Attachment "C"

LAWYERS

LONG TERM INCENTIVE PLAN

PLAN RULES

CHALLENGER FINANCIAL SERVICES GROUP LIMITED

2 Park Street Sydney NSW 2000 Australia GPO Box 3810 Sydney NSW 2001 DX 10348 SSE Telephone + 61 2 9263 4000 Facsimile + 61 2 9263 4111 [email protected] www.gtlaw.com.au Liability limited by the Solicitors Scheme approved under the Professional Standards Act 1994 (NSW)

CONTENTS

SCHEDULE 2 - SHARE APPLICATION

SCHEDULE 3 - LOAN TERMS

RULES OF THE LONG TERM INCENTIVE PLAN OF CHALLENGER FINANCIAL SERVICES GROUP LIMITED

$1.$ INTRODUCTION

$1.1$ Name of Plan

The Plan constituted by these Rules is called the "Long Term Incentive Plan".

$1.2$ Object of the Plan

The object of the Plan is to facilitate the attraction and retention of those executive employees of the Company and other Group Companies who are expected to have a significant impact on the growth of shareholder value in the Company over the long term.

$1.3$ Commencement of Plan

The Plan will take effect on and from the Approval Date.

$2.$ INTERPRETATION

$2.1$ Definitions

In these Rules, unless the contrary intention appears:

Approval Date means 22 December 2003 provided resolution 7 is passed by the Unitholders at the meeting on that date.

Associate has the meaning given to it by sections 10 to 17 of the Corporations Act as if the reference to associate occurs in Chapter 6 of the Corporations Act.

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

Bonus Issue means a pro rata issue or distribution of securities or other property to Members in that capacity at no cost to those Members by way of a bonus issue or capitalisation of any account or by way of any other distribution in specie.

Business Day means a day (other than a Saturday, Sunday or public holiday) on which banks are open for general business in Sydney.

Calculation Date means, in respect of an Initial Participating Share, the second anniversary of the Reference Date for that Initial Participating Share.

Change of Control means a person and its Associates (other than CPH or its related bodies corporate) unconditionally acquires, or becomes entitled to, a relevant interest in more than 50% of the Company's Voting Shares.

Change of Control Date means the earlier of:

• the date on which a person and its Associates (other than CPH or its related $(i)$ bodies corporate) unconditionally acquires, or becomes entitled to, a relevant interest in more than 50% of the Company's Voting Shares; and
• the date on which a court approves a scheme of arrangement under which a $(ii)$ person and its Associates (other than CPH or its related bodies corporate) may unconditionally acquire, or become entitled to, a relevant interest in more than 50% of the Company's Voting Shares.

Company means Challenger Financial Services Group Limited ACN 106 842 371.

Corporations Act means the Corporations Act 2001 (Cth) and any regulations made under the Act.

CPH means Consolidated Press Holdings Limited ABN 65 008 394 509.

Custodian means the custodian nominated from time to time by the Company in accordance with clause 5 to hold the Participating Shares on behalf of the Participants in accordance with these Rules.

Deal means, in respect of any interest, sell, transfer, assign, declare oneself a trustee of or otherwise dispose (including by way of joint venture or grant) of that interest (or any interest in it or any part of it), or create or allow to exist any Security Interest over that interest (or any interest in it or any part of it).

Directors means the directors from time to time of the Company.

Disposal means sale (including by way of acceptance of a buy-back offer from the Company) or cancellation, and Dispose has a corresponding meaning.

Employee Share Scheme Buy-Back has the meaning given to it in the Corporations Act.

Executive means an executive or a proposed executive of a Group Company who is declared by the Directors to be an Executive for the purpose of the Plan and includes a director of a Group Company who is:

• employed in an executive capacity by a Group Company; and $(a)$
• similarly declared by the Directors to be an Executive for the purpose of the Plan. $(b)$

For the avoidance of doubt, a non-executive director of the Company cannot be an Executive.

Group Company means each of the Company, its subsidiaries (as defined in section 46 of the Corporations Act) and entities (as defined in section 9 of the Corporations Act) controlled by the Company or any of its subsidiaries.

Initial Participating Shares means those Participating Shares which have been both:

• issued for the benefit of Participants who were employed by a Group Company $(a)$ as at the Approval Date; and
• determined by the Directors to be "Initial Participating Shares", $(b)$

and were issued within five months of the Approval Date.

Issue Price means, in respect of a Participating Share:

• which has been issued under the Plan, the VWAP of the Shares over the five $(a)$ Trading Days up to and including the date of issue of that Participating Share; and
• which has been transferred under the Plan, the VWAP of the Shares over the five $(b)$ Trading Days up to and including the date of transfer.

Listing Rules means the listing rules of ASX which are applicable while the Company is admitted to the official list of ASX, each as amended or replaced from time to time, except to the extent of any express written waiver by ASX.

Loan means, in respect of a Participant, the loan or deemed loan from the Company pursuant to clause 6 enabling that Participant to pay for the Participating Shares issued or transferred to the Custodian for the benefit of the Participant.

Members means holders of Shares.

Net Proceeds means, in respect of a Disposal, the gross proceeds of sale less the selling expenses (if any) in connection with that Disposal.

Non-Cash Distributions means any pro rata distributions to Members by the Company that are not in cash or cash equivalent but excluding Rights Issues to subscribe for Shares and Bonus Issues.

Participant means an Executive who duly accepts a Share Offer.

Participating Shares means Shares issued or transferred under a Share Offer, and any Shares which are deemed to be Participating Shares under clauses 7.4 or 7.5.

Period means in respect of:

• any Initial Participating Share, each period commencing on the Calculation Date $(a)$ for that Share and ending on the first, second or third anniversaries of that date; and
• any Subsequent Participating Share, each period commencing on the Reference $(b)$ Date for that Share and ending on the second, third, fourth or fifth anniversaries of that date.

Plan means the Long Term Incentive Plan constituted by these Rules.

Post Termination Obligations means, in respect of a Participant, the obligations of the Participant under his or her employment contract with a Group Company which commence or continue from the termination of employment of that Participant.

Reference Date means, in respect of a Participating Share, the date of issue or transfer of the Participating Share to the Custodian or, in respect of an Initial Participating Share. such earlier date as determined by the Directors but being no earlier than 10 April 2003.

Reference Parcel means one Participating Share as varied, if at all, by clause 13.

Reference Price has the meaning given to it in clause 12.

Released means, in respect of any Participating Share, that Participating Share has been expressed to have been released under clause 8.1, 8.2, 9(b) or 15.

Restrained Activities means, in respect of a Participant, that Participant:

• $(a)$ carrying on or engaging in (within Australia) any business, activity or operation that is similar to or competitive with the business of that part of any Group Company in which the Participant worked, in any capacity or role in which the Participant could make use of any confidential information of any Group Company to its detriment; or
• $(b)$ soliciting any senior executive or managerial employee of a Group Company to terminate his or her employment with the Group Company.

Return has the meaning given to it in clause 12.

Rights Issue means the granting by the Company to Members in that capacity a pro rata right to acquire securities, whether or not that right is renounceable.

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

Share means a fully paid ordinary share issued in the capital of the Company.

Share Application means a share application in the form set out in schedule 2 or in such other form approved by the Directors.

Share Offer means an offer made by the Company to an Executive for that Executive to subscribe for or purchase Shares in accordance with these Rules, in the form set out in schedule 1 or in such other form containing the information set out in clause 4.1 (and such other additional information as the Directors may determine from time to time) and approved by the Directors.

Subsequent Participating Shares means the Participating Shares other than the Initial Participating Shares.

Target Return means, in respect of:

• any Initial Participating Share, 15% per annum compounded annually from the $(a)$ Calculation Date at the Reference Price; and
• any Subsequent Participating Share, 15% per annum compounded annually from (b) the Reference Date at the Reference Price.

Trading Day means a day on which the stock market conducted by ASX is open for general business.

Unitholders means the holders of units issued in Challenger Financial Services Group ARSN 091 545 185.

Unreleased means, in respect of any Participating Share, that Participating Share has not been Released.

Voting Share has the meaning given to it in section 9 of the Corporations Act.

VWAP means, in respect of any security or other financial product:

• for the definition of "Issue Price", the volume weighted average sale price of that $(a)$ security or financial product sold on ASX (including trading on a deferred settlement basis); and
• for all other purposes, the volume weighted average sale price of that security or $(b)$ financial product sold on ASX (including trading on a deferred settlement basis) excluding any of those securities or financial products which are sold other than in the ordinary course of trading on ASX (including any transaction referred to in the ASX Business Rules as special, crossings prior to the commencement of normal trading, crossings during the closing phase and the after hours adjust phase, any overseas trades or trades pursuant to the exercise of options over shares and any overnight crossings).

$2.2$ General

In these Rules, the following rules of interpretation apply unless the contrary intention appears.

• Headings are for convenience only and do not affect the interpretation these $(a)$ Rules.
• The singular includes the plural and vice versa. $(b)$
• Words that are gender neutral or gender specific include each gender. $(c)$
• Where a word or phrase is given a particular meaning, other parts of speech and $(d)$ grammatical forms of that word or phrase have corresponding meanings.
• The words 'such as', 'including', 'particularly' and similar expressions are not used $(e)$ as nor are intended to be interpreted as words of limitation.
• A reference to: $(f)$
• a person includes a natural person, partnership, joint venture, government $(i)$ agency, association, corporation or other body corporate;
• clauses and schedules are to clauses of and schedules to these Rules; $(ii)$
• a thing (including a chose in action or other right) includes a part of that $(iii)$ thing; and
• a document includes all amendments, supplements or novations to that $(iv)$ document.
• When the day on which something must be done is not a Business Day, that thing $(g)$ must be done on the following Business Day.

References to Participating Shares $2.3$

A reference in these Rules to a "Participant's Participating Shares" or "Participating Shares of a Participant" or similar references are references to those Participating Shares which are held by the Custodian for the benefit of that Participant under these Rules.

ELIGIBILITY AND PARTICIPATION $3.$

Determination by Directors $3.1$

Only Executives may participate in the Plan and the Directors may, in their absolute discretion, determine:

• the Executives to whom a Share Offer will be made; and $(a)$
• the number of Shares to be offered under each Share Offer. $(b)$

Limit on Participating Shares $3.2$

The number of Participating Shares (excluding all deemed Participating Shares under clauses 7.4 or 7.5) that may be issued or transferred to the Custodian for the benefit of Participants under the Plan plus the 40,000,000 Shares to be issued for the benefit of the chief executive officer of the Company must not exceed 10% of the Shares calculated at the time of issue or transfer.

$\overline{\mathbf{4}}$ . PARTICIPATING SHARES

$4.1$ Share Offer

Each Share Offer made to an Executive must include:

• $(a)$ the name and address of the Executive;
• the number of Shares offered; $(b)$
• the Issue Price, which will not be a specific amount but as determined in $(c)$ accordance with the definition of Issue Price;
• the loan funds available to fund the payment of the Issue Price multiplied by the $(d)$ number of Shares offered;
• the closing date for acceptance of the offer (which must not be less than 5 $(e)$ Business Days nor more than 20 Business Days from the date of the Share Offer); and

$(f)$ a form of Share Application.

Acceptance of Share Offer $4.2$

Following receipt by an Executive of a Share Offer, application for all but not some of the Shares specified in the Share Offer may be made by the Executive delivering to the person specified in the Share Offer a Share Application (in the form attached to the Share Offer) duly signed and completed, on or before the closing date specified in the Share Offer.

Acceptance of Application $4.3$

• The Directors are entitled, in their absolute discretion, to: $(a)$
• require from the relevant Executive any information that they regard as $(i)$ relevant concerning the Executive and the Executive's entitlement to lodge a Share Application; and
• reject any Share Application, without assigning any reason. $(ii)$
• Following the acceptance by the Directors of a duly signed and completed Share $(b)$ Application for Shares pursuant to clause 4.2, the Company must, on a date nominated by the Directors:
• cause the Shares the subject of the Share Application to be issued or $(i)$ transferred (as applicable) to the Custodian to be held for the benefit of the relevant Participant in accordance with these Rules;
• issue a share certificate or holding statement (in such form as the $(ii)$ Directors may determine) in the name of the Custodian to be held by the Custodian in accordance with schedule 3; and
• notify the Executive that the Share Application has been accepted and $(iii)$ that a share certificate or holding statement has been issued in the name of the Custodian.
• Subject to paragraph (d), the Company may only issue or cause the transfer of $(c)$ Participating Shares to the Custodian under these Rules on any of 1 March, 1

June, 1 September or 1 December in any year, or such other date as determined by the Directors.

The Company may not issue or cause the transfer of Participating Shares to the $(d)$ Custodian under these Rules, if to do so would result in those Participating Shares being issued or transferred during or immediately after a trading halt or suspension of trading of the Shares on ASX which commenced at least 5 Trading Days before the proposed date of issue or transfer.

Consequences of Acceptance 4.4

By accepting a Share Offer, a Participant:

• agrees to be bound by these Rules and the constitution of the Company, and to $(a)$ the extent that there is inconsistency between them then until the relevant Participating Shares have been Released and the portion of the Loan relating to those Participating Shares is repaid, these Rules prevail in relation to them;
• agrees to be bound by the terms of the Share Offer and related Share Application; $(b)$ and
• irrevocably appoints each of the Directors as his or her attorney to exercise any $(c)$ rights, or perform any obligations, of the Participant under these Rules.

CUSTODIAN 5.

• Appointment of the Custodian $5.1$
• The Company shall appoint, from time to time, a person willing to act as the $(a)$ Custodian to hold the Participating Shares for the benefit of the Participants in accordance with these Rules.
• Subject to any agreement between the Company and the Custodian, the Company $(b)$ may replace the Custodian with another Custodian from time to time.
• The Company must notify each Participant of any change of the Custodian under $(c)$ paragraph (b) within 10 Business Days of the change.

Each Participant must do all things necessary or requested by the Directors to $(d)$ assist the Company in effecting the change of the Custodian under paragraph (b).

$5.2$ Dealings with the Custodian

• No Participant may give directions to the Custodian in respect of that $(a)$ Participant's Participating Shares.
• Each Participant irrevocably authorises: $(b)$
• the Custodian to do all things contemplated by these Rules in respect of $(i)$ that Participant's Participating Shares at the direction of the Company; and
• the Company to give directions to the Custodian in respect of matters $(ii)$ under paragraph (i).
• The Company may only give a direction to the Custodian which it is permitted to $(c)$ give in accordance with these Rules.
• Unless otherwise directed by the Company, the Custodian must disregard any $(d)$ direction given by a Participant.
• The Directors may, from time to time, impose such further restrictions on a $(e)$ Participant's dealings with the Custodian.

No voting on Participating Shares $5.3$

Unless and until Participating Shares of a Participant are Released and the portion of the Loan relating to those Participating Shares is repaid, the Custodian must not vote, or permit any other person to vote, in respect of those Participating Shares.

$6.$ FUNDING

The Issue Price of each Participating Share may be satisfied by way of a loan $(a)$ made or deemed to be made by the Company to the relevant Participant on the terms and conditions set out in schedule 3.

The Company's provision of Loans to Participants pursuant to paragraph (a) must $(b)$ be in accordance with the requirements of Part 2J.3 of the Corporations Act (to the extent those provisions are applicable).

LIMITATIONS ON PARTICIPATING SHARES $7₁$

Restrictions on Dealing $7.1$

Unless and until Participating Shares of a Participant are Released and the portion of the Loan relating to those Participating Shares is repaid, the Participant:

• must not Deal with his or her interest in any of those Participating Shares, other $(a)$ than to sell those Participating Shares in accordance with clause 3(a) of schedule $3;$
• must assist the Company, if requested, in placing a holding lock on those $(b)$ Participating Shares; and
• must not vote, or permit any other person to vote, in respect of those Participating $(c)$ Shares.

$7.2$ Dividends

Unless and until Participating Shares of a Participant are Released and the portion of the Loan relating to those Participating Shares is repaid, all cash dividends payable in respect of Participating Shares must be paid to the Company as interest on Loans made on the terms and conditions in schedule 3.

Non-Cash Distributions $7.3$

Unless and until Participating Shares of a Participant are Released and the portion of the Loan relating to those Participating Shares is repaid:

the Participant and the Company must take such steps as may be required to $(a)$ ensure that the Participant's entitlement to the Non-Cash Distributions in respect of such Participating Shares is transferred to the Custodian to be held and Dealt with in accordance with these Rules;

• the Company must direct the Custodian to sell on market at the best price $(b)$ reasonably obtainable any Non-Cash Distributions made by the Company in respect of those Participating Shares and apply approximately (as determined by the Company having regard to fractional amounts) 50 percent of the Net Proceeds to repaying the Loan and pay the balance to the Participant; and
• any such sale must take place within 7 days of the date of the Non-Cash $(c)$ Distribution or such other period as determined by the Directors (where a sale is not practicable within that period).

Bonus Issues $7.4$

• Unless and until Participating Shares of a Participant are Released and the $(a)$ portion of the Loan relating to those Participating Shares is repaid, all Shares issued in respect of those Participating Shares by way of a Bonus Issue will be deemed to be Participating Shares of the Participant.
• All such Shares referred to in paragraph (a) which are issued by way of Bonus $(b)$ Issue in respect of:
• Released Participating Shares, will be deemed to be Released $(i)$ Participating Shares; and
• Unreleased Participating Shares, will be deemed to be Unreleased $(ii)$ Participating Shares.
• The Participant and the Company must take such steps as may be required to $(c)$ ensure that the Participant's entitlement to the Shares issued by way of Bonus Issue in respect of the Participant's Participating Shares is transferred to the Custodian to be held and Dealt with in accordance with these Rules.

$7.5$ Rights Issues

• Unless and until Participating Shares of a Participant are Released and the $(a)$ portion of the Loan relating to those Participating Shares is repaid, paragraphs (b) to (f) will apply in respect of Rights Issues to subscribe for Shares.

• If a Participant wishes to exercise all rights under a Rights Issue in respect of the $(b)$ Participant's Released Participating Shares, the Participant must:

• notify the Company in writing within the two days of the earlier of the $(i)$ commencement of trading of the rights and the date on which the Participant becomes entitled to the rights, that he or she intends to exercise all such rights; and

• provide the Company with sufficient immediately available funds for the $(ii)$ total exercise price under those rights by that date.
• If a Participant complies with the requirements under paragraph (b), the $(c)$ Company must direct the Custodian to exercise the rights in respect of those Released Participating Shares and on issue of those Shares, the Custodian must transfer those Shares, as directed by the Company, to the Participant or the Participant's nominee.
• If a Participant does not comply with the requirements under paragraph (b) or the $(d)$ rights are in respect of Unreleased Participating Shares, the Company must direct the Custodian, if the rights under the Rights Issue are renounceable, to sell on market at the best price reasonably obtainable, a sufficient number of rights in respect of the Participant's Participating Shares to fund:
• the exercise of the remaining rights in respect of the Participant's $(i)$ Participating Shares; and
• a payment to the Participant equal to approximately (as determined by the $(ii)$ Company having regard to fractional amounts) 50 percent of the Net Proceeds of the sale of the rights,

and the Company must direct the Custodian to exercise those remaining rights and pay to the Participant the amount referred to in sub-paragraph (ii).

• All Shares acquired under paragraph (c) will be for the account of the relevant $(e)$ Participant and will not be Participating Shares.
• All Shares acquired under paragraph (d) through the exercise of rights: $(f)$
• in respect of Released Participating Shares, will be deemed to be $(i)$ Released Participating Shares of the Participant; and

in respect of Unreleased Participating Shares, will be deemed to be $(ii)$ Unreleased Participating Shares.

$7.6$ Deemed Participating Shares

All Shares which are deemed to be Participating Shares under clause 7.4 or 7.5 are to be treated as if they were issued on the date of issue, or transferred on the date of transfer, of the Participating Shares in respect of which those Shares were issued and subject to the same restrictions and the same Loan as those Participating Shares are subject to as at the date the Shares are issued or transferred to the Custodian on behalf of the relevant Participant under clause 7.4 or 7.5 (as the case may be.

$7.7$ Equal ranking

Each Participating Share ranks equally in all respects with all other Shares except, in respect of shares deemed to be Participating Shares under clause 7.4 or 7.5, to the extent otherwise specified under the terms of issue of those Shares pursuant to the relevant Rights Issue or Bonus Issue.

$7.8$ Quotation of Participating Shares on ASX

• Unless and until the Participating Shares are Released, the Participating Shares $(a)$ will not be quoted under the ASX Listing Rules unless the Directors otherwise determine.
• The Company will apply to the ASX for, and will use its best endeavours to $(b)$ obtain, quotation under the ASX Listing Rules of all Participating Shares as they are Released.

7.9 Following repayment of Loan

For the avoidance of doubt, once a Participant's Participating Share has been Released and the portion of the Loan relating to that Participating Share has been repaid, that Participant will no longer be bound by these Rules in respect of that Participating Share.

No impact on Reference Parcel $7.10$

This clause 7 does not affect the operation of clause 13, nor does clause 13 affect the operation of this clause 7.

8. MEETING TARGET RETURN

$8.1$ Initial Participating Shares

• 20% of the Initial Participating Shares of each Participant will be released with $(a)$ effect from the Calculation Date for the relevant Shares.
• $(b)$ In respect of the balance of the Initial Participating Shares of the Participant, if the Return for a Period equals or exceeds the Target Return the following proportion of the relevant Participating Shares will be released with effect from the end of the relevant Period:
• for the Period ending on the first anniversary of the Calculation Date for $(i)$ the relevant Shares, 20%;
• for the Period ending on the second anniversary of the Calculation Date $(ii)$ for the relevant Shares, 20%; and
• $(iii)$ for the Period ending on the third anniversary of the Calculation Date for the relevant Shares, 40%.

$8.2$ Subsequent Participating Shares

In respect of Subsequent Participating Shares of each Participant, if the Return for a Period equals or exceeds the Target Return the following proportion of the relevant Subsequent Participating Shares will be released with effect from the end of the relevant Period:

• $(a)$ for the Period ending on the second anniversary of the Reference Date for the relevant Shares, 20%;
• $(b)$ for the Period ending on the third anniversary of the Reference Date for the relevant Shares, 20%;
• $(c)$ for the Period ending on the fourth anniversary of the Reference Date for the relevant Shares, 20%; and
• $(d)$ for the Period ending on the fifth anniversary of the Reference Date for the relevant Shares, 40%.

FAILING TO MEET TARGET RETURN 9.

• If the Return for a Period does not equal or exceed the Target Return for that $(a)$ Period, the relevant proportion of Participating Shares of a Participant that could have been Released in respect of that Period will not be Released at the end of that Period.
• If the Return for any subsequent Period equals or exceeds the Target Return for $(b)$ that Period, then subject to the relevant Participant being entitled to the Participating Shares, the Participating Shares that could have, but (because of the Return for an earlier Period failing to equal or exceed the Target Return for that Period) have not, previously been Released will be released with effect from the end of that subsequent Period.

NOTIFICATIONS $10.$

Notification of Return $10.1$

Within seven days after the end of each Period, the Company will confirm to each relevant Participant whether or not the Return for that Period equals or exceeds the Target Return. A Participant may not Deal with his or her Participating Shares which could be Released with effect from the end of the Period unless and until the Company has confirmed that the Return for the Period equals or exceeds the Target Return and that the relevant Participating Shares have been Released.

Notification of Corporate Events $10.2$

The Company must notify each Participant of a Non-Cash Distribution, Bonus Issue or Rights Issue within 5 Business Days of the Company notifying its Members of that Non-Cash Distribution, Bonus Issue or Rights Issue (as the case may be).

Notification regarding Participating Shares $10.3$

On written request from a Participant, the Company must notify that Participant within 20 Business Days of receipt of that request of:

• the number of Participating Shares beneficially held by that Participant; $(a)$

• whether those Participating Shares are Released or Unreleased; $(b)$

• the Issue Price of those Participating Shares; $(c)$

• the outstanding amount of the Loan to that Participant; $(d)$
• the cash dividends paid on those Participating Shares and the franking credits (if $(e)$ any) in respect of those dividends;
• the date of acquisition, and the purchase or subscription price, of any deemed $(f)$ Participating Shares; and
• the date of Disposal, and the Disposal price, of any rights sold by the Custodian $(g)$ under clause 7.5.

UNRELEASED PARTICIPATING SHARES $11.$

• If a Participant's Participating Shares are not Released after the expiry of: $(a)$
• in the case of Initial Participating Shares, the Period ending on the third $(i)$ anniversary of the Calculation Date in respect of those Participating Shares; and
• in all other cases, the Period ending on the fifth anniversary of the $(ii)$ Reference Date in respect of those Participating Shares,

the Participant will not be entitled to any Unreleased Participating Shares and the Company may direct the Custodian to Dispose of those Participating Shares either on market at the best price reasonably obtainable or, at the Company's discretion, if the market price is less than the Issue Price of those Participating Shares, under an Employee Share Scheme Buy-Back, or cancellation, by the Company at the Issue Price of those Participating Shares.

Where a Participant ceases to be employed in circumstances referred to in clause $(b)$ 14.1, or the Participant ceases to be entitled to any Unreleased Participating Shares under clause 14.2, the Company may direct the Custodian, at any time after the termination of employment or the event giving rise to that cessation, to Dispose of that Participant's Unreleased Participating Shares either on market at the best price reasonably obtainable or, at the Company's discretion, if the market price is less than the Issue Price of those Participating Shares, under an Employee Share Scheme Buy-Back, or cancellation, by the Company at the Issue Price of those Participating Shares.

The Net Proceeds of any Disposal of Unreleased Participating Shares must be $(c)$ applied in accordance with clause 3 of schedule 3.

RETURN $12.$

The formula for calculating the Return for any Period is as follows:

Price + Distributions – Reference Price $x = 100\%$ Return Reference Price

where:

Price means the VWAP of the Reference Parcel over the 20 Trading Days on the ASX immediately preceding the last day of the relevant Period;

Distributions means the amount or value (as appropriate) of pro-rata distributions (whether by way of dividend or return of capital and whether paid in cash or in the form of an in specie distribution of property but excluding franking credits) in respect of a Reference Parcel from time to time during the relevant Period; and

Reference Price means in respect of:

• an Initial Participating Share, 53c; and $(a)$
• a Subsequent Participating Share, its Issue Price. $(b)$

VARIATION OF REFERENCE PARCEL $13.$

Automatic Variation $13.1$

If an event specified in clauses 13.2 to 13.4 occurs in respect of any property comprising the Reference Parcel before the day the relevant Participating Shares are Released, the property which constitutes the Reference Parcel is automatically and immediately varied in accordance with this clause 13.

Variation for Reconstructions $13.2$

If the Shares are divided into a greater number of securities or consolidated into a lesser number of securities or are subject to a similar reconstruction or are changed in any way:

• the description of the Participating Shares becomes that of the securities $(a)$ substituted by reason of the change or reconstruction; and
• the Reference Parcel becomes the number of the new securities issued in $(b)$ substitution for or arising from the Participating Shares which constituted the Reference Parcel before the change or reconstruction.

$13.3$ Variation for Bonus Issues

If there is a Bonus Issue, the Reference Parcel includes the securities or property issued or distributed in respect of the Participating Shares which form part of the Reference Parcel which participate in the issue or distribution.

Variation for Rights Issues $13.4$

• If there is a Rights Issue, the Reference Parcel includes the additional number of $(a)$ Shares given by the formula set out below, unless the Company determines that it is impossible for the Company reasonably to determine whether the right under a Rights Issue has value or that the right under the Rights Issue has no value, in which case, the property that constitutes a Reference Parcel is unchanged.
• The formula referred to above is as follows: $(b)$

$$
C = \frac{B \times N \times R}{D \times X}
$$

where:

• means the number of additional Participating Shares in the Reference $\mathbf c$ Parcel after the Rights Issue;

• means the number of Participating Shares constituting the Reference B. Parcel immediately before the Rights Issue;

• N means the numerator of the Rights Issue;

• means the value of a right under the Rights Issue being calculated as the $\overline{\mathsf{R}}$ VWAP of those rights over the period during which they may be traded;
• means the denominator of the Rights Issue; and D
• means the VWAP of the Shares ex rights over the period during which $\mathsf{x}$ the rights may be traded or, if no such price is available, such other amount as is determined by the Directors.

For the avoidance of doubt and by way of example, a 2:7 Rights Issue has a numerator of 2 and a denominator of 7.

$13.5$ Discretion of Directors

Where the Directors determine that any of the provisions of clauses 13.2 to 13.4 are not appropriate in any particular circumstance or that an event which is not dealt with by clauses 13.2 to 13.4 should have been dealt with, they may make any alterations to the effect of the relevant provision that they consider to be appropriate.

13.6 Calculations and Shares

In clauses 7.3, 7.5, 12 and 13:

• $(a)$ subject to paragraph (b), all calculations will be rounded to four decimal places;
• no rounding of numbers will occur until the time at which the calculation is to be $(b)$ made and at that time the Participating Shares of all Participants will be aggregated and that aggregate will be rounded so that all money amounts are rounded down to the nearest whole cent and all numbers of Participating Shares are rounded down to the nearest whole number;
• where, following an application of this clause 13, the Reference Parcel comprises $(c)$ property of different kinds, each of those kinds of property is to be treated as the Participating Shares and as if it were a Reference Parcel in its own right, and each adjustment required by this clause 13 is to be made to each kind of property separately; and

in the event of a dispute between the Company or the Directors, and the $(d)$ Participant, the matter in dispute shall be determined by the Directors.

TERMINATION OF EMPLOYMENT 14.

Resignation, gross misconduct or poor performance $14.1$

• If a Participant ceases to be employed by a Group Company as a consequence of: $(a)$
• $(i)$ resignation;
• gross misconduct; or $(ii)$
• poor performance (as defined below), $(iii)$

that Participant will not be entitled to any Participating Shares that have not been Released to him or her as at the date of termination of employment.

• Where paragraph (a) applies to a Participant, all of that Participant's Released $(b)$ Participating Shares must be sold (and the related portion of the Loan repaid) within seven Business Days of termination of employment, failing which, the Company may direct the Custodian to sell those Participating Shares either on market at the best price reasonably obtainable or, at the Company's discretion, if the market price is less than the Issue Price of those Participating Shares, under an Employee Share Scheme Buy-Back, or cancellation, by the Company at the Issue Price of those Participating Shares and apply the Net Proceeds of sale in accordance with clause 3 of schedule 3.
• For the purposes of paragraph (a), where a Participant resigns, the date of $(c)$ termination of employment shall be the later of the actual date on which the employment terminates and the date on which the employment would have terminated had the employer allowed the Participant to work out the required notice period instead of paying the Participant in lieu of working to the end of the notice period.

• poor performance means, in respect of a Participant, performance of the $(d)$ Participant:

• which the Directors or the chief executive officer of the Company, when $(i)$ acting in good faith, consider to be poor having regard to the performance reasonably expected of the person in the Participant's role and of a person in a comparable role within the industry; and

• in respect of which the Participant has been advised at least twice (in $(ii)$ writing) over a reasonable prior period that his or her performance is poor and that performance has not improved to an acceptable standard.

Other Termination $14.2$

• If a Participant ceases to be employed by a Group Company as a consequence of: $(a)$
• $(i)$ death;
• genuine redundancy; $(ii)$
• incapacity or total and permanent disability; $(iii)$
• termination by his or her employer other than for gross misconduct or $(iv)$ poor performance (within the meaning of clause 14.1); or
• expiry of a fixed term contract, $(v)$

that Participant will (subject to paragraph (b) and (c)) be entitled to retain all Unreleased Participating Shares (including any Unreleased Participating Shares from a prior Period).

• Where paragraph (a) applies to a Participant, that Participant's relevant $(b)$ proportion of Unreleased Participating Shares for each Period ending after termination of employment will be Released at the end of the relevant Period as long as:
• the Target Return for that Period has been achieved; $(i)$

• the Participant (or the Participant's estate) has not commenced any legal $(ii)$ action against any Group Company in his or her capacity as a former employee or officer of any Group Company at any time following the termination of employment; and

• the Participant has not breached his or her Post Termination Obligations. $(iii)$

• If a Participant does not comply with paragraphs (b)(i) and b(iii), the Participant $(c)$ will immediately cease to be entitled to all of his or her Unreleased Participating Shares.

Continuance of Loan $14.3$

The cessation of the employment of a Participant by a Group Company will not affect the terms of the Loan made to that Participant.

CHANGE OF CONTROL $15.$

Where a Change of Control occurs, all Unreleased Participating Shares (other than those to which a Participant has ceased to be entitled) will be released with effect from the Change of Control Date.

MANAGEMENT OF PLAN 16.

Administration $16.1$

The Plan will be administered by the Directors who will have power to:

• determine appropriate procedures and make regulations and guidelines for $(a)$ administration of the Plan consistent with these Rules;
• resolve conclusively all questions of fact or interpretation in connection with the $(b)$ Plan and these Rules;
• terminate or suspend the operation of the Plan at any time so long as that $(c)$ termination or suspension will not materially and adversely affect the rights of Participants holding Participating Shares at that time;
• delegate such functions and powers as they may consider appropriate for $(d)$ administration of the Plan to a committee or any person or persons capable of performing those functions and exercising those powers; and
• take and rely upon independent professional expert advice in or in relation to, the $(e)$ exercise of any of their powers or discretions under these Rules.

Directors to have Discretion $16.2$

Where these Rules provide for a determination, decision or approval of the Directors, such determination, decision or approval may be made or given by the Directors in their absolute discretion.

Powers to be exercised by the Directors 16.3

Any power or discretion which is conferred on the Directors by these Rules may be exercised by the Directors in the interests or for the benefit of the Company.

Variation of Plan 16.4

The Directors may waive or vary the terms of the Plan and these Rules from time to time for all or some Participants or future Participants so long as any such variation does not materially and adversely affect existing issues of Participating Shares.

Expenses of Plan 16.5

The costs and expenses of establishing, managing and administering the Plan will be borne by the Company.

Compliance with Law 16.6

• Despite anything in these Rules, the Directors and the Company are not obliged $(a)$ to do anything or refrain from doing anything under these Rules to the extent that to do so would cause any Director or the Company to contravene any applicable law (including the Corporations Act) or the Listing Rules.
• To the extent that approval by Members would be required to avoid a $(b)$ contravention under paragraph (a) that would be caused by the Release of any Participating Shares, the Company will seek such approval from the Members at the earliest practicable opportunity.

Buy-Back 16.7

The Company may buy back any Participating Shares (whether or not Released and whether through an Employee Share Scheme Buy-Back or other buy-back). Where the buy back is of Released Participating Shares it can only take place with the agreement of the Participant in accordance with any applicable laws and the Listing Rules. However, a Participant is not permitted to sell any Unreleased Participating Shares in any on-market buy back.

16.8 Governing Law

These Rules will be governed by and construed in accordance with the law for the time being in force in the State of New South Wales. Each Participant shall, by virtue of agreeing to become a Participant, be deemed to have submitted to the non-exclusive jurisdiction of the Courts exercising jurisdiction in New South Wales.

Rights of Participants 16.9

These Rules:

• do not confer on any Executive the right to be offered any Shares; $(a)$
• do not confer on any Participant the right to continue as an employee of any $(b)$ Group Company; and
• do not affect the terms of any Participant's employment. $(c)$

SCHEDULE 1

SHARE OFFER

[Name of Executive] TO: $[Address]$

Challenger Financial Services Group Limited (Company) is pleased to invite you to participate in the Long Term Incentive Plan subject to the Rules for the Plan a copy of which is attached and on the following basis:

• Total number of Shares offered: []. $\overline{1}$ .
• Issue Price per Share offered will be the VWAP of an issued Share over the five $2.$ Business Days up to and including the date that the Company issues or transfers the Shares under this Share Offer following receipt of your Share Application and its acceptance.
• Total price payable is an amount equal to the total number of Shares offered 3. multiplied by the Issue Price per Share.
• Maximum Loan available is the same amount as the amount under paragraph 3. $\overline{4}$ .
• This Share Offer may only be accepted on the terms of the attached Share $5₁$ Application.
• [The Shares offered to you will be Initial Participating Shares and the 6. Reference Date for those Shares is [insert date].]

Capitalised terms have the meaning given to them in the attached Rules unless the context otherwise requires.

We also attach a copy of the constitution of the Company.

You may accept this Share Offer for all but not some of the Shares offered to you.

This Share Offer will remain open for acceptance for [1] days from the date of this letter. Please ensure your Share Application is signed and delivered to [insert contact person] at the registered office of the Company before 5 pm on [ 1.

By order of the Board

. . . . . . . . . . . . . . . . . . . . Secretary

Dated:

SCHEDULE 2

SHARE APPLICATION

Challenger Financial Services Group Limited (Company) TO: $[Address]$

AND: [Custodian name] $[Address]$

I refer to the your recent Share Offer to me under the Company's Long Term Incentive Plan (Plan).

I accept the Share Offer and apply in respect of all of the Shares under that offer.

I acknowledge that I have read a copy of the rules for the Plan (Rules) and acknowledge that by accepting the Share Offer and subject to my Share Application being accepted:

• the Shares will be held for my benefit by the Custodian in accordance with the $(a)$ Rules, and further acknowledge that if those Shares are to be transferred to me, I agree to become a member of the Company and to be bound by the constitution of the Company;
• I agree to be bound by the Rules; $(b)$
• I irrevocably appoint each of the Directors as my attorney to exercise any of my $(c)$ rights, or perform any of my obligations, under the Rules;
• I irrevocably authorise the Custodian to do all things contemplated by the Rules $(d)$ in respect of the Shares issued or transferred to the Custodian for my benefit under the Plan;
• I irrevocably authorise the Company to direct the Custodian to do all things $(e)$ contemplated by the Rules in respect of the Shares issued or transferred to the Custodian for my benefit under the Plan; and
• I agree to borrow from the Company all of the funds to acquire those Shares in $(f)$ accordance with a loan on the terms and conditions set out in Schedule 3 to the Rules.

Capitalised terms have the meaning given to them in the Rules unless the context otherwise requires.

Executed as a deed.

. . . . . . . . . . . . . . . . . . . .

[Name of Executive] Dated:

$\sim$

SCHEDUIF3

LOAN TERMS

$1₁$ LOAN

The Company will lend to each Participant and the Participant will borrow from the Company an amount equal to:

• the total Issue Price for the Participant's Participating Shares for the purpose only $(a)$ of satisfying the Participant's obligation to pay the Issue Price for each Participating Share; and
• the amount of any stamp duty payable on any transaction or dealing, pursuant to $(b)$ the Rules, with respect to the Custodian's acquisition of the Participant's Participating Shares, for the purpose only of paying that stamp duty.

$2.$ INTEREST

• The Participant must pay interest on the Loan from time to time in amounts equal $(a)$ to any cash dividends declared and paid by the Company to the Custodian in respect of the Participant's Participating Shares.
• The Company must direct the Custodian to appropriate each such dividend $(b)$ payment received before the Loan is completely repaid and apply it as payment of interest on the Loan.

3. SALE OF PARTICIPATING SHARES

• A Participant may, before the repayment date of the Loan, direct the Company to $(a)$ direct the Custodian to sell some or all of the Participant's Participating Shares and repay an equivalent proportion of the Loan so long as:
• $(i)$ those Participating Shares have been Released;

• where applicable, the Company has notified the Participant in writing in $(ii)$ accordance with clause 10 of the Rules that those Participating Shares have been Released; and

• the sale of the Participating Shares is made in accordance with the $(iii)$ Company's share trading policy.

• If a Participant has not directed the Company to direct the Custodian to sell a $(b)$ Released Participating Share in accordance with paragraph (a) before the repayment date of the relevant portion of the Loan, the Company must direct the Custodian, as soon as practicable, to Dispose of that Participating Share either on market at the best price reasonably obtainable or, at the Company's discretion, if the market price is less than the Issue Price of that Participating Share, under an Employee Share Scheme Buy-Back, or cancellation, by the Company at the Issue Price of that Participating Share.
• If the Custodian Disposes of a Participating Share of the Participant (whether $(c)$ under paragraphs (a) or (b) or under any provision of the Rules) then:
• the Company must direct the Custodian to apply the Net Proceeds of the $(i)$ Disposal of that Participating Share to repay that portion of the Loan relating to that Participating Share;
• where at the time of Disposal, the Participating Share: $(ii)$
  • has been Released, the Participant will be entitled to the balance A. (if any) of the Net Proceeds of the Disposal; or
  • has not been Released, the Company will be entitled to the B. balance (if any) of the Net Proceeds of the Disposal,

the Company must direct the Custodian to pay such balance (if any) accordingly within 5 Business Days of receipt of those funds by the Custodian; and

• where at the time of Disposal, the Net Proceeds of the Disposal are $(iii)$ insufficient to repay the whole of that portion of the Loan relating to that Participating Share, clause 6 of this Schedule will apply to that portion of the Loan.
• Neither the Custodian nor the Company will be liable to the Participant in respect $(d)$ of any reasonable delay in the Company or the Custodian giving effect to any direction given by the Participant.

REPAYMENT DATE $\overline{4}$ .

• The Participant must repay that portion of the Loan relating to a Participating $(a)$ Share on the earliest of:
• the sixth anniversary of the Reference Date for that Participating Share; $(i)$
• the Disposal of that Participating Share; $(ii)$
• the date which is 30 days after the date on which the Company notifies $(iii)$ the Participant that he or she has breached the Rules (including any of the terms and conditions of this Schedule) and that he or she must repay that portion of the Loan; and
• the date specified for repayment under clauses 4(b) and (c) of this $(iv)$ Schedule.
• Following the termination of the Participant's employment, the Participant must $(b)$ repay that portion of the Loan relating to a Participating Share on the earlier of:
• the date which is 30 days after the fifth anniversary of the Reference Date $(i)$ for that Participating Share; and

• the date which is 30 days after the occurrence of any of the following: $(ii)$

  • the Participant ceases to be employed by a Group Company for A. any reason set out in clause 14.1(a) of the Rules;
  • the Participant commences any legal action against any Group $B₁$ Company in his or her capacity as a former employee or officer of any Group Company;
  • the Participant breaches any Post Termination Obligations; $C$ .
  • the Participant engages in any Restrained Activities; D.
  • the Participant becomes bankrupt or makes any arrangement or Ε. composition with his or her creditors generally; or

• any execution or other process of any court or authority is issued $F.$ against or levied on the Participant's interest in the Participant's Participating Shares.

• If the Participant dies, that portion of the Loan relating to the Participant's $(c)$ Participating Share which, at the date of death, is:
• a Released Participating Share shall be repaid no later than 180 days after $(i)$ the date of death; and
• an Unreleased Participating Share shall be repaid no later than 30 days $(ii)$ after the earlier of the date on which that Participating Share is Released and the date on which the Participant or the Participant's estate ceases to be entitled to that Participating Share.

5. DEFAULT

If the Participant defaults in any obligation to make repayment of the Loan or the Participant (or his or her estate) ceases to be entitled to a Participating Share, the Participant irrevocably acknowledges that:

• the Company is authorised to instruct the Custodian to Dispose of that $(a)$ Participating Share on behalf of the Participant by any means and at the best price reasonably obtainable; and
• the Net Proceeds of the Disposal under paragraph (a) must be applied in $(b)$ accordance with clause 3(c) of this Schedule.

NO PERSONAL RECOURSE 6.

If a portion of the Loan has become repayable under clause 3 or 4 of this Schedule and notwithstanding a failure by the Participant to make full repayment, the Company acknowledges that:

• it will only have recourse to the Net Proceeds of sale of the Participating Shares $(a)$ for recovery of the outstanding balance of that portion of the Loan;
• it will not seek repayment by the Participant for any part of that portion of the $(b)$ Loan in excess of the Net Proceeds referred to in paragraph (a); and

if, after application of the Net Proceeds referred to in paragraph (a), that portion $(c)$ of the Loan has not been repaid fully, that portion of the Loan will be regarded as fully discharged and the Participant will be released from any further obligation to the Company in respect of that portion of the Loan.

$\overline{7}$ . CUSTODIAN

Despite anything in this Schedule, the Custodian will not be liable to the Participant in respect of timing or price obtained on, or any other circumstance relating to, a Disposal under this schedule.