Billabong International : Updated Securities Trading Policy

Billabong International Limited

1. Introduction

2. Purpose

   This document sets out the policy of Billabong International Limited (the Company) regarding Dealings (as defined below) by the Company's Directors, group employees, contractors and their close family members with respect to:

   • trading in shares, options and other securities issued by the Company (BBG Securities); and

   • the Company's prohibition on insider trading.

   The purpose of the policy is to ensure that Directors and group employees comply with the law at all times in connection with their Dealings in BBG Securities. It is also intended to minimise the possibility of a perception arising that Directors or group employees are trading while in possession of unpublished, price-sensitive 'inside information'.

   If Directors and group employees Deal in BBG Securities they must comply with this policy and ensure the Dealing does not breach the law or reflect badly on themselves or the Company.

3. Policy Application

   This policy applies to all Directors and employees of the Company as well as to any independent contractor or consultant whose terms of engagement incorporate this policy (collectively referred to in this policy as Personnel or individually a Person). It also extends to Close Associates of Personnel such as family members or companies, trusts and other entities controlled by them as further set out in Section 2 below.

4. General Overview

   The general overview of this policy regarding allowable Dealings by Personnel in BBG Securities is that:

5. Personnel and Close Associates should ensure they act within the law and do not Deal in BBG Securities if they are in possession of unpublished, price-sensitive 'inside information'.

6. It is inappropriate for Personnel to regularly Deal in BBG Securities.

7. Where any of the Directors and Senior Management (as defined below) propose to Deal in BBG Securities the person shall comply with Section 5 and at least 48 hours prior to the proposed Dealing inform the Chair (or the Chair of the Audit & Risk Committee in the case of the Chair) in writing of the details of the proposed Dealing and confirm that they do not possess any unpublished, price-sensitive 'inside information'.

8. After a Director of the Company has traded in BBG Securities, the Director must notify the Chair within three days of the Dealing taking place so that the Company Secretary can lodge a change of interest notice with ASX.

9. Unless otherwise permitted by this policy, Personnel must not Deal in BBG Securities during the closed periods established under this policy.

11. Consequences and Responsibility

    Breach of insider trading law under the Corporations Act 2001 (Cth) by a Person or their Close Associates could expose them to criminal and/or civil liability. Breach of insider trading law or this policy will also be regarded as serious misconduct which may lead to disciplinary action and/or termination of employment.

    The Company has implemented the policy to identify when and in what circumstances Personnel and their Close Associates may Deal in BBG Securities. This policy provides a general summary of the law in Australia in relation to insider trading. It is the personal responsibility of each individual Person to comply with this policy and with the law.

12. Overview of the Insider Trading Provisions of the Corporations Act 2001

13. Definitions

    For the purposes of this policy: "Close Associates" means:

    • family members who could be expected to be influenced by a Person in their Dealings with securities (this would include a Director or Person's partner and dependants);

    • superannuation funds or trusts under which a Person is a trustee or beneficiary; and

    • companies controlled by a Person.

      "Dealing" includes applying for, acquiring or disposing of, or entering into an agreement to apply for, acquire or sell, securities, and "Deal" has a corresponding meaning.

      "Inside Information" means unpublished, price sensitive information that the person knows, or ought reasonably to know:

    • is generally not available, including information that the Company has not disclosed to the market in accordance with the Company's Continuous Disclosure Policy; and

    • might have a material effect on the price or value of securities if it was generally available.

      A non-exhaustive list of examples of Inside Information is set out in Section 2.2.

      "BBG Securities" means shares, options, warrants or any other security, or financial products issued or created over or in respect of the Company's securities (e.g. derivatives), whether or not they are traded on the Australian Securities Exchange and, for the avoidance of doubt, includes American depositary receipts (ADRs) and American depositary shares (ADSs).

14. Insider Trading Laws

    It is illegal for anybody to Deal in BBG Securities or the securities of any other listed corporation when in possession of Inside Information.

    Some examples of Inside Information could include:

    • a possible acquisition or sale of any assets or business by the Company;

    • Board or senior management changes;

    • proposed dividends;

    • potential changes in the Company's capital structure;

    • the financial performance of the Company; or

    • unexpected liabilities against the Company.

    The above list is illustrative only and is not intended to be exhaustive. A reasonable person will be deemed to know, or ought to know the Inside Information will have a material effect on the price or value of securities if the information would, or would be likely to, influence persons who commonly acquire those securities in deciding whether or not to acquire or dispose of those securities.

    The prohibition on insider trading extends to procuring another person (such as a Close Associate) to Deal, and, in the case of securities of listed corporations, extends to communicating the Inside Information to another person, if the person knows, or ought reasonably to know, that the other person would, or would be likely to, Deal in the securities in question or procure another person to do so.

15. Confidentiality and Inside Information

    A person in possession of Inside Information about the Company has a duty to keep that information confidential and must not disclose or communicate that information to any person.

16. General Prohibition - All Employees

    Consistent with the legal prohibitions on insider trading, all Personnel and their Close Associates are prohibited from trading in any BBG Securities while in possession of Inside Information.

    It is a criminal offence for anyone to trade with knowledge of Inside Information. This includes family members and friends of Directors and employees. Personnel should also be aware that ASX, ASIC and other governance advisers monitor compliance with this policy. Significant penalties may be imposed on the Company and/or Personnel for any breach.

    Additional restrictions are also applicable to those Personnel with regular access to Inside Information as noted under Section 5 below.

17. Additional Restrictions on Trading - Directors and Senior Management

    Directors and certain group employees whose positions expose or are likely to expose them to Inside Information regarding the Company (collectively the Directors and Senior Management) are subject to additional restrictions on trading in BBG Securities during the closed periods outlined below, unless exceptional circumstances apply.

    For the purposes of this policy, the Directors and Senior Management are:

    • members of the Board;

    • the CEO of the Company, and his or her direct reports;

    • anyone else who directly reports to the Chair, CEO, CFO and/or Company Secretary;

    • participants in the Billabong Executive Performance Share Plan; and

    • any other person who is notified that this part of the policy applies to them.

    • Closed Periods

    The Company's closed periods, unless otherwise determined by the Board, are as follows:

    • from the close of trading on 30 June until after two clear trading days have elapsed from the date upon which the Company gives to the ASX its preliminary final report (full-year result); and

    • from the close of trading on 31 December until after two clear trading days have elapsed from the date upon which the Company gives to the ASX its half-yearly report (half-year result).

    For example, if the full-year results are released on Thursday, 25 August 2016 then allowing two clear days after the date of the release (being Friday, 26 August 2016 and Monday, 29 August 2016) means the trading window would open on Tuesday, 20 August 2016.

    If any person is unsure as to the precise start and finish dates of the closed periods they should consult with the Company Secretary. Alternatively the closed period dates for the calendar year are posted on the website www.billabongbiz.com.

    Dealing in BBG Securities by the persons listed above and their Close Associates is prohibited during closed periods, unless prior clearance has been obtained from the Chair (in the case of Directors and Senior Management other than the Chair) or the Chair of the Audit & Risk Committee (in the case of the Chair). Directors and Senior Management must take reasonable steps to ensure that their Close Associates inform them of any proposed dealing in BBG Securities during a closed period, so that they can seek prior clearance on behalf of their Close Associate.

    Prior clearance to Deal during a closed period will only be given in exceptional circumstances, such as severe financial hardship, compulsion by court order or any other circumstance that is deemed exceptional by the Chair or the Chair of the Audit & Risk Committee (as relevant).