**Exhibit 4.1.6**

 

21 October 2004

 

Mr Peter Hodgson

17/530 Collins St

Melbourne

 

Dear Peter

 

On behalf of Australia and New Zealand Banking GroupLimited (“ANZ”), I am pleased to formally advise you of your appointment to theposition of****Chief Risk Officer.

 

This letter sets out the terms of your employment, andconstitutes your employment agreement with ANZ (“employment agreement”).  This employment agreement replaces allexisting agreements, arrangements, or understandings between you and ANZ.  (References to ANZ include any corporationrelated to ANZ under the *Corporations Act*2001.)

 

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

 

Your position is Chief Risk Officerreporting to John McFarlane, Chief Executive Officer and located at 32/100Queen St, Melbourne.

 

Your position is atSenior Executive Group level.  ANZ may,at its 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

 

This employment agreement, and yourobligations under it, will commence on 1 December 2004.  It does not affect your continuity of servicefor the purposes of leave entitlements and other employment benefits.

 

# **3**                                         Remuneration

 

The details of your remuneration are setout in the Schedule.  The Schedule formspart of this employment agreement.

 

# **4**                                         Leave

 

## ***4****.1**                              **Annual Leave*

 

You will receive 4 weeks’ contracted hourspaid annual leave for each completed year of paid service with ANZ.  You are required to take your full annualleave entitlement of 4 weeks over the course of each ANZ financial year (1October to 30 September), 2 weeks of which must be taken consecutively.  (ANZ policy requires that you are absent forat least 10 consecutive business days per annum.)

 

At the end of each ANZ financial year, ANZwill deem you to have taken your full 4 weeks’ annual leave.  Accordingly, there will be no positiveaccrual of this leave and your annual leave balance at 1 October each year willnever be more than your balance at 1 October of the previous year, or zerowhichever is greater.

 

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***4.2******                               Sick Leave***

 

You may take sick leave in accordance withstandard arrangements applicable to all ANZ employees.  Any untaken part of this entitlement iscumulative from year to year.  In theevent of prolonged illness, ANZ may decide at its discretion to provide youwith 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**                              **Parental Leave*

 

You may take parental leave in accordancewith standard arrangements applicable to all ANZ employees.

## *** ***

## ***4****.4**                              **Long Service Leave*

 

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

 

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

 

All inventions, discoveries, computersoftware processes and improvements made by you during your employment with ANZremain the property of ANZ.

 

By signing this employment agreement, you:

 

•                  assign to ANZ all proprietary rights including all ownership rightsand copyright and the exclusive right to develop, make, use, sell, license orotherwise benefit from any inventions, discoveries, processes and improvements,made by you within the scope of your employment with ANZ; and

 

•                  agree to execute any further document that is necessary or desirableto give full effect to 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 expects you to further ANZ’s objectivesand reputation and faithfully and diligently to perform your duties, exerciseyour powers, and manage with integrity and respect all matters concerning ANZemployees 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.

 

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# **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 wilful misconduct in carrying out your duties.

 

 

**8****                                         Policies and Procedures, Performance Management Plans**

 

## ***8****.1**                              **Policies and 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 otherwise included in your contract of employment withANZ, including this employment agreement.

 

## ***8****.2**                              **Performance Management 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. You must also take all reasonable and necessary precautions to maintainthe confidentiality and secrecy of any of this information, and prevent itsunauthorised disclosure by any other person or entity. This obligationcontinues 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 orrelate to ANZ, its customers or its affairs, and any copies of such documents;and

 

•                  any vehicle, computer hardware or software, key, security pass orother property that belongs to ANZ.

 

# **10**                                  Restraint

 

You must notat any time, either during your employment with ANZ or for 6 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.

 

Youacknowledge that consideration for the restraint is included in your TotalEmployment Cost (TEC).

 

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# **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**                       **Termination Entitlements*

 

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 onlyentitlements paid to you upon the termination of your employment with ANZ.

 

## ***12****.2**                       **Resignation*

 

You mayterminate your employment for any reason by giving ANZ 3 months’ written notice.  You and ANZ may agree on a lesser period ofnotice, or ANZ may in its absolute discretion waive the notice period or anypart of it.  If ANZ waives the noticeperiod or any part of it, entitlements on termination will include payment inrespect of the waived period (calculated on the basis of your Total EmploymentCost (TEC), as described in the Schedule).

 

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******                        Termination byANZ***

 

***(a)******                                 Termination on 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 Total Employment Cost (TEC), as described in theSchedule.  Alternatively, 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.

 

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

 

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.

 

***(c)******                                  Retrenchment***

 

If ANZterminates your employment because no suitable position exists for you, youwill be entitled to a severance payment equal to 12 months’ TEC or an amountcalculated as follows, whichever is the greater:

 

1)              7 weeks’ notional salaryfor your first year of service;

2)              Plus 4 weeks’ notionalsalary for each year for your second to tenth consecutive years of continuousservice;

3)              Plus 3 weeks’ notionalsalary for each year for your eleventh to sixteenth consecutive years ofcontinuous service;

 

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4)              Plus 2 weeks’ notionalsalary for each subsequent consecutive year of continuous service to a maximumof 25 years including the first;

5)              Plus a pro-rata paymentfor each completed month of service in your final part year of service, up toand including your 25th year of service.

 

If a severancepayment is made to you under this clause 12.3(c), you will not be entitled tonotice or payment in lieu of notice under clause 12.3(a) above.

 

Your severancepayments set out under this clause 12.3(c) will however, be taken to include anamount equal to the minimum notice payments required under the Banking Services– ANZ group – Award 1998.

 

# **13**                                  Variationsto Conditions of Employment

 

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

 

# **14**                                  Relevantlaw

 

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

 

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 theopportunities and challenges facing ANZ.

 

A copy of this employment agreement isenclosed for your records.  Please signand return the original to me to confirm your acceptance of its terms.

 

 

Yours sincerely

**AUSTRALIA AND NEW ZEALAND BANKINGGROUP LIMITED**

 

 

**Shane Freeman**

**Group General Manager**

**People Capital and Breakout**

 

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** **

**SCHEDULE**

**REMUNERATION ENTITLEMENTS, INCLUDING PAYMENTS**

**ON TERMINATION**

 
| Name:            | **Peter Hodgson**              |            |                |
|------------------|--------------------------------|-----------------|---------------------|
| Title:           | **Chief Risk Officer**         | ** **      | ** **          |
| Location:        | **32/100 Queen St, Melbourne** |            |                |
| Reporting To:    | **John McFarlane**             |            |                |
| Schedule Issued: | **Tbc**                        | Effective Date: | **1 December 2004** |

 

This Schedule forms part of your employmentagreement.

 

Yourremuneration will be a combination of salary, superannuation and benefits asagreed between you and ANZ from time to time using ANZ’s total employment cost(TEC) methodology. Essentially,TEC is the fixed component of remuneration. It comprises notional salary (65% of TEC) and mandatory superannuationcontributions, with the balance 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 superannuation contributionschange, the flexible component of your TEC will be varied accordingly (so thatyour TEC package remains the same).

 

Theflexible component of TEC can be directed to benefits that are available at ANZ’sdiscretion in accordance 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, superannuationand cash benefit/Cashtec (if applicable) will be paid fortnightly and non-cashbenefits will be provided as applicable. ANZ will review your TEC annually.

 

Bonus payments are at the discretion of theBoard.

 

**1****                                         Total Target Reward**

 

Your Total Target Reward (TTR) is a combination of Fixed Reward – TEC(60% of TTR) plus Variable Reward – Executive Remuneration Scheme (40% ofTTR).  Your annualised TTR is $1,000,000.

 

***1.1******                               Fixed Reward - TEC***

 

Your TECpackage on commencement of work in your new position is $600,000 per annum.

 

You must take65% of TEC as notional salary.  Thebalance, less mandatory superannuation contributions, is a flexible componentand can be taken as cash benefit/Cashtec or non-cash benefits or a combinationof both.

 

***1.2******                               Variable Reward - Executive Remuneration Scheme***

 

Bonus payments underthe Executive Remuneration Scheme are subject to business unit and individualperformance and are at the discretion of the Board.

 

Bonuses may be paid as cash or shares or acombination of both.  The Board may, atits discretion, change the ratio of cash to shares.  You must at all times comply with theprovisions of ANZ’s Share Trading Policy.

 

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**2**                                         **Superannuation**

 

Your notionalsalary is used to calculate your superannuation contributions (if any) and thelevel 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.

 

**3****                                         Entitlements upon 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.

 

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

 

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

you will notbe entitled to:

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

•                  exerciseany options.

 

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

you will beentitled to:

•                  a Performance Bonus pro-rata to the date of termination;

•                  any deferred shares issued to youas part of a short-term incentive program under this employment agreement or aformer employment agreement between you and ANZ;

•                  any deferred shares issued to you,under this employment agreement or a former employment agreement between youand ANZ, as part of a long-term incentive program which have already vested,and any that vest during the notice period;

•                  exercise any options granted to youunder this employment agreement or a former employment agreement between youand ANZ, that have already vested, and any that vest during the notice periodin accordance with the ANZ Share Option Plan Rules (that is with the Board’sapproval or otherwise in accordance with the Rules).

 

•                                          ***On termination for serious misconduct*** (see clause 12.3(b)),

you will not be entitled to:

•                  any vested or unvested deferred shares issued to you under the ANZincentive arrangements which are held in trust;

•                  exercise any options.

 

•                                          ***On retrenchment*** (see clause12.3(c)),

you will be entitled to:

•                  any deferred shares issued to you under the ANZ incentivearrangements;

•                  exercise any options in accordance with the ANZ Share Option PlanRules (that is, with the Board’s approval or otherwise in accordance with theRules).

 

•                                          ***On total and permanent******disablement or death***,

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

•                  a Performance Bonus pro-rated to the date of termination;

•**                 **any deferred shares issued to you under the ANZ incentivearrangements;

 

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•                  exercise any options in accordance with the ANZ Share Option PlanRules (that is, with the Board’s approval or otherwise in accordance with theRules).

 

**4****                                         Definitions**

 

For the purposes of this employmentagreement:

 

•                                          **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.

 

•                                          **salary** meansnotional salary, which is 65% of TEC.

 

##### **ACCEPTANCE**

 

I, Peter Hodgson, have read and understood and agreeto the terms of employment set out in this employment agreement (including theSchedule).

 

 
| Name:           |   |   |   |
|-----------------|--------|--------|--------|
|            |   |   |
|            |   |   |
| Signature:      |   |   | Date:  |   |   |
|            |   |   |
|            |   |   |
| /S/ P. Hodgson  |   |   |
| Dated: 28/10/04 |   |   |
|                 |        |        |        |  |  |  |

 

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