A summary of the Pacific Brands Dividend Reinvestment Plan and some frequently asked questions are outlined below. You can download the plan rules here.

What is the Plan?

The Plan enables you, as a shareholder in Pacific Brands Limited (the Company) to reinvest all or part of any dividend paid on your shares in additional Pacific Brands shares instead of receiving that dividend in cash.

Your participation in the Plan is entirely optional. If you elect to reinvest your dividends, additional shares will be allocated to you immediately following the date for payment of that dividend. You will receive a dividend notice setting out the number of shares allocated to you, the price per share and other information relevant to the dividend.

Am I eligible to participate?

All Australian and New Zealand resident holders of fully paid ordinary shares in the Company may participate in the Plan.

If you are a shareholder with an address outside of Australia or New Zealand, you may not, at this time, participate under the Plan.

How do I join the Plan?

If you wish to participate in the Plan, you must complete and sign an Election Form and return it to the Company's Share Registry. To obtain an Election Form, please contact the Company's Share Registry:

Computershare Investor Services Pty Limited Yarra Falls, 452 Johnston Street Abbotsford VIC 3067 Australia Phone 1300 132 632

or

Computershare Investor Services Limited Level 2, 159 Hurstmere Road Takapuna, North Shore City New Zealand Phone 09 488 8777

Your participation in the Plan will, in general, commence with the first dividend payment after receipt of your completed Election Form. If your form is received after the record date for a dividend, it will not be effective until the Company's next dividend.

If I participate, do all my shares participate in the Plan?

If you wish to participate in the Plan, you will complete the Election Form and return it to the Company's Share Registry.

When you complete the Election Form you have two options:

1. Full Participation
   If you elect full participation, dividends on all of your shares will be reinvested in acquiring new shares. Dividends on any shares you may acquire in the future will also be reinvested in this way.
   
2. Partial Participation
   If you elect partial participation, you nominate a number of your shares which participate in the Plan. Only the dividends paid on those shares that you nominate will be reinvested in acquiring new shares. You will receive cash dividends on the rest of your shares in the normal way.
   If you buy more shares, those shares will NOT participate in the Plan unless you lodge a Notice of Variation.
   If you hold less shares than the number of shares you have specified in the Election Form, then the dividends on the shares that you actually hold will be reinvested.

The Directors may, from time to time, set minimum or maximum participation limits (whether in respect of a particular dividend or dividends generally) which will limit the number of shares that you may nominate to participate in the Plan. However, at this time the Directors have not set any minimum or maximum limits.

What type of shares will I get under the Plan?

You will be allocated with fully paid ordinary shares in Pacific Brands Limited under the Plan.

These additional shares may be purchased on-market or newly issued by the Company.

If new shares are allocated to you, they will be listed on the ASX or NZSX (as applicable) and will, in general, rank equally with the Company's existing shares.

What is the allocation price of shares under the Plan?

Shares will be allocated to you at the "average market price" (which is either the "weighted average market price" or the "arithmetic average of the daily weighted average market price" as the Directors may determine) of the Company's shares on the ASX over a period of 5 trading days (or such longer period as the Directors may determine) around the record date.

The Directors may determine in relation to all or any dividends paid, that shares will be allocated under the Plan subject to a discount below the average market price. At this time, the Board has determined that no discount will apply.

How is my entitlement calculated and how are shares allocated?

Following the payment of a dividend by the Company, the dividend payable on your participating shares (less any withholding tax) will be paid into a "DRP account" that the Company will establish for you.

The Company will then determine the maximum whole number of shares that will be allocated to you under the Plan, by dividing the amount of your dividend by the allocation price (determined as set out above).

In the case of fractional entitlements, the number of shares that you will be entitled to under the Plan will be rounded up to the nearest whole number.

What record do I have of my participation in the Plan?

After each dividend payment, you will receive a statement that details the level of your participation (ie full or partial) in the Plan, the amount and date of the dividend paid, the number of shares allocated to you under the Plan and the allocation price of those shares under the Plan. The statement will also set out information required for completion of your tax return regarding the dividend paid.

Can I sell shares that participate in the Plan or that are allocated to me under the Plan?

Subject to any restrictions that apply in connection with shares acquired pursuant to the Employee Gift, you may sell any of your shares, at any time. This includes your participating shares in the Plan and the shares that you are allocated when your dividends are reinvested.

If you elect for 'full participation' and then sell some of your shares, the dividends on your remaining shares will continue to be reinvested under the Plan.

If you elect for "partial participation' and then sell some of your shares, the number of shares sold will be deemed first to be non-participating shares and, once they are all deemed to be sold, then second participating shares under the Plan.

What are the taxation implications of participating?

Australian shareholders

Dividends that are reinvested under the Plan will be assessable for income tax and will carry franking credits to the same extent as any cash dividend. Shares allocated under the Plan may be subject to either income tax or capital gains tax when you sell them.

The taxation treatment of shares and dividends under Australian law can be quite complex. These comments are general in nature only. You should seek professional taxation advice in relation to your individual circumstances.

New Zealand shareholders

Dividends received by New Zealand resident shareholders which are reinvested in the Plan will be taxable to the shareholder to the same extent as a cash dividend. The shareholder will be entitled to a credit for any Australian non-resident withholding tax deducted from the dividend and any New Zealand imputation credits attached to the dividend up to the amount of New Zealand tax otherwise payable on the dividend.

Any profit derived on the sale of shares allocated under the Plan will only be subject to New Zealand tax if the shareholder is in the business of dealing in shares, if the shares were purchased for the purpose of sale or if the shares are sold as part of a profit-making undertaking or scheme.

These comments are general in nature only. You should seek professional taxation advice in relation to your individual circumstances.

How do I change my participation or withdraw from the Plan?

You may vary your level of participation in the Plan or withdraw from the Plan at any time by giving a Variation/Termination Notice to the Company's Share Registry.

You can obtain a Variation/Termination Notice by contacting the Company's Share Registry.

The Variation/Termination Notice will be effective in relation to the dividend with a record date next occurring after your Notice is received.

Termination of the Plan by the Directors

The Rules of the Plan may be varied, by the Directors at any time by notice on the Company's website www.pacificbrands.com.au and to ASX and NZSX.

The Directors may also suspended or terminate the operation of the Plan at any time by notice on the website or to the exchanges.

What happens if I exceed any maximum or minimum participation limit

At present, the Directors have not set any maximum or minimum participation limit. However:

• if the number of your participating shares exceed any maximum limit set by the Directors, you are deemed to have elected to participate to that limit. Any of your shares in excess of the limit will not participate in the Plan and you will receive cash dividends in the usual way in respect of those shares;
• if the number of your shares which are participating in the Plan is less than any minimum participation limit set by the Directors, you will be deemed to have no shares participating in the Plan. Instead you will receive cash dividends on all of your shares.

If any maximum or minimum participation limit is set and then later lifted, your participation in the Plan will revert back to the levels you elected on your original Election Form.

Enquiries

Click here to download a copy of the Plan Rules.

If you wish to enquire further about the Plan, please contact the Company's Share Registry:

Computershare Investor Services Pty Limited Yarra Falls, 452 Johnston Street Abbotsford VIC 3067 Australia Phone 1300 132 632

or

Computershare Investor Services Limited Level 2, 159 Hurstmere Road Takapuna, North Shore City New Zealand Phone 09 488 8777

A copy of the most recent annual report (if any) and financial statements complying with the Corporations Act and the Financial Reporting Act 1993 (NZ) of Pacific Brands Limited is available from Pacific Brands Limited, on request and free of charge.

Under the Corporations Act, a prospectus is not required to be lodged or registered in relation to shares to be issued under the Plan described in this booklet. If you are in any doubt as to whether to participate in the Plan, you should consult your own financial adviser.