Document:

EXHIBIT 4.8

 

Employment
agreement – Mr Peter A McKinnon

 

 

	
  22 December 2003

  
	
   

  
	
   

  
	
  Peter McKinnon

  
	
  500 Bourke St

  
	
  Melbourne, Victoria, 3000

  

 

 

Dear Peter

 

National Australia Bank Ltd is pleased to confirm your
employment with us in the Position of Executive General Manager, People Culture
(“your Position”) on the terms and conditions set out in this letter and the
Attachment.

 

Employer

 

Your contract of employment will continue to be with
National Australia Bank Ltd (“us”).  As
our employee, you may be required to provide services to any Related Body
Corporate of the National Australia Bank Ltd as well as to us.  You will remain our employee despite any
alteration to your Position or appointment to another Position in accordance
with these terms and conditions.

 

Position and Duties

 

In your Position, you will be located in Melbourne,
Victoria and will report to the

 

Chief Executive Officer.

 

The duties and responsibilities in your Position have
been discussed with you. You may be required to undertake other duties and
responsibilities from time to time, and your reporting responsibility and/or
Position title may also be altered from time to time. In some circumstances you
may be required to undertake another Position. 
In any other Position, these terms and conditions will continue to
apply.

 

 

Date of Operation

 

The terms and conditions set out in this letter and
the Attachment, if accepted, will apply to your employment with us from 1
December 2003, and be for a period of three years (“Initial Period”).  The contract may be extended after the
initial period for a further twelve months if mutually agreed.

 

Employment Status

 

During the Initial Period of this agreement your
employment status, unless varied by mutual agreement, will be as follows:

 

Year 1 - Full Time (standard five day work week);

 

Years 2 and 3 – Within the Year 1 period we will
review your employment status with the intention of moving it to a part-time
basis.  Any reduction in employment
status (eg to three days per week) must be by mutual agreement.

 

Any change in your employment status will result in
your entitlements, and your total remuneration package at that time, being
reduced on a pro-rated basis.  That is, a
three day working week would entitle you to three-fifths of your current entitlements
and remuneration.

 

National Australia Bank Group policies

 

You will be required to comply with our policies and
procedures generally, as established and varied from time to time.  Some of those policies and procedures are
referred to in more detail in the Attachment.

 

By accepting this offer, you acknowledge that you have
received the enclosed copies of the following policies prior to acceptance:

 

(a)                                  “Equity in Employment: We’re Committed”;

 

(b)                                 “Sexual Harassment: Off Limits”; and

 

(c)                                   “Code of Conduct: Our Behavioural Guidelines”, and

 

(d)                                  “The National’s Privacy Policy”

 

Remuneration and Other Benefits

 

Your remuneration arrangements including your Total
Employment Compensation and certain other benefits are set out in Section B of
the Attachment.  Your Total Employment
Compensation will not be altered unless you agree, except to the extent that
this agreement permits.

 

 

Confidentiality and other Duties

 

Section C of the Attachment sets out your obligations
in respect of Confidential Information and Personal Information.  Those obligations continue, even if your
employment with us ceases for any reason.

 

Leave

 

Your leave entitlements and obligations are set out in
Section D of the Attachment.

 

Termination of Employment

 

You may terminate your employment with us by giving us
6 weeks notice in writing.  You may also
terminate your employment with us on other specified grounds which require you
to give us a longer notice period.  We
may terminate your employment upon specified grounds which require notice or
payment in lieu to be given.  In certain
circumstances, including serious misconduct, (for example, disclosure of
Confidential Information or other serious or continuing breaches of your
contract), we may terminate your employment without notice.  In this case you will receive only accrued but
untaken leave entitlements.  Detailed
conditions of termination are set out in Section E of the Attachment.

 

New Agreement

 

This agreement, as set out in this letter and the
Attachment, replaces any present employment agreement you have with us.  Any agreements, understandings or
negotiations in respect of your employment with us cease to have any effect
from the date of this letter.  Further
details on this matter are set out in Section F.8 of the Attachment.

 

Applicable law and other general conditions

 

Your contract of employment arising from acceptance of
this offer will be governed by the law of the State of Victoria.  Other general conditions of the offer of
employment are set out in Section F of the Attachment.

 

Definitions

 

Definitions of the terms used in this letter of offer
and the Attachment are set out in section G of the Attachment.

 

 

The Attachment

 

The Attachment to this letter forms part of the terms
and conditions of this offer of a contract of employment with us.

 

Letter of Offer, Attachment and Enclosures

 

This letter summarises the terms and conditions of our
offer of employment.  If there is any
inconsistency between this letter and the Enclosures and the Attachment, then
the Enclosures and the Attachment prevail.

 

 

Acceptance

 

In order for
the terms and conditions set out in this letter and the attachment to have
legal effect, you must sign the duplicate of this letter in the presence of a
witness and return it to me.  If this offer is not accepted within 28 days
after the date of this letter it will lapse.

 

 

	
  Yours sincerely,

  
	
   

  
	
   

  
	
  [Original signed]

  
	
   

  
	
   

  
	
  Frank Cicutto

  
	
  CEO/Managing Director

  

 

 

Enclosures:

 

Attachment

Policies:

 

	
  (a).

  	
  “Equity in Employment: We’re Committed”;

  
	
  (b).

  	
  “Sexual Harassment: Off Limits”;

  
	
  (c)

  	
  “Code of Conduct: Our Behavioural Guidelines”;

  
	
  (d).

  	
  “The National’s Privacy Policy”

  

 

 

I acknowledge having read this letter and
each of its enclosures, and I accept the offer of continuing employment with
National Australia Bank Ltd on the terms set out in this letter and its
enclosures.

 

 

	
  Signed:

  	
   

  	
  [Original signed]

  	
   

  
	
   

  	
   

  
	
  Date:

  	
  Twenty second of December                 2003

  	
   

  
	
   

  	
   

  
	
  Witnessed
  By:

  	
  [Original signed]

  	
   

  
	
   

  	
   

  
	
  Full
  Name of Witness

  	
  Rosemary Mould

  	
   

  
	
  (Please
  Print)

  	
   

  
	
   

  	
   

  
	
  Address
  of Witness

  	
  1 Stephen Court Nunawading 3131

  	
   

  

 

 

 

Contents

 

	
  Section:

  
	
   

  	
   

  
	
  A:

  	
  Position and Work

  
	
  B:

  	
  Remuneration and Benefits

  
	
  C:

  	
  Confidential Information and Related Matters

  
	
  D:

  	
  Leave

  
	
  E:

  	
  Termination of Employment

  
	
  F:

  	
  General Conditions

  
	
  G:

  	
  Definition of Terms.

  
	
   

  	
   

  
	
  Policies:

  
	
   

  	
   

  
	
  1.

  	
  “Equity in Employment: We’re Committed”;

  
	
  2.

  	
  “Sexual Harassment: Off Limits”;

  
	
  3.

  	
  “Code of Conduct: Our Behavioural Guidelines”;

  
	
  4.

  	
  “National’s Privacy Policy”.

  

 

 

Section A:
Position and Work

 

A.1                             Your Position

 

As set out in your offer of continuing
employment your Position is «JobTitle», «BusinessUnit».

 

A.2                             Duties

 

A.2.1                   Your powers responsibilities and duties

 

You may exercise the powers and
discretions, hold the responsibilities and perform the duties and tasks which:

 

(a)        we determine are appropriate
to your Position; and

 

(b)        are conferred, delegated or
specified to you by us through your Manager (or any other person authorised by
us) from time to time

 

(collectively “the
powers, duties and responsibilities of your Position”).

 

A.2.2      Compliance
with directions

 

You must comply with all lawful and
reasonable directions of your Manager (or any other person authorised by us).

 

A.3                             Changes in your Position and Work

 

A.3.1                   Changes in your Position

 

During your employment by us we may alter, add to or
reduce the powers, duties and/or responsibilities of your Position either:

 

(a)                                  with your agreement; or

 

(b)                                 by a direction from us.

 

We can only give you a direction if it does not
unreasonably alter, add to or reduce the powers, duties and/or responsibilities
of your Position.

 

A.3.2                   Appointment to another Position

 

During your employment by us, we may appoint you to
another Position (“the other Position”):

 

(a)                                  with your agreement; or

 

(b)                                 by a direction in writing from us.

 

 

We can only give you a direction if the other
Position:

 

(a)                                   is reasonably comparable to your Position, taking into account the
powers, duties and responsibilities of the other Position; and

 

(b)                                  is at the same location as your Position or is at a location within
a reasonable distance of your place of residence.

 

A.3.3      Continuation
of the Agreement

 

The terms of this agreement will continue to apply
even though:

 

(a)                                   the powers, duties and responsibilities of your Position are varied;
or

 

(b)                                  you are appointed to another Position

 

under this agreement.

 

A.3.4      No
material change of circumstances

 

A variation to the powers, duties and/or
responsibilities of your Position, or appointment to another Position, in
accordance with this agreement does not constitute a “material change in
circumstances” for the purpose of Clause E.2.1.

 

A.4                             Performance

 

A.4.1                   Performance of duties

 

You will exercise your powers and perform your duties
and responsibilities in a proper and efficient manner.  Unless you are absent by reason of ill health
or approved leave, you will devote the whole of your time, attention and
abilities, during our normal business hours and otherwise as is reasonably
necessary, to exercising your powers and carrying out your duties and
responsibilities.

 

A.4.2      Other
employment

 

(a)                                   You must not:

 

(i)                                      undertake any other business or profession;

 

(ii)                                   be or become an employee or agent of any other person; or

 

(iii)                                assist or have any interest in any other business or profession.

 

(b)                                  However, despite sub-clause (a):

 

(i)                                      we may agree to you doing any of those things, and we will not
unreasonably refuse to so agree;

 

(ii)                                   you may hold or acquire as a bona fide investment shares or other
securities of any publicly listed company, including any company listed for
quotation on the Australian Stock Exchange Ltd.

 

 

(c)                                   You may be required to disclose to us any information relevant to
any matter referred to in this clause.

 

A.4.3      Promotion
of our interests

 

You must use your best endeavours to promote and
enhance the Bank’s interests, welfare, business, profitability, growth and
reputation.  You must not intentionally
or negligently do anything which is or may be harmful to those things.

 

A.4.4      Compliance
with our policies

 

In addition to each of your other duties and
responsibilities, you must comply with our policies and procedures, as
determined by us from time to time including, in particular, the following
policies and procedures:

 

(a)                                   Equity in Employment: We’re Committed;

(b)                                  Sexual Harassment: Off Limits;

(c)                                   Code of Conduct: Our Behavioural Guidelines and,

(d)                                  The National’s Privacy Policy

 

You
acknowledge that you have been provided with a copy of each of these policies
and procedures prior to signing this Agreement.

 

A.4.5                   Duties owed

 

In addition to
the duties owed to us as your employer, including but not restricted to clauses
A4.2 and A4.3, Section C and clause F.5 you also owe duties to each Related
Body Corporate of National Australia Bank Limited.

 

A.4.6                   Illegal Drugs and Alcohol

 

You
must not:

 

(a)                                 use
or have in your possession any illegal drugs during working hours;

 

(b)                                  attend to carry out the duties of your Position under the influence
of any alcoholic beverage or under the influence of any illegal drug. “Under
the influence of any alcoholic beverage” means that in the reasonable opinion
of your manager, you are affected by alcohol in such a way that you may not be
able:

 

(i)                                     to perform the duties of your position;

 

(ii)                                  to exercise the level of judgement and skill that the performance of
those duties requires; or

 

(iii)                               to take reasonable care for your own safety or the safety of others.

 

(c)           drive any vehicle in the
course of your employment:

 

(i)                                      with a blood alcohol content exceeding that prescribed by the laws
of the State in which the vehicle is being driven;

 

(ii)                                   under the influence of any illegal drug.

 

 

“Illegal drug”
means a substance the possession or use of which is prohibited by law.

 

 

A.4.7      Occupational Health and Safety

 

You must:

 

(a)                                   assist us in the implementation of any measures taken by us in
respect of occupational health and safety;

 

(b)                                  observe any occupational health and safety policy, procedure,
regulation or rule which applies to us;

 

(c)                                   use all equipment and appliances provided by us to ensure the health
and safety of you, our other employees, our customers and any other persons;

 

(d)                                  generally, comply with any obligation imposed on you under the laws
applicable to occupational health and safety.

 

A.4.8                   Obligations of the Bank

 

We:

 

(a)                                  acknowledge our obligation to provide a safe workplace, under and in
terms of relevant occupational health and safety legislation and common law
duties;

 

(b)                                 acknowledge our obligations under and in terms of relevant Federal
and State industrial and other legislation, applicable to us in our capacity as
your employer, including but not limited to the Workplace
Relations Act 1996; and

 

(c)                                  undertake to use our best endeavours to ensure that all information
provided to you by us, in relation to the terms and conditions of your
employment with us, and your rights and obligations under this agreement is
accurate.

 

A.5          Management Information

 

A.5.1                   Reporting
requirements

 

You must
promptly report to your Manager, or any other person authorised by us, any
information which relates to our business, the exercise of your powers, or the
performance of your duties and responsibilities.  A report must be made in response to a
request and may be made on your own initiative.

 

A.5.2                   Explanations

 

You must
provide any explanations that your Manager, or any other person authorised by
us, requests, where such explanation relates to our business, the exercise of
your powers, or the performance of your duties and responsibilities.

 

 

Section B:  Remuneration
and Benefits

 

B.1          Total
Employment Compensation

 

You will receive Total Employment
Compensation (TEC) of $«TEC» which is
inclusive of Employer-funded Superannuation.

 

A full explanation of each component of your TEC appears below.

 

B.1.1      Total
Remuneration Package

 

Your Total
Remuneration Package (TRP) includes a Benefit Component that may be taken as
cash.

 

Your TRP is
initially $«TRP» and will be paid
fortnightly in arrears.

 

B.1.2      Benefit Component

 

The Benefit Component of your TRP is initially $«BenefitComponent».

 

The Benefit Component may be taken as cash or non cash
benefits or a combination of both. It includes Fringe Benefits Tax (FBT)
payable by us in connection with the provision of non-cash benefits.

 

B.1.3      Superannuation

 

(a)                                   We will arrange for the Trustee of the National Australia Bank Group
Superannuation Fund (“the Fund”) to offer membership of the Fund to you, on the
terms of the applicable Trust Deed and Rules.

 

(b)                                  The total value of superannuation is calculated as 9.7% of 90% of
your TRP.  This amount is initially $«SuperannuationTotal».  This amount is made up as follows:

 

(i)                                      We will provide 9.0% of 90% of your TRP up to the Maximum Earnings
Base (MEB) as set by the Government each July to the Fund on your behalf.  This amount is initially $«SuperannuationAmount»and will be credited to
your Fund account on a regular basis in line with the pay cycle as a
contribution for, or in respect of, you. 
This amount may be altered by us from time to time, subject to any
applicable legislation.

 

This contribution is in addition to any
salary sacrifice superannuation contribution you nominate as part of your TRP
and any contribution you elect to make to superannuation from post-tax TRP.

 

(ii)                                   $«SuperannuationAllowance»will
be paid to you as cash in the form of a superannuation allowance.

 

(iii)                                We provide on average 0.7% of 90% of your TRP up to the MEB to the
Fund on your behalf to cover the cost of death and disability benefits (on
average 0.5% of 90% of your TRP) and fund administration (on average 0.2% of
90% of your TRP).  This amount may be
altered by us from time to time, subject to any recommendations by the Fund
Actuary or any applicable legislation.

 

 

B.1.4      Review

 

Your next remuneration review is expected to be during
January «NextReview».  Thereafter we will review your Total
Employment Cost at least once in each 12 months of your employment on such a
basis as we, in our absolute discretion, may determine.  Your effective TEC will not be reduced as a
consequence of a review.

 

B.1.5      Incentive
Plan

 

We have an incentive program which may change from
time to time.  You are entitled to
participate in that program on its terms if:

 

(a)                                   in the Incentive Plan Year under consideration you have worked for
us for at least three months; and

 

(b)                                  you are employed by us at the time any incentive payment relating to
that Incentive Plan Year is made.

 

B.2          Benefits

 

B.2.1      Other benefits

 

In addition to the benefits provided to you under your
Total Employment Compensation:

 

(a)                                   you are eligible to participate in the National Australia Bank Staff
Share Allocation Plan and National Australia Bank Staff Share Ownership Plan on
their terms, as varied from time to time.

 

(b)                                  you will be considered for participation in any offers made under
the National Australia Bank Executive Share Option Plan No.2, in accordance with
the Plan rules as applicable from time to time;

 

(c)                                   you are entitled to participate in other benefits which are normally
provided to staff employed by us at your level.

 

B.2.2      Reimbursement of Expenses

 

Subject to substantiation and approval in accordance
with our guidelines from time to time, we will reimburse you for all expenses
you properly incur in carrying out your responsibilities and duties (including,
but not limited to travelling, accommodation, entertainment and telephone
expenses).

 

 

Section C:  Confidential
Information, Personal Information and Related Matters

 

C.1          Confidential Information

 

C.1.1      Acknowledgement

 

You acknowledge that the Confidential Information is
solely and exclusively our property.

 

C.1.2      Confidentiality

 

Unless:

 

(a)                                   you are required by us, or our auditors, or by law; or

 

(b)                                  we agree in writing,

 

you
must not:

 

(c)                                   use any Confidential Information; or

 

(d)                                  disclose any Confidential Information to any person,

 

other
than for the purpose of carrying out your powers, duties and responsibilities.

 

C.1.3      Use

 

You must not use any Confidential Information for the
benefit of any person other than us.

 

C.1.4      Confidential
Information in the public domain

 

To the extent that Confidential Information is in the
public domain, subject to clause C.1.5 your obligations under clauses C.1.2 and
C.1.3 cease.

 

C.1.5      Uncertainty

 

If it is uncertain whether:

 

(a)                                   any information is Confidential Information; or

 

(b)                                  any Confidential Information is lawfully within the public domain,

 

such information
is deemed to be Confidential Information and deemed to be not within the public
domain, unless we inform you in writing to the contrary.

 

C.1.6      Security of Confidential Information

 

So far as is
reasonably practicable, you must:

 

(a)                                   maintain proper and secure custody of Confidential Information; and

 

(b)                                  use your best endeavours to prevent the disclosure of Confidential
Information to third parties or the use by them of Confidential Information.

 

 

C.1.7      Delivery

 

You must immediately deliver all Confidential
Information which is physically capable of delivery to us if:

 

(a)                                   this agreement is terminated; or

 

(b)                                  you are so requested by your Manager or a person authorised by us.

 

C.1.8      Confidential
Information may be destroyed

 

(a)                                   If we request you to do so, instead of delivering the Confidential
Information according to clause C.1.7, you must destroy the Confidential
Information and certify in writing to us that the Confidential Information has
been destroyed.

 

(b)                                  In the case of computer software or other computer data we have
requested you to destroy, you must erase it from magnetic media on which it is
stored such that it cannot be recovered or in any way reconstructed and certify
in writing to us that the Confidential Information has been destroyed.

 

C.1.9      Obligations
relating to Personal Information

 

(a)                                   In relation to any Personal Information which comes to your
knowledge as our employee or while you perform any duties for us, you must
comply with and not cause us to breach:

 

(i)                                      any applicable privacy laws; and

 

(ii)                                   our Privacy Policy (as amended from time to time).

 

(b)                                  To the extent that Confidential Information consists of or includes
Personal Information, you must in addition to the obligations set out generally
in this Section C comply with the obligations set out in sub-clause (a) above.

 

C.1.10    Obligations
to continue

 

Your obligations under this clause:

 

(a)                                   continue after termination of this agreement;

 

(b)                                  are enforceable by us at any time by legal process; and

 

(c)                                   are for our continuing benefit.

 

C.1.11    Obligations
under Corporations Act

 

Your obligations to us pursuant to the Corporations Act are in addition to
your obligations under this agreement.

 

 

C.2          Non Solicitation Covenant

 

You covenant that whether on your own account or for
any person during your employment and for a period of 12 months after your
employment ceases, you will not solicit or entice (or endeavour to solicit or
entice) from us:

 

(a)                                   any of our officers or employees or any contractors to us, whether
or not that person would commit a breach of any contract by reason of ceasing
to serve or provide services and/or goods to us;

 

(b)                                  the custom of any person who has during the two years prior to the
cessation of your employment been our customer, if that person dealt with the
area of our operations for which you have or have had responsibility in the
period of two years prior to cessation of your employment.

 

 

Section D:  Leave

 

D.1          Annual Leave

 

(a)                                   You are entitled to 4 weeks paid leave, or other amount as specified
in the Award, for each period of 12 months during your employment or a
proportionate amount of leave for any period of less than 12 months.

 

(b)                                  This leave is in addition to any declared public and Bank holidays
which are normally observed by us.

 

(c)                                   So far as possible, leave will be taken at times mutually agreed to
by you and us.  If this is not possible,
leave is to be taken at such times as we direct.

 

(d)                                  Any accrued but unused portion of annual leave will be paid upon
termination of employment.  Payment will
be calculated on your TRP at the date of termination.

 

D.2          Long
Service Leave

 

D.2.1      You are entitled to long
service leave in accordance with:

 

(a)                                   the National Australia Bank Group Award 2002 as
replaced and varied from time to time, as it applies to the Bank; or

 

(b)                                  our long service leave scheme as varied from time to time,

 

whichever is
the greater.

 

D.2.2                   Any accrued but unused portion of long service leave will be paid on
termination of employment.  Payment will
be calculated on your TRP at the date of termination.

 

D.3          Sick Leave

 

D.3.1                   You are entitled to sick leave under and in accordance with the
Award.

 

D.3.2                   In summary:

 

(a)                                   Under the Award your current sick leave entitlement (which
accumulates to the Award maximum from year to year) is:

 

	
  (i)

  	
  In the first
  year of employment -

  	
  8 days

  
	
   

  	
   

  	
   

  
	
  (ii)

  	
  In the
  second year of employment -

  	
  10 days

  
	
   

  	
   

  	
   

  
	
  (iii)

  	
  Thereafter
  in each year of employment-

  	
  12 days

  

 

D.3.3                   You should refer to the Award for the statement of your entitlements
and the applicable conditions.

 

 

D.4          Parental Leave

 

D.4.1                   After 12 months continuous service with us you are entitled to
parental leave, on a without remuneration basis, in accordance with:

 

(a)                                   the Award;

 

(b)                                  the Workplace Relations Act 1996;
or

 

(c)                                   Our Parental Leave Policy as varied from time to time,

 

whichever
is the greater.

 

D.4.2                   In summary:

 

(a)                                   Your current basic parental leave entitlement is a period of up to
52 weeks unpaid leave;

 

(b)                                  Upon return to work, following the taking of parental leave, you are
entitled to return to the Position you held prior to the commencement of the
leave.  If that Position no longer
exists, you are entitled to a Position as nearly comparable in status and TEC
to the former Position as is possible.

 

D.4.3                   You should refer to the documents set out in clause D.4.1. for the
statement of your entitlements and the applicable conditions.

 

 

Section E:  Termination
of Employment

 

E.1          Termination by us

 

We may
terminate your employment in a number of circumstances.  These are set out below.

 

E.1.1       Summary termination

 

We may terminate your employment by giving written
notice to you effective immediately, if you:

 

(a)                                   become bankrupt or compound with your creditors (or any of them) or
assign your estate for the benefit of your creditors (or any of them);

 

(b)                                  are precluded from taking part in the management of a corporation by
the provisions of Section 91a, 229 or 230 of the Corporations
Act;

 

(c)                                   are convicted of any offence involving fraud or dishonesty or any
other serious offence (except for a traffic offence) which is punishable by
imprisonment (whether you are imprisoned or not);

 

(d)                                  commit a serious or persistent breach or non-observance of this
agreement;

 

(e)                                   knowingly fail to comply with an obligation imposed upon you under
the Award or Enterprise Agreement; or

 

(f)                                     are guilty of misconduct of such a kind that it would be
unreasonable to require us to continue your employment during the notice period
required under this Agreement.

 

E.1.2       Termination for unsatisfactory
performance

 

(a)                                   We may terminate your employment by giving you twelve weeks’ notice
in writing if:

 

(i)                                      we have informed you in writing of reasonable standards of
performance in relation to your Position (“the performance standards”);

 

(ii)                                   we have given you a reasonable opportunity to meet the performance
standards;

 

(iii)                                on a reasonable assessment, you have failed to meet the performance
standards;

 

(iv)                               we have informed you in writing that you have not met the
performance standards;

 

(v)                                  we have given you the opportunity to respond to matters of concern
in connection with your performance (unless, in all the circumstances, we could
not reasonably be expected to give you that opportunity); and

 

(vi)                               having considered any response you may make to those matters, we are
satisfied that there is no adequate reason for your failure to meet the

 

 

performance standards and no adequate
reason why your employment should not be terminated.

 

(b)                                  In our discretion:

 

(i)                                      we may require you to work through all (or part only) of the notice
period; or

 

(ii)                                   we will make payment in lieu of the whole notice period (or the
unworked balance of the notice period).

 

(c)                                   If we make payment in lieu of all or part of the notice period, it
will be calculated on the basis of your Total Remuneration Package.

 

E.1.3       Termination
because of redundancy

 

(a)                                   We may terminate your employment in the case of redundancy by giving
you six weeks’ notice in writing.

 

(b)                                  A redundancy occurs where we consider that the work being done by
you (or a major portion of it) is no longer required to be done.  This may be as a result of re-organisation,
changed business practice, technological change or a down turn in business.

 

(c)                                   A redundancy does not occur if we offer another Position to you of a
similar kind at the same location as your Position or at a different location,
if the different location is within a reasonable distance of your place of
residence.

 

(d)                                  In our discretion:

 

(i)                                      we may require you to work through all (or part only) of the notice
period; or

 

(ii)                                   we will make payment in lieu of the whole notice period (or the
unworked balance of the notice period).

 

(e)                                   If we make payment in lieu of all or part of the notice period, it
will be calculated on the basis of your Total Remuneration Package.

 

(f)                                     Upon termination of employment under this clause, we will pay to you
the greater of:

 

(i)                                      a Termination Payment equal to 72
weeks Total Remuneration Package; or

 

(ii)                                   the redundancy payment calculated in accordance with the Redundancy,
Redeployment and Retrenchment Agreement (less any payment in lieu of notice
required to be made under that agreement).

 

 

E.1.4       Termination
because of changed requirements

 

(a)                                   We may terminate your employment in the case of changed
requirements, by giving you six weeks’ notice in writing.

 

(b)                                  “Changed requirements” means that we have determined that we no
longer wish to retain your services.

 

(c)                                   In our discretion:

 

(i)                                      we may require you to work through all (or part only) of the notice
period; or

 

(ii)                                   we will make payments in lieu of the whole notice period (or the
unworked balance of the notice period).

 

(d)                                  If we make payment in lieu of all or part of the notice period, it
will be calculated on the basis of your Total Remuneration Package.

 

(e)                                   Upon termination of employment under this Clause, we will pay to you
a termination payment equal to 72 weeks
Total Remuneration Package.

 

E.2          Termination by You

 

You may
terminate your employment in a number of circumstances.  These are set out below.

 

E.2.1       Termination
because of material change of circumstances

 

(a)                                   You may terminate this agreement in the case of a material change of
circumstances by giving us six weeks’ notice in writing.

 

(b)                                  A change in the powers, duties and responsibilities of your
Position, or appointment to another Position, which is not authorised by clause
A.3 is a “material change of circumstances” if, and only if, without your
agreement:

 

(i)                                      we purport to substantially reduce your Total Remuneration Package;

 

(ii)                                   we purport to substantially reduce the powers or responsibilities of
your Position;

 

(iii)                                we purport to substantially diminish the scope of your duties in
your Position; or

 

(iv)                               there is any other change by us in relation to your employment
which, under generally applicable principles of law, would amount to conduct by
us entitling you to accept that conduct as constituting a termination of this
agreement.

 

(c)                                   In our discretion:

 

(i)                                      we may require you to work through all (or part only) of the notice
period; or

 

 

(ii)                                   we will make payment in lieu of the whole notice period (or the
unworked balance of the notice period).

 

(d)                                  If we make a payment in lieu of all or part of the notice period, it
will be calculated on the basis of your Total Remuneration Package.

 

(e)                                   Upon termination of employment under this clause, we will pay to you
a termination payment equal to 72 weeks
Total Remuneration Package.

 

(f)                                     If you terminate this agreement, as a result (wholly or in part) of
an event under sub-clause E.2.1.(b)(i), then any payment we make under this
clause E.2.1 shall be calculated on your Total Remuneration Package before the
reduction.

 

E.2.2       Other
termination

 

(a)                                   You may terminate this agreement at any time by giving us not less
than 4 weeks written notice.

 

(b)                                  We may either:

 

(i)                                      retain you in our service for all or part of the notice period; or

 

(ii)                                   pay you an amount equal to your Total Remuneration Package for so
much of the notice period as you are not retained, up to a maximum of 4 weeks.

 

E.3          Entitlements
upon termination

 

(a)                                   In
addition to any other entitlement under this Agreement, on any termination of
this Agreement you are entitled to receive:

 

(i)                                      your Cash Salary and other benefits under this Agreement;

 

(ii)                                   payment of any accrued or untaken annual leave paid on TRP;

 

(iii)                                TRP in lieu of any accrued but untaken long service leave; and

 

(iv)                               any other benefits due to you pursuant to any share plan or other
relevant plan;

 

up to
and including the date of termination.

 

(b)                               If this Agreement terminates due to the effluxion of time, in
addition to the entitlements listed in (a) above, you are entitled to receive:

 

(i)                                    any deferred short-term incentive amounts held on your behalf;

 

(ii)                                 retain any unvested long-term incentive allocations on their
original terms and conditions.  Any vesting
would remain subject to the satisfaction of the original hurdle;

 

(iii)                              any other benefit due to an executive of your level on retirement.

 

(c)            If your employment is terminated because of redundancy (Clause
E.1.3), changed requirements (Clause E.1.4), or material change of
circumstances (Clause E.2.1) we will request the Trustees of the National
Australia Bank Superannuation Fund to pay to you a benefit which will include
the full current value of any Excess Transfer Value which would normally be
vested and credited to your account progressively between the ages of 45 and 50
years.

 

 

E.4          Reasonableness of provisions and satisfaction of
obligations

 

E.4.1       Acknowledgment

 

You acknowledge:

 

(a)                                   that the terms and conditions of this agreement in respect of termination
of employment (“the terms”) are fair and reasonable, recognising that the
extent and nature of benefits due to you upon termination differ appropriately
accordingly to the reason for termination;

 

(b)                                  that the terms are not harsh, unjust or unconscionable.

 

If we give notice (or pay in lieu of notice) and make
payment of entitlements which arise under this agreement upon termination of
employment on a particular basis we are doing so, and you receive them, in
satisfaction of each of your entitlements under this agreement, the Award
and/or the Enterprise Agreement, in respect of a termination of employment upon
that basis.

 

E.4.2       No compensation

 

If your employment is terminated in accordance with
the express terms of this agreement you are not entitled to claim any
compensation or damages from us in respect of termination.

 

E.5          Return of our Property

 

Upon termination of this agreement you will return
each item of our property (including but not limited to keys, disks, each
vehicle owned or leased by us and computers, access cards) in your possession
or control.

 

E.6          Loans and accounts

 

While you are an employee of the Bank any account you
open which is referred to in the Employee’s Choice booklet (available on the
Bank’s intranet site), as amended from time to time, will be subject to the
benefits and concessions set out in that booklet relevant to that account.  Such benefits and concessions cease upon
termination of your employment with the Bank for any reason, except where
otherwise specified.

 

 

Section F:  General
Conditions

 

F.1          Governing law

 

This agreement is governed by and will be interpreted
in accordance with the laws of Victoria.

 

F.2          Relevance of Award and Industrial Agreement

 

(a)                                   You and we acknowledge that, by reason of the Workplace
Relations Act 1996 (“the Act”), the Award and the Enterprise
Agreement apply to your employment.

 

(b)                                  We agree with you that:

 

(i)                                      no provision of the Award or the Enterprise Agreement will be
binding upon us in connection with your employment except in accordance with
the Act;

 

(ii)                                   no provision of the Award or the Enterprise Agreement will be, or be
implied to be, a term of your contract of employment with us,

 

unless
we otherwise agree with you.

 

F.3          Amendment

 

This agreement may only be varied or replaced by a
document signed by us and you.

 

F.4          Waiver and Exercise of rights

 

(a)                                   A single or partial exercise or waiver of a right relating to this
agreement will not prevent any other exercise of that right or the exercise of
any other right.

 

(b)                                  A party will not be liable for any loss, cost or expense of any
other party caused or contributed to by the waiver, exercise, attempted
exercise, failure to exercise or delay in the exercise of a right.

 

F.5          Misrepresentation

 

You must not:

 

(a)                                   at any time intentionally make any untrue statement in relation to
us or in relation to your employment with us, or have made any untrue or
misleading statement in connection with prospective employment with us; or

 

(b)                                  after cessation of employment represent that you are employed by or
connected with us.

 

F.6          Arbitration

 

(a)                                   Any dispute between us and you (other than any claim for equitable
relief) as to:

 

(i)                                      the interpretation of this agreement; or

 

 

(ii)                                   the rights or obligations of each party arising from our employment
relationship with you,

 

must be submitted to a single arbitrator in accordance
with and subject to the Commercial Arbitration Act
1984 (Victoria).

 

(b)                                  A party must give notice of a dispute to the other party within 21
working days of the dispute arising.

 

(c)                                   For the purposes of an arbitration under this clause, if we do not
agree with you on the appointment of an arbitrator within 14 days of the
notification of dispute by either party to the other, the President or Acting
President of the Law Institute of Victoria will appoint an arbitrator on
application by either you or us.

 

F.7          Rights Cumulative

 

Subject to any express provision in this agreement to
the contrary, the rights of a party under this agreement are cumulative and are
in addition to any other rights of that party.

 

F.8          Entire Understanding

 

F.8.1                      This agreement constitutes the entire agreement of the parties about
its subject matter.  Any previous
agreements, understandings and negotiations on that matter cease to have any
effect.

 

F.8.2                      For the avoidance of doubt, for the purpose of this agreement the
subject matter of this agreement is the terms and conditions of your employment
by us.  Subject to the express terms of
this agreement, this clause is not intended to limit, extend or otherwise vary:

 

(a)                                   any duty imposed upon you or us which arises by operation of law or
by force of legislation; or

 

(b)                                  any term of the agreement implied by law.

 

F.8.3       No oral explanation or
information provided by any party to another will:

 

(a)                                   affect the meaning or interpretation of this agreement, or

 

(b)                                  constitute any collateral agreement, warranty or understanding
between any of the parties.

 

F.9          Severance

 

(a)                                   You and we consider that covenants, obligations and restrictions
contained in this agreement (“the covenants”) are reasonable in all the
circumstances of your employment.

 

(b)                                  Each and every part of the covenants is a severable and independent
covenant.  You agree with us that our
joint intention is that if the covenants, taken together, go beyond what is
reasonable in all the circumstances but would be reasonable with any one or
more of the covenants (or any one or more parts of the covenants) deleted, the
covenants will apply as if those unreasonable covenants (or parts of covenants)
were deleted.

 

 

Section G:  Definition
of Terms

 

In this
Agreement, unless the context otherwise requires:

 

“Accrued but untaken” or “accrued
but unused”, in relation to leave
entitlements, means leave to which you have become entitled upon termination of
employment pursuant to the Award.

 

“Award” means the National Australia Bank
Group Award 2002 as varied or replaced from time to time;

 

“Bank” means National Australia Bank Limited and its Related Bodies
Corporate.

 

“Commencement Date” means the commencement date set out in your letter of offer.

 

“Confidential Information” means any trade secret, manufacturing process, formulae or other
confidential information relating to the business affairs, accounts, works,
marketing plans, sales plans, prospects, research, management, financing,
products, inventions, designs, processes and any data bases, data surveys,
customer lists, specifications, drawings, records, reports, software or other
documents, material or other information whether in writing or otherwise
concerning the Bank or any of its customers or suppliers to which you gain
access, whether before, during or after your employment.

 

“Employment Period” means the period from the Commencement Date until your employment
is terminated in accordance with this agreement.

 

“Enterprise Agreement” means any industrial agreement binding upon us which has been
approved or certified by the Australian Industrial Relations Commission from
time to time, pursuant to the provisions of the Workplace
Relations Act  1996, as varied or replaced from time to time.

 

“Incentive Plan Year” means the period commencing 1 October in any year until 30
September in the following year.

 

“Manager” means the person holding the Position to which you report in your
Position.

 

“Personal
Information” means information or an opinion
about individuals, including in particular information about our customers
whether true or not and whether recorded in material form or not, whose
identity is apparent or can reasonably be ascertained from that information or opinion.

 

“Position” means:

(a)                                           your position specified in Section A of the Attachment; or

(b)                                          your position as it is varied in accordance with this agreement; or

(c)                                           any other position to which you are appointed in accordance with
this agreement,

as the case may be.

 

“Privacy Policy” means the National Privacy Policy effective 21 December 2001.

 

 

“Redundancy, Redeployment and
Retrenchment Agreement” means the
Redundancy, Redeployment and Retrenchment Agreement entered into between us and
the Finance Sector Union of Australia in 2002, as varied or replaced from time
to time.

 

“Related Body Corporate” has the same meaning as in Section 50 of the Corporations
Act.

 

“Total Employment Compensation” means the amount as specified in Section B of the Attachment where
this amount includes TRP and Employer-funded Superannuation.

 

“Total Remuneration Package” means the amount specified as such in Section B of the Attachment
where a portion of the TRP includes a Benefit Component that may be taken as
cash.

 

“Us” ( or “us”) means National Australia Bank Limited.

 

“We” ( or “we”) means National Australia Bank Limited.

 

“You” ( or “you”) means the person to whom this offer of continuing employment is
addressed.EXHIBIT 4.9

 

Employment agreement – Ms Lynne M Peacock (as General
Manager, Business Development)

 

 

DATED
29 May 2003

 

 

 

(1)           NATIONAL AUSTRALIA GROUP EUROPE LIMITED

 

 

-and-

 

 

(2)           Lynne Peacock

 

 

 

 

SERVICE AGREEMENT

 

 

THIS AGREEMENT is made on 29 May 2003

 

BETWEEN:

 

NATIONAL AUSTRALIA GROUP EUROPE LIMITED whose
registered office is situated at 88 Wood Street, London, EC2V 7QQ (“the Company”);

 

and

 

Lynne Peacock (“the Executive”) of The Granary, Kennel
Farm, Chelsham Road, Warlingham, Surrey CR6 9PA.

 

IT IS AGREED as follows:

 

1              APPOINTMENT

 

1.1           The Company shall employ the Executive and the
Executive shall serve the Company as General Manager Business Development (the “Position”)
reporting to the Chief Executive & Chief Operating Officer Europe.

 

2              COMMENCEMENT
AND EMPLOYMENT

 

2.1           The Appointment shall take effect from no later than 1 November 2003 (the “Commencement Date”) and, subject to Clause 14
below, shall continue thereafter until terminated by either party giving
written notice in accordance with Clause 2.2 (the “Employment”).

 

2.2           The Executive will be entitled to notice of
termination from the Company of 6 calendar months and is required to give
notice of termination to the Company of 3 calendar months.

 

2.3           Notwithstanding the terms
of Clause 2.1 and 2.2, the Employment shall automatically terminate when the
Executive reaches age 60.

 

2.4           The Executive’s period of continuous employment will
begin no later than 1 November 2003. 
No previous employment with any other employer shall be treated as continuous
with the Employment.

 

3              DUTIES

 

3.1           The Executive shall be employed in the Position in
which capacity she shall devote all her time, attention and skill to her duties
hereunder and shall faithfully and diligently perform such duties and exercise
such powers consistent therewith as may from time to time be assigned to or
vested in her by the Company.

 

3.2           The Company reserves the right to assign to the
Executive duties of a different nature either additional to or instead of those
referred to in Clause 3.1 above, it being understood that she will not be
assigned duties which she cannot reasonably perform or which would reasonably
involve a reduction in status.

 

 

3.3           The Executive shall obey the reasonable and lawful
orders of the Company, given by or with the authority of the Company, and shall
comply with all the Company’s rules, regulations, policies and procedures from
time to time in force.

 

3.4           The Executive may be required in pursuance of her
duties to perform services not only for the Company but also for any Group
Company and, without further remuneration (except as otherwise agreed), to
accept any such office or position in any Group Company which is consistent
with her position with the Company, as the Company may from time to time reasonably
require.  The Company may at its sole
discretion assign the Executive’s employment to any Group Company on the same
terms and conditions as set out herein.

 

3.5           The Executive’s normal working hours shall be 9.00am
to 5.00pm Monday to Friday, and such additional hours (without further
remuneration) as are necessary for the proper performance of her duties of
employment (including any such hours which exceed the maximum weekly working
time limit of 48 hours imposed by the Working Time Regulations 1998 or any
re-enactment thereof).

 

4              EXCLUSIVITY OF SERVICE

 

4.1           The Executive shall not (without the prior written
consent of the Company) during the Employment directly or indirectly be
interested in, engage in, be concerned with, or provide services to, any other
person, company, business entity or other organisation whatsoever (whether as
an employee, officer, director, agent, partner, consultant or otherwise)
PROVIDED THAT the Executive may hold up to 5% of any securities in a company
which is quoted on any recognised Stock Exchange.

 

4.2           Subject to any written regulations issued by the
Company which may be applicable to her, the Executive or her Immediate
Relatives shall not be entitled to receive or obtain directly or indirectly any
discount, rebate, commission or other benefit in respect of any business
transacted (whether or not by her) by or on behalf of the Company or any Group
Company and if she, her Immediate Relatives or any company or business entity
in which she is interested, shall directly or indirectly obtain any such
discount, rebate, commission or other benefit she shall forthwith account to
the Company or Group Company for the amount received or value of the benefit so
obtained.

 

4.3           The Executive confirms that she has disclosed fully
to the Company all circumstances in respect of which there is, or there might
be, a conflict of interest between the Company or any Group Company, and the
Executive or her Immediate Relatives, and she agrees to disclose fully to the
Company any such circumstances which may arise during the Employment.

 

5              REMUNERATION

 

5.1           The Company shall pay to the Executive a base salary
of £300,000, payable monthly in arrears by equal instalments.  The Executive’s salary will be reviewed on
1st January each year and the next review will be 1st  January 2004. At this review there is no obligation on
the part of the Company to increase the base salary but it shall not be
decreased.

 

5.2           The Executive shall also be eligible to receive
further remuneration by way of a performance incentive calculated in accordance
with, and subject to, Schedule 1 attached hereto.

 

 

 

6              EXPENSES

 

The Company shall reimburse to the
Executive (against receipts or other satisfactory evidence) all reasonable
business expenses properly incurred and defrayed by her in the course of the
Employment.

 

7              DEDUCTIONS

 

The Company shall be entitled at any time
during the Employment, or in any event on termination (howsoever arising), to
deduct from the Executive’s remuneration hereunder any monies due from her to
the Company or any Group Company including but not limited to any outstanding
loans, advances, relocation expenses excess holiday and any other monies owed
by her to the Company or any Group Company.

 

8              BENEFITS

 

8.1           The Executive will be eligible for a
range of benefits which are described in Schedule 2.

 

8.2           The Executive will be eligible to participate in the
National Australia Bank Executive Share Option Plan No.2 (“the Option Plan”)
and the National Australia Bank Performance Rights Plan (“the Performance
Rights Plan”) in accordance with the rules of the Option Plan and the
Performance Rights Plan as applicable from time to time. Subject to any legal
or regulatory requirements, including under relevant stock exchange listing
rules, the Company will, in November 2003, procure that National Australia
Bank Limited offers the Executive the right to be granted 50,000 options
under the terms of the Option Plan rules and the right to obtain 12,500 performance rights under the terms of the Performance Rights Plan rules.

 

9              PLACE OF WORK

 

9.1           The Executive’s normal
place of work shall be at the Company’s London head office.

 

9.2           In the performance of his
duties hereunder, the Executive will be required to travel and work both
throughout and outside the United Kingdom and in particular he will be required
to travel to and work in Australia in the course of her employment. The
Executive may be required to work overseas for periods in excess of one month
at any one time.

 

10           SICKNESS BENEFITS

 

10.1         The Company reserves the right to require the
Executive to undergo a medical examination by a doctor or consultant nominated
by it, in which event the Company will bear the cost thereof.

 

10.2         If the Executive is absent from work due
to sickness or injury she shall:

 

(a)           immediately inform the
Company of her sickness or injury;

 

(b)           in respect of a consecutive
period of absence lasting less than 8 days (including weekends), send to the
Company a self-certification form in a format 
stipulated by the Company; and

 

(c)           in respect of any absence
exceeding 7 consecutive days (including weekends), send to the Company a
medical certificate signed by a doctor covering the further consecutive period
of absence.

 

 

10.3         Subject to the Executive complying with the terms of
Clause 10.2, the Company may, at its sole discretion continue to pay full basic
salary during any period of absence due to sickness or injury for up to a
maximum period of 26 weeks and thereafter a sum equivalent to 50% of basic
salary during any further period of absence due to sickness or injury for up to
a maximum period of 26 weeks unless the Employment is terminated in terms of
Clauses 2.2 or 14.

 

10.4         Payment of the basic salary in terms of
Clause 10.3 shall be made less:

 

(a)           an amount equivalent to any
Statutory Sick Pay payable to the Executive;

 

(b)           any sums which may be
received by the Executive under any permanent health or any other insurance
policy effected by the Company; and

 

(c)           any other benefits to which
the Executive may be entitled hereunder or under any relevant legislation.

 

10.5         Once the Executive has received, at the discretion
of the Company, sick pay under Clause 10.3, the Executive shall have no right
to any benefit or emolument from the Company during any further period of
sickness absence except any remaining entitlement to Statutory Sick Pay.

 

10.6         Where any payments are made
to the Executive under any permanent health insurance scheme or arrangement all
other benefits provided to or in respect of the Executive by the Company will
cease immediately (if they have not done so already) except those benefits for
which the Company received reimbursement in full of the total cost to it of the
benefit, from the insurer under the appropriate scheme or arrangement.

 

11           HOLIDAYS

 

11.1         The Executive shall be entitled to receive her
normal remuneration for all Bank and Public holidays as detailed in the NAG
Employee Handbook and related to base country. She will also be entitled to 30
working days’ holiday in each holiday year (the period from March to end February).  The Executive may only take her holiday at
suitable and convenient times to the Company.

 

11.2         The entitlement to holiday during the first and last
years shall accrue on a pro rata basis for each complete month of service in
the holiday year.

 

11.3         The Company reserves the right, at its sole
discretion, to require the Executive to take any outstanding holiday during any
notice period or to make payment in lieu thereof.

 

11.4         The Company shall, upon
termination of the Employment, make payment in lieu of any outstanding holiday
which has accrued but has not been taken by the Executive.  The Executive will be required to make a
payment to the Company in lieu of any holiday taken in excess of the Executive’s
accrued holiday entitlement at the date of termination of Employment.  Any sums due may be deducted from any money
owing to the Executive.

 

11.5         Holiday entitlement for one holiday year cannot be
taken in subsequent holiday years. 
Failure to take holiday entitlement in the appropriate holiday year will
lead to forfeiture of any accrued holiday not taken, without any right to
payment in lieu thereof.

 

 

12           PENSION AND DEATH BENEFITS

 

12.1         The Company shall pay annual
contributions to a personal pension scheme nominated by the Executive and
approved under Chapter IV of Part XIV of the Income and Corporation Taxes Act
1998 (the “Scheme”). The Executive shall provide to the Company such
particulars of the Scheme which is to apply for the purposes of this clause and
such other information in relation to the Scheme as the Company may reasonably
require from time to time. The contribution shall be paid to the Scheme on or
about the anniversary of the actual commencement date in each yearof employment
and in respect of part years of employment the Executive shall be entitled to a
pro rata contribution.

 

The Company’s contributions, subject to the
following paragraph, will be an amount equal to 
25% of the Executive’s basic salary. However, this is subject to any
Inland Revenue restrictions from time to time in force on the amount that may
be contributed without tax being charged or other adverse tax consequences.
Inland Revenue restrictions currently specify a maximum annual contribution as
a percentage of  the Executive’s relevant
earnings in respect of the appropriate year of assessment (having regard to any
contributions to the scheme or to any other arrangement paid by the Executive)
(as mentioned in section 640 of the Income and Corporation Taxes Act
1988), and an earnings cap applied as at the date of payment of the
contribution (pursuant to section 640A of the Income and Corporation Taxes
Act 1988).

 

If the amount that can be contributed to
the Scheme in accordance with Inland Revenue restrictions (the “Approved
Contribution”) is less than 25% of the Executive’s basic salary in any
appropriate year of assessment (“the Total Contribution”), the Company shall
pay a sum equal to the difference between the Total Contribution and the
Approved Contribution by way of an additional payment of annual salary in any
appropriate year of assessment. The Company shall not be liable for any tax
liability incurred by the Executive in respect of such payments.

 

12.2         A contracting-out certificate
under the Pension Schemes Act 1993 is not in force in respect of the Employment.

 

 

13           CONFIDENTIALITY

 

13.1         The Executive shall neither during the Employment
nor at any time after the termination thereof (howsoever arising) directly or
indirectly: -

 

(a)           use for her own purposes or
those of any other person, company, business entity or other organisation
whatsoever; or

 

(b)           disclose to any person,
company, business entity or other organisation whatsoever; or

 

(c)           through any failure to
exercise due care and diligence, cause any unauthorised disclosure of any trade
secrets or confidential information;

 

relating or belonging to the Company or any
Group Company or its financial information and plans, designs, formulae,
product lines, financial and business dealings, research activities, any
document marked ‘Confidential’ or which the Executive is told is ‘Confidential’
or which she might reasonably expect the Company or any Group Company would
regard as ‘Confidential’ or any information which has been given to the Company
or any Group Company in confidence.

 

13.2         Nothing in Clause 13.1 above shall prevent the
Executive from:-

 

(a)           using her own personal
skills and expertise after the termination of her employment with the Company;

 

(b)           using or disclosing such
information for the proper performance of her duties or as authorised by the Company;
or

 

(c)           disclosing such information
if required to do so by a Court or similar authority.

 

13.3         The obligations contained in Clause 13.1 above shall
continue to apply without limitation of time following the termination of the
Employment, howsoever arising, but they shall cease to apply to any information
or knowledge which may subsequently come into the public domain other than by
way of unauthorised disclosure.

 

14           TERMINATION

 

14.1         Notwithstanding Clause 2 above, the Company may
terminate the Employment with immediate effect and without any payment in lieu
of notice if the Executive: -

 

(a)           is guilty of dishonesty or
other gross misconduct (which shall include the following (but is not
exhaustive): -

 

(i)            serious mismanagement of
personal finances;

 

(ii)           concealing errors and
omissions, or attempting to protect others who have done so;

 

(iii)          unlawful discrimination
against any individual or group contravening the Company’s Equal Opportunities
Policy including acts of intimidation, harassment, victimisation, bullying or
assault;

 

 

(iv)          abuse of the Occupational
Sick Pay Scheme, as defined in that Scheme;

 

(v)           misrepresenting reasons for
absence from work whilst undertaking work, paid or unpaid, for another employer
or person;

 

(vi)          dishonesty whether for
personal gain or for the benefit of any other person; in particular, stealing,
borrowing, misappropriating or converting money, information goods or documents
belonging to the Company or its customers;

 

(vii)         being convicted of a criminal
offence which by its nature detracts from the individual’s suitability to carry
out her duties; or, where the penalty imposed for any offence makes it
impossible or impracticable to continue employment;

 

(viii)        carrying out transactions /
processing on her accounts or accounts belonging to friends or family members,
without the appropriate mandate;

 

(ix)           unauthorised disclosure of
confidential information detrimental to the Company’s interests;

 

(x)            sabotage or vandalism of
Company equipment or buildings; or deliberately damaging the property of
another person whilst in the course of employment;

 

(xi)           provision of the Company’s
products or services when there is reason to suspect that these facilities may
be used for criminal or illegal activity;

 

(xii)          any other misconduct judged
by the Company to be of sufficient seriousness to warrant summary dismissal,

or

 

(b)           or gross incompetence or wilful neglect of duty or, 

 

(c)           if she commits any other serious breach of this Agreement or -

 

(i)            acts in any manner
(whether in the course of performing her duties or otherwise) which is likely
to bring the Executive, the Company or any Group Company into disrepute; or

 

(ii)           is convicted of an
indictable criminal offence; or

 

(iii)          becomes bankrupt, applies
for or has made against her a receiving order, makes any composition with her
creditors or commits an act of bankruptcy; or

 

(iv)          resigns as a director of the
Company or any Group Company (without the Company’s written consent); or

 

(v)           becomes of unsound mind; or

 

 

(vi)          shall be guilty of
continuing unsatisfactory conduct or performance of her duties, after having
received a written warning from the Company relating to the same.

 

The
above grounds are given by way of illustration only and are not an exhaustive
list of reasons for summary dismissal.

 

14.2         Notwithstanding Clause 2, the Company may
terminate the Employment by giving, in writing, not less than statutory notice,
if the Executive has been prevented by reason of ill health, injury or some
other reason beyond her control, from performing her duties under this
Agreement for a period or periods aggregating at least ninety days in the
preceding period of twenty four consecutive months.

 

14.3         On the termination of the Employment, howsoever
arising, the Executive shall forthwith return to the Company in accordance with
its instructions all correspondence, records, specifications, software, models,
notes, reports and other documents and any copies thereof and any other
property belonging to the Company or any Group Company or any of its or their
clients (including but not limited to the Company’s car, keys, credit cards,
passes) which are in her possession or under her control.

 

14.4         The Company shall be entitled at its sole
discretion:

 

(a)           to terminate the employment
immediately either instead of or at any time after notice of termination being
given (by either the Company or the Executive) and  pay the Executive in lieu of any salary only
(and excluding any bonus, incentive, compensation  in respect of the company car or other
benefits) to which the Executive would have been entitled to during any notice
period outstanding on the last day of Employment; or

 

(b)           to require the Executive
not to attend at work (the “Garden Leave”) and/or not to undertake any work or
duties or to carry out different duties commensurate with her status during any
period of notice (whether given by the Executive or the Company).  For the avoidance of doubt during any period
of Garden Leave the Executive may be required to refrain from contacting any employee
or client of the Company or Group Company and will not be entitled to work for
any other person or business during any Garden Leave.

 

14.5         The termination of the Employment shall be without
prejudice to any right the Company may have in respect of any breach by the
Executive of any of the provisions of this Agreement  which may have occurred prior to such
termination.

 

15           RESTRICTIONS AFTER TERMINATION

 

15.1         Definitions

 

Since the Executive is likely to obtain
confidential information in the course of the Employment and personal knowledge
of and influence over suppliers, customers, clients and employees of the
Company and Group Companies, the Executive hereby agrees with the Company that
in addition to the other terms of this Agreement and without prejudice to the
other restrictions imposed upon her by law, she will be bound by the covenants
and undertakings contained in Clauses 15.2 to 15.5.  In this Clause 15.1, unless the context
otherwise requires:

 

 

“Critical Employee”
means any person who was a director, employee or consultant of the Company at
any time within the Relevant Period who by reason of that position and in
particular her seniority and expertise or knowledge of confidential information
or knowledge of or influence over the clients, customers or contacts of the
Company is likely to cause damage to the Company if she were to leave the
employment of the Company and become employed by a competitor of the Company;

 

“Customer” means
any person to which the Company distributed, sold or supplied Restricted Goods
or Restricted Services during the Relevant Period and with which, during that
period either the Executive, or any employee under the direct or indirect
supervision of the Executive, had material dealings in the course of employment
with the Company, but always excluding therefrom, any division, segment, branch
or office of such person with which the Executive and/or any such employee had
no dealings during that period;

 

“Prospective Customer”
means any person with which the Company had discussions during the Relevant
Period regarding the possible distribution, sale or supply of Restricted Goods
or Restricted Services and with which during such period the Executive, or any
employee who was under the direct or indirect supervision of the Executive, had
material dealings in the course of employment by the Company, but always
excluding therefrom any segment, division, branch or office of that person with
which the Executive and/or any such employee had no dealings during that
period;

 

“Relevant Period”
means the period of one year immediately preceding the Termination Date;

 

“Restricted Area”
means:

 

(a)           UK and the Republic of
Ireland; and/or

 

(b)           any other country in the
world where, on the Termination Date, the Company dealt in Restricted Goods or
Restricted Services;

 

“Restricted Goods”
means any products by the Company and with which the duties of the Executive
were materially concerned or for which she was responsible during the Relevant
Period, or any products of the same type or materially similar to those
products;

 

“Restricted Period”
means the period of 6 months commencing on the Termination Date;

 

“Restricted Services”
means any services (including but not limited to technical and product support,
technical advice and customer services) supplied by the Company and with which
the duties of the Executive were materially concerned or for which she was
responsible during the Relevant Period, or any services of the same type or
materially similar to those services;

 

“Supplier” means
any supplier, agent, distributor or other person who, during the Relevant
Period was in the habit of dealing with the Company and with which, during that
period, the Executive, or any employee under the direct or indirect supervision
of the Executive, had material dealings in the course of employment with the
Company; and

 

“Termination Date” means the date upon which the Employment terminates.

 

 

15.2         Restrictive covenants

 

The Executive confirms that, neither during
the Employment nor during the Restricted Period, without the prior written
consent of the Company, whether by herself, through her employees or agents or
otherwise and whether on her own behalf or on behalf of any person, directly or
indirectly, she will not:-

 

(a)           so as to compete with the
Company solicit business from or canvas any Customer or Prospective Customer in
respect of Restricted Goods or Restricted Services;

 

(b)           so as to compete with the
Company accept orders from, act for or have any business dealings with, any
Customer or Prospective Customer in respect of Restricted Goods or Restricted
Services;

 

(c)           so as to compete with the
Company within the Restricted Area, be employed or engaged in an executive
capacity in a  business which is involved
in the business of researching into, developing, manufacturing, distributing,
selling, supplying or otherwise dealing with Restricted Goods or Restricted
Services, if the business is or seeks to be in competition with the
Company.  For the purposes of this sub-clause,
acts done by the Executive outside the Restricted Area shall nonetheless be
deemed to be done within the Restricted Area where their primary purpose is to
distribute, sell, supply or otherwise deal with Restricted Goods or Restricted
Services in the Restricted Area;

 

(d)           solicit or induce or
endeavour to solicit or induce any person who, on the Termination Date, was a
Critical Employee (and with whom the Executive had dealings during the Relevant
Period) to cease working for or providing services to the Company, whether or
not any such person would thereby commit a breach of contract;

 

(e)           employ or otherwise engage
any Critical Employee in the business of researching into, developing,
manufacturing, distributing, selling, supplying or otherwise dealing with
Restricted Goods or Restricted Services if that business is, or seeks to be, in
competition with the Company; or

 

(f)            solicit or induce or
endeavour to solicit or induce any Supplier to cease to deal with the Company
and shall not interfere in any way with any relationship between a Supplier and
the Company.

 

15.3         Application of restrictive covenants to
other Group Companies

 

Clause 15.2 shall also apply as though
references to the “Company”
include references to each Group Company in relation to which the Executive has
in the course of the Employment or by reason of rendering services to or
holding office in such Group Company:-

 

(a)           acquired knowledge of its
trade secrets or confidential information; or

 

(b)           had personal dealings with
its Customers or Prospective Customers; or

 

(c)           supervised directly or
indirectly employees having personal dealings with its Customers or Prospective
Customers,

 

 

but so that references in Clause 15.1 to
the “Company” shall for this purpose be deemed to be references to the relevant
Group Company.  The obligations
undertaken by the Executive pursuant to this Clause 15.3 shall, with respect to
each Group Company, constitute a separate and distinct covenant and the
invalidity or unenforceability of any such covenant shall not affect the
validity or enforceability of the covenants in favour of any other Group
Company.

 

15.4         Effect of suspension on Restricted Period

 

If the Company exercises its right to
suspend the Executive’s duties and powers under Clause 14.4 after notice of
termination of the Employment has been given, the aggregate of the period of
the suspension and the period after the Termination Date for which the
covenants in this Clause 15 shall apply shall not exceed 9 months and if the
aggregate of the two periods would exceed 9 months, the period after the
Termination Date for which the covenants in this Clause 15 shall apply shall be
reduced accordingly.

 

15.5         Further undertakings

 

The Executive hereby undertakes with the
Company that she will not at any time:-

 

(a)           during the Employment or
after the Termination Date engage in any trade or business or be associated
with any person engaged in any trade or business using the name(s) or
incorporating the word(s) National Australia Group (Europe) Limited/Clydesdale
Bank PLC/Yorkshire Bank PLC/Northern Bank Limited/National Irish Bank Limited;
or

 

(b)           after the Termination Date
represent or otherwise indicate any association or connection with the Company
or any Group Company or for the purpose of carrying on or retaining any
business represent or otherwise indicate any past association with the Company
or any Group Company.

 

15.6         Severance

 

The restrictions in this Clause 15, the
terms of which have been fully explained to the Executive, as the Executive
hereby acknowledges, are separate and severable restrictions and are considered
by the parties to be reasonable in all the circumstances.  It is agreed that if any such restrictions,
by themselves, or taken together, shall be adjudged to go beyond what is
reasonable in all the circumstances for the protection of the legitimate
interests of the Company or a Group Company but would be adjudged reasonable if
some part of it were deleted or the length of time or the geographical coverage
of the restrictions reduced, the relevant restriction or restrictions shall
apply with such deletion(s) or reduction(s) as may be necessary to make it or
them valid and enforceable.

 

16           DIRECTORSHIPS

 

16.1         The Executive shall forthwith resign (without claim
for compensation) from all directorships and other offices she may hold from
time to time with the Company or any Group Company in the event of: -

 

(a)           the termination of her
employment, howsoever arising; or

 

(b)           either the Company or the
Executive serving on the other notice of termination of the Employment; or

 

 

(c)           the Company exercising its
rights under Clause 14.4(b) above.

 

16.2         In the event of the Executive failing to comply with
her obligations within Clause 16.1 above, she hereby irrevocably
authorises the Company to appoint some person in her name and on her behalf to
sign any documents, and/or do all things necessary or requisite, to give effect
to such resignations as referred to in Clause 16.1 above.

 

17           DISCIPLINARY ISSUES

 

Any disciplinary issues will be dealt with
by the line manager.

 

18           GRIEVANCE

 

If the Executive has any grievance relating
to the Employment, she should raise it with the line manager.

 

19           FSA COMPETENCE REQUIREMENTS

 

19.1         The Executive must comply
with any regulatory and compliance requirements which apply to the Position,
including (but not limited to):

 

(a)           the Code of Conduct for
Dealings in Investments by Directors and Employees;

(b)           the Code of Conduct for
Handling Investment Business for Customers; and

(c)           the Financial Services and
Markets Act 2000 (“FSMA”), all applicable secondary legislation made under the
FSMA and all applicable rules, regulations and guidance of the Financial
Services Authority (“FSA”) and any other statutory body involved in regulation
of the activity carried out by the Executive in the Position or otherwise in
the course of the Employment. [Subject to review in light
of specific duties of the Executive.]

 

The Company may take disciplinary action,
up to and including dismissal, if the Executive does not comply with these
requirements.

 

19.2         The Position is subject to
statutory regulation by the Financial Services Authority (“FSA”).  FSA Regulations require that, in order to
perform the Position, the Executive must be assessed as competent on an ongoing
basis, in line with appropriate criteria. 
If the Executive fails to meet the appropriate standard of competence,
the Company would be in contravention of its obligations under the FSA
Regulations if it permitted the Executive to continue to work in the
Position.  The Company will therefore
take appropriate action to fulfil its regulatory obligations, which may result
in termination of the Employment.

 

 

19.3         The Company shall provide to
the Executive all reasonable assistance, training, support and access to advice
(at the cost of the Company) in connection with statutory regulatory and
compliance requirements.

 

20           DATA PROTECTION

 

The Executive acknowledges and agrees that
the Company is permitted to hold personal information about the Executive as
part of its personnel and other business records and may use such information
in the course of the Company’s or the Group’s business.  The Executive agrees that the Company may
disclose such information to third parties in the event that such disclosure is
in the Company’s view required for the proper conduct of the Company’s business
or that of any Group Company.  This
Clause applies to information held, used or disclosed in any medium.

 

21           SEVERABILITY

 

The various provisions and sub-provisions
of this Agreement are severable and if any provision or sub-provision or
identifiable part thereof is held to be invalid or unenforceable by any court
of competent jurisdiction then such invalidity or unenforceability shall not
affect the validity or enforceability of the remaining provisions or
sub-provisions or identifiable parts thereof in this Agreement.

 

22           WARRANTY

 

The Executive represents and warrants that
she is not a party to any agreement, arrangement, contract, understanding or
otherwise, which would in any way directly or indirectly restrict or prohibit
her from fully undertaking or performing the duties of the Employment, or any
of them, in accordance with the terms and conditions of this Agreement.

 

23           NOTICES

 

Any notice to be given hereunder may be
delivered, or be sent by first class post addressed, if to the Company, to its
registered office for the time being or, if to the Executive, to her address
stated in the heading of this Agreement or otherwise her address last known to
the Company.  Notices served by post
shall be deemed served on the second business day after the date of
posting.  For the purposes of this
clause, “business day” means a day on which the Company is open for business in
the place both of posting and of address of the notice.

 

24           DEFINITIONS

 

In this Agreement the following words and
expressions shall have the meanings set out below:

 

“Employment”  means the employment of the Executive under this Agreement
or as the contract requires, the duration of the employment;

 

“Group” means
all of the Group Companies;

 

“Group Company”
means the Company, or a company which is from time to time its holding company
or subsidiary of the Company or its holding company and “holding company” and “subsidiary”
shall have the meanings ascribed to them under section 736 Companies Act
1985 (as amended).  Associated employer
has the meaning ascribed to it in section 231 Employment Rights Act 1996;

 

 

“Immediate Relatives”
shall include husband, wife, common law spouse, partner, children, brothers,
sisters, parents, grandparents, and the aforesaid relatives by marriage.

 

All references in this Agreement to the
termination of the Executive’s employment “howsoever arising” (or such similar
expressions) shall be treated as including but not limited to such termination
by the Executive or the Company (with or without notice), by operation of law,
and whether or not such termination is connected with or results from a
repudiatory breach of this Agreement on the part of the Executive or the
Company.

 

25           NAG EMPLOYEE HANDBOOK

 

The NAG Handbook is not contractual for the
purposes of the Executive’s employment and may be amended from time to time by
the Company at its sole discretion and without giving the Executive prior
warning.  The NAG handbook does not apply
to the Position except as expressly provided for in this Agreement or as the
context requires.

 

26           EQUAL OPPORTUNITIES

 

The Company is committed to a policy of
Equal Opportunities. Details of this Policy together with the Equal
Opportunities Complaints Procedure can be found in the NAG Handbook.

 

27           MISCELLANEOUS

 

27.1         This Agreement cancels and is in substitution for
all previous letters of engagement, agreements and arrangements (whether oral
or in writing) relating to the subject-matter hereof between the Company and
the Executive all of which shall be deemed to have been terminated by mutual
consent.  This Agreement constitutes the
entire Agreement between the parties as to the subject-matter hereof and no
waiver or modification hereof shall be valid unless in writing, signed by the
parties and only to the extent therein set forth.

 

28           GOVERNING LAW

 

This Agreement is governed by and construed
in accordance with English law.

 

[AS WITNESS the hands of a duly authorised officer of
the Company and of the Executive the day and year first before written.]/[IN
WITNESS WHEREOF this Agreement is executed as follows:-]

 

	
  SIGNED by 

  	
   

  	
  )

  
	
  Ross Pinney

  	
  [Original signed]

  	
   

  
	
   

  	
   

  	
  )

  
	
   

  	
   

  	
  )

  
	
  For and on behalf of

  	
   

  	
  )

  
	
  National Australia Group Europe Limited

  	
  )

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED by the said

  	
   

  	
  )

  
	
  Lynne Peacock

  	
  [Original signed]

  	
  )

  

 

 

ERP

 

SCHEDULE 1

 

Annual EVA Incentive 

 

The Executive will be eligible to participate in the
Company’s EVA Incentive Plan (“the Incentive Plan”).

 

The first payment under the Incentive Plan will be
prorated in respect of the period from the Commencement Date to 30 September 2004.

 

The Incentive Plan provides for payments as a
percentage of Basic Salary, and reflects the Economic Value Added performance
of the Group and of business units, as well as individual performance.  The target incentive is 80% of base salary.

 

Payments are made following the end of the financial
year to which they apply, and determination of Group, business unit, and
individual performance for that year. No EVA incentive payment will be payable
to the Executive after the date upon which the Company invokes Clause 14.4 of
this agreement.

 

 

SCHEDULE 2

 

Company Car

 

The Executive shall have the use of a company car
subject to and in accordance with the terms of the Company Car Policy, being a
vehicle appropriate for the Executive’s use in performing his duties hereunder.
The Executive shall be entitled to receive a vehicle equivalent to a monthly
lease value totalling £15,000 per annum.

 

Alternatively, in lieu of the provision by the Company
of a car, the Executive may elect to receive an amount equivalent to the monthly
lease value totalling £15,000 per annum.

 

Full details can be found in the attached copy of the
Policy.

 

National
Partnership Share Plan

 

The Executive will be eligible
to join the Partnership Share Plan provided they are an employee of a participating
Company within the National, have at least 6 months continuous service and are
a UK resident for tax purposes.   Further
details are available in the NAGE Employee Handbook.

 

Medical Cover

 

The Executive and her family shall be entitled to
participate in the Company’s private medical insurance scheme (PPP) subject to
and in accordance with the Scheme rules, with the Company paying 100% of the
annual subscription rate. The Company reserves the right, at its sole
discretion, to change the scheme and the level of benefits provided thereunder.
Further details are available from Human Resources Shared Services
Administration.

 

Discounted Mortgage / Loans

 

The Executive is eligible for a discounted mortgage
and / or loan subject to the rules of the Company from time to time.

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