Rural Press Dividend Reinvestment Plan

November 4, 1998

INTRODUCTION

At our annual general meeting on October 9, 1998 shareholders approved the proposal of establishing the Rural Press Dividend Reinvestment Plan ("Plan").

With the establishment of the Plan, Directors were able to declare the proposed special dividend of 30 cents per share on ordinary shares and 33 cents per share on preferred shares, all fully franked at 36% and payable on December 18, 1998 to all shareholders registered at 5 pm on November 25, 1998.

The Directors also announced that the special dividend would be one to which the Plan would apply. The Plan is an optional, economical and convenient method by which, for those special dividends to which the Plan applies, shareholders may reinvest all or part of those dividends in additional Rural Press Limited shares, without the usual costs of acquiring shares, such as brokerage and stamp duty, and at a discount to the market price of the shares; in this instance the discount will be 2.5% on market value.

The Plan will only apply to dividends which are nominated by the Board at the time the dividend is declared to be dividends to which the Plan will apply (such dividends are referred to in these explanatory notes as "DRP Dividends"). It is not proposed to operate the Plan in respect of interim and final dividends.

For your assistance, this booklet contains the following:

• An outline of the Plan set out in question and answer form. 
• The Terms and Conditions which govern the operation of the Plan.

 OUTLINE OF THE PLAN

 What is the Rural Press Dividend Reinvestment Plan?

The Plan applies to dividends on both preferred and ordinary shares and is a simple and convenient way for DRP Dividends to be automatically reinvested in additional shares, without the cost of brokerage or (under current law) stamp duty, and at a discount determined by the Board from time to time but not exceeding 7.5%.

Shares issued under the Plan will be of the same class as the shares on which the DRP Dividend is paid.

 Need I reinvest all my dividends?

No. There are three options: 

1. Full participation in the Plan

This option provides for investment of DRP Dividends on all preferred and ordinary Rural Press Limited shares you hold now, or shares you may subsequently acquire which entitle the holder to participate in the DRP Dividend.

 2. Partial participation in the Plan

This option provides for investment of DRP Dividends on a specified number of your holding of Rural Press Limited preferred and ordinary shares. You can nominate the number of shares that you wish to participate in the Plan. Cash dividend payments will be made in respect of shares not participating in the Plan.

 3. No participation in the Plan

This option provides for cash dividend payments in respect of your shares in the company. To receive a cash dividend you are not required to complete any forms.

How do I participate in the Plan for a DRP Dividend?

To participate in the Plan for a DRP Dividend, you simply complete the Election Notice specifying whether you would like full or partial participation. Should you select partial participation, please nominate the number of the shares which are to participate in the Plan.

The Election Notice should be returned to Corporate Registry Services Pty Limited, the Company's share registry.

Please note that your completed and signed Election Notice should be received not later than 5 pm on the date on which the Companyís share register is closed in order to determine entitlement to the relevant DRP Dividend ("Record Date"). The Election Notice will be effective upon receipt.

Election Notices that are not properly signed will be returned and will not be effective. An Election Notice that is properly signed but does not specify the level of participation desired will be deemed to be for full participation.

 If I participate in the Plan for a DRP Dividend, will I automatically participate for any future DRP Dividends?

No. When the Directors declare a special dividend and announce that it is a DRP Dividend, an Election Notice will be sent to all eligible shareholders for completion in relation to that DRP Dividend. Even if you have completed an Election Notice in relation to a previous DRP Dividend, you will not participate in the Plan for any subsequent DRP Dividend unless a further properly completed Election Notice is received by 5pm on the Record Date for that subsequent DRP Dividend.

 Who is eligible to participate in the Plan?

All holders of Rural Press Limited fully paid preferred and ordinary shares resident in Australia are eligible to participate in the Plan. Shareholders with registered addresses in the United States of America are currently unable to participate due to relevant US laws. Shareholders with registered addresses in the UK and New Zealand, for instance, are able to participate.

Other overseas shareholders may be eligible, subject to overseas government approvals being obtained, and provided any legal restraints applicable overseas do not make participation in the Plan impracticable or illegal.

 How is the price of shares issued under the Plan determined?

Shares are issued under the Plan at a discount to be determined by the Board from time to time. The discount will not exceed 7.5% from the weighted average market price of all Rural Press Limited shares of each class traded on the Australian Stock Exchange during the 5 trading days immediately after the Record Date for the DRP Dividend. In this instance the discount will be 2.5%.

 What are the costs to me if I participate in the Plan?

There are no brokerage or other transaction costs payable on the shares allotted under the Plan.

All administration costs are met by Rural Press Limited and under present law, no stamp duty or other duties are payable by the participants.

 What happens to any dividend that is not sufficient to buy one further share?

The dividend on your shares participating in the Plan will be applied towards acquiring as many fully paid Rural Press Limited shares as the dividend can purchase. If there is a small dividend amount left which is not enough to purchase one share then this amount will be foregone.

How can I keep a record of my participation in the Plan?

After each applicable dividend payment, you will be sent a statement which will show amongst other things:

1. the number of shares nominated which are participating in the Plan;

2. the dividend paid on those shares, the extent to which the dividend is franked and unfranked, and the imputation tax credit;

3. the net amount of dividend reinvested in new Rural Press Limited shares after deduction of any withholding tax;

4. the number of new Rural Press Limited shares issued and the value at which each has been issued; and

5. the total of Rural Press Limited shares held.

What is my taxation position?

Rural Press Limited takes no responsibility for the liabilities of participants in the Plan and as individual circumstances and laws vary considerably, specific taxation advice should be obtained by participants. It may be relevant to point out, however, that for participants in the Plan two transactions will occur concurrently at each DRP Dividend payment date:

• - payment of the DRP Dividend; and
• - investment of the appropriate amount of the DRP Dividend in new shares in Rural Press Limited, as elected.

Under current law and practice:

• (a) Dividends received under the Plan are treated as dividends for the purposes of the Australian dividend imputation system on the same basis as cash dividends. Accordingly, where Rural Press Limited declares "franked dividends", dividends received by shareholders under the Plan will be treated as franked dividends to which "franking rebates" (i.e. tax rebates) attach for Australian income tax purposes.
• (b) Shares allotted to a shareholder participating in the Plan will, in general, be subject to Australian capital gains tax upon disposal. This applies regardless of whether the Rural Press Limited shares in respect of which they are issued have been acquired by the shareholder before, on or after 20 September 1985. For capital gains tax purposes the cost base of the shares received under the Plan will be calculated on the basis that they have been acquired at a cost equal to the cash value of the dividend which is applied to pay for the shares. 

Do I get a certificate for shares issued under the Plan?

No. As of March 1998, Rural Press Limited began operating an uncertificated register. Therefore, share certificates are no longer issued. You will, however, be issued with a holding statement showing your new balance of shares held if you participated in the Plan.

 What happens if I sell some of my shares?

If you elect partial participation in the Plan for a DRP Dividend and a sale of some of your shares occurs so that at the Record Date the number of shares held is less than the number nominated for participation in the Plan, then that lesser number will participate.

Should you sell shares which are participating in the Plan shortly before the Record Date, you should inform your broker that the shares are participating in the Plan.

Is there any difference between shares issued under the Plan and existing shares?

No. Shares issued under the Plan rank equally in all respects with existing fully paid shares of the same class from the date of allotment and thus carry the same voting rights and the same entitlements to dividends and to bonus and rights issues.

 Stock Exchange Listing

Application will be made for official quotation on the Australian Stock Exchange of the shares issued under the Plan.

 Can the Terms and Conditions of the Plan be changed?

The Directors of Rural Press Limited may modify or suspend the Terms and Conditions of the Plan at any time upon giving notice to shareholders participating in the Plan, as provided in the Terms and Conditions.

The Directors may also terminate the Plan upon giving notice to participants.

 Enquiries

The full Terms and Conditions of the Plan are set out below. Should further information be required, please contact or write to:

The share registry
Corporate Registry Services Limited
60 Carrington Street
SYDNEY NSW 2000

Telephone: (02) 8234 5000

Facsimile: (02) 8234 5070

OR

The Company Secretary
Rural Press Limited
159 Bells Line of Road
NORTH RICHMOND NSW 2754

Telephone: (02) 4570 4444

Facsimile: (02) 4570 4663

TERMS AND CONDITIONS

The following are the terms and conditions of the Company's Dividend Reinvestment Plan applicable to shareholders.

   1. Definitions

1.1 In these Terms and Conditions, unless the context otherwise requires:

(1) "ASX" means Australian Stock Exchange Limited;

(2) "Company" means Rural Press Limited ACN 000 010 382;

(3) "Constitution" means the constitution of the Company as amended from time to time;

(4) "Directors" means the directors for time being of the Company;

(5) "DRP Dividend" means a dividend to which the Plan applies in accordance with clause 7.1;

(6) "Election Notice" means an election to participate in the Plan substantially in the form of Schedule 1 or in such other form prescribed or approved from time to time, which form may be combined with or become part of any other form or notice; (NOTE: Schedule 1 of the Terms and Conditions has not been included in this booklet)

(7) "Listing Rules" means the official listing rules of ASX;

(8) "Non-participating Shares" means Shares which are not subject to the Plan and on which the dividend is paid in the normal way;

(9) "Participant" means a Shareholder who elects to participate in the Plan;

(10) "Participating Shares" means Shares which are subject to the Plan, the dividend from which is invested in new Shares;

(11) "Plan" means the Rural Press Dividend Reinvestment Plan;

(12) "Record Date" means a date on which the Company's share register is closed in order to determine entitlement, in this context, to a DRP Dividend;

(13) "Shares" means fully paid preferred or ordinary shares, as the case may be, in the Company (as referred to in the Constitution);

(14) "Shareholder" means a registered holder of Shares; and

(15) "Terms and Conditions" means these terms and conditions of the Plan as amended from time to time.

 1.2  Reference to:

(1) one gender includes each other gender;

(2) the singular includes the plural and the plural includes the singular; and

(3) a person includes a body corporate.

1.3  Headings are for convenience only and do not form part of these Terms and Conditions or affect their interpretation.

1.4 Where a Shareholder holds a distinct number of Shares under separate holder numbers, that Shareholder will, for the purposes of these Terms and Conditions, be deemed to be a separate and distinct Shareholder in relation to:

(1) each holder number; and

(2) the Shares from time to time allocated to that holder number.

 2.   The Plan

2.1 The Plan is a means by which Shareholders may elect to receive Shares instead of cash for DRP Dividends in respect of all or part of their holdings of Shares.

2.2 Shares issued under the Plan will be of the same class as the Shares on which the DRP Dividend is paid and all references to Shares in the Plan shall be construed accordingly.

2.3 Participation in the Plan is:

(1) optional;

(2) not transferable; and

(3) subject to these Terms and Conditions.

 3.   Eligibility to Participate

3.1 Subject to clause 4 all Shareholders are eligible to participate in the Plan.

 4.  Shareholders in Countries other than Australia

4.1 A Shareholder who is subject to the laws of a country or a place other than Australia may not be eligible to participate in the Plan because of legal requirements that apply in that country or place.

4.2 An allotment of Shares to a Shareholder who is not resident in Australia at the time of allotment is subject to all necessary governmental approvals. It is the responsibility of the Shareholder to obtain those approvals.

4.3 Before electing to participate in the Plan a Shareholder who is not resident in Australia should seek professional advice to ascertain if any restrictions apply.

4.4 The Directors may on any occasion determine that the right to participate in the Plan is not available to a Shareholder:

(1) whose registered address is in a country or place where the offer of a right of election would or might be unlawful if no registration statement is given or other formality complied with; or

(2) if in the opinion of the Directors either the law of Australia or that of another country or some other matter or thing makes the Shareholder's participation illegal, impossible or impracticable.

 5.   Level of Participation

5.1 A Shareholder may elect one of the two following levels of participation in the Plan.

(1) Full Participation

A Shareholder may participate in the Plan in respect of all Shares registered in the name of the Shareholder as at each Record Date.

(2) Partial Participation

A Shareholder may nominate a specific number of Shares, less than the holder's total holding, to be subject to the Plan.

5.2  Neither full participation nor partial participation applies to Shares in respect of which, as at a Record Date, a full dividend is not then payable.

5.3 If a Participant has elected full participation then all Shares acquired by the Participant after an Election Notice has been given are added to the number of Participating Shares of that Participant.

 6.  Election Notice to Participate to be Given

6.1 A new Election Notice to participate in the Plan must be given to the Company before the Record Date for each DRP Dividend and must be:

(1) given on the form supplied by the Company; and

(2) signed by the Shareholder.

6.2  At the discretion of the Directors the Election Notice may be a section in the application or other form included in the prospectus relating to Shares issued by the Company or, with the approval of the Company, by any other person.

6.3 To be effective for a DRP Dividend the Election Notice must be received by the Company by 5 pm on the Record Date for that dividend.

6.4 An Election Notice remains in force only in respect of the DRP Dividend to which it relates.

6.5 Where shares are sold or otherwise transferred to a new owner after an Election Notice has been given, the Notice shall cease to have effect on registration of the transfer.

6.6 An Election Notice that is signed but does not specify the level of participation desired is deemed to be for full participation.

6.7 An Election Notice to participate in the Plan by joint holders must be signed by all holders.

6.8 The Company shall give eligible Shareholders an opportunity to participate in the Plan for a DRP Dividend.

 7.  Operation of the Plan

7.1 When declaring a cash dividend the Directors may announce that the Plan applies to that dividend and may direct the distribution of fully paid-up shares in respect of the dividend accruing to the Participating Shares. In respect of each DRP Dividend the Company must, in respect of each Participant

(a) calculate the value of the dividend on Participating Shares by multiplying the number of Participating Shares by an amount equal to the rate of dividend applying to the Participating Shares;

(b) determine the number of Shares, valued in accordance with the provisions of the Plan, which most nearly equal (but do not exceed) the value of the dividend (less any withholding tax where applicable);

(c) allot that number of Shares to the Participant; and

(d) any amount of residue of dividend less than the value of one Share shall be foregone.

7.2   The value of Shares to be allotted under the Plan for each dividend is the weighted average market price of all shares sold on ASX on the 5 business days immediately following the Record Date for the dividend, less a discount not exceeding 7.5% as determined by the Directors from time to time.

7.3 The weighted average market price is to be determined by the Company from information obtained from ASX.

 8.  Shares Allotted under the Plan

8.1 All Shares issued under the Plan rank equally in every respect with existing fully paid preferred or ordinary shares as the case may be of the Company.

8.2 The Company must allot shares issued under the Plan and enter the Shares into the Participant's uncertificated holding not more than 10 business days after (but not including) the payment date of the DRP Dividend or within such other period as is specified in the Listing Rules applicable at that time.

8.3 Shares allotted under the Plan are registered on the register on which a Participant holds most Participating Shares unless the Participant requests that they be registered on another register.

 9.  Statements to Participants

9.1 For each DRP Dividend the Company must send to each Participant as soon as possible after the dividend payment date, a statement detailing in respect of that Participant:

(1) the number of Participating Shares as at the relevant Record Date;

(2) the value of the DRP Dividend referrable to the Participating Shares;

(3) the value of Shares allotted under the Plan and the amount of variation from market price applicable to that dividend;

(4) the number of Shares allotted under the Plan and which are to be entered into the Participant's uncertificated holding; and

(5) if applicable, the amount of withholding tax which has been deducted in respect of the DRP Dividend on the Participating Shares.

9.2  Statements to partially participating Shareholders need not include information as to Non-participating Shares.

 10.  ASX Listing

10.1 The Company must make application, promptly after the allotment, for Shares issued under the Plan to be listed for quotation on the official list of ASX and any other stock exchanges on which Shares of the Company are listed.

10.2 The Company must comply with and all Shares allotted under the Plan must be allotted in accordance with and be subject to the Listing Rules applicable from time to time.

 11.  Costs to Participants

11.1 No brokerage, commission or other transaction costs are payable by Participants on Shares allotted under the Plan and under the present law no stamp or other duties are payable by Participants.

 12.  Reduction or Termination When No Notice Given

12.1 Where a partially participating Shareholder:

(1) disposes of a number of his or her Shares; and

(2) does not notify the Company to the contrary;

the Shares being disposed of are, to the fullest extent possible, assumed by the Company to be Non-participating Shares.

12.2  Where a Participant disposes of all of his or her Shares the Shareholder's participation in the Plan ceases on the date on which the last transfer is registered by the Company.

 13.  Modification of the Plan

13.1 The Directors may modify these Terms and Conditions from time to time after giving 1 monthís notice in writing to Shareholders of their intention to do so.

13.2 The Directors may resolve any difficulties which arise in any way they think fit and may also adopt whatever administrative procedures they think fit.

13.3 The Directors must immediately notify ASX of any modification to these Terms and Conditions.

 14.  Termination of the Plan

14.1 The Directors may suspend or terminate the Plan after giving 1 months' notice in writing to Shareholders of their intention to do so.

14.2 The Directors must immediately notify ASX of any suspension or termination of the Plan.

 15.  Taxation

15.1 Neither the Company nor its Directors, officers, employees, representatives or agents take any responsibility or assume any liability for the taxation liabilities of Participants.

15.2 As individual circumstances and laws vary considerably, specific taxation advice from professional advisers should be obtained by the Participant.

 16.  General

16.1 Unless the Directors otherwise determine the Plan does not apply in any case where, in accordance with the Constitution or otherwise by law:

(1) the Directors are entitled to retain all or part of a dividend payable in respect of Shares which a Participant has nominated as participating in the Plan; or

(2) the Company is entitled to a charge over those Shares or over any dividend payable in respect of them.

 17.   Notices

17.1 An Election Notice, or any other notice given by a Shareholder to the Company in respect to the Plan (in this clause all referred to as a "Notice") must be:

(1) in writing; and

(2) in such form as the Company directs from time to time.

17.2  Notices to the Company must be sent to:

Company Secretary
Rural Press Limited
159 Bells Line of Road
NORTH RICHMOND NSW 2754

or such other address as the Company notifies to Shareholders from time to time.

17.3 Notices must be received by the Company by 5 pm on the Record Date for a DRP Dividend to take effect for that dividend. Notices received after that time are not effective.

17.4 A Participant which is a corporation must execute a Notice in accordance with the Corporations Law or under power of attorney.

17.5 If a Notice is completed by an individual or a corporation under a power of attorney that power must accompany the completed Notice unless the power has been previously noted by the Company.

17.6 The provisions of the Constitution relating to service of notices on shareholders apply to service by the Company of notices on Participants.

 18.  Governing Law and Jurisdiction

18.1 The law of New South Wales governs the Plan, the Terms and Conditions and the operation of the Plan.

18.2 The Company and each Participant submits to the exclusive jurisdiction of the courts of New South Wales and the Federal Court of Australia.