**Exhibit 4.1.2**

 

12 March 2004

 

Mr SteveTargett

74 RiversideOne

Hester Road

London , SW114AN

### **United Kingdom**

### ** **

Dear Steve

 

On behalf ofAustralia and New Zealand Banking Group Limited (“ANZ”), I am pleased to offeryou employment with ANZ.

 

This lettersets out the terms of your employment should you accept this offer and thoseconditions be satisfied, and will constitute your employment agreement with ANZ(“employment agreement”).  Thisemployment agreement will replace all existing agreements, arrangements, orunderstandings between you and ANZ. (References to ANZ include any corporation related to ANZ under the *Corporations Act 2001*.)

 

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

# ** **

Your positionis Managing Director, Institutional Financial Services, reporting to the ChiefExecutive Officer, John McFarlane and to the Chief Operating Officer, BobEdgar. You will be located at 100 Queen Street, Melbourne, Victoria, Australia.

 

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**                               Termof Employment Agreement

# ** **

Youremployment pursuant to this employment agreement will commence on a date to beagreed but not later than  1 October 2004**.**

 

# **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**                    **Annual Leave*

## ** **

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 requires thatyou are absent for at least 10 consecutive business days per annum.)

 

At theend of each ANZ financial year, ANZ will deem you to have taken your full 4weeks’ annual leave.  Accordingly, therewill be no positive accrual of this leave and your annual

 

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leavebalance at 1 October each year will never be more than your balance at 1October following your first year of service, or zero whichever is greater.

 

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

 

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**                    **Parental Leave*

## ** **

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

 

## ***4****.4**                    **Long Service 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 to ANZ allproprietary 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 to execute anyfurther document that is necessary or desirable to give full effect to yourobligations 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.

 

ANZexpects you to further ANZ’s objectives and reputation and faithfully anddiligently to perform your duties, exercise your powers, and manage withintegrity and respect all matters concerning ANZ employees and customers.

 

ANZalso has certain 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. As we have discussed, ANZ is supportive of youobtaining an outside directorship, subject to Board approval.

 

# **7**                               Conduct

# ** **

Youmust at all times act honestly and in a manner that is consistent with thestatus of your position with ANZ.  Youindemnify ANZ against any loss or damage it suffers as a result of anydishonest act by you, or any wilful misconduct in carrying out your duties.

 

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**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 included in your contract of employment with ANZ,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

# ** **

Youmust not disclose or use in any manner (except in the proper course of youremployment, by compulsion of law, or on the written direction of an authorisedofficer of ANZ or its auditors) any information about ANZ, its customers or itsaffairs which you acquire during your employment with ANZ, unless theinformation is already legitimately in the public domain.  This obligation extends after your employmentwith ANZ ends.

 

Youmust also return to ANZ on request or immediately your employment with ANZends:

 

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

 

•             any vehicle, computerhardware or software, key, security pass or other property that belongs to ANZ.

 

# **10**                        Restraint

# ** **

Youmust not at any time, either during your employment with ANZ or for 12 monthsafter your employment with ANZ ends (or for such lesser time as a court maydeem reasonable), either on your own account or for or jointly with any otherperson solicit, interfere with or attempt to entice away from ANZ any personwho, at any time within the period of 12 months before the date your employmentwith ANZ ends, was a customer or employee of, or in the habit of dealing with,ANZ and whom you had direct or indirect contact with, or dealings with orknowledge of, for the purpose of your employment. Consideration for the restraint isincluded in your Total Employment Cost (TEC).

 

# **11**                        DisciplinaryAction

# ** **

If youfail to comply with the provisions of your employment agreement or any otherANZ performance requirements, ANZ may take disciplinary action which mayinclude suspension with or without pay and, in certain circumstances,termination of your employment with ANZ (see clause 12).

 

# **12**                        Terminationof Employment

# ** **

## ***12****.1**             **Termination Entitlements*

## ** **

Your termination entitlements will depend upon thecircumstances of the termination and are set out in this clause 12 and in theSchedule. These will be the only entitlements paid to you upon the terminationof your employment with ANZ.

 

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

 

You mayterminate your employment for any reason by giving ANZ 6 months’ written

 

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notice.  You and ANZ may agree on a lesser period ofnotice, or ANZ may in its discretion waive the notice period or any part ofit.  If ANZ waives the notice period orany part of it, entitlements on termination will include payment in respect ofthe waived period calculated on the basis of your Total Employment Cost (TEC)as described in the Schedule, up to a maximum of 3 months.

 

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******              Termination by ANZ***

 

***(a)******                       Termination onNotice***

 

ANZ mayterminate your employment for any reason by giving you 12 months’ writtennotice.  ANZ may elect to pay you in lieuof giving you all or part of the notice period based on your Total EmploymentCost package (“TEC”) (refer Schedule below). 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)******                       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 such circumstances,you will only be entitled to payment of TEC up to the date of termination.

 

# **13**                        Variationsto Conditions of Employment

# ** **

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

 

# **14**                        Relevantlaw

# ** **

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

 

# **15**                        OtherConditions of Employment

# ** **

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 youhave not already provided the following original documentation for sighting,then please forward copies with your acceptance and bring the originals withyou for verification 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.

 

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Productionof this documentation is a condition of employment with ANZ.  If you do not have this information, you willbe asked to defer commencement with ANZ until this documentation is produced.

 

As an ANZ employee, your salary will need to be directly credited to anANZ account.  An ANZ Access accountattracts staff concessional benefits.  Toopen this account, or other accounts, contact your local branch or ANZ PhoneBanking on 1800 641 567.  You will needto meet the relevant account terms and conditions and present the necessarydocumentation to meet the 100-point check required by law.

 

ANZ provides achallenging and ever-changing job environment and I trust that it will bepossible for you to develop and enhance your capabilities within ANZ.  I look forward to your contribution to theopportunities and challenges facing ANZ.

 

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

 

 

Yourssincerely

**AUSTRALIAAND NEW ZEALAND BANKING GROUP LIMITED**

 

 

**JohnMcFarlane**

**ManagingDirector**

 

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**SCHEDULE**

**REMUNERATION ENTITLEMENTS, INCLUDINGPAYMENTS ON TERMINATION**

 
| Name:            |       | Steve  Targett                                           |
|------------------|------------|----------------------------------------------------------|
| Title:           | ** ** | **Managing Director,  Institutional Financial Services** |
| Location:        |       | 100 Queen  Street, Melbourne, Victoria, Australia        |
| Schedule Issued: |       | 10 March 2004                                            |   | Effective Date: | **No later than  1 October 2004** |

 

This Scheduleforms part of your employment agreement.

 

Your remuneration will be a combination of salary,superannuation and benefits as agreed between you and ANZ from time to timeusing 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.

 

Mandatorysuperannuation contributions are paid in accordance with ANZ’s obligationsunder legislation as varied from time to time. If legislative 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).

 

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,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 paymentsare at the discretion of the Board.

 

**1****                               TotalTarget Reward**

 

YourTotal Target Reward (TTR) is a combination of Fixed Reward – TEC (60% of TTR)plus Variable Reward – Executive Remuneration Scheme (40% of TTR).  Your annualised TTR is AUD1,333,333.

 

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

 

YourTEC package on commencement of work in your new position is AUD800,000 perannum.

 

Youmust take 65% of TEC as notional salary. The balance, less mandatory superannuation contributions, is a flexiblecomponent and can be taken as cash benefit/Cashtec or non-cash benefits or acombination of both.

 

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

 

Bonus payments under the Executive Remuneration Schemeare subject to business unit and individual performance and are at thediscretion of the Board.

 

Bonuses will be paid one-half in cash and one-half indeferred shares.  The shares will vest 3years from the date of issue.  The Boardmay, at its 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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***1.3******                     Long Term Incentives***

 

You will be eligible to participate in ANZ’s Long TermIncentive Plan. Awards under this Plan are entirely at the discretion of theBoard.

 

**2**                               **Other Benefits**

 

***2.1******                    ***Inthe event that Lloyds TSB requires you to work out some or all of your sixmonth notice period (in excess of a six-week period), and you are not eligiblefor short term incentive for this period, ANZ will compensate you.  This compensation will relate to the period youwere employed by Lloyds but not eligible for STI and will be an amount up toAU$500,000 per annum pro-rated for the period commencing from your date ofnotice up until your commencement with ANZ.

 

***2.2******                    ***Inrecognition of your loss of access to equity as a result of your resignationfrom Lloyds TSB, we will provide the following in compensation:

 

•                  Fourtranches of A$700,000 worth each of deferred shares to be issued at six monthintervals in April and October each year. (The first tranche will be issued within three months of April 2004subject to you being employed by ANZ at this time.  Should your employment date be later thanApril 2004, the first tranche will be issued within three months of yourjoining date.)

•                  Hurdledoptions worth A$750,000 to be issued within 3 months of your commencement atANZ.

 

***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****                              ****Relocation to Melbourne**

 

ANZwill pay to relocate you from the United Kingdom (“UK”) to Melbourne,Australia.  This will include:

 

•             first class airfare inorder for you to commence employment with ANZ;

•             reasonable costs in relationto the removal of furniture and personal belongings;

•             reasonable costsassociated with the sale of your UK residential property, if applicable;

•             a fully maintained hire car for aperiod of up to 4 weeks from the date of your arrival in Melbourne, or for suchlesser period if you organise a personal vehicle sooner;

•             reasonable costsassociated with obtaining taxation advice in regard to your move back toAustralia, from ANZ’s Taxation Service provider (currentlyPricewaterhouseCoopers).

 

**4****                              ****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.

 

**5****                               Entitlementsupon Termination of Employment**

 

(a)                        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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(b)                       Inaddition to any notice or payment under clause 12 of your employment agreement,you will have the following entitlements on the termination of your employment:

 

(i)***               On******resignation***(see clause12.2),you will not be entitled to:

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

•                        exerciseany options.

 

(ii)            ***On termination for serious misconduct*** (see clause 12.3(b)),you will not be entitled to:

•                        any unvesteddeferred shares issued to you;

•                        exercise anyoptions.

 

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

you will be entitled to:

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

•                        all thesign-on deferred shares provided in clause 2.2 above that have already beenissued, and those issued during the notice period, will vest in full;

•                        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).

•                        a pro-rataexercise of unvested sign-on options provided in clause 2.2 above in proportionto your period of employment. This period will include the 12 month noticeperiod.

 

(iv)        ***On total and permanent******disablement or death***,you or, in the event of death, your estate, will be entitled to:

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

•                        any deferredshares issued to you;

•                        all sign-ondeferred shares in accordance with Clause 2.2 of this Schedule,

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

 

**6****                               Definitions**

 

For the purposes of this employment agreement:

 

•                                **totaland 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** means notional salary, which is 65% ofTEC.

 

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##### **ACCEPTANCE**

 

I, SteveTargett, have read and understood and agree to the terms of employment set outin this employment agreement (including the Schedule).

 
| Name:             |   |   |   |   |
|-------------------|--------|--------|--------|--------|
|              |   |   |   |
| Signature:        |   |   | Date:  |   |   |
|              |   |   |
|              |   |   |
| /S/  S.C. Targett |   |   |   |
| no  date          |   |   |
|                   |        |        |        |        |  |  |

 

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