Exhibit 99.2 NOTICE OF 2018 ANNUAL GENERAL MEETING JAMES HARDIE INDUSTRIES PLC
NOTICE OF 2018 ANNUAL GENERAL MEETING Notice is given that the Annual General Meeting (AGM) of James Hardie Industries plc (James Hardie or the Company) will be held on Friday, 10 August 2018 in James Hardie’s Corporate Headquarters, The Cork Room, Europa House, 2nd Floor, Harcourt Centre (Block 9), Harcourt Street, Dublin 2, Ireland at 7:00am (Dublin time). ATTENDANCE AT AGM Persons registered as shareholders as at 7:00pm (Sydney time) / 10:00am (Dublin time) on Wednesday, 8 August 2018 may attend the AGM in person in Dublin. Shareholders wishing to participate in the AGM can also participate remotely via teleconference, during which they will have the same opportunities to ask questions as people attending the AGM in person. Shareholders or proxies will all be able to ask questions of the Board of Directors of James Hardie (Board) and the Company’s external auditor, Ernst & Young LLP. To enable more questions to be answered, enclosed is a form that you can use to submit questions in advance of the AGM, whether or not you will be attending. Shareholders or proxies not present at the AGM wishing to ask questions can do so in the manner described on page 4 of this booklet. CONTENTS OF THIS BOOKLET This booklet contains: §§ the Agenda for the AGM setting out the resolutions proposed to be put to the meeting; §§ Explanatory Notes describing the business to be conducted at the meeting; §§ information about who may vote at the AGM and how they may cast their vote; §§ details of how shareholders can attend the meeting in person in Dublin; and §§ details of how shareholders can participate in the meeting remotely by teleconference. NOTICE AVAILABILITY THIS DOCUMENT IS IMPORTANT AND REQUIRES Additional copies of this booklet can be downloaded from YOUR IMMEDIATE ATTENTION. James Hardie’s Investor Relations website If you are in any doubt as to the action you should take, (http://www.ir.jameshardie.com.au/jh/shareholder_meetings.jsp) you should immediately consult your investment or other or they can be obtained by contacting the Company’s registrar, professional advisor. Computershare Investor Services Pty Limited (Computershare), by calling: James Hardie Industries plc ARBN 097 829 895, with registered office at Europa House, 2nd Floor, Harcourt Centre, Harcourt Street, Dublin 2, §§ 1300 855 080 from within Australia; or Ireland and registered in Ireland under company number 485719. §§ +61 3 9415 4000 from outside Australia. The liability of its members is limited. 2
AGENDA AND BUSINESS OF THE ANNUAL GENERAL MEETING Explanations of the background, rationale and further information 6. Grant of Return on Capital Employed Restricted Stock Units for each proposed resolution are set out in the Explanatory Notes To consider and, if thought fit, pass the following resolution on pages 6 to 13 of this Notice of Meeting. as an ordinary resolution: The following are items of ordinary business: That the award to the Company’s CEO, Louis Gries, of 1. Financial statements and reports for fiscal year 2018 up to a maximum of 168,004 return on capital employed (ROCE) restricted stock units (ROCE RSUs), and his To review James Hardie’s affairs and to consider and, if thought acquisition of ROCE RSUs and ordinary shares of James fit, pass the following resolution as an ordinary resolution: Hardie (Shares) issuable thereunder, up to that number, To receive and consider the financial statements and the be approved for all purposes in accordance with the reports of the Board and external auditor for the fiscal terms of the 2006 LTIP (as amended) and on the basis year ended 31 March 2018. set out in the Explanatory Notes. The vote on this resolution is advisory only. 7. Grant of Relative Total Shareholder Return Restricted 2. Remuneration Report for fiscal year 2018 Stock Units To consider and, if thought fit, pass the following resolution As part of the review of James Hardie’s affairs, to consider and, as an ordinary resolution: if thought fit, pass the following resolution as a non‑binding ordinary resolution: That the award to Louis Gries of up to a maximum of 324,406 relative total shareholder return (TSR) restricted To receive and consider the Remuneration Report of stock units (Relative TSR RSUs), and his acquisition of the Company for the fiscal year ended 31 March 2018. Relative TSR RSUs and Shares issuable thereunder, up to The vote on this resolution is advisory only. that number, be approved for all purposes in accordance with the terms of the 2006 LTIP (as amended) and on the 3. Election / Re-election of Directors basis set out in the Explanatory Notes. To consider and, if thought fit, pass each of the following resolutions as separate ordinary resolutions: 8. Amendment of the Company’s Articles of Association (a) That Persio Lisboa be elected as a director. To consider and, if thought fit, pass the following resolution as a special resolution: (b) That Andrea Gisle Joosen, who retires by rotation in accordance with the Company’s Articles of Association, That the Company’s Articles of Association be and be re-elected as a director. are hereby amended in the manner provided for in the Annexure to this Notice of Meeting. (c) That Michael Hammes, who retires by rotation in accordance with the Company’s Articles of Association, VOTING EXCLUSION STATEMENT be re-elected as a director. In accordance with the ASX Listing Rules, James Hardie will (d) That Alison Littley, who retires by rotation in accordance disregard any votes cast in favour of Resolutions 5, 6 and 7 with the Company’s Articles of Association, be re-elected of this Notice of Meeting if they are cast by Louis Gries (who is as a director. the only director eligible to participate in the employee incentive 4. Authority to fix the External Auditor’s Remuneration schemes which are the subject of Resolutions 5, 6 and 7) or his associates. Mr Gries and his associates will not have their To consider and, if thought fit, pass the following resolution votes disregarded if: (i) they are acting as a proxy for a person as an ordinary resolution: who is entitled to vote, in accordance with the directions on a Voting Instruction Form or form of proxy; or (ii) they are chairing That the Board be authorised to fix the remuneration of the the meeting as proxy for a person who is entitled to vote, in external auditor for the fiscal year ended 31 March 2019. accordance with a direction on a Voting Instruction Form or The following are items of special business: form of proxy to vote as the proxy decides. 5. Re-Approval of the James Hardie Industries Long Term Notes on voting and Explanatory Notes follow, and a Incentive Plan 2006 Voting Instruction Form and Question Form are enclosed. To consider and, if thought fit, pass the following resolution By order of the Board. as an ordinary resolution: That approval is given for all purposes for further amendment to, and continued operation of, the James Hardie Industries Long Term Incentive Plan 2006 (the Natasha Mercer 2006 LTIP) (as amended) to provide incentives for the Company Secretary Chief Executive Officer CEO( ) and other executives of 6 July 2018 the Company in accordance with the terms of the 2006 LTIP and on the basis set out in the Explanatory Notes. 3 JAMES HARDIE NOTICE OF MEETING 2018
VOTING AND PARTICIPATION IN THE ANNUAL GENERAL MEETING If you are a registered shareholder as at 7:00pm (Sydney time) / If you hold more than one Share carrying voting rights, you 10:00am (Dublin time) on Wednesday, 8 August 2018, you may may instruct the appointment of more than one proxy to attend, attend, speak and vote, in person or appoint a proxy (who need speak and vote at the meeting on your behalf provided each not be a shareholder) to attend, speak and vote on your behalf, proxy is appointed to exercise rights attached to different at the AGM in Dublin, Ireland or participate and ask questions Shares held by you. while participating via the AGM teleconference. See VOTING ON THE RESOLUTIONS below for information on VOTING ON THE RESOLUTIONS how you can vote. How you can vote will depend on whether you are: §§ a shareholder; AGM DETAILS The AGM will be held at James Hardie’s Corporate Headquarters, §§ a holder of American Depositary Shares, which trade on the The Cork Room, Europa House, 2nd Floor, Harcourt Centre New York Stock Exchange (NYSE) in the form of American (Block 9), Harcourt Street, Dublin 2, Ireland, starting at 7:00am Depositary Receipts (ADRs); or (Dublin time) on Friday, 10 August 2018. §§ a Nominated Proxy. Voting if you are a shareholder: OPTIONS FOR SHAREHOLDERS UNABLE TO ATTEND AGM The AGM will be accessible by teleconference at 4:00pm If you are a shareholder and want to vote on the resolutions to (Sydney time) / 7:00am (Dublin time) on Friday, 10 August 2018. be considered at the AGM, you have the following two options: Shareholders participating in the AGM teleconference will be Option A – If you are not attending the AGM or appointing a able to ask questions of the Board and the Company’s external Nominated Proxy auditor, Ernst & Young LLP. You will need to have your Security Holder Reference Number (SRN) or the Holder Identification Follow this option if you do not intend to attend the AGM in Number (HIN) (included on your Voting Instruction Form or most person or appoint a Nominated Proxy. recent holding statement) as well as the name of your holding if You may lodge a Voting Instruction Form directing CHESS you intend to ask a question via the teleconference. Depository Nominees Pty Limited (CDN) (the legal holder of The following details are also set out on the Shareholder Shares for the purposes of the ASX Settlement Operating Rules) Meetings page on James Hardie’s Investor Relations website to nominate the Chairman of the AGM as its proxy to vote the (http://www.ir.jameshardie.com.au/jh/shareholder_meetings.jsp). Shares underlying your holding of CHESS Units of Foreign Securities (CUFS) that it holds on your behalf. PARTICIPATION IN AGM TELECONFERENCE You can submit your Voting Instruction Form as follows: To participate in the AGM teleconference, please: 1. Complete the hard-copy Voting Instruction Form §§ dial into the AGM using one of the following numbers: accompanying this Notice of Meeting and lodge it using Australia toll free 1800 573 793 / USA toll free 1866 548 4713 the “Lodgement Instructions” set out on page 5. or the rest of the world 1866 548 4713 2. Complete a Voting Instruction Form using the internet: §§ Passcode: 2838535; and Go to www.investorvote.com.au §§ provide the operator with your name and SRN / HIN. You will need: If you have any questions during the teleconference follow §§ your Control Number (located on your Voting Instruction the prompts from the teleconference operator. Form); and APPOINTING A PROXY §§ your SRN or HIN for your holding; and To instruct the appointment of: §§ your postcode as recorded in the Company’s register. §§ a proxy to attend the AGM in person on your behalf If you lodge the Voting Instruction Form in accordance with these (Nominated Proxy); and instructions, you will be taken to have signed it. §§ the Company Secretary in the event your Nominated Proxy For your vote to count, your completed Voting Instruction does not attend the AGM, Form must be received by Computershare no later than 7:00pm (Sydney time) / 10:00am (Dublin time) on Wednesday, please complete the relevant section of the Voting Instruction 8 August 2018. You will not be able to vote your Shares by Form, and return it to Computershare no later than 7:00pm way of teleconference. (Sydney time) / 10:00am (Dublin time) on Wednesday, 8 August 2018 using the “Lodgement Instructions” set out on page 5. 4
Option B – If you are (or your Nominated Proxy is) Accordingly, if you are the beneficial owner of Shares underlying attending the AGM ADSs, and your broker holds your ADSs in its name, then you must instruct your broker as to how to vote your Shares. If you would like to attend the AGM or appoint a Nominated Otherwise, your broker may not vote your Shares. If you do not Proxy to attend the AGM on your behalf, and vote in person, you give your broker voting instructions and the broker does not may use a Voting Instruction Form to direct CDN to nominate: vote your Shares, this is a “broker non-vote” which is treated (a) you or another person nominated by you (who does not as an abstention and does not count toward determining the need to be a shareholder) as a Nominated Proxy; and votes for / against the resolution. (b) the Company Secretary in the event the Nominated Proxy Voting if you are a Nominated Proxy: does not attend the AGM, If you are a Nominated Proxy and you do not attend and vote as proxy to vote the Shares underlying your holding of CUFS at the AGM, the Company Secretary will vote the Shares in on behalf of CDN in person at the AGM in Dublin. accordance with the instructions on the Voting Instruction Form or form of proxy or, for undirected proxies, in accordance with If the Nominated Proxy does not attend the AGM, the Company your written instructions. If you wish to direct the Company Secretary will vote the relevant Shares in accordance with the Secretary how to vote any undirected proxies, you must submit instructions on the Voting Instruction Form or, for undirected your written instructions to the Company Secretary by no later proxies, in accordance with the Nominated Proxy’s written than the earlier of (i) the time of commencement of voting on instructions. If the Nominated Proxy does not provide written the resolutions at the AGM and (ii) 7:30am (Dublin time) / 4:30pm instructions to the Company Secretary care of Computershare (Sydney time) on Friday,10 August 2018, otherwise, if you have by facsimile to 1300 534 987 from inside Australia, or not provided written instructions to the Company Secretary by +61 3 9473 2408 from outside Australia, or by email to such time, then the Company Secretary intends voting in favour [email protected] by the earlier of (i) the of all of the resolutions. time of commencement of voting on the resolutions at the AGM and (ii) 7:30am (Dublin time) / 4:30pm (Sydney time) on Friday, 10 August 2018, then the Company Secretary intends voting LODGEMENT INSTRUCTIONS in favour of all of the resolutions. Completed Voting Instruction Forms may be lodged with Computershare using one of the following methods: For your proxy appointment to count, your completed Voting Instruction Form must be received by Computershare no (a) by post to GPO Box 242, Melbourne, Victoria 3001, Australia; later than 7:00pm (Sydney time) / 10:00am (Dublin time) on or Wednesday, 8 August 2018. (b) by delivery to Computershare at Level 5, 115 Grenfell Street, To obtain a free copy of CDN’s Financial Services Guide, or any Adelaide SA 5000, Australia; or Supplementary Financial Services Guide, go to http://www.asx. (c) online at www.investorvote.com.au; or com.au/documents/settlement/CHESS_Depositary_Interests.pdf or phone 131279 from within Australia or +61 2 9338 0000 from (d) for Intermediary Online subscribers only (custodians), outside Australia to ask to have one sent to you. online at www.intermediaryonline.com; or If you submit a completed Voting Instruction Form to (e) by facsimile to 1800 783 447 from inside Australia or Computershare, but fail to select either of Option A or +61 3 9473 2555 from outside Australia. Option B, you are deemed to have selected Option A. Written instructions to the Company Secretary (if required) Voting if you hold American Depositary Shares (ADSs): may be lodged by the Nominated Proxy with Computershare using one of the following methods: The depositary for ADSs held in James Hardie’s ADR program is Deutsche Bank Trust Company Americas (Deutsche Bank). (a) by facsimile to 1300 534 987 from inside Australia, or Deutsche Bank will send this Notice of Meeting to ADS holders +61 3 9473 2408 from outside Australia; or on or about 9 July 2018 and advise ADS holders how to give their voting instructions. To be eligible to vote, ADS holders (b) by email to [email protected]. must be the registered or beneficial owner as at 5:00pm US If the Nominated Proxy is a corporate and the written Eastern Daylight Time (US EDT) on 3 July (the ADS record date). instructions will be submitted by a representative of the Deutsche Bank must receive any voting instructions, in the form corporate, the appropriate ‘Certificate of Appointment of required by Deutsche Bank, no later than 5:00pm (US EDT) on Corporate Representative’ form will need to be provided 3 August 2018. along with the written instructions. Deutsche Bank will endeavour, as far as is practicable, and A form of certificate may be obtained from Computershare or permitted under applicable law, to instruct that the Shares online at www.investorcentre.com under the help tab and then ultimately underlying the CUFS represented by ADSs are voted click on ‘Need a Printable Form’. in accordance with the instructions received from ADS holders. If an ADS holder does not submit any voting instructions, the Shares ultimately underlying the CUFS represented by NO VOTING AVAILABLE IN AGM TELECONFERENCE the ADSs held by that holder will not be voted. You will not be able to vote by way of teleconference. If you wish for your vote to count, you must follow the instructions If you do not provide voting instructions, the Shares ultimately set out above. underlying your ADSs will not be voted on any resolution for which a broker does not have discretionary authority to vote. Under NYSE rules, brokers that are NYSE member organisations are prohibited from directing the voting of the Shares underlying ADSs held in customer accounts on non-routine matters (such as executive compensation and director elections) if they have not received voting instructions from the beneficial holders. 5 JAMES HARDIE NOTICE OF MEETING 2018
EXPLANATORY NOTES TERMINOLOGY RESOLUTION 2 – REMUNERATION REPORT FOR References to shareholders in this Notice of Meeting, FISCAL YEAR 2018 including these Explanatory Notes, include references to all Resolution 2 asks shareholders to receive and consider the the shareholders of James Hardie acting together, and include Remuneration Report for the year ended 31 March 2018. holders of CUFS, holders of ADSs, holders of Shares and The Company is not required to produce a remuneration report members of the Company within the meaning of the Irish or to submit it to shareholders under Irish, Australian or US Companies Act 2014, except where describing how each law or regulations. However, taking into consideration James group of shareholders may cast their votes. Hardie’s Australian and US shareholder base and ASX listing, the Company has voluntarily produced a remuneration report for RESOLUTION 1 – FINANCIAL STATEMENTS AND non-binding shareholder approval for some years and currently REPORTS FOR FISCAL YEAR 2018 intends to continue to do so. This report provides information on James Hardie’s remuneration practices in fiscal year 2018 and Resolution 1 asks shareholders to receive and consider the also voluntarily includes an outline of the Company’s proposed financial statements and the reports of the Board and the remuneration framework for fiscal year 2019. Company’s external auditor, Ernst & Young LLP, for the year ended 31 March 2018. This resolution will also involve the James Hardie’s Remuneration Report is set out on pages review by the members of James Hardie’s affairs. The financial 29 to 67 of the 2018 Annual Report and can also be found statements which are the subject of Resolution 1 are those on the Company’s Investor Relations website, prepared in accordance with Irish law, US Generally Accepted http://www.ir.jameshardie.com.au/. Accounting Principles (US GAAP) (to the extent that the use of Although this vote does not bind the Company, the Board those principles in the preparation of the financial statements intends to take the outcome of the vote into consideration does not contravene any provision of Irish law) and Accounting when considering the Company’s future remuneration policy. Standards issued by the Accounting Standards Board and promulgated by the Institute of Chartered Accountants in Recommendation Ireland (Generally Accepted Accounting Practice in Ireland), as distinct from the US GAAP consolidated financial statements The Board believes it is in the interests of shareholders that of the James Hardie Group as set out in the Company’s 2018 the Company’s Remuneration Report for the year ended Annual Report. 31 March 2018 be received and considered, and recommends that you vote in favour of Resolution 2. A brief overview of the financial and operating performance of the James Hardie Group during the year ended 31 March 2018 RESOLUTION 3 – ELECTION / RE-ELECTION will be provided during the AGM. Copies of the James Hardie Group’s consolidated Irish financial statements are available OF DIRECTORS free of charge either: As part of their review of the composition of the Board, the Board and the Nominating and Governance Committee (a) at the AGM in Dublin, Ireland; considered the desired profile of the Board, including the right (b) at the Company’s registered Irish office at Europa House, number, mix of skills, qualifications, experience, expertise, 2nd Floor, Harcourt Centre, Harcourt Street, Dublin 2, Ireland; diversity and geographic location of its directors, to maximise the effectiveness of the Board. The Board and Nominating and (c) at the Company’s registered Australian office at Level 3, Governance Committee work together to ensure James Hardie 22 Pitt Street, Sydney NSW; or puts in place appropriate mechanisms for Board renewal. (d) on the Company’s Investor Relations website, Resolution 3(a) asks shareholders to consider the election http://www.ir.jameshardie.com.au/. of Persio Lisboa to the Board. Recommendation Resolutions 3(b), 3(c) and 3(d) ask shareholders to separately consider the re-election of Andrea Gisle Joosen, Michael The Board believes it is in the interests of shareholders that Hammes and Alison Littley to the Board. the financial statements and the reports of the Board and external auditor for the year ended 31 March 2018 be received James Hardie’s Articles of Association currently requires that and considered, and recommends that you vote in favour one-third of the directors subject to re-election (other than any of Resolution 1. directors appointed by the Board during the year) will retire at each AGM, with re-election possible after each term. Andrea Gisle Joosen, Michael Hammes and Alison Littley will retire at the 2018 AGM and each offers himself or herself for re-election. 6
Profiles of the candidates follow: Experience: Mr Hammes has extensive commercial experience at a senior executive level. He has held a number of executive Persio Lisboa positions in the medical products, hardware and home BS improvement, and automobile sectors, including CEO and Age 52 Chairman of Sunrise Medical, Inc. (2000-2007), Chairman and Persio Lisboa was appointed as an CEO of Guide Corporation (1998-2000), Chairman and CEO independent non-executive director of James of Coleman Company, Inc. (1993-1997), Vice Chairman of Black Hardie in February 2018. He is a member of & Decker Corporation (1992-1993) and various senior executive the Nominating and Governance Committee. roles with Chrysler Corporation (1986-1990) and Ford Motor Company (1966-1986). Experience: Mr Lisboa has extensive senior executive experience. He currently serves as Directorships of listed companies in the past five years: Executive Vice President & Chief Operating Officer at Navistar, Former – Director of Navistar International Corporation (1996- Inc. (Navistar), a leading manufacturer of commercial trucks, 2017); Director of DynaVox Mayer-Johnson (2010-2016). buses, defense vehicles and engines, since March 2017. Last elected: August 2016 Prior to holding this position, Mr Lisboa served as President, Operations of Navistar from November 2014 to March 2017. Alison Littley Prior to that, Mr Lisboa served as Senior Vice President, Chief BA, FCIPS Procurement Officer of Navistar from December 2012 to Age 56 November 2014, as Vice President, Purchasing and Logistics and Chief Procurement Officer of Navistar from October 2011 Alison Littley was appointed as an independent to November 2012, and as Vice President, Purchasing and non-executive director of James Hardie in Logistics of Navistar from August 2008 to October 2011. Prior to February 2012. She is a member of the Audit these positions, Mr Lisboa held various management positions Committee and the Remuneration Committee. within Navistar’s North American and South American operations. Mr Lisboa began his career at Maxion International Motores Experience: Ms Littley has substantial Brasil, followed by a move to International Engines Argentina experience in multinational manufacturing and S.A., and then to MWM-International South America. supply chain operations, and she brings a strong international leadership background building effective management teams Directorships of listed companies in the past five years: and third party relationships. She has held a variety of positions, Current – Director of Broadwind Energy Inc,. (since 2016). most recently as Chief Executive of Buying Solutions, a UK Government Agency responsible for procurement of goods and Last elected: Appointed to the Board in February 2018. Will services on behalf of UK government and public sector bodies stand for election at 2018 AGM. (2006-2011). She has previously held senior management roles in Diageo plc (1999-2006) and Mars, Inc. (1981-1999). Andrea Gisle Joosen MSc, BSc Directorships of listed companies in the past five years: None Age 54 Other: Director of Market Harborough Building Society (since Andrea Gisle Joosen was appointed as January 2018); Director of Eakin Healthcare Limited (since 2015); an independent non-executive director Director of Weightmans LLP (since 2013). of James Hardie in March 2015. She is Last elected: August 2015 a member of the Audit Committee. Experience: Ms Gisle Joosen is an Recommendation experienced former executive with extensive experience in marketing, brand management and business The Board, on the recommendation of the Nominating and development across a range of different consumer businesses. Governance Committee, believes it is in the interests of Her former roles include Chief Executive of Boxer TV Access AB shareholders that Persio Lisboa be elected as a director of the in Sweden and Managing Director (Nordic region) of Panasonic, Company and recommends (with Persio Lisboa abstaining from Chantelle AB and Twentieth Century Fox. Her early career voting in respect of his own election) that you vote in favour of involved several senior marketing roles with Procter & Gamble Resolution 3(a). and Johnson & Johnson. The Board, having assessed the performance of Directorships of listed companies in the past five years: Andrea Gisle Joosen, Michael Hammes and Alison Littley, and Current – Director of Mr Green AB (since 2015); Director of on the recommendation of the Nominating and Governance BillerudKorsnas AB (since 2015); Director of Dixons Carphone plc Committee, believes it is in the interests of shareholders that (since 2014); Director of ICA Gruppen AB (since 2010). Former – each of the individuals referred to above be re-elected as a Director of Dixons Retail plc (2013-2014). director of James Hardie, and recommends (with Andrea Gisle Joosen, Michael Hammes and Alison Littley each abstaining Other: Director of Phoodster (since July 2017); Director of from voting in respect of their own election) that you vote in Neopitch AB (since 2004). favour of Resolutions 3(b), 3(c) and 3(d). Last elected: August 2015 RESOLUTION 4 – AUTHORITY TO FIX THE EXTERNAL Michael Hammes AUDITOR’S REMUNERATION BS, MBA Resolution 4 asks shareholders to give authority to the Board to Age 76 fix the external auditor’s remuneration. Ernst & Young LLP were Michael Hammes was elected as an first appointed external auditors for the James Hardie Group independent non-executive director of James for the year ended 31 March 2009. A summary of the external Hardie in February 2007. He was appointed auditor’s remuneration during the fiscal year ended 31 March Chairman of the Board in January 2008 and 2018, as well as non-audit fees paid to Ernst & Young LLP is a member of the Audit Committee, the are set out on page 158 of the 2018 Annual Report. The Audit Remuneration Committee and the Nominating Committee periodically reviews Ernst & Young LLP’s performance and Governance Committee. and independence as external auditor and reports its results to the Board. A summary of Ernst & Young LLP’s interaction with 7 JAMES HARDIE NOTICE OF MEETING 2018
EXPLANATORY NOTES CONTINUED James Hardie, the Board and the Board Committees is set out For the purpose of satisfying ASX Listing Rule requirements, on pages 80 and 81 of the 2018 Annual Report. the information disclosed in respect of the 2006 LTIP applies to Resolution 5 through 7 inclusive. Recommendation Specific provisions under US law The Board believes it is in the interests of shareholders that the Board be given authority to fix the external auditor’s remuneration US law contains specific provisions dealing with compensation for the fiscal year ended 31 March 2019 and recommends, on the for Executives, which are relevant to the Company. Consequently, recommendation of the Audit Committee that you vote in favour since a number of Participants in the 2006 LTIP have been and of Resolution 4. will be US Executives, a separate Sub-Plan with additional conditions applicable to US Executives is provided. Generally, RESOLUTION 5 – RE-APPROVAL OF THE JAMES HARDIE the 2006 LTIP is designed to comply with applicable US tax laws and regulations. INDUSTRIES LONG TERM INCENTIVE PLAN 2006 Resolution 5 asks shareholders to re-approve the 2006 Grants of Entitlements and performance hurdles LTIP, subject to certain amendments. The 2006 LTIP was The vesting of Entitlements granted to all Participants under originally approved at the 2006 AGM and was re-approved the 2006 LTIP may be conditional on the achievement of by shareholders with certain amendments at each of the 2008, performance hurdles set out in the terms of the specific grant. 2009, 2012 and 2015 AGMs. Proposed Amendments to Plan Rules The 2006 LTIP provides for a range of potential entitlements to be paid to executives who are eligible to participate in the 2006 LTIP It is proposed to amend the Plan Rules for the 2006 LTIP in (Executives or Participants). One of the Participants is Louis order to make necessary changes for compliance with current Gries, the CEO. The benefits to be provided to the CEO under applicable US tax laws and regulations, as a result of changes the 2006 LTIP in respect of fiscal year 2019 are the subject of emanating from the Tax Cuts and Jobs Act of 2017, as well as Resolutions 6 and 7. certain other administrative changes. Overview of the 2006 LTIP A copy of the Plan Rules highlighting the proposed amendments is available free of charge: The 2006 LTIP is a key component of the Company’s compensation arrangements for Executives. It provides flexibility (a) at the AGM in Dublin, Ireland; in the type of equity award which can be used to deliver (b) at the Company’s registered Irish office at Europa House, long-term shareholder alignment. The Board believes that 2nd Floor, Harcourt Centre, Harcourt Street, Dublin 2, Ireland; this flexibility is important given the Company’s international operations and will continue to allow it to tailor rewards to (c) at the Company’s registered Australian office at Level 3, Executives and maximise returns to shareholders over the 22 Pitt Street, Sydney NSW; or long‑term by: (d) on the Company’s Investor Relations website, §§ aligning the interests of Executives and shareholders; http://www.ir.jameshardie.com.au/. §§ matching Executive rewards under the 2006 LTIP with A summary of the Plan Rules as proposed to be amended is set the long-term performance of the Company; and out below. §§ helping to attract and retain Executives. Brief summary of each Sub-Plan Under the 2006 LTIP, the Company may offer eligible Executives The following is a brief summary of the operation of each of the both cash-settled awards (Awards) and stock-settled RSUs Sub-Plans. (together referred to as Entitlements). Award Sub-Plan Operation of the 2006 LTIP The Award Sub-Plan involves cash-settled awards rather than The rules of the 2006 LTIP (Plan Rules) explain the general the acquisition of securities by Executives. A grant of Awards to a terms of the 2006 LTIP which apply to grants of each type particular Executive is subject to the Plan Rules and the terms of of Entitlement. The Plan Rules include a separate sub-plan the specific grant. (Sub-Plan) setting out the terms and conditions for each type of Entitlement, as well as a separate Sub-Plan with additional As the Award Sub-Plan does not involve any issue of securities conditions that apply to offers of Entitlements to US Executives. by the Company, shareholder approval of this aspect of the 2006 LTIP is not required. However, it is included here for the Selected Executives will be granted either a specified number of information of shareholders. In general, the terms and conditions Entitlements, or a number of Entitlements calculated by reference for grants of Awards are the same as those for grants of RSUs to a US$ amount of long-term incentive and the fair value of the (described below). Entitlement to be granted. A grant of Entitlements under the 2006 LTIP is subject to the Plan Rules and the terms of the specific More information about the grant of Awards which are proposed grant. The Board administers the 2006 LTIP in accordance with to be made during fiscal year 2019 is set out in the Remuneration the Plan Rules and the terms and conditions of the specific Report for the year ended 31 March 2018. grants to Executives. RSU Sub-Plan General A summary of the terms and conditions that apply specifically to The term “Shares” as used in Resolutions 5 to 7 (and in RSUs is set below. the Explanatory Notes accompanying Resolutions 5 to 7) Entitlement – Each RSU granted to an Executive will entitle the includes CUFS. Executive to be issued or transferred one Share, subject to the The Shares which may be earned under the various Entitlements RSU vesting. The Company may put the Executive in contact may be issued as new Shares or purchased by the Company with a broker who will arrange with the Executive to sell the on-market. Shares and provide the cash proceeds on or after the date the RSU has vested. The Company will not provide loans in relation to the issue of Entitlements under the 2006 LTIP. Price payable by an Executive to Company on issue of the RSU and on vesting of RSU is zero – RSUs will be granted to the 8
Executive for no consideration. Executives will be entitled to §§ any other similar event has occurred or is likely to occur receive Shares upon vesting of their RSUs for no consideration. (including, but not limited to, a merger of the Company with another company), which the Board determines, in Transferability/assignability – RSUs cannot be transferred or its absolute discretion, to be a Control Event. assigned by an Executive except in limited circumstances. Board discretion – The Board may in its absolute discretion (on Sub-division, consolidation, reduction or return – If the Company any conditions which it thinks fit) decide that some or all of the conducts any share capital re-organisation, including by sub- unvested RSUs held by an Executive do not lapse, but lapse at a dividing, consolidating, reducing or returning capital, the Board time and subject to any conditions it may specify by notice to the may make an appropriate and proportionate adjustment to the Executive, which may include that the RSU will vest immediately number of Shares which will be issued or transferred upon vesting or at some time in the future depending on satisfaction of of an RSU in accordance with any applicable ASX Listing Rules. performance hurdles. The Board will not exercise this discretion Voting, participation and dividend entitlements – RSUs carry in circumstances where the Executive is terminated for cause no entitlement to vote, participate in new issues of Shares or (including for fraud or dishonesty). The Board may delegate the accrue dividends. discretion to the Remuneration Committee. When RSUs lapse – Each grant of RSUs will have an expiry date. Sub-Plan relating to grants to US Executives Depending on the circumstances in which an Executive ceases A summary of the key features of the long-term incentive employment with the Company or a related body corporate prior arrangements for grants of Awards and / or RSUs to US to the end of the RSU vesting period, unvested RSUs will, unless Executives is set out below. A grant under this Sub-Plan to the terms of grant state otherwise, lapse or vest as follows: a particular US Executive is subject to the Plan Rules and §§ voluntary resignation or termination for cause – any unvested the terms of the specific grant. RSUs will be forfeited. Awards – The Sub-Plan provides for grants of cash-settled §§ other reasons, including death, retirement, permanent Awards to US Executives. disability or termination not for cause – a pro-rata number RSUs – The Sub-Plan provides for grants of RSUs to US of unvested RSUs will lapse automatically on the relevant Executives. day, calculated based on the formula: Restrictions – The Sub-Plan sets out a number of restrictions in D = C x (A/B) relation to grants to US Executives, which affect the term, time, where: form and method of settlement and form and timing of payment of any such grant. There are also particular restrictions relating to A = the number of months from the relevant event to, depending on US-specific taxation law. the type of RSU, the date of vesting (for RSUs with time vesting) or the end of the applicable performance period or, if applicable, Terms – The Sub-Plan incorporates the other Sub-Plans, subject the first testing date (for RSUs with a performance hurdle); to the extent of any inconsistency. B = depending on the type of RSU, the vesting period calculated Limits on number of Shares that can be issued in months (for RSUs with time vesting) or the number of The Board will not grant RSUs if the aggregate number of Shares months from the date the RSU was granted until the end of the involved, when added to the number of Shares which would be applicable performance period or, if applicable, the first testing issued if all outstanding RSUs vested, (but disregarding grants date (for RSUs with a performance hurdle); made or Shares issued to a person, where the person was C = the number of RSUs in the relevant tranche; and situated outside Australia at the time the offer was made) would exceed 5% of the total number of issued Shares at the date on D = the number of RSUs which lapse automatically. which the Board proposed to grant RSUs. All of the remaining unvested RSUs will lapse at the earlier of Administration of the 2006 LTIP 24 months after the relevant event or the date they would have expired had the former Executive remained employed by the Any power or discretion which is conferred on the Board under Company, unless the Board reasonably determines that the the 2006 LTIP may be delegated by the Board to a committee RSUs have lapsed (and provides notice to that effect to the consisting of directors, other officers, or employees of the former Executive, or in the event of an Executive’s death, the Company as the Board thinks fit. estate of the former Executive). The Remuneration Committee has the authority to interpret the Control Event – 2006 LTIP and any documents used to evidence Entitlements, to determine the terms and conditions of Entitlements, and to §§ if a Control Event occurs prior to the RSUs vesting, the Board make all other determinations necessary or advisable for the may determine at its absolute discretion, and subject to any administration of the 2006 LTIP. conditions that it determines, that all or a portion of the RSUs have vested; and Shareholder approval §§ any RSUs held by a Participant which the Board has not If the ASX Listing Rules require shareholder approval for the accelerated so that they are vested following a Control Event granting of Entitlements, no Entitlements will be granted before will lapse, and the Executive will be treated as having never that approval is obtained. held any right or interest in those RSUs. Previous Allotments For these purposes “Control Event” means any of the following: Since the 2006 LTIP was last approved by shareholders at the §§ a takeover bid is made to acquire the whole of the issued 2015 AGM, the following RSU grants have been made: ordinary share capital of the Company and the takeover bid is recommended by the Board or becomes unconditional; FY2016 FY2017 FY2018 §§ a transaction is announced by the Company which, if ROCE RSUs 503,944 407,539 515,249 implemented, would result in a person owning all the issued Relative TSR RSUs 579,262 456,819 932,393 Shares in the Company; §§ a person owns or controls sufficient Shares to enable them to influence the composition of the Board; or 9 JAMES HARDIE NOTICE OF MEETING 2018
EXPLANATORY NOTES CONTINUED Summary of the reasons for seeking shareholder approval ROCE RSU changes for fiscal year 2019 Shareholder approval of the 2006 LTIP is sought for all purposes The Remuneration Committee has approved revised ROCE under the Listing Rules of ASX. Under ASX Listing Rule 7.1 performance hurdles for fiscal year 2019 to incorporate the the Company may not issue Shares in respect of more than impact of the Company’s acquisition of Fermacell, which 15% of its issued share capital in any 12-month period without closed on 3 April 2018. The Remuneration Committee believes shareholder approval (subject to limited exceptions). Where the adjusted hurdles continue to require management to deliver shareholders have approved the issue of Shares under an improved and sustainable operational efficiencies. employee share plan within the three years preceding the issue pursuant to Exception 9 of ASX Listing Rule 7.2, as an exception Key aspects of ROCE RSUs to ASX Listing Rule 7.1, those Shares would not be counted Goal Setting: ROCE performance hurdles for the ROCE towards the 15% limit. RSUs are based on historical results and take into account As the 2006 LTIP was most recently approved in its entirety at the forecasts for the US and Asia Pacific housing markets. the 2015 AGM, shareholder approval is sought for the continued By way of reference, the three-year average ROCE result for grant of Entitlements and issue of Shares generally under the fiscal years 2016, 2017 and 2018 was 31.0%. 2006 LTIP (as amended). ROCE Definitions: The ROCE measure will be determined Recommendation by dividing Adjusted Earnings Before Interest and Tax (Adjusted EBIT) by Adjusted Capital Employed each as The Board believes that the 2006 LTIP (as amended) is an further explained below. appropriately designed equity-based employee incentive scheme, capable of attracting, motivating and retaining key executives The Adjusted EBIT component of the ROCE measure will be and driving the improved performance of the Company, and determined as follows. Earnings before interest and taxation recommends that you vote in favour of Resolution 5. as reported in James Hardie’s financial results, adjusted by: §§ excluding the earnings impact of legacy issues (such as RESOLUTION 6 – GRANT OF ROCE RSUs asbestos adjustments); and Resolution 6 asks shareholders to approve the grant of ROCE §§ adding back asset impairment charges in the relevant period, RSUs under the 2006 LTIP (as amended) to James Hardie’s unless otherwise determined by the Remuneration Committee. Director and Chief Executive Officer, Louis Gries. Since management’s performance will be assessed on the pre‑impairment value of James Hardie’s assets, the A summary of the terms and conditions of the 2006 LTIP Remuneration Committee would not normally deduct the (as amended) is set out in the Explanatory Notes in respect impact of any asset impairments from the Company’s EBIT of Resolution 5. for the purposes of measuring ROCE performance. For fiscal year 2019, the Remuneration Committee has allocated The Adjusted Capital Employed component of the ROCE the Long-Term Incentive (LTI) target of the Chief Executive measure will be determined as follows. Total Assets minus Officer (and each senior executive) between the following three Current Liabilities, as reported in James Hardie’s financial components to ensure that the reward is based on a diverse results, adjusted by: range of factors which validly reflect longer term performance, as well as provide an appropriate incentive to ensure senior §§ excluding balance sheet items related to legacy issues executives focus on the key areas which will drive shareholder (such as asbestos adjustments), dividends payable and value creation over the medium and long-term: deferred taxes; §§ 25% to ROCE RSUs – an indicator of James Hardie’s capital §§ adding back asset impairment charges in the relevant efficiency over time; period, unless otherwise determined by the Remuneration Committee, in order to align the Adjusted Capital Employed §§ 25% to Relative TSR RSUs – an indicator of James Hardie’s with the determination of Adjusted EBIT; performance relative to its US peers; and §§ adding back leasehold assets for manufacturing facilities §§ 50% to Scorecard LTI – an indicator of each senior and other material leased assets, which the Remuneration executive’s contribution to James Hardie achieving its Committee believes give a more complete measure of the long‑term strategic goals. Company’s capital base employed in income generation; and As the Board and Remuneration Committee believe the LTI §§ deducting all greenfield construction-in-progress, program is achieving the stated objectives, and that management and any brownfield construction-in-progress projects understands the current LTI program and continues to be involving capacity expansion that are individually greater motivated by it, the LTI components for fiscal year 2019 are than US$20 million, until such assets reach commercial materially consistent with the components for fiscal year 2018. production and are transferred to the fixed asset register, Reasons for ROCE RSUs in order to encourage management to invest in capital expenditure projects that are aligned with the long-term ROCE RSUs shall vest if James Hardie’s ROCE performance interests of the Company. meets or exceeds ROCE performance hurdles over a three year period, subject to the exercise of negative discretion by the The ROCE performance hurdles will be indexed for changes to Remuneration Committee. US and Asia Pacific addressable housing starts. James Hardie introduced ROCE RSUs in fiscal year 2013 The resulting Adjusted Capital Employed for each quarter of any once the US housing market had stabilised to an extent which fiscal year will be averaged to better reflect capital employed permitted the setting of multi-year financial metrics. As James over the course of a year rather than at a certain point in time. Hardie funds capacity expansions and market initiatives in the The ROCE result to compare to the performance hurdles will be US, Asia Pacific and Europe it is important that management the average of James Hardie’s ROCE in fiscal years 2019, 2020 focuses on ensuring that the Company continues to achieve and 2021. strong ROCE results while pursuing growth. Upon vesting, These definitions have been framed to ensure management ROCE RSUs shall be settled in CUFS on a 1-to-1 basis. is rewarded and held accountable for the aspects over which they have direct influence and control, while not discouraging management from recommending that James Hardie undertake investments that will provide for future Company growth. 10
Grant: The Chief Executive Officer will receive a grant equal Worked Example to the maximum number of ROCE RSUs (200% of target). The The following example uses the Chief Executive Officer’s LTI number of ROCE RSUs which actually vest and the number of fiscal year 2019 target quantum of US$4.0 million and assumes Shares ultimately received in 2021 will depend on James Hardie’s for illustrative purposes, a three-year average ROCE performance ROCE performance in fiscal years 2019 to 2021 together with the of 28%. Remuneration Committee’s exercise of negative discretion. At grant date the LTI quantum granted to the Chief Executive Performance Hurdle: The performance hurdles for ROCE RSUs Officer in ROCE RSUs is: granted in fiscal year 2019 (for performance in fiscal years 2019 to 2021) are: $4.0 million LTI target x 25% of LTI target issued in ROCE RSUs x 200% maximum leverage = US$2.0 million to be ROCE % OF ROCE RSUs VESTING granted in ROCE RSUs. < 24.0% 0% At a value of US$16.00/share, this is equivalent to a grant of ≥ 24.0%, but < 26.0% 25% 125,000 ROCE RSUs. Based on a 28% average ROCE result for the three year period to fiscal year 2021, 150% of target or ≥ 26.0%, but < 27.5% 50% 75% of the total ROCE RSUs granted would be eligible to vest: ≥ 27.5%, but < 28.5% 75% 125,000 RSUs x 75% = 93,750 ROCE RSUs ≥ 28.5% 100% At the conclusion of the three-year performance period, the Remuneration Committee will review James Hardie’s The earnings component of ROCE performance targets is performance (and decide whether to reduce the number of predicated on assumptions in market growth. Market growth ROCE RSUs which vest based on its negative discretion). in James Hardie’s primary markets has two main components – independent third party sourced data for new housing starts For indicative purposes, assuming that the Remuneration and an independent third party data sourced index for the repair Committee determines that 50% (rather than the 75% based and remodel market. These two main components are blended on performance against the ROCE performance hurdles) of for an index of market growth. The above performance hurdles the Chief Executive Officer’s total ROCE RSUs should vest, can be indexed up or down to the extent that actual US and Asia the Chief Executive Officer would receive: Pacific addressable housing starts over the performance period 125,000 RSUs x 50% = 62,500 ROCE RSUs are higher or lower than those assumed in James Hardie’s fiscal years 2019-2021 business plan. Maximum and actual number of ROCE RSUs Performance period: The overall performance period is three The maximum number of Shares and ROCE RSUs for which years. The ROCE RSUs vest three years after they are granted approval is sought under this Resolution 6 is 168,004 and (which is expected to occur in August 2018), subject to the is based on the grant that would be made if James Hardie’s exercise of negative discretion by the Remuneration Committee. performance warranted the maximum possible award for fiscal year 2019 (i.e. 200% of LTI target) and the Remuneration Conditions and negative discretion: In 2021, the Remuneration Committee did not exercise any negative discretion to reduce Committee will review James Hardie’s performance over the the number of ROCE RSUs which ultimately are to vest and be performance period and may exercise negative discretion to settled into Shares. reduce the number of ROCE RSUs that would otherwise vest under the ROCE vesting scale above based on the quality of the The actual number of ROCE RSUs granted will be determined ROCE returns balanced against management’s delivery of market by dividing the maximum dollar amount granted under the share growth and performance against certain specified strategic ROCE RSUs portion of the LTI target (which is 200% of LTI goals and objectives (i.e., the Scorecard). The Remuneration target) by James Hardie’s share price over the 20 trading days Committee can only exercise negative discretion. It cannot preceding the date of grant, subject to the maximum specified be applied to enhance the reward that can be received. The in the resolution. potential to exercise negative discretion allows the Remuneration In the unlikely event the grant calculation returns an actual Committee to ensure that ROCE returns are not obtained at the number of ROCE RSUs to be granted that is greater than the expense of long-term sustainability. maximum number of Shares for which approval is sought under The Scorecard includes a number of longer-term measures this Resolution 6, James Hardie may grant a cash settled award which the Remuneration Committee believes are important equal in value to the number of ROCE RSUs which exceed the contributors to long-term creation of shareholder value. Each maximum number of Shares. Any such cash settled award made year the Remuneration Committee approves a number of key will vest on the same criteria as set forth above and would only objectives and the measures it expects to see achieved for each vest in the event the ROCE RSU grant vests in full. of these objectives. The fiscal year 2019 Scorecard applicable Previous grants for the grants of ROCE RSUs (and Scorecard LTI) is set out in the Remuneration Report for the year ended 31 March 2018. The The number of ROCE RSUs granted to the Chief Executive Remuneration Committee considers the goals to be reflective of Officer in the past three years is: James Hardie’s overall long-term goals. The Chief Executive Officer’s rating ultimately depends on the MAXIMUM Remuneration Committee’s assessment (and the Board’s review) NUMBER APPROVED BY of his contribution to James Hardie in meeting the Scorecard DATE OF GRANT GRANTED SHAREHOLDERS objectives. Although most of the objectives in the Scorecard 21 Aug 2017 136,441 183,517 have quantitative targets, the Board has not allocated a specific 16 Sep 2016 194,626 336,470 weighting to any and the final Scorecard assessment and 16 Sep 2015 254,480 391,720 exercise of negative discretion (if any) will involve an element of judgment by the Remuneration Committee. A different amount of negative discretion is likely to be applied when assessing There was no consideration paid by, and James Hardie did not the Chief Executive Officer’s performance for the Scorecard LTI provide loans to, the Chief Executive Officer in relation to the grants (which only include consideration of Scorecard measures) grant of these ROCE RSUs. and ROCE RSUs grants (which involve a broader assessment of the quality of James Hardie’s results). 11 JAMES HARDIE NOTICE OF MEETING 2018
EXPLANATORY NOTES CONTINUED General The Sherwin Williams Company, and the removal of The Sherwin Williams Company due to its size post acquisition of The Valspar ROCE RSUs will be granted in accordance with the terms of the Corporation. The Peer Group for fiscal year 2019 is: 2006 LTIP (as amended). ROCE RSUs will be granted for no consideration and James Acuity Brands, Inc Louisiana-Pacific Quanex Building Hardie will not provide loans to the Chief Executive Officer in Corp Products Corp relation to the grant of ROCE RSUs. Subject to the performance American Martin Marietta Simpson hurdles being met and the Remuneration Committee’s exercise Woodmark Corp Materials Inc Manufacturing of negative discretion (if any), the Chief Executive Officer will be Co., Inc entitled to receive Shares upon vesting of the ROCE RSUs for no Apogee Masco Trex Co., Inc consideration. ROCE RSUs will be granted to the Chief Executive Enterprises, Inc Corporation Officer no later than 12 months after the passing of Resolution 6. Armstrong World Mohawk USG Corp No director other than Mr Gries has received any grant under the Indus, Inc Industries, Inc 2006 LTIP since the last AGM and no director other than Mr Gries Eagle Materials, Mueller Water Valmont is eligible to participate in the 2006 LTIP. Inc Products, Inc Industries, Inc Summary of the legal requirements for seeking Fortune Brands, NCI Building Vulcan shareholder approval Home & Security Systems, Inc Materials Co Inc. ASX Listing Rule 10.14 provides that a listed company must not permit a director to acquire shares or rights to be issued shares Lennox Owens Corning Watsco, Inc under an employee incentive scheme without the approval of International, Inc shareholders by ordinary resolution. Testing and performance period: The performance hurdle will Recommendation be tested (based on James Hardie’s performance against its Peer Group for the 20 trading days preceding the test date) and The Board believes it is in the interests of shareholders that the the Relative TSR RSUs may vest after three years from the grant fiscal year 2019 grant of ROCE RSUs to the Chief Executive date. Any Relative TSR RSUs that have not vested following this Officer up to the number specified in Resolution 6 under the 2006 test will lapse. LTIP (as amended), subject to the above terms and conditions be approved, and recommends that you vote in favour of Resolution 6. Maximum and actual number of Relative TSR RSUs The maximum number of Shares and Relative TSR RSUs for RESOLUTION 7 – GRANT OF RELATIVE TSR RSUs which approval is sought under this Resolution 7 is 324,406 and Resolution 7 asks shareholders to approve the grant of is based on the grant that would be made if James Hardie equals Relative TSR RSUs to Louis Gries, James Hardie’s Director or exceeds the 80th percentile of performance against the Peer and Chief Executive Officer. Relative TSR RSUs shall vest Group and all the Relative TSR RSUs vest. if James Hardie’s TSR performance meets or exceeds the Relative TSR performance hurdles. Upon vesting, TSR RSUs The actual number of Relative TSR RSUs granted will be shall be settled in CUFS on a 1-to-1 basis. determined by dividing the maximum dollar amount granted under the Relative TSR RSU portion of the LTI target (which is Relative TSR RSU changes from fiscal year 2018 200% of LTI target) by the value of the Relative TSR RSUs, using a Monte Carlo simulation, over the 20 trading days preceding the The key aspects of the Relative TSR RSUs are unchanged. date of grant, subject to the maximum specified in the resolution. Key aspects of Relative TSR RSUs As with Resolution 6, in the unlikely event the grant calculation Grant: The Chief Executive Officer will receive a grant equal returns an actual number of Relative TSR RSUs to be granted to the maximum number of Relative TSR RSUs (200% of that is greater than the maximum number of Shares for which target). The number of Relative TSR RSUs which actually vest approval is sought under this Resolution 7, James Hardie may and the number of Shares ultimately received depends on grant a cash settled award equal in value to the number of James Hardie’s Relative TSR performance compared to the Relative TSR RSUs which exceed the maximum number of performance hurdles. Shares. Any such cash settled award made will vest on the same criteria as set forth above and would only vest in the event the Performance Hurdle: The performance hurdle vesting scale for Relative TSR RSU grant vests in full. fiscal year 2019 grants is unchanged from fiscal year 2018 and is as follows: Previous grants The number of Relative TSR RSUs granted to the Chief Executive PERFORMANCE AGAINST % OF RELATIVE TSR Officer in the past three years is: PEER GROUP RSUs VESTED < 40th Percentile 0% MAXIMUM 40th Percentile 25% NUMBER APPROVED BY DATE OF GRANT GRANTED SHAREHOLDERS 40th – 60th Percentile Sliding Scale 60th Percentile 50% 21 Aug 2017 246,902 324,406 61st – 80th Percentile Sliding Scale 16 Sep 2016 218,159 380,079 ≥80th Percentile 100% 16 Sep 2015 292,514 455,507 Peer Group: The Peer Group for the fiscal year 2019 Relative There was no consideration paid by, and James Hardie did not TSR RSU grant is comprised of other companies exposed provide loans to, the Chief Executive Officer in relation to the to the US building materials market, which is James Hardie’s grant of these Relative TSR RSUs. major market. The Remuneration Committee and the Board General reviewed the composition of the Peer Group with the Company’s independent advisors, Aon Hewitt, and determined that no Relative TSR RSUs will be granted in accordance with the changes would be made for fiscal year 2019 with the exception terms of the 2006 LTIP (as amended) and on the basis set of the removal of The Valspar Corporation which was acquired by out in the Explanatory Notes. 12
Relative TSR RSUs will be granted for no consideration and Consistent with ASX Listing Rules, directors appointed by the James Hardie will not provide loans to the Chief Executive Officer Board to fill a vacancy or as an additional director resulting from in relation to the grant of Relative TSR RSUs. Subject to the an increase in the number of directors must retire at the next performance hurdles being met, the Chief Executive Officer will AGM, at which meeting they may be put forward by the Board be entitled to receive Shares upon vesting of the Relative TSR for election. If elected, they will be given a class designation by RSUs for no consideration. Relative TSR RSUs will be granted the Board and they shall serve a term consistent with their fellow to the Chief Executive Officer within 12 months of the passing class members. of this Resolution 7. New directors appointed by shareholders in accordance with the No director other than Mr Gries has received any grant under the Articles of Association will: 2006 LTIP since the last AGM and no director other than Mr Gries §§ if appointed as an additional director, be given a class is eligible to participate in the 2006 LTIP. designation by the Board and they shall serve a term Summary of the legal requirements for seeking consistent with their fellow class members; or shareholder approval §§ if appointed to fill a vacancy, have the same remaining The reason for seeking shareholder approval is the same as set term as their predecessor unless otherwise designated to out for Resolution 6. a different class. Recommendation Nothing in the proposed amendments affects the circumstances in which a director might otherwise cease to hold office, including The Board believes it is in the interests of shareholders that the right of shareholders to remove a director from office at any the fiscal year 2019 grant of Relative TSR RSUs to the Chief time by ordinary resolution. Executive Officer up to the number specified in Resolution 7 under the 2006 LTIP (as amended), subject to the above terms Recommendation and conditions be approved, and recommends that you vote The Board believes that the proposed amendments to the in favour of Resolution 7. Articles of Association will provide a more orderly framework for managing the director retirement, election and succession RESOLUTION 8 – AMENDMENT OF THE COMPANY’S process, while maintaining consistency with the requirement ARTICLES OF ASSOCIATION under the ASX Listing Rules that a director must not hold office Resolution 8 asks shareholders to approve certain amendments past the third AGM (or for more than 3 years, whichever is longer) to the Company’s Articles of Association (as set out in full in after their appointment or last election. The Board anticipates the Annexure to this Notice of Meeting) in order to update that the resulting Board structure will promote stability and and improve the procedure pursuant to which directors of the continuity for directors and ensure that directors with oversight Company periodically retire and stand for re-election. experience and familiarity with the Company’s business and affairs are not required to submit for re-election prematurely, Currently, the Company’s Articles of Association require that while still annually providing an opportunity for shareholders to each director (other than the CEO) must present themselves for vote on the election (or re-election) of a portion of the Board. re-election at least once every three years and that each year In addition, the proposed structure enables the Board to plan one‑third (or the number nearest one-third) of the directors must for a reasonable period into the future and provides a more retire and (if willing to act) stand for re-election. While the Company stable platform to attract and retain new directors with the has operated under this existing procedure since it re-domiciled to required skill-sets, who can then be provided adequate time to Ireland in 2010, from time to time the interaction of the 3 year limit develop a detailed understanding of the Company’s business, and the requirement that one-third of the directors retire at each its management team and the environment in which it operates. AGM has led to situations where the number of directors standing Finally, the Board believes the revised structure will further for re-election is inconsistent on a year-by-year basis. Further, encourage a long-term focus by directors in overseeing the from a Board (and Board committee) management and succession management and affairs of the Company and promote more standpoint, the current procedure does not successfully provide consistent terms of office among the directors. a platform to promote long-term stability. For these reasons, the Board believes it is in the best interests The proposed amendments to the Articles of Association seek of shareholders to adopt the proposed changes to the Articles to implement a classified Board structure similar to that utilized of Association, and recommends that you vote in favour of by a number of US peer companies, as well as a number of Resolution 8. Irish domiciled companies. If the proposed amendments are approved, following the 2018 AGM, directors of the Company will be divided by the Board into three classes that are as nearly equal in size as practicable, designated as Class I, Class II and Class III. Directors designated as Class I directors would serve a term concluding at the calendar 2019 AGM, Class II directors would serve a term concluding at the calendar 2020 AGM and Note to CDN / Irish Registered Members Class III directors would serve a term concluding at the calendar This note is only relevant to CDN and the six other members 2021 AGM. of the Company for the purposes of Irish law, as well as any Starting at the 2019 AGM, upon the expiration of the term of a other persons who become members of the Company for the class of directors at an AGM, each director in that class may, if purposes of Irish law after the date of this notice of meeting willing to act and if the Board so recommends, put themselves but before 7:00pm (Sydney time) / 10:00am (Dublin time) on forward for re-election at that same AGM to serve from the time Wednesday, 8 August 2018, (together, the Irish Law Members) of re-election until the third AGM following his or her re-election. and is being provided in accordance with Section 181(5) of the If a director was not put forward for re-election, or not re-elected, Irish Companies Act 2014 (the 2014 Act). Each of the Irish Law at the relevant AGM then the director would cease to hold office Members are entitled to appoint one or more proxies, using the at the conclusion of that AGM. form set out in Section 184 of the 2014 Act, to attend, speak and vote at the AGM in their place. A proxy need not be a member In order to ensure the director classes remain appropriately of the Company. The proxy must be received at the Company’s balanced, the Board will have the ability to re-designate directors registered office at Europa House, 2nd Floor, Harcourt Centre, from one class to another, notwithstanding the fact that this may Harcourt Street, Dublin 2, Ireland by 7:00am (Dublin time) on shorten the term of a director. Friday, 10 August 2018. 13 JAMES HARDIE NOTICE OF MEETING 2018
ANNEXURE PROPOSED AMENDMENTS TO THE COMPANY’S ARTICLES OF ASSOCIATION Set out below are the amendments to the Company’s Articles of (b) At each of the first three annual general meetings following Association proposed by Resolution 8, with additional text shown 17 June 2010, the Directors (including any Directors holding in double underline, and deleted text shown in strike-through. executive office pursuant to these Articles but excluding the Chief Executive Officer) to retire by rotation shall be those PART XIV – who have agreed to put themselves forward for retirement provided that where the number of such Directors is less APPOINTMENT AND RETIREMENT OF DIRECTORS than one-third, the Chairman shall nominate the Directors 109. Retirement who are to retire. (a) The Directors (other than the Chief Executive Officer) (c) At the fourth and at each subsequent annual general shall be divided into three classes, as nearly equal in size meeting following 17 June 2010, the Directors (including as practicable, designated Class I, Class II and Class III. any Directors holding executive office pursuant to these The initial division of the Directors (other than the Chief Articles but excluding the Chief Executive Officer) to Executive Officer) into classes shall be made by the retire by rotation shall be those who have been longest decision of an affirmative vote of a majority of the Directors. in office since their last appointment or reappointment (b) Each Class I Director shall (unless his office is vacated but as between persons who became or were last in accordance with these Articles) serve initially until the reappointed Directors on the same day those to retire conclusion of the annual general meeting of the Company shall be determined (unless they otherwise agree among held in the calendar year 2019. themselves) by lot. (c) Each Class II Director shall (unless his office is vacated (d) Subject to Article 110, a Director who retires at an annual in accordance with these Articles) serve initially until the general meeting may be reappointed, if willing to act. If he conclusion of the annual general meeting of the Company is not reappointed (or deemed to be reappointed pursuant held in the calendar year 2020. to these Articles) he shall retain office until the meeting appoints someone in his place or, if it does not do so, until (d) Each Class III Director shall (unless his office is vacated the end of the meeting. in accordance with these Articles) serve initially until the conclusion of the annual general meeting of the Company 110. Deemed reappointment Director Term held in the calendar year 2021. If the Company, at the meeting at which a Director retires by (e) (a) At each annual general meeting of the Company rotation, does not fill the vacancy then, subject to Article 111 the one-third of the Directors who are subject to retirement retiring Director, if willing to act, shall be deemed to have been by rotation, or if their number is not three or a multiple of re-appointed, unless at the meeting it is resolved not to fill the three then the number nearest to one-third, shall retire vacancy or a resolution for the reappointment of the Director is from office, but if there is only one Director who is subject put to the meeting and lost. to retirement by rotation then he shall retire provided that Notwithstanding any other provision of these Articles, no Director each Director (other than the Chief Executive Officer) shall (other than the Chief Executive Officer) shall hold office (without present himself for re-election at least once every three re-election) past: years., beginning from (and including) the calendar year 2019, successors to the class of Directors whose term (a) the third annual general meeting of the Company; or expires at that annual general meeting shall be elected (b) 3 years, following the Director’s appointment (or last for a three-year term. A Director may, with the prior election), whichever is longer. approval of the board of Directors, stand for re-election (as his own successor) at an annual general meeting at 111. Eligibility for appointment as a Director which his term expires. (a) Subject to receiving the prior approval of the board of (f) The board of Directors, acting in good faith and in the Directors, any Director retiring by rotation at an annual interests of the Company, may re-designate any Director general meeting in accordance with Article 109 will be (including, for the avoidance of doubt, Directors appointed eligible for re-appointment. in accordance with Article 112 and/or Article 114) from one class to another, notwithstanding the fact that this may (b) (a) No person other than a Director retiring by rotation shall shorten the term of the relevant Director. A Director shall be appointed, re-appointed or deemed to be appointed or hold office until the close of the annual general meeting re-appointed as a Director at any general meeting unless for the year in which his term expires or (if earlier) until a that person is: resolution is passed at that annual general meeting not to (i) recommended by the Directors; or fill the vacancy or a resolution to re-appoint him is put to a vote at the meeting and is lost, subject, however, to prior (ii) nominated in accordance with paragraph (bc) by one death, resignation, retirement, disqualification or removal or more members who alone or together hold 10% of from office. the Company’s issued share capital. 14
(c) (b) A nomination made in accordance with Article 111(ab)(ii) PART XV – shall be: DISQUALIFICATION AND REMOVAL OF DIRECTORS (i) lodged with the Company accompanied by 113. Disqualification of Directors a biography setting out their experience and The office of a Director shall be vacated ipso facto if: directorships of other listed and unlisted companies of not more than 300 words together with the consent (a) he is restricted or disqualified from acting as a director of of the nominee to act as Director if appointed; and any company under the provisions of Part 14 of the Act; (ii) received by the Company in hardcopy or electronic (b) he becomes bankrupt or makes any arrangement or form at such postal or electronic address as has been composition with his creditors generally; specified by the Company for that purpose in, (c) in the opinion of a majority of his co-Directors, he becomes (A) the announcement of the intention to convene an incapable by reason of mental disorder of discharging his annual general meeting in accordance with Article duties as a Director; 51; or (d) (not being a Director holding for a fixed term an executive (B) the announcement of the intention to convene an office in his capacity as a Director) he resigns his office by extraordinary general meeting in accordance with notice to the Company; Article 55(a), (e) his term of office expires in accordance with Article 110; at least thirty (30) Business Days before the general (f) (e) he is convicted of an indictable offence, unless the meeting to which it relates. Directors otherwise determine; or 112. Appointment of additional Directors (g) (f) he shall have been absent for more than six (a) Subject to Article 111, the Company by ordinary resolution consecutive months without permission of the Directors may appoint a person to be a Director either to fill a from meetings of the Directors held during that period vacancy or as an additional Director and any Director and his alternate Director (if any) shall not have attended so appointed shall be subject to retire by rotation in any such meeting in his place during such period, and accordance with Article 109(a).. A Director so appointed the Directors pass a resolution that by reason of such as an additional director shall be designated as a Class I, absence he has vacated office. Class II or Class III Director by the decision of an affirmative vote of a majority of the Directors and shall hold office for 114. Removal of Directors a term that shall coincide with the remaining term of that The Company, by ordinary resolution of which notice has been class. Any Director elected to fill a vacancy shall have the given in accordance with the Acts, may remove any Director same remaining term as that of her or his predecessor before the expiry of his period of office notwithstanding anything unless otherwise designated to a different class. in these Articles or in any agreement between the Company and such Director and may, if thought fit, by ordinary resolution (b) The Directors may appoint a person who is willing to act appoint another Director in his stead. The person so appointed to be a Director, either to fill a vacancy or as an additional shall be subject to retirement at the same time as if he had Director, provided that the appointment does not cause become a Director on the date on which the Director in whose the number of Directors to exceed any number determined place he is appointed was last appointed a Director.have the by the Directors or fixed by or in accordance with these same remaining term as that of his or her predecessor unless Articles as the maximum number of Directors. A Director otherwise designated to a different class. Nothing in this Article so appointed shall hold office only until the next following shall be taken as depriving a person removed hereunder of annual general meeting and shall not be taken into account compensation or damages payable to him in respect of the in determining the Directors who are to retire by rotation termination of his appointment as Director or of any appointment at the meeting, at which meeting he may, with the prior terminating with that Director. approval of the board of Directors, stand for election. If re-appointed at that annual general meeting, the Director shall be designated as a Class I, Class II or Class III Director by the decision of an affirmative vote of a majority of the Directors and shall hold office for a term that shall coincide with the remaining term of that class. If not re-appointed at such annual general meeting, such Director shall vacate office at the conclusion thereof. Designed and produced by ArmstrongQ armstrongQ.com.au 15 JAMES HARDIE NOTICE OF MEETING 2018
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