EXHIBIT
4.27


 


Non-executive
director appointment letter – Mr John G Thorn


 





















 


Mr JG Thorn

64 Roseville Avenue


ROSEVILLE NSW
2069


 


9
August 2004


 


Dear John


 


Letter of Appointment


 


This letter is intended to inform you of the terms of
your appointment to the office of Non-Executive Director of National Australia
Bank Limited (“National”) and National Equities Limited.  It should be read in conjunction with, and is
subject to, the National’s Constitution (a copy of which is attached to this
letter), and the charters and policies approved from time to time by the Board,
including the Board Charter (a copy of which is attached to this letter).  Such charters and policies may be changed by
the Board from time to time.


 


The Board
approved your appointment with effect from 16 October 2003 and you held office
until the next Annual General Meeting of the National which was held on 19
December 2004, at which time you were elected as a Director of the National by
the shareholders.


 


Please
acknowledge that you have read, understand and accept the contents of this
letter by signing the enclosed copy of this letter and returning it to the
Company Secretary.


 


1              Terms of
appointment


 


1.1           Qualifications


 


To qualify for the office of Director of the National, you must:


 


•              be under 70 years of age; [Article 10.9]


 


•              not be disqualified or suspended from managing corporations and must
otherwise be permitted by law to act as a director of a company; [s203B Corporations Act and Part 2D.6]


 


•              sign a Confidentiality Deed which prohibits you from disclosing any
matters, affairs or concerns of the National; [Article
11.8 of the National’s Constitution] and


 





















 


•              hold at least 2,000 fully paid shares in the National in your own
right within two months after your appointment. 
[Article 10.8]


 


1.2           Term


 


Following your appointment by the Board, you hold office until the
first Annual General Meeting of the National after the date of your
appointment.  You were then elected to
the position of Director by resolution of the shareholders of the National at
that Annual General Meeting.  [Articles 10.12 and 10.13]


 


Once you were elected to the office of Director by resolution of the
shareholders of the National in General Meeting, you became subject to the
rotation of Directors provided for in Articles 10.3 to 10.7 of the National’s
Constitution.  Broadly, these Articles
provide that at each Annual General Meeting one-third of the Directors for the
time being and any other Director not in such one-third who has held office for
three years or more must retire from the office and is eligible for
re-election.  Please refer to the clause
2.8 – Performance evaluation, concerning the process undertaken by the Board to
determine if the Board will recommend to shareholders that a Director be
re-elected to office.


 


The National may remove a Director from office as a Director at any
time by a resolution passed at a General Meeting.  [Articles 10.3-10.7 and
10.14].


 


Appointment and removal of Directors is a matter for shareholders.  However, the Board has set a policy limit of
10 years for individual service as a Director, subject to an annual review
thereafter.  The Board regards this as an
appropriate period of service.  This
provided an opportunity for renewal of the Board whilst recognising that
Directors who have served on the Board for an extended period of time have
gained valuable experiences, insights and historical perspectives regarding the
National that would not be easily replaced.  [Clause 7.5 of Board Charter]


 


1.3           Vacation
of office


 


Your position becomes vacant if any of the circumstances prescribed
under the Corporations Act 2001 (Cwlth) or the
National’s Constitution, arise, including the following:


 


•              you are disqualified from managing corporations; [s203B Corporations Act and Part 2D.6]


 


•              you resign from office or refuse to act; [Article
10.28(b)]


 


•              you are removed from office by resolution passed at a General
Meeting of the National; [Article 10.28(c)]


 


•              you are not present personally or by an alternate director or proxy
at meetings for a continuous period of two months without a leave of absence
from the Board; or [Article 10.28(d)]


 


•              you accept or hold any office in another bank without the consent of
the Board.  [Article
10.28(f)]


 





















 


Article 10.28 of the National’s Constitution contains a list of
circumstances that, in addition to those prescribed by the Corporations Act,
will result in the office of a Director becoming vacant.


 


1.4           Relationship
with the National


 


Once appointed, you hold office as a Director of the National.  You are not appointed or designated as an
employee of the National nor are you an Executive Director within the meaning
of the National’s Constitution.


 


2              Expectations


 


2.1           Overview


 


The National’s expectations of you as a Director are listed in this
section.  In many cases, you are obliged
to meet these expectations because of your legal duties to the National.  You are encouraged to seek independent legal
advice to assist you in the performance of these duties.


 


2.2           Time
commitment


 


You must contribute sufficient time to your directorship to enable you
to effectively fulfil your duties to the National.  You are also be expected to spend additional
time if you are a Board committee member or if you are the Chairman, or a
director of a subsidiary of the National.


 


While most Board and Board committee meetings are held in Melbourne,
the Board does visit and hold meetings at interstate and international venues
from time to time.


 


You should inform the Board of any change in circumstances that could
affect your ability to commit time to the position.


 


2.3           Board
meetings


 


Board meetings are scheduled ten times a year and normally have a
duration of two days, with the exception of the annual Board meeting in the
United Kingdom which usually has a duration of five days.  A list of the Board Meeting dates for the
remainder of 2004 and for 2005 is attached. 
It is necessary from time to time to convene an unscheduled
meeting.  The National endeavours to keep
such meetings to a minimum, however, a Director may convene additional Board
meetings at any time.  [Article 12.2]


 


You are expected to:


 


•              attend Board meetings and ensure that you have fully read all papers
relating to agenda items;


 


•              apply your mind to the matters before you and bring your own special
skills and experience to your position;


 





















 


•              raise questions and make enquiries when you need more information;


 


•              make sure that any of the Board’s delegates are qualified, reliable
and competent to carry out the duties given to them; and


 


•              make sure that you have been provided with accurate, relevant and
timely information to reach any decision that will affect the National.  You should not make a decision, and you may
refuse to consider any matter, until appropriate information has been provided
to you.


 


2.4           Board
committees and subsidiaries


 


Currently there are four standing Board committees:  the Audit Committee, Risk Committee,
Compensation Committee and the Nomination Committee, and the Board may, from
time to time, convene other Board committees.


 


You are expected to serve on one, and may be asked to serve on more
than one, of these Board committees in accordance with the written charters of
those committees.  Charters for all Board
committees are approved by the Board.


 


You may also be appointed a director of a subsidiary, or subsidiaries,
of the National.


 


2.5           Independence


 


Non-Executive Directors are appointed on the basis that they remain
independent of management and free from any business or other relationship that
could materially interfere with, or could reasonably be perceived to materially
interfere with, the exercise of their unfettered and independent judgment.


 


The Board has approved the definition of ‘independence’ which is set
out in the Board Charter.


 


The Board regularly reviews Director independence.  You should immediately report to the Board
any change in your relationship or the relationship of your associates with the
National, or with its management team, which could affect your independence.


 


2.6           Insider
trading policy and Code of Conduct


 


Directors are expected to comply with the corporate policies approved
from time to time by the Board, including:


 


•               the National’s insider trading policy;


 


•               the National’s Code of Conduct; and


 


•               the Corporate Governance Guide entitled “Role, Duties,
Responsibilities and Rights of the Directors of Category A Company”.


 


Copies of these key policies and codes are attached to this letter.


 


The insider trading policy restricts dealings in National securities by
Directors as well as other officers and employees of the National.  Directors may only deal in


 





















 


such securities in the eight-week periods immediately following either
the release of the full and half year profit announcements (currently made in
May and November) or following the release of a qualifying prospectus.  However, even during such periods, Directors
may not deal in National securities if they are aware of any share price
sensitive information.  An example of
this may be any merger, acquisition or significant disposal activity occurring
during the window period.  Further, under
the insider trading policy, Directors must not deal in National securities for
short-term gain and therefore dealing in the same National securities within a
12-month period is prohibited.  Directors
must also discuss their intention to deal in National securities with the
Chairman before effecting any such dealings.


 


2.7           Confidentiality


 


You are expected to maintain the confidentiality of all materials and
information you obtain in connection with your position.  You are also expected to ensure that your
representatives maintain the confidentiality of such materials and information.


 


You must comply with the Confidentiality
Deed you execute in accordance with Article 11.8 of the National’s
Constitution.


 


2.8           Performance
evaluation


 


The Board regularly conducts an assessment of its effectiveness using
an external facilitator.  This review may
include an assessment of individual director performance.


 


In addition, in advance of you being presented to shareholders for
re-election in accordance with the retirement by rotation provisions in the
National’s Constitution, a peer review process will be undertaken.  That is, the Board (in your absence) will
consider whether the Board will make a recommendation to shareholders in
support of your re-election as a Director of the National.


 


The Nomination Committee will oversee the implementation of this
process.


 


3              Duties
and powers


 


3.1           Duties


 


At the most general level, your role is to
oversee management on behalf of the National, to monitor the National’s
business results and to set goals and formulate strategy.  In performing this role, you are subject to a
number of legal duties to the National.


 


A detailed explanation of your duties is
provided in the Corporate Governance Guide entitled “Role, Duties,
Responsibilities and Rights of the Directors of Category A Company” referred to
earlier and attached to this letter.


 


3.2           Disclosure
of conflicts and material personal interests


 


If a conflict of interest arises in
relation to a matter that will be considered by the Board, you must give the
other Directors notice of the conflict, and, if the conflict is a material
personal interest in the matter (as defined by section 191(2) of the


 





















 


Corporations Act), you must not be present
while the matter is being considered at a Board meeting or vote on the matter.


 


Further guidance in relation to conflicts
and material personal interests is given in the Corporate Governance Guide
attached.


 


3.3           Powers


 


The Board has the power to exercise all of the National’s powers, other
than the powers which the Constitution and the Corporations Act require to be
exercised by the National in General Meeting. 
[Article 11.1 and s198A(2) of Corporations Act]


 


Decisions of the Board are decided by a majority of votes of Directors
present and entitled to vote.  Each
Director has one vote.  [Articles 12.3 and 12.4]


 


3.4           Appointment
of Alternate Director


 


Articles 12.6 - 12.14 of the National’s Constitution provides for a
Director to appoint an Alternate Director to act in his / her place, subject to
the approval of the majority of the other Directors.  However, it has not been the practice in the
National to appoint Alternate Directors.


 


4              Remuneration


 


4.1           Remuneration


 


Non-Executive Directors do not participate in schemes designed to
remunerate executives and do not receive share options, performance rights,
bonuses or other types of performance based remuneration.


 


The National does not provide retirement benefits to Non-Executive
Directors, other than the superannuation payments described below.


 


Each Non-Executive Director will receive the fees set out in Schedule 1
of this letter for their directorship.


 


Additional fees are payable for membership of any Board committees,
subsidiary directorships and for the position of Chairman, in accordance with
the National’s Constitution.


 


The Board approves these fees within the limits set by the shareholders
of the National in General Meeting.


 


Shares


 


Under the National’s Non-Executive Director Share Plan, you will be
provided at least 10% of your annual remuneration in the form of National
shares, except in limited, unusual circumstances.  There is flexibility to provide a maximum of
40% of your annual emoluments in the form of National shares.  The Company Secretary will provide you with
further information on the Non-Executive Director Share Plan.


 





















 


Superannuation


 


Directors may elect to receive part of their remuneration in the form
of superannuation contributions.  As a
minimum, in accordance with the relevant superannuation guarantee (“SG”)
legislation, the National is generally obliged to pay into an approved
superannuation fund, superannuation guarantee contributions on behalf of
Directors at the rate of 9% of the fees (and any other amounts which fall
within the description of “ordinary time earnings” for SG purposes) paid to
you.


 


Other
non-cash benefits


 


If required, the National will provide Directors with a laptop computer
to facilitate the electronic distribution of Board papers and receipt of
electronic communication material to enable Directors to effectively perform
their duties to the National.  Subject to
applicable law, financial services may also be provided by the National to
Directors under terms and conditions that would normally apply to the
public.  [Clause 13.5
of Board Charter]


 


The Company Secretary will assist you to make arrangements in this
regard.


 


4.2           Expenses


 


You are entitled to be reimbursed out of the funds of the National such
reasonable travelling, accommodation and other expenses as you may incur when
travelling to or from Board meetings or Board committee meetings or when you
are otherwise engaged in the business of the National.  [Article 10.18]  I should mention that it is the
National’s policy that no more than two Directors should travel by air together
at any time.


 


4.3           Insurance
and indemnity


 


You have the benefit of the indemnity provided to you in the National’s
Constitution.  This indemnity is broad,
however, it does not provide protection if the National is prohibited from
indemnifying you, for example, where liability is owed to the National.  [Article 21.1 and s199A(2)
of the Corporations Act]


 


Following your appointment, you entered into a Deed of Access,
Indemnity and Insurance which mirrors the protection afforded to you under the
National’s Constitution.  That deed also
includes an undertaking by the National to effect and maintain an appropriate
Directors’ and Officers’ Insurance Policy.


 


You may also be protected under the National’s Directors & Officers
Insurance Policy.


 


Details of the indemnity and the National’s Directors and Officers
Insurance Policy are provided in the brochure attached.


 


It is important that, if you become aware of any matter that may give
rise to an actual or potential claim, or of any circumstances that may lead to
such a claim, you contact Global Operational Risk, Insurance & Compliance
(Melbourne).


 





















 


5              Induction
and training


 


5.1           Induction


 


The National’s Induction Program for Non-Executive Directors is
designed to assist them to participate fully and actively in Board
decision-making from the date of appointment.


 


The program enables appointees to gain an understanding of:


 


•               the National’s financial, strategic, operational and risk management
position;


 


•               their rights, duties and responsibilities; and


 


•               the role of Board Committees.


 


The National’s Induction Program involves the supply of reading
material, informal discussions with the Group Chief Executive and Executive
General Managers, and technical workshops.


 


From time to time, the Nominations Committee reviews the effectiveness
of the Induction Program.


 


Continuing
education


 


The National is committed to providing its Directors with opportunities
to update and enhance their skills and knowledge.  Directors are regularly provided with updates
from management and external advisers about key developments in the company and
the banking and funds management industries.


 


Directors are also entitled to attend external seminars, workshops and
other training programs that are relevant to the National or to their
directorship.  The National will
reimburse a Director for any reasonable costs of such additional training.


 


6              Access to
information


 


6.1           Access to
financial records and company books


 


Under the Corporations Act, a Director has
rights of access to the National’s financial records and, for the purposes of
legal proceedings to which the Director is a party, the National’s books, at
all reasonable times.  [Section 198F and section 290 of the Corporations Act]


 


The Deed of Access, Indemnity and Insurance
grants you access to Board papers and related material.


 


6.2           Access to
the Company Secretary


 


The Company Secretary is responsible for
providing advice and support to the Board and for ensuring that Directors have
sufficient information to make decisions at meetings of the Board.  The Company Secretary also prepares minutes
of all Board meetings.


 





















 


Directors have direct access to, and are
entitled to request additional assistance and information from, the Company
Secretary.


 


6.3           Authority
to appoint independent professional advisers


 


Directors are entitled to seek independent professional advice in
relation to their duties and powers as Directors of the National.  The National will reimburse Directors for all
reasonable expenses incurred in obtaining such advice, provided that the
expenses have been approved by the Chairman and, where appropriate, a copy of
the advice is made available to the Board.


 


7              Further
guidance and information


 


If you have any queries about your appointment, please contact the
Company Secretary.


 


 


	
  Yours sincerely

  
	
   

  
	
  [Original signed]

  	
   

  
	
   

  
	
  GRAHAM J KRAEHE AO

  
	
  CHAIRMAN

  



 


 


I acknowledge that I have read, understood and
accepted the contents of this letter.


 


 


	
  Signed: 

  	
   

  	
  [Original signed]

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Name:

  	
   

  	
  JOHN G THORN

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Date:

  	
   

  	
  11 August 2004

  	
   

  



 


 


When you have signed the attached copy of this letter,
please return the signed copy to –


 


Mr GF Nolan

Company Secretary

National Australia Bank Limited

Level 24

500 Bourke Street

MELBOURNE   VIC   3000


 





















 


Schedule
1: Directors’ Fees as at 9 August 2004


 


	
  BOARD/COMMITTEE

  	
   

  	
  CHAIRMAN

  	
   

  	
  MEMBER

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal
  Board and Board Nomination Committee

  	
   

  	
   

  	
   

  	
  A$

  	
  137,150

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal
  Board Audit Committee

  	
   

  	
  A$

  	
  39,000

  	
   

  	
  A$

  	
  19,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal
  Board Risk Committee

  	
   

  	
  A$

  	
  39,000

  	
   

  	
  A$

  	
  19,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Compensation
  Committee

  	
   

  	
  A$

  	
  17,550

  	
   

  	
  A$

  	
  7,364