QANTAS DEFERRED SHARE PLAN The following Rules of the Qantas Deferred Share Plan (Plan) are subject to, and must be read in conjunction with, the Terms & Conditions of the Plan (Terms & Conditions) and the Trust Deed of the Qantas Deferred Share Plan Trust (Trust). Capitalised terms in these Rules have the same meaning as in the Terms & Conditions and the Trust Deed. The Board (including via the Remuneration Committee) of Qantas has absolute discretion with respect to the operation, control and administration of the Plan as well as any matter incidental to the Plan. 1. Background 1.1 The Terms & Conditions were approved by Shareholders at the 2002 Annual General Meeting. 1.2 These Rules have been adopted in accordance with clause 10.1.ii of the Terms & Conditions and apply in respect of the 2009 offer of Plan Shares (Deferred Shares) to Eligible Employees (excluding non-executive Directors) of Qantas (Participants) as part of their medium term incentive (Incentive). These Rules include extra conditions for the purposes of clause 3.1.ii of the Terms & Conditions. 1.3 The operation of the Plan will be subject to review by the Board or the Remuneration Committee who, in their absolute discretion, may vary these Rules. 2. Offer of Deferred Shares 2.1 Pursuant to clause 3.1.i(a) of the Terms & Conditions, Deferred Shares will be offered to Participants because Qantas achieved certain Balanced Scorecard targets set by the Board in 2008 in respect of the financial year ended 30 June 2009. The Balanced Scorecard targets related to: i. financial performance measured by net expenditure unit cost improvement; ii. network punctuality; iii. customer satisfaction; and iv. reduction in employee injury rates. 2.2 The Deferred Shares may be offered to Participants under these Rules: i. by the Board in the case of the Chief Executive Officer (CEO), Chief Financial Officer (CFO) and members of the Executive Committee; or ii. by the CEO for all other Participants. 2.3 All Deferred Shares will, subject to compliance with the inside information provisions of the Corporations Act, either be acquired on-market, issued by Qantas or allocated from the forfeited Shares in the Trust. 2.4 Unless otherwise determined by the Board, Remuneration Committee, or CEO, the number of Deferred Shares to be acquired on-market, issued by Qantas or allocated from the forfeited Shares in the Trust for each Participant will be calculated by the cash value of the Incentive awarded to each Participant, divided by the volume weighted average price of Qantas shares as traded on the ASX for the seven calendar days up to and including the date of allocation (being the date of offer under Rule 2.2 by either the Board or CEO). All calculations must be rounded down to the nearest whole share. 2.5 Participants who are offered Deferred Shares will receive a holding statement. QANTAS DEFERRED SHARE PLAN Page 1 of 6
3. Trust Deferred Shares acquired under these Rules will be held on behalf of each Participant by the Trustee until the expiration of the Holding Lock Period (as set out in Rules 4 and 5.5). 4. Holding Lock Period 4.1 Unless the Board otherwise determines, Deferred Shares will be subject to a Holding Lock Period expiring on the seventh anniversary of the date of allocation. 4.2 A Participant may request that the Board exercise its discretion to remove the Holding Lock prior to that stipulated in Rule 4.1, provided the Holding Lock is not removed before: i. 1 July 2010 in respect of up to one-half of Deferred Shares acquired on behalf of each Participant; and ii. 1 July 2011 in respect of all remaining Deferred Shares. 4.3 A Participant makes their request to the Board under Rule 4.2 by completing a Request to Remove Holding Lock in the form of Attachment 1. The Board must not unreasonably withhold its exercise of discretion under Rule 4.2. 4.4 Notwithstanding Rule 4.2 and 4.3, the Board or the Remuneration Committee may, at any time, resolve to remove the Holding Lock in relation to some or all Deferred Shares held by the Trust under these Rules. 4.5 Upon the expiry of the relevant Holding Lock Period by virtue of either of the events described in Rules 4.1, 4.2 or 4.4 occurring, the Deferred Shares will be transferred from the Trustee and registered in the name of the relevant Participant. 5. Forfeiture 5.1 Subject to clause 5.2, a Good Leaver is a Participant whose employment terminates in the following circumstances: i. Total and Permanent Disablement; ii. death; iii. retirement (ie the Participant leaving in circumstances of bona fide retirement from the full time workforce, with a presumption that this would not occur before age 55); iv. bona fide redundancy; or v. other circumstances, as determined by the Board in the case of the CEO, the Remuneration Committee in relation to members of the Executive Committee and as determined by the CEO in all other cases, including but not limited to Qantas initiated terminations (not for cause). 5.2 Prior to a Participant being designated as a Good Leaver approval must be given in writing by: i. the Board in relation to the CEO; ii. the Remuneration Committee in relation to members of the Executive Committee; or iii. the CEO in all other cases. 5.3 Unless a Participant is designated as a Good Leaver, any Deferred Shares acquired under these Rules which remain subject to a Holding Lock Period in accordance with Rule 4 will be forfeited if the Participant: i. ceases employment with the Group; or ii. commits an act of gross misconduct in relation to the Qantas Group. Gross misconduct means an act or omission justifying summary dismissal. QANTAS DEFERRED SHARE PLAN Page 2 of 6
5.4 Notwithstanding Rule 5.3.i, if the Participant is employed by the Group on or after 30 June 2010 but not as at 30 June 2011 and the Participant completes a Request to Remove Holding Lock prior to cessation of employment with the Qantas Group, then the Request to Remove Holding Lock will be valid in respect of up to one-half of the Deferred Shares acquired on behalf of the Participant. 5.5 Notwithstanding Rule 5.3.i, if the Participant is employed by the Group on or after 30 June 2011 and the Participant completes a Request to Remove Holding Lock prior to cessation of employment with the Qantas Group, then the Request to Remove Holding Lock will be valid in respect of all of the Deferred Shares (or any remaining shares not previously dealt with in accordance with Rule 4.2.i) acquired on behalf of the Participant. 5.6 On a Deferred Share being forfeited, all rights of a Participant under the Plan in respect of the Deferred Share cease and no consideration or compensation will be payable in relation to that forfeiture. 5.7 Notwithstanding Rule 4, where a Good Leaver ceases to be employed by the Group before the expiry of the Holding Lock Period, the Holding Lock Period for the Deferred Shares which were offered to that Participant will expire and the Deferred Shares will be transferred to the Good Leaver (or their estate): i. in the case of any of the events in sub-paragraphs i.-iv. of Rule 5.1, on the next business day after the Participant ceases to be an employee of the Group; or ii. in the case of any event in sub-paragraph v. of Rule 5.1, on the date that the Board, Remuneration Committee or CEO designates the Participant to be a Good Leaver. 6. Administration 6.1 The Chairman and CEO are each delegated authority to approve in writing the taking of such action as may be reasonably necessary or desirable to implement or effect the offer, including without limitation: i. authorising the purchase (on-market) of the Deferred Shares and causing their registration in the name of the Trustee; ii. approval of any Requests to Remove Holding Lock in accordance with Rule 4.3; and iii. authorising the transfer (off-market) of the registration of title in the Deferred Shares from the Trustee into the name of each Participant on expiry of the Holding Lock Period. 6.2 The CFO, Group Executive People and the Company Secretary are each delegated authority to approve in writing the following aspects of the administration of the Plan under these Rules: i. authorising the purchase (on-market) of the Deferred Shares and causing their registration in the name of the Trustee; ii. approval of any Requests to Remove Holding Lock in accordance with Rule 4.3; and iii. authorising the transfer (off-market) of the registration of title in the Deferred Shares from the Trustee into the name of each Participant on expiry of the Holding Lock Period. 7. Conflict 7.1 If there is a conflict between any part of these Rules and the Terms & Conditions of the Plan, the Terms & Conditions prevail. 7.2 If there is a conflict between any part of these Rules and the Plan Trust Deed, the Plan Trust Deed prevails. QANTAS DEFERRED SHARE PLAN Page 3 of 6
8. Currency of these Rules No offer under these Rules is to be made after 30 June 2010. 9. Qantas Employee Share Trading Policy All Participants must comply with the requirements of the Qantas Employee Share Trading Policy, contained in the Qantas Code of Conduct & Ethics. QANTAS DEFERRED SHARE PLAN Page 4 of 6
Qantas Deferred Share Plan 2009 Performance Share Plan REQUEST TO REMOVE HOLDING LOCK Attachment 1 To: Company Secretary Qantas Airways Limited Qantas Centre Building A, Level 9 203 Coward Street MASCOT NSW 2020 Facsimile: (02) 9691 3339 This Request to Remove Holding Lock is subject to, and must be read in conjunction with, the Qantas Deferred Share Plan Terms & Conditions and the 2009 Performance Share Plan Rules. Capitalised terms in this Request to Remove Holding Lock have the same meaning as in the Terms & Conditions. I, (name), (staff number) of (address), in accordance with Rules 4.2 and 4.3 of the 2009 Performance Share Plan Rules, request that the Holding Lock be removed in relation to the following number of my Deferred Shares: Note: If the above number of Deferred Shares exceeds those available to have their Holding Lock removed (Available Shares), it will be deemed that the Holding Lock be removed in relation only to the Available Shares. IMPORTANT INFORMATION ALSO CONTAINED OVERLEAF. YOU MUST READ THIS PRIOR TO SIGNING AND RETURNING THIS FORM. Note: Disposal of any Qantas Shares is subject to the Qantas Employee Share Trading Policy included in the Qantas Code of Conduct & Ethics. (signed) (date) NB: Participation in any employee incentive scheme may have taxation implications for Participants. Participants must seek their own individual professional advice in relation to their participation in the 2009 Performance Share Plan, including taxation advice. QANTAS DEFERRED SHARE PLAN Page 5 of 6
IMPORTANT INFORMATION As set out in Rule 4.2 of the 2009 Performance Share Plan Rules, the Holding Lock cannot be removed before: 1 July 2010 in respect of up to one-half of your Deferred Shares; and 1 July 2011 in respect of the remainder of your Deferred Shares. As set out in Rules 4.2 and 4.3, the Board may exercise its discretion to remove the Holding Lock and this discretion must not be unreasonably withheld. Any Requests to Remove Holding Lock received before the dates set out above will not be processed until either 30 June 2010 or 30 June 2011, as the case may be. For the purposes of administering the Plan, any Requests to Remove Holding Lock will be deemed to be received on the last business day of the month of receipt and, if approved, the transfer of the registration of title in the Deferred Shares from the Trustee to you will occur on the first business day of the following month. Example 1: Form completed before 30 June 2010 If you sign and return this form on 28 May 2010, providing you are still employed by the Qantas Group as at 30 June 2010, your form will be deemed to be received on Wednesday 30 June 2010 (being the last business day of the month of deemed receipt). Subject to the Board exercising its discretion, up to one-half of your Deferred Shares will be transferred from the Trustee and registered in your name. The transfer will occur on Thursday 1 July 2010 (being the first business day of the following month). Within a reasonable period of time after the transfer, the Qantas Share Registry will send you an updated holding statement. Example 2: Form completed between 30 June 2010 and 30 June 2011 If you sign and return this form on 4 February 2011, your form will be deemed to be received on Monday 28 February 2011. Up to one half of your Deferred Shares will be transferred from the Trustee and registered in your name. Subject to the Board exercising its discretion, the transfer will occur on Tuesday 1 March 2011 (being the first business day of the following month). Within a reasonable period of time after the transfer, the Qantas Share Registry will send you an updated holding statement. Example 3: Form completed after 30 June 2011 If you sign and return this form on 7 February 2012, your form will be deemed to be received on Wednesday 29 February 2012. Up to all your Deferred Shares will be transferred from the Trustee and registered in your name. Subject to the Board exercising its discretion, the transfer will occur on Thursday 1 March 2012 (being the first business day of the following month). Within a reasonable period of time after the transfer, the Qantas Share Registry will send you an updated holding statement. To have the Holding Lock removed in relation to any Deferred Shares which remain subject to a holding lock at any time, you will need to complete a new Request to Remove Holding Lock (which can be obtained via the Qantas Share Registry Services link at: http://www.qantas.com.au/travel/airlines/investors-share-holder/global/en). QANTAS DEFERRED SHARE PLAN Page 6 of 6