Lead Manager

BABCOCK & BROWN PROSPECTUS
• * After completion of the bookbuild process, a general moratorium on commercial banking activities in
Australia, New Zealand, the US or UK is declared, or there is a material disruption in commercial banking
or securities settlement or clearance services in those places, or
• * After completion of the bookbuild process, there is an adverse change or disruption to the existing
financial markets, political or economic conditions of Australia, Japan, the United Kingdom, the United
States or the international financial markets or any change in national or international political, financial or
economic conditions, in each case the effect of which is such as to make it, in the reasonable opinion of the
Lead Manager, impracticable to market the Offer or to enforce contracts to issue and allot the Shares
8.10 EQUITY INCENTIVE PLAN
Babcock & Brown has established the Long-Term Equity Incentive Plan (Plan) to assist in the attraction,
retention and motivation of Executives (including Directors) of Babcock & Brown and its subsidiaries.The Plan
contains typical terms for dealing with the Plan’s administration, its variation, termination and suspension. A
summary of the key terms of the Plan is set out below.
8.10.1 General
The Plan is Babcock & Brown’s incentive scheme for selected Executives and Directors (collectively Employees).
Under the Plan, eligible Employees may be granted various kinds of equity related awards, including Options,
performance rights or bonus deferral rights (each being a right to acquire a Share on terms and conditions
determined by the Board) or cash awards (which are the right to receive an amount of cash calculated by
reference to the market price of Babcock & Brown’s Shares, but do not involve an actual acquisition of Shares).
Collectively these are termed “Awards”.
The Plan confers broad discretions on Babcock & Brown to set the terms of Awards when they are granted,
including the vesting conditions and performance hurdles (if any) and the exercise price of options. Performance
rights and bonus deferral rights have a nil exercise price, but will have vesting conditions.
8.10.2 Initial grant of Awards
The Employee Trusts have purchased from Babcock & Brown 12.5 million fully paid $5 Shares and 23.5 million
Options exercisable at $5, as referred to in Section 4.7.7. Babcock & Brown has granted rights to acquire Shares
and Options to identified and as yet unidentified Executives.The Shares and Options held by the Employee
Trusts will be used to satisfy these grants.The rights granted to Executives by Babcock & Brown vest, as referred
to in Section 4.7.7.
8.10.3 Terms of subsequent Awards
Under the Plan, Awards are granted at no cost to the Employee.The rules of the Plan provide that the Board may
determine (at the time of grant) a price that is payable on exercise of a cash award.
Each Option, performance right and bonus deferral right is an entitlement to one Share, subject to satisfaction of
any vesting conditions.To the extent the vesting conditions are satisfied, Awards will vest and may be exercised by
participants to acquire Shares, subject to the terms of the Plan.
8.10.4 Vesting of bonus deferral rights
The initial grant of bonus deferral rights, likely to be made in the first quarter of 2006, will be subject to vesting
conditions such that they cannot be exercised until four years after the date of grant. Once vested, these bonus
deferral rights can be exercised by the participant at any time during the two-year period commencing on the
fourth anniversary of the date of grant. If at the end of this two-year period, the vested bonus deferral rights have
not been exercised, they will lapse.
If a participant ceases to be employed by Babcock & Brown or any of its subsidiaries before bonus deferral rights
have vested for any reason, those bonus deferral rights will lapse, unless the Board determines otherwise.
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