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Ziggy Switkowski
Chief Executive Officer
    
    
    
    
    

242
Exhibition Street
Melbourne VIC 3000
Australia
Locked Bag 5639
Melbourne VIC 810020 December 2004


    T 03 9204 9999F 03 9204 9991

    
    400 George StreetSydney NSW 2000
Australia
Locked Bag 6600
Sydney NSW 1100

    
    T 02 9204 9999F 02 9204 9991Ms Deena Shiff
Level 6, 255 Elizabeth Street
Sydney NSW 2000
 Dear Deena
  New South Wales.
 
    
    The special incentive plan in which you were participating for 2004/05 will now lapse.
There will be no payment under that plan for the 2004/05 financial year.
    
    For the 2004/05 financial year you will be assessed and paid based on a full twelve month
GMD Annual Incentive Plan. At Target this plan is calculated at 70% of your Fixed
Remuneration. Half of any payment under this plan will be provided as cash and the
balance in the form of Telstra equity which will be held in trust.
    
    The next Long Term Incentive allocation is in August 2005. Subject to your continuation
in this role the allocation made to you at that time will be based on your GMD
remuneration package.
 
 
 1/2/05Deena Shiff
    
    Date
 ZES(signatory initials)
    
    JVS(signatory initials)
 Page 1




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CONTENTS
 1.
    
    COMMENCEMENT2.
    
    ROLE AND LOCATION3.
    
    PERFORMANCE4.
    
    HOURS OF WORK5.
    
    REMUNERATION6.
    
    SUPERANNUATION7.
    
    LEAVE8.
    
    REASSIGNMENT AND RELOCATION9.
    
    RESOLVING DISAGREEMENTS10.
    
    RECOVER OF OVERPAYMENTS11.
    
    TERMINATION OF YOUR EMPLOYMENT12.
    
    INDEMNITY13.
    
    ENTIRE AGREEMENT14.
    
    DICTIONARYCONFIDENTIALITY AND FUTURE EMPLOYMENT
 ZES
    
    
    
    JVS(signatory
initials)LR-216320
    
    
    
    (signatory initials)
 Page 2




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1
    
    COMMENCEMENT
 1.1
    
    The commencement date of your new Agreement is 1 January 2005.
 2
    
    ROLE AND LOCATION
 2.1
    
    You will be assigned to the role of Group Managing Director, Telstra
Wholesale
reporting to Ziggy Switkowski, Chief Executive Officer. Your duties and the
reporting
requirements of this role may be varied from time to time in accordance with the
needs of Telstra.2.2
    
    You will be located in the Sydneyoffice in New South Wales.
 3
    
    PERFORMANCE
 3.1
    
    You are required to perform your role in a proper and efficient manner. You
will
be expected to devote your time, attention and energy to the performance of
your duties and achieving your accountabilities and to use your best endeavours
to promote and enhance the interests of the Telstra Group, in a manner that is
consistent with the Telstra Values.3.2
    
    Except with the written consent of Telstra you must not
undertake, be employed
in connection with or have any interest in any other business or profession during
your employment under this Agreement, other than by way of holding any shares or other securities which are publicly listed or in a private family company
or otherwise available to the general public by way of investment.
 4
    
    HOURS OF WORK
  5
    
    REMUNERATION
 5.1
    
    Your remuneration has fixed and variable or at risk elements which make up your
Total Remuneration.5.2
    
    The Remuneration Summary annexed to this Agreement shows your Fixed
Remuneration and Total Remuneration at the commencement of this Agreement.5.3
    
    Your Fixed Remuneration includes salary, superannuation and any benefits
(which also may include fringe benefit tax).5.4
    
    The variable and/or at risk element of your Total Remuneration is to be paid
through participation in Telstras annual incentive plan (as amended or
replaced from time to time). Any payment due to you from these plans will be paid after
the end of each financial year.5.5
    
    Telstra reviews remuneration levels each year and will take into
account relevant factors including performance and prevailing market conditions in establishing
your remuneration level. Your first remuneration review will be in
October
2005. Any change to your remuneration level will be reflected in a new Remuneration
Summary.
 ZES
    
    
    
    JVS(signatory
initials)LR-216320
    
    
    
    (signatory initials)
 Page 3




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6
    
    SUPERANNUATION
  7
    
    LEAVE
 7.1
    
    You will accrue 4 weeks leave annually. This will be taken in accordance with
Telstra policy, at a time agreed between you and your manager.7.2
    
    Long service leave will accrue and be paid in accordance with Telstra Policy
subject to any minimum requirements under applicable legislation. Currently,
Telstra Policy provides for three months long service leave after ten years
employment with Telstra.7.3
    
    Subject to your managers approval, the company allows for a total of up to 3
months paid sick leave in any one calendar year. Any additional periods of paid
sick leave must be agreed with your manager. There is no sick leave
accumulation.7.4
    
    Your annual leave accruals and long service leave accruals will
continue to be
recognised by Telstra whilst you are employed under this Agreement.7.5
    
    If you have a sick leave balance it will be preserved. You may not access this
preserved sick leave balance while this Agreement operates.
 8
    
    REASSIGNMENT AND RELOCATION
 8.1
    
    In the event that business needs change, you may be re-assigned to an
equivalent role for which your manager judges you to be suitably qualified and experienced,
either within Telstra or via secondment within the Telstra Group.8.2
    
    Unless otherwise agreed in writing, your assignment (or any re-assignment)
within Telstra or any secondment within the Telstra Group will occur under the
terms and conditions of this Agreement. Any re-assignment or secondment will
not constitute termination of this Agreement or your employment with Telstra.8.3
    
    In the event you agree to move residence to perform a role, Telstra will provide
you with relocation assistance in accordance with Telstra Policy.
 9
    
    RESOLVING DISAGREEMENTSIf any disagreement arises about your employment or terms of this Agreement, it shall be
resolved by applying the Telstra Internal Resolution Process (as amended from time to
time).
 10
    
    RECOVERY OF OVERPAYMENTS
 10.1
    
    In the event an overpayment is made to you, Telstra is entitled to recover it by
giving you at least 7 days notice. Overpayments will be recovered through
Deduction(s) to your pay in accordance with Telstra Policy until the Overpayment
is recovered.10.2
    
    If your employment ceases for whatever reason, Telstra may offset any amounts
owing by you to Telstra (or its Related Bodies Corporate or other specified entities)
against any amounts otherwise payable to you upon termination.
 ZES
    
    
    
    JVS(signatory initials)
    
    
    
    (signatory initials)
 Page 4




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11
    
    TERMINATION OF YOUR EMPLOYMENT
 11.1
    
    Subject to relevant legislation, your employment may be terminated by either
party giving six months written notice.11.2
    
    If Telstra terminates your employment on notice, you may be required to:
 
    
    remain in Telstras service for all or part of the notice period;
    
    be paid at your Fixed Remuneration rate in lieu of notice; or
    
    be paid at your Fixed Remuneration rate for the notice period
but not required to attend for work during the notice period.
 11.3
    
    Telstra may terminate your employment if you commit any act of serious
misconduct, which includes breach of Telstra Policy. In the event of such
termination you will be entitled only to Fixed Remuneration to the date of
termination, which shall be immediate.11.4
    
    If Telstra terminates your employment due to redundancy, you will also receive a
severance payment determined in accordance with Telstra Policy. Should this
severance payment be less than the termination payment provided for in clause
11.5 the termination payment provided for in clause 11.5 will apply.11.5
    
    If Telstra terminates your employment for any reason other than serious
misconduct or redundancy, you will receive in addition to any notice or payment
in lieu of notice a termination payment equivalent to twelve months Fixed
Remuneration.11.6
    
    You must immediately return all Property at the request of any authorised
representative, at any time.
 12
    
    INDEMNITYIn the event that you are appointed to a position of statutory responsibility and
accountability in any company formed or acquired by Telstra, the Telstra Directors and
Officer Liability Policy will apply.
 13
    
    ENTIRE AGREEMENT
 13.1
    
    This document together with any Attachments records the agreement between
the parties. No previous negotiations, understandings, contracts, agreements,
representations, warranties, memoranda or commitments will affect the terms
and conditions of your employment by Telstra.13.2
    
    No oral explanation or information provided by any party to another shall
 (a)
    
    affect the meaning or interpretation of this document, or(b)
    
    constitute any collateral agreement, warranty or understanding
between any of the parties.
 ZES
    
    
    
    JVS(signatory
initials)LR-216320
    
    
    
    (signatory initials)
 Page 5




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14
    
    DICTIONARYIn this Agreement:Confidential Information means any trade secret, technical knowledge, concepts,
ideas, designs, programs, processes, procedures, innovations, inventions, data bases,
data surveys, customer lists or information, sales plans or marketing plans,
research, software, records or other information concerning Telstra or its Related
Bodies Corporate or any of their customers or suppliers which is secret and
confidential of which you became aware during your employment with Telstra;Deduction means the authorised repayment by you of such Overpayment;Overpayment means money paid by Telstra to you, whether by error or
otherwise, to which you are not entitled under this Agreement, or Telstra Policy;Related Body Corporate has the same meaning as in the Corporations Act 2001;Related Entity has the same meaning as in the Corporations Act 2001;Telstra means Telstra Corporation Limited;Telstra Group means the Telstra Group of companies, and unless otherwise specified,
includes Telstra, its business units or functional divisions, its Related Bodies
Corporate and any other Related Entities or entities in which Telstra has any share
holding of any kind;Telstra Policy means the policies, procedures, business rules, and processes of
Telstra, its business units or functional divisions, as varied or added to from time
to time.Property means any property of the Telstra Group which is in your possession,
custody or control, including any documents and papers and all copies of such
documents and papers.
 ZES
    
    
    
    JVS(signatory initials)
    
    
    
    (signatory initials)
 Page 6




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14.1
    
    SIGNING PAGE
  
 (SIGNATURE)
    
    
    
    (SIGNATURE)**Signature of witness
    
    
    
    Signature of EmployeeSALLY DARBY255 ELIZABETH STSYDNEY NEW 2000Deena ShiffFull Name and address of witness
    
    
    
    Name of employee(please print)Signed for and on behalf of
    )Telstra Corporation Limited
    )on 22/12/04 by its authorised
    )representative in the presence of:
    )(SIGNATURE)
    
    
    
    (SIGNATURE)Signature of witness
    
    
    
    Signature of authorised representativeSIMON ASENBERGER242 EXHIBITION STMELBOURNE 3000Dr. Ziggy SwitkowskiFull Name and address of witness
    
    
    
    Chief Executive Officer(please print)
 ZES
    
    
    
    JVS(signatory initials)
    
    
    
    (signatory initials)
 Page 7




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CONFIDENTIALITY AND FUTURE EMPLOYMENT
 A
    
    Confidentiality and Protection of Business Interests
 (a)
    
    In entering this Agreement you agree and undertake:(1)
    
    that at all times during and after your employment under this
Agreement
you will not disclose any Confidential Information to any person other
than in the performance of your duties, as required by law or with the prior
written consent of the Telstra Group; and(2)
    
    that you will not at any time during or after your employment
under this
Agreement use any Confidential Information for the benefit of any person
except where authorised to do so by Telstra; and(3)
    
    that immediately upon the request of Telstra or upon the
termination of
your employment with Telstra you will:
 (A)
    
    1.1 deliver to Telstra all Confidential
Information which is in
your control and which is physically capable of delivery; and(B)
    
    1.2 destroy any Confidential Information
which is stored in any
electronic, magnetic or optical form but which is not capable of
delivery to Telstra so that it cannot be recovered or in any way
reconstructed or reconstituted.
 (4)
    
    These obligations shall lapse in relation to any of the Confidential
Information which comes into the public domain other than through your
wrongful act.
 (b)
    
    Except with the written consent of Telstra you must not undertake, be
employed in connection with or have any interest in any other business or
profession during your employment under this Agreement, other than by way of
holding any shares or other securities that are publicly listed, in a private family
company or otherwise available to the general public by way of investment. B
    
    Future EmploymentIf your employment with Telstra ceases for any reason you must not (without the
prior written consent of Telstra) be employed by, or provide services as an agent,
independent contractor or in any other capacity to, any telecommunications business
or any business of a like or similar nature to that conducted by Telstra, whether
in Australia or overseas, for the minimum period of notice specified in clause 11.1
of the Agreement (whether or not a payment is made in lieu of this period). This
period will commence from the date that the notice period commences or the payment
in lieu of notice is made. Each element of this restraint operates to the extent to
which it is deemed reasonable by any court. Part of the remuneration and benefits
provided to you by Telstra is specifically referable to this obligation and your
agreement to this term is an acknowledgment that this term is reasonable and goes
no further than is necessary to protect the interests and Confidential Information
of Telstra and its Related Bodies Corporate.
 ZES
    
    
    
    JVS(Signatory initials)
    
    
    
    (Signatory initials)
 Page 8




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Fixed RemunerationFixed Remuneration1
    
    
    
    
    
    $
    650,000Minimum Superannuation Amount
    
    $
    11,585Variable Remuneration2004/2005 Target Incentive (At Risk Component)Cash Component      35% of Fixed Remuneration
    
    
    
    
    
    $
    227,500Equity Component    35% of Fixed Remuneration
    
    
    
    
    
    $
    227,500Total RemunerationTotal Potential Remuneration
    
    
    
    
    
    $
    1,105,000(including On Target Incentive Level)
 Name:
    
    Deena ShiffEmployee Number:
    
    38001746Work ID
    
    GMD000Effective Date:
    
    1 January 2005
 ZES
    
    
    
    JVS
 
 1 Fixed Remuneration includes the Telstra compulsory superannuation guarantee contribution.
 By agreement, a greater part of your Fixed Remuneration can be paid as company
superannuation contributions, subject to the total contribution (including the compulsory
amount) not exceeding the statutory age-based deduction limits.
 If you are currently in an excess pension Reasonable Benefit Limit (RBL) position, Telstra
may not be required to pay any part of your subject to the total as superannuation contributions. You should speak to a
financial adviser if this situation applies to you.