**Exhibit 4.2.1**

 

**23April 2003**

 

**MrTimothy L’Estrange**

 

 

Dear Tim,

 

On behalf of Australia and NewZealand Banking Group Limited (“ANZ”), I am pleased to offer you employmentwith ANZ.  This offer is conditionalupon ANZ satisfactorily completing reference checking.

 

This letter sets out the termsof your employment, and constitutes your employment agreement with ANZ(“employment agreement”).  (Referencesto ANZ include any corporation related to ANZ under the *Corporations Act*2001.)

 

**1****                                         Position,Reporting Arrangements and Location**

 

Your positionis **Group General Counsel**reportingto **Peter Marriott,****Chief Financial Officer** and located at **100 Queen Street, Melbourne**.

 

ANZ may, atits discretion, change your position, reporting arrangements, duties andlocation on giving you reasonable notice, following consultation with you, andtaking into account career considerations and personal circumstances.

 

**2****                                         OperativeDate**

 

Thisemployment agreement, and your obligations under it, will commence on theearlier of the date you sign it and your first day of work in your newposition.

 

**3****                                         Remuneration**

 

The details ofyour remuneration are set out in the Schedule. The Schedule forms part of this employment agreement.  Your entitlement to remuneration willcommence on your first day of work in your new position.

 

**4****                                         Leave**

 

***4.1******                               AnnualLeave***

 

You willreceive 4 weeks’ contracted hours paid annual leave for each completed year ofpaid service with ANZ.  You are requiredto take your full annual leave entitlement of 4 weeks over the course of eachANZ financial year (1 October to 30 September), 2 weeks of which must be takenconsecutively.  (ANZ policy requiresthat you are absent for at least 10 consecutive business days per annum.)

 

At the end ofeach ANZ financial year, ANZ will deem you to have taken your full 4 weeks’annual leave.  Accordingly, there willbe no positive accrual of the leave and your annual leave balance at 1 Octobereach year will never be more than your balance at 1 October following yourfirst year of service, or zero whichever is greater.

 

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***4.2******                               SickLeave***

 

You may takesick leave in accordance with standard arrangements applicable to all ANZemployees.  Any untaken part of thisentitlement is cumulative from year to year. In the event of prolonged illness, ANZ may decide at its discretion toprovide you with sick leave in excess of your sick leave entitlements.  You are not entitled to any payment forunused sick leave when your employment with ANZ ends.

 

***4.3******                               ParentalLeave***

 

You may takeparental leave in accordance with standard arrangements applicable to all ANZemployees.

 

***4.4******                               LongService Leave***

 

You areeligible for 13 weeks’ long service leave after completing 15 years ofcontinuous service, and a further 8.66 weeks’ leave for each subsequent 10completed years of continuous service. You may access long service leave on a pro-rata basis after 10 completedyears of continuous service.

 

**5****                                         Ownershipof Intellectual Property and Trade Secrets**

 

Allinventions, discoveries, computer software processes and improvements made byyou during your employment with ANZ remain the property of ANZ.

 

By signingthis employment agreement, you:

 

•                       assign toANZ all proprietary rights including all ownership rights and copyright and theexclusive right to develop, make, use, sell, license or otherwise benefit fromany inventions, discoveries, processes and improvements, made by you within thescope of your employment with ANZ; and

 

•                       agree toexecute any further document that is necessary or desirable to give full effectto your obligations under this clause 5.

 

**6****                                         Valuesand Ethical Standards**

 

ANZ hasdeveloped guiding values and expects you to actively ensure they are anintegral part of the way that you, and those who report to you, carry outduties within ANZ.

 

ANZ expectsyou to further ANZ’s objectives and reputation and faithfully and diligently toperform your duties, exercise your powers, and manage with integrity andrespect all matters concerning ANZ employees and customers.

 

ANZ also hascertain ethical standards that you are required to maintain.  In particular, you must not in any way,either directly or indirectly, be or become engaged, concerned or interested inany business whether as principal, partner, director, agent, promoter orbeneficiary except that of ANZ.  Thisrequirement may be waived at ANZ’s discretion by a written consent signed bythe Chief Executive Officer.

 

**7****                                         Conduct**

 

You must atall times act honestly and in a manner that is consistent with the status ofyour position with ANZ.  You indemnifyANZ against any loss or damage it suffers as a result of any dishonest act byyou, or any willful misconduct in carrying out your duties.

 

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**8****                                         Policiesand Procedures, Performance Management Plans**

 

***8.1******                               Policiesand Procedures***

 

ANZ haspolicies and procedures that apply to your employment.  These policies and procedures may be amendedby ANZ from time to time.  They are notincorporated into or included in your contract of employment with ANZ,including this employment agreement.

 

***8.2******                               PerformanceManagement Plans***

 

Performancemanagement plans will be developed in consultation with you and may be reviewedand varied during the performance period.

 

**9****                                         ConfidentialInformation**

 

You must notdisclose or use in any manner (except in the proper course of your employment,by compulsion of law, or on the written direction of an authorised officer ofANZ or its auditors) any information about ANZ, its customers or its affairswhich you acquire during your employment with ANZ, unless the information isalready legitimately in the public domain. This obligation extends after your employment with ANZ ends.

 

You must alsoreturn to ANZ on request or immediately your employment with ANZ ends:

 

•                       all books,papers, documents and other property which belong or relate to ANZ, itscustomers or its affairs, and any copies of such documents; and

 

•                       anyvehicle, computer hardware or software, key, security pass or other propertythat belongs to ANZ.

 

**10****                                  Restraint**

 

You must notat any time, either during your employment with ANZ or for 12 months after youremployment with ANZ ends (or for such lesser time as a court may deemreasonable), either on your own account or for or jointly with any other personsolicit, interfere with or attempt to entice away from ANZ any person who, atany time within the period of 12 months before the date your employment withANZ ends, was a customer or employee of, or in the habit of dealing with, ANZand whom you had direct or indirect contact with, or dealings with or knowledgeof, for the purpose of your employment.

 

**11****                                  DisciplinaryAction**

 

If you fail tocomply with the provisions of your employment agreement or any other ANZperformance requirements, ANZ may take disciplinary action which may includesuspension with or without pay and, in certain circumstances, termination ofyour employment with ANZ (see clause 12).

 

**12****                                  Terminationof Employment**

 

***12.1******                        TerminationEntitlements***

 

Yourtermination entitlements will depend upon the circumstances of the terminationand are set out in this clause 12 and in the Schedule.  These will be the only entitlements paid toyou upon the termination of your employment with ANZ.

 

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***12.2******                        Resignation***

 

You mayterminate your employment for any reason by giving ANZ 6 months’ writtennotice.  You and ANZ may agree on alesser period of notice, or ANZ may in its discretion waive the notice periodor any part of it.  If ANZ waives the noticeperiod or any part of it, entitlements on termination will not include anypayment in respect of the waived period.

 

If, however,ANZ elects not to waive the notice period, ANZ may, during the notice period orany part of it, direct you not to perform all or part of the duties of yourposition, to cease communication with customers, suppliers, employees andcontractors of ANZ and/or not to attend your principal place of work.

 

***12.3******                        Terminationby ANZ***

 

***(a)******                                 Terminationon Notice***

ANZ mayterminate your employment for any reason (other than (b) or (c) below) bygiving you 12 months’ written notice. ANZ may elect to pay you in lieu of giving you all or part of the noticeperiod based on your TEC salary. Alternatively, ANZ may, during the notice period or any part of it,direct you not to perform all or part of the duties of your position, to ceasecommunication with customers, suppliers, employees and contractors of ANZand/or not to attend your principal place of work.

 

***(b)******                                 Retrenchment***

If ANZ terminates your employment because no suitable position existsfor you, you will be entitled to a severance payment equal to 12 months’TEC.  If a severance payment is made toyou under this clause 12.3(b), you will not be entitled to notice or payment in lieu of notice under clause 12.3(a)above.

 

***(c)******                                  SeriousMisconduct***

ANZ mayterminate your employment at any time, without notice, because of your seriousmisconduct, serious neglect of duty, or serious breach of any of the terms ofthis employment agreement.  In suchcircumstances, you will only be entitled to payment of TEC up to the date oftermination.

 

**13****                                  Variationsto Conditions of Employment**

 

Variations toyour employment agreement may be necessary for the fair, efficient andeffective administration of ANZ’s business. Accordingly, this employment agreement may be varied by agreement fromtime to time.  Your consent to suchvariation must not be unreasonably withheld. If your consent is unreasonably withheld, ANZ may give you one month’swritten notice that such variation will take effect.

 

**14****                                  Relevantlaw**

 

Thisemployment agreement takes effect under, is governed by and is to beinterpreted according to, the law of Victoria.

 

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**15****                                  OtherConditions of Employment**

 

In accordancewith ANZ policy, a police record check will be required to be undertaken priorto your commencing work with ANZ.  Youremployment with ANZ is conditional upon receipt of a police record check thatis satisfactory to ANZ.

 

If you havenot already provided the following original documentation for sighting, thenplease forward copies with your acceptance and bring the originals with you forverification on your first day of work in your new position:

 

•                                          BirthCertificate or Certificate of Extract of Birth;

•                                          proofof legal right to work in Australia (if applicable); and

•                                          evidenceof educational qualifications.

 

Production ofthis documentation is a condition of employment with ANZ.  If you do not have this information, youwill be asked to defer commencement with ANZ until this documentation isproduced.

 

As an ANZemployee, your salary will need to be directly credited to an ANZ account.  An ANZ Access account attracts staffconcessional benefits.  To open thisaccount, or other accounts, contact your local branch or ANZ Phone Banking on1800 641 567.  You will need to meet therelevant account terms and conditions and present the necessary documentationto meet the 100-point check required by law.

 

ANZ provides a challenging andever-changing job environment and I trust that it will be possible for you todevelop and enhance your capabilities within ANZ.  I look forward to your contribution to the opportunities andchallenges facing ANZ.

 

A copy of this employmentagreement is enclosed for your records. Please sign and return the original to me to confirm your acceptance ofits terms.

 

Following the satisfactorycompletion of reference checking through next week, we would confirm this offerin writing.

 

 

Yours sincerely

**AUSTRALIAAND NEW ZEALAND BANKING GROUP LIMITED**

 

 

**ShaneFreeman**

**GroupGeneral Manager People Capital**

 

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**SCHEDULE**

**REMUNERATION ENTITLEMENTS, INCLUDING PAYMENTS**

**ON TERMINATION**

 
| Name:             |   | **Tim L’Estrange**                   |
|-------------------|--------|-------------------------------------------|
| Title:            |   | **Group General Counsel**                 |
| Location:         |   | **100 Queen Street, Melbourne Australia** |
| Reporting  To:    |   | **Peter Marriott**                        |
| Schedule  Issued: |   | **23 April 2003**                         |   | Effective  Date: |   | **T.B.A** |

 

This Schedule forms part ofyour employment agreement.

 

Your remuneration will be acombination of salary, superannuation and benefits as agreed between you andANZ from time to time using ANZ’s total employment cost (TEC) methodology.  Essentially, TEC is the fixed component ofremuneration.  It comprises notionalsalary (65% of TEC) and mandatory superannuation contributions, with thebalance being a flexible component.

 

Mandatory superannuationcontributions are paid in accordance with ANZ’s obligations under legislationas varied from time to time.  Iflegislative requirements for the payment of mandatory superannuationcontributions change, the flexible component of your TEC will be variedaccordingly (so that your TEC package remains the same).

 

The flexible component of TECcan be directed to benefits that are available at ANZ’s discretion inaccordance with ANZ’s policy as amended from time to time.  It can be taken as a cash benefit (alsoreferred to as Cashtec) or non-cash benefits (such as motor vehicles, petrol,parking and, if applicable, concessional lending) or a combination of both cashbenefit/Cashtec and non-cash benefits. Any fringe benefits tax that is payable on non-cash benefits will formpart of the flexible component of TEC.

 

Your notional salary,superannuation and cash benefit/Cashtec (if applicable) will be paidfortnightly and non-cash benefits will be provided as applicable.  ANZ will review your TEC annually.

 

Bonus payments are at thediscretion of the Board.

 

**1****                               TotalTarget Reward**

** **

Your TotalTarget Reward (TTR) is a combination of Fixed Reward – TEC ($500,000) plusVariable Reward – Executive Remuneration Scheme($300,000).  Your annualised TTR is **$800,000.**

 

***1.1******                     FixedReward - TEC***

*** ***

Your TECpackage on commencement of work in your new position is **AUD$500,000** per annum.

 

You must take65% of TEC a notional salary. The balance, less mandatory superannuationcontributions, is a flexible component and can be taken as cash benefit/Cashtecor non-cash benefits or a combination of both.

 

***1.2******                     VariableReward - Executive Remuneration Scheme***

 

Bonus paymentsunder the Executive Remuneration Scheme are subject to business unit andindividual performance and are at the discretion of the Board.

 

Bonuses willbe paid one-half in cash and one-half in deferred shares.  The shares will vest 3 years from the dateof issue.  The Board may, at itsdiscretion, change the ratio of cash to shares.  You must at all times comply with the provisions of ANZ’s ShareTrading Policy.

 

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***1.3******                     Additionalentitlements on commencement***

*** ***

***(a)******        ***Cashpayment

Subject tocontinued employment, a cash payment equal to $50,000 will be paid in each ofOctober 2003, and April 2004

 

***(b)***

Subject toBoard approval and within 3 months of your commencement with ANZ, you will beissued with deferred shares to the value of AUD$300,000.  Half of these shares will vest on 1 October2004, and half on 1 October 2005.

 

***(c)***          In the event of noticeof resignation prior to the dates in 1.3(a) above, or prior to the vestingperiods specified in clause 1.3(b) above the cash payments and shares will beforfeited.

 

***(d)***         In the event of ANZterminating the contract on notice (see clause 12.3a) prior to vesting, 50% ofthe equity stated in this clause will be forfeited.

 

***1.4******                     LongTerm Incentives***

*** ***

***(a)***         You may be eligible toparticipate in the Board’s long term incentive plan.  Awards under this plan are entirely at the Board’sdiscretion.  I have provided you withdetails regarding this plan under separate cover..

 

**2****                               Superannuation**

 

Your notionalsalary is used to calculate your superannuation contributions (if any) and the levelof mandatory superannuation contributions. It is also used to calculate the insured component of your death andtotal and permanent disablement benefits. For full details of the ANZ Australian Staff Superannuation Scheme,refer to the member’s booklet.

 

**3****                               Relocation**

** **

ANZ will payto relocate you and your family from Sydney to Melbourne.  This will include:

 

•                       economyairfares from Sydney to Melbourne for you and your family;

•                       allreasonable costs in relation to the removal and storage of furniture andpersonal belongings.  Storage costs willbe covered for a period of up to 12 weeks from the date of your arrival inMelbourne;

•                       a fullypaid serviced apartment or house of sufficient size to accommodate your familyfor a period of up to 12 weeks from the date of your arrival in Melbourne;

•                       afully-maintained hire car for a period of up to 2 weeks from the date of yourarrival in Melbourne, or for such lesser period if you organise a personalvehicle sooner;

•                       allreasonable agent’s and transaction costs for the purchase of a house inMelbourne;

 

**4****                               Entitlementsupon Termination of Employment**

** **

Upontermination of employment, you will be entitled to payment for accrued andunused long service leave and annual leave in accordance with the standardarrangements applicable to all ANZ employees. Payments will be on the basis of your notional salary plus cashbenefit/Cashtec.

 

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In addition toany notice or payment under clause 12 of your employment agreement, you willhave the following entitlements on the termination of your employment:

 

•                       ***On resignation***(seeclause 12.2),

you will notbe entitled to:

•                  any unvesteddeferred shares issued to you under the ANZ incentive arrangements;

•                  exercise anyoptions.

(For theInitial issue of ANZ Share Options and Deferred Shares the provisions of clause1.3 will apply to the Initial issue.)

 

•                       ***On termination for seriousmisconduct*** (see clause 12.3c),

you will notbe entitled to:

•                  any unvesteddeferred shares issued to you;

•                  exercise anyoptions.

 

•                       ***On termination on notice***(see clause 12.3a),

you will beentitled to:

•                  any deferredshares that have already vested, and any that vest during the notice period;

•                  exercise anyoptions that have already vested, and any that vest during the notice period,in accordance with the ANZ Share Option Plan Rules (that is, with the Board’sapproval or otherwise in accordance with the Rules).

(For theInitial issue of ANZ Share Options and Deferred Shares the provisions of clause1.3 will apply to the Initial issue.)

 

•                       ***On retrenchment*** (seeclause 12.3b),

you will beentitled to:

•                  any deferredshares issued to you;

•                  exercise anyoptions in accordance with the ANZ Share Option Plan Rules (that is, with theBoard’s approval or otherwise in accordance with the Rules).

 

•                       ***On total and permanent disablementor death,***

you or, in theevent of death, your estate, will be entitled to:

•                  a PerformanceBonus pro-rated to the date of termination;

•                  any deferredshares issued to you;

•                  exercise any optionsin accordance with the ANZ Share Option Plan Rules (that is, with the Board’sapproval or otherwise in accordance with the Rules).

 

**5****                               Definitions**

** **

For thepurposes of this employment agreement:

 

•                       **total and permanent disablement**means:

 

(a)               incircumstances where you are a member of the ANZ Australian Staff SuperannuationScheme (the “Scheme”) or an ANZ-sponsored staff superannuation fund, total andpermanent disablement as determined by the trustee of the Scheme or fund;

 

(b)              incircumstances where you are not a member of the ANZ Australian StaffSuperannuation Scheme or an ANZ-sponsored staff superannuation fund, such stateof physical or mental incapacity as renders you unlikely ever to be able towork again in a job for which you are reasonably qualified by education,training or experience.  Every questionof total and permanent disablement will be decided by ANZ after receipt ofreports by two qualified medical practitioners approved by ANZ.

 

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•                       **salary** means notional salary, which is 65%of TEC.

 

 

**ACCEPTANCE**

 

I, **Timothy L’Estrange**, have read and understood and agree to theterms of employment set out in this employment agreement (including theSchedule).

 

 
| Name:      | Timothy  L’Estrange     |   |
|------------|------------------------------|--------|
|       |
|       |
| Signature: | /s/ Timothy  L’Estrange |   | Date: | 24.4.03 |   |
|            |                              |        |  |  |  |  |  |

 

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