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Dividend Re-Investment Plan Application Form

Dividend Re-Investment Plan Booklet and Rules

1. Introduction

The Dividend Re-Investment Plan (Plan) offers shareholders (Shareholders) of Absolute Equity Performance Fund Limited (Company) the opportunity to purchase additional shares in the Company by reinvesting part or all of their periodic dividends.

The directors of the Company (Directors) consider it important that the Plan operates to the advantage of all Shareholders, not only those that participate in the Plan. Therefore, the Directors will only operate the Plan where they have formed the view that the benefits derived from the capital raised through the Plan will exceed the costs associated with the Plan.

Accordingly, under the terms of the Plan the Directors have the ability to:

(a) limit the amount of dividend which may be invested in subscription for shares under the Plan;

(b) determine the discount to the weighted average market price that will be used to calculate the issue price for each issue of shares under the Plan;

(c) acquire shares on-market and procure the transfer of those shares to participants in the Plan rather than to issue new shares under the Plan; and

(d) suspend, amend or terminate the Plan.

The following sections outline the way the Plan works and should be read in conjunction with the rules of the Plan. The Plan rules that are currently in place were adopted on 28 February 2018 and are set out in full at the back of this booklet. If Shareholders are interested in participating in the Plan, Shareholders are encouraged to read the rules of the Plan in full.


2. Eligibility to Participate

Participation in the Plan is optional and is open to all Shareholders resident in Australia and those who are resident outside Australia and who have produced to the Company such evidence as the Company may require to satisfy it that any necessary governmental approvals required by Shareholders to participate in the Plan have been obtained and that their participation is not contrary to any applicable laws.

Before electing to participate in the Plan, a shareholder who is not a resident in Australia should seek professional advice to ascertain if any restrictions apply. That shareholder should then contact the Company directly with evidence to satisfy the criteria for participation set out above.


3. How to Participate

Shareholders wishing to participate in the Plan that are eligible to do so should read this booklet (including the Plan rules) and complete and return the application (in a form that is capable of authentication). If necessary, Shareholders should consult their financial adviser before joining.

The Company may in its absolute discretion refuse any election to participate in the Plan.

If a shareholder holds shares in the Company through multiple accounts, a separate application will be required for each account.


4. When Participation Begins

Subject to the Company's acceptance of shareholder's application, shareholder's participation in the Plan will, in general, begin with the first dividend paid after the Company accepts their application. If shareholder's application is received after the closing date for elections to participate in the Plan with respect to a particular dividend, it will not be effective until the Company's next dividend. For each dividend, the Directors will determine in accordance with the Listing Rules the last date on which applications for participation must be received.


5. Full or Partial Participation

Shareholders wishing to participate in the Plan can elect to participate in respect of all of the shares registered in their name or in respect of a specified number of such shares only. Accordingly, Shareholders have two options when completing an application form. Shareholders can elect:

(a) Full Participation: Dividends on all shares held by a shareholder (including any additional shares acquired in the future whether under the Plan or otherwise) will be reinvested in acquiring new shares under the Plan (subject to any limits on reinvestment announced by the Company from time to time).

(b) Partial Participation: The shareholder can nominate the number of shares which participate in the Plan. Only the dividends on those shares (and any new shares issued under the Plan in respect of those shares) will be reinvested in acquiring new shares under the Plan and Shareholders will continue to receive cash dividends on the rest of their shares.

If an application does not clearly indicate the level of participation in the Plan, it will be deemed to be an application for "full participation".


6. Shares Acquired under the Plan

Under the Plan, the Directors will determine whether participating Shareholders (Participants) are to be issued with new fully paid ordinary shares in the Company or transferred existing fully paid ordinary shares in the Company pursuant to an on-market acquisition of shares through a broker on behalf of Participants.

All shares allotted and issued under the Plan will rank equally in all respects with existing shares from the date of issue. After allotment, the Company will apply to have the shares issued under the Plan quoted on the ASX.


7. How the Plan Operates

When announcing a dividend, the Company will announce via the ASX:

(a) the amount of the dividend;

(b) any limit on the amount of dividend which may be applied to acquire shares under the Plan;

(c) the record date for the dividend;

(d) the closing date by which Shareholders must lodge an election to participate or vary their Plan participation if they wish their election to take effect in respect of the current dividend period;

(e) the payment date for that dividend; and

(f) any other information required by the ASX Listing Rules from time to time.

Following the end of a dividend period, the Company will determine each shareholder's net dividend entitlement.


8. Reinvestment of Dividends (for Participants)

The Plan has been structured to take account of the relationship between the market price of the Company's shares and the Company's net tangible asset value per share (NTA Price) at the relevant time when dividends are being invested (Relevant Time).

Where the share price is greater than or equal to NTA Price

If the share price at the Relevant Time is higher than or equal to the NTA Price, Participants will receive dividends as newly issued shares in the Company. In addition, the Company will promptly apply for quotation on the ASX of new shares issued and allotted under the Plan. 

Where the share price is less than the NTA Price

If the share price at the Relevant Time is less than the NTA Price, dividends on shares subject to the Plan will be used to cause the acquisition of the Company's shares on-market.

The Company has up to 20 Trading Days to cause existing shares to be acquired for this purpose. The average share price, less brokerage and stamp duty, is then determined and the shares purchased under the Plan are allocated among the Participants in accordance with their level of participation. However, where the Company cannot cause sufficient existing shares to be acquired for this purpose within 20 Trading Days to satisfy the full amount of dividends payable, the remainder of the dividend will be applied towards the issue of new shares or given to the shareholder in cash.

What is the issue price of shares?

Shares issued under the Plan will be issued at a price that is the greater of:

  • the NTA Price on the day immediately prior to the record date for the dividend (rounded to the nearest cent); and
  • the weighted average price of all shares traded on the ASX during the period set by the Directors less any discount the Directors consider appropriate.

9. Disposal of Shares

If a Participant elects for "Full Participation" and then sells some of its shares, the dividends on their remaining shares will continue to be reinvested under the Plan.

If a Participant elects for "Partial Participation" and then sells some of its shares, the number of shares sold will be deemed firstly to be shares that are not participating in the Plan and secondly, once all non-participating shares are deemed to have been sold, participating shares under the Plan.


10. Variation or Termination of Participation

Shareholders may vary their level of participation in the Plan or withdraw from the Plan at any time by giving notice to the Company's share registry. The notice must be in the form approved by the Company from time to time.

The Company may in its absolute discretion refuse any variation of level of participation in the Plan (but not any withdrawal). The Company will determine the last date on which it will accept variations with respect to each dividend.

Provided the variation notice is received by the Company before the cut-off for a specific dividend, the variation (subject to acceptance by the Company) will be effective in relation to any dividends paid after the notice is received.

The termination notice will be effective with respect to all dividends paid after the notice is received by the Company.


11. Variation, Suspension and Termination of Plan

The Company may vary the Plan rules at any time by notice on the Company's website and by notice to ASX. If the Plan rules are varied, Participants will continue to participate under the Plan and the rules, in their varied form, will apply to them.

The Company may also suspend or terminate the operation of the Plan at any time by notice on the Company's website and by notice to ASX. The Company may reinstate the Plan following a suspension at any time by notice on the Company's website and by notice to ASX.


12. Brokerage and Commission

The Company will issue shares under the Plan free of brokerage fees and commission. Where the Company causes existing shares to be acquired on-market for Participants, brokerage payable on those acquisitions will be passed on to the Participants. The Company will endeavour to secure the most cost-effective brokerage rates possible.


13. Plan Underwriting

Where the Directors consider it appropriate, the Company may periodically have the Plan underwritten.


14. Taxation

Under current Australian taxation laws, reinvested income will be regarded for tax purposes as if it were received in cash. Please refer to the Plan dividend statement for the details of each dividend.

The Company does not take any responsibility for the taxation liabilities of Shareholders and suggests that Shareholders obtain independent advice concerning their taxation position.