Document:

Exhibit 4.1.2

 

12 March 2004

 

Mr Steve
Targett

74 Riverside
One

Hester Road

London , SW11
4AN

United Kingdom

 

Dear Steve

 

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

 

This letter
sets out the terms of your employment should you accept this offer and those
conditions be satisfied, and will constitute your employment agreement with ANZ
(“employment agreement”).  This
employment agreement will replace all existing agreements, arrangements, or
understandings 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 position
is Managing Director, Institutional Financial Services, reporting to the Chief
Executive Officer, John McFarlane and to the Chief Operating Officer, Bob
Edgar. You will be located at 100 Queen Street, Melbourne, Victoria, Australia.

 

ANZ may, at
its discretion, change your position, reporting arrangements, duties and
location on giving you reasonable notice, following consultation with you, and
taking into account career considerations and personal circumstances.

 

2                               Term
of Employment Agreement

 

Your
employment pursuant to this employment agreement will commence on a date to be
agreed but not later than  1 October 2004.

 

3                               Remuneration

 

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

 

4                               Leave

 

4.1                     Annual Leave

 

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

 

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

 

1

 

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

 

4.2                     Sick Leave

 

You may take
sick leave in accordance with standard arrangements applicable to all ANZ
employees.  Any untaken part of this
entitlement is cumulative from year to year. 
In the event of prolonged illness, ANZ may decide at its discretion to
provide you with sick leave in excess of your sick leave entitlements.  You are not entitled to any payment for
unused sick leave when your employment with ANZ ends.

 

4.3                     Parental Leave

 

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

 

4.4                     Long Service Leave

 

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

 

5                               Ownership
of Intellectual Property and Trade Secrets

 

All
inventions, discoveries, computer software processes and improvements made by
you during your employment with ANZ remain the property of ANZ.

 

By signing
this employment agreement, you:

 

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

 

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

 

6                               Values
and Ethical Standards

 

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

 

ANZ
expects you to further ANZ’s objectives and reputation and faithfully and
diligently to perform your duties, exercise your powers, and manage with
integrity and respect all matters concerning ANZ employees and customers.

 

ANZ
also 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 in
any business whether as principal, partner, director, agent, promoter or
beneficiary except that of ANZ.  This
requirement may be waived at ANZ’s discretion by a written consent signed by
the Chief Executive Officer. As we have discussed, ANZ is supportive of you
obtaining an outside directorship, subject to Board approval.

 

7                               Conduct

 

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

 

2

 

8                               Policies and Procedures, Performance Management Plans

 

8.1                     Policies and Procedures

 

ANZ has
policies and procedures that apply to your employment.  These policies and procedures may be amended
by ANZ from time to time.  They are not
incorporated into or included in your contract of employment with ANZ,
including this employment agreement.

 

8.2                     Performance Management Plans

 

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

 

9                               Confidential
Information

 

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

 

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

 

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

 

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

 

10                        Restraint

 

You
must not at any time, either during your employment with ANZ or for 12 months
after your employment with ANZ ends (or for such lesser time as a court may
deem reasonable), either on your own account or for or jointly with any other
person solicit, interfere with or attempt to entice away from ANZ any person
who, at any time within the period of 12 months before the date your employment
with 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 or
knowledge of, for the purpose of your employment. Consideration for the restraint is
included in your Total Employment Cost (TEC).

 

11                        Disciplinary
Action

 

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

 

12                        Termination
of Employment

 

12.1              Termination Entitlements

 

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

 

12.2              Resignation

 

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

 

3

 

notice.  You and ANZ may agree on a lesser period of
notice, or ANZ may in its discretion waive the notice period or any part of
it.  If ANZ waives the notice period or
any part of it, entitlements on termination will include payment in respect of
the 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, during
the notice period or any part of it, direct you not to perform all or part of
the duties of your position, to cease communication with customers, suppliers,
employees and contractors of ANZ and/or not to attend your principal place of
work.

 

12.3              Termination by ANZ

 

(a)                       Termination on
Notice

 

ANZ may
terminate your employment for any reason by giving you 12 months’ written
notice.  ANZ may elect to pay you in lieu
of giving you all or part of the notice period based on your Total Employment
Cost 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 cease
communication with customers, suppliers, employees and contractors of ANZ
and/or not to attend your principal place of work.

 

(b)                       Serious
Misconduct

 

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

 

13                        Variations
to Conditions of Employment

 

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

 

14                        Relevant
law

 

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

 

15                        Other
Conditions of Employment

 

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

 

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

 

•                                Birth
Certificate or Certificate of Extract of Birth;

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

•                                evidence
of educational qualifications.

 

4

 

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

 

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

 

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

 

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

 

 

Yours
sincerely

AUSTRALIA
AND NEW ZEALAND BANKING GROUP LIMITED

 

 

John
McFarlane

Managing
Director

 

5

 

SCHEDULE

REMUNERATION ENTITLEMENTS, INCLUDING
PAYMENTS 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 Schedule
forms 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 time
using ANZ’s Total Employment Cost (TEC) methodology. Essentially, TEC is the fixed component of
remuneration.  It comprises notional
salary (65% of TEC) and mandatory superannuation contributions, with the
balance being a flexible component.

 

Mandatory
superannuation contributions are paid in accordance with ANZ’s obligations
under legislation as varied from time to time. 
If legislative requirements for the payment of mandatory superannuation
contributions change, the flexible component of your TEC will be varied
accordingly (so that your TEC package remains the same).

 

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

 

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

 

Bonus payments
are at the discretion of the Board.

 

1                               Total
Target Reward

 

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

 

1.1                     Fixed Reward -
TEC

 

Your
TEC package on commencement of work in your new position is AUD800,000 per
annum.

 

You
must take 65% of TEC as notional salary. 
The balance, less mandatory superannuation contributions, is a flexible
component and can be taken as cash benefit/Cashtec or non-cash benefits or a
combination of both.

 

1.2                     Variable Reward -
Executive Remuneration Scheme

 

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

 

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

 

i

 

1.3                     Long Term Incentives

 

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

 

2                               Other Benefits

 

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

 

2.2                     In
recognition of your loss of access to equity as a result of your resignation
from Lloyds TSB, we will provide the following in compensation:

 

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

•                  Hurdled
options worth A$750,000 to be issued within 3 months of your commencement at
ANZ.

 

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

 

3                               Relocation to Melbourne

 

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

 

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

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

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

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

•             reasonable costs
associated with obtaining taxation advice in regard to your move back to
Australia, from ANZ’s Taxation Service provider (currently
PricewaterhouseCoopers).

 

4                               Superannuation

 

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

 

5                               Entitlements
upon Termination of Employment

 

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

 

ii

 

(b)                       In
addition 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 clause
12.2),

you will not be entitled to:

•                        any
unvested deferred shares issued to you under the ANZ incentive arrangements or
any other arrangement;

•                        exercise
any options.

 

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

you will not be entitled to:

•                        any unvested
deferred shares issued to you;

•                        exercise any
options.

 

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

you will be entitled to:

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

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

•                        exercise any
options 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’s
approval or otherwise in accordance with the Rules).

•                        a pro-rata
exercise of unvested sign-on options provided in clause 2.2 above in proportion
to your period of employment. This period will include the 12 month notice
period.

 

(iv)        On total and permanent disablement or death,

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

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

•                        any deferred
shares issued to you;

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

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

 

6                               Definitions

 

For the purposes of this employment agreement:

 

•                                total
and permanent disablement means:

 

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

 

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

 

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

 

iii

 

ACCEPTANCE

 

I, Steve
Targett, have read and understood and agree to the terms of employment set out
in this employment agreement (including the Schedule).

 

	
  Name:

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  /S/
  S.C. Targett

  	
   

  	
   

  	
   

  
	
  no
  date

  	
   

  	
   

  
							

 

ivExhibit 4.1.3

 

	
   

  	
  Corporate Headquarters

  
	
   

  	
  PO Box 1791

  
	
   

  	
  Wellington

  
	
   

  	
  New Zealand

  
	
   

  	
  Phone: 0-4-494 4000

  
	
   

  	
  Fax: 0-4-494 4504

  

 

1 January 2004

 

Sir John Anderson

c/o NBNZ House

1 Victoria Street

WELLINGTON

 

Dear Sir John

 

I am pleased to advise you
formally of your appointment to the position of Chief Executive Officer, The
National Bank of New Zealand Limited.  It
is intended that you become Chief Executive Officer of our combined banks in
New Zealand on amalgamation – your appointment to that position will be subject
to the approval of the Reserve Bank of New Zealand.

 

This letter sets out the terms of your employment, and constitutes your
employment agreement with The National Bank of New Zealand Limited (the “National
Bank”).  This employment agreement varies
and replaces all existing agreements, arrangements, or understandings between
you and the National Bank.  (References
to the National Bank include any corporation related to the National Bank under
the Companies Act 1993.)

 

1.                           Position, Reporting Arrangements and Location

 

Your position is Chief Executive Officer, The National Bank of New
Zealand Limited, reporting to the Chief Executive Officer and Chief Operating
Officer of Australia and New Zealand Banking Group Limited, who are Directors
of the Board of the National Bank, and to the Chairman of the National Bank of
New Zealand Limited.  Your position is
currently located at NBNZ House, 1 Victoria Street, Wellington.

 

ANZ may, at its discretion, change your position, reporting
arrangements, duties and location on giving you reasonable notice, following
consultation with you, and taking into account career considerations and
personal circumstances.  You may be
required to undertake reasonable travel within New Zealand and offshore to
carry out the responsibilities of your position.

 

2.                           Term of Employment

 

This employment agreement, and your obligations under it, will commence
on 1 December 2003 and will end on 30 September 2005, unless earlier terminated
in accordance with clause 12.

 

The term of this employment
agreement has been selected to enable you to fulfil the medium-term objectives
of the above position.  You should not
have any necessary expectation of ongoing employment with the National Bank in
this role beyond the expiry of this employment agreement, although it is
acknowledged that, depending upon the fulfilment of objectives within the term
of this employment agreement, a further separate rolling term of one year may
be agreed.  The National Bank will discuss
the prospect of any additional term with you at an appropriate time during the
term of this employment agreement.

 

3.                           Remuneration

 

The details of your remuneration are set out in Schedule 1.  Schedule 1 forms part of this employment
agreement.

 

1

 

4.                           Leave

 

4.1                     Annual Leave

 

You will receive 4 weeks’ contracted hours paid annual leave for each
completed year of paid service with the National Bank.  You are required to take your full annual
leave entitlement of 4 weeks over the course of each National Bank financial
year, 2 weeks of which must be taken consecutively.

 

At the end of each National Bank financial year, the
National Bank will deem you to have taken your full 4 weeks’ annual leave.  Accordingly, there will be no positive
accrual of this leave and your annual leave balance at the commencement of each
financial year will never be more than your balance at the commencement of the
previous year, or zero whichever is greater.

 

You are also entitled to long service leave in
accordance with the National Bank’s policy.

 

4.2                     Sick Leave

 

You may take sick leave in accordance with standard arrangements
applicable to National Bank employees in New Zealand.  The National Bank reserves the right to place
limits on the amount of sick leave available to you.  You are not entitled to any payment for
unused sick leave when your employment with the National Bank ends.

 

5.                           Ownership of Intellectual Property and Trade Secrets

 

All inventions, discoveries, computer software processes and
improvements made by you during your employment with the National Bank remain
the property of the National Bank.

 

By signing this employment agreement, you:

 

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

 

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

 

6.                              Values and Ethical Standards

 

The National Bank expects you to actively ensure that its guiding values
are an integral part of the way that you, and those who report to you, carry
out duties within the National Bank.

 

The National Bank expects you to further its objectives and reputation
and faithfully and diligently to perform your duties, exercise your powers, and
manage with integrity and respect all matters concerning National Bank
employees and customers.

 

The National Bank also 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 in any business whether as principal, partner,
director, agent, promoter or beneficiary except that of the National Bank.  This requirement may be waived at the
National Bank’s discretion by a written consent signed by the Chairman of the
Board.

 

2

 

7.                           Conduct

 

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

 

8.                           Policies and Procedures, Performance Management Plans

 

8.1                     Policies and Procedures

 

The National Bank has policies and procedures that apply to your
employment.  These policies and
procedures may be amended by the National Bank from time to time.  They are not incorporated into or included in
your contract of employment with the National Bank, including this employment
agreement.

 

8.2                     Performance Management Plans

 

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

 

9.                              Confidential Information

 

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

 

You must also return to the National Bank on request or immediately your
employment with the National Bank ends:

 

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

 

•             any vehicle, computer hardware or
software, key, security pass or other property that belongs to the National
Bank.

 

10.                    Restraint

 

You must not at any time, either during your employment with the
National Bank or for 12 months after your employment with the National Bank
ends (or for such lesser time as a court may deem reasonable), either on your
own account or for or jointly with any other person solicit, interfere with or
attempt to entice away from the National Bank any person who, at any time
within the period of 12 months before the date your employment with the
National Bank ends, was a customer or employee of, or in the habit of dealing
with, the National Bank and whom you had direct or indirect contact with, or
dealings with or knowledge of, for the purpose of your employment.

 

Except with the written consent of the Chairman of the Board, you must
not for the period of 6 months after your employment with the National Bank
ends whether by yourself, or as a consultant to or as a partner, agent, trust,
employee, shareholder, member or director, be directly or indirectly interested,
engaged or concerned in, or assist financially or in any other way, any
financial institution in New Zealand or Australia.

 

Consideration for the restraint is included in your Total Employment
Cost (TEC) - refer Schedule 1.

 

3

 

11.                    Disciplinary Action

 

If you fail to comply with the provisions of your employment agreement
or any other National Bank performance requirements, the National Bank may take
disciplinary action, which may include termination of your employment with the
National Bank (see clause 12).  The
National Bank may suspend you from employment (with or without pay) during any
investigation into any disciplinary matter.

 

12.                    Termination of Employment

 

12.1              Termination Entitlements

 

Your termination entitlements will depend upon the circumstances of the
termination and are set out in this clause 12 and in Schedule 1.  These will be the only entitlements paid to
you upon the termination of your employment with the National Bank.

 

12.2              Resignation

 

You may terminate your employment for any reason by giving the National
Bank 12 months’ written notice.  You and
the National Bank may agree on a lesser period of notice, or the National Bank
may in its discretion waive the notice period or any part of it.  If the National Bank waives the notice period
or any part of it, entitlements on termination will not include any payment in
respect of the waived period.

 

If, however, the National Bank elects not to
waive the notice period, the National Bank 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 cease communication with customers, suppliers, employees and
contractors of the National Bank and/or not to attend your principal place of work.

 

12.3              Termination by National
Bank

 

(a)                       Termination on Notice

 

The National Bank may terminate your employment
for any reason (other than (b) or (c) below) by giving you written notice equal
to the unexpired term of this employment agreement.  The National Bank may elect to pay you in
lieu of giving you all or part of the notice period based on your salary.  Alternatively, the National Bank 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 cease communication with customers, suppliers,
employees and contractors of the National Bank and/or not to attend your
principal place of work.

 

(b)                       Retrenchment

 

If the National Bank terminates your employment
because no suitable position exists for you, you will be entitled to a
severance payment equal to 6 months’ salary or an amount calculated as follows,
whichever is the greater:

 

1)              7 weeks’ salary for your first year of service;

 

2)              Plus 4 weeks’ salary for each year for your
second to tenth consecutive years of continuous service;

 

3)              Plus 3 weeks’ salary for each year for your
eleventh to twentieth consecutive years of continuous service;

 

4

 

4)              Plus 2 weeks’ salary for each subsequent consecutive
year of continuous service to a maximum of 35 years including the first;

 

5)              Plus a pro-rata payment for each completed
month of service in your final part year of service, up to and including your
35th year of service.

 

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

 

You will also be entitled to an additional sum
calculated in accordance with the National Bank’s policy for the payment of gratuities
to retiring executives.

 

(c)                        Serious Misconduct

 

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

 

13.                    Variations to Conditions of Employment

 

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

 

14.                    Relevant law

 

This employment agreement takes
effect under, is governed by and is to be interpreted according to, the law of
New Zealand.

 

15.                    Employment Relationship Problem Resolution Procedure

 

In line with the Employment Relations
Act 2000, a plain language explanation of the process to be used is
attached as Schedule 2 to this employment agreement.

 

*     *     *     *     *

 

I look forward to your continuing contribution to the opportunities and
challenges facing the National Bank.

 

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

 

 

Yours sincerely

 

 

	
  Sir Wilson Whineray

  	
  John McFarlane

  
	
  Chairman

  	
  Chief Executive Officer

  
	
  The National Bank of New

  	
  Australia and New Zealand

  
	
  Zealand Limited

  	
  Banking Group Limited

  

 

5

 

SCHEDULE
1

REMUNERATION
ENTITLEMENTS, INCLUDING PAYMENTS

ON TERMINATION

 

	
  Name:

  	
  Sir
  John Anderson

  
	
  Title:

  	
  Chief Executive Officer, The National Bank of New
  Zealand Limited

  
	
  Location:

  	
  Wellington

  
	
  Reporting To:

  	
  Chief Executive Officer and Chief Operating
  Officer of Australia and New Zealand Banking Group Limited, and the Board of
  the National Bank

  
	
  Schedule Issued:

  	
  5
  December 2003

  	
  Effective Date:

  	
  1 December 2003

  

 

This Schedule forms part of your employment agreement.

 

Your remuneration will
be a combination of salary, superannuation and benefits as agreed between you
and the National Bank from time to time using the Total Employment Cost (TEC)
methodology of Australia and New Zealand Banking Group Limited.

 

1                               Total Target Reward

 

Your Total Target Reward (TTR) is a
combination of Fixed Reward – TEC (two-thirds of TTR) plus a short-term
incentive (one-third of TTR).  Your
annualised TTR is NZD1,500,000 gross.

 

1.1                     Fixed
Reward - TEC

 

Your TEC package on commencement of work in your new position is
NZD1,000,000 gross per annum,
and is inclusive of the National Bank’s (employer) contributions to The
National Bank Staff Superannuation Fund.

 

1.2                     Short-Term
Incentive

 

A target cash bonus of NZD500,000 gross per annum
is payable during this employment agreement, at a target of
NZD250,000 each six months (i.e. for the periods ending March and September
2004 and 2005).  This is
subject to the National Bank’s business performance and your individual
performance.

 

1.3                     Zero-Priced
Share Options

 

During this employment agreement, you will be
granted zero-priced share options, under the ANZ Share Option Plan, to the
value of NZD500,000 annually, which will be granted in two tranches per annum
(i.e. for the periods ending March and September 2004 and 2005).  Subject to clause 3 of this Schedule 1 below,
the share options may be exercised at any time during your employment with the
National Bank, and within six months of the termination of your employment with
the National Bank.

 

2                               Superannuation

 

You will remain a member of The National Bank Staff Superannuation
Fund.  Contributions made to that Fund
are based on your salary.

 

i

 

3                               Entitlements upon
Termination of Employment

 

Upon termination of employment, you
will be entitled to payment for accrued and unused annual leave in accordance
with the standard arrangements applicable to all employees of the National
Bank.  Payments will be on the basis of
your salary.

 

In addition to any notice or payment
under clause 12 of your employment agreement, you will have the following
entitlements on the termination of your employment with the National Bank:

 

•                                On resignation
(see
clause 12.2),
you will not be entitled to:

•                  exercise any share options granted to you under this
employment agreement that have not been exercised as at the date your
employment with the National Bank ends.

 

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

you will not be entitled to:

•                  exercise any share options granted
to you under this employment agreement that have not been exercised as at the
date your employment with the National Bank ends.

 

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

you will be entitled to:

•                  exercise any share options granted
to you under this employment agreement, in accordance with the ANZ Share Option
Plan Rules (that is, with the Board’s approval or otherwise in accordance with
the Rules).

 

•                                On termination by the effluxion of time (see
clause 2),

you will be entitled to:

•             any bonus payable as at
the date of termination;

•             exercise any share
options granted to you under this employment agreement, in accordance with the
ANZ Share Option Plan Rules (that is, with the Board’s approval or otherwise in
accordance with the Rules).

 

•                                On retrenchment (see clause 12.3(b)),

you will be entitled to:

•                  exercise any share options granted
to you under this employment agreement in accordance with the ANZ Share Option
Plan Rules (that is, with the Board’s approval or otherwise in accordance with
the Rules).

 

•                                On total and permanent disablement
or death,

you, or your estate, will be entitled to:

•             any bonus prorated to the date of
termination;

•             exercise any share options granted
to you under this employment agreement in accordance with the ANZ Share Option
Plan Rules (that is, with the Board’s approval or otherwise in accordance with
the Rules).

 

ii

 

4                               Definitions

 

For the purposes of this employment agreement:

 

•                                total and permanent
disablement means:

 

(a)                       in circumstances where you are a member of The
National Bank Staff Superannuation Fund (the “Fund”) or a National
Bank-sponsored staff superannuation scheme, total and permanent disablement as
determined by the trustee of the Fund or scheme;

 

(b)                      in circumstances where you are not a member of The
National Bank Staff Superannuation Fund or a National Bank-sponsored staff
superannuation scheme, total and permanent disablement as determined by the
National Bank after receipt of reports by two qualified medical practitioners
approved by the National Bank.

 

•                                salary means Total Employment Cost minus the National Bank’s
(employer) contributions to The National Bank Staff Superannuation Fund.

 

iii

 

SCHEDULE 2

 

Employment
Relationship Problem Resolution Procedure

 

The Employment Relations Act
2000 provides a process to assist
in resolving any employment relationship problem that arises.

 

An employment
relationship problem includes:

 

1.               any
personal grievance as defined in section 103 of the Employment Relations Act  2000
(i.e., unjustified dismissal, unjustifiable action leading to disadvantage,
discrimination, sexual harassment, racial harassment, or duress in relation to
union membership);

 

2.               any
dispute over the interpretation, application, or operation of this employment
agreement; or

 

3.               any
other problem relating to or arising out of the employment relationship.

 

It does not include any
problem with the fixing of new terms and conditions of employment.

 

This procedure focuses on resolving employment relationship problems
quickly and effectively, and in a way that is consistent with your and the
National Bank’s legal rights and obligations under the Employment Relations Act  2000. 
Both you and the National Bank must try and resolve your problems in
good faith.

 

The steps to be followed are:

 

Step 1 – Raising the Problem
with the National Bank

 

In order to address employment relationship problems as fairly and
efficiently as possible, you must raise a problem as soon as it occurs or you
become aware of it occurring.  You can
involve a representative at any stage of this process and you are encouraged to
do so.

 

If you have been dismissed, you may request that the National Bank
provide you with a written statement of the reasons for your dismissal.  This request should be made in writing and
must be made within 60 days of your dismissal. 
The National Bank will respond to you within 14 days from the time they
receive your request.  If you do not make
your request within 60 days, the National Bank is not required to respond.

 

You must raise a personal grievance with the National Bank within 90
days of the grievance occurring or you become aware of the grievance unless
there are exceptional circumstances.  You
need to take reasonable steps to make the National Bank aware that you have a
grievance that you want addressed.    For
example, you could advise your Manager in writing that you have a personal
grievance, and what it is about.

 

Step 2 – Meeting to Hear the
National Bank’s Response and Discuss the Problem

 

You and the National Bank will meet as soon as practical for the National
Bank to respond to your grievance, and to discuss the problem.  If you have a representative, they can be at
this meeting as well.

 

If you and the National Bank cannot resolve the personal grievance or
problem at this stage, you can proceed to Mediation.

 

iv

 

Step 3 - Mediation

 

The Department of Labour provides a mediation service that assists in
resolving personal grievances and other employment relationship problems.  If you proceed to mediation, there are a
number of possible outcomes:

 

(a)          You and the National Bank reach an agreement or
settlement with the assistance of the mediator. 
In this instance, the mediator would sign the agreed terms of settlement
so that they are final and binding on both you and the National Bank.

 

(b)         You and the National Bank agree to give the
mediator power to make a decision.  The
decision would be final and binding on both you and the National Bank.

 

(c)          You and the National Bank cannot agree, and one
or both parties are not prepared to give the mediator power to make a final and
binding decision.   In this situation,
you can escalate your personal grievance or problem to the Employment Relations
Authority.

 

Step 4 – Refer the Problem to
the Employment Relations Authority

 

If you and the National Bank cannot resolve your grievance or problem in
mediation, you can refer it to the Employment Relations Authority.

 

A member of the Authority will investigate your case and make a decision
about it.  There is no formal process as
to how the member will make the decision, and the decision is final and
binding.  It can be appealed to the
Employment Court in certain circumstances.

 

If you consider you are being unlawfully discriminated against; or if
you are being sexually or racially harassed and you do not want to raise the
matter with the National Bank directly, you can ring the Human Rights
Commission on 0800 496 877 or the Race Relations Office.  They can assist you with free, confidential
advice.  They also provide mediation and
investigation services free of charge.

 

 

ACCEPTANCE

 

I, Sir John Anderson, have
read and understood and agree to the terms of employment set out in this
employment agreement (including the Schedules) and in doing so acknowledge that
I have no entitlement to redundancy compensation from The National Bank of New
Zealand Limited and agree that this acknowledgment and waiver constitutes a
promise in favour of The National Bank of New Zealand Limited, and it may rely
on it accordingly.

 

 

	
  Name:

  	
   

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  	
   

  
	
  /S/
  Sir J. Anderson

  	
   

  	
   

  
	
  Dated:
  11/12/03

  	
   

  
										

 

v

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