**Exhibit 4.2.3**

 

13 August 2003

 

Michael Grime

32/100 Queen St.

Melbourne Vic 3000

 

 

Dear Mike

 

On behalf of Australia and New Zealand Banking Group Limited (“ANZ”), Iam pleased to offer you employment with ANZ.

 

This offer is conditional upon you obtaining permanent residence statusin Australia and lawfully terminating your current employment with StandardChartered Bank.

 

This letter sets out the terms of your employment should you acceptthis offer and those conditions be satisfied, and will constitute youremployment agreement with ANZ (“employment agreement”).  This employment agreement will replace allexisting agreements, arrangements, or understandings between you and ANZ.  (References to ANZ include any corporationrelated to ANZ under the *Corporations Act2001*.)

 

**1****              Position, ReportingArrangements and Location**

 

Your position is Managing Director, Operations, Technology and SharedServices, located at 100 Queen Street, Melbourne, Victoria, Australia.

 

Your position is at Senior Executive Group level.  ANZ may, at its discretion, change yourposition, reporting arrangements, duties and location on giving you reasonablenotice, following consultation with you, and taking into account careerconsiderations and personal circumstances.

 

**2****              Term of EmploymentAgreement**

 

Your employment pursuant to this employment agreement will commence ona date to be agreed but not later than **[insertdate]** and, subject to the rights of either party to terminate theemployment under clause 12, will continue for a period of 3 years thereafter,whereupon it the employment will terminate by the effluxion of time unless theparties otherwise agree. (‘**Term**’)

 

**3****              Remuneration**

 

The details of your 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 will receive 4 weeks’ contracted hours paid annual leave for eachcompleted year of paid service with ANZ. You are required to take your full annual leave entitlement of 4

 

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weeks over the course of each ANZ financial year (1 October to 30September), 2 weeks of which must be taken consecutively. (ANZ policy requiresthat you are absent for at least 10 consecutive business days per annum.)

 

At the end of each ANZ financial year, ANZ will deem you to have takenyour full 4 weeks’ annual leave. Accordingly, there will be no positive accrualof this leave and your annual leave balance at 1 October each year will neverbe more than your balance at 1 October following your first year of service, orzero whichever is greater.

 

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

 

You may take sick leave in accordance with standard arrangementsapplicable to all ANZ employees. Any untaken part of this entitlement iscumulative from year to year. In the event of prolonged illness, ANZ may decideat its discretion to provide you with sick leave in excess of your sick leaveentitlements.  You are not entitled toany payment for unused sick leave when your employment with ANZ ends.

 

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

 

You may take parental leave in accordance with standard arrangementsapplicable to all ANZ employees.

 

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

 

You are eligible for 13 weeks’ long service leave after completing 15years of continuous service, and a further 8.66 weeks’ leave for eachsubsequent 10 completed years of continuous service.  You may access long service leave on a pro-rata basis after 10completed years of continuous service.

 

**5****              Ownership ofIntellectual Property and Trade Secrets**

 

All inventions, discoveries, computer software processes andimprovements made by you during your employment with ANZ remain the property ofANZ.

 

By signing this employment agreement, you:

 

•                  assignto ANZ all proprietary rights including all ownership rights and copyright andthe exclusive right to develop, make, use, sell, license or otherwise benefitfrom any inventions, discoveries, processes and improvements, made by youwithin the scope of your employment with ANZ; and

 

•                  agreeto execute any further document that is necessary or desirable to give fulleffect to your obligations under this clause 5.

 

**6****              Values and EthicalStandards**

 

ANZ has developed guiding values and expects you to actively ensurethey are an integral part of the way that you, and those who report to you,carry out duties within ANZ.

 

ANZ expects you to further ANZ’s objectives and reputation andfaithfully and diligently to perform your duties, exercise your powers, andmanage with Integrity and respect all matters concerning ANZ employees andcustomers.

 

ANZ also has certain ethical standards that you are required tomaintain.  In particular, you must notin any way, either directly or indirectly, be or become engaged, concerned orinterested in any business whether as principal, partner, director, agent,promoter or beneficiary except that of ANZ. This requirement may be walved at ANZ’s discretion by a written consentsigned by the Chief Executive Officer.

 

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**7****              Conduct**

** **

You must at all times act honestly and in a manner that is consistentwith the status of your position with ANZ. You indemnify ANZ against any loss or damage it suffers as a result ofany dishonest act by you, or any wilful misconduct in carrying out your duties.

 

**8****              Policies andProcedures, Performance Management Plans**

 

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

*** ***

ANZ has policies 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***

** **

Performance management plans will be developed in consultation with youand may be reviewed and varied during the performance period.

 

**9****              ConfidentialInformation**

** **

You must not disclose or use in any manner (except in the proper courseof your employment, by compulsion of law, or on the written direction of anauthorised officer of ANZ or its auditors) any information about ANZ, itscustomers or its affairs which you acquire during your employment with ANZ,unless the information is already legitimately in the public domain.  This obligation extends after youremployment with ANZ ends.

 

You must also return to ANZ on request or immediately your employmentwith ANZ ends:

 

•      allbooks, 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 not at any time, either during your employment with ANZ or for12 months after your employment with ANZ ends (or for such lesser time as acourt may deem reasonable), either on your own account or for or jointly withany other person solicit, interfere with or attempt to entice away from ANZ anyperson who, at any time within the period of 12 months before the date youremployment with ANZ ends, was a customer or employee of, or in the habit ofdealing with, ANZ and whom you had direct or indirect contact with, or dealingswith or knowledge of, for the purpose of your employment.

 

**11****           Disciplinary Action**

 

If you fall to comply with the provisions of your employment agreementor any other ANZ performance requirements, ANZ may take disciplinary action whichmay include suspension with or without pay and, in certain circumstances,termination of your employment with ANZ (see clause 12).

 

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**12****           Termination ofEmployment**

 

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

** **

Your termination entitlements will depend upon the circumstances of thetermination and 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.

 

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

 

You may terminate your employment for any reason by giving ANZ 6months’ written notice.  You and ANZ mayagree on a lesser period of notice, or ANZ may in its discretion waive thenotice period or any part of it.  If ANZwaives the notice period or any part of it, entitlements on termination willnot include any payment in respect of the waived period.

 

If, however, ANZ elects not to waive the notice period, ANZ may, duringthe notice period or any part of it, direct you not to perform all or part ofthe duties of your position, to cease communication with customers, suppliers,employees and contractors of ANZ and/or not to attend your principal place ofwork.

 

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

*** ***

***(a)***        ***Termination on Notice***

ANZ may terminate your employment for any reason by giving you 6months’ written notice.  ANZ may electto pay you in lieu of giving you all or part of the notice period based on yourTotal Employment Cost package (“TEC”) (refer Schedule below).  Alternatively, ANZ may, during the noticeperiod or any part of it, direct you not to perform all or part of the dutiesof your position, to cease communication with customers, suppliers, employeesand contractors of ANZ and/or not to attend your principal place of work.

 

***(b)***        ***Serious Misconduct***

ANZ may terminate your employment at any time, without notice, becauseof your serious misconduct, serious neglect of duty, or serious breach of anyof the terms of this employment agreement. In such circumstances, you will only be entitled to payment of TEC up tothe date of termination.

 

**13****           Variations toConditions of Employment**

 

Variations to your employment agreement may be necessary for the fair,efficient and effective administration of ANZ’s business.  Accordingly, this employment agreement maybe varied by agreement from time to time. Your consent to such variation must not be unreasonably withheld.  If your consent is unreasonably withheld,ANZ may give you one month’s written notice that such variation will takeeffect.

 

**14****           Relevant law**

 

This employment agreement takes effect under, is governed by and is tobe interpreted according to, the law of Victoria.

 

**15****           Other Conditions ofEmployment**

 

This offer of employment is conditional upon your obtaining residencein Australia.  Therefore, you should notresign from your current employer, Standard Chartered Bank, until ANZ formallyadvises you that your Australian residence visa requirements have beenapproved.  ANZ will assist you with, andwill pay for, the processing of you and your family’s Australian visarequirements.

 

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In accordance with ANZ policy, a police record check will be requiredto be undertaken prior to your commencing work with ANZ.  Your employment with ANZ is conditional uponreceipt of a police record check that is satisfactory to ANZ.

 

If you have not already provided the following original documentationfor sighting, then please forward copies with your acceptance and bring theoriginals with you for verification on your first day of work in your newposition:

 

•              Birth Certificate or Certificateof Extract of Birth;

•              proof of legal right to work inAustralia (if applicable); and

•              evidence of educationalqualifications.

 

Production of this documentation is a condition of employment withANZ.  If you do not have thisinformation, you will be asked to defer commencement with ANZ until thisdocumentation is produced.

 

As an ANZ employee, your salary will need to be directly credited to anANZ account.  An ANZ Access accountattracts staff concessional benefits. To open this account, or other accounts, contact your local branch orANZ Phone Banking on 1800 641 567.  Youwill need to meet the relevant account terms and conditions and present thenecessary documentation to meet the 100-point check required by law.

 

ANZ provides a challenging and ever-changing job environment and Itrust that it will be possible for you to develop and enhance your capabilitieswithin ANZ.  I look forward to yourcontribution to the opportunities and challenges facing ANZ.

 

A copy of this employment agreement is enclosed for your records.  Please sign and return the original to me toconfirm your acceptance of its terms.

 

 

Yours sincerely

**AUSTRALIA AND NEW ZEALAND BANKING GROUPLIMITED**

 

 

**Shane Freeman**

**Group General Manager**

**People Capital**

 

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**SCHEDULE**

**REMUNERATIONENTITLEMENTS, INCLUDING PAYMENTS**

**ONTERMINATION**

 
| Name:            |   | Michael Grime                                                  |
|------------------|--------|----------------------------------------------------------------|
| Title:           |   | Managing Director, Operations,  Technology and Shared Services |
| Location:        |   | 100 Queen Street, Melbourne,  Victoria, Australia              |
| Schedule Issued: |   |                                                           | Effective Date: | TBA |

 

This Schedule forms part of your employmentagreement.

 

Your remuneration will be a combination ofsalary, superannuation and benefits as agreed between you and ANZ from time totime 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 superannuation contributions arepaid in accordance with ANZ’s obligations under legislation as varied from timeto time.  If legislative requirementsfor the payment of mandatory superannuation contributions change, the flexiblecomponent of your TEC will be varied accordingly (so that your TEC packageremains the same).

 

The flexible component of TEC can be directedto benefits that are available at ANZ’s discretion in accordance with ANZ’spolicy as amended from time to time.  Itcan be taken as a cash benefit (also referred to as Cashtec) or non-cashbenefits (such as motor vehicles, petrol, parking and, if applicable,concessional lending) or a combination of both cash benefit/Cashtec andnon-cash benefits.  Any fringe benefitstax that is payable on non-cash benefits will form part of the flexiblecomponent of TEC.

 

Your notional salary, superannuation and cashbenefit/Cashtec (if applicable) will be paid fortnightly and non-cash benefitswill be provided as applicable.  ANZwill review your TEC annually.

 

Bonus payments are at the discretion of theBoard.

 

**1              Total Target Reward**

 

Your Total Target Reward (TTR) is acombination of Fixed Reward – TEC (60% of TTR) plus Variable Reward – ExecutiveRemuneration Scheme (40% of TTR).  Yourannualised TTR is AUD1,000,000.

 

***1.1          Fixed Reward - TEC***

 

Your TEC package on commencement of work inyour new position is AUD600,000 per annum.

 

You must take 65% of TEC as notionalsalary.  The balance, less mandatorysuperannuation contributions, is a flexible component and can be taken as cashbenefit/Cashtec or non-cash benefits or a combination of both.

 

***1.2          Variable Reward - ExecutiveRemuneration Scheme***

 

Bonus payments under the ExecutiveRemuneration Scheme are subject to business unit and individual performance andare at the discretion of the Board.

 

Bonuses will be paid one-half in cash andone-half in deferred shares.  The shareswill vest 3 years from the date of issue. The Board may, at its discretion, change the ratio of cash toshares.  You must at all times complywith the provisions of ANZ’s Share Trading Policy.

 

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***1.3          Long Term Incentives***

 

You may be eligible to participate in ANZ’s Long Term IncentivePlan.  Awards under this Plan areentirely at the discretion of the Board.

 

**2              OtherBenefits**

 

***2.1***                               Shouldyou lose your entitlement to your current year bonus as a result of yourresignation from Standard Chartered Bank (“SCB”), ANZ will compensate you tothe value of up to AUD400,000 paid in the form of shares deferred for 3 years,i.e. they will be held in trust for at least 3 years during which period youwill be unable to dispose of them but you will receive any dividends payable inrespect of them.  The allocation priceof the shares will be determined as at the date of purchase/issue.  The shares may remain in trust for up to 10years but will be subject to forfeiture in the event of serious misconduct.

 

***2.2***                               Ifas a result of your resignation from SCB, you lose access to non-vested SCBequity (such equity having been issued to you at an issue price of less thanGBP8.10), you will receive compensation from ANZ for a loss of up toAUD250,000.  You will need to providedetails of such equity issues to enable the quantum of the compensation to becalculated.

 

***2.3***                               Theprovision of the benefits detailed in paragraphs 2.1 and 2.2 above are subjectto ANZ Board approvals and, subject to these approvals being given, thebenefits will be effected with 3 months of your commencement with ANZ.

 

**3****                                         Relocationto Melbourne**

 

ANZ will pay to relocate you and your family from the United Kingdom(“UK”) to Melbourne, Australia.  Thiswill include:

 

•                       first classairfares for you and your immediate family in order for you to commenceemployment with ANZ;

•                       reasonableagent’s costs and transaction costs for the sale of your primary UK residentialproperty and on the purchase of a residence in Melbourne;

•                       reasonablecosts in relation to the removal of furniture and personal belongings;

•                       theservices of a relocation consultant to assist with identifying suitablehousing;

•                       a servicedapartment or a furnished house of sufficient size to accommodate you and yourfamily for 3 months from the time of your arrival in Melbourne;

•                       a fully-maintainedhire car for 3 months;

•                       the cost ofany official immigration documentation required.

 

**4              Superannuation**

 

Your notional salary is used to calculate your superannuationcontributions (if any) and the level of mandatory superannuation contributions.  It is also used to calculate the insuredcomponent of your death and total and permanent disablement benefits.  For full details of the ANZ Australian StaffSuperannuation Scheme, refer to the member’s booklet.

 

**5              Entitlementsupon Termination of Employment**

 

(a)                                  Upon termination ofemployment, you will be entitled to payment for accrued and unused long serviceleave and annual leave in accordance with the standard arrangements applicableto all ANZ employees.  Payments will beon the basis of your notional salary plus cash benefit/Cashtec.

 

(b)                                 In addition to anynotice or payment under clause 12 of your employment agreement, you will havethe following entitlements on the termination of your employment:

 

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**(i)****                *On resignation***(see clause 12.2),

you will not be entitled to:

•                       anyunvested deferred shares issued to you under the ANZ incentive arrangements;

•                       exerciseany options.

 

**(ii)****            *On termination for serious misconduct***(seeclause 12.3(c)),

you will not be entitled to:

•                       anyunvested deferred shares issued to you;

•                       exerciseany options.

 

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

you will be entitled to:

•                       anydeferred shares that have already vested, and any that vest during the noticeperiod;

•                       exerciseany options that have already vested, and any that vest during the noticeperiod, in accordance with the ANZ Share Option Plan Rules (that is, with theBoard’s approval or otherwise in accordance with the Rules).

 

**(iv)****           *On termination by the effluxion of time***(seeclause 2),

you will be entitled to:

•                       aPerformance Bonus pro-rated to the date of termination;

•                       anydeferred shares issued to you, in accordance with the conditions of issue;

•                       exerciseany options in accordance with the ANZ Share Option Plan Rules (that is, withthe Board’s approval or otherwise in accordance with the Rules).

 

**(v)****               *On total and permanent disablement or death,***

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

•                       aPerformance Bonus pro-rated to the date of termination;

•                       anydeferred shares issued to you;

•                       exerciseany options in accordance with the ANZ Share Option Plan Rules (that is, withthe Board’s approval or otherwise in accordance with the Rules).

 

**6****                      Definitions**

 

For the purposes of this employmentagreement:

 

**•****                       total and permanent disablement**means:

 

(a)          in circumstances where you are a member ofthe ANZ Australian Staff Superannuation Scheme (the “Scheme”) or anANZ-sponsored staff superannuation fund, total and permanent disablement asdetermined by the trustee of the Scheme or fund;

 

(b)         in circumstances where you are not a member ofthe ANZ Australian Staff Superannuation Scheme or an ANZ-sponsored staffsuperannuation fund, such state of physical or mental incapacity as renders youunlikely ever to be able to work again in a job for which you are reasonablyqualified by education, training or experience.  Every question of total and permanent disablement will be decidedby ANZ after receipt of reports by two qualified medical practitioners approvedby ANZ.

 

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

 

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**ACCEPTANCE**

 

I, Michael Grime, have read andunderstood and agree to the terms of employment set out in this employmentagreement (including the Schedule).

 
| Name:      | MICHAEL GRIME     |   |   |
|------------|-------------------|--------|--------|
|       |
| Signature: | /s/ Michael Grime |   | Date:  |  19/8/03 |   |
|            |                   |        |        |  |  |  |  |  |

 

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