Employee Share Acquisition (Tax Exempt) Plan Plan Rules

Employee Share Acquisition (Tax Exempt) Plan Plan Rules Dated: 29 September 2010 QR National Limited (ACN 146 335 622)

1 1 Operation 1.1 Operation of the Plan These Rules set out the terms and conditions of the operation of the Plan. The Company, the Trustee and each Participant are bound by these Rules. 1.2 Purpose The Plan is intended to assist in the attraction, retention and motivation of the Group s Employees by providing eligible Employees with an opportunity to acquire an ownership interest in the Company. 1.3 Commencement The Plan commences on a date to be determined by the Board. 1.4 Requirements under the Tax Act It is intended that the Plan, and any scheme for the provision of financial assistance in respect of acquisitions of Shares under the Plan, will satisfy the requirements of Division 83A of the Tax Act (including operating the Plan on a Non-discriminatory basis) which provide for an exemption from taxation for shares acquired under an employee share plan. 2 Definitions and interpretation 2.1 Definitions These meanings apply unless the contrary intention appears: Applicable Law means one or more, as the context requires of: the Corporations Act; the Corporations Regulations 2001 (Cth);

2 (c) (d) (e) (f) (g) the Listing Rules; any other applicable securities laws; the common law, principles of equity, and laws made by parliament (and laws made by parliament include State, Territory and Commonwealth laws and regulations and other instruments under them, and consolidations, amendments, re-enactments or replacements of any of them); the constitution of the Company; and any practice note, policy statement, class order, declaration, guideline, policy or procedure authorising or entitling ASIC or ASX to regulate, implement or enforce, either directly or indirectly: (i) (ii) (iii) a provision of the laws, regulations, rules or constitution referred to in paragraphs to (f); any agreement or deed made under the laws, regulations, rules or constitution referred to in paragraphs to (f); or a person's conduct or proposed conduct under the laws, regulations, rules or constitution referred to in paragraphs to (f), or any agreement or deed referred to in paragraph (g)(ii). Application Form means an application form for Participant Shares submitted by an Employee under the terms of an Invitation. ASIC means the Australian Securities and Investments Commission. ASX means ASX Limited (ACN 008 624 691) or the Australian Securities Exchange as appropriate. Board means all or some of the Directors acting as a board of the Company or, if the relevant powers or discretions have been delegated by the Board, the committee or individuals acting as delegates of the Board. Business Day means a day other than a Saturday, Sunday or public holiday in Brisbane, Australia.

3 Commissioner means the Commissioner of Taxation of Australia. Company means QR National Limited (ACN 146 335 622). Corporations Act means the Corporations Act 2001 (Cth). Director means a director of the Company. Employee means a permanent full-time or permanent part-time employee of any Employer or any other person determined by the Board in accordance with Applicable Laws. Employer means the Company or any Group Company or, in relation to any particular Participant, means the entity by which that Participant is for the time being employed. Group means the Company and its Related Bodies Corporate from time to time. Group Company means any member of the Group or, subject to Applicable Laws, any other entity determined by the Board to be a Group Company. Invitation means an invitation made by the Company to an Employee to apply for the acquisition of Shares under the Plan in accordance with Rule 3.2. Listing Rules means the official listing rules of ASX, except to the extent of any express waiver by ASX. Non-discriminatory basis has the same meaning as in section 83A-35(6) of the Tax Act. Participant means an Employee who has been admitted to the Plan under Rule 4.3, and who has not ceased to be a Participant under Rule 4.5. Participant s Shares means, in relation to a Participant, the Shares held by the Trustee on behalf of the Participant for the purposes of the Plan which stand to the credit of the Share Account of that Participant and Participant Shares has a corresponding meaning.

4 Plan means the Employee Share Acquisition (Tax Exempt) Plan established and operated in accordance with these Rules. Related Body Corporate has the meaning it has under the Corporations Act. Reserve Account means the account established by the Trustee under the Trust Deed. Rules means these rules (including the terms and conditions set out in an Invitation), as amended from time to time. Security Interest means a mortgage, charge, pledge, lien or other encumbrance of any nature. Share means an ordinary fully paid share in the capital of the Company. Share Account means, in relation to a Participant, the account maintained in respect of that Participant under the Trust Deed. Tax Act means the Income Tax Assessment Act 1936 (Cth) and the Income Tax Assessment Act 1997 (Cth), as the context requires. Trust means the employee share plans trust established by the Trust Deed. Trust Deed means the Trust Deed executed by the Company and the Trustee. Trustee means initially CPU Share Plans Pty Limited (ABN 20 081 600 875) (in its capacity as trustee of the Trust) and thereafter means the trustee from time to time of the Trust. 2.2 Interpretation In these Rules, unless the context otherwise requires: references to gender includes all genders; words importing the singular include the plural and vice versa;

5 (c) (d) (e) (f) (g) (h) (i) (j) (k) (l) (m) (n) references to a person includes the legal personal representatives, successors and assigns of that person, and also corporations and other entities recognised by law; a group of persons or things is a reference to any 2 or more of them jointly and to each of them individually; references to a statute, provision or other law or to the Listing Rules include regulations and other instruments under it and consolidations, amendments, re-enactments or replacements of any of them; headings are for convenience only and do not affect the interpretation of these Rules; references to a Rule or paragraph is a reference to a Rule or paragraph of these Rules, or a corresponding Rule or Rules of the Plan, as amended from time to time; 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; where the time for doing any act, matter or thing under these Rules falls on a day which is not a Business Day, it will be done on the next succeeding Business Day; references to an act includes an omission and a reference to doing any act includes executing a document; references to a document or any part of a document means the document or relevant part, as amended from time to time; references to the exercise of a power or discretion include a decision not to exercise the power or discretion; references to a year mean any period of 12 months; and including when introducing a list of items does not exclude a reference to other items whether of the same class or genus or not.

6 3 Invitation, application and acceptance 3.1 Eligibility The Board may determine the Employees who are eligible to participate in the Plan from time to time. 3.2 Invitation may be made From time to time the Board may invite Employees to participate in the Plan on terms as the Board determines, provided that the terms: are consistent with Rule 1.4; (c) do not vary the restriction on the disposal of or other dealings in Shares by Participants under Rule 6.1; and do not include any provision for the forfeiture of Shares acquired by Participants under the Plan. 3.3 Content of Invitation The Invitation to an Employee must be in writing and include the following details: (c) (d) a statement setting out the amount payable, if any, by the Employee for the Shares; the number of Shares or the method of calculating the number of Shares for which the Employee may apply; the time by which the Employee must apply for the Shares; and any restrictions or other conditions relating to the Invitation and the Shares as determined by the Board. Each Invitation must be accompanied by an Application Form.

7 3.4 Employee agrees to be bound Each Employee is, by submitting an Application Form, deemed to have agreed to be bound by: (c) the terms of the Invitation and Application Form; the provisions of these Rules, as amended from time to time; and the constitution of the Company as amended from time to time. 4 Offer and Acceptance 4.1 How an Employee may apply for Shares An Employee may apply for Shares by completing and returning the signed Application Form to the person designated by the Company. 4.2 When must Application Forms be received? The Application Form must be received by the Company before the end of the time specified in the Invitation. 4.3 Time of acceptance The time for acceptance of the Employee s application for Shares will be when the Board accepts the Employee s Application Form, which will be at the date the Shares are allocated in accordance with Rule 5. 4.4 Condition of acceptance It is a condition for acceptance of each application for Shares that the person making the offer is an Employee and has not been given notice, and has not given notice, of termination of employment at the time of acceptance of the offer under Rule 4.3.

8 4.5 Cessation of participation A person ceases to be a Participant when all the Participant s Shares and any other property or money to which the Participant is entitled have been transferred or paid in accordance with these Rules. 4.6 Transaction costs No brokerage, commission, stamp duty or other transaction cost is payable by Participants in respect of any issue or transfer of Shares to an Employee under the Plan. 5 Acquisition and allocation of Shares by Trustee 5.1 Shares held for Participants Participant Shares must be held by the Trustee on behalf of a Participant for a period of 3 years subject to the provisions of these Rules. 5.2 Shares registered in name of Trustee Shares acquired for a Participant under the Plan are to be registered in the name of the Trustee, or a nominee of the Trustee, as determined from time to time and must be allocated to the Share Account of that Participant. A Participant s rights and obligations under the Plan are conditional on Shares being registered in the name of the Trustee, or a nominee of the Trustee, and allocated to that Participant s Share Account. 5.3 Notice to Employee The Company must ensure that a Participant is notified in writing when Shares are acquired and registered in the name of the Trustee, or a nominee of the Trustee, for the benefit of that Participant and allocated to that Participant s Share Account.

9 5.4 Quotation of Shares The Company must apply to ASX for official quotation of any Shares allotted under the Plan in accordance with these Rules. 5.5 No fractions of Shares The Trustee must not hold fractions of Shares on behalf of a Participant. Any Shares remaining after the allocation of whole Shares to a Participant may be held in the Reserve Account and used by the Trustee to satisfy future applications made under the Plan. 5.6 No rights of the Company or Group Company in Shares Nothing in these Rules confers or is intended to confer on the Company or any Group Company, any proprietary right or interest or any Security Interest in the Shares acquired by the Trustee under this Rule 5. The rights of the Company under these Rules are purely contractual. 6 Restrictions on dealing with Participant Shares 6.1 Restriction on dealing A Participant is not permitted to sell, assign, transfer or otherwise deal with, or grant a Security Interest over, a Participant Share acquired under the Plan before the earlier of: the end of the period 3 years after the allocation of the Participant Shares to the Participant; and the time when the Participant is no longer employed by any of: (i) (ii) a Group Company; and the company which employed the Participant at the date the Participant Shares were acquired by the Participant, whether or not that company is still a Group Company.

10 6.2 Enforcing the restriction on dealing Each of the Company and the Trustee is entitled to make any arrangements it considers necessary to enforce the restriction in Rule 6.1 and Participants are bound by those arrangements and must take any steps reasonably required by the Company and the Trustee. 7 Distribution of dividends, rights issues, bonus Shares and interest The distribution of dividends, rights issues, bonus Shares and interest in respect of a Participant s participation in the Plan are in accordance with the terms of the Trust Deed. 8 Voting rights The voting rights of a Participant are in accordance with the terms of the Trust Deed. 9 Administration of the Plan 9.1 Trustee and Board to administer Plan The Plan is to be administered by the Trustee and the Board in accordance with these Rules. The Board may make further provisions for the operation of the Plan which are consistent with these Rules. 9.2 Board powers and discretions Any power or discretion which is conferred on the Board by these Rules must be exercised by the Board in the interests or for the benefit of the Company, and the Board is not, in exercising any power or discretion, under any fiduciary or other obligation to any other person.

11 9.3 Delegation of Board powers and discretion Any power or discretion which is conferred on the Board by these Rules may be delegated by the Board to a committee consisting of those Directors and/or other officers and/or Employees of the Company as the Board thinks fit. 9.4 Board decision: final and conclusive The decision of the Board as to the interpretation, effect or application of these Rules is final and conclusive. 9.5 Documents The Trustee and the Company may each from time to time require a Participant to complete and return any other documents as may be required by law to be completed by the Participant or any other documents which the Trustee or the Company considers should, for legal or taxation reasons, be completed by the Participant. 9.6 Information on the acquisition of Shares under the Plan The Company must provide to: the Participant information about Shares acquired pursuant to the Plan during the year by no later than 14 July after the end of the relevant financial year. The information provided will be in accordance with the requirements outlined in Division 392 of the Taxation Administration Act 1953 (Cth); and the Commissioner information about Shares acquired pursuant to the Plan during the year in the approved form by no later than 14 August after the end of the relevant financial year. The information provided will be in accordance with the requirements outlined in Division 392 of the Taxation Administration Act 1953 (Cth).

12 9.7 Liability for TFN withholding tax (ESS) The Trustee and the Company will not be liable for tax imposed under the Income Tax (TFN Withholding Tax (ESS)) Act 2009 (Cth), as participation in the Plan is conditional on the Participant providing a valid tax file number. Acceptances to the Plan will not be processed unless the Participant provides a valid tax file number. 10 Overriding restrictions on the Plan 10.1 Applicable Laws Despite any other provision of these Rules, no Shares may be acquired by the Trustee or transferred to a Participant or other person if to do so would contravene any Applicable Laws. 10.2 Trustee Sole Activities Test The Trustee must, at all times, satisfy the requirements to satisfy paragraph (ha) of the definition of fringe benefit in section 136(1) of the Fringe Benefits Tax Assessment Act 1986 (Cth). 11 Amendments 11.1 Board may amend the Plan and Rules Subject to the Listing Rules and Rule 11.2: the Board may at any time by written instrument or resolution amend the Plan and these Rules, including this Rule; and any amendment may affect the rights of any Participant in respect of Shares held under the Plan at the date of the amendment.

13 11.2 No reduction of existing rights Any amendment to the Plan and these Rules must not materially reduce the rights of any Participant in respect of their Shares held under the Plan at the date of the amendment, unless: the amendment is introduced primarily: (i) (ii) (iii) (iv) (v) for the purpose of complying with or conforming to present or future State, Territory or Commonwealth legislation governing or regulating the maintenance or operation of the Plan or similar plans (including the Corporations Act, the Tax Act and the Listing Rules); to correct any manifest error or mistake; for the purpose of enabling the Plan and Rules to be operated and maintained in a tax effective manner; to enable a Group Company to comply with the requirements of a regulator, including under an instrument of relief issued by ASIC; or to enable the Group to undertake a re-organisation of or other transaction relating to its Shares without the approval of Participants in a capacity other than as securityholders; or the amendment is agreed to in writing by 75% of the Participants whose rights will be materially prejudiced by the proposed amendment. 11.3 Listing Rules No amendment may be made except in accordance with and in the manner (if any) stipulated by the Listing Rules. 11.4 Retrospective amendment possible Subject to Rule 11.2, any amendment made under Rule 11.1 may be given retrospective effect as specified in the written instrument or resolution by which the amendment is made.

14 12 Termination or suspension of the Plan 12.1 Board may terminate or suspend The Board may terminate or suspend the operation of the Plan. However, the Board must determine how any Share subject to the restriction on dealing under Rule 6.1 should be dealt with so as to ensure, if possible, the continued satisfaction of the requirements of section 83A-35(8) of the Tax Act, if and to the extent Division 83A of the Tax Act applies to Shares under the Plan. 12.2 Notice of termination or suspension As soon as reasonably practicable after termination or suspension of the Plan, the Board must give written notice to any Participant affected. 13 Connection with other schemes 13.1 Company may provide other incentives The Company is not restricted to using the Plan as the only method of providing incentive rewards to employees. The Company may approve other incentive schemes. 13.2 Participation in other schemes Participation in the Plan does not affect, and is not affected by, participation in any other incentive or other scheme of the Company unless the terms of that incentive or scheme provide otherwise.

15 14 Miscellaneous provisions 14.1 Rights of Participants Nothing in these Rules: (c) (d) confers on any Employee the right to receive an Invitation in accordance with Rule 3 or any right to become a Participant or any right to receive any Shares; confers on any Participant the right to continue as an Employee of any Employer; affects any rights which any Employer may have to terminate the employment of any Employee; or may be used to increase damages in any action brought against any Employer in respect of any termination of employment. No person, whether a Participant or otherwise, has any claim, right or interest in relation to the Plan or any Shares held under the Plan or other property of the Trust, whether against the Trustee, the Company, any Group Company or any other person, except under and in accordance with these Rules. 14.2 Instructions by Participants For the purposes of the Plan, the Trustee, the Board, the Company and any Group Company is entitled to regard any notice, direction or other communication given or purported to be given by or on behalf of a Participant (or a legal personal representative of a Participant) as valid, whether given orally or in writing. 14.3 Notices Any notice, certificate, consent, approval, waiver or other communications given by the Trustee, the Board or the Company is deemed to have been duly given if: sent by electronic mail or delivered by hand; or

16 sent by ordinary prepaid mail, and is deemed to have been served: (c) (d) if sent by electronic mail or delivered by hand, at the time of delivery or sending; or if posted, 3 Business Days (or, if posted to a Participant s address outside Australia, 7 Business Days) after the date of posting. Delivery, transmission and postage is to the address of any Participant as indicated on the Application Form or any other address as the Trustee, Board or any Participant may notify to the other. 14.4 Governing law The Plan is governed by the laws in force in Queensland and will be construed and takes effect in accordance with those laws. 14.5 Jurisdiction All disputes arising in connection with or under these Rules will be submitted to the exclusive jurisdiction of the courts of Queensland. 14.6 Payments net of tax If, when the Trustee makes or is deemed to make a payment to a Participant under these Rules, the Trustee is obliged to deduct or withhold any amount of tax or other government levy or impost, the payment to the Participant is to be made net of the deduction or withholding. 14.7 Stamp duty on transfer to Participants The Trustee may, when transferring Shares to a Participant under these Rules, require the Participant to provide the Trustee with an amount of money which the Trustee estimates is necessary to meet the Participant s liability (if any) to pay stamp duty or other taxes in respect of the transfer. Where the Trustee is provided with funds for that purpose, the Trustee must apply the funds in payment of the stamp duty or other tax, arrange for registration of the transfer on the Participant s behalf and return any excess funds to the Participant

17 14.8 Rounding Any calculation of a number of Shares under the Plan is to be rounded down to the nearest whole number.