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NOTICE OF ANNUAL GENERAL MEETING AND EXPLANATORY MEMORANDUM

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AFTERPAY TOUCH GROUP LIMITED – ACN 618 280 649

NOTICE OF ANNUAL GENERAL MEETING AND EXPLANATORY MEMORANDUMAFTERPAY TOUCH GROUP LIMITEDACN 618 280 649

DATE: WEDNESDAY 13 NOVEMBER 2019TIME: 10.30AM (MELBOURNE TIME) VENUE: HERBERT SMITH FREEHILLS LEVEL 42, 101 COLLINS STREET MELBOURNE VIC 3000

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LETTER FROM THE CHAIR

Dear Shareholder, I am pleased to invite you to attend the 2019 Annual General Meeting (AGM) of Afterpay Touch Group Limited (Afterpay or Company). The AGM will be held at Herbert Smith Freehills, Level 42, 101 Collins Street in Melbourne on Wednesday 13 November 2019 at 10.30am.

Enclosed with this letter is a Notice of Meeting and proxy form detailing the items of business to be considered at the meeting.

At the AGM, our CEO & Managing Director, Anthony Eisen, and I will provide an overview of Afterpay’s performance over the 2019 financial year and an update on matters important to you, our Afterpay shareholders.

It has been an exciting year for our Company. We have achieved a number of critical milestones in our mission to become “the world’s most loved way to pay”. The strength of our differentiated business model, and the global demand for our platform, has driven strong growth in FY19 and saw us become a S&P/ASX 100 company.

We are focused on continuing to deliver shareholder value by executing on our strategic and operational priorities. These priorities are underpinned by our four strategic pillars – to grow, perform, innovate and do the right thing.

Afterpay’s market value has grown significantly in a short period of time and we are conscious that our investors expect a level of governance that is commensurate with similar-sized companies. We are focused on continuously improving our corporate governance and have outlined some of the initiatives we are committed to in our 2019 Annual Report. These include transitioning to a majority independent Board with an independent Chair and implementing a new equity incentive plan that is appropriate for an Australian listed company of our size and global operations. The new equity incentive plan has been developed after an extensive review, with the assistance of external remuneration specialists, and aims to strike a balance between the need to compete for world-class talent in the global technology sector as well as meet the expectations of a S&P/ASX 100 company. Some of the resolutions you are being asked to consider in our Notice of AGM relate to these initiatives.

Details of the items of business and instructions on how to vote (including how to appoint a proxy to vote on your behalf if you are unable to attend the AGM) are included in the Notice of Meeting and enclosed proxy form. There will be opportunities at the AGM for shareholders to ask questions regarding each agenda item, Afterpay’s performance and the 2019 Annual Report.

The AGM will be webcast via the Afterpay website at www.afterpaytouch.com. After the Meeting, you can also watch an archived recording on the website.

Thank you for your ongoing support of Afterpay. My fellow directors and I look forward to welcoming you to the 2019 AGM.

Yours sincerely,

Elana RubinIndependent Interim Chair

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NOTICE OF 2019 ANNUAL GENERAL MEETINGNOTICE IS GIVEN THAT THE 2019 ANNUAL GENERAL MEETING OF AFTERPAY TOUCH GROUP LIMITED ACN 618 280 649 WILL BE HELD AT HERBERT SMITH FREEHILLS, LEVEL 42, 101 COLLINS STREET, MELBOURNE VIC 3000 ON WEDNESDAY 13 NOVEMBER 2019 AT 10.30AM (MELBOURNE TIME)

BUSINESS OF THE MEETINGShareholders are invited to consider the following items of business at the Annual General Meeting:

1. FINANCIAL AND RELATED REPORTS

To receive and consider the financial report of the Company and its controlled entities and the related directors’ and auditor’s reports in respect of the financial year ended 30 June 2019.

2. ADOPTION OF REMUNERATION REPORT (NON-BINDING RESOLUTION)

RESOLUTION 1 ADOPTION OF REMUNERATION REPORT (NON-BINDING RESOLUTION)

Description Shareholders are asked to adopt the Company's Remuneration Report for the year ended 30 June 2019. The Remuneration Report is set out in the 2019 Annual Report and is available from the Company's website (www.afterpaytouch.com). In accordance with section 250R(3) of the Corporations Act, the vote on this resolution will be advisory only and will not bind the directors or the Company.

Resolution To consider and, if thought fit, pass the following resolution:

“THAT the Remuneration Report of the Company for the year ended 30 June 2019 be adopted.”

Voting Exclusion The Company will disregard any votes cast on the Resolution (Resolution 1) by or on behalf of a member of the Key Management Personnel (KMP) named in the Remuneration Report for the year ended 30 June 2019, or that member's Closely Related Party, regardless of the capacity in which the vote is cast. However, a member of the KMP or Closely Related Party may cast a vote on this item as proxy for a person that is entitled to vote if:

• the appointment of the proxy specifies in writing the way the proxy is to vote on the resolution; or

• that person is the Chair of the Meeting, and the appointment of the proxy expressly authorises the Chair of the Meeting to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a member of the KMP.

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3. INCREASE IN NON-EXECUTIVE DIRECTORS’ FEE POOL

RESOLUTION 2 INCREASE IN MAXIMUM AGGREGATE REMUNERATION FOR NON-EXECUTIVE DIRECTORS

Description The Company seeks shareholder approval under ASX Listing Rule 10.17 and clause 21.1 of the Constitution to increase the maximum aggregate remuneration payable to Non-Executive Directors of the Company to $1,800,000.

Resolution (ordinary)

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

“THAT for all purposes, including for purposes of ASX Listing Rule 10.17 and clause 21.1 of the Constitution, the maximum aggregate remuneration payable to the Non-Executive Directors of the Company be increased by $1,100,000 from $700,000 to $1,800,000 per annum.”

Voting Exclusion The Company will disregard any votes cast:

• in favour of this Resolution by or on behalf of a Director of the Company or their associates, or

• on the Resolution as proxy by any member of KMP or a Closely Related Party of a member of KMP, who is not directed how to vote.

However, the Company will not disregard a vote if it is cast by:

• a person as proxy for a person who is entitled to vote in accordance with the directions of the proxy form; or

• the person is the Chair of the meeting as proxy for a person who is entitled to vote, without being directed how to vote and the appointment expressly authorises the chair to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a member of the KMP.

4. RE-ELECTION OF DIRECTOR

RESOLUTION 3 RE-ELECTION OF MR CLIFFORD ROSENBERG AS DIRECTOR

Description Mr Clifford Rosenberg, who was appointed as a Director on 30 March 2017, retires as a Director in accordance with clause 20.1 of the Constitution and, being eligible, offers himself for re-election under clause 20.7 of the Constitution.


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

“THAT Mr Clifford Rosenberg, who retires as a Director of the Company in accordance with ASX Listing Rule 14.4 and clause 20.1 of the Constitution and, being eligible, offers himself for election, be re-elected as a Director of the Company.”

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5. RATIFICATION OF ISSUE OF SHARES PURSUANT TO PLACEMENT

RESOLUTION 4 RATIFICATION OF ISSUE OF SHARES PURSUANT TO PLACEMENT

Description The Company seeks shareholder ratification pursuant to ASX Listing Rule 7.4 for an issue of 13,793,104 Shares at an issue price of $23.00 per Share by the Company to certain institutional and professional investors in June 2019 (Placement).


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

“THAT, for the purposes of ASX Listing Rule 7.4 and for all other purposes shareholders approve and ratify the issue of 13,793,104 fully paid ordinary shares on 17 June 2019 to certain institutional and professional investors on the terms and conditions set out in the Explanatory Notes accompanying this Notice.”

Voting Exclusion The Company will disregard any votes cast on the resolution (Resolution 4) by or on behalf of a person who participated in the issue or an associate of these persons.

However, the Company will not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions in the proxy form or if it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

6. APPROVAL OF THE AFTERPAY EQUITY INCENTIVE PLAN

RESOLUTION 5 APPROVAL OF THE AFTERPAY EQUITY INCENTIVE PLAN

Description The Company seeks shareholder approval pursuant to ASX Listing Rule 7.2, exception 9(b) for the grant of Options and Rights, and issue of Shares by the Company to certain eligible participants under the Afterpay Equity Incentive Plan (Plan).


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

“THAT, for the purposes of ASX Listing Rule 7.2, exception 9(b) and for all other purposes, shareholders approve the grant of Options and Rights, and issue of Shares by the Company under the Afterpay Equity Incentive Plan on the terms described in the Explanatory Memorandum accompanying this Notice.”

Voting Exclusion The Company will disregard any votes cast in favour of the resolution (Resolution 5) by a director of the Company (except a Director who is ineligible to participate in any employee scheme of the Company) or their associates.

However, the Company will not disregard a vote if it is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions in the proxy form or if it is cast by the person chairing the meeting as proxy for a person who is entitled to vote, in accordance with a direction on the proxy form to vote as the proxy decides.

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7. APPROVAL OF LONG-TERM INCENTIVE (LTI) GRANT – CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR

RESOLUTION 6 APPROVAL OF LTI GRANT – CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR

Description Resolution 6 seeks approval from Shareholders under ASX Listing Rule 10.14 for the grant of Options to Mr Anthony Eisen, Co-Founder and Chief Executive Officer and Managing Director of the Company.


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

“THAT, for the purposes of ASX Listing Rule 10.14 and for all other purposes, the grant of 125,000 Options to Mr Anthony Eisen under the Afterpay Equity Incentive Plan on the terms described in the Explanatory Memorandum accompanying this Notice, is approved.”


• in favour of this Resolution by or on behalf of any director of the Company who is eligible to participate in the employee incentive scheme in respect of which the approval is sought or their associates; or





8. APPROVAL OF LONG-TERM INCENTIVE (LTI) GRANT – GLOBAL CHIEF REVENUE OFFICER AND EXECUTIVE DIRECTOR

RESOLUTION 7 APPROVAL OF LTI GRANT – GLOBAL CHIEF REVENUE OFFICER AND EXECUTIVE DIRECTOR

Description Resolution 7 seeks approval from Shareholders under ASX Listing Rule 10.14 for the Board to grant Options to Mr Nick Molnar, Co-Founder and Global Chief Revenue Officer and Executive Director of the Company.


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

“THAT, for the purposes of ASX Listing Rule 10.14 and for all other purposes, the grant of 125,000 Options to Mr Nick Molnar, under the Afterpay Equity Incentive Plan on the terms described in the Explanatory Memorandum accompanying this Notice, is approved.”

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• in favour of this Resolution by or on behalf of any director of the Company who is eligible to participate in the employee incentive scheme in respect of which the approval is sought or their associates; or





9. APPROVAL OF CHANGE OF COMPANY NAME

RESOLUTION 8 APPROVAL OF CHANGE OF THE COMPANY’S NAME TO AFTERPAY LIMITED

Description The Company seeks shareholder approval to change its Company name to Afterpay Limited, and to update all references in the Constitution from ‘Afterpay Touch Group Limited’ to ‘Afterpay Limited’ to reflect the Company’s new name.

Resolution (Special)

To consider and, if thought fit, pass the following resolution as a special resolution:

“THAT, for the purposes of sections 157(1)(a) and 136(2) of the Corporations Act 2001 (Cth) and for all other purposes, the Company change its name from ‘Afterpay Touch Group Limited’ to ‘Afterpay Limited’ and all references in the Company’s constitution to ‘Afterpay Touch Group Limited’ be amended to ‘Afterpay Limited’ to reflect the Company’s new name.”

DATED: 11 OCTOBER 2019

BY ORDER OF THE BOARD OF AFTERPAY TOUCH GROUP LIMITED

Christopher StevensGeneral Counsel & Company Secretary

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QUESTIONS FROM SHAREHOLDERSIn order to provide an equal opportunity for all shareholders to ask questions of the Board, we ask you to submit in writing any questions to the Company or to the Company’s auditor, Ernst & Young in relation to the conduct of the external audit for the year ended 30 June 2019, or the content of its audit report. Please send your questions to:

The Company Secretary, Afterpay Touch Group Limited

Via mail: Level 5, 406 Collins Street, Melbourne VIC 3000

Via email: [email protected]

Written questions must be received by no later than 5.00pm (Melbourne time) on Wednesday 6 November 2019.

AFTERPAY HAS TO BE THE BEST THING ON EARTH

“ “

GEORGIE RENEE

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Your questions should relate to matters that are relevant to the business of the Meeting, as outlined in this Notice of Meeting and Explanatory Memorandum.

In accordance with the Corporations Act 2001 (Cth) and the Company’s policy, a reasonable opportunity will also be provided to shareholders attending the Meeting to ask questions about, or make comments upon, matters in relation to the Company including the Company’s Remuneration Report for the year ended 30 June 2019.

During the course of the Meeting, the Chair will seek to address as many shareholder questions as reasonably practicable, and where appropriate, will give a representative of the auditor the opportunity to answer written questions addressed to it. However there may not be sufficient time to answer all questions at the Annual General Meeting. Please note that individual responses may not be sent to shareholders.

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VOTING INFORMATION

Entitlement to vote at the Meeting

A determination has been made by the Board of the Company under regulation 7.11.37 of the Corporations Regulations 2001 that that the persons eligible to vote at the Meeting are those who are registered shareholders of the Company as at 7.00 pm (Melbourne time) on Monday 11 November 2019, subject to any applicable voting exclusion.

Voting by proxy

a. A shareholder entitled to attend and vote at the Meeting may appoint one proxy or, if the shareholder is entitled to cast 2 or more votes at the Meeting, 2 proxies, to attend and vote instead of the shareholder.

b. Where 2 proxies are appointed to attend and vote at the Meeting, each proxy may be appointed to represent a specified proportion or number of the shareholder’s voting rights at the Meeting.

c. A proxy need not be a shareholder of the Company.

d. A proxy may be an individual or a body corporate. If a body corporate is appointed, the proxy form must indicate the full name of the body corporate and the full name or title of the individual representative of the body corporate for the Meeting.

e. A proxy form accompanies this notice. If a shareholder wishes to appoint more than 1 proxy, they may make a copy of the proxy form attached to this notice. For the proxy form to be valid it must be received together with the power of attorney or other authority (if any) under which the form is signed, or a certified copy of that power of authority by 10.30 am (Melbourne time) on Monday 11 November 2019:

• online by going to investorvote.com.au or by scanning the QR code, found on the enclosed proxy form with your mobile device

• by post at GPO Box 242, Melbourne, Victoria 3001;

• by personal delivery at Yarra Falls, 452 Johnston Street, Abbotsford, Victoria, 3067;

• by facsimile: Australia – 1800 783 447, overseas - +61 3 9473 2555; or

• Custodian voting - For Intermediary Online subscribers only (custodians) please visit www.intermediaryonline.com to submit your voting intentions.

Proxy voting by the Chair

The Corporations Act imposes prohibitions on Key Management Personnel and their Closely Related Parties from voting their shares (or voting undirected proxies) on, amongst other things, remuneration matters.

However, the chair of a meeting may vote an undirected proxy (i.e. a proxy that does not specify how it is to be voted), provided the shareholder who has lodged the proxy has given an express voting direction to the chair to exercise the undirected proxy, even if the resolution is connected with the remuneration of a member of Key Management Personnel. If you complete a proxy form that authorises the Chair of the Meeting to vote on your behalf as proxy, and you do not mark any of the boxes so as to give her directions about how your vote should be cast, then you will be taken to have expressly authorised the Chair to exercise your proxy on Resolutions 1, 2, 5, 6 and 7. In accordance with this express authority provided by you, the Chair will vote in favour of Resolutions 1, 2, 5, 6 and 7. If you wish to appoint the Chair of the Meeting as your proxy, and you wish to direct her how to vote, please tick the appropriate boxes on the form.

The Company’s Interim Chair, Ms Elana Rubin, will chair the Meeting and intends to vote all available undirected proxies in favour of each item of business.

If you appoint as your proxy any Director of the Company, except the Chair, or any other Key Management Personnel or any of their Closely Related Parties and you do not direct your proxy how to vote on Resolutions 1, 2, 5, 6 or 7 he or she will not vote your proxy on that item of business.

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EXPLANATORY MEMORANDUM TO NOTICE OF 2019 ANNUAL GENERAL MEETING

1. FINANCIAL AND RELATED REPORTS

EXPLANATION

Section 317 of the Corporations Act requires the Company’s financial report, directors’ report and auditor’s report for the financial year ended 30 June 2019 to be laid before the Company’s 2019 Annual General Meeting. There is no requirement for a formal resolution on this item.

The financial report contains the financial statements of the consolidated group consisting of Afterpay Touch Group and its controlled entities.

As permitted by the Corporations Act, a printed copy of the Company’s 2019 Annual Report has been sent only to those shareholders who have elected to receive a printed copy. A copy of the 2019 Annual Report is available from the Company’s website (www.afterpaytouch.com).

The Chair of the Meeting will allow a reasonable opportunity at the Meeting for shareholders to ask questions. Shareholders will also be given a reasonable opportunity at the Meeting to ask the Company’s auditor Ernst & Young questions about its audit report, the conduct of its audit of the Company’s financial report for the year ended 30 June 2019, the preparation and content of its audit report, the accounting policies adopted by the Company in its preparation of the financial statements and the independence of Ernst & Young in relation to the conduct of the audit.

2. ADOPTION OF REMUNERATION REPORT (NON-BINDING RESOLUTION)

RESOLUTION 1 ADOPTION OF REMUNERATION REPORT (NON-BINDING RESOLUTION)

EXPLANATION

Shareholders are asked to adopt the Company’s Remuneration Report. The Remuneration Report is set out in the Company’s 2019 Annual Report and is available from the Company’s website (www.afterpaytouch.com).

The Remuneration Report:

• describes the policies behind, and the structure of, the remuneration arrangements of the Company and the link between the remuneration of executives and the Company’s performance in FY19;

• sets out the remuneration arrangements in place for each director and for certain members of the senior management team in FY19; and

• explains the differences between the basis for remunerating non-executive directors and senior executives, including the Managing Director.

The Remuneration Report also sets out details of the Company’s new Executive KMP framework which will apply from FY20 (see Section 2 of the Remuneration Report), which the Board spent considerable time and effort developing in FY19.

Under section 250R(2) of the Corporations Act, the Company must put the adoption of its Remuneration Report to a vote of Shareholders at the Company’s AGM.

The vote on this item is advisory only and will not require the Company to alter the arrangements set out in the Remuneration Report if Resolution 1 is not passed. However, the Remuneration and Nomination Committee and Board of Afterpay will take into account any feedback from its shareholders in relation to the Company’s remuneration strategy, including the discussion and vote on this resolution. A reasonable opportunity will be provided for the discussion of, and questions relating, to the Remuneration Report at the meeting.

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As a result of provisions in the Corporations Act, known generally as the “two strikes rule”, shareholders should note that the result of the vote on this resolution may affect next year’s Annual General Meeting. If 25% or more of the votes cast on the resolution are voted “against” adoption of the Remuneration Report at the meeting, then:

• if comments are made on the report at the meeting, the Company’s Remuneration Report for FY20 will be required to include an explanation of the Board’s proposed action in response or, if no action is proposed, the Board’s reasons for this; and

• if, at next year’s AGM, at least 25% of the votes cast on the resolution for adoption of the Remuneration Report are against it, the Company will be required to put to shareholders at that AGM a resolution proposing that an Extraordinary General Meeting (EGM) be called to consider the election of the Directors of Afterpay (a spill resolution).

If a spill resolution is passed (i.e. more than 50% of votes cast are in favour), all of the Directors (other than the Managing Director) will cease to hold office at the subsequent EGM, unless re-elected at that meeting.

VOTING EXCLUSION

A voting exclusion statement applies to this resolution, as set out in the Notice.

BOARD RECOMMENDATION

The Directors unanimously recommend that shareholders vote in favour of adopting the Remuneration Report.

CHAIR’S AVAILABLE PROXIES

The Chair of the Meeting intends to vote all available proxies in favour of Resolution 1.

3. INCREASE IN NON-EXECUTIVE DIRECTORS’ FEE POOL

RESOLUTION 2 INCREASE IN MAXIMUM AGGREGATE REMUNERATION FOR NON-EXECUTIVE DIRECTORS

EXPLANATION

In accordance with ASX Listing Rule 10.17 and clause 21.1 of the Company’s Constitution, an increase in the maximum aggregate remuneration (fee pool) for the remuneration of Non-Executive Directors requires shareholder approval.

The current maximum aggregate remuneration available for Non-Executive Directors has not changed since the Company was listed on the ASX in 2017.

As set out in further detail below, the Directors consider that it is reasonable and appropriate at this time to seek shareholder approval for an increase to the maximum fee pool for Non-Executive Directors (for the purposes of ASX Listing Rule 10.17) in recognition of:

• the Board’s evolving composition including the need to appropriately compensate an Independent Chair and provide flexibility to appoint multiple new Non-Executive Directors in the medium term (including overseas Directors); and

• the need to pay market competitive fees to existing and new Non-Executive Directors to ensure the Company is able to attract and retain Directors of the requisite calibre for the Afterpay Board, and in recognition of Directors’ significant workloads.

If this Resolution 2 is passed, the maximum aggregate amount of Directors’ fees that may be paid to all of the Company’s Non-Executive Directors’ is $1,800,000 per annum. The remuneration of each Non-Executive Director to the year ended 30 June 2019 is detailed in Remuneration Report of the Company’s Annual Report.

EVOLVING BOARD COMPOSITION

As the Company continues on its journey from an Australia-focused start-up to an ASX listed company with a global presence, the Company is committed to ensuring it meets the highest standards of corporate governance and external expectations, which includes the composition and independence of its Board.

Ensuring the Board has the right composition and set of skills, expertise, experience and values to support the expansion and globalisation of the Afterpay business and execution of the Company’s mid-term strategy is critical to the Company’s long-term success.

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Reflecting this, and as announced to the market in July 2019, the Company is in the process of transitioning to a majority independent Board with an independent Chair. An initial step towards this transition was the appointment of Elana Rubin as Independent Interim Chair (effective 1 July 2019) until a new independent Chair is appointed. The Company’s previous Executive Chairman (Anthony Eisen) assumed the role of Chief Executive Officer and Managing Director (effective 1 July).

The Company is also currently undertaking a global search to recruit at least two additional independent Directors over the medium term to complement the skill sets of the existing Non-Executive Directors.

In light of this, an increase to the fee pool is sought to provide sufficient flexibility and headroom to appropriately compensate a new Independent Chair and additional Director appointments (including overseas appointments) over the medium term.

MARKET COMPETITIVENESS - FY19 NON-EXECUTIVE DIRECTOR FEE REVIEW

In addition to providing sufficient flexibility to accommodate the evolving composition of the Afterpay Board, an increase to the maximum fee pool is required to facilitate an increase to Non-Executive Director fees (effective from FY20) to market competitive levels.

During FY19, the Board undertook a review of Non-Executive Director fees (facilitated by independent market data provided by an independent remuneration consultant).

The Company’s current fees were set when the Company was significantly smaller in market capitalisation, complexity and geographic spread, and were positioned well below market relative to other Australian companies of a comparable size by market capitalisation (i.e. generally below the 10th percentile), as well as the fees paid by other specific ASX-listed comparator companies in the fin-tech and technology sectors.

Informed by this review, the Board determined that an increase to Non-Executive Director member and Committee fees to be positioned just below the median of the market capitalisation comparator group (comprising companies with a market capitalisation ranging from $2.50bn to $9.95bn at the time of preparation of the market data during FY19) was appropriate, having regard to:

• the need to ensure the Company is competitive in attracting and retaining world-class Non-Executive Director talent with the requisite skills, expertise and experience to support Afterpay’s

international expansion and execution of its mid-term plan in the interests of shareholders. Market competitiveness of fees is particularly important as the Company looks to recruit additional Non-Executive Directors (including overseas Directors) to complement the skill-sets of its existing Non-Executive Directors; and

• the significant workload of Directors in light of the international expansion of the Company into new markets, including the UK, and the increasing complexity of the regulatory environment in which the Company operates.

To accompany the increase in fees, the Board resolved during FY19 to introduce a new minimum shareholding requirement, which will require Non-Executive Directors to build a shareholding equivalent to 1 x their base member fee (on an after-tax basis) in Afterpay shares over 3 years, to further strengthen the alignment between Non-Executive Directors and the Company’s shareholders (refer section 6 of the Remuneration Report for further detail on this new Policy and the increase to Non-Executive Director fees).

The proposed fee pool of $1,800,000 is positioned below the median fee pool of companies within the market capitalisation comparator group (noted above) of $1,950,000.

No securities have been issued to any Non-Executive Director under ASX Listing Rules 10.11 or 10.14 with shareholder approval within the past three years.

Accordingly, the Board considers it appropriate to put this proposed increase to the Shareholders at this time. Disclosure of Directors’ remuneration will continue to be made to Shareholders in each Annual Report in accordance with applicable legal and ASX requirements. If shareholder approval is obtained, the increased fee pool will apply for the financial year ending 30 June 2020.

VOTING EXCLUSION

A voting exclusion statement applies to this Resolution 2, as set out in the Notice.


The Board, acknowledging that each Non-Executive Director has a personal interest in their own remuneration from the Company, recommends that shareholders vote in favour of Resolution 2.



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4. RE-ELECTION OF DIRECTOR

RESOLUTION 3 RE-ELECTION OF MR CLIFFORD ROSENBERG AS DIRECTOR

EXPLANATION

Clause 20.1 of the Constitution provides that a Director must not hold office without re-election: (a) following the third annual general meeting after that Director’s last appointment or re-election; or (b) for more than three years, whichever is longer.

Mr Clifford Rosenberg was appointed on 30 March 2017, and this Meeting will be his third annual general meeting since his appointment.

Accordingly, Mr Rosenberg retires as a Director of the Company in accordance with clause 20.1 of the Constitution and, being eligible under clause 20.7, offers himself for election as a Director of the Company.

ABOUT CLIFFORD ROSENBERG

Clifford Rosenberg has spent more than 20 years working at digital companies leading innovation and change in the industry both as an entrepreneur and senior executive.

Clifford was previously a senior executive at LinkedIn, serving as the Managing Director of LinkedIn for South East Asia, Australia and New Zealand. Prior to LinkedIn, Clifford was Managing Director at Yahoo Australia and New Zealand, and previously the founder and Managing Director of iTouch Australia and New Zealand, one of the biggest mobile content and application service providers in Australia. Prior to iTouch, Clifford was the Head of Strategy for Vodafone Australasia.

Clifford has a Bachelor of Business Science (Honours) and a Master of Science in Management.

Clifford is also a Non-Executive Director of ASX listed companies Nearmap Ltd, A2B Australia Limited and Technology One Limited.

In addition, effective from 16 September 2019, Clifford joined the board of a publicly listed company on the Johannesburg Stock Exchange (JSE) by the name of Bid Corporation Limited (JSE: BID).


The Board, with Mr Rosenberg abstaining on Resolution 3, recommends that shareholders vote in favour of Resolution 3.



5. RATIFICATION OF ISSUE OF SHARES

PURSUANT TO PLACEMENT

RESOLUTION 4 RATIFICATION OF ISSUE OF SHARES PURSUANT TO PLACEMENT

EXPLANATION

The Company seeks shareholder ratification pursuant to ASX Listing Rule 7.4 for previous issues of securities made by the Company during the last 12 months within the placement limit in ASX Listing Rule 7.1.

ASX LISTING RULES

ASX Listing Rule 7.1 provides that a company must not, subject to specified exceptions under ASX Listing Rule 7.2, issue or agree to issue shares during any 12-month period in excess of 15% of the number of shares on issue at the commencement of that 12-month period without shareholder approval.

ASX Listing Rule 7.4 sets out an exception to ASX Listing Rule 7.1, by permitting the ratification of previous issues of shares which were not made under a prescribed exception under ASX Listing Rule 7.2 or with shareholder approval, provided that such issues did not breach the 15% threshold set out by ASX Listing Rule 7.1. If shareholders of a company approve the ratification of such previous issues of shares at a general meeting, those shares will be deemed to have been issued with shareholder approval for the purposes of ASX Listing Rule 7.1.

Accordingly, if shareholders ratify the Company’s previous issue of Shares (made under ASX Listing Rule 7.1) by way of approving this Resolution 4, those Shares will be deemed to have been issued with shareholder approval for the purposes of ASX Listing Rule 7.1 and will no longer be deducted from the Company’s 15% placement capacity.

SPECIFIC INFORMATION ON RESOLUTION

Resolution 4 seeks shareholder ratification of the issue of 13,793,104 Shares on 17 June 2019 at an issue price of $23.00 per share to certain institutional investors.

The Placement was undertaken within the Company’s 15% placement capacity.

In accordance with ASX Listing Rule 7.5, which contains requirements as to the contents of a notice sent to shareholders for the purposes of ASX Listing Rule 7.4, the following information is provided to shareholders:

NO OF SECURITIES ISSUED

13,793,104 Shares

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ISSUE PRICE

$23.00 per share

RECIPIENTS OF ISSUE

Certain institutional investors. These investors included existing institutional shareholders of the Company and additional investors introduced by the Lead Manager to the placement, Citigroup Global Markets.

TERMS OF ISSUE

Fully paid ordinary shares ranking equally with other existing fully paid ordinary shares in the Company

USE OF FUNDS

The proceeds from the issue of the Shares will be used to support the Company’s global growth strategy as outlined in the Company’s previously announced mid-term plan.

VOTING EXCLUSION

A voting exclusion statement applies to this item of business, as set out in the Notice.


The Directors unanimously recommend that shareholders vote in favour of Resolution 4 approving the Placement.



6. APPROVAL OF AFTERPAY EQUITY

INCENTIVE PLAN

RESOLUTION 5 APPROVAL OF AFTERPAY EQUITY INCENTIVE PLAN

EXPLANATION

The Board has recently adopted the Afterpay Equity Incentive Plan (Plan) under which certain eligible employees and Directors of the Company and its subsidiaries (Eligible Employees) may be granted equity Awards from time to time.

The purpose of the Plan is to:

• attract, retain and motivate world-class talent from the global technology talent pool, with the skills and experience to drive the Company’s international expansion and returns for shareholders;

• align the interests of Eligible Employees with Shareholders, drive an ‘ownership’ mindset amongst Eligible Employees and encourage a focus on long term sustainable decision making, by providing an opportunity for Eligible Employees to receive an equity interest in the Company and to share in any future growth in the value of the Company; and

• support the Company’s key strategic pillars (‘Perform’, ‘Grow’, ‘Innovate’ and ‘Do the Right Thing’), drive a high-performance culture and focus Eligible Employees on delivering exceptional results and the best possible user experience for the Company’s customers.

It is intended that the Plan will be used to deliver the RSUs and performance-tested LTI Awards under the Company’s new executive remuneration framework commencing from FY20 (refer section 2 of the Remuneration Report for further detail).

WHY IS SHAREHOLDER APPROVAL BEING SOUGHT?

Resolution 5 seeks approval from Shareholders for the Company to adopt the Plan for the purposes of ASX Listing Rule 7.2, Exception 9(b). Such approval will have the effect of excluding securities issued pursuant to the Plan (including the grant of any equity Awards under the Plan, and any issue of shares under the Plan upon the exercise of Awards) in the 3 year period after approval, from being counted toward the 15% placement capacity limit under ASX Listing Rule 7.1.

ASX Listing Rule 7.1 provides that, subject to any approvals or exceptions provided in the ASX Listing Rules, in any 12 month period, a company must not issue new securities of more than 15% (in

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number) of the securities already on issue during that 12 month period, unless the Company obtains shareholder approval for the issue.

The Company has an existing Employee Incentive Plan which was adopted prior to listing in July 2017 and has relied on a separate exception to ASX Listing Rule 7.1 under ASX Listing Rule 7.2, Exception 9(a) that is available in respect of an employee incentive scheme established before a listed entity was listed. Since listing in July 2017, a total of 8,177,500 options have been granted under that existing Plan. None of those awards were granted to directors of the Company. The Company also has an existing US Equity Incentive Plan which was approved by Shareholders for the purposes of ASX Listing Rule 7.2, Exception 9(b) at the Company’s Annual General Meeting held on 28 November 2018.

The terms of the new Plan have not previously been approved by Shareholders for the purposes of ASX Listing Rule 7.2, Exception 9(b). If approval of this item is obtained, the benefit of this exception will apply to Awards granted on and after the date of this AGM, unless the Board determines otherwise.

Subject to there being no material amendments to the terms of the Plan, approval of the Plan at the meeting will be effective for 3 years from the date of the approval.

In the absence of such an approval, issues of securities under the Plan may still be made, but must be counted towards the Company’s capacity to issue equity securities under ASX Listing Rule 7.1 at the time of issue.

The key terms of the Plan are summarised in Annexure 1 to this Notice.

Prior shareholder approval will be required before any Director can participate in the Plan. Accordingly, separate shareholder approval is being sought for the grant of an LTI award to the Company’s Chief Executive Officer & Managing Director (Mr Anthony Eisen) at Resolution 6 and Global Chief Revenue Officer (Mr Nick Molnar) at Resolution 7.

VOTING EXCLUSION



The Directors unanimously recommend that shareholders vote in favour of Resolution 5.



7. LTI GRANT – CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR

RESOLUTION 6 LTI GRANT TO THE CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR

EXPLANATION

ASX Listing Rule 10.14 requires shareholder approval for a Director to be issued securities under an employee incentive scheme. Accordingly, Resolution 6 seeks approval from Shareholders under ASX Listing Rule 10.14 for the Board to grant Options to Mr Anthony Eisen, Co-Founder and Chief Executive Officer and Managing Director of the Company.

The Options are granted as the LTI component of Mr Eisen’s remuneration for the financial year ending 30 June 2020 under the Company’s new Plan. The key terms of the Plan are summarised in the Explanatory Notes to Resolution 5 above and Annexure 1.

The proposed LTI grant to Mr Eisen forms part of the Company’s new FY20 remuneration framework (see section 2 of the Remuneration Report for further detail). Mr Eisen has elected to forego any STI and RSUs under the new FY20 framework.

The proposed LTI grant will be performance tested against formal long term performance hurdles, which are aligned with the Company’s stretching mid-term Plan and assessed over a 3 year period. The use of premium priced Options will also encourage a focus on growing the Company’s share price and total shareholder return, as the Company’s share price will need to increase above the Exercise Price for the Options to deliver any value to Mr Eisen.

Mr Eisen’s total remuneration for FY20 (including the proposed LTI grant) is conservative. That is, Mr Eisen’s total remuneration is positioned well below market when compared to comparable roles within companies of a comparable size i.e. below the 7th percentile of the market capitalisation comparator group (set out in the Explanatory Notes to Resolution 2) comprising companies with a market capitalisation ranging from $2.50bn to $9.95bn.

Key terms of the proposed LTI grant It is proposed that 125,000 Options be granted to Mr Eisen, with an Exercise Price of $37.31 following vesting. The Exercise Price has been calculated based on a 20% premium to the market value of Company Shares equal to the 10 day VWAP in the period immediately following the release of full-year results.

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An overview of the vesting conditions and other key terms of the proposed grant of Options to Mr Eisen, including information required under ASX Listing Rule 10.15, is set out in Annexure 2.

This grant is conditional on receiving shareholder approval. If Shareholders do not approve the proposed grant of Options to Mr Eisen, the proposed grant of Options will not proceed. In that circumstance, the Board would then need to consider alternative remuneration arrangements for Mr Eisen which are consistent with the Company’s remuneration principles.

Once shareholder approval is obtained under ASX Listing Rule 10.14, shareholder approval is not required under ASX Listing Rule 7.1, and the issue of such Options to Mr Eisen will not count towards the Company’s capacity to issue equity securities under ASX Listing Rule 7.1.

The Company has determined that the grant of Options under the Plan pursuant to this Resolution 6 as part of Mr Eisen’s remuneration package will constitute the giving of reasonable remuneration for the purposes of Chapter 2E of the Corporations Act.

VOTING EXCLUSION



The Board (with Mr Eisen abstaining) recommends that shareholders vote in favour of Resolution 6.



8. LTI GRANT – GLOBAL CHIEF REVENUE

OFFICER AND EXECUTIVE DIRECTOR

RESOLUTION 7 LTI GRANT TO THE GLOBAL CHIEF REVENUE OFFICER AND EXECUTIVE DIRECTOR

EXPLANATION

ASX Listing Rule 10.14 requires shareholder approval for a Director to be issued securities under an employee incentive scheme. Accordingly, Resolution 7 seeks approval from Shareholders under ASX Listing Rule 10.14 for the Board to grant Options to Mr Nick Molnar, Co-Founder and Global Chief Revenue Officer and Executive Director of the Company.

The Options are granted as the LTI component of Mr Molnar’s remuneration for the financial year ending 30 June 2020 under the Company’s new Plan. The key terms of the Plan are summarised in the Explanatory Notes to Resolution 5 above and Annexure 1.

Similarly to Mr Eisen, the proposed LTI grant to Mr Molnar forms part of the Company’s new FY20 remuneration framework (see section 2 of the Remuneration Report for further detail). Mr Molnar has elected to forego any STI and RSUs under the new FY20 framework.

The proposed LTI grant will be performance tested against formal long term performance hurdles, which are aligned with the Company’s stretching mid-term Plan and assessed over a 3 year period. The use of premium priced Options will also encourage a focus on growing the Company’s share price and total shareholder return, as the Company’s share price will need to increase above the Exercise Price for the Options to deliver any value to Mr Molnar.

Mr Molnar’s total remuneration for FY20 (including the proposed LTI grant) is conservative. That is, Mr Molnar’s total remuneration is positioned well below market when compared to comparable roles within companies of a comparable size i.e. below the 41st percentile of the market capitalisation comparator group (set out in the Explanatory Notes to Resolution 2) comprising companies with a market capitalisation ranging from $2.50bn to $9.95bn.

KEY TERMS OF THE PROPOSED LTI GRANT

It is proposed that 125,000 Options be granted to Mr Molnar, with an Exercise Price of $37.31 following vesting. The Exercise Price has been calculated based on a 20% premium to the market

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value of Company Shares equal to the 10 day VWAP in the period immediately following the release of full-year results.

An overview of the vesting conditions and other key terms of the proposed grant of Options to Mr Molnar, including information required under ASX Listing Rule 10.15, is set out in Annexure 3.

This grant is conditional on receiving shareholder approval. If Shareholders do not approve the proposed grant of Options to Mr Molnar, the proposed grant of Options will not proceed. In that circumstance, the Board would then need to consider alternative remuneration arrangements for Mr Molnar which are consistent with the Company’s remuneration principles.

Once shareholder approval is obtained under ASX Listing Rule 10.14, shareholder approval is not required under ASX Listing Rule 7.1, and the issue of such Options to Mr Molnar will not count towards the Company’s capacity to issue equity securities under ASX Listing Rule 7.1.

The Company has determined that the grant of Options under the Plan pursuant to this Resolution 7 as part of Mr Molnar’s remuneration package will constitute the giving of reasonable remuneration for the purposes of Chapter 2E of the Corporations Act.

VOTING EXCLUSION



The Board (with Mr Molnar abstaining) recommends that shareholders vote in favour of Resolution 7.



9. APPROVAL OF CHANGE OF COMPANY NAME

RESOLUTION 8 APPROVAL OF CHANGE OF COMPANY NAME

EXPLANATION

The Board proposes the change of Company name to Afterpay Limited on the basis that it best aligns with the Company’s existing brand presence in the global market. Afterpay Touch Group Limited was listed on the ASX in 2017, as a result of the merger of Afterpay Holdings Limited and Touchcorp Limited. Since that time, the Afterpay business within the overall Afterpay Touch Group business has grown substantially and expanded internationally, including its expansion to the U.S. market. As a result, the Afterpay business has become the predominant brand of the Company.

Your directors believe the Company should have a name that resonates with customers and is reflective of its existing strong brand presence in the market, and that a name change is in the best interest of the business. The name change is proposed as we continue to execute our strategic focus on global merchant and customer growth, platform innovation and scaling our global infrastructure given an increased appreciation of the size of our global market opportunity and confidence in our differentiated value proposition.

The change of name applies to the listed parent company only. Our “pay now” businesses will continue to operate under their existing names and branding. The Group’s Australian operating subsidiary, Afterpay Pty Ltd, will change its name prior to the change of the Company’s name to Afterpay Limited.

There will be no change to the ‘APT’ ASX listing code.

CORPORATIONS ACT REQUIREMENTS

Section 157 of the Corporations Act provides that a change of company name requires a special resolution (that is, at least 75 per cent of votes cast at the meeting be in favour of the resolution). If this Resolution 8 is passed, the change of name will take effect when the Australian Securities and Investments Commission alters the details of the Company’s registration, which will be announced to the ASX.


The Board recommends that shareholders vote in favour of Resolution 8.



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DEFINITIONSAfterpay Touch Group or the Company means Afterpay Touch Group Limited ACN 618 280 649.

ASX means ASX Limited (ACN 008 624 691) or the securities market which it operates, as the case may be.

ASX Listing Rules means the Listing Rules of the ASX and any other rules of the ASX which apply while the Company is admitted to the Official List of the ASX, as amended or replaced from time to time, except to the extent of any express written waiver by ASX.

Board means the board of directors of the Company.

Change of Control Event occurs where:

a. an offer is made for Shares pursuant to a takeover bid under Chapter 6 of the Corporations Act and the Board resolves to recommend the bid, or the bid is, or is declared, unconditional;

b. the Court sanctions under Part 5.1 of the Corporations Act a compromise or arrangement pursuant to which control of the majority of the shares in the Company may change;

c. an administrator, liquidator, provisional liquidator, receiver or receiver and manager is appointed in respect of the Company or substantially all of the assets of the Company; or

d. a notice of a general meeting of the Company proposing a resolution to voluntarily wind-up the Company is dispatched to members of the Company.

Constitution means the Company’s constitution.

Corporations Act means Corporations Act 2001 (Cth).

Closely Related Party (of a member of KMP of an entity) has the definition given to it by section 9 of the Corporations Act, and means:

a. a spouse or child of the member; or

b. a child of the member’s spouse; or

c. a dependant of the member or of the member’s spouse; or

d. anyone else who is one of the member’s family and may be expected to influence the member, or be influenced by the member, in the member’s dealings with the entity; or

e. a company the member controls; or

f. a person prescribed by the regulations for the purposes of this definition (nothing at this stage).

Director means a director of the board of Afterpay Touch Group.

Key Management Personnel or KMP means those people described as Key Management Personnel in the Remuneration Report and includes all directors.

Meeting means the Company’s 2019 Annual General Meeting.

Option means an option to acquire a Share for an exercise price.

Shares means fully paid ordinary shares in the Company.

VWAP means volume weighted average price of Shares sold on ASX.

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ANNEXURE 1

KEY TERMS OF THE PLAN

Details of the key terms of the Plan are summarised below.

ELIGIBILITY

Eligibility to participate in the Plan will be determined by the Board.

Consistent with the ASX Listing Rules and Corporations Act, Awards may not be granted to a Director or any of their Associates under the Plan unless approval of the grant is given by Shareholders in general meeting in accordance with the requirements of the ASX Listing Rules.

OFFERS

The Board may offer Awards to any Eligible Employee from time to time as determined by the Board by making an offer or invitation to the Eligible Employee.

AWARDS

Under the Plan, the Board will have the discretion to offer Awards in the form of:

• rights to acquire shares in the Company for nil consideration (Rights). This includes (but is not limited to) restricted stock units (RSUs);

• options to acquire shares in the Company for an exercise price (Options); and/or

• restricted shares in the Company to be held under the Plan subject to dealing restrictions.

Subject to the terms of the Plan and the relevant offer, each Option or Right will entitle the holder to receive a share in the Company, or to receive a cash amount equivalent to the market value of a share (less the exercise price in respect of Options) at the time of vesting in respect of Rights and exercise in respect of Options (at the Board’s discretion).

TERMS AND CONDITIONS

The Board has the discretion to determine the terms and conditions applicable to an offer of Awards under the Plan, including:

• the number and type of Awards being offered;

• the timing of making of an offer to participate in the Plan;

• identifying persons eligible to participate in the Plan;

• any performance, service or other vesting conditions which must be satisfied or waived before the Awards vest (Vesting Conditions);

• any acquisition price payable for the grant of Awards;

• in the case of Awards in the form of Options, any exercise price payable on the exercise of the Options;

• any disposal and/or forfeiture conditions applicable to Awards granted under the Plan or shares acquired under the Plan, including following the vesting of shares granted under the Plan or shares acquired on the exercise of Options or Rights (Dealing Restrictions).

EXPIRY OF OPTIONS

Options which have not been exercised by the date determined by the Board and specified in the offer if applicable (Expiry Date), will lapse unless the Board determines otherwise.

VESTING AND EXERCISE (AS APPLICABLE) OF OPTIONS AND RIGHTS

Options which have not lapsed under the Plan will vest and become exercisable if and when any applicable Vesting Conditions have been satisfied or waived by the Board.

Rights which have not lapsed under the Plan will vest if and when any applicable Vesting Conditions have been satisfied or waived by the Board.

Subject to applicable law, following the valid exercise of an Option or vesting of a Right, the Company will issue or arrange the transfer of such number of shares to the Eligible Employee that relate to the Award being exercised or vested (respectively), or make a cash payment equivalent to the market value of such shares (less the exercise price in respect of Options) in lieu of such shares at the time of exercise in respect of Options and vesting in respect of Rights (at the discretion of the Board).

RIGHTS ATTACHING TO OPTIONS AND RIGHTS

Options and Rights awarded under the Plan will not carry any voting or dividend rights.

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Unless the Board determines otherwise, Options and Rights do not confer the right to participate in rights issues of shares or other securities in the Company. However, the Plan provides for adjustments to be made to the number of shares to which a participant would be entitled on the exercise of Options or vesting of Rights in the event of a bonus issue to existing holders of shares or a reorganisation of capital.

Options or Rights awarded under the Plan will not be quoted on the ASX.

SHARES RECEIVED AS AN AWARD OR ON THE EXERCISE OF AN AWARD

Shares acquired under the Plan (including shares acquired on the exercise of Options or vesting of Rights) may, at the discretion of the Board, be delivered through:

• the issue of new shares; and/or

• the transfer of existing shares, including shares held in an employee share plan trust, acquired on-market or acquired through an off-market transaction.

Shares acquired under the Plan will rank equally in all respects, and carry the same rights and entitlements, as existing shares from the date of acquisition, including in respect of dividends and distributions, rights issues, bonus issues and voting.

The Company will apply for official quotation of any shares issued under the Plan in accordance with the ASX Listing Rules.

Subject to the terms of the relevant offer, shares acquired under the Plan may be subject to Dealing Restrictions which may restrict the shares from being disposed of or dealt with for a period of time and/or forfeiture conditions which may result in the shares being forfeited if such conditions are not satisfied or waived.

VESTING OF SHARES

Shares granted under the Plan which have not been forfeited under the Plan will vest if and when any applicable Vesting Conditions have been satisfied or waived by the Board.

Upon vesting, subject to any Dealing Restrictions specified in the relevant offer, shares will cease to be subject to disposal restrictions and the forfeiture provisions of the Plan.

WAIVER

The Board may, at its discretion, amend, reduce or waive any Vesting Conditions and/or Dealing Restrictions attaching to Awards at any time, subject to applicable law.

FORFEITURE / LAPSE OF AWARDS

Unless the Board, at its discretion, determines otherwise, a share granted under the Plan will be forfeited, and an Option or Right will lapse, in certain circumstances including:

• where the Board determines that any Vesting Condition applicable to the Award cannot be satisfied;

• where the participant purports to dispose of the Award, or enter into any arrangement in respect of the Award in breach of any disposal or hedging restrictions;

• in the case of an Option, on the Expiry Date applicable to the Option;

• in certain circumstances if the participant’s employment is terminated (see “Treatment on cessation of employment” below);

• if the Board determines that the Award will be forfeited or lapse in the event of a change of control of the Company (see “Change of control” below); and

• if the Board determines that the Award is liable to malus/clawback (see “Malus / clawback” below).

TREATMENT ON CESSATION OF EMPLOYMENT

Where a participant ceases employment with the Company, the treatment of their Awards on cessation will depend on the circumstances of cessation.

Unless otherwise determined by the Board and specified in the invitation document:

• where the participant ceases employment in “bad leaver” circumstances i.e. for dismissal for cause or resignation, all of their unvested Awards will be forfeited or lapse (unless the Board determines otherwise); or

• where a participant ceases employment in “good leaver” circumstances (i.e. the Eligible Employee is not a “bad leaver”), treatment will be at the discretion of the Board for all participants (and subject to applicable law).

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MALUS / CLAWBACK

Amongst other things, the Board may elect to forfeit any unvested Awards (i.e. malus) or clawback any vested and paid Awards (i.e. clawback) in the following circumstances:

• serious misconduct by an Eligible Employee (including fraud, dishonesty, breach of employment obligations, gross negligence or serious misconduct including recklessness or wilful indifference);

• a material misstatement in, or omission from the Company’s financial statements, or a misstatement of an applicable Vesting Condition;

• where an Eligible Employee has acted or failed to act in a way that has contributed to material reputational damage to the Company; and

• where, in the opinion of the Board, acting in good faith, all or part of the initial award is no longer justified having regard to the circumstances or information which has subsequently come to light after a grant was made.

CHANGE OF CONTROL

Where a Change of Control Event (as defined in the Definitions) occurs:

• any unvested Awards will vest on a pro-rata basis to time, based on the proportion of the performance / vesting period that has passed at the time of the Change of Control Event;

• an Award which is subject to any Dealing Restrictions at the time of the Change of Control Event, will no longer be subject to Dealing Restrictions; and

• where the Change of Control Event occurs during the Period an Award is exercisable, the Award may only be exercised during the period specified by the Board, which can be a period that is shorter or ends earlier than the Expiry Date.

In addition, the Board retains a discretion (to be exercised consistently with the ASX Listing Rules) to determine that a particular treatment will apply to Awards where a transaction or event is proposed that, in the opinion of the Board, may result in a person becoming entitled to control of the Company. This might apply, for example, where a takeover bid is announced or a scheme of arrangement is proposed, and it becomes important to deal appropriately with options and rights on issue as part of the overall capital structure.

RESTRICTIONS

Awards may not be sold, transferred, mortgaged, pledged, charged, granted as security or otherwise disposed of, without the prior approval of the Board, or unless required by law.

Participants must not enter into any arrangement for the purpose of hedging, or otherwise affecting their economic exposure to any unvested shares, or Options or Rights.

EMPLOYEE SHARE TRUST

A trust may be established in connection with the operation and administration of the Plan. The trust, if established, may be used to acquire shares that are then used to satisfy the Company’s obligations to deliver shares to participants upon the exercise of Options and Rights under the Plan.

AMENDMENT

The Board may, at its discretion, amend the terms of the Plan or Awards granted under the Plan, provided that (except in specified circumstances) if such amendment would materially reduce the rights of a participant in respect of Awards granted to that participant prior to the date of the amendment, the Board must obtain the consent of the participant.

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ANNEXURE 2

KEY TERMS OF THE PROPOSED LTI GRANT TO THE CHIEF EXECUTIVE OFFICER AND MANAGING DIRECTOR

Details of the key terms of the proposed LTI grant to the Chief Executive Officer and Managing Director are summarised in the table below.

DETAILS OF THE PROPOSED GRANT

The maximum number of Options to be issued to Mr Eisen is 125,000 options.

The number of Options has been calculated by dividing the dollar value of his long-term incentive opportunity for FY20 of $1,500,000 by the market value of options.

The market value of Options has been calculated using a Black Scholes pricing methodology, based on the 10 day VWAP in the period immediately following the release of full-year results and an exercise price for the Options equal to a 20% premium to that 10 day VWAP (refer below). The market value of Options is not reduced for the likelihood of performance hurdles being met.

Each Option proposed to be granted to Mr Eisen will provide an option to acquire one Share in the Company or a cash payment equivalent to the market value of a Share (less the exercise price) in lieu of such Share at the time of exercise (at the discretion of the Board).

PRICE PAYABLE ON GRANT OR EXERCISE

The Options will be granted for no consideration.

Mr Eisen will be required to pay an Exercise Price of $37.31 to exercise the Options following vesting.

This has been calculated based on a 20% premium to the market value of the Company’s Shares equal to the 10 day VWAP in the period immediately following the release of full-year results.

The use of premium priced Options will incentivise Mr Eisen to drive share price performance in the interests of the Company’s shareholders, as the market price at the time of exercise will need to exceed the exercise price for the Options to deliver any value to Mr Eisen.

GRANT DATE

If Shareholder approval for the grant is obtained, the Options will be granted to Mr Eisen as soon as practicable after the Meeting, but in any event within 12 months after the date of the Meeting.

EXPIRY DATE

The Options will expire on 1 July 2024.

PERFORMANCE PERIOD

The Performance Period is 3 years, commencing on 1 July 2019 to 30 June 2022.

PERFORMANCE CONDITIONS

Options which have not lapsed will vest and become exercisable on the date on which Performance Conditions applicable to the Options have been satisfied (or waived by the Board) or the date on which the Options otherwise vest in accordance with the Plan Rules.

The Options are subject to performance testing against the following Performance Conditions:

• absolute Gross Merchandise Value (GMV) (i.e. underlying sales) in respect of the relevant Performance Period (50%) (GMV Options); and

• Net Transaction Margin (NTM) performance conditions in respect of the relevant Performance Period (50%) (NTM Options).

These measures were selected as they align with the Company’s stretching mid-term plan, are reflective of the key value drivers of the business over the long term and, in the Board’s view, strike an appropriate balance between growth and long-term profitability.

ABSOLUTE GROSS MERCHANDISE VALUE (GMV) PERFORMANCE CONDITION

GMV (i.e. underlying sales) is a measure of the dollar value of total merchandise sold through the Afterpay platform.

The percentage of GMV Options that will vest, if any, will be determined at the end of the Performance Period by reference to the following vesting schedule:

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LEVEL OF PERFORMANCE

PERCENTAGE OF GMV OPTIONS VESTING (%)

COMPANY GMV (I.E. UNDERLYING SALES) (TARGETS)

Target 50% $15B in final year of Performance Period

Maximum 100% $25B in final year of Performance Period

Vesting will occur on a straight-line basis between target and maximum levels of performance. No vesting will occur if the target level of performance is not achieved.

NET TRANSACTION MARGIN (NTM) PERFORMANCE CONDITION

NTM is a measure of gross profit margin (post-receivables impairment expense and receivables financing costs, pre-operating costs) generated by transactions on the Afterpay platform. A transparent disclosure of the calculation of NTM (that reconciles to the statutory accounts) will be provided at the end of the performance period.

The percentage of NTM Options that will vest, if any, will be determined at the end of the Performance Period by reference to the following vesting schedule:


PERCENTAGE OF NTM OPTIONS VESTING (%)

COMPANY NTM (TARGETS)

Target 50% Targets to be disclosed at the end of the Performance Period due to commercial sensitivity

Maximum 100% Targets to be disclosed at the end of the Performance Period due to commercial sensitivity



If Mr Eisen ceases employment with the Company prior to the Options vesting, the treatment will depend on the circumstances of cessation.

If Mr Eisen ceases employment in:

‘Bad leaver’ circumstances i.e. for dismissal for cause or resignation, all of his unvested Options will lapse (unless the Board determines otherwise); and

‘Good leaver’ circumstances i.e. Mr Eisen is not a ‘bad leaver’, treatment will be at the discretion of the Board (and subject to applicable law). The Board’s

intention is that the Options would be pro-rated to time and left on foot to be tested and vest in the ordinary course.

MALUS / CLAWBACK

See Annexure 1 for malus / clawback provisions in the Plan Rules.

CHANGE OF CONTROL

Where a Change of Control Event (as defined in the Definitions) occurs during the Performance Period, any unvested Options held by Mr Eisen will vest on a pro-rata basis to time, based on the proportion of the Performance Period that has passed at the time of the Change of Control Event (unless the Board determines otherwise).

In addition, the Board retains a discretion (to be exercised consistently with the ASX Listing Rules) to determine that a particular treatment will apply to these Options where a transaction or event is proposed that, in the opinion of the Board, may result in a person becoming entitled to control of the Company. This might apply, for example, where a takeover bid is announced or a scheme of arrangement is proposed, and it becomes important to deal appropriately with options and rights on issue as part of the overall capital structure.

OTHER INFORMATION REQUIRED BY ASX LISTING RULE 10.15

Mr Eisen is one of two people referred to in ASX Listing Rule 10.14 presently entitled to participate in the Plan.

No persons referred to in ASX Listing Rule 10.14 have previously been issued securities under the Plan.

No loan will be made available to Mr Eisen in relation to the acquisition or exercise of the Options proposed to be granted to him if this Resolution is approved.

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ANNEXURE 3

KEY TERMS OF THE PROPOSED LTI GRANT TO THE GLOBAL CHIEF REVENUE OFFICER AND EXECUTIVE DIRECTOR

Details of the key terms of the proposed LTI grant to the Global Chief Revenue Officer and Executive Director are summarised in the table below.

DETAILS OF THE PROPOSED GRANT

The maximum number of Options to be issued to Mr Molnar is 125,000 options.

The number of Options has been calculated by dividing the dollar value of his long-term incentive opportunity for FY20 of $1,500,000 by the market value of options.

The market value of Options has been calculated using a Black Scholes pricing methodology, based on the 10 day VWAP in the period immediately following the release of full-year results and an exercise price for the Options equal to a 20% premium to that 10 day VWAP (refer below). The market value of Options is not reduced for the likelihood of performance hurdles being met.

Each Option proposed to be granted to Mr Molnar will provide an option to acquire to one Share in the Company or a cash payment equivalent to the market value of a Share (less the exercise price) in lieu of such Share at the time of exercise (at the discretion of the Board).

PRICE PAYABLE ON GRANT OR EXERCISE

The Options will be granted for no consideration.

Mr Molnar will be required to pay an Exercise Price of $37.31 to exercise the Options following vesting.

This has been calculated based on a 20% premium to the market value of the Company’s Shares equal to the 10 day VWAP in the period immediately following the release of full-year results.

The use of premium priced Options will incentivise Mr Molnar to drive share price performance in the interests of the Company’s shareholders, as the market price at the time of exercise will need to exceed the exercise price for the Options to deliver any value to Mr Molnar.

GRANT DATE

If Shareholder approval for the grant is obtained, the Options will be granted to Mr Molnar as soon as practicable after the Meeting, but in any event within 12 months after the date of the Meeting.

EXPIRY DATE

The Options will expire on 1 July 2024.

PERFORMANCE PERIOD

The Performance Period is 3 years, commencing on 1 July 2019 to 30 June 2022.

PERFORMANCE CONDITIONS

Options which have not lapsed will vest and become exercisable on the date on which Performance Conditions applicable to the Options have been satisfied (or waived by the Board) or the date on which the Options otherwise vest in accordance with the Plan rules.

The Options are subject to performance testing against the following Performance Conditions:

• absolute Gross Merchandise Value (GMV) (i.e. underlying sales) in respect of the relevant Performance Period (50%) (GMV Options); and

• Net Transaction Margin (NTM) performance conditions in respect of the relevant Performance Period (50%) (NTM Options).

These measures were selected as they align with the Company’s stretching mid-term plan, are reflective of the key value drivers of the business over the long term and, in the Board’s view, strike an appropriate balance between growth and long-term profitability.

ABSOLUTE GROSS MERCHANDISE VALUE (GMV) PERFORMANCE CONDITION

GMV (i.e. underlying sales) is a measure of the dollar value of total merchandise sold through the Afterpay platform.

The percentage of GMV Options that will vest, if any, will be determined at the end of the Performance Period by reference to the following vesting schedule:

26


PERCENTAGE OF GMV OPTIONS VESTING (%)

COMPANY GMV (I.E. UNDERLYING SALES) (TARGETS)

Target 50% $15B in final year of Performance Period

Maximum 100% $25B in final year of Performance Period


NET TRANSACTION MARGIN (NTM) PERFORMANCE CONDITION

NTM is a measure of gross profit margin (post-receivables impairment expense and receivables financing costs, pre-operating costs) generated by transactions on the Afterpay platform. A transparent disclosure of the calculation of NTM (that reconciles to the statutory accounts) will be provided at the end of the performance period.

The percentage of NTM Options that will vest, if any, will be determined at the end of the Performance Period by reference to the following vesting schedule:


PERCENTAGE OF NTM OPTIONS VESTING (%)

COMPANY NTM (TARGETS)

Target 50% Targets to be disclosed at the end of the Performance Period due to commercial sensitivity

Maximum 100% Targets to be disclosed at the end of the Performance Period due to commercial sensitivity



If Mr Molnar ceases employment with the Company prior to Options vesting, the treatment will depend on the circumstances of cessation.

If Mr Molnar ceases employment in:

‘Bad leaver’ circumstances i.e. for dismissal for cause or resignation, all of his unvested Options will lapse (unless the Board determines otherwise); and

‘Good leaver’ circumstances i.e. Mr Molnar is not a ‘bad leaver’, treatment will be at the discretion of the Board (and subject to applicable law). The Board’s intention is that the Options would be pro-rated to

time and left on foot to be tested and vest in the ordinary course.

MALUS / CLAWBACK

See Annexure 1 for malus / clawback provisions in the Plan Rules.

CHANGE OF CONTROL

Where a Change of Control Event (as defined in the Definitions) occurs during the Performance Period, any unvested Options held by Mr Molnar will vest on a pro-rata basis to time, based on the proportion of the Performance Period that has passed at the time of the Change of Control Event (unless the Board determines otherwise).

In addition, the Board retains a discretion (to be exercised consistently with the ASX Listing Rules) to determine that a particular treatment will apply to these Options where a transaction or event is proposed that, in the opinion of the Board, may result in a person becoming entitled to control of the Company. This might apply, for example, where a takeover bid is announced or a scheme of arrangement is proposed, and it becomes important to deal appropriately with options and rights on issue as part of the overall capital structure.

OTHER INFORMATION REQUIRED BY ASX LISTING RULE 10.15

Mr Molnar is one of two people referred to in ASX Listing Rule 10.14 presently entitled to participate in the Plan.

No persons referred to in ASX Listing Rule 10.14 have previously been issued securities under the Plan.

No loan will be made available to Mr Molnar in relation to the acquisition or exercise of the options proposed to be granted to him if this Resolution is approved.

SAMPLE

SRN/HIN: I9999999999

XX

For your proxy appointment to be effective itmust be received by 10.30am (Melbournetime) Monday 11 November 2019.

All your securities will be voted in accordance with your directions.

YOUR VOTE IS IMPORTANT

Phone:1300 850 505 (within Australia)+61 3 9415 4000 (outside Australia)

Online:www.investorcentre.com/contact

Need assistance?

Proxy FormLodge your Proxy Form:How to Vote on Items of Business

Online:

Lodge your vote online atwww.investorvote.com.au using yoursecure access information or use yourmobile device to scan the personalisedQR code.

Corporate RepresentativeIf a representative of a corporate securityholder or proxy is to attend the meeting youwill need to provide the appropriate “Appointment of Corporate Representative” priorto admission. A form may be obtained from Computershare or online atwww.investorcentre.com under the help tab, "Printable Forms".

ATTENDING THE MEETING

SIGNING INSTRUCTIONS FOR POSTAL FORMS

For Intermediary Onlinesubscribers (custodians) go towww.intermediaryonline.com

By Mail:

Computershare Investor Services Pty LimitedGPO Box 242Melbourne VIC 3001Australia

1800 783 447 within Australia or+61 3 9473 2555 outside Australia

By Fax:

Your secure access information is

APPOINTMENT OF PROXY

PLEASE NOTE: For security reasons itis important that you keep your SRN/HINconfidential.

Control Number: 999999

PIN: 99999

If you are attending in person, please bring this form with you to assist registration.

Individual: Where the holding is in one name, the securityholder must sign.

Joint Holding: Where the holding is in more than one name, all of the securityholders mustsign.

Power of Attorney: If you have not already lodged the Power of Attorney with the registry,please attach a certified photocopy of the Power of Attorney to this form when you return it.

Companies: Where the company has a Sole Director who is also the Sole CompanySecretary, this form must be signed by that person. If the company (pursuant to section 204Aof the Corporations Act 2001) does not have a Company Secretary, a Sole Director can alsosign alone. Otherwise this form must be signed by a Director jointly with either anotherDirector or a Company Secretary. Please sign in the appropriate place to indicate the officeheld. Delete titles as applicable.

Voting 100% of your holding: Direct your proxy how to vote by marking one of the boxesopposite each item of business. If you do not mark a box your proxy may vote or abstain asthey choose (to the extent permitted by law). If you mark more than one box on an item yourvote will be invalid on that item.

Voting a portion of your holding: Indicate a portion of your voting rights by inserting thepercentage or number of securities you wish to vote in the For, Against or Abstain box orboxes. The sum of the votes cast must not exceed your voting entitlement or 100%.

Appointing a second proxy: You are entitled to appoint up to two proxies to attend themeeting and vote on a poll. If you appoint two proxies you must specify the percentage ofvotes or number of securities for each proxy, otherwise each proxy may exercise half of thevotes. When appointing a second proxy write both names and the percentage of votes ornumber of securities for each in Step 1 overleaf.

A proxy need not be a securityholder of the Company.

APT

MR SAM SAMPLEFLAT 123123 SAMPLE STREETTHE SAMPLE HILLSAMPLE ESTATESAMPLEVILLE VIC 3030

Samples/000001/000001/i12

*S00000112Q01*

SAMPLE

I 9999999999

or failing the individual or body corporate named, or if no individual or body corporate is named, the Chair of the Meeting, as my/our proxy to actgenerally at the meeting on my/our behalf and to vote in accordance with the following directions (or if no directions have been given, and to theextent permitted by law, as the proxy sees fit) at the Annual General Meeting of Afterpay Touch Group Limited to be held at Herbert Smith Freehills,Level 42, 101 Collins Street, Melbourne, Victoria on Wednesday, 13 November 2019 at 10.30 am (Melbourne time) and at any adjournment orpostponement of that meeting.Chair authorised to exercise undirected proxies on remuneration related resolutions: Where I/we have appointed the Chair of the Meetingas my/our proxy (or the Chair becomes my/our proxy by default), I/we expressly authorise the Chair to exercise my/our proxy on Resolutions 1, 2,5, 6 and 7 (except where I/we have indicated a different voting intention in step 2) even though Resolutions 1, 2, 5, 6 and 7 are connected directlyor indirectly with the remuneration of a member of key management personnel, which includes the Chair.Important Note: If the Chair of the Meeting is (or becomes) your proxy you can direct the Chair to vote for or against or abstain from voting onResolutions 1, 2, 5, 6 and 7 by marking the appropriate box in step 2.

The Chair of the Meeting intends to vote undirected proxies in favour of each item of business. In exceptional circumstances, the Chair of the Meetingmay change his/her voting intention on any resolution, in which case an ASX announcement will be made.

I ND

A P T 2 5 4 5 4 9 A

MR SAM SAMPLEFLAT 123123 SAMPLE STREETTHE SAMPLE HILLSAMPLE ESTATESAMPLEVILLE VIC 3030

XXAppoint a Proxy to Vote on Your Behalf

Change of address. If incorrect,mark this box and make thecorrection in the space to the left.Securityholders sponsored by abroker (reference numbercommences with ‘X’) should adviseyour broker of any changes.

Proxy Form Please mark to indicate your directions

I/We being a member/s of Afterpay Touch Group Limited hereby appoint

the Chairof the Meeting

ORPLEASE NOTE: Leave this box blank ifyou have selected the Chair of theMeeting. Do not insert your own name(s).

Step 1

Step 2 Items of Business PLEASE NOTE: If you mark the Abstain box for an item, you are directing your proxy not to vote on yourbehalf on a show of hands or a poll and your votes will not be counted in computing the required majority.

This section must be completed.

Individual or Securityholder 1 Securityholder 2 Securityholder 3

Sole Director & Sole Company Secretary Director Director/Company Secretary

Update your communication details By providing your email address, you consent to receive future Noticeof Meeting & Proxy communications electronicallyMobile Number Email Address

(Optional)

Signature of Securityholder(s)Step 3

For Against Abstain

Resolution 1 Adoption of Remuneration Report (non-binding resolution)

Resolution 2 Increase in maximum aggregate remuneration for Non-Executive Directors

Resolution 3 Re-election of Mr Clifford Rosenberg as Director

Resolution 4 Ratification of issue of shares pursuant to Placement

Resoltuon 5 Approval of the Afterpay Equity Incentive Plan

Resolution 6 Approval of LTI grant – Chief Executive Officer and Managing Director

Resolution 7 Approval of LTI grant – Global Chief Revenue Officer and Executive Director

Resolution 8 Approval of change of the Company's name to Afterpay Limited

Date

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