Chairman has served

as a Director for 13 years. The Board is unanimous in its view that Mr Hosking's independence is not compromised by his re-election for a further 3 years. In fact, the Board considers Mr Hosking's re-election and continued leadership of the Board important in the context of the continuing Board renewal agenda.

The Board considers Mr Hosking to be an independent Director, and with Mr Hosking abstaining, recommends that shareholders vote in favour of Item 3.

Item 4 Re-election of Mr Ken Scott-Mackenzie

BE (Mining), Dip Law

Mr Scott-Mackenzie, 66 years of age, joined the Board as an independent non-executive Director in July 2010. He is Chair of the Safety, Health and Environment Committee and Member of

the Nomination, Remuneration and Governance Committee and Independent Directors' Committee.

Mr Scott-Mackenzie is a Bachelor of Engineering (Mining) and holds a Diploma in Law. He has over 40 years experience in infrastructure, construction and mining services gained in Australia and overseas, as well as a background in the financial, legal and commercial aspects of projects. As an executive, he held several senior management positions and was the chief executive officer

of a major construction group.

Mr Scott-Mackenzie was formerly a Chairman of Macmahon Holdings Limited, Linking Melbourne Authority and Murchison Metals Ltd.

The Board has considered the performance of

Mr Scott-Mackenzie as well as the skills, knowledge and experience he brings to the Board and his contribution to Board discussions.

The Board considers Mr Scott-Mackenzie to be an independent Director, and with Mr Scott-Mackenzie abstaining, recommends that shareholders vote

in favour of Item 4.

Item 5 Re-election of Ms Arlene Tansey

FAICD, MBA, JD, BBA

Ms Tansey, 59 years of age, joined the Board as an independent non-executive Director in April 2011. She is Chair of the Nomination, Remuneration and Governance Committee and Member of the Audit, Risk and Compliance Committee and Independent Directors' Committee.

Ms Tansey has spent over 30 years as a senior executive in business and the financial services industry gained in Australia and the United States with a background in investment banking and securities law.

Ms Tansey is a Director of Primary Health Care Limited, Aristocrat Leisure Limited, Lend Lease Real Estate Investments Limited and an external member of Infrastructure New South Wales.

The Board has considered the performance of Ms Tansey as well as the skills, knowledge and experience she brings to the Board and her contribution to Board discussions.

The Board considers Ms Tansey to be an independent Director, and with Ms Tansey abstaining, recommends that shareholders vote in favour of Item 5.

Item 6 Issue of Awards to the Managing Director

Under ASX Listing Rule 10.14, shareholder approval is required for securities to be granted to the Managing Director under an employee incentive scheme. Accordingly, shareholder approval is sought for a grant of Awards to the Managing Director,

Mr M Brydon, pursuant to and subject to Adelaide Brighton's Executive Performance Share Plan (Plan).

Approval is also sought under section 200B of the Corporations Act for the pro rata vesting of Awards granted to Mr Brydon upon cessation of his employment in circumstances other than where he resigns or the Company terminates his employment for cause.

This year's Awards will have a four year performance period over the period 1 January 2017 to 31 December 2020, with testing of the performance conditions and vesting available

in May 2021.

The Board considers that it is important that the remuneration of the Managing Director and

members of the senior executive team, including any long term incentive, be on the same terms to ensure a co-ordinated and consistent effort

to achieving the Company's goals. Following the meeting, the Company will issue Awards to

members of the senior executive team on similar terms to those proposed for Mr Brydon.

The key terms of the proposed grant of Awards to the Managing Director in respect of the 2017 Award is set out below. An overview of the Plan can be found on pages 56 and 57 of the Remuneration Report.

Number of Awards allocated Date of grant Performance period and vesting Performance hurdles

If approval is obtained, Mr Brydon will be issued with 273,188 Awards (at no cost to Mr Brydon) under the Plan. This represents the long term incentive component of his 2017 remuneration package.

The number of Awards to be allocated to Mr Brydon was determined by dividing 100% of his fixed annual remuneration (being his maximum annual participation level in the Plan)

by $5.2671, being the volume weighted average price of the Company's shares over the 3 month period to 31 December 2016.

Each Award is a right to one fully paid ordinary share in the Company.

If shareholder approval is obtained, the Awards will be formally granted to Mr Brydon no later than one month after the date of the meeting.

The Awards are subject to a four year performance period, commencing on 1 January 2017 (which is the effective grant date) and ending on 31 December 2020.

Any Awards which do not vest following testing of the performance hurdles at the end of the performance period will lapse.

The earliest exercise date for those Awards which vest after the end of the performance period is 1 May 2021. Any vested but unexercised Awards will expire on 30 September 2021.

The Awards are subject to two performance hurdles which are independent and tested separately.

The Board considers these performance hurdles to be appropriate as they link a proportion of Mr Brydon's remuneration to Company performance and the generation of shareholder value.

Total Shareholder Return (TSR) hurdle

50% of the Awards are subject to the TSR hurdle.

This hurdle requires the Company's total shareholder return over the performance period to equal or exceed the growth in the median company of the S&P/ASX 200 Accumulation Index (excluding all GICS Financial companies and selected resources companies).

No Awards will vest if the Company's TSR performance

over the performance period is less than the 50th percentile. If performance is at the 50th percentile, then 50% of Awards will vest. Full vesting will occur at the 75th percentile, with pro rata vesting on a straight line basis between these points.

Earnings Per Share (EPS) hurdle

50% of Awards are subject to the EPS hurdle.

The EPS hurdle measures the compound annual growth in

the Company's earnings per share (as disclosed in the audited accounts) over the period from 31 December 2016 (ie. the base year) to the end of the 2020 financial year.

The target growth rate over the performance period for 50% vesting is 5% per annum compound annual growth, with full vesting occurring where the growth rate equals or exceeds 10% per annum compound. The Awards vest on a straight line basis between these points.

Trading restrictions Price payable on grant or exercise of Awards Cessation of employment Other required information - ASX Listing Rules Other required information - section 200E Corporations Act

Vested Awards may be exercised at any time prior to

30 September 2021. Shares allocated on exercise of an Award are subject to the restrictions in the Company's share trading policy.

No amount is payable in respect of the grant, or upon vesting or exercise, of Awards.

If Mr Brydon ceases employment with the Company before the end of the performance period, his Award entitlements (if any) will depend on the circumstances of cessation.

All unvested Awards will lapse if Mr Brydon resigns or is terminated by the Company for cause.

If his employment otherwise terminates before 1 May 2021,

the Awards will vest on a pro rata basis determined by reference to the portion of the performance period elapsed, and subject

to the satisfaction of the performance conditions, at the date of cessation. Any Awards that vest are able to be exercised for six months post termination, after which point they will lapse.

Mr Brydon is the only Director of the Company entitled to participate in the Plan.

Mr Brydon was appointed Chief Executive Officer of the Company in May 2014, followed by his appointment as Managing Director of the Company in November 2015.

In accordance with the approval received from shareholders at the 2016 Annual General Meeting, 325,482 Awards were

granted to Mr Brydon under the Plan during the 2016 financial year. Since this approval, no other Awards have been made under the Plan to Mr Brydon.

The potential future value of Awards which may vest upon cessation of employment cannot currently be ascertained, as this benefit is dependent upon the number of Awards that vest at the time of cessation of employment, which will depend upon the portion of the performance period that has elapsed at the time employment ceases.

The Board (excluding Mr Brydon) recommends that shareholders vote in favour of Item 6.