ASX Announcement 25 September 2015‌

Des p a t c h o f N o t i c e o f A n n u a l G e n e r a l M e e t i n g

In accordance with ASX Listing Rule 3.17, Atlas Iron Limited (ASX Code: AGO) advises that the Notice of Annual General Meeting and Explanatory Statement, Proxy Form and Voting Instruction Form attached to this announcement have today been despatched to shareholders.

For those holders who have elected to receive a paper copy of the Company's 2015 Annual Report, this has also been despatched. A copy of the Annual Report is also available on the Company's website (www.atlasiron.com.au).

The Annual General Meeting will be held at 3pm (WST) on Wednesday, 28 October 2015, at the Celtic Club, 48 Ord Street, West Perth, Western Australia.

Media Enquiries:

Read Corporate +61 8 9388 1474

Paul Armstrong +61 421 619 084

Atlas Iron Limited

ABN 63 110 396 168

Raine Square, Level 18

300 Murray Street Perth WA 6000

PO Box 7071

Cloisters Square Perth WA 6850

P: +61 8 6228 8000

F: +61 8 6228 8999

E: [email protected]

W: www.atlasiron.com.au

ATLAS IRON LIMITED

A C N 1 1 0 3 9 6 1 6 8

NOTICE OF ANNUAL GENERAL MEETING

The Annual General Meeting of the Company will be held at The Celtic Club, 48 Ord Street, West Perth, Western Australia on Wednesday, 28 October 2015 at 3.00pm (WST).

ATLAS IRON LIMITED

A C N 1 1 0 3 9 6 1 6 8

NOTICE OF ANNUAL GENERAL MEETING

Notice is hereby given that the Annual General Meeting of Shareholders of Atlas Iron Limited ('Company') will be held at The Celtic Club, 48 Ord Street, West Perth, Western Australia on Wednesday, 28 October 2015 at 3.00pm (WST) ('Meeting').

The Explanatory Memorandum to this Notice provides additional information on matters to be considered at the Annual General Meeting. The Explanatory Memorandum, Notes and the Proxy Form form part of this Notice.

Terms and abbreviations used in this Notice, the Notes, the Explanatory Memorandum and the Proxy Form are defined in the Glossary.

AGENDA

1. Annual Financial Report

   To receive and consider the Annual Financial Report of the Company for the year ended 30 June 2015 together with the Directors' report in relation to that financial year and the Auditor's report on the Annual Financial Report.

   
   

2. Resolution 1 - Remuneration Report

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

   
   

   'That, for the purpose of section 250R(2) of the Corporations Act and for all other purposes, the 2015 Remuneration Report be adopted by the Shareholders.'

   
   

   Note: The vote on Resolution 1 will be an advisory vote of Shareholders only, and will not bind the Directors or the Company.

   
   

   Voting Restrictions: See the Notes for details of the voting restrictions that apply to Resolution 1.

   
   

3. Resolution 2 - Re-election of Mrs Cheryl Edwardes (Chairman) as a Director

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

   
   

   'That Mrs Cheryl Edwardes, who was appointed as a Director by the Board on 6 May 2015 and retires in accordance with Rule 3.3 of the Constitution and, being eligible, offers herself for re-election, be re-elected as a Director.'

   
   

4. Resolution 3 - Re-election of Mr Jeff Dowling as a Director

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

   
   

   'That Mr Jeff Dowling, who retires by rotation in accordance with Rule 3.6 of the Constitution and, being eligible, offers himself for re-election, be re-elected as a Director.'

   
   

5. Resolution 4 - Re-election of Mr Ken Brinsden as a Director

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

   
   

   'That Mr Ken Brinsden, who retires by rotation in accordance with Rule 3.6 of the Constitution and, being eligible, offers himself for re-election, be re-elected as a Director.'

   
   

6. Resolution 5 - Approval of the Atlas Iron Limited Option Plan ('Option Plan')

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

   
   

   'That, for the purpose of Listing Rule 7.2 (Exception 9(b)), sections 200B and 200E of the Corporations Act and for all other purposes, approval is given for the Company to adopt the Atlas Iron Limited Option Plan tabled at the Meeting (and signed by the Chair for the purposes of identification) ('Option Plan'), and for the issue of securities (including the issue of Options and the issue of Shares on exercise of Options) and the giving of benefits under the Option Plan in connection with any future retirement from office or position of employment with the Company.'

   
   

   Short Explanation: Approval is sought under Listing Rule 7.2 (Exception 9(b)) to enable the Company to issue securities under the Option Plan without those securities counting towards the Company's 15% limit for new issues in Listing Rule 7.1. Approval is also sought under the Corporations Act for the Company to give potential benefits under the Option Plan in connection with any future retirement of a member of Key Management Personnel of the Company or any other person who holds a Managerial or Executive Office with the Company. Please refer to the Explanatory Memorandum for details.

   
   

   Voting Prohibition and Exclusion Statement:

   A vote on this Resolution must not be cast in any capacity by or on behalf of any person who may receive benefits under the Option Plan or an associate of such a person ('Plan Participant'), unless the vote is:

7. cast by a person as proxy appointed by writing that specifies how the proxy is to vote on the Resolution; and

8. not cast on behalf of a Plan Participant.

   Furthermore, the Company will disregard any votes cast on this resolution by or on behalf of:

9. a Director (except one who is ineligible to participate in any employee incentive scheme in relation to the Company) ('Eligible Director') and any associate of an Eligible Director; and

10. by any other member of Key Management Personnel or a Closely Related Party of such member acting as proxy,

unless the vote is cast by:

1. the person as proxy for a person who is entitled to vote and in accordance with a direction on the Proxy Form; or

2. the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides and exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

Key Management Personnel and their Closely Related Parties are prohibited under the Corporations Act from voting as proxy in a manner contrary to the above. The Chair (where permitted and to the extent appropriately authorised) intends to vote all available undirected proxies in favour of Resolution 5.




11. Resolution 6 - Approval to issue Options to Mr David Flanagan and issue Shares upon exercise of the Options, and to give potential retirement benefits

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

    
    

    'That, for the purpose of Listing Rule 10.14, Chapter 2E of the Corporations Act, sections 200B and 200E of the Corporations Act and for all other purposes, the issue of 20,911,333 Options to Mr David Flanagan (including the issue of up to 20,911,333 Shares on exercise of those Options) under the Option Plan, on the terms and conditions described in the Explanatory Memorandum to this Notice, and the giving of benefits under the Option Plan in connection with any future retirement from his office or position of employment with the Company, are approved.'

    
    

    Short Explanation: Approval is sought under Listing Rule 10.14 and Chapter 2E of the Corporations Act to allow the Company to grant the Options to a Director (Mr Flanagan) and to issue Shares upon exercise of those Options under the Option Plan. Approval is also sought under the Corporations Act for the Company to give potential benefits under the Option Plan to Mr Flanagan in connection with any future retirement by Mr Flanagan from his office or employment with the Company. Please refer to the Explanatory Memorandum for details.

    
    

    Voting Prohibition and Exclusion Statement:

    A vote on this Resolution must not be cast in any capacity by or on behalf of Mr Flanagan or any associate of Mr Flanagan, unless the vote is cast by a person as proxy for a person who is entitled to vote and the Proxy Form specifies how the proxy is to vote on this Resolution.

    Furthermore, the Company will disregard any votes cast on this Resolution by or on behalf of:

12. an Eligible Director and any associate of an Eligible Director; and

13. by any other member of Key Management Personnel or a Closely Related Party of such member acting as proxy,

    unless the vote is cast by:

14. the person as proxy for a person who is entitled to vote and in accordance with a direction on the Proxy Form; or

15. the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides and exercise the proxy even if the Resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

Key Management Personnel and their Closely Related Parties are prohibited under the Corporations Act from voting as proxy in a manner contrary to the above. The Chair (where permitted and to the extent appropriately authorised) intends to vote all available undirected proxies in favour of Resolution 6.




16. Resolution 7 - Approval of 10% Additional Placement Capacity

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

    
    

    'That, for the purpose of Listing Rule 7.1A, additional capacity to issue or agree to issue equity securities equal to a number at the time of issue which does not exceed 10% of the Company's fully paid ordinary securities on issue, calculated in accordance with Listing Rule 7.1A.2, is approved on the terms and conditions described in the Explanatory Memorandum to this Notice.'

    
    

    Short Explanation: Approval is sought under Listing Rule 7.1A to give the Company additional capacity to issue or agree to issue equity securities (up to 10% of the Company's total fully paid ordinary securities on a 12 month look back basis), in addition to the 15% permitted under Listing Rule 7.1, without further member approval. Please refer to the Explanatory Memorandum for details.

    
    

    Voting Exclusion Statement:

    The Company will disregard any votes cast on Resolution 7 by, or on behalf of, any person who may participate in the proposed issue and persons who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if Resolution 7 is passed, and any of their associates. However, the Company need not disregard a vote if it is cast by:

17. a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form; or

18. the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

The Chair intends to vote all available undirected proxies (where permitted) in favour of Resolution 7.







Dated: 25 September 2015 By Order of the Board




Yasmin Broughton Company Secretary




NOTES







Right to vote

The Directors have determined pursuant to Regulation 7.11.37 of the Corporations Regulations 2001 (Cth) that the persons eligible to vote at the Meeting are those persons who are Shareholders at 4.00pm (WST) on Monday, 26 October 2015.




Voting Restrictions for Resolution 1

In accordance with the Corporations Act, the Company will disregard any votes cast on Resolution 1 by, or on behalf of:

1. a member of Key Management Personnel details of whose remuneration is included in the 2015 Remuneration Report; or

2. a Closely Related Party of such a member, (each an 'Excluded Person').

This restriction does not apply if the Excluded Person has been appointed as a proxy in writing that specifies how the proxy is to vote on Resolution 1, provided that the Shareholder who appointed the proxy is not themselves an Excluded Person.

Also, the restrictions do not apply to the Chair where the Proxy Form is not from an Excluded Person and the Chair is expressly authorised to exercise an undirected proxy even if the resolution is connected directly or indirectly with the remuneration of a member of Key Management Personnel.

The Chair intends to vote all undirected proxies (where the Chair has been appropriately authorised) in favour of Resolution 1.

If you do not wish to appoint the Chair to vote on Resolution 1 in the manner indicated above, the Company encourages you to complete the voting directions in respect of Resolution 1 in Section B of the Proxy Form.

Other Excluded Persons must not cast any votes in respect of Resolution 1 that arise from any undirected proxy that they hold.




Voting Restrictions for Resolutions 5 to 6

The Chair may vote undirected proxies on Resolutions 5 to 6 if the Proxy Form expressly authorises the Chair to exercise the proxy even if the resolution is connected directly or indirectly with the remuneration of a member of the Key Management Personnel.

The Chair intends to vote all undirected proxies (where the Chair has been appropriately authorised) in favour of Resolutions 5 to 6.

If you do not wish to appoint the Chair to vote on Resolutions 5 to 6 in the manner indicated above, the Company encourages you to complete the voting directions in respect of Resolutions 5 to 6 in Section B of the Proxy Form.

Directors (other than the Chair), and executives who are Key Management Personnel of the Company, and Closely Related Parties, who have been appointed to act as proxies at the meeting must not vote as proxy on Resolutions 5 to 6 unless the proxy appointment directs them how to vote on the Resolution.




Voting Restrictions for Resolution 7

The Company will disregard any votes cast on Resolution 7 by, or on behalf of, any person who may participate in the proposed issue and persons who might obtain a benefit, except a benefit solely in the capacity of a holder of ordinary securities, if Resolution 7 is passed, and any of their associates.

This restriction does not apply if the vote is cast by a person as proxy for a person who is entitled to vote, in accordance with the directions on the Proxy Form.

Also, the restrictions do not apply to votes cast by the Chair as proxy for a person who is entitled to vote, in accordance with a direction on the Proxy Form to vote as the proxy decides.

The Chair intends to vote all undirected proxies (where permitted) in favour of Resolution 7.

If you do not wish to appoint the Chair to vote on Resolution 7 in the manner indicated above, the Company encourages you to complete the voting directions in respect of Resolution 7 in Section B of the Proxy Form.




Appointment of proxies

Each Shareholder entitled to vote at the Meeting may appoint a proxy to attend and vote at the Meeting. To vote by proxy, please complete, sign and return the enclosed Proxy Form in accordance with its instructions. A proxy need not be a Shareholder of the Company and can be an individual or a body corporate.

A body corporate appointed as a Shareholder's proxy may appoint an individual as its representative to exercise any of the powers the body may exercise as a proxy at the Meeting. The appointment may be a standing one. Unless the appointment states otherwise, the representative may exercise all of the powers that the appointing body could exercise at a meeting or in voting on a resolution. The representative should bring to the Meeting evidence of his or her appointment, including any authority under which the appointment is signed, unless it has previously been given to the Share Registry.

A Shareholder entitled to cast two or more votes may appoint two proxies and may specify the proportion or number of votes each proxy is appointed to exercise. If a Shareholder appoints 2 proxies and the appointment does not specify the proportion or number of the member's votes to be exercised, then in accordance with section 249X(3) of the Corporations Act, each proxy may exercise one-half of the votes.

Shareholders and their proxies should be aware that if proxy holders vote, they must cast all directed proxies as directed. Section 250BB(1) of the Corporations Act provides that if an appointment of a proxy specifies the way the proxy is to vote on a particular resolution:

1. the proxy need not vote on a show of hands, but if the proxy does so, the proxy must vote as directed;

2. if the proxy has 2 or more appointments that specify different ways to vote on the resolution, the proxy must not vote on a show of hands;

3. if the proxy is the Chair, the proxy must vote on a poll, and must vote as directed; and

4. if the proxy is not the Chair, the proxy need not vote on a poll, but if the proxy does so, the proxy must vote as directed.




Lodgement of proxy documents

For an appointment of a proxy for the Meeting to be effective:

1. the proxy's appointment; and

2. if the appointment is signed by the appointor's attorney - the authority under which the appointment was signed (eg a power of attorney) or a certified copy of it,

must be received by the Share Registry by 3.00pm (WST) on Monday, 26 October 2015. Proxies should be returned as follows:

Online: By Mobile: By Mail to:

At www.investorvote.com.au Scan the QR Code on your Proxy form

and follow the prompts




By Facsimile Transmission to: By Hand to:

Computershare Investor Services Pty Limited

GPO Box 242

Melbourne Victoria 3001 Australia

1800 783 447

(within Australia) or

+61 3 9473 2555

(outside Australia)

Computershare Investor Services Pty Limited

Level 11

172 St George's Terrace Perth, Western Australia 6000




ATLAS IRON LIMITED

A C N 1 1 0 3 9 6 1 6 8




EXPLANATORY MEMORANDUM




Introduction

This Explanatory Memorandum has been prepared for the information of Shareholders in connection with the business to be conducted at the Annual General Meeting to be held at The Celtic Club, 48 Ord Street, West Perth, Western Australia at 3.00pm (WST) on 28 October 2015 ('Meeting').




1. Annual Financial Report

   The Company has sent to those Shareholders who requested it, the 2015 Annual Report, which includes the Annual Financial Report for the year ended 30 June 2015, a Directors' report in relation to that financial year and the Auditor's report on the Annual Financial Report. A copy of the 2015 Annual Report is available on the Company's website: www.atlasiron.com.au or a copy can be obtained by contacting the Company on (08) 6228 8000.

   There is no requirement for Shareholders to approve these reports. However, the Chair will allow a reasonable opportunity for Shareholders as a whole to ask questions or make comments about those reports and the management of the Company. Shareholders as a whole will also be given a reasonable opportunity to ask the Auditor or the Auditor's representative questions about the conduct of the audit, the preparation and content of the Auditor's report, the accounting policies adopted by the Company and the independence of the Auditor in relation to the conduct of the audit.

   In addition to taking questions at the Meeting, written questions to the Chair about the management of the Company, or to the Company's Auditor about the:

2. content of the Auditor's report; or

3. conduct of the audit,

   may be submitted no later than 5.00pm (WST) on Wednesday, 21 October 2015 to the Company Secretary at the Company's registered office at Level 18, Raine Square, 300 Murray Street, Perth WA 6000, or by facsimile on (08) 6228 8999.

   
   

4. Resolution 1 - Remuneration Report

   Pursuant to section 250R(2) of the Corporations Act, the Company is required to put the 2015 Remuneration Report to the vote of Shareholders. The 2015 Annual Report contains the 2015 Remuneration Report which sets out the remuneration policy for the Company and reports the remuneration arrangements in place for Executive Directors, specified Executives and Non-Executive Directors of the Company.

   Subject to the rules set out in Division 9 of Part 2G.2 of the Corporations Act described below under the heading 'Consequence of voting against Resolution 1', Resolution 1 need only be an advisory vote of Shareholders and does not bind the Directors or the Company. Of itself, a failure of Shareholders to pass Resolution 1 will not require the Directors to alter any of the arrangements in the 2015 Remuneration Report. However, the Board will take the outcome of the vote very seriously when considering the Company's future remuneration policy. To this end, your Directors would like to point out the following matters in the 2015 Remuneration Report which they believe are relevant to Shareholders in considering their vote on the 2015 Remuneration Report. These matters are:

5. The Remuneration Policy of the Company and its subsidiaries (Group) has been designed to align executive objectives with shareholder and business objectives by providing a fixed remuneration component and offering specific short and long-term incentives based on key performance areas affecting the Group's financial and operating results. Your Board and Remuneration Committee believe the Remuneration Policy to be appropriate.

6. The structure of the executive remuneration package remains a key focus of the Board to ensure alignment with the nature of Atlas' business as Atlas optimises operations and continues to reduce costs.

   
   

7. The Board resolved not to award any short term incentive payments, long term incentive payments or increase salaries for the 2015 financial year. In addition, the Company reduced its overall remuneration expense as a result of a substantial reduction in headcount.

8. The previous Managing Director (Mr Brinsden) and the Non-Executive Directors took a 15% reduction in total fixed remuneration and fees respectively during the financial year. The reduction in the Managing Director's fixed remuneration remained in place when Mr Flanagan was appointed Managing Director.

9. No long term incentives were issued in the financial year, even though shareholder approval was obtained to issue long term incentives to the Executive Directors at the 2014 Annual General Meeting.

   These matters are part of the Company's strategy to ensure the remuneration of Directors, executives and all other employees is in line with best practice for a company its size and in keeping with the wishes of the Shareholders.

   
   

   Consequence of voting against Resolution 1

   If at least 25% of the votes cast on Resolution 1 are against the adoption of the 2015 Remuneration Report, and at least 25% of the votes cast at the next annual general meeting of the Company ('2016 AGM') on a resolution that the 2016 remuneration report be adopted is against the adoption of that report, then the Company will be required under section 250V of the Corporations Act to put to the vote at the 2016 AGM a spill resolution ('Spill Resolution') to decide whether or not to convene another general meeting within 90 days of the 2016 AGM (the 'Spill Meeting') where:

10. all the Directors of the Company who were directors at the time of the 2016 AGM (other than the Managing Director) will cease to hold office immediately before the end of the Spill Meeting; and

11. a resolution to fill the position of each of the Directors referred to in (a) by re-election or otherwise will be put to the vote at the Spill Meeting.

The Chair will allow a reasonable opportunity for Shareholders as a whole to ask about, or make comments on, the 2015 Remuneration Report.

As the votes cast against the remuneration report at the Company's 2014 Annual General Meeting were less than 25%, a Spill Resolution is not relevant for this Meeting.




Directors' Recommendation

The Board unanimously recommends that the Shareholders adopt the 2015 Remuneration Report and you vote in favour of Resolution 1.




12. Resolution 2 - Re-election of Mrs Cheryl Edwardes (Hon) (Chairman) as a Director

    Listing Rule 14.4 and Rule 3.3 of the Constitution require that a Director who is elected as an addition to the Board must not hold office (without re-election) past the next annual general meeting of the entity. Rule 3.3 of the Constitution provides that a Director who retires under Rule 3.3 is eligible for re-election.

    Cheryl Edwardes (Hon) was appointed Non-Executive Director of Atlas Iron Limited on 6 May 2015 and subsequently as Non-Executive Chairman on 11 June 2015 (Period of service: 0 years and 4 months).

    A solicitor by profession, Mrs Edwardes is a former Minister in the Western Australian Government with extensive experience and knowledge of WA's legal and regulatory framework relating to mining projects, environmental, native title, and heritage and land access.

    During her political career, Mrs Edwardes held positions including WA Attorney General, Minister for the Environment and Minister for Labour Relations. She also has broad experience and networks within China's business community.

    Mrs Edwardes is chairman of Vimy Resources Limited (ASX: VMY) and chairman of Edconnect (formerly) School Volunteer Program.

    Mrs Edwardes is a member of the Remuneration and Nomination Committee (effective 1 July 2015) and is a member of the Audit and Risk Management Committee (effective 1 July 2015).

    
    

    Directors' Recommendation

    The Board, other than Mrs Edwardes, unanimously recommends the re-election of Mrs Edwardes.

    
    

13. Resolution 3 - Re-election of Mr Jeff Dowling as a Director

    Listing Rule 14.4 and Rule 3.6 of the Constitution require that a Director (excluding the Managing Director) must retire from office at the third annual general meeting after the Director was last elected or re-elected. Rule 3.6 of the Constitution provides that a Director who retires under Rule 3.6 is eligible for re-election.

    Mr Dowling was appointed as a Non-Executive Director on 8 November 2011 (4 years and 10 months) and last re-elected at the Company's 2012 Annual General Meeting.

    Mr Dowling is a highly experienced corporate leader with 36 years' experience in professional services with Ernst & Young. He has held numerous leadership roles within Ernst & Young which focused on mining, oil and gas and other industries. His professional expertise centres around audit, risk and financial acumen derived from acting as lead partner on large public company audits, capital raisings and corporate transactions. Mr Dowling's career with Ernst & Young culminated in his appointment as Managing Partner of the Ernst & Young Western Region for a period of 5 years. He also led Ernst & Young's Oceania China Business Group, responsible for building Ernst & Young's Oceania relationships with Chinese Corporations. Mr Dowling is a director of Telethon Institute for Child Research Ltd.

    As at the date of this Notice, Mr Dowling is the chairman of Sirius Resources NL (ASX: SIR) (Sirius), a director of NRW Holdings Limited (ASX: NRW) and a director of Pura Vida Energy (ASX: PVD). Following the proposed acquisition of Sirius by Independence Group NL, Mr Dowling will cease to be a director of Sirius and will not form part of the board of the merged entity. During the last three years, Mr Dowling has been a director of Neptune Marine Services Limited (ASX: NMS).

    Mr Dowling is Chairman of the Audit and Risk Management Committee and a member of the Remuneration and Nomination Committee.

    
    

    Directors' Recommendation

    The Board, other than Mr Dowling, unanimously recommends the re-election of Mr Dowling. The Board considers Mr Dowling to be an independent Director.

    
    

14. Resolution 4 - Re-election of Mr Ken Brinsden as a Director

    Listing Rule 14.4 and Rule 3.6 of the Constitution require that a Director (excluding the Managing Director) must retire from office at the third annual general meeting after the Director was last elected or re-elected. These requirements now apply to Mr Brinsden because he ceased acting as the Company's Managing Director on 11 June 2015. Rule 3.6 of the Constitution provides that a Director who retires under Rule 3.6 is eligible for re-election.

    Mr Brinsden joined Atlas in May 2006 as Operations Manager. In January 2010 he was promoted to Chief Operating Officer and in July 2011 to Chief Development Officer. Mr Brinsden has been instrumental to the growth of the Company which has seen it develop from a junior explorer to a significant Pilbara iron ore producer.

    Mr Brinsden was appointed as Managing Director on 22 February 2012 and transitioned into an Executive Director role on 11 June 2015. (Period of service: 3 years and 7 months). Mr Brinsden ceased to be an Executive Director on 31 August 2015 and became a Non-Executive Director on 1 September 2015.

    Mr Brinsden is a mining engineer with over 20 years of experience in surface and underground mining operations. Since graduating from the Western Australian School of Mines in 1993, he has held a number of roles in production, management and brown-fields and green-fields mine developments across a number of leading companies including; Central Norseman Gold Corporation, Iluka Resources Limited, WMC Resources Limited and Gold Fields Limited.

    
    

    Directors' Recommendation

    The Board, other than Mr Brinsden, unanimously recommends the re-election of Mr Brinsden.

    
    

    
    

15. Resolution 5 - Approval of the Atlas Iron Limited Option Plan ('Option Plan')




Background

The Directors consider that it is desirable to maintain an option plan under which employees of the Company may be invited to participate and be granted Options over Shares, in order to increase the range of potential incentives available to them and to strengthen the link between Shareholders and employees of the Company.

At the Company's 2014 Annual General Meeting, Shareholders approved the issue of securities under the Company's Employee Share Plan, Long Term Incentive Plan and Short Term Incentive Deferral Plan (Existing Employee Incentive Plans). Due to recent changes in the employee share scheme income tax rules, the Board undertook a review of the Company's Existing Employee Incentive Plans to determine whether any modifications to the Existing Employee Incentive Plans were needed so they aligned with those new tax rules. Broadly speaking, the new employee share scheme income tax rules address many taxation problems associated with the use of option plans, making tax deferral much easier to achieve and moving the taxing point in many cases to the exercise point of the option rather than the vesting point as per the old rules. As a result of this review, the Board determined that the new Option Plan should be created to enable the Company to offer Options to eligible participants, with this new plan designed to better align with the new employee share scheme income tax rules concessions. Accordingly, the Board replaced the Existing Employee Incentive Plans by adopting the Atlas Iron Limited Option Plan Rules ('Option Plan Rules') on 26 August 2015.

To enable the Company to attract, motivate and retain people who can assist the Company in achieving its objectives, it is necessary to provide remuneration and incentives to personnel commensurate with market rates and practices. The Option Plan is designed to achieve this objective by providing these incentives to employees and to recognise employee's contribution to the Company's success. The Option Plan also encourages continued improvement in performance over time and encourages personnel to acquire and retain shareholdings in the Company. In addition, it is a means of providing non-cash incentive to the Company's key employees, which is consistent with Atlas' strategy of maximising its cash position.

The Company, for the purposes of satisfying its obligations to issue or transfer Shares on exercise of Options under the Option Plan, may purchase Shares on market; however depending on the Company's circumstances at the time, may decide to settle these by a new issue of Shares. Accordingly, approval is sought for the issue of Options as well as any Shares on exercise of the Options so as to preserve the Company's flexibility to do so.

Resolution 5 seeks Shareholder approval, for the purposes of Listing Rule 7.2 (Exception 9(b)), sections 200B and 200E of the Corporations Act and for all other purposes, of the Option Plan and the issue of Options (and any Shares issued on exercise of Options) under the Option Plan to employees and Directors of the Company.




Listing Rule 7.1

Listing Rule 7.1 provides that (subject to certain exceptions) prior approval of Shareholders is required for an issue of securities if the securities will, when aggregated with the securities issued by the Company during the previous 12 months without Shareholder approval, exceed 15% of the number of Shares on issue at the commencement of that 12 month period. Listing Rule 7.2 (Exception 9(b)) sets out an exception to the 15% threshold imposed by Listing Rule 7.1 by providing that an issue of equity securities under an employee incentive scheme made without Shareholder approval is effectively treated as having been made with Shareholder approval if, within three years before the issue, Shareholders had approved the issue of equity securities under the relevant scheme as an exception to Listing Rule 7.1.

If Resolution 5 is passed, all securities issued by the Company under the Option Plan will be excluded from the 15% limit imposed by Listing Rule 7.1 for a period of three years from the date of the approval. In the absence of such Shareholder approval, the issue of securities can still occur, but these securities are counted as part of the 15% limit which would otherwise apply during the 12 month period.

If Shareholders do not pass Resolution 5, the Board will take the outcome of the vote very seriously when considering the Company's future remuneration policy. Shareholder approval under the Listing Rules is not needed for the Company to acquire Shares on market for the purposes of providing Shares to employees and Directors on exercise of Options under the Option Plan.

It should be noted that, notwithstanding an approval by Shareholders of Resolution 5, any future grant of Options to a Director will remain subject to further Shareholder approval under Listing Rule 10.14.




Information required by the Listing Rules

In accordance with Listing Rule 7.2 (Exception 9(b)), the following information is provided with respect to the Option Plan:

1. A summary of the key terms of the Option Plan Rules is set out in Schedule 1. A copy of the full terms of the Option Plan can be obtained by contacting the Company Secretary.

2. The Option Plan is a new plan and has not previously been approved by Shareholders. Accordingly, no Options have been issued under the Option Plan since it was approved by the Board on 26 August 2015.

3. A voting prohibition and exclusion statement for Resolution 5 is included in the Notice.




Potential dilution

As at the date of this Notice of Meeting, there are approximately 120 employees apart from Mr Flanagan who have or will be invited to participate in the Option Plan.

It is proposed that Mr Flanagan and those employees receive up to 210,622,135 Options in aggregate under the Option Plan grants (representing (upon conversion into Shares) up to 7.89% of the current issued capital of the Company). The number of Options to be issued to Mr Flanagan and Atlas employees has been calculated using an assumed Share price of $0.03203 (being the 5 day VWAP of Shares from 9 September 2015 to 14 September 2015).




Information required for sections 200B and 200E of the Corporations Act

The Corporations Act provides that the Company may only give a person a benefit in connection with their ceasing to hold a Managerial or Executive Office in the Company or its related bodies corporate if it is approved by Shareholders or an exemption applies (for example, where the benefit together with other benefits does not exceed the payment limits set out in the Corporations Act, including where the aggregate benefits do not exceed one year's average base salary). This restriction will apply to all Key Management Personnel.

The term 'benefit' is open to a wide interpretation. Accordingly, Shareholder approval of Resolution 5 will allow the Board, where appropriate, to exercise its discretion under the Option Plan to determine that some or all of the unvested Options held by a person retiring from a Managerial or Executive Office are deemed to have vested or that (unvested or vested, but not yet exercised) Options are not automatically forfeited on retirement.

If Resolution 5 is not approved, eligible participants who hold a Managerial or Executive Office may not be able to receive the benefit described above, which is otherwise available to all other eligible participants.

The value of the benefit that might be given by the exercise of the Board's discretion under the Option Plan will depend on a number of factors. Accordingly, the precise value of the benefit cannot be ascertained at the present time. Apart from the future Share price being unknown, the following matters which will or are likely to affect the value of the benefits are also unknown:

1. the number of Options held by the relevant person prior to their retirement from office or cessation of their employment;

2. reasons for the retirement from office or cessation of employment and the person's length of service;

3. the term of the Options remaining;

4. the extent to which any vesting conditions or other performance or exercise hurdles have been satisfied; and

5. the exercise of the Board's discretion at the relevant time.




Directors' recommendation

Subject to the qualification below, the Directors: (1) consider that the Option Plan is an appropriate mechanism to assist in the recruitment, reward, retention and motivation of employees of the Company; and (2) believe that the adoption of the Option Plan is in the best interests of the Company, and unanimously recommend that Shareholders vote in favour of Resolution 5.

Mr Flanagan does not make a recommendation in relation to Resolution 5 as he is eligible to participate in the Option Plan.