QANTAS AIRWAYS LIMITED LONG TERM INCENTIVE PLAN TERMS AND CONDITIONS

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1 QANTAS AIRWAYS LIMITED LONG TERM INCENTIVE PLAN TERMS AND CONDITIONS 1 Grant/Invitation 1.1 Eligibility The Board may determine from time to time which Group employees are eligible to participate in the Long Term Incentive Plan (LTIP) (Eligible Employees). The Board may, from time to time, in its absolute discretion: grant to an Eligible Employee; or invite Eligible Employees to apply for a grant of, LTIP Rights upon the terms of the LTIP and such additional terms and conditions as the Board determines. The Board will only grant LTIP Rights where an Eligible Employee continues to satisfy any relevant conditions imposed by the Board at the time of issuing an invitation. 1.2 Written notice The Board will, at the time of a grant or invitation pursuant to clause 1.1, advise each Eligible Employee of the following minimum information: the number of LTIP Rights being granted or the subject of the invitation; details of any performance or service related conditions which must be satisfied before an LTIP Right vests (Conditions); the time at which LTIP Rights may vest and, if the LTIP Rights are exercisable, the period during which LTIP Rights may be exercised following vesting; the circumstances in which LTIP Rights lapse; and any other relevant terms and conditions to be attached to the LTIP Rights or Shares acquired on vesting of an LTIP Right (including for example, any restrictions on transfer of such Shares). 1.3 Acceptance of application An Eligible Employee who is granted, or who applies for a grant of, LTIP Rights is deemed to have agreed to be bound by these Terms, any additional terms specified in the written notice provided under clause 1.2 and, upon allocation of a Share, to have agreed to become a shareholder of Qantas (and to be bound by the Constitution of Qantas). If an invitation is issued pursuant to clause 1.1, upon the Board accepting an application, LTIP Rights will be allocated to the Eligible LONG TERM INCENTIVE PLAN TERMS & CONDITIONS Page 1 of 7

2 Employee (Participant).Unless the Board determines otherwise, no payment is required for the grant of an LTIP Right. 2. LTIP Rights Unless the Board determines otherwise, LTIP Rights may not be registered in any name other than that of the Participant. An LTIP Right granted under and subject to the LTIP is only transferable: with the consent of the Board; or by force of law upon death to the Participant s legal personal representative or upon bankruptcy to the Participant s trustee in bankruptcy. Where a Participant purports to transfer an LTIP Right other than in accordance with clause 2, his or her LTIP Rights immediately lapse. 3. Vesting and lapse of LTIP Rights 3.1 Vesting of LTIP Rights Unless the Board, in its discretion, determines otherwise and subject to clauses 3.2 (unvested LTIP Rights), 5 (lapse of LTIP Rights), 6 (fraud or dishonesty), 7 (reorganisation), 8 (change of control), and 9.2 (Board powers), an LTIP Right will not vest unless the Conditions (if any) advised to the Participant pursuant to clause 1.2 have been satisfied. 3.2 Unvested LTIP Rights Subject to the Board s overriding discretion, a Participant s unvested LTIP Rights will lapse upon the earliest to occur of: the date specified by the Board for the purposes of clause 1.2; an event described in clauses 2 (transfer restriction), 5 (lapse of LTIP Rights), 6 (fraud or dishonesty), 7 (reorganisation), or 8 (change of control); and 4. Allocation of Shares 4.1 Allocation failure to meet the Conditions. Upon vesting of an LTIP Right, Qantas must allocate, or procure the transfer, to the Participant (or his or her personal representative) of one Share for each LTIP Right that vests. 4.2 Share ranking and listing on ASX Any Shares allocated under the LTIP will rank equally in all respects with other ordinary shares for the time being on issue, except with regards to any rights attaching to such shares by reference to a record date prior to the date of their allocation. Qantas will apply for quotation of any Shares issued under the LTIP within the period required by ASX. LONG TERM INCENTIVE PLAN TERMS & CONDITIONS Page 2 of 7

3 5. Lapse of LTIP Rights (d) Where a Participant resigns in circumstances not approved by the Board, is terminated for cause or terminated in other circumstances determined by the Board to involve unacceptable performance or conduct before an LTIP Right has vested, all of the Participant s LTIP Rights lapse and the Participant ceases to have any rights or entitlements under this LTIP. Unless the Board determines otherwise, where a Participant ceases to be an employee of the Group, other than in circumstances set out in clause 5 before an LTIP Right has vested, all of the Participant s LTIP Rights lapse. The Participant will, where he or she continues to satisfy any other relevant conditions imposed by the Board at the time of granting an LTIP Right, be entitled to a cash payment determined at the time that the Conditions applicable to the LTIP Rights are tested for other Participants at the end of the Performance Period, which will be calculated with regard to the value of the LTIP Rights which would have vested had they not lapsed on cessation of employment, the part of the performance period for which the Participant was employed by the Group and the extent to which the Conditions have been satisfied. Without limiting the discretion of the Board pursuant to clause 5, the Board may determine, in relation to a particular Participant or a class of Participants, that instead of lapsing their LTIP Rights: some or all of the LTIP Rights that have not vested at the date of cessation will not lapse (Continuing Rights) and the Continuing Rights will be subject to the same Conditions as all other LTIP Rights and if the Conditions are met, they will vest and Shares will be issued to the Participant in accordance with these Terms; or some or all of the LTIP Rights that have not vested at the date of cessation will vest at the time of cessation of employment having regard to the portion of the Performance Period that has elapsed at the time of cessation of employment and the degree to which the Conditions have been achieved. The Board will give written notice to each Participant of the number of LTIP Rights that vest. 6. Fraud or Dishonesty 6.1 Action of Participant Where, in the opinion of the Board, a Participant: acts fraudulently or dishonestly; or is in breach of his or her obligations to the Group, then the Board may: deem all or any LTIP Rights of the Participant which have not vested to have lapsed; and/or deem all or any Shares held by the Participant following vesting of an LTIP Right to be forfeited; and/or where Shares that have been allocated to the Participant upon vesting or exercise of an LTIP Right are subsequently sold, require the Participant to repay the net proceeds of such a sale to Qantas. LONG TERM INCENTIVE PLAN TERMS & CONDITIONS Page 3 of 7

4 6.2 Actions of others Where, in the opinion of the Board, an LTIP Right vests, or may vest, as a result of the fraud, dishonesty or breach of obligations of an employee of the Group other than the Participant and, in the opinion of the Board, the LTIP Right would not otherwise have vested, the Board may determine that the Participant s LTIP Right has not vested and may determine any treatment in relation to the LTIP Right (including resetting Conditions, deeming Shares to be forfeited and/or new LTIP Rights to be allocated) to ensure that no unfair benefit is obtained by a Participant as a result of the actions of another person. 7. Bonus Shares and capital reorganisation If: Shares are issued pro rata to Qantas s shareholders generally by way of a bonus issue; or any reorganisation (including consolidation, subdivision, reduction or return) of the issued capital of the Qantas is effected, then the number of LTIP Rights to which each Participant is entitled will be adjusted in the manner determined by the Board. If new LTIP Rights are granted, such LTIP Rights will be subject to the same terms and conditions as the original LTIP Rights, including without limitation, any Condition. 8. Change of control 8.1 Takeover bid or scheme of arrangement If a Change of Control occurs prior to the vesting of an LTIP Right, then, a notice indicating that Participants target number of unvested LTIP Rights will vest must immediately be given to the Board and, unless the Board determines otherwise within 14 days of such notice being given, Participants will be entitled to vesting of the target number of LTIP Rights to which the Participants would otherwise have been entitled, had the relevant Conditions been achieved at the end of the relevant Performance Period on the 15 th day after the notice is given. If a Change of Control occurs after vesting of an LTIP Right, all vested LTIP Rights must, if not converted into Shares, be so converted (if at all) within 30 days of the Change of Control event occurring. In these Terms, Change of Control means, in respect of Qantas: a Takeover Bid is made for Qantas and, either: (A) (B) the Board recommends the bid; and/or the bid is declared unconditional by the bidder, and, in either event, the bidder is entitled to more than 50% of the Shares in Qantas; the Board resolves to seek a court order for a meeting to be held in relation to a proposed compromise or arrangement for the purposes of or in connection with a scheme for the reconstruction of Qantas or its amalgamation with any other company or companies; or a proposal is formally adopted by the Board pursuant to which any person may become bound or entitled to acquire shares in Qantas under section 414 of the Corporations Act (upon a scheme of arrangement being approved); or LONG TERM INCENTIVE PLAN TERMS & CONDITIONS Page 4 of 7

5 (vi) a proposal is made pursuant to which any person may become bound or entitled to acquire shares in Qantas under Chapter 6A of the Corporations Act (compulsory acquisition following a Takeover Bid); or a notice of resolution is put to shareholders for the compulsory winding up of Qantas; or an order is sought for the compulsory winding up of the Qantas, Each of sub-clauses to (vi) above constitute a separate and independent event giving rise to a Change of Control for the purposes of these Terms. 8.2 Acquisition of shares in another Company If a company (Acquiring Company) obtains control of Qantas and Qantas, the Acquiring Company and the Participant agree, a Participant may be provided with shares in the Acquiring Company or its parent or its subsidiary in substitution for LTIP Rights, on substantially the same terms and subject to substantially the same conditions as the LTIP Rights, but with appropriate adjustments to the number of shares the subject of the LTIP Rights. 9. Administration of LTIP 9.1 Amendment of LTIP Terms and Conditions The Board may, at any time, amend, add to, vary, omit from or substitute any of these Terms, by notice in writing to each Participant who holds LTIP Rights [or Shares pursuant to the LTIP], provided that such amendment may not materially reduce or otherwise prejudicially affect a Participant s rights in respect of LTIP Rights [or Shares], other than an amendment introduced primarily: for the purpose of complying with or conforming to present or future State or Commonwealth legislation; to correct any manifest error or mistake; or to take into consideration possible adverse tax implications arising from, amongst others, adverse rulings from the Commissioner of Taxation, changes to tax legislation (including an official announcement by the Commonwealth of Australia) and/or changes in the interpretation of tax legislation by a court or tribunal of competent jurisdiction. Qantas must provide written notification to a Participant who holds LTIP Rights after any amendment has been made to these Terms. 9.2 Board powers The Board has absolute and unfettered discretion in exercising any power or discretion concerning the LTIP and may: delegate to any person for the period and on the terms it decides the exercise of any of its powers or discretions under the LTIP; decide on appropriate procedures for administering the LTIP; resolve conclusively all questions of fact or interpretation concerning the LTIP and these Terms and any dispute of any kind that arises under the LTIP; subject to the ASX Listing Rules and clause 9.1, amend, add to or waive any provision of the LTIP (including this clause) and/or any term or condition (including a Condition or other restriction) relating to the LTIP Rights; LONG TERM INCENTIVE PLAN TERMS & CONDITIONS Page 5 of 7

6 (vi) determine to cease operation of the LTIP at any time; and act or refrain from acting at its discretion under these Terms or concerning the LTIP or the LTIP Rights held under the LTIP. 9.3 Notices A notice or other communication is validly given: by Qantas to a Participant, if delivered personally to the addressee or sent by prepaid post to his or her last known residential address, or sent to him or her by facsimile or at his or her place of work or posted on an electronic noticeboard maintained by Qantas and accessible by the Participant; and by a Participant to Qantas, if delivered or sent by prepaid post addressed to the Company Secretary at Qantas registered office. A notice or other communication sent: to Qantas must be actually received by Qantas by the date or within the period specified in these Terms in order to be effective; and by Qantas to a Participant will be treated as being received immediately following the time it was sent, or where it is sent by post it will be treated as received 48 hours after it was posted. 9.4 Terms of employment not affected These Terms do not form part of, and will not be incorporated into any contract of employment of a Participant and the fact that a Participant receives one invitation to participate in the LTIP does not entitle them to any future invitation. 9.5 Non-residents of Australia The Board may at any time, amend, add to, vary, omit from or substitute any of these Terms to ensure compliance with the requirements of, or impact of, any law or regulation in any jurisdiction outside of Australia. This clause applies notwithstanding anything in this LTIP. Any different Terms that may apply must be notified to each affected Participant in writing. For the purposes of clarification, any different Terms that are adopted under clause 9.5 may have an adverse impact upon the Participant. However, any different Terms that may apply must comply, to the extent legal and practicable, with the basic principles of the LTIP. 9.6 Miscellaneous A Participant does not have any rights under the LTIP to compensation or damages in consequence of the exercise by Qantas or the Board of any right, power or discretion. Except as otherwise expressly provided in these Terms, the Board has absolute and unfettered discretion to act or refrain from acting under or in connection with the LTIP and in the exercise of any power or discretion under these Terms. 9.7 Governing Law The LTIP is governed by the laws of New South Wales and the Commonwealth of Australia. LONG TERM INCENTIVE PLAN TERMS & CONDITIONS Page 6 of 7

7 10. Definitions and Interpretation In this LTIP: Board means the directors of Qantas, a committee of the Board or the Board s delegate; Group means Qantas, its subsidiaries and any other entity declared by the Board to be a member of the group for the purposes of the LTIP; LTIP Right means a right to be allocated a Share pursuant to the Terms of the LTIP; Qantas means Qantas Airways Limited ACN ; Share means a fully paid ordinary share in the capital of Qantas; Takeover Bid has the meaning given in section 9 of the Corporations Act; and Terms means these Terms and Conditions of the Qantas Airways Limited Long Term Incentive Plan. In these Terms, any reference to the ASX Listing Rules or the Corporations Act is a reference to the ASX Listing Rules or the Corporations Act 2001, (and to all regulations or instruments issued under them) in force at the time that an invitation or grant (as the case may be) is made under the LTIP unless expressed to the contrary in the Terms, determined otherwise by the Board or required at law. LONG TERM INCENTIVE PLAN TERMS & CONDITIONS Page 7 of 7

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