Document:

Exhibit 4(c)16

 

Rules of the

Westpac Banking
Corporation

Reward Plan

 

as adopted at
a meeting of the Board of Directors on 11 October 2006 and approved by
Shareholders of Westpac Banking Corporation by resolution at the 2006 Annual
General Meeting and subsequently amended by the:

 

·                  Board Remuneration Committee on 5 August 2008; and

 

·                  Board Remuneration Committee Chairman on 13 December 2007
and 15 August 2008.

 

Allens Arthur Robinson

The Chifley Tower

2 Chifley Square

Sydney NSW 2000

Australia

Tel  61  2 9230 4000

Fax  61  2 9230 5333

 

© Copyright Allens Arthur Robinson 2008

 

 

	
  Westpac Banking Corporation Reward Plan

  	
   

  	
  

  

 

Table of
Contents

 

	
  1.

  	
  Purpose

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  2.

  	
  Definitions and
  interpretations

  	
   

  	
  1

  
	
   

  	
   

  	
   

  	
   

  
	
  3.

  	
  Interpretation

  	
   

  	
  6

  
	
   

  	
   

  	
   

  	
   

  
	
  4.

  	
  Invitation to acquire
  Options

  	
   

  	
  7

  
	
   

  	
  4.1

  	
  Issue

  	
   

  	
  7

  
	
   

  	
  4.2

  	
  Form

  	
   

  	
  7

  
	
   

  	
  4.3

  	
  Option price

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Application for
  Options

  	
   

  	
  8

  
	
   

  	
  5.1

  	
  Application procedure

  	
   

  	
  8

  
	
   

  	
  5.2

  	
  Application in whole or in part

  	
   

  	
  8

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  6.

  	
  Grant of Options

  	
   

  	
  8

  
	
   

  	
  6.1

  	
  Creation of Options

  	
   

  	
  8

  
	
   

  	
  6.2

  	
  Non-acceptance of Application

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  7.

  	
  Lapse of Options

  	
   

  	
  9

  
	
   

  	
  7.1

  	
  Time of lapse

  	
   

  	
  9

  
	
   

  	
  7.2

  	
  Breach, fraud or dishonesty

  	
   

  	
  9

  
	
   

  	
  7.3

  	
  Rights following lapse

  	
   

  	
  9

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Exercise of Options

  	
   

  	
  10

  
	
   

  	
  8.1

  	
  Vested Options

  	
   

  	
  10

  
	
   

  	
  8.2

  	
  Exercise Period

  	
   

  	
  10

  
	
   

  	
  8.3

  	
  Exercise of Options in part

  	
   

  	
  12

  
	
   

  	
  8.4

  	
  Exercise procedure

  	
   

  	
  12

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Performance Hurdles
  and Vested Options

  	
   

  	
  12

  
	
   

  	
  9.1

  	
  Performance criteria

  	
   

  	
  12

  
	
   

  	
  9.2

  	
  Performance Hurdles

  	
   

  	
  12

  
	
   

  	
  9.3

  	
  Determination of number of Vested Options

  	
   

  	
  14

  
	
   

  	
  9.4

  	
  Rounding of fractions

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Allocation of Shares

  	
   

  	
  16

  
	
   

  	
  10.1

  	
  Allotment of Shares

  	
   

  	
  16

  
	
   

  	
  10.2

  	
  Purchase of Shares

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Change in Control

  	
   

  	
  16

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  Capital Event

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  New issues

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  Options not
  transferable

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  15.

  	
  Security Interest

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  Ranking and listing

  	
   

  	
  18

  
	
   

  	
   

  	
   

  	
   

  
	
  17.

  	
  Issue limitations

  	
   

  	
  19

  

 

i

 

	
  18.

  	
  No interest in Shares
  until exercise

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  19.

  	
  Commencement and
  termination

  	
   

  	
  19

  
	
   

  	
  19.1

  	
  Commencement

  	
   

  	
  19

  
	
   

  	
  19.2

  	
  Termination and Suspension

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  20.

  	
  Administration of the
  Plan

  	
   

  	
  19

  
	
   

  	
   

  	
   

  	
   

  
	
  21.

  	
  Amendment of the Plan

  	
   

  	
  20

  
	
   

  	
  21.1

  	
  By the Board

  	
   

  	
  20

  
	
   

  	
  21.2

  	
  Listing Rules

  	
   

  	
  20

  
	
   

  	
   

  	
   

  	
   

  
	
  22.

  	
  Law, Listing
  Rules and the Constitution

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  23.

  	
  Rights of Participants

  	
   

  	
  21

  
	
   

  	
   

  	
   

  	
   

  
	
  24.

  	
  General

  	
   

  	
  21

  
	
   

  	
  24.1

  	
  Advice

  	
   

  	
  21

  
	
   

  	
  24.2

  	
  Costs and Expenses

  	
   

  	
  21

  
	
   

  	
  24.3

  	
  Dispute

  	
   

  	
  22

  
	
   

  	
  24.4

  	
  Notices

  	
   

  	
  22

  
	
   

  	
  24.5

  	
  Error Correction

  	
   

  	
  23

  
	
   

  	
  24.6

  	
  Governing Law

  	
   

  	
  23

  

 

ii

 

WESTPAC
BANKING CORPORATION (ABN 33 007 457 141)

 

WESTPAC
REWARD PLAN

 

RULES

 

1.                                     Purpose

 

The
Westpac Banking Corporation Reward Plan has been established as an initiative
for creating a stronger link between employee performance and reward and
increasing shareholder value by enabling Participants to have a greater
involvement with, and share in the future growth and profitability of the Bank.

 

2.                                     Definitions and interpretations

 

In this
document the following terms have the following meanings:

 

Application means an application
on an Application Form by an Eligible Employee to acquire Options under
the Plan or an application made in accordance with any application procedures
as the Board may determine from time to time.

 

Application Date means the last
possible date as specified in an Invitation on which an Application can be
made.

 

Application Form means the
application form (if any) in such form as the Board may approve from time to
time.

 

ASIC means the Australian
Securities and Investments Commission.

 

ASIC Act means the Australian
Securities and Investments Commission Act 2001 (Cth).

 

ASX means Australian Stock
Exchange Limited (ABN 98 008 624 691).

 

Award means, in relation to a Participant,
the number of Options created in favour of that Participant pursuant to clause
6 having the same Issue Date.

 

Bank means Westpac Banking
Corporation (ABN 33 007 457 141) or any company that becomes a holding company
of Westpac Banking Corporation.

 

Board means the board of
directors of the Bank from time to time.

 

Business Day means any day other
than a Saturday, Sunday or other day on which commercial banking institutions
in Sydney are authorised or required by law to be closed.

 

Capital Event means any of the
following:

 

(a)                                 any event affecting the number or type of securities on issue in the
capital of the Bank, including a subdivision, consolidation, reduction,
redemption or further issue of securities whether by way of rights issue, bonus
issue or otherwise; and

 

(b)                                any other event which the Board in its discretion reasonably
considers should be a Capital Event.

 

1

 

Change in Control occurs when a
person’s voting power is more than (or will become more than) 35% in relation
to the Bank (excluding any voting power held by virtue of acceptances under an
off-market bid unless or until the bid is or becomes unconditional).

 

Class Order means an
instrument made by ASIC that exempts each person in a class of persons from the
Corporations Act, the ASIC Act or any part of either or both, or that modifies
the application of the Corporations Act, the ASIC Act or any part of either or
both in particular circumstances.

 

Condition means, in respect of
any Option, one or more conditions (if any) determined by the Board in its
absolute discretion to apply to that Option including, without limitation,
Performance Hurdles, First Exercise Date and Last Exercise Date, as specified
in an Invitation made to the relevant Eligible Employee under clause 4.

 

Constitution means the Bank’s
constitution as amended from time to time.

 

Corporations Act means the
Corporations Act 2001 (Cth).

 

Determination Date means the
Trading Day immediately preceding the Performance Period Commencement Date.

 

Dual Listed Company Structure
means an arrangement whereby, among other things, two corporations have a
unified management structure, but where each of the two corporations retains
its separate legal identity and existing stock exchange listing.

 

Eligible Employee means an
Employee who is a member of senior management and whom the Board determines is
to receive an Invitation under the Plan. 
The Board may also determine at any time that such an Employee who is
located in a jurisdiction where it is, in the opinion of the Board, not
reasonably practicable to invite participation in the Plan, is not an Eligible
Employee and that, until the Board determines otherwise, such Employee shall
not receive an Invitation under the Plan.

 

Employee means any person who is
in full-time or part-time employment of a Group Company.

 

Exercisable Option means an
Unvested Option which becomes a Vested Option pursuant to a determination made
under clause 9.3(b)(iv), such determination to be made on the basis that
the Test Date applicable to that Option:

 

(a)                                 will be the Monthly TSR Test Date immediately preceding the Last
Employment Date of the Participant holding that Option; or

 

(b)                                if no Monthly TSR Test Date has occurred since the Issue Date of
that Option, will be taken to be the Last Employment Date of that Participant.

 

Exercise Price means the amount
payable per Share, if any, on the exercise of a Vested Option or an Exercisable
Option calculated as follows:

 

(a)                                 the
Market Price; or

 

(b)                                any
other amount (which may be nil) specified by the Board in the Invitation,

 

in each
case making appropriate adjustment, if any, in respect of Capital Events in
accordance with clause 12.

 

2

 

First Exercise Date means the
earliest date that a Participant may give Notice of Exercise under clause
8.2(a), such date to be determined by the Board in its absolute discretion and,
once determined, specified in that Participant’s Invitation.

 

First Test Date means the third
anniversary (or such other date as may be determined from time to time by the
Board and specified in an Invitation made under clause 4, of the
Performance Period Commencement Date.

 

First Test Date Notice means the
written notification provided to a Participant under clause 9.3(c) in
respect of the Board’s determination made as of the First Test Date.

 

Group Company means the Bank and
any of its subsidiaries.

 

Invitation means an invitation
to apply to acquire Options under the Plan, or such other means as the Board
may determine from time to time, subject always to compliance with any Law.

 

Issue Date means the date on
which an Option is created under clause 6.1 by being inscribed on the
Register.

 

Last Employment Date means, with
respect to a particular Participant, the date on which:

 

(a)                                 that Participant ceases to be an Employee for whatever reason; or

 

(b)                                that Participant’s employer (being a company other than the Bank)
ceases to be a Group Company.

 

Last Exercise Date means the day
ending at 5.00 pm Sydney time on the date 10 years after the Performance Period
Commencement Date or such other earlier date as is determined by the Board and
specified in an Invitation to an Eligible Employee.

 

Law means the applicable law of
the jurisdiction in which an Eligible Employee is located at the time of
receipt of an Invitation.

 

Listing Rules means the
listing rules of the ASX as amended from time to time.

 

Market Price means the weighted
average market price per Share of all Shares traded on the ASX during the five
Business Day period up to and including the Determination Date.  The Board may exercise a discretion to
include or exclude particular transactions from this calculation (e.g. “specials”)
as it thinks fit.  If no Shares are
traded on the ASX during that period, the price as determined by the Board.

 

Maximum TSR Ranking means the
TSR Ranking equal to 75% or such other percentage as determined by the Board at
the time of determination of the Performance Hurdles applicable to the relevant
Options.

 

Minimum Parcel means the minimum
number of Shares determined by the Board from time to time, which need not be
the same number for all purposes of the Plan.

 

Minimum TSR Ranking means the
TSR Ranking equal to 50% or such other percentage as determined by the Board at
the time of determination of the Performance Hurdles applicable to the relevant
Options.

 

Monthly TSR Test Date means, in respect of any Option, the last Business Day of each
calendar month during the Performance Period applicable to that Option.

 

3

 

Notice of Exercise means a duly
completed notice of exercise of a Vested Option or an Exercisable Option signed
by the Participant, in a form approved by the Board from time to time, and
lodged in accordance with clause 8.4.

 

Option means a right, which is
subject to Performance Hurdles, to subscribe for one Share under the Plan, or
such number of Shares as determined under clause 12, for monetary consideration
exceeding $1.00 per Share.

 

Participant means:

 

(a)                                 an Eligible Employee who acts in accordance with clause 5.1(a) and
returns a duly completed Application Form or applies, or is deemed to have
applied in accordance with any application procedure determined by the Board
from time to time;

 

(b)                                the legal personal representative of that Eligible Employee where
that legal personal representative’s name has been entered on the Register as
the holder of the Options; or

 

(c)                                 if, because of the Bankruptcy Act 1966 (Cth) or equivalent
legislation in any other jurisdiction, Options (or the rights under those
Options) held under the Plan that form part of the property of an Eligible
Employee, vest in the trustee of that Eligible Employee’s estate, that trustee,
whether or not the name of that trustee has been entered in the Register.

 

Peer Group means those entities
(being at least 13 in number) as determined by the Board from time to time for
the purposes of constituting such a group.

 

Performance Hurdles means performance
criteria as set out or referred to in the relevant Invitation, being the
criteria set out in clause 9.2 and clause 9.3 unless the Board determines
alternative, additional or modified performance criteria under clause 9.1.

 

Performance Period means, in
respect of any Option, the period commencing and ending on dates as determined
by the Board for the purposes of determining the extent (if any) to which the
Performance Hurdles have been satisfied.

 

Performance Period Commencement Date means the first day of the Performance Period, as set out in an
Invitation.

 

Plan means the Westpac Banking
Corporation Reward Plan.

 

Register means the register
created and maintained by or on behalf of the Bank under and in accordance with
section 170 of the Corporations Act.

 

Retirement means the voluntary
cessation of employment of a Participant with a Group Company solely by reason
of that Participant having notified that Group Company of his or her intention
to permanently leave the workforce.

 

Rules means the rules of
the Plan as set out in this document.

 

Satisfaction Date means the date
that is specified in an Invitation to an Eligible Employee as the last possible
date on which Conditions must be and remain satisfied.

 

4

 

Second Test Date means the
fourth anniversary (or such other date as may be determined from time to time
by the Board and specified in an Invitation made under clause 4), of the
Performance Period Commencement Date.

 

Second Test Date Notice means
the written notification provided to a Participant under clause 9.3(c) in
respect of the Board’s determination made as of the Second Test Date.

 

Security Interest means a
mortgage, charge, pledge, lien or other encumbrance of any nature.

 

Shares means fully paid ordinary
shares in the capital of the Bank.

 

Tax includes any tax, levy,
impost, deduction, charge, rate, contribution, duty or withholding which is
assessed (or deemed to be assessed), levied, imposed or made by any government
or any governmental, semi-governmental or judicial entity or authority together
with any interest, penalty, fine, charge, fee or other amount assessed (or
deemed to be assessed), levied, imposed or made on or in respect of any or all
of the foregoing.

 

Tax Act means the Income Tax
Assessment Act 1936 (Cth) or the Income Tax Assessment Act 1997 (Cth) or both,
as the context requires.

 

Test Date means, in respect of
each Performance Period, each of:

 

(a)                                 the First Test Date;

 

(b)                                the Second Test Date;

 

(c)                                 the Third Test Date; and

 

(d)                                in any case where a determination of the Board is required under:

 

(i)                                   clause 8.2(d)(vi) or 8.2(e)(iv), the date (being either a
Monthly TSR Test Date or the Last Employment Date of the relevant Participant);
or

 

(ii)                                clause 11, the date (being either a Monthly TSR Test Date, a Test
Date or the Notice Date),

 

on or as at which such a determination is required to
be made.

 

Third Test Date means the fifth
anniversary (or such other date as may be determined from time to time by the
Board and specified in an Invitation made under clause 4), of the
Performance Period Commencement Date.

 

Third Test Date Notice means the
written notification provided to a Participant under clause 9.3(c) in
respect of the Board’s determination made as of the Third Test Date.

 

Total and Permanent Disablement,
in relation to a Participant, means that that Participant has, in the opinion
of the Board, after considering such medical and other evidence as it sees fit,
become incapacitated to such an extent as to render the Participant unlikely
ever to engage in any occupation with the Bank or any other Group Company for
which he or she is reasonably qualified by education, training or experience.

 

Total Exercise Price means the
number of Vested Options or Exercisable Options to be exercised in a particular
case multiplied by the Exercise Price.

 

Trading Day means a day on which
Shares are traded on the ASX.

 

5

 

TSR means, in respect of an
entity, the total shareholder return (including dividends) of that entity being
the amount calculated on a basis, rounded to not less than 3 decimal places, to
be determined from time to time by the Board.

 

TSR Ranking means the percentage
ranking of the Bank relative to each entity comprising the TSR Ranking
Group.  To obtain the Bank’s percentage
ranking at each applicable Test Date:

 

(a)                                 the TSR of each entity comprising the TSR Ranking Group and of the
Bank shall be ranked in descending order from highest to lowest;

 

(b)                                the number of entities in the TSR Ranking Group with a lower TSR
than the Bank shall be calculated (the Numerator);
and

 

(c)                                 the Numerator shall be divided by the number of entities then in the
TSR Ranking Group and the result of that equation, expressed as a percentage,
shall be the Bank’s TSR Ranking.

 

TSR Ranking Group means, on any
Test Date, the first 10 entities (or such other number as the Board may from
time to time determine) in the Peer Group that remain listed on the ASX and
which have published sufficient data to enable each entity’s respective TSR to
be determined for the purposes of this Plan.

 

Unvested Option means an Option
that is neither a Vested Option nor an Option that has lapsed under
clause 7.

 

Vested Option has the meaning
given in clause 8.1, and the expression Vested Option shall be construed
accordingly.

 

3.                                     Interpretation

 

In this
document unless the contrary intention appears:

 

(a)                                 a gender includes all genders;

 

(b)                                the singular includes the plural and vice versa;

 

(c)                                 a reference to any legislation or to a provision of any legislation
includes any modification or re-enactment of it, any legislative provision
substituted for it and all regulations and statutory instruments issued under
it;

 

(d)                                headings are for convenience only and do not affect the interpretation
of these Rules;

 

(e)                                 reference to a clause or paragraph is a reference to a clause or
paragraph of these Rules, or the corresponding Rule or Rules of this
Plan as amended from time to time;

 

(f)                                   where any word or phrase is given a definite meaning in these Rules,
any part of speech or other grammatical form of that word or phrase has a
corresponding meaning;

 

6

 

(g)                                where the time for doing any act, matter or thing under these Rules falls
on a day which is not a Business Day, it shall be done on the next succeeding
Business Day; and

 

(h)                                terms which are defined in the Corporations Act bear the same
meaning when used in this document.

 

4.                                     Invitation to acquire Options

 

4.1                              Issue

 

In its
absolute discretion and subject to these Rules, the Board may from time to time
issue or cause to be issued Invitations on behalf of the Bank to Eligible
Employees in respect of that number or value of Options as the Board in its
discretion determines.  In determining
the number or value of Options to be the subject of individual Invitations, the
Board may determine that those Invitations be made on a differential basis to
Eligible Employees, different classes of Eligible Employees or to Eligible
Employees within the same class, as the case may be.

 

4.2                              Form

 

An
Invitation may take any form determined by the Board from time to time and:

 

(a)                                 will specify or include the following information:

 

(i)                                  the date of the Invitation;

 

(ii)                               the name of the Eligible Employee to whom the Invitation is made;

 

(iii)                            the maximum number or value of Options in respect of which the
Eligible Employee is being invited to apply;

 

(iv)                           the Performance Period Commencement Date;

 

(v)                              the First Exercise Date of the Options;

 

(vi)                           the Last Exercise Date of the Options;

 

(vii)                        the Exercise Price;

 

(viii)                     the time period in which an Application shall be made; and

 

(ix)                             any other material terms and conditions required by any Law and any
relevant Class Order and any other terms and conditions applicable to the
Invitation including the requirement that the Eligible Employee must continue
and remain an Eligible Employee on the date that the Options are to be granted
in accordance with clause 6.1, and where Conditions (such as Performance
Hurdles to be satisfied) have been determined to apply by the Board, details of
those Conditions and any Satisfaction Date; and

 

(b)                                may be issued with an Application Form and such explanatory or
other material in respect of the Plan as the Board considers appropriate, or as
is required by Law and any relevant Class Order.

 

7

 

4.3                              Option
price

 

Options
granted by the Bank under the Plan will be granted free of charge to
Participants, unless otherwise determined by the Board.

 

5.                                     Application for Options

 

5.1                              Application
procedure

 

(a)                                An Eligible Employee who receives an Invitation may only make an
Application within the time period and as otherwise specified in the
Invitation.

 

(b)                               If, after making an Application in accordance with paragraph (a) of
this clause 5.1, the Eligible Employee’s employment or appointment with a
Group Company has not ceased, he or she:

 

(i)                                   becomes a Participant;

 

(ii)                                as appropriate, irrevocably accepts (or is deemed to have accepted)
the offer of Options, or offers to acquire Options, under the Plan in
accordance with the terms of the Invitation; and

 

(iii)                             agrees to be bound by the terms of the Invitation and by these Rules or
any modification of these Rules for the purposes of clause 9.1(b) as
set out in any relevant schedule to these Rules.

 

5.2                              Application
in whole or in part

 

An
Eligible Employee who receives an Invitation may make an Application in respect
of all or part of the maximum number of Options specified in the
Invitation.  If an Application is made
for only part of the Options, then the Eligible Employee may only do so in
respect of that number of Options which, if exercised, would result in the
Eligible Employee acquiring a number of Shares that is not less than the
Minimum Parcel.  No further Application
may be made in respect of that Invitation.

 

6.                                     Grant of Options

 

6.1                              Creation
of Options

 

(a)                                Options granted under the Plan shall be created, and a Participant’s
title to those Options will, subject to clause 24.5, conclusively be evidenced
for all purposes of the Plan by being inscribed on the Register.  No certificate or other evidence of title to
an Option will be issued unless required under any applicable law or the Board
in its sole discretion determines otherwise.

 

(b)                               Within 28 days after the end of the period for making an
Application, as specified in the Invitation, and except as provided in clause
6.2, the Board will, in respect of each Eligible Employee who has become a
Participant in accordance with clause 5.1(b):

 

8

 

(i)                                   inscribe or cause to be inscribed in the Register the name of that
Participant and the number of Options applied for by that Participant; and

 

(ii)                                notify that Participant of the Issue Date and that the Options have
been so inscribed.

 

6.2                              Non-acceptance
of Application

 

(a)                                In the event that the Board does not grant Options in favour of any
Participant under clause 6.1(a), the Board shall:

 

(i)                                   provide notification to that Participant that it does not wish to
accept that Participant’s Application;

 

(ii)                                refund the moneys (if any) provided by that Participant as
consideration to apply for Options under the Plan; and

 

(iii)                             undertake any other action as it sees fit.

 

(b)                               If paragraph (a) of this clause 6.2 applies to a
Participant, the Invitation to that Participant, and the Application by that
Participant in relation to that Invitation, shall be deemed never to have been
made.

 

7.                                     Lapse of Options

 

7.1                              Time
of lapse

 

An
Option lapses, to the extent it has not been exercised, on the earlier to occur
of:

 

(a)                                the date of lapse under clause 7.2 or clause 11;

 

(b)                               the last day of any period specified in clauses 8.2(b) to
8.2(f) (inclusive) in which a Participant may exercise an Option;

 

(c)                                where Conditions have not been satisfied and remain unsatisfied on
the Satisfaction Date, the Satisfaction Date; and

 

(d)                               the Last Exercise Date.

 

7.2                              Breach,
fraud or dishonesty

 

If in
the reasonable opinion of the Board a Participant acts fraudulently or
dishonestly or is in material breach of his or her obligations to the Bank or
any other Group Company then the Board may in its absolute discretion determine
that any Unvested Options of the Participant have lapsed and the Board’s
decision will be final and binding.

 

7.3                              Rights
following lapse

 

Upon
the lapse of an Option, all rights of the Participant in respect of that Option
cease.

 

9

 

8.                                     Exercise of Options

 

8.1                              Vested
Options

 

(a)                                An Option granted to a Participant will become a Vested Option on
the relevant Test Date by reference to which a determination is made that the
Option has become a Vested Option only if all Conditions (including any
Performance Hurdles) applicable to that Option have been satisfied unless,
prior to that Test Date, the Option has lapsed under clause 7.

 

(b)                               An Option granted to a Participant will also be treated for all
purposes under these Rules as a Vested Option if a determination is made
under clause 8.2(c), clause 8.2(f), clause 9.3(b)(iii) or clause 9.3(b)(iv) that
the Option is to become a Vested Option, from the date of the determination.

 

8.2                              Exercise
Period

 

(a)                                Except as provided in clauses 8.2(b) to 8.2(f) (inclusive),
an Option that is a Vested Option may only be exercised during the period
commencing on the First Exercise Date and ending on the Last Exercise
Date.  Except as provided in clauses 8.2(b) to
8.2(f) (inclusive) or clause 11, an Unvested Option may not be
exercised.  Notwithstanding any provision
in this clause 8, no Option may be exercised after the Last Exercise Date.

 

(b)                               Death or Total and Permanent Disablement

 

If a Participant ceases to be an Employee as a result
of his or her death or Total and Permanent Disablement, that Participant may,
at any time prior to the first to occur of the Last Exercise Date and the first
anniversary of the Last Employment Date, exercise all Options (whether or not
they are Unvested Options).

 

(c)                                Resignation

 

If a Participant ceases to be an Employee as a result
of his or her resignation, that Participant may, at any time prior to the first
to occur of the Last Exercise Date and the date that is 3 months after the Last
Employment Date, exercise only those Options (if any) that are Vested Options
at the Last Employment Date unless the Board in its absolute discretion
determines that such Participant is entitled to have some Unvested Options
treated as Vested Options, in which event those Unvested Options will become
Vested Options.  All Unvested Options
will lapse on the Last Employment Date.

 

10

 

(d)                               Retrenchment or cessation of Participant’s employer
as a Group Company

 

If:

 

(i)                                   a Participant ceases to be an Employee as a result of the
retrenchment of that Participant; or

 

(ii)                                that Participant’s employer (being a company other than the Bank)
ceases to be a Group Company,

 

that Participant may:

 

(iii)                             at any time prior to the first to occur of the Last Exercise Date
and the first anniversary of the Last Employment Date; or

 

(iv)                            in the case of cessation as a result of retrenchment only, if the
Participant has provided notice of their election prior to the Last Employment
Date, to extend the period in which they may exercise Options beyond the first
anniversary of the Last Employment Date, at any time prior to the Last Exercise
Date,

 

exercise:

 

(v)                               only those Options (if any) that are Vested Options at the Last
Employment Date; plus

 

(vi)                            if the Last Employment Date is before the Third Test Date, that
number of Unvested Options (if any) that have become Vested Options pursuant to
a determination made under clause 9.3(b)(iii),

 

with all other Unvested Options lapsing on that Participant’s Last
Employment Date.

 

(e)                                Retirement

 

If a Participant ceases to be an Employee as a result
of the Retirement of that Participant, that Participant may:

 

(i)                                   at any time prior to the first to occur of the Last Exercise Date and
the first anniversary of the Last Employment Date; or

 

(ii)                                if the Participant has provided notice of their election prior to
the Last Employment Date, to extend the period in which they may exercise
Options beyond the first anniversary of the Last Employment Date, at any time
prior to the Last Exercise Date,

 

exercise:

 

(iii)                             only those Options (if any) that are Vested Options at the Last
Employment Date; plus

 

(iv)                            only that number of Unvested Options (if any) that become
Exercisable Options, pursuant to a determination made under
clause 9.3(b)(iv),

 

with all other Unvested Options lapsing on that Participant’s Last
Employment Date..

 

11

 

(f)                                  Other circumstances

 

If a Participant ceases to be an Employee for any
reason other than those set out in clauses 8.2(b) to 8.2(e), all of
the Participant’s Options (whether they are Vested Options that have not been
exercised or Unvested Options) shall lapse on the Last Employment Date unless
the Board in its absolute discretion determines that such Participant is
entitled to have some Unvested Options treated as Vested Options, in which
event those Unvested Options will become Vested Options and the Participant
may, at any time prior to the first to occur of the Last Exercise Date and the
date that is 3 months after the Last Employment Date, exercise those Vested
Options.

 

8.3                              Exercise
of Options in part

 

If a
Participant elects to exercise part of his or her Options comprised in an
Award, the Notice of Exercise must be in respect of:

 

(a)                                that number of Shares which is not less than the Minimum Parcel;

 

(b)                               multiples of a Minimum Parcel; 
and

 

(c)                                that number of Shares which will not leave any unexercised Options
comprised in that Award to that Participant totalling less than a Minimum
Parcel.

 

8.4                              Exercise
procedure

 

A
Participant may exercise any of his or her Options by lodging a Notice of
Exercise and a cheque payable to the Bank for the Total Exercise Price (if any)
applicable to those Options, or by such other means of payment as may be
approved by the Board, at the head office of the Bank for the time being or
other place nominated by the Board for this purpose.

 

9.                                     Performance Hurdles and Vested Options

 

9.1                              Performance
criteria

 

(a)                                The performance criteria applicable to any Options shall be as
specified in clause 9.2 and clause 9.3 unless the Board determines otherwise.

 

(b)                               If the Board determines that alternative, additional or modified
performance criteria are to apply to any Option in lieu of the performance
criteria specified in clause 9.2 and clause 9.3, the Board shall as part of
that determination approve a schedule, to be attached to and form part of these
Rules, which contains replacement clauses setting out those alternative,
additional or modified performance criteria (including any modification, if
necessary, to cross referencing within these Rules) applicable to that Option.

 

9.2                              Performance
Hurdles

 

(a)                                Subject to clause 9.1, the Performance Hurdles applicable to any
Performance Period relating to any Option comprised in an Award shall be
determined by 

 

12

 

reference to the TSR Ranking Group in
accordance with sub-clauses (b), (c) and (d) below.

 

(b)                               Where, as at the First Test Date, the TSR Ranking of the Bank is:

 

(i)                                   less than the Minimum TSR Ranking, the number of Options that shall
become Vested Options as at the First Test Date shall be zero;

 

(ii)                                equal to the Minimum TSR Ranking, the number of Options that shall
become Vested Options as at the First Test Date is the number equal to 50% of
the total number of Options comprised in that Award;

 

(iii)                             equal to or greater than the Maximum TSR Ranking, the number of
Options that shall become Vested Options as at the First Test Date is the
number equal to 100% of the total number of Options comprised in that Award;
and

 

(iv)                            greater than the Minimum TSR Ranking and less than the Maximum TSR
Ranking, the number of Options that shall become Vested Options as at the First
Test Date increases on a straight line basis from 50% to 100% of the total
number of Options comprised in that Award.

 

(c)                                Where, as at the Second Test Date, the TSR Ranking of the Bank is:

 

(i)                                   less than the Minimum TSR Ranking or equal to or less than the TSR
Ranking of the Bank on the First Test Date, the number of Options that shall
become Vested Options as at the Second Test Date shall be zero;

 

(ii)                                equal to or greater than the Maximum TSR Ranking, the number of
Options that shall become Vested Options as at the Second Test Date is the
number equal to 100% of the total number of Unvested Options comprised in that
Award; and

 

(iii)                             greater than the TSR Ranking of the Bank on the First Test Date and
less than the Maximum TSR Ranking, an additional number of Options shall become
Vested Options as at the Second Test Date so that the total percentage by
number of Options in an Award which have become Vested Options as a result of
the operation of clause 9.2 increases on a straight line basis from the
percentage of Options that became Vested Options on the First Test Date to 100%
of the total number of Options comprised in that Award.

 

(d)                               Where, as at the Third Test Date, the TSR Ranking of the Bank is:

 

(i)                                   less than the Minimum TSR Ranking or equal to or less than the TSR
Ranking of the Bank on the First Test Date or Second Test Date (whichever is
the greater), the number of Options that shall become Vested Options as at the
Third Test Date shall be zero;

 

(ii)                                equal to or greater than the Maximum TSR Ranking, the number of
Options that shall become Vested Options as at the Third Test Date is the
number equal to 100% of the total number of Unvested Options comprised in that
Award; and

 

13

 

(iii)                             greater than the TSR Ranking of the Bank on the First Test Date or
the Second Test Date (whichever is the greater) and less than the Maximum TSR
Ranking, an additional number of Options shall become Vested Options as at the
Third Test Date so that the total percentage by number of Options in an Award
which have become Vested Options as a result of the operation of clause 9.2
increases on a straight line basis from the percentage of Options that became
Vested Options on the First Test Date or the Second Test Date (whichever is the
higher) to 100% of the total number of Options comprised in that Award.

 

9.3                              Determination
of number of Vested Options

 

(a)                                As soon as practicable after each Test Date applicable to any
Performance Period, the Board shall determine:

 

(i)                                   the TSR Ranking Group; and

 

(ii)                                the TSR Ranking of the Bank and of each entity comprising the TSR
Ranking Group,

 

as at that Test Date.

 

(b)                               As soon as practicable after each Test Date, the Board shall
determine in respect of each Participant as at that Test Date:

 

(i)                                   whether, and to what extent, the Performance Hurdles and all other
Conditions (if any) applicable to that Performance Period up to that Test Date
have been satisfied;

 

(ii)                                the number of Unvested Options that will become Vested Options (if
any);

 

(iii)                             in the case of a determination made for the purposes of clause
8.2(d)(vi), the number of Unvested Options (if any) that have become Vested
Options, calculated in accordance with the following formula:

 

	
  A = 

  	
  (

  	
  W x 

  	
  [50 + 2 (X – 50)]

  	
   x

  	
  Y

  	
  )

  	
  - V

  	
   

  
	
   

  	
  100

  	
   

  	
  Z

  	
   

  

 

where:

 

A is the
number of Unvested Options that will become Vested Options.  If the Bank’s TSR Ranking as at the Test Date
is less than 50%, A shall be taken to be nil;

 

V is the
number of Options comprised in an Award that have become Vested Options prior
to the Last Employment Date other than those that become Vested Options as a
result of the operation of this clause 9.3(b)(iii);

 

W is the
number of Options comprised in an Award;

 

X is the
Bank’s TSR Ranking determined on or as at:

 

14

 

(i)                                   the most recent of a Monthly TSR Test Date and a Test Date to have
occurred immediately preceding the Last Employment Date of the relevant
Participant; or

 

(ii)                                if no Monthly TSR Test Date or Test Date has occurred since the
Issue Date of that Participant’s Options, the Last Employment Date of that
Participant,

 

PROVIDED THAT if the Bank’s TSR Ranking so determined
is greater than 75%, X shall for the
purposes of this calculation be taken to be 75% (in each case X will be expressed as a whole number);

 

Y is the
number of days from and excluding the Performance Period Commencement Date up
to and including the Last Employment Date but only if that Participant’s Last
Employment Date occurs before the First Test Date; and

 

Z is the
number of days from and excluding the Performance Period Commencement Date up
to and including the First Test Date but only if that Participant’s Last
Employment Date occurs before the First Test Date.

 

(iv)                            in the case of a determination made for the purposes of clause
8.2(e)(iv), the number of Unvested Options (if any) that have become
Exercisable Options;

 

(v)                               whether any Capital Event has occurred during the Performance Period
up to that Test Date;

 

(vi)                            the Exercise Price (if any);

 

(vii)                         in the case of the First Test Date and the Second Test Date of an
applicable Performance Period, the number of Options that will continue to be
Unvested Options; and

 

(viii)                      in the case of the Third Test Date, the number of Unvested Options
that will automatically lapse on that day.

 

(c)                                Following each determination made by the Board under clause 9.3(b),
the Board shall provide a written notification to each Participant:

 

(i)                                   as to whether or not the Performance Hurdles and other Conditions
(if applicable) have been met;

 

(ii)                                the number of Vested Options (if any) that the Participant will be
entitled to exercise;

 

(iii)                             in the case of determinations made under clause 9.3(b)(iii) and
(iv), the number of Unvested Options (if any) that have become Vested Options
or, as the case may be, Exercisable Options;

 

(iv)                            whether a Capital Event has occurred; and

 

(v)                               the Exercise Price.

 

15

 

9.4                              Rounding
of fractions

 

If any
determination made under clause 9.2 or clause 9.3, results in there being a
fraction of a Vested Option, the aggregate number of Vested Options shall be
rounded, as follows:

 

(a)                                upwards to the nearest whole number, if the fraction is a value of
0.5 or more; and

 

(b)                               downwards to the nearest whole number, if the fraction is a value
less than 0.5.

 

10.                              Allocation of Shares

 

10.1                       Allotment
of Shares

 

Subject
to clause 10.2, the Bank must within 28 days after receipt of a Notice of
Exercise and the Total Exercise Price (if any) in respect of Options, allot and
issue to the Participant that number of Shares nominated by the Participant in
the Notice of Exercise under these Rules.

 

10.2                       Purchase
of Shares

 

(a)                                The Bank may, at the Board’s discretion, determine to apply the
Total Exercise Price together with, to the extent permitted by Law, moneys
provided by the Bank, in purchasing Shares instead of making an allotment and
issue of Shares for the purpose of the Notice of Exercise.  The relevant Shares will be purchased in the
name of the Participant within 28 days after receipt of the Notice of Exercise
and Total Exercise Price (if any).

 

(b)                               If the Board so determines, the Board shall at the time of that
determination appoint an entity that is unrelated to any Group Company (Entity) for the sole purpose of
purchasing the relevant number of Shares and, for that purpose, the Bank shall
pay or cause to be paid to that Entity an amount equal to the costs and
expenses of the acquisition of those Shares.

 

(c)                                The Entity so appointed shall acquire the number of Shares as
directed by the Board and immediately allocate and cause those Shares to
immediately be registered in the name of the relevant Participant, as directed
by the Board.

 

(d)                               In acquiring those Shares, but not otherwise, the Entity acts as
trustee for the relevant Participant until such time as those Shares have been
acquired, allocated and registered in the name of that Participant.  All other fiduciary obligations and duties of
that Entity to that Participant that might otherwise be implied or imposed by
law or equity are expressly excluded to the extent permitted by law, including
without limitation any such obligation or duty arising under any statute.

 

(e)                                The Entity is not an agent or trustee for the Bank or, except as
provided by paragraph (d) of this clause 10.2, any Participant.

 

11.                              Change in Control

 

(a)                                Where there is publicly announced any proposal (whether by takeover
bid, scheme of arrangement or otherwise but excluding a proposal for a Dual
Listed Company 

 

16

 

Structure) in relation to the Bank which the Board
reasonably believes may lead to a Change in Control, the Board shall,
notwithstanding any other provisions of these Rules or the Options held by
each Participant, promptly notify (the date of such notice being the Notice Date) each Participant in
writing that he or she may, within a period specified in the notice (which
period must be not less than 14 days from the Notice Date) (the Change in Control Notice Period),
exercise:

 

(i)                                   in the case of Options comprised in an Award where the Notice Date
is on or after the Satisfaction Date, only those Options (if any) that are
Vested Options held by the Participant at the Notice Date; and

 

(ii)                                in the case of Options comprised in an Award where the Notice Date
is prior to the Satisfaction Date, only that number of Options (if any)
calculated in accordance with the following formula:

 

	
  A = 

  	
  (

  	
  W x 

  	
  [50 + 2 (X – 50)]

  	
   x

  	
  Y

  	
  )

  	
  - V

  	
   

  
	
   

  	
  100

  	
   

  	
  Z

  	
   

  

 

where:

 

A is the
number of Unvested Options that will become Vested Options.  If the Bank’s TSR Ranking as at the Test Date
is less than 50%, A shall be taken to be nil;

 

V is the
number of Options comprised in an Award that have become Vested Options prior
to the Notice Date;

 

W is the
number of Options comprised in an Award;

 

X is the
Bank’s TSR Ranking determined on or as at:

 

(i)                                   the most recent of a Monthly TSR Test Date and a Test Date to have
occurred immediately preceding the Notice Date; or

 

(ii)                                if no Monthly TSR Test Date or Test Date has occurred since the
Issue Date of that Participant’s Options, the Notice Date,

 

PROVIDED THAT if the Bank’s TSR Ranking so determined
is greater than 75%, X shall for the
purposes of this calculation be taken to be 75% (in each case X will be expressed as a whole number);

 

Y is the
number of days from and excluding the Performance Period Commencement Date up
to and including the Notice Date but only if the Notice Date occurs before the
First Test Date; and

 

Z is the
number of days from and excluding the Performance Period Commencement Date up
to and including the First Test Date but only if the Notice Date occurs before
the First Test Date.

 

(b)                               All Options held by the Participant which:

 

(i)                                   are not the subject of notice under paragraphs (a)(i) or
(a)(ii); or

 

17

 

(ii)           are
the subject of a notice under paragraphs (a)(i) or (a)(ii) and have
not been exercised by the Participant by the end of the Change of Control
Notice Period,

 

shall lapse.

 

12.          Capital Event

 

(a)           If a
Capital Event occurs before the lodgement of a Notice of Exercise, the Board
shall determine in respect of each Option:

 

(i)            the
number of underlying Shares; and

 

(ii)           the
Exercise Price,

 

by taking into account the Capital Event in a manner
which is fair and equitable to the Participants and which is consistent with
the relevant provisions of the Listing Rules. 
Options shall be reconstructed in a manner which will not result in any
additional benefits being conferred on Participants which are not conferred on
persons holding Shares or vice versa.

 

(b)           The
Board may inform each Participant of these decisions or shall otherwise inform
each Participant on request.

 

13.          New issues

 

An
Option does not confer on a Participant the right to participate in new issues
of Shares by the Bank, including by way of bonus issue, rights issue or
otherwise.

 

14.          Options not transferable

 

Options
may not be transferred, assigned or novated without the approval of the Board,
except that a legal personal representative of a Participant who has died or
whose estate is liable to be dealt with under laws relating to mental health or
bankruptcy will be entitled to be registered as the holder of those Options
after the production to the Board of such documents or other evidence as the
Board may reasonably require to establish that entitlement.

 

15.          Security Interest

 

Participants
shall not grant any Security Interest in or over or otherwise dispose of or
deal with any Options or any interest therein, and any such Security Interest
or disposal or dealing will not be recognised in any manner by the Bank.

 

16.          Ranking and listing

 

(a)           Shares
allotted as a consequence of the exercise of Options will, from the date of
allotment, rank equally with all other issued Shares.

 

18

 

(b)           The Bank
will apply for official quotation of those Shares on each stock exchange on
which Shares are quoted in accordance with the Listing Rules.

 

(c)           The
Options will not be listed for quotation on any stock exchange.

 

17.          Issue limitations

 

(a)           The
total number of unissued Shares, the subject of Options, which may be offered
at any time to Eligible Employees under the Plan shall not exceed the maximum
permitted under any Class Order providing relief from the prospectus
regime of the Corporations Act to ensure compliance with such Class Order.

 

(b)           Options
may not be granted under the Plan to an Eligible Employee to the extent that if
all of the Options granted would be immediately exercisable from the Issue Date
and are exercised on the Issue Date, the Eligible Employee would, on the Issue
Date:

 

(i)            hold
a legal or beneficial interest in more than five percent (5%) of the Shares; or

 

(ii)           be in
a position to cast, or control the casting of, more than five percent (5%) of
the maximum number of votes that might be cast at a general meeting of the
Bank.

 

18.          No interest in Shares until exercise

 

A
Participant has no interest in any Share unless and until the related Option is
exercised and Shares are either allotted and issued to, or purchased in the
name of, that Participant as a result of that exercise.

 

19.          Commencement and termination

 

19.1        Commencement

 

The
Plan takes effect from the date of resolution by the Board adopting the Plan or
as such later date as may be specified by the Board in that resolution.

 

19.2        Termination
and Suspension

 

The
Board may terminate or suspend the operation of the Plan at any time by
resolution of the Board.  For the
avoidance of doubt, any termination of the Plan pursuant to this clause will
not affect any Options that are outstanding.

 

20.          Administration of the Plan

 

(a)           The
Plan shall be administered by the Board which shall have power to delegate to
any one or more persons (including, but not restricted to, a committee of the
Board) for such period and on such conditions as the Board may determine the
exercise of its powers or discretions arising under the Plan.

 

19

 

(b)           The
Board may at any time and from time to time:

 

(i)            give
directions to any person or persons appointed under paragraph (a) of this
clause 20 as to the manner of the exercise by the Board of any of its
discretions under these Rules or the Plan; and

 

(ii)           amend
any of those directions,

 

and where the Board has given such a direction, the
person or persons (as the case may be) must exercise the relevant discretion in
accordance with that direction.

 

(c)           The
Board shall have power to:

 

(i)            determine
appropriate procedures for administration of the Plan consistent with the
provisions of these Rules; and

 

(ii)           resolve
conclusively all questions of fact or interpretation and all calculations
arising in connection with the Plan.

 

(d)           The
Board may at any time appoint or engage specialist service providers for the
operation and administration of the Plan.

 

(e)           The
Board shall ensure a complete register of Participants is maintained to
facilitate efficient management and administration, and to comply with
regulatory reporting requirements.

 

21.          Amendment of the Plan

 

21.1        By
the Board

 

Subject
to clause 21.2, the Board may at any time and from time to time by
resolution:

 

(a)           amend
all or any of these Rules or all or any of the rights or obligations of
the Participants or any of them; and

 

(b)           formulate
(and subsequently amend) special terms and conditions, in addition to those set
out in these Rules, to apply to Eligible Employees employed in, resident in, or
who are citizens of, countries other than Australia.  Each of such sets of special terms and
conditions shall be restricted in its application to those Eligible Employees
employed in, resident in, or who are citizens of the foreign country or
countries specified by the Board, and may be revoked, added to or varied in
accordance with paragraph (a) of this clause 21.1.

 

21.2        Listing
Rules

 

The
exercise of any powers under these Rules by the Board is subject to any
restrictions or procedural requirements relating to the amendment of the rules of
an employee incentive scheme or of issued options imposed by any Law or by the
Listing Rules and applicable to the Plan or the Options, as the case may
be, unless those restrictions, conditions or requirements are relaxed or waived
by the ASX or any of its delegates either generally or in a particular case or
class of cases and either expressly or by implication.

 

20

 

22.          Law, Listing Rules and the Constitution

 

The Rules and
all offers and issues of Options and Shares under the Plan are subject to any
Law, the Listing Rules and the Bank’s Constitution, each as in force from
time to time.

 

23.          Rights of Participants

 

Nothing
in these Rules:

 

(a)           confers
on any Eligible Employee or Participant the right to continue as an Employee of
any Group Company;

 

(b)           confers
on any Employee the right to become or remain an Eligible Employee or to participate
under the Plan;

 

(c)           affects
any rights which a Group Company may have to terminate the employment of an
Eligible Employee or Participant;

 

(d)           may be
used to increase damages in any action brought against any Group Company in
respect of any such termination and a Participant shall waive any and all
rights to compensation or damages in consequence of any such termination
insofar as those rights arise or may arise from that Participant ceasing to
have rights under or entitled to exercise any Option under the Plan as a result
of such termination; and

 

(e)           confers
any responsibility or liability on any Group Company or its directors,
officers, employees, representatives or agents in respect of any taxation
liabilities of the Eligible Employees or Participants.

 

24.          General

 

24.1        Advice

 

Eligible
Employees should obtain their own independent advice on the financial, taxation
and other consequences to them of or relating to participation in the Plan
including in relation to exercising Options and disposing of any or all Shares
acquired as a result of exercising Options.

 

24.2        Costs
and Expenses

 

With
the exception of Taxes (excluding any Taxes payable on brokerage) which are
payable by a Participant, a Participant will not be liable for any costs
associated with the implementation and administration of the Plan unless the
Board in its discretion determines otherwise. 
If the Board so determines, the Board must inform the Participant prior
to allocating any such expense to a Participant.

 

Subject
to the preceding paragraph, the Bank will pay all expenses, costs and charges
in relation to the establishment, implementation and administration of the
Plan, including all costs incurred in or associated with the allotment and
issue or purchase of Shares (except for Taxes which are payable by
Participants) for the purposes of the Plan.

 

21

 

24.3        Dispute

 

Any
disputes or differences of any nature arising under the Plan shall be referred
to the Board and its decision shall be final and binding in all respects.

 

24.4        Notices

 

Any
notice, instruction, direction or other communication (a Notice)
given under or pursuant to these Rules:

 

(a)           is
validly given if it is handed to the addressee, faxed to the addressee at the
fax number last notified by that person, emailed to the last email address
notified by that person, or posted ordinary prepaid post (first class air-mail
if to an overseas address) to the last known address of the addressee;

 

(b)           must
be signed by the sending or a person duly authorised by the sender and if sent
by email:

 

(i)            the
Notice must be signed by a person clearly authorised by the sender in a manner
which complies with the electronic signature guidelines; and

 

(ii)           the
sender must keep an electronic and a printed copy of the Notice sent;

 

(c)           except
as provided in paragraph (d), will be taken to have been given:

 

(i)            in
the case of personal delivery, when personally received;

 

(ii)           in the
case of post to a domestic address, three Business Days after posting;

 

(iii)          in the
case of post to an overseas address, seven Business Days after posting;

 

(iv)          in the
case of a fax, on production of a transmission report by the machine from which
the fax was sent that indicates that the fax was transmitted in its entirety to
the fax number of the addressee; or

 

(v)           in the
case of email complying with paragraph (b), on the first to occur of:

 

(A)          receipt
by the sender of an email acknowledgement from the recipient’s information
system showing that the Notice has been delivered to the email address stated
above;

 

(B)          the
time that the Notice enters an information system which is under the control of
the recipient; and

 

(C)          the
time that the Notice is first opened or read by an employee or officer of the
recipient,

 

unless it is personally received or faxed after 5.00
pm on the day, in which case it shall be deemed to be received or faxed on the
next succeeding Business Day; and

 

(d)           in the
case of a notice of election under clause 8.2(d) or clause 8.2(e), an
Application Form (if any) or a Notice of Exercise, that election,
application or notice will not be taken to have been received by or on behalf
of the Bank until it is actually received by the Bank at the address nominated
from time to time by the 

 

22

 

Board or, if the terms of the election,
application or notice permit it to be submitted in electronic form, then that
election, application or notice will not be taken to have been received by or
on behalf of the Bank until all conditions specified by the Board from time to
time for the submission of that election, application or notice have been
satisfied.

 

24.5        Error
Correction

 

(a)           In the
event that any error or mistake has been made in relation to the number of  Options the subject of:

 

(i)            an
Invitation under clause 4.2;

 

(ii)           an
inscription in the Register pursuant to clause 6.1; or

 

(iii)          any
notification made under clause 9.3(c),

 

that Invitation, inscription or notification, as the
case may be, shall be null and void and of no effect to the extent of any such
error or mistake and the Board may in its absolute discretion, correct such
error or mistake, without the need to obtain consent from the relevant Eligible
Employee or relevant Participant, by notice to the Eligible Employee or that
Participant and, where appropriate, may issue an amended Invitation or
notification or correct the Register.

 

(b)           The
Board will notify the relevant Participant within a reasonable period after
discovering and correcting the error or mistake.

 

24.6        Governing
Law

 

This
Plan and the rights of Participants under its Rules are governed by the
laws in force in New South Wales.

 

23Exhibit
4(c)17

 

	
  Rules of the

  Westpac Banking Corporation

  Restricted Share Plan

  
	
   

  
	
  as adopted at a meeting of the Board of
  Directors on 9 August 2006, approved by shareholders on 14
  December 2006 and
  subsequently amended bythe Board Remuneration
  Committee Chairman on 6 November 2007, 5 August 2008 and with
  effect from 9 September 2008.

  
	
   

  
	
  Allens Arthur Robinson

  The Chifley Tower

  2 Chifley Square

  Sydney 
  NSW  2000

  Australia

  Tel  61  2
  9230 4000

  Fax  61  2
  9230 5333

  	
   

  
	
   

  	
   

  
	
  © Copyright Allens Arthur Robinson 2008

  	
   

  

 

 

	
  Rules of the Westpac Banking Corporation Restricted
  Share Plan

  	
   

  	
  

  

 

Table of Contents

 

	
  1.

  	
  Purpose

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Definitions and interpretations

  	
  1

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Interpretation

  	
  6

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Invitation to acquire Shares

  	
  6

  
	
   

  	
  4.1

  	
  Issue

  	
  6

  
	
   

  	
  4.2

  	
  Form of
  Invitation

  	
  7

  
	
   

  	
  4.3

  	
  Share Price

  	
  7

  
	
   

  	
   

  	
   

  	
   

  
	
  5.

  	
  Application for Shares

  	
  7

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Methods of Share Acquisition

  	
  8

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Acquisition of Shares by the Plan Company

  	
  8

  
	
   

  	
  7.1

  	
  Directions
  by the Board

  	
  8

  
	
   

  	
  7.2

  	
  Payment of
  contributions

  	
  8

  
	
   

  	
  7.3

  	
  Use of
  contributions

  	
  8

  
	
   

  	
   

  	
   

  	
   

  
	
  8.

  	
  Allocation of Shares

  	
  9

  
	
   

  	
  8.1

  	
  Allocation
  to Participants

  	
  9

  
	
   

  	
  8.2

  	
  Registered
  holder

  	
  9

  
	
   

  	
  8.3

  	
  Identification
  of funds

  	
  10

  
	
   

  	
  8.4

  	
  Non-acceptance
  of Application

  	
  10

  
	
   

  	
  8.5

  	
  Error in
  Allocation

  	
  10

  
	
   

  	
  8.6

  	
  Unallocated
  Shares

  	
  10

  
	
   

  	
   

  	
   

  	
   

  
	
  9.

  	
  Vesting of Shares

  	
  11

  
	
   

  	
  9.1

  	
  Vesting Date

  	
  11

  
	
   

  	
  9.2

  	
  Death, Total
  and Permanent Disablement or Retirement

  	
  11

  
	
   

  	
  9.3

  	
  Retrenchment
  or employer ceases to be a Group Company

  	
  11

  
	
   

  	
  9.4

  	
  Change of
  Control

  	
  11

  
	
   

  	
  9.5

  	
  Shares
  forfeited under clause 10

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  10.

  	
  Forfeiture of Shares

  	
  12

  
	
   

  	
  10.1

  	
  Breach,
  Fraud or Dishonesty

  	
  12

  
	
   

  	
  10.2

  	
  Resignation
  or Dismissal

  	
  12

  
	
   

  	
  10.3

  	
  Forfeiture
  Mechanism

  	
  12

  
	
   

  	
   

  	
   

  	
   

  
	
  11.

  	
  Restrictions on dealing with Shares

  	
  12

  
	
   

  	
  11.1

  	
  Application
  of Holding Lock

  	
  12

  
	
   

  	
  11.2

  	
  Holding Lock
  restrictions

  	
  13

  
	
   

  	
  11.3

  	
  Enforcement
  by Board

  	
  13

  
	
   

  	
  11.4

  	
  Release from
  Holding Lock

  	
  13

  
	
   

  	
   

  	
   

  	
   

  
	
  12.

  	
  Rights attaching to Shares

  	
  13

  
	
   

  	
  12.1

  	
  Ranking and
  Listing

  	
  13

  
	
   

  	
  12.2

  	
  Voting
  rights

  	
  13

  
	
   

  	
  12.3

  	
  Bonus Shares

  	
  14

  

 

i

 

	
   

  	
  12.4

  	
  Rights
  Issues

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  13.

  	
  Commencement and termination

  	
  14

  
	
   

  	
  13.1

  	
  Commencement

  	
  14

  
	
   

  	
  13.2

  	
  Termination
  and Suspension

  	
  14

  
	
   

  	
   

  	
   

  	
   

  
	
  14.

  	
  Administration of the Plan

  	
  14

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Amendment of the Plan

  	
  15

  
	
   

  	
  15.1

  	
  By the Board

  	
  15

  
	
   

  	
  15.2

  	
  Listing
  Rules

  	
  15

  
	
   

  	
   

  	
   

  	
   

  
	
  16.

  	
  Issue limitations

  	
  16

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Law, Listing Rules and the Constitution

  	
  16

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Rights of Participants

  	
  16

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Attorney

  	
  16

  
	
   

  	
   

  	
   

  
	
  20.

  	
  General

  	
  17

  
	
   

  	
  20.1

  	
  Advice

  	
  17

  
	
   

  	
  20.2

  	
  Relation of
  the Bank, Plan Company, Trustee and Participants

  	
  17

  
	
   

  	
  20.3

  	
  Costs and
  Expenses

  	
  18

  
	
   

  	
  20.4

  	
  Notices

  	
  18

  
	
   

  	
  20.5

  	
  Dispute

  	
  19

  
	
   

  	
  20.6

  	
  Governing
  Law

  	
  19

  

 

ii

 

WESTPAC BANKING CORPORATION (ABN 33 007 457
141)

 

RESTRICTED SHARE PLAN

 

RULES

 

1.            Purpose

 

The
Westpac Banking Corporation Restricted Share Plan has been established as an
initiative for creating a stronger link between employee performance and reward
and increasing shareholder value by enabling Participants to have a greater
involvement with, and share in, the future growth and profitability of the
Bank.

 

2.            Definitions and interpretations

 

In this
document the following terms have the following meanings:

 

Acquisition Date means in
relation to Shares acquired under the Plan by, or for the benefit of, a
Participant:

 

(a)           the date on which the
Shares are allotted and issued to that Participant or, in the case of Shares
purchased on behalf of that Participant, the name of that Participant is
entered in the Bank’s register of members; or

 

(b)           such other date as may be
determined by the Board in its discretion.

 

Application means an application
on an Application Form by an Eligible Employee to acquire Shares under the
Plan, or an application made in accordance with any application procedures as
the Board may determine from time to time.

 

Application Date means the last
possible date as specified in an Invitation on which an Application can be
made.

 

Application Form means the
application form (if any) in such form as the Board may approve from time to
time.

 

ASIC means the Australian
Securities and Investments Commission.

 

ASIC Act means the Australian
Securities and Investments Commission Act 2001 (Cth).

 

ASX means Australian Stock
Exchange Limited (ABN 98 008 624 691).

 

Attorney means an attorney
appointed by the Participant pursuant to the power of attorney in clause 19.

 

Australian ADI means an
authorised deposit-taking institution, as defined by section 5 of the Banking
Act 1959 (Cth).

 

Award means, in relation to a
Participant, the number of Shares allocated in favour of that Participant
pursuant to clause 8, having the same Acquisition Date.

 

Bank means Westpac Banking
Corporation (ABN 33 007 457 141) or any company that becomes the holding
company of Westpac Banking Corporation.

 

1

 

Board means the board of
directors of the Bank from time to time.

 

Bonus Shares means Shares to
which a holder of Shares is entitled in any pro rata issue by the Bank to
holders of Shares for which no consideration is payable by the holder.

 

Business Day means any day other
than a Saturday, Sunday or other day on which commercial banking institutions
in Sydney are authorised or required by law to be closed.

 

Change of Control occurs when a
person’s voting power is more than (or will become more than) 35% in relation
to the Bank (excluding any voting power held by virtue of acceptance under an
off-market bid unless or until the bid is or becomes unconditional.)

 

Charity means an entity where
gifts or contributions to that entity are deductible in accordance with
Division 30 of the Tax Act or any charitable organisation as determined by the
Board from time to time.

 

Class Order means an
instrument made by ASIC that exempts each person in a class of persons from the
Corporations Act, the ASIC Act or any part of either or both, or that modifies
the application of the Corporations Act, the ASIC Act or any part of either or
both in particular circumstances.

 

Constitution means the Bank’s
constitution as amended from time to time.

 

Corporations Act means the
Corporations Act 2001 (Cth).

 

Disposal Restrictions means the
restrictions on dealing with Shares as set out in clause 11.

 

Dual Listed Company Structure
means an arrangement whereby, among other things, two corporations have a
unified management structure, but where each of the two corporations retains
its separate legal identity and existing stock exchange listing.

 

Eligible Employee means an
Employee whom the Board determines is to receive an Invitation under the
Plan.  The Board may also determine at
any time that an Employee who is located in a jurisdiction where it is, in the
opinion of the Board, not reasonably practicable to invite participation in the
Plan is not an Eligible Employee and that, until the Board determines
otherwise, such Employee shall not receive an Invitation under the Plan.

 

Employee means any person who is
in full-time or part-time employment of a Group Company, and, for the purpose
of the definition of Eligible Employee only, any other person who the Board
determines is an Employee, from time to time.

 

Forfeited means that a Share is
subject to the forfeiture provisions in clause 10.

 

Group Company means the Bank and
any of its subsidiaries.

 

Holding Lock means a mechanism
to prevent, in accordance with clause 11.2, dealings with Shares held by a
Participant under the Plan during the Holding Lock Period with respect to those
Shares.

 

Holding Lock Period means, in
relation to Shares acquired under the Plan by, or for the benefit of, a
Participant, the period from the Vesting Period Commencement Date for those
Shares until the earlier of:

 

(a)           the tenth anniversary of
the Vesting Period Commencement Date, or such other date as may be determined
by the Board in its discretion;

 

2

 

(b)           the date on which the
Participant ceases employment within the meaning of section 139CA(3) of
the Tax Act;

 

(c)           the time of receipt by the
Plan Company of a written consent of the Board approving a Release Request made
by a Participant pursuant to clause 11.4; or

 

(d)           only if the Board
determines in its absolute discretion, the date on which the Participant’s
employer first ceases to be a Group Company.

 

Invitation means an invitation
to apply to acquire Shares under the Plan, or such other means as the Board may
determine from time to time subject always to compliance with any Law.

 

Last Employment Date means, with
respect to a particular Participant, the date on which:

 

(a)           that Participant ceases to
be an Employee for whatever reason; or

 

(b)           that Participant’s employer
(being a company other than the Bank) ceases to be a Group Company.

 

Law means the law of New South
Wales and the applicable law of the jurisdiction in which an Eligible Employee
is located at the time of receipt of an Invitation.

 

Listing Rules means the
listing rules of the ASX as amended from time to time.

 

Market Price means:

 

(a)           in
relation to the allocation of Shares acquired in On-Market Acquisitions, the
average price per Share (rounded to the nearest whole cent, with one-half of
one cent being rounded down) of all Shares so acquired by the Plan Company  for the purposes of making that allocation to
each relevant Participant; and

 

(b)           in
relation to the allocation of Shares that have been or are to be acquired by
way of allotment and issue by the Bank to the Plan Company for the purposes of
making that allocation to each relevant Participant:

 

(i)            the weighted average
market price per Share of all Shares traded on the ASX during the five Business
Day period up to and including the day before the day on which the Shares are
allocated to that Participant in accordance with clause 8 (and for this purpose
the Board may exercise a discretion to include or exclude particular
transactions from this calculation (e.g. “specials”) as it thinks fit); and

 

(ii)           if no Shares are traded on
the ASX during that five Business Day period, the price as determined by the
Board.

 

(c)           in relation to Unallocated
Shares which are then allocated to a Participant:

 

(i)            where the Unallocated
Shares are part of an allocation that is to be partially satisfied out of
On-Market Acquisitions of shares, the same as the Market Price for those shares
purchased on-market as determined under paragraph (a) above; or

 

(ii)           in all other circumstances:

 

3

 

(A)          the
weighted average market price per Share of all Shares traded on the ASX during
the five Business Day period up to and including the day before the day on
which the Unallocated Shares are allocated to that Participant in accordance
with clause 8 (and for this purpose the Board may exercise a discretion to
include or exclude particular transactions from this calculation (e.g. “specials”)
as it thinks fit); and

 

(B)          if no
Shares are traded on the ASX during that five Business Day period, the price as
determined by the Board.

 

Minimum Parcel means the number
of Shares determined by the Board from time to time.

 

On-Market Acquisition means the
acquisition of Shares in the ordinary course of trading or otherwise on a
Trading Day on the ASX.

 

Participant means:

 

(a)           an
Eligible Employee who acts in accordance with clause 5(a) and returns a
duly completed Application Form  or applies, or is deemed to have applied,
in accordance with any application procedure determined by the Board from time
to time;

 

(b)           the
legal personal representative of that Eligible Employee where that legal
personal representative, having satisfied the requirements of the Constitution,
is the shareholder named in the Bank’s register of members; or

 

(c)           if,
because of the Bankruptcy Act 1966 (Cth) or equivalent legislation in any other
jurisdiction, Shares (or any interests in Shares) held under the Plan that form
part of the property of an Eligible Employee vest in the trustee of that
Eligible Employee’s estate, that trustee, whether or not the name of that
trustee had been entered in the Bank’s register of members.

 

Plan means the Westpac Banking
Corporation Restricted Share Plan.

 

Plan Company means an entity
other than a Westpac Related Body Corporate, nominated from time to time by the
Board.

 

Release Request means a duly
completed request executed by a Participant in a form approved by the Board
from time to time, for permission from the Board to have released from a
Holding Lock all or a specified number (being not less than a Minimum Parcel,
unless the number of Vested Shares remaining in the Plan for that Participant
is less than a Minimum Parcel in which case the Release Request must be in
respect of all of the remaining Vested Shares) of Shares held by that
Participant under the Plan.

 

Relevant Value in relation to an
Eligible Employee means the amount determined by the Board and specified in an
Invitation to that Eligible Employee.

 

Restrictions means the
restrictions on dealing with Shares as set out in clause 11 and any other
restrictions which the Board determines from time to time shall apply to Shares
offered to all or some Eligible Employees.

 

4

 

Retirement means the voluntary
cessation of employment of a Participant with a Group Company solely by reason
of that Participant having notified that Group Company of his or her intention
to permanently leave the workforce.

 

Rules means the rules of
the Plan as set out in this document.

 

Security Interest means a
mortgage, charge, pledge, lien or other encumbrance of any nature.

 

Shares means fully paid ordinary
shares in the capital of the Bank.

 

Tax includes any tax, levy,
impost, deduction, charge, rate, contribution, duty or withholding which is
assessed (or deemed to be assessed), levied, imposed or made by any government
or any governmental, semi-governmental or judicial entity or authority together
with any interest, penalty, fine, charge, fee or other amount assessed (or
deemed to be assessed), levied, imposed or made on or in respect of any or all
of the foregoing.

 

Tax Act means the Income Tax
Assessment Act 1936 (Cth) or the Income Tax Assessment Act 1997 (Cth) or both,
as the context requires.

 

Total and Permanent Disablement
means that the Participant has, in the opinion of the Board, after considering
such medical and other evidence as it sees fit, become incapacitated to such an
extent as to render the Participant unlikely ever to engage in any occupation
with the Bank or any other Group Company for which he or she is reasonable
qualified by education, training or experience.

 

Trading Day means a day on which
Shares are traded on the ASX.

 

Trust Deed means the deed poll
entered into by the Trustee for the purposes of holding money, Shares and other
property on trust for Participants and other persons in accordance with the Rules and
the deed poll and includes any amendment to the Trust Deed.

 

Trustee means the person or
entity nominated by the Board from time to time which may hold contributions
from the Plan Company or Group Companies and Shares on trust for Participants
and other persons as set out in these Rules on the terms and conditions
set out in the Trust Deed.

 

Unallocated Shares means Shares
acquired at any time:

 

(a)           by the Plan Company under
clause 7.3(a) for the purposes of the Plan which have not been allocated
to Participants under clause 8.1;

 

(b)           by the Trustee under clause
8.5; and

 

(c)           by the Trustee under clause
10.3.

 

Unvested Shares means Shares which have not vested in accordance with clause 9.

 

Vesting Date means, unless an
Invitation to an Eligible Employee specifies otherwise, the third anniversary
of the Vesting Period Commencement Date, or such other date as may be
determined by the Board in its discretion.

 

Vesting Period means the period
commencing on the Vesting Period Commencement Date and ending on the Vesting Date.

 

5

 

Vesting Period Commencement Date
means the date the Vesting Period commences, as determined by the Board from
time to time and set out in the Invitation.

 

Vested Shares means Shares which have vested in accordance with clause 9.

 

Year of Income means a period of 12 months ending on 30 June in any year and
including the period commencing on the date of commencement of this Plan and
terminating on the next 30 June and the period ending on the date of termination
of the Plan and commencing on the preceding 1 July or any other period
determined by the Board in its discretion.

 

3.            Interpretation

 

In this
document unless the contrary intention appears:

 

(a)           a gender includes all
genders;

 

(b)           the singular includes the
plural and vice versa;

 

(c)           a reference to any
legislation or to a provision of any legislation includes any modification or
re-enactment of it, any legislative provision substituted for it and all
regulations and statutory instruments issued under it;

 

(d)           headings are for
convenience only and do not affect the interpretation of these Rules;

 

(e)           reference to a clause or
paragraph is a reference to a clause or paragraph of these Rules, or the
corresponding Rule or Rules of this Plan as amended from time to
time;

 

(f)            where any word or phrase
is given a definite meaning in these Rules, any part of speech or other
grammatical form of that word or phrase has a corresponding meaning;

 

(g)           where the time for doing
any act, matter or thing under these Rules falls on a day which is not a
Business Day, it shall be done on the next succeeding Business Day; and

 

(h)           terms which are defined in
the Corporations Act bear the same meaning when used in this document.

 

4.            Invitation to acquire Shares

 

4.1          Issue

 

In its absolute discretion and subject to these Rules, the Board may
from time to time issue or cause to be issued Invitations on behalf of the Bank
to Eligible Employees.  The Board may
further determine that those Invitations be made on a differential basis to
Eligible Employees, different classes of Eligible Employees or to Eligible
Employees within the same class, as the case may be.

 

6

 

4.2          Form of Invitation

 

(a)           An Invitation may take any form determined
by the Board from time to time and must specify or include the following
information unless determined otherwise by the Board from time to time:

 

(i)            the date of the Invitation;

 

(ii)           the name of the Eligible Employee to whom
the Invitation is made;

 

(iii)          the Relevant Value in respect of each
Employee;

 

(iv)          the Vesting Period Commencement Date,
Vesting Period and Vesting Date;

 

(v)           the Disposal Restrictions which will attach
to the Shares acquired by the Eligible Employee;

 

(vi)          the time period in which to make an
Application in respect of the Invitation; and

 

(vii)         any other material terms and conditions
required by any Law and any relevant Class Order and any other terms and
conditions applicable to the Invitation including the requirement that the
Eligible Employee must continue to be and remain an Eligible Employee on the
date that Shares are allocated under clause 8.

 

(b)           Eligible Employees may be issued an
Application Form and such explanatory and other material in respect of the
Plan as the Board considers appropriate, or as is required by Law and any
relevant Class Order.

 

(c)           An Application Form (if applicable)
and other material for the purpose of this clause 4.2 may be in electronic
form, in which case references in these Rules to completing and submitting
an Application Form will, subject to the Constitution, the Law and any Class Order
be taken to be satisfied by the completion and submission of information in
electronic form in any manner specified in the Application Form.

 

4.3          Share Price

 

Unless otherwise determined by the Board, an Eligible Employee will not
be required to make any payment to acquire Shares granted by the Bank under the
Plan.

 

5.            Application for Shares

 

(a)           An Eligible Employee who receives an
Invitation may only make an Application in respect of the total Relevant Value
specified in the Invitation within the time period and as otherwise specified
in the Invitation.

 

(b)           If, after making an Application in accordance
with paragraph (a) of this clause 5 or otherwise being deemed to have
applied for Shares in accordance with any application procedure determined by
the Board from time to time, the Eligible 

 

7

 

Employee’s employment or appointment with
the Group Company has not ceased, he or she:

 

(i)            becomes a Participant;

 

(ii)           as appropriate, irrevocably accepts (or is
deemed to have accepted) the offer of Shares or offers to acquire Shares under
the Plan in accordance with the terms of the Invitation, and

 

(iii)          agrees to become a member of the Bank and
to be bound by the terms of the Invitation and by these Rules.

 

6.            Methods of Share Acquisition

 

Shares may be acquired for the purposes of the Plan:

 

(a)           by way of allotment and issue of Shares by
the Bank to the Participant;

 

(b)           by the Plan Company making an On-Market
Acquisition; or

 

(c)           by transfer from the Trustee.

 

7.            Acquisition of Shares by the Plan Company

 

7.1          Directions by the Board

 

Subject to these Rules, the Listing Rules, the Constitution, the Trust
Deed and any relevant Law or Class Order, the Plan Company and the Trustee
must comply with any direction given to it by the Board as to the operation of
the Plan.

 

7.2          Payment of contributions

 

Any Group Company may pay to the Plan Company contributions in each
case as determined by the Board from time to time, within a reasonable time
period before or after acquisition of Shares to be used for the purposes of the
Plan.

 

7.3          Use of contributions

 

(a)           Upon receipt of contributions from a Group
Company, the Plan Company must use such contributions to acquire Shares (and to
meet any costs associated with such acquisitions) for Participants within a
reasonable period, unless the Plan Company has already acquired Shares in
advance of receiving the contributions in which case it may use the
contributions to reimburse itself for the purchase or subscription price for
the Shares and any costs associated with the acquisition.

 

(b)           Pending the payment of contributions to the
Plan Company for the purposes of acquiring Shares in respect of a Participant,
the Bank shall ensure that an amount equal to the amount required for the
acquisition of Shares is held in a trust account conducted by the Bank with
itself or with some other Australian ADI solely for the purposes of the
Plan.  Moneys deposited in that account
shall not earn any interest.

 

8

 

(c)           Any surplus contributions will be applied
by the Plan Company towards the costs of administering the Plan or if so
directed by the Board will be transferred to the Trustee for the purposes of
the trust established under the Trust Deed.

 

(d)           Any money held by the Plan Company at the
end of a Year of Income shall be applied by the Plan Company, if so directed by
the Board, in whole or in part for the benefit of

 

one or more of the following beneficiaries as
nominated by the Board:

 

(A)          an employee share or option plan, scheme or
trust established and maintained by any Group Company for the benefit of all or
any Employees;

 

(B)          a provident, superannuation or retirement
fund established and maintained by any Group Company for the benefit of all or
any Employees;

 

(C)          a plan, scheme or trust established and
maintained by any Group Company for the benefit of all or any Employees; or

 

(D)          any Charity.

 

8.            Allocation of Shares

 

8.1          Allocation to Participants

 

(a)           Each Participant, who continues to be an
Employee as at the date on which Shares are allocated under this Plan, shall be
allocated such number of Shares as is determined in accordance with the
following formula:

 

	
  Number of Shares =

  	
   

  	
  Relevant
  Value

  	
   

  
	
   

  	
  Market Price

  	
   

  

 

or such number as the Board determines from time to time.

 

(b)           Where the number of Shares to be allocated
under the formula in paragraph 0 of this clause 8.1 is not a whole number, the
number shall be rounded down to the nearest whole number.

 

(c)           Each Participant agrees that the transfer
of any Shares to the Participant by the Trustee or Plan Company or the
registration of any Shares in the name of the Participant at the direction of
the Trustee or the Plan Company satisfies any right of the Participant to be
allocated an equivalent number of Shares under paragraph 0 of this clause 8.1
and discharges any obligation of the Bank to make such allocation.

 

8.2          Registered holder

 

Shares acquired for a Participant pursuant to an Invitation are to be
registered in the name of the Participant.

 

9

 

8.3          Identification of funds

 

The Plan Company is not required to identify any Shares it acquires
under the Plan with any particular funds it receives from any Group Company in
respect of any Participant, but must allocate the Shares purchased among the
relevant Participants as determined by the Board.

 

8.4          Non-acceptance of Application

 

(a)           In the event that the Bank does not, under
clause 8.1, allocate Shares to a Participant, the Bank shall:

 

(i)            provide notification to that Participant
that it does not wish to accept that Participant’s Application in relation to
those Shares; and

 

(ii)           undertake any other action as it sees fit.

 

(b)           If paragraph (a) of this clause 8.4
applies to a Participant, the Invitation to that Participant, and the
Application by that Participant in relation to that Invitation, shall be deemed
never to have been made.

 

8.5          Error in Allocation

 

If any Share is allocated under this Plan in
error or by mistake to a person who is not the intended recipient of that Share
or who is not an Eligible Employee (the Mistaken Recipient)
, the Mistaken Recipient shall have no right or interest, and shall be taken
never to have had any right or interest, in that Share and shall hold that
Share absolutely for the benefit of the Trustee.  If directed by the Plan Company to do so, the
Mistaken Recipient must as soon as practicable (and in any event within 10
Business Days of being so requested) transfer that Share to the Trustee. Each
Participant irrevocably appoints each officer of the Plan Company as the
Attorney of the Participant to execute and deliver any instrument of transfer
or other document necessary or desirable to effect such a transfer from the
Mistaken Recipient to the Trustee.  An
officer of the Plan Company is required to execute the instrument of transfer
within a reasonable period of time.

 

8.6          Unallocated Shares

 

If, after allocating Shares to Participants under clause 8.1, there
remains Unallocated Shares, the Plan Company shall transfer Unallocated Shares
to the Trustee and the Trustee shall, if so directed by the Board:

 

(a)           allocate those Unallocated Shares to one or
more Eligible Employees as nominated by the Board from time to time;  or

 

(b)           (i)            transfer those Unallocated Shares;

 

(ii)           sell those Unallocated Shares and
distribute the net sale proceeds;  or

 

(iii)          undertake any combination of paragraph (i) or
paragraph (ii),

 

to one or more of the following beneficiaries as
nominated by the Board:

 

(iv)          an employee share or option plan, scheme or
trust established and maintained by any Group Company for the benefit of all or
any Employees;

 

10

 

(v)           a provident, superannuation or retirement
fund established and maintained by any Group Company for the benefit of all or
any Employees;

 

(vi)          a plan, scheme or trust established and
maintained by any Group Company for the benefit of all or any Employees;  or

 

(vii)         any Charity;  or

 

(c)           undertake any combination of paragraphs (a) and
(b) .

 

9.            Vesting of Shares

 

9.1          Vesting Date

 

Except as provided in clauses 9.2 to 9.4 inclusive, on the Vesting Date
a Participant’s Shares held under this Plan become Vested Shares, unless prior
to the Vesting Date, the Shares are Forfeited in accordance with clause 10.

 

9.2          Death, Total and Permanent Disablement or
Retirement

 

If a Participant who holds Unvested Shares ceases to be an Employee as
a result of his or her death or Total and Permanent Disablement or Retirement,
all the Participant’s Unvested Shares held under this Plan become Vested Shares
on the Last Employment Date.

 

9.3          Retrenchment or employer ceases to be a
Group Company

 

If a Participant holds Unvested Shares and

 

(i)            ceases to be an Employee as a result of the
retrenchment of that Participant; or

 

(ii)           that Participant’s employer (being a
company other than the  Bank) ceases to
be a Group Company,

 

all the Participant’s Unvested Shares held under this Plan become
Vested Shares on the Last Employment Date unless the Board determines
otherwise.

 

Where the number of Shares to become Vested Shares under this clause
9.3 is not a whole number, the number shall be rounded down to the nearest
whole number.

 

9.4          Change of Control

 

Where there is publicly announced any proposal (whether by takeover
bid, scheme of arrangement or otherwise but excluding a proposal for a Dual
Listed Company Structure) in relation to the Bank which the Board reasonably
believes may lead to a Change of Control, the Board shall, notwithstanding any
other provisions of these Rules or the Shares held by each Participant,
notify (the day of such notice being the Notice Date)
each Participant in writing that all the Participant’s Unvested Shares held
under this Plan have become Vested Shares on the Notice Date.

 

Where the number of Shares to become Vested Shares under this clause
9.4 is not a whole number, the number shall be rounded down to the nearest
whole number.

 

11

 

9.5          Shares forfeited under clause 10

 

For the purpose of clauses 9.1 to 9.4 included a Participant will be
taken not to hold any Unvested Shares which are Forfeited under clause 10, even
if at the relevant time those Shares are still registered in the name of the
Participant.

 

10.          Forfeiture of Shares

 

10.1        Breach, Fraud or Dishonesty

 

Unless the Board determines otherwise, a Participant forfeits any right
or interest in Shares (irrespective of whether the Shares have vested) held by
that Participant at that time under the Plan subject to a Holding Lock if, in
the opinion of the Board, the Participant has acted fraudulently or dishonestly
or is or has been in material breach of his or her obligations to any Group
Company.

 

10.2        Resignation or Dismissal

 

If a Participant ceases to be an Employee as a result of his or her
resignation or dismissal all Unvested Shares held by the Participant under the
Plan will be Forfeited on the Last Employment Date, unless the Board in its
absolute discretion determines that a Participant who has resigned or has been
dismissed is entitled to have some Shares treated as Vested Shares, in which
event those Vested Shares will not be Forfeited.

 

10.3        Forfeiture Mechanism

 

Unless the Board determines otherwise:

 

(a)           any Shares or right or interest in Shares
Forfeited by a Participant under this clause 10 will, upon forfeiture, be
transferred by an Attorney on behalf of that Participant to the Trustee;

 

(b)           the Trustee must deal with those Shares as
Unallocated Shares in accordance with the provisions of clause 8.6; and

 

(c)           the Trustee will pay to that Participant
the sum of $1.00 for all the Shares Forfeited under this clause 10.3.

 

11.          Restrictions on dealing with Shares

 

11.1        Application of Holding Lock

 

A Holding Lock will be applied by the Bank to all Shares held by a
Participant under the Plan for the duration of the Holding Lock Period and the
Participant:

 

(a)           agrees that the Shares so held by the
Participant will be subject to a Holding Lock for the duration of the Holding
Lock Period; and

 

(b)           undertakes not to make a Release Request
(or permit or authorise another person to do so) unless the Shares have become
Vested Shares.

 

12

 

The Board has an absolute discretion as to whether or not a Release
Request made by a Participant will be approved and any such approval may be
granted subject to one or more conditions.

 

11.2        Holding Lock restrictions

 

While subject to a Holding Lock, Shares acquired and held under the
Plan by or for the benefit of a Participant cannot be transferred by the
Participant and the Participant:

 

(a)           must not grant (or purport to grant) any
Security Interest in or over or otherwise dispose of or deal with (or purport
to otherwise dispose or deal with) any Shares acquired under the Plan or any
interest in any Shares acquired under the Plan held by the Participant; and

 

(b)           must not enter into any hedging transaction
in relation to Unvested Shares.

 

Failure to comply with this Rule 11.2 will render all the
Participant’s Shares liable to Forfeiture under clause 10.

 

11.3        Enforcement by Board

 

The Board shall be entitled to prescribe, take and enforce such action,
steps or arrangements as it considers necessary, desirable or appropriate to
enforce or give further effect to the provisions of clauses 11.1 and 11.2  so as to ensure the Disposal Restrictions are
satisfied.

 

11.4        Release from Holding Lock

 

Subject to clause 8.5, a Participant shall be entitled at any time to
submit a Release Request to the Board in respect of any Vested Shares. If a
Release Request by a Participant is approved by the Board, the Board shall
release those Vested Shares from the Holding Lock within a reasonable period
from the date of receipt of the Release Request.  In relation to any Shares which are Vested
Shares, the Board shall be entitled to release the Vested Shares from a Holding
Lock without having received a Release Request from a Participant and may
remove those Shares from the Plan.

 

12.          Rights attaching to Shares

 

12.1        Ranking and Listing

 

(a)           A Participant is entitled to receive any
dividend or other distributions paid or made on Shares (including Vested Shares
and Unvested Shares) held by that Participant under the Plan.  This applies notwithstanding the application
of a Holding Lock.

 

(b)           If Shares are allotted or issued under this
Plan, they will, from the Acquisition Date, rank equally with all other issued
Shares.  The Bank will apply for official
quotation of these Shares on each stock exchange on which Shares are quoted.

 

12.2        Voting rights

 

A Participant may exercise any voting rights attaching to the Shares
(including Vested Shares and Unvested Shares) held by that Participant under
the Plan, or may appoint a 

 

13

 

proxy to represent and vote for him or her, at any meeting of the
members of the Bank.  This applies
notwithstanding the application of a Holding Lock.

 

12.3        Bonus Shares

 

(a)           Any Bonus Shares in respect of Shares (the Original Shares) that, at the
closing date for determining entitlements to those Bonus Shares, are allocated
to that Participant under the Plan and registered in the name of that
Participant, shall also be held by that Participant under the Plan and be
subject to a Holding Lock.

 

(b)           Bonus Shares shall be deemed to be subject
to the same Restrictions for the purposes of the Plan as if they were the
Original Shares and shall be treated as Unvested Shares unless and until the
Original Shares are Vested Shares.

 

(c)           The Plan Company will not sell the Bonus
Shares or transfer them to the Participant unless the Plan Company sells or
transfers the Original Shares.

 

12.4        Rights Issues

 

A Participant is entitled to:

 

(a)           participate in any pro rata rights issue of
Shares made to existing Shareholders by the Bank in respect of Shares held
under the Plan; and

 

(b)           sell any renounceable rights acquired in
respect of Shares held by the Participant under the Plan.

 

13.          Commencement and termination

 

13.1        Commencement

 

The Plan takes effect from the date of resolution by the Board adopting
the Plan or as such later date as may be specified by the Board in that
resolution.

 

13.2        Termination and Suspension

 

The Board may terminate or suspend the operation of the Plan at any
time by resolution of the Board, provided that in the case of termination all
Shares then subject to a Holding Lock shall be released from the Holding Lock
on the date of termination or on such other date specified in that resolution.

 

14.          Administration of the Plan

 

(a)           The Plan shall be administered by the Board
which shall have power to delegate to any one or more persons (including, but
not restricted to a committee of the Board) for such period and on such
conditions as the Board may determine the exercise of its powers or discretions
arising under the Plan.

 

(b)           The Board may at any time and from time to
time:

 

14

 

(i)                                   give directions to any one or
more persons appointed under paragraph (a) of this clause 14 as to the
manner of the exercise of any discretions under these Rules or the Plan;
and

 

(ii)                                 amend any of those directions,

 

and where the Board has given such a direction, the person or persons
(as the case may be) must exercise the relevant discretion in accordance with
that direction.

 

(c)                                  The Board shall have power to:

 

(i)                                  determine appropriate
procedures for administration of the Plan consistent with the provisions of
these Rules; and

 

(ii)                                 resolve conclusively all
questions of fact or interpretation and all calculations arising in connection
with the Plan.

 

(d)                                The Board may at any time
appoint or engage specialist service providers for the operation and administration
of the Plan.

 

(e)                                 The Board shall ensure a
complete register of Participants is maintained to facilitate efficient
management and administration and to comply with regulatory reporting
requirements.

 

15.                              Amendment of the Plan

 

15.1                       By the Board

 

Subject to clause 15.2, the Board may at any time and from time to time
by resolution:

 

(a)                                  amend all or any of these Rules or
all or any of the rights or obligations of the Participants or any of them; and

 

(b)                                 formulate (and subsequently
amend) special terms and conditions, in addition to those set out in these
Rules, to apply to Participants employed in, resident in, or who are citizens
of, countries other than Australia.  Each
of such sets of special terms and conditions shall be restricted in its application
to those Participants employed in, resident in, or who are citizens of the
foreign country or countries specified by the Board, and may be revoked, added
to or varied under paragraph (a) of this clause 15.1.

 

15.2                       Listing Rules

 

The Board’s exercise of its powers under clause 15.1 is subject to any
restrictions or procedural requirements relating to the amendment of the rules of
an employee incentive scheme imposed by the Listing Rules and applicable
to the Plan or the Shares, as the case may be, unless those restrictions or
requirements are relaxed or waived by the ASX or any of its delegates either
generally or in a particular case or class of cases and either expressly or by
implication.

 

15

 

16.                              Issue limitations

 

(a)                                  The total number of unissued
Shares which may be offered at any time to Eligible Employees under the Plan
shall not exceed the maximum permitted under any Class Order providing
relief from the prospectus regime of the Corporations Act to ensure compliance
with such Class Order.

 

(b)                                 Shares may not be offered
under the Plan to an Eligible Employee to the extent that, immediately
following acceptance of the Shares, either the Eligible Employee would hold a
legal or beneficial interest in more than five percent (5%) of the Shares or
would be in a position to cast, or control the casting of, more than five
percent (5%) of the maximum number of votes that might be cast at a general
meeting of the Bank.

 

17.                              Law, Listing Rules and
the Constitution

 

The Rules and all offers and issues of Shares under the Plan are
subject to the Law, the Listing Rules and the Bank’s Constitution, each as
in force from time to time.

 

18.                              Rights of Participants

 

Nothing in these Rules:

 

(a)                                  confers on any Eligible
Employee or Participant the right to continue as an employee of any Group
Company;

 

(b)                                 confers on any Employee the
right to become or remain an Eligible Employee or to participate under the
Plan;

 

(c)                                  affects any rights which a
Group Company may have to terminate the employment of an Eligible Employee or
Participant;

 

(d)                                 may be used to increase
damages in any action brought against any Group Company in respect of any such
termination and a Participant shall waive any and all rights to compensation or
damages in consequence of any such termination in so far as those rights arise
or may arise from that Participant ceasing to have rights to any Shares under
the Plan as a result of termination; or

 

(e)                                  confers any responsibility or
liability on any Group Company or its directors, officers, employees,
representatives or agents in respect of any taxation liabilities of the
Eligible Employees or Participants at any time whether before or after
termination of the Plan.

 

19.                              Attorney

 

(a)           Each Participant, in consideration
of being entitled to participate in the Plan as an Eligible Employee provides a
power of attorney on the terms set out in this clause 19.

 

16

 

(b)                                 For valuable consideration,
each Participant irrevocably appoints the Plan Company and each officer or
employee of the Plan Company from time to time 
(each an Attorney), severally as the
Attorney of the Participant to:

 

(i)                                    execute and deliver any
instrument of transfer or other document necessary or desirable to effect any
transfer of Shares on behalf of the Participant under the Rules; and

 

(ii)                                 do all acts or things on
behalf of and in the name of the Participant which may be convenient or
necessary for the purpose of giving effect to the Rules.

 

(c)                                  The Attorney may delegate his
or her powers (including this power) and revoke such delegation.

 

(d)                                 An Attorney may exercise his
or her power even if doing so involves a conflict of interest.

 

(e)                                  If requested by the Plan
Company or an Attorney, the Participant must formally approve anything that the
Attorney may do under this clause 19.

 

(f)                                    The Participant indemnifies
the Attorney against each claim, action, proceeding, judgement, damage, cost,
loss, expense or liability incurred or suffered by or brought or made or
recovered against the Attorney in connection with the exercise of any of the
powers and authorities conferred by this 
power of attorney.

 

(g)                                 The exercise by the Attorney
of the powers and authorities conferred by this power of attorney does not
involve any assumption by the Attorney, or any body which he or she is a
partner or employed, of personal liabilities in connection with the exercise of
the powers and authorities or the consequences of doing so.

 

(h)                                 The Participant authorises the
Attorney to exercise the powers and authorities conferred by this power of
attorney even if it involves a conflict of duty or the Attorney (or a person
they know) have a personal interest in doing so.

 

(i)                                     This power of attorney is
intended to have effect as a deed.

 

20.                              General

 

20.1                       Advice

 

Eligible Employees should obtain their own independent advice on the
financial, taxation and other consequences to them of or relating to
participation in the Plan, the acquisition of Shares under the Plan and the
subsequent disposal of those Shares.

 

20.2                       Relation of the Bank, Plan
Company, Trustee and Participants

 

(a)                                  Except when acting as an
Attorney, the Plan Company acts as principal in relation to the Plan and not as
an agent of the Bank or of Participants.

 

(b)                                 The Trustee acts as trustee on
the terms and conditions set out in the Trust Deed and these Rules in
respect of Unallocated Shares.

 

17

 

(c)           When acquiring or  arranging for the issue or allocation of
Shares and when acquiring and dealing with Unallocated Shares, but not
otherwise, the Plan Company acts as trustee for the relevant Participant until
such time as those Shares have been acquired, allocated to that Participant or
the Trustee and registered in the Participant’s or Trustee’s name. All other
fiduciary obligations or duties of the Plan Company to any Participant that
might otherwise be implied or imposed by law or equity are expressly excluded
to the extent permitted by law, including without limitation any such
obligation or duty arising under any statute.

 

(d)           The Plan Company is not a
trustee for the Bank or, except as provided by paragraph (b) of this
clause 20.2, any Participant.

 

(e)           The Bank does not have any
entitlement to Shares or other property held by the Trustee under the terms of
the Trust Deed.

 

20.3                       Costs and Expenses

 

With the exception of Taxes that may be levied on the Plan Company or
the Trustee in respect of the acquisition of Shares on behalf of Participants
under this Plan (allocated to relevant Participants in such proportion as the
Board in its discretion determines), a Participant will not be liable for any
costs incurred by the Plan Company or the Trustee in connection with the
implementation and administration of the Plan (including without limitation
brokerage and GST on brokerage) unless the Board in its discretion determines
otherwise.  If the Board so determines,
the Board must inform the Participant prior to allocating any expense or Taxes
to a Participant.

 

Subject to the preceding paragraph, the Bank will pay all expenses,
costs and charges in relation to the establishment, implementation and
administration of the Plan, including all costs incurred in or associated with
the allotment and issue or purchase of Shares (except for brokerage and Taxes
which are allocated to Participants) for the purposes of the Plan.

 

20.4                       Notices

 

Any notice, direction, consent or other communication (a Notice) given or made under these
rules:

 

(a)           is validly given if it is
handed to the addressee, faxed at the fax number last notified by that person,
emailed to the last email address notified by that person, or posted prepaid
post  (first class airmail if to an
overseas address) to the last known address of the addressee;

 

(b)           must be in writing and signed
by the sender or a person duly authorised by the sender and if sent by e-mail:

 

(i)                                    the Notice must be signed by a
person clearly authorised by the sender in a manner which complies with the
electronic signature guidelines; and

 

(ii)                                 the sender must keep an
electronic and a printed copy of the Notice sent;

 

(c)           except as provided in
paragraph (d) below, will be taken to be duly given or made:

 

(i)                                    in the case of delivery in
person, when personally received;

 

18

 

(ii)           in the case of delivery by
post, three Business Days after the date of posting (if posted to an address in
the same country) or seven business days after the date of posting (if posted
to an address in another country);

 

(iii)          in the case of fax, on receipt
by the sender of a transmission control report from the despatching machine
showing the relevant number of pages and the correct destination fax
number or name of recipient and indicating that the transmission has been made
without error; and

 

(iv)          in the case of email complying
with paragraph (b), on the first to occur of:

 

(A)                             receipt by the sender of an
email acknowledgement from the recipient’s information system showing that the
Notice has been delivered to the email address stated above;

 

(B)                               the time that the Notice
enters an information system which is under the control of the recipient; and

 

(C)                               the time that the Notice is
first opened or read by an employee or officer of the recipient,

 

but if the result is that a Notice would be taken to be given or made
on a day that is not a Business Day in the place to which the Notice is sent or
is later than 5pm (local time) it will be taken to have been duly given or made
at the start of business on the next Business day in that place; and

 

(d)           in the case of any Application
Form or a Release Request, that application or request will not be taken
to have been received by or on behalf of the Bank until it is actually received
by the Bank at the address nominated from time to time by the Board or, if the
terms of an Application Form or Release Request permit it to be submitted
in electronic form, then that Application Form or Release Request will not
be taken to have been received by or on behalf of the Bank until all conditions
specified by the Board from time to time for the submission of that Application
Form or Release Request have been satisfied.

 

20.5                       Dispute

 

Any disputes or differences of any nature arising under the Plan shall
be referred to the Board and its decision shall be final and binding in all
respects.

 

20.6                       Governing Law

 

This Plan and the rights of Participants under its Rules are
governed by the laws in force in New South Wales.

 

19

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