EXHIBIT
4.4


 


Executive employment agreement
– Mr John M Stewart (as Managing Director and


Chief Executive Officer of the
Group)


 





















 


 


PRIVATE & CONFIDENTIAL


 


27 May 2004


 


Mr John Stewart


Managing Director & Chief Executive Officer


National Australia Bank Limited


Level 35, 500 Bourke Street


Melbourne   VIC   3000


 


Dear John


 


1                                          Offer of
Appointment and Employment


 


On behalf of
the Board of National Australia Bank Limited, I am pleased to confirm your
employment in the position of Managing Director and Chief Executive Officer of
National Australia Bank Limited, on the terms and conditions set out in this
agreement.  During your employment with
the National in this position, you may use the title “Group Chief Executive”.


 


2                                          Employer


 


Your contract
of employment will be with National Australia Bank Limited.  You may also be required to provide services
to any Related Body Corporate of the National.


 


3                                          Period of
Employment


 


3.1                                  You agree that the terms and
conditions set out in this agreement have applied to your employment with the
National from 2 February 2004 (the “Commencement Date”).


 


3.2                                  Subject to paragraph 17 of
this agreement, the period of your employment under the terms of this agreement
is for three years from the Commencement Date and will cease by reason of
effluxion of time on 1 February 2007 (the “End Date”).


 


3.3                                  No later than six months
before the End Date, the National will review with you the possibility of
extending your employment and this agreement for a period of one year from the
End Date.


 


4                                          Position
and Duties


 


4.1                                  You will exercise the powers
and discretions, hold the responsibilities and perform the duties of Managing
Director and Chief Executive Officer inclusive of those which the Board
determines are appropriate to your position or those delegated to you by the
Board from time to time (collectively “the powers, duties and responsibilities
of your position”).


 





















 


4.2                                  You will exercise your powers
and perform your duties and responsibilities in a proper and efficient
manner.  Unless you are absent by reason
of ill health or approved leave, you will devote the whole of your time,
attention and abilities, during the National’s normal business hours and
otherwise as is reasonably necessary, to perform the powers, duties and
responsibilities of your position.


 


4.3                                  In your position, you will
report to the Board and, as required from time to time, to the Chairman on
behalf of the Board.  You will comply
with all lawful directions of the Board or of the Chairman.


 


4.4                                  For the purposes of this
agreement, independently of the National’s rights under the Constitution, the
National may give you a direction which alters, adds to or reduces the powers,
duties and/or responsibilities of your position, provided that the direction is
reasonable.


 


4.5                                  During your employment, you
must use your best endeavours to promote and enhance the National’s interests,
welfare, business, profitability, growth and reputation.  You must not intentionally recklessly or
negligently do, or omit to do, anything which is or may be harmful to those
things.


 


4.6                                  In addition to your duties as
an officer and an employee of the National, you will also owe duties in respect
of each Related Body Corporate of the National in respect of the holding of
office as a Director of a Related Body Corporate and in your capacity as an
employee of the National in respect of any duties performed in relation to a
Related Body Corporate.


 


4.7                                  You must promptly report to
the Board, or any other person authorised by the Board, any material
information which relates to the business of the National (or of any Related
Body Corporate), the exercise of your powers, or the performance of your duties
and responsibilities.


 


4.8                                  You must provide any
information and explanations that the Board, or any other person authorised by
the Board, requests, where such information and explanation relates to the
business of the National (or of any Related Body Corporate), the exercise of
your powers, or the performance of your duties and responsibilities.


 


5                                          Location


 


5.1                                  Your position will be located
at the Head Office for the operations of the Group, which is currently
Melbourne, Australia.


 


6                                          Other
Offices


 


6.1                                  You may, from time to time,
hold office as a director of a Related Body Corporate.  If you cease to be an employee of the
National and thereby the office of Managing Director and Chief Executive
Officer of the National held by you becomes vacant, you agree to resign with
immediate effect from each office held by you in the National and in each
Related Body Corporate.


 





















 


6.2                                  For the purposes of sub-paragraph
6.1 above, you irrevocably appoint the Chairman of the National, as elected
from time to time, to be your attorney and in your name and on your behalf to
execute any document or do anything necessary to comply with your obligations
under the provisions of sub-paragraph 6.1. 
The power of attorney granted to the Chairman under sub-paragraph 6.1
shall remain in force both during your employment and after it ceases.


 


7                                          Travel
Provisions


 


7.1                                Upon the completion of the period
of your employment under this agreement, the National will provide to you a
one-way, first-class, airfare from Melbourne to London and will reimburse you
for reasonable expenses incurred by you relocating to London.  These travel benefits do not form part of
your Total Employment Compensation.


 


8                                          Performance
Review


 


8.1                                  No later than the last month
of each financial year of the National, you and the Board or nominee will
discuss appropriate performance measures and targets for the forthcoming
financial year of the National, with a view to reaching agreement on the
measures of performance and the targets in respect of those measures which will
be used by the Board or nominee in the assessment of your performance in your
position.  In default of agreement,
within three months of the commencement of a financial year of the National,
the Board or nominee may provide a determination in writing of reasonable
performance measures and targets for that financial year.


 


8.2                                  As soon as practicable after
the end of each financial year, the Board will review your performance by
reference to the agreed or determined measures and targets.


 


9                                          Exclusive
Employment


 


9.1                                  During your employment by the
National, you must not, without the Chairman’s prior written consent:


 


(a)                                   be or become an employee or
agent of any other person;


 


(b)                                  undertake any other business
or profession; or


 


(c)                                   assist or have any interest in
any other business or profession.


 


9.2                                  Notwithstanding sub-paragraph
9.1, you may hold or acquire, as a bona fide investment, shares or other
securities of a company listed for quotation on any recognised stock exchange,
unless to do so would be unlawful or the standards of corporate governance
determined by the Board makes it improper or inappropriate.


 


10                                   Remuneration


 


Total Employment Compensation (“TEC”)


 


10.1         Your annual remuneration will be provided
as a TEC.  Your TEC is $2,230,000.  Your TEC is comprised of your Total
Remuneration Package (“TRP”) and, as set


 





















 


out in paragraphs 10.6, 10.7, 10.8 and 10.9,
either employer superannuation contributions or pension contributions, i.e. any
superannuation or pension contributions are funded from your TEC.


 


10.2         Your TEC is provided in accordance with the
terms of the Management Remuneration Package Guidelines as issued and varied by
the National in its discretion from time to time.


 


10.3         Your TRP is comprised of a salary and
benefit component.  The salary component
of your TRP is $1,230,571.  The benefit
component of your TRP is $820,381.  Your
TRP is, therefore, $2,050,952.


 


10.4         You may salary package the benefit
component of your TRP in each year.  This
proportion may be provided as cash or non-cash benefits or a combination of
both.  It includes any Fringe Benefits
Tax payable by the National in connection with the provision of non-cash
benefits.


 


10.5         Your salary and any other cash benefit
component of your TRP will be paid fortnightly in arrears.


 


Superannuation (funded from your TEC)


 


10.6                            During the period of your
employment, the National will make annual superannuation contributions (if any)
of an amount equal to 9.7% of 90% of your TRP into the National Australia Bank
Group Superannuation Fund (the “Fund”) – these contributions are included in
your TEC.  The National may alter the
amount of this contribution from time to time, subject to any applicable
legislation.  Any amount above the
Maximum Earnings Base for Superannuation Guarantee contribution purposes will
be paid to you as a cash allowance.


 


10.7                            The employer superannuation
contribution set out in sub-paragraph 10.6 is in addition to any employee
superannuation contributions you may make to the Fund, either in the form of
additional employee contributions, or by deductions from your TRP.


 


10.8                            In lieu of the Australian
superannuation arrangements provided for in sub-paragraphs 10.6 and 10.7 above,
you may elect, by notice in writing to the National, to participate in a
pension or other scheme in the United Kingdom nominated by you, which is
approved by the National (the “approved scheme”), to which you may contribute
up to 25% of the salary component of your TRP. 
However, the contribution can be no greater than the amount permitted by
any Inland Revenue regulations (or other United Kingdom tax provisions) to be
made to the approved scheme from time to time, without any tax being charged to
the National or a Related Body Corporate or other tax consequences for the
National or a Related Body Corporate.


 


10.9                            If the amount that may be
contributed to the approved scheme in accordance with sub-paragraph 10.8 is less
than 25% of the salary component of your TRP, the National will pay to you the
amount equal to the difference in the form of additional taxable salary.


 





















 


Other benefits


 


10.10                      In addition to the benefits
provided to you as part of your TEC, you are entitled to participate in:


 


(a)                                   the Short-Term Incentive
Performance-Based Plan, as set out in Schedule A to this agreement; and


 


(b)                                  the Long-Term Incentive
Performance-Based Plan, as set out in Schedule B to this agreement.


 


10.11                      In addition to the benefits
provided to you as part of your TEC, and subject to any approvals of
shareholders where required by law, by the Constitution, the Corporations Act, or the Listing Rules:


 


(a)                                   you will be considered for
participation in other staff share schemes as the Board may determine;


 


(b)                                  you are encouraged to
undertake an annual medical assessment at the National’s expense; and


 


(c)                                   you are entitled to
participate in other benefits which are normally provided to executives
employed by the National.


 


11                                   Director’s
Remuneration


 


Your TEC is
paid in respect of services provided by you to the National under this
agreement, including services in connection with holding office as a Director
of the National or of any Related Body Corporate.  No separate amount is payable by the National
to you in respect of your services as a Director of the National or of any
Related Body Corporate.


 


12                                   Expenses


 


Subject to
substantiation and approval in accordance with the National’s guidelines from
time to time, the National will reimburse you for all expenses you properly
incur in carrying out your responsibilities and duties including, but not
limited to, travelling, accommodation, entertainment and telephone
expenses.  Payment of any reimbursement
is subject to the approval of the Chairman.


 


13                                   Annual
Leave


 


13.1         You are entitled to 30 days’ paid annual
leave for each period of 12 months’ continuous service during your
employment.  For any continuous period of
service of less than 12 months, you will be entitled to a proportionate amount
of leave.


 


13.2                            Leave will be taken within 12
months of it falling due, at times agreed by you and the Chairman.  Annual leave is not cumulative and annual
leave not taken within 12 months of it falling due will be forfeited.  No payment in lieu of forfeited annual leave
will be made.  Despite this, with the
National’s consent, you may carry forward a maximum of 10 days’ annual leave
from one year to the next.


 





















 


13.3                            Subject to sub-paragraph 13.2,
any accrued but unused portion of annual leave will be paid upon termination of
your employment.  Payment will be
calculated on the basis of your TEC at the date of termination, or in
accordance with the payment basis which the National applies to other senior
executives of the National at the time the payment to you is due.


 


14                                   Long
Service Leave


 


14.1                            You are entitled to long
service leave in accordance with:


 


(a)                                   the National Australia Bank Group Award
2002 as replaced and varied from time to
time, as it applies to the National; or


 


(b)                                  the National’s retiring allowance and
extended leave scheme as varied from time to time,


 


whichever
provides the greater period of leave.


 


14.2                            Any accrued but unused portion
of long service leave will be paid on termination of your employment.   Payment will be calculated on the basis of
your TRP at the date of termination, or in accordance with the payment basis
which the National applies to other senior executives of the National at the
time the payment to you is due.


 


15                                   Sick
Leave


 


During the
period of your employment, and any further period of employment under this
agreement, the National will provide you with a total of 90 days’ paid sick
leave if you are unable to duly perform the powers, duties and/or
responsibilities of your position by reason of personal illness, accident or
injury.  This entitlement is subject to
you providing evidence satisfactory to the National of your incapacity, if requested by the National to do so.


 


16                                   Confidentiality
and other Duties


 


16.1                            You agree that:


 


(a)                                   Confidential Information is solely and
exclusively the property of the National or of a Related Body Corporate (or
both) (as the case may be);


 


(b)                                  you are subject to obligations in relation
to Confidential Information by reason of this agreement;


 


(c)                                   you are subject to obligations in relation
to Confidential Information under the common law; and


 


(d)                                  the Corporations Act places certain
obligations on you in respect of use or disclosure of information.


 


16.2                            Unless you are required by the
National (or the relevant Related Body Corporate), its auditors, or by law, or
the National (or the relevant Related Body Corporate) agrees in writing, you
must not use any Confidential Information or disclose any Confidential
Information to any person other than for the purposes of your office and employment.


 





















 


16.3                            You must not use any
Confidential Information for the benefit of any person other than the National
(or the relevant Related Body Corporate).


 


16.4                            To the extent that
Confidential Information is publicly available (other than by reason of a
breach by you or any other person of obligations owed to the National (or to
the relevant Related Body Corporate) in relation to Confidential Information),
subject to sub-paragraph 16.5 below your obligations under this paragraph 16
cease.


 


16.5                            If it is uncertain whether any
information is Confidential Information or any Confidential Information is
publicly available, such information is deemed to be Confidential Information
and deemed not to be publicly available, unless the National (or the relevant Related
Body Corporate) informs you in writing to the contrary.


 


16.6                            So far as is reasonably
practicable, you must maintain proper and secure custody of Confidential
Information and use your best endeavours to prevent the disclosure of
Confidential Information to third parties or the use by them of Confidential
Information.


 


16.7                            Upon cessation of your
employment or on request by the Board, you must immediately deliver to the
National (on its behalf or on behalf of the relevant Related Body Corporate)
all Confidential Information which is physically capable of delivery.


 


16.8                            If the National requests you
to do so (on its behalf, or on behalf of any Related Body Corporate), instead
of delivering the Confidential Information as set out in sub-paragraph 16.7 above,
you must destroy the Confidential Information and certify in writing to the
National that the Confidential Information has been destroyed.


 


16.9                            In the case of computer
software or other computer or electronic data the National has requested you to
destroy, you must erase it from magnetic or other media on which it is stored
such that it cannot be recovered or in any way reconstructed and certify in
writing to the National that the Confidential Information has been so
destroyed.


 


16.10                      Your obligations in relation
to Confidential Information under this agreement:


 


(a)                                   continue
after cessation of your employment with the National;


 


(b)                                  are
enforceable by the National (or any Related Body Corporate) at any time by
legal process; and


 


(c)                                   are for the continuing benefit
of the National and of each Related Body Corporate.


 


16.11                      Your obligations under the
Corporations Act as an officer and as an employee
are in addition to your obligations under this agreement.


 


16.12                      You have read and understood,
and will comply with, Article 11.8 of the Constitution “Obligation of
Secrecy” and, without limiting the generality of your obligations as an
employee or as an officer of the National, you will not reveal or make known
any of the matters, affairs or concerns which may come to your


 





















 


knowledge as a Director or officer of the
National to any person or persons except in the course or performance of your
duties or under compulsion or obligation of law when officially required to do
so.


 


17                                   Termination
of Employment


 


Summary Termination


 


17.1                            At any time, the National may
terminate your employment effective immediately by giving written notice to
you, if:


 


(a)                                   you become bankrupt or
compound with your creditors (or any of them) or assign your estate for the
benefit of your creditors (or any of them);


 


(b)                                  you are precluded from taking
part in the management of a corporation by a provision of the Corporations Act;


 


(c)                                   you are convicted of any
offence involving fraud or dishonesty or any other serious offence (except for
a traffic offence) which is punishable by imprisonment (whether you are
imprisoned or not);


 


(d)                                  you commit a serious or
persistent breach or non-observance of this agreement;


 


(e)                                   you are guilty of misconduct
of such a kind that it would be unreasonable to require the National to
continue your employment during the notice period required under this
agreement; or


 


(f)                                     your office as a Director
becomes vacant or is vacated by force of the Corporations Act or of the
provisions of Article 10.14 or Article 10.28 of the Constitution.


 


Termination by the National by giving notice


 


17.2                            At any time the National may
terminate your employment by giving you six months’ written notice, if:


 


(a)                                   the National has determined
that it no longer wishes to retain your services; or


 


(b)                                  you are removed from office as
a Director of the National in accordance with the relevant provisions of the
Corporations Act or  the Constitution (subject to any applicable
provisions of the Corporations Act).


 


17.3                            In the National’s discretion
it may:


 


(a)                                   require you to work through
all (or part only) of the notice period;


 


(b)                                  direct you to take special
leave on TEC during some part or all of the notice period;


 


(c)                                   in respect of a period for
which payment in lieu is not made, direct you to work for part and to take
special leave for part; or


 





















 


(d)                                  make payment in lieu of the
whole notice period (or the balance of the notice period if you have worked
and/or been directed to take special leave for part of the notice period).


 


17.4                            If the National makes payment
in lieu of all or part of the notice period, it will be calculated on the basis
of your TEC.


 


17.5                            Upon termination of employment
under sub-paragraph 17.2, the National will in addition to any payment under
sub-paragraph 17.3 pay to you a termination payment of an amount equal to 12
months’ TEC.


 


Consequences of cessation of office


 


17.6                            You acknowledge that, by
reason of the Constitution and of the Corporations Act, if you cease to hold
office as a Director of the National or your office as a Director of the
National becomes vacant, you thereupon automatically cease to hold office as
Managing Director and Chief Executive Officer and the National may terminate
your employment in accordance with the provisions of this agreement.


 


Termination by the National on account of extended
absence


 


17.7                            At any time, the National may
terminate your employment by making a payment in lieu of notice of an amount
equal to six months of your TEC if you are unable, by reason of illness,
accident or injury:


 


(a)                                   to duly perform the powers,
duties and/or responsibilities of your position for periods aggregating more
than three months in any 12 month period; or


 


(b)                                  to resume the powers, duties
and/or responsibilities of your position after a period of three months from
the commencement of the incapacity.


 


17.8                            Before the National is
entitled to terminate your employment under sub-paragraph 17.7:


 


(a)                                   you must have been afforded a
reasonable opportunity to provide the National with any information from a
medical practitioner or any other health service provider of your choice, as to
the nature and extent of your incapacity including the expected duration of
incapacity and your prognosis generally; and


 


(b)                                  in order for the National to
make an informed decision as to whether you are able to carry out the inherent
requirements of your position, the National may require you to undergo an
examination by a medical practitioner or other health service provider of the
National’s choice and you consent to a report, including the results of such
examination, being provided to the National by that medical practitioner or
other health service provider.


 


17.9                            If your employment is
terminated in accordance with sub-paragraph 17.7:


 


(a)                                   the National will pay to you a
termination payment of an amount equal to 12 months’ TEC; and


 





















 


(b)                                  in addition to such
termination payment, the National may, in its absolute discretion, determine to
pay to you any additional benefits which may be appropriate in the
circumstances.


 


Termination by you because of material change of
circumstances


 


17.10                      You may terminate your
employment under this agreement in the case of a material change of
circumstances by giving the National six months’ notice in writing.


 


17.11                      A change in the powers, duties
and responsibilities of your position that is not authorised by the terms of
this agreement is a “material change of circumstances” if, and only if, without
your agreement:


 


(a)                                   the National purports to
reduce your TEC;


 


(b)                                  the National purports to
substantially reduce the powers or responsibilities of your position;


 


(c)                                   the National purports to
substantially diminish the scope of your duties in your position;


 


(d)                                  the National purports to
unilaterally appoint you to another position;


 


(e)                                   there is any other change by
the National in relation to your employment, which, under generally applicable
principles of law, would amount to conduct by the National entitling you to
accept that conduct as constituting a termination of your employment; or


 


(f)                                     you cease to report to the
board of the ultimate parent or holding company of the National.


 


17.12                      In the National’s discretion:


 


(a)                                   the National may require you
to work through all (or part only) of the notice period; or


 


(b)                                  the National will make payment
in lieu of the whole notice period (or the balance of the notice period if you
have worked for part of the notice period).


 


17.13                      If the National makes a
payment in lieu of all or part of the notice period, it will be calculated on
the basis of your TEC.


 


17.14                      Upon termination of employment
on this basis, the National will in addition to any payment under sub-paragraph
17.12(b) pay to you a termination payment of an amount equal to 12 months’ TEC.


 


17.15                      If you terminate your
employment as a result (wholly or in part) of an event under sub-paragraph
17.11(a) above, then any payment the National makes under sub-paragraph 17.14
will be calculated on the basis of your TEC before the purported reduction of
your TEC.


 





















 


Other termination by you


 


17.16                      You may terminate this agreement
at any time by giving the National six months’ written notice or such other
period of notice as the National may agree with you in writing.


 


17.17                      The National may either:


 


(a)                                   retain you in its service for
all or part of the notice period, in which case the National may either require
you to undertake your normal duties or require you to take special leave during
this period; or


 


(b)                                  make payment in lieu of the
whole of the notice period (or the balance of the notice period if you have
worked or taken special leave for part of the notice period).


 


17.18                      If the National makes a
payment in lieu of all or part of the notice period, it will be calculated on
the basis of your TEC.


 


Forfeiture of Deferred Issued Shares upon
termination of employment by the National in certain circumstances


 


17.19                      If:


 


(a)                                   your employment is terminated
by the National on, or by reason of, any of the grounds listed in sub-paragraph
17.1(b)-(f) under the heading “Summary Termination” above; and


 


(b)                                  that ground (or grounds)
included or involved a breach by you of, or failure to comply with, your duties
or obligations to, or otherwise directly involved, the National,


 


then all,
right, title or interest in all Deferred Issued Shares (whenever issued) will
be forfeited.


 


18                                   Entitlements
and Obligations Upon Termination


 


18.1                            Subject to any reductions in
the amount of your termination payment in accordance with sub-paragraphs 18.2
and 18.3 of this agreement, in addition to any other entitlement under this
agreement, on any termination of your employment you are entitled to receive:


 


(a)                                   your salary and other benefits
under this agreement until the date of termination;


 


(b)                                  an amount in lieu of any
accrued but untaken annual leave calculated on the basis of TRP;


 


(c)                                   an amount in lieu of any
accrued but untaken long service leave calculated on the basis of TRP;


 


(d)                                  any other benefits due to you
pursuant to any share plan or other relevant plan; and


 





















 


(e)                                   reimbursement of any expenses
properly incurred by  you in accordance
with this agreement,


 


up to and including the date of your
termination.


 


18.2                            Any amount payable to you in
accordance with this agreement upon termination of employment is conditional
upon the payment complying with, and being permitted by, the provisions of the
Corporations Act.


 


18.3                            If the payment upon
termination of employment required under this agreement would exceed that which
is permitted by the Corporations Act, then, despite any other provisions of
this agreement, you will only be entitled to, and the National will only pay to
you, that part of the amount of the payment as is permitted by the provisions
of the Corporations Act.


 


18.4                            Upon termination of your
employment you will return each item of the National’s property (including but
not limited to keys, access cards, each vehicle owned or leased by the
National, computers, and disks) in your possession or control.


 


Non-Solicitation Covenant


 


18.5                            You covenant that whether on
your own account, or for any person, for a period of 12 months from the date your
employment with the National ceases, or if that is not reasonable, for a period
of 6 months from the date your employment with the National ceases, you will
not solicit or entice, or endeavour to solicit or entice, from the National (or
from any Related Body Corporate) any officers or employees of (or any
contractors to) the National, whether or not that person would commit a breach
of any contract by reason of ceasing to service or provide services and/or
goods to the National (or to any Related Body Corporate).


 


18.6                            For the purposes of
sub-paragraph 18.5, any reference to the officers, employees, and contractors
of the National (or any Related Body Corporate) is limited to those employees
and contractors directly or indirectly interested, engaged or employed by the
National (or by any Related Body Corporate) in any business or activity of a
like or similar kind to that in which the National (or any Related Body
Corporate) was interested or engaged during the period of 12 months prior to
the cessation of your employment with the National.


 


Non-Competition Covenant


 


18.7                            You covenant that for a period
of 12 months from the date your employment with the National ceases, or if that
is not reasonable, for a period of 6 months from the date your employment with
the National ceases, you will not, without the National’s prior written
consent:


 


(a)                                   engage in Restricted
Activities, that is:


 


(i)                                      participation in the business
of providing financial services in competition with the Group;


 


(ii)                                   participation in any business
or activity of a like or similar kind to that in which the Group was interested
or engaged and in respect of which you, in the National’s reasonable opinion,
had substantial knowledge, during the period of 12 months prior the termination
of


 





















 


your employment with the National in respect of that business or
activity;


 


(iii)                                soliciting or enticing, or
endeavour to solicit or entice, from the National, the custom of any person who
during the 12 months prior to the cessation of your employment was a significant
customer of the National;


 


(b)                                  in a Restricted Area, that is:


 


(i)                                   any State or Territory of
Australia;


 


(ii)                                   any State or Territory of
Australia and any country in which the National, or a Related Body Corporate
is, directly interested or engaged in:


 


(1)                               the business of providing
financial services;


 


(2)                                    any business or activity of a
like or similar kind to that in which the National, or a Related Body
Corporate, was interested or engaged during the period of 12 months prior to
the termination of your employment with the National, in respect of that
business or activity.


 


Application of Restrictions


 


18.8                            Sub-paragraph 18.7 will be
construed and have effect as if it were a number of separate sub-paragraphs
which results from combining the commencement of sub-paragraph 18.7 with each
sub-paragraph in paragraph (a) and combining each such combination with each
sub-paragraph of paragraph (b).  Each
such resulting sub-paragraph is severable from each such resulting sub-paragraph
and any word or phrases contained in the commencement of sub-paragraph 18.7 is
severable.  If any such resulting sub-paragraph
(or any word or phrase contained in the commencement of sub-paragraph 18.7) is
declared or determined to be illegal, invalid or unenforceable for any reason
by final determination of any court or tribunal of competent jurisdiction, such
illegality, invalidity or unenforceability will not prejudice or in any way
affect the validity or enforceability of any other such resulting sub-paragraph,
word or phrase.


 


Reasonableness


 


18.9                            You agree that in your
position, and in your employment with the National generally, you have and will
become aware of information which is confidential to the National and its
Related Bodies Corporate and information concerning all aspects of the National’s
dealings with its customers.  You further
agree that the restrictions set out in sub-paragraph 18.5, 18.6 and 18.7 are
reasonable in all the circumstances of your employment with the National.


 


Interpretation


 


18.10                      For the purposes of sub-paragraph
18.7:


 


“the business
of providing financial services” includes, but is not limited to, banking
services, insurance services and funds management services;


 





















 


“participation
in” means, whether directly or indirectly, being:


 


(a)                                    interested, engaged or
employed in, or acting at, the senior executive or management level;


 


(b)                                   an officer (including being
the holder of any non-executive office);


 


(c)                                    a senior executive or
managerial employee or agent; or


 


(d)                                   an adviser or consultant to the
board of directors, senior executives or management level employees,


 


of any person, firm or corporation.


 


19                                   Policies


 


19.1                            You will comply with all the
National’s policies and procedures generally, as established and varied from
time to time.  The National’s policies
and procedures are for the National’s benefit solely and create no right or
entitlement in you.  By accepting this
offer, you acknowledge your awareness of the National’s policies and procedures
which are currently in operational effect.


 


20                                   Dispute
resolution


 


20.1                            Any dispute in respect of the
application of this agreement or concerning its interpretation, other than a
dispute giving rise to a claim for equitable relief, will be resolved in
accordance with the following steps:


 


(a)                                   when either you or the
National notifies a dispute in writing to the other party, the dispute will be
discussed between you and the Chairman with a view to resolution;


 


(b)                                  if that discussion fails to
resolve the dispute within 14 days of the notice, within a further 3 days the
dispute will be discussed between you and the Board with a view to resolution.


 


20.2                            Subject to completion of the
process set out in sub-paragraph 20.1 above, a dispute between the National and
you (other than a claim for equitable relief) as to:


 


(a)                                   the interpretation of this
agreement; or


 


(b)                                  the rights or obligations of
each party arising from your employment relationship with the National,


 


must be submitted to a single arbitrator in accordance
with and subject to the Commercial Arbitration Act 1984 (Victoria).


 


20.3                            For the purposes of an
arbitration under sub-paragraph 20.2 above, if the National does not agree with
you on the appointment of an arbitrator within 14 days of the notification of
dispute by either party to the other, the President or Acting President of the
Law Institute of Victoria will appoint an arbitrator on application by either
you or the National.


 





















 


21                                   Amendment


 


This agreement may only be varied or replaced
by a document signed by the National and you.


 


22                                   Extent of
Contractual Obligations


 


22.1                            The provisions of this
agreement shall operate only to the extent permitted by:


 


(a)                                 law, in particular,
the Corporations Act; and


 


(b)                                  any other obligations with
which the National must comply under the Listing Rules.


 


22.2                            If any provision or part of a
provision of this agreement goes beyond that which is permitted by law, or does
not comply with the obligations referred to in sub-paragraph 22.1 above, that
provision or part of a provision shall be interpreted in such a way as to be
permitted by law or to comply with the obligations or, if such an
interpretation is not open, that provision or part of the provision must be
severed.


 


22.3                            This paragraph 22 does not
apply so as to limit or affect the operation of any other provision of this
agreement which governs the interpretation of this agreement or which provides
for severance of any part of this agreement.


 


23                                   Entire
Understanding


 


23.1                            This agreement including its
Schedules constitute the entire agreement of the parties about its subject
matter.   Any previous agreements,
understandings and negotiations on that matter cease to have any effect.


 


23.2                            For the avoidance of doubt,
for the purpose of this agreement the subject matter of this agreement is the
terms and conditions of your employment by the National and, subject to the
Corporations Act and the Constitution, the holding
of any office with the National or a Related Body Corporate.  Subject to the express terms of this
agreement, this paragraph is not intended to remove, limit, extend or otherwise
vary:


 


(a)                                   any
duty imposed upon you or the National which arises by operation of law or by
force of legislation; or


 


(b)                                  any term of the agreement or
obligation which would, in the absence of express provision in the agreement,
be implied by law.


 


23.3                            No oral explanation or
information provided by either you or the National to the other party will:


 


(a)                                 affect the meaning or
interpretation of this agreement; or


 


(b)                                  constitute
any collateral agreement, warranty or understanding between the National and
you.


 





















 


24                                   Waiver
and Exercise of rights


 


24.1                            A single or partial exercise
or waiver of a right relating to this agreement will not prevent any other
exercise of that right or the exercise of any other right.


 


24.2                            A party will not be liable for
any loss, cost or expense of any other party caused or contributed to by the
waiver, exercise, attempted exercise, failure to exercise or delay in the
exercise of a right.


 


25                                   Severance


 


25.1                            You and the National consider
that the Covenants are reasonable in all the circumstances of your employment.


 


25.2                            Each and every part of the
Covenants is a severable and independent covenant.   You agree with the National that the joint
intention of the parties is that if the Covenants, taken together, go beyond
what is reasonable in all the circumstances but would be reasonable with any
one or more of the Covenants (or any one or more parts of the Covenants)
deleted, the Covenants will apply as if those unreasonable Covenants (or parts
of Covenants) were deleted.


 


26                                   Governing
law


 


This Agreement is governed by and will be
interpreted in accordance with the laws of Victoria, Australia.


 


27                                   Definitions


 


In this
agreement, unless the context otherwise requires, words have the meaning given
to them in Schedule C.


 


28.                                Acceptance


 


A copy of this
agreement is enclosed for your records. 
Would you please sign and return the original to me to confirm your
acceptance of the terms and conditions of your employment with the National.


 


	
  Yours sincerely

  
	
   

  
	
  [Original signed]

  
	
   

  
	
   

  
	
  Graham
  Kraehe

  
	
  Chairman

  
	
  National
  Australia Bank Limited

  



 





















 


ACCEPTANCE


 


I, John Morrison Stewart, acknowledge that I have read and understood
this agreement, including the Schedules, and I hereby accept the offer of
employment with National Australia Bank Limited on the terms set out in this
agreement including the Schedules.


 


 


	
  Signed:

  	
   

  	
  [Original
  signed]

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  27 May 2004

  	
   

  
	
   

  	
   

  
	
  Witnessed By:

  	
  [Original
  signed]

  	
   

  
	
   

  	
   

  
	
  Full Name of Witness

  	
  Arthur
  Robert Willett

  	
   

  
	
  (Please Print)

  	
   

  
	
   

  	
   

  
	
  Address of Witness

  	
  38 Waltham
  St Flemington Vic 3031

  	
   

  



 





















 


SCHEDULE A


 


SHORT-TERM INCENTIVE
PERFORMANCE-BASED PLAN (the “STI Plan”)


 


1                                          STI Plan


 


1.1                                  During your employment, you
are entitled to participate in the STI Plan.  
The Board may in its discretion (but not in a manner inconsistent with
this Schedule A) change the terms of the STI Plan at any time.


 


1.2                                  Under the STI Plan, as it is
in operation from time to time, you will be considered for an annual STI
Reward.


 


1.3                                  Your target STI Reward for the
first year of the period of your employment is 100% of your TEC.  For each subsequent year of the period of
your employment, your target STI Reward will be reviewed annually by the Board
by reference to factors determined by it in its discretion, including, but not
limited to, economic conditions and market movements.  The target STI Reward as determined by the
Board in respect of a year will not be less than the target STI Reward for the
immediately preceding year.


 


1.4                                  You will be informed of the
details of your annual target STI Reward, annual goals and payments for various
percentage achievement of those goals each year in writing.


 


1.5                                  The STI Rewards will be
governed by the EVA Incentive Program or such other program as determined by
the Board, as in force and amended from time to time.


 


1.6                                  Whether the STI Reward for a
particular year will be provided to you, and, if so, its quantum relative to
the target, will be subject to:


 


(a)                                   the extent to which you
achieve the performance targets referred to in this agreement as determined by
the Board;


 


(b)                                  an assessment by the Board of
the contribution you have made to the overall development of the Group; and


 


(c)                                   the extent to which you
achieve an annual Economic Value Added target as set by the Board.


 


1.7                                  The Board will take into
account reasonable and relevant factors in exercising its discretion in
determining the quantum of your STI Reward. 
The Board may, in its absolute discretion,  award a reasonable and appropriate STI Reward
in excess of the target STI Reward for exceptional performance in any year.


 


Provision of STI Reward


 


1.8                                  In order to continue your
current demonstrated support for the National and its shareholders, and to link
your performance to the future performance of the National, at least 50% of
your annual STI Reward, if any, will be provided in National Shares to be known
as Deferred Issued Shares.


 





















 


1.9                                  Before the date nominated by
the National for the relevant year, you may express a preference in writing to
the Chairman as to the percentage of any STI Reward, in addition to the 50%
prescribed under clause 1.8 of this Schedule A, you would prefer the
National to provide as Deferred Issued Shares for the coming STI Plan year,
should you become eligible for the STI Reward.


 


Achievement of an STI Reward


 


1.10                            In any year in which you are
eligible to receive an STI Reward, the Board will, as soon as reasonably
practicable arrange for provision to you of the proportion of that STI Reward
which is not being placed in National Shares and arrange for you to be provided
with National Shares for the remaining proportion of the STI Reward, to be held
on trust as Deferred Issued Shares.


 


Deferred Issued Shares


 


1.11                            The Deferred Issued Shares
will be held on trust for you under the National Australia Bank Staff Share
Ownership Plan.


 


1.12                            While the Deferred Issued
Shares are held on trust, you will be entitled to receive dividend payments and
exercise voting rights through the Trustee.


 


1.13                            Subject to the provisions in
sub-paragraph 17.19 of this agreement concerning the forfeiture of Deferred
Issued Shares upon termination of your employment, the terms of the Deferred
Issued Shares will be substantially the same as those currently provided under
the National’s “At Risk” program, save that the relevant restriction period for
each provision of National Shares will be up to 10 years from the date of
allocation.


 


Approval by Shareholders


 


1.14                            Any issue or allocation of
shares as part of the STI Reward, under the National Australia Bank Staff Share
Ownership Plan, is subject to approval by shareholders if required by law or
under any obligations with which the National must comply under the Listing
Rules.


 





















 


SCHEDULE B


 


LONG-TERM INCENTIVE
PERFORMANCE-BASED PLAN


 


At the first Annual General Meeting after the date of
acceptance of this offer, at which it is lawful to do so, the National will
seek the approval of shareholders for the grant of executive share options
and/or performance rights to you under the National Australia Bank Executive
Share Option Plan No. 2 and the National Australia Bank Performance Rights Plan
in numbers to be determined by the Board.


 





















 


SCHEDULE C


 


DEFINITIONS


 


In this agreement, unless the context otherwise
requires:


 


“Accrued but untaken” or “accrued but unused”,
in relation to leave entitlements, means leave to which you have become
entitled upon termination of employment pursuant to any applicable award of the
Australian Industrial Relations Commission or a statutory provision or this
agreement.


 


“Board” means the Board of Directors of
National Australia Bank Limited as comprised from time to time.


 


“Chairman” means the Chairman of the Board, as
appointed from time to time.


 


“Confidential Information” means any trade
secret or other confidential information relating to the business affairs,
strategy, accounts, business plans, marketing plans, sales plans, prospects,
research, management, financing, products, inventions, designs, processes and
any data bases, data surveys, customer lists, records, reports, software or
other documents, material or other information in any form concerning the
National (and any Related Body Corporate) or any of the customers or suppliers
of the National (or of any Related Body Corporate) to which you gain access,
whether before, during or after your employment with the National.


 


“Constitution” means the Constitution of the
National Australia Bank Limited [as applicable from time to time].


 


“Corporations Act” means the Corporations Act
2001 (Cth) as amended and in force from time to time.


 


“Covenants” means the covenants, obligations
and restrictions contained in this agreement.


 


“Deferred Issued Shares” means National
Shares provided as part of an annual STI Reward.


 


“EVA Incentive Program” means the Group’s
Economic Value Added Incentive Program.


 


“Group” or “National Australia Bank Limited
Group” means National Australia Bank Limited and each Related Body Corporate.


 


“Listing Rules” means the listing rules of
the Australian Stock Exchange Ltd or any other stock exchange on which the
National is listed, as amended and in force from time to time.


 


“National” means National Australia Bank
Limited and, where applicable, its Related Bodies Corporate.


 


“National Shares” means ordinary shares in National
Australia Bank Limited.


 


“Related Body Corporate” means Related Body Corporate
of the National and, in that case, has the same meaning as in Section 50
of the Corporations Act.