PEET LIMITED — Capital/Financing Update 2004

Aug 1, 2004

[TO BE PRINTED ON PEET & COMPANY LIMITED LETTERHEAD]

[Date]

[insert name and address]

Dear linsert namel

Peet & Company Limited Employee Share Option Plan

In recognition of the Initial Public Offering of Peet & Company Limited ("Peet"), and the importance of your contribution to the ongoing success of the Company, the Board is inviting you to apply for Options under the Peet Employee Share Option Plan ("the Plan").

The Plan enables you to participate in the growth of Peet and align your interests more closely with those of other shareholders.

The Options you are invited to apply for will be issued at no cost. Each Option will allow you to subscribe for one ordinary share in Peet at a fixed price, during any period in which the Listing Requirement is satisfied once the time based Exercise Conditions are met. Attached are the Details and Terms and Conditions of your invitation. You are under no obligation to apply for these Options.

Your potential financial reward from participating in the Plan depends on the market value of Peet shares. Upon meeting the Exercise Conditions and satisfying the Listing Requirement, your Options will become valuable if the market value of Peet shares exceeds the exercise price. Movements in the market value of Peet shares reflects Peet's performance and the impact of various external factors such as general economic conditions.

More details are contained in the enclosed Information Booklet (including the Rules of the Plan) and it is important that you read this carefully. It is also recommended that you consult your tax or financial adviser prior to making any decisions about the Options.

Please note that where you are also offered Shares under the Employee Gift Offer, there are potential tax implications that you should consider. These are discussed on pages 17 and 19 of the Taxation Summary with the Information Booklet that you will be provided under this offer.

If you would like to participate in the Plan, please complete and sign the enclosed Application Form and return it to the address indicated by 20 July 2004.

Options are not transferable and may only be granted to you personally.

The terms of your invitation are confidential and must not be disclosed to anyone except for the purposes of obtaining financial, taxation or legal advice in respect of the invitation. In this regard please sign the enclosed confidentiality acknowledgement.

Option Employee Invite_CLEAN FINAL

We welcome you to the Plan and invite you to share with us in the future of Peet.

$\sim 10^7$

$\hat{\mathcal{L}}$

Yours faithfully

Warwick Hemsley Managing Director

Option Employee Invite_CLEAN FINAL

$\sim 10^7$

DETAILS OF INVITATION

Numbers of Options you mayacquire	finsert number of options?
Exercise Price 1	$1.20
Expected date of grant	28 July 2004 (Exact date will be the date in your Option Certificate)
Exercise Conditions and exerciseperiods	100% of the Options vest after the third anniversary of the grant date.However, the Options will only ever be exercisable during any period wherethe shares the subject of the Options are in the same class as securitieswhich have been quoted on the Australian Stock Exchange throughout the12 month period immediately preceding the exercise date of the Optionswithout suspension for more than a total of 2 trading days during that 12month period.
Date of expiry of Options	Options will expire at the 5 year anniversary of the date of grant of theOptions.

TERMS AND CONDITIONS OF OPTION GRANT

This invitation is made to you on the terms and conditions set out in this letter and the Rules of the Peet & Company Limited Employee Share Option Plan. This letter sets out the terms of issue of the Options in addition to the Rules of the Plan.

• 1. Options may be exercised in accordance with Rule 5 of the Peet & Company Limited Employee Share Option Plan Rules ("Plan Rules"). These Options are subject to a 3 year vesting period, after which 100% of these Options granted to the Option holder will be exercisable during any period where the shares the subject of the Options are in the same class as securities which have been quoted on the Australian Stock Exchange throughout the 12 month period immediately preceding the exercise date of the Options without suspension for more than a total of 2 trading days during that 12 month period.
• 1. Lapse of Options:

2.1 An unexercised Option will lapse in accordance with Rule 5.6 of the Plan Rules upon the earliest of:

• a) the Option lapsing in accordance with the transfer of Options Rule 4.2(b) of the Plan Rules;
• b) the Option lapsing in accordance with the exercise of Options Rule 5 of the Plan Rules (which addresses matters such as the Option lapsing on cessation of employment where the exercise condition has not been met or in the event of fraudulent or dishonest behaviour by the Option holder - refer 2.2 below);
• c) the Option lapsing in accordance with Rule 7 of the Plan Rules regarding takeovers. scheme of arrangements, winding up etc:
• d) failure to meet the Option's exercise conditions in the prescribed period: or
• e) the 5 year anniversary of the grant date.
• f). if the proposed initial public offer of shares in Peet (IPO) does not proceed, such that Peet

<sup>1 Note the Exercise Price is subject to adjustment in the event of a rights issue or, in certain circumstances, reorganisation of capital in accordance with Rule 8 of the Plan Rules.

Option Employee Invite_CLEAN FINAL

is not admitted to the official list of the Australian Stock Exchange by 1 October 2004, the options will lapse unless the Board determines otherwise.

• 2.2 Where, in the opinion of the Board, the Option holder acts fraudulently or dishonestly or breaches his or her obligations to any Peet group company, the Board can deem any unexercised Options held by the Option holder to have lapsed. This condition is detailed in Rule 5.5 "Fraudulent or dishonest actions" of the Plan Rules. Failure of an Option holder to comply with the confidentiality acknowledgement will be construed as a breach of that Option holder's obligations to any Peet group company under Rule 5.5 of the Plan Rules whereby the Board may deem any unexercised Options of the Option holder to have lapsed.
• 1. Cessation of employment:
  • a) Where an Option holder ceases employment with Peet when his/her Options have vested (i.e. after the exercise conditions are met), but before they have been exercised, these Options can be exercised during any period determined by the Board until they lapse in accordance with the Rule 5.6 of the Plan Rules.
  • b) Where the Options are unvested (i.e. the exercise conditions have not vet been met) at the date when employment ceases, the Options will automatically lapse one month after the date the Option holder ceased employment, unless the Board determines otherwise.

These conditions are detailed in Rule 5 "Exercise of Options" of the Plan Rules.

• 1. Options are granted subject to:
  • a) The Plan Rules (as amended from time to time) approved by Peet in general meeting on 7 April 2004.
  • b) The exercise conditions outlined above and the terms and conditions set out in this letter from Peet dated 30 June 2004:
  • c) The terms and conditions set out in the Option Certificate; and
  • d) The Australian Corporations Act requirements.
• 1. The exercise price of each Option shall be as set out in your Option Certificate from Peet.