Director of Billabong Paul Naude to step down

Mr. Naude has advised that he is seeking to hold discussions with potential financiers, both debt and equity, to gain their support for a potential change of control transaction of Billabong. Mr. Naude's decision was not solicited by the Board of Billabong and Mr. Naude has confirmed that there is no agreement, arrangement or understanding with any member of the Board or Billabong's senior management team in regard to his proposal. He is acting independently.

The Board of Billabong has agreed to Mr. Naude taking these steps, but strictly on the basis of certain protocols which ensure that the interests of the Company and shareholders are protected. The key protocols are:

• Granting a period of up to six weeks (or such longer period as the Board may subsequently determine) for Mr. Naude to stand aside from his current roles at Billabong;
• For the purposes of Mr. Naude’s discussions with potential financiers, no confidential information regarding Billabong will be provided to them;
• If discussions between Mr. Naude and potential financiers advance to the development of a proposal capable of consideration by the Board, confidential information will only be provided through a formal due diligence process approved by the Board, with customary confidentiality agreements in place;
• Any proposal received from Mr. Naude must meet the same sufficiency of information as previously required by the Board from other interested parties. In particular any proposal would need to include an indicative price per share and sufficient evidence for the Board to have a reasonable basis to determine that financing would be available for such price;
• Mr. Naude is not to engage in discussions with any party involved in the formal change of control process recently undertaken by the Company, without the express consent of the Chairman of Billabong; and
• During Mr. Naude’s absence, he will not contact directors (other than the Chairman or CEO), any top 20 shareholder or anyone Mr. Naude knows to be a shareholder, employees, customers, suppliers or the media in relation to any proposal or the business of Billabong. If Mr. Naude is required for business reasons of the Company to talk to anyone of the above parties this will only be done with the approval of the Chairman or CEO.