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## AGL Share Purchase Plan 

The AGL Energy Limited Board of Directors approved the AGL Share Purchase Plan (SPP) on 5 October 2006. Under the SPP, the Board may in its discretion, from time to time invite any eligible employees to acquire fully-paid ordinary shares in AGL with funds provided in lieu of remuneration they would have received. The Directors of AGL may also participate in the SPP. The total amount that can be allocated to the purchase of shares under the SPP in any financial year commencing on or after 1 July 2009 is $5,000. Eligible employees include full-time or permanent part-time employees of entities in the consolidated entity who have attained the age of 18 years. Employees who are resident overseas can only participate at the Board’s discretion. 

The trustee of the SPP applies amounts contributed by entities in the consolidated entity in lieu of remuneration entitlements which eligible employees or Directors would otherwise have received in purchasing shares on behalf of participating employees or Directors in the ordinary course of trading on the ASX; or subscribing for shares on behalf of the participating employees or Directors. All shares acquired by the trustee are acquired at the market value of the shares. 

Market value means in relation to a subscription for shares, the weighted average of the prices at which AGL’s ordinary shares are traded on the ASX during the five business days up to and including the day on which the subscription occurs. Market value in relation to a purchase of shares means the price at which the shares are actually acquired in the ordinary course of trading on the ASX. 

SPP shares may not be disposed before the earlier of seven years after the date of acquisition (or, in the case of SPP shares acquired on or before 31 May 2010, 10 years), the date on which the participating employee ceases to be employed by the consolidated entity, and the Board or the trustee determines that the shares should be freed from this restriction following the written request of the participating employee. During this period, the trustee is entitled to retain custody of share certificates or holding statements in respect of the SPP shares and to implement procedures to prevent any dealing with those shares. 

SPP shares rank pari passu in all respects with all other shares and carry the same rights and entitlements, including dividend and voting rights, as those conferred by other shares. 

Details of share movements in the AGL Share Purchase Plan are set out below: 

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(a)  Under Mr Fraser’s prior service agreement, originally entered into in 1998, he was entitled to certain retention payments. In lieu of these prior retention arrangements, Mr Fraser has been allocated shares in three tranches. Upon appointment as Managing Director and Chief Executive Officer, the first tranche of 74,740 shares with a face value of $1,023,639 was acquired under the SPP. During the 2009 financial year, the second tranche of 27,623 shares with a face value of $400,000 was acquired under the SPP. During the 2010 financial year, the third tranche of 28,715 shares with a face value of $400,000 was acquired under the SPP. (b)  Mr Fraser earned a short-term incentive for the 2008 financial year which was payable in September 2008. One half of the short-term incentive was paid in cash and the 

balance of $525,000 was deferred for 12 months, by providing an allocation of 38,222 shares under the SPP at that date. 

At the reporting date, there were 2 non-executive Directors (2010: 4) and 190 employees including the Managing Director (2010: 139) participating in the SPP. All shares were purchased on-market and the fair value per share is market value (as defined above). 

No expense is recognised in the income statement in relation to shares purchased under the SPP as they are acquired out of salary sacrificed remuneration. 

