Document:

Exhibit
4.1.4

 

26 October 2004

 

Mr John McFarlane

Chief Executive Officer

ANZ Banking Group Limited

32/100 Queen Street

Melbourne Vic 3000

 

Dear John

 

The Board of Directors is very pleased that we have
mutually agreed
for an extension of a further 12 months to 30 September 2007. We congratulate
you on your continuing leadership of the Bank for our shareholders, our people,
our customers and the communities in which we live.

 

Further to our recent discussions, on behalf of the
Board I am pleased to confirm the variations to your existing contract dated 23
October 2001 as stated below. This letter is to be read in conjunction with
your existing employment agreement. 
Clause numbers refer to your original contract.

 

2.                            Operative
Date

 

By mutual
agreement, your employment agreement is extended by 12 months to 30 September
2007.

 

3.                            Remuneration

 

The details of
your remuneration are set out in the Schedule. 
The Schedule forms part of this letter of variation.

 

12.                     Termination
of Employment

 

12.3              Termination by ANZ

 

(a)                       Termination on
Notice

 

(i)                 ANZ may terminate your employment for any reason (other than (b)) by
giving you written notice equal to the unexpired term of the employment
agreement (which ends on September 30, 2007).

 

(ii)              In the event that clause 12.3(b) is not applicable, and ANZ breaches
its contractual obligation under clause 12.3(a)(i) by terminating your
employment without the notice set out in clause 12.3(a)(i), the parties agree
that the damages for breach by ANZ of that contractual obligation shall be the
TEC that you would have received during that part of the notice period that you
were not able to serve due to ANZ’s early termination of the employment
agreement.

 

The Board is
confident that you can continue the Group’s current momentum with a focus on
growth and continue to enhance shareholder value. It looks forward with much
pleasure to continuing to work with you.

 

1

 

I enclose a
duplicate original of this letter of variation. 
Please sign and return it to me as acceptance of the terms of variation.

 

 

	
  Yours
  sincerely

  
	
   

  
	
   

  
	
  Charles Goode

  
	
  Chairman

  
	
  AUSTRALIA AND NEW ZEALAND BANKING GROUP LIMITED

  

 

2

 

VARIATION TO SCHEDULE

REMUNERATION ENTITLEMENTS, INCLUDING
PAYMENTS ON TERMINATION

 

	
  Name:

  	
  John
  McFarlane

  
	
  Title:

  	
  Chief Executive
  Officer

  
	
  Location:

  	
  100
  Queen Street, Melbourne

  
	
  Reporting To:

  	
  Board of
  Directors, ANZ Banking Group Limited

  
	
  Schedule Issued:

  	
  26 October 2004

  	
  Effective Date:

  	
  1 October 2003

  

 

This Schedule
forms part of your employment agreement.

 

In accordance with the ANZ Director’s Share Plan, you may elect to forego
part of your TEC or any bonus you may receive in order to purchase ANZ Shares
to an equivalent value.  (Refer ANZ
Director’s Share Plan Rules).  You have
advised that you presently intend to exercise this election for all future
bonuses and for that proportion of your TEC in excess of what is required for
your mandatory superannuation contributions and other payroll deductions.

 

1                               Total
Target Reward

 

Your Total Target Reward (TTR) is a combination of Fixed Reward – TEC
(50% of TTR) plus Variable Reward  (50%
of TTR).  Your annualised TTR is $4,000,000.

 

1.1                     Fixed Reward - TEC

 

Your TEC
package is now $2,000,000 per
annum.

 

1.2                     Variable Reward

 

Your target bonus opportunity is now $2,000,000 per
annum.

 

Bonus payments are subject to performance against annual
targets and are at the discretion of the Board. Your targets for FY2005 have
been agreed with you.

 

1.3                    ANZ
Performance Shares

 

The Board will put a
proposal before shareholders at the Annual General Meeting in December 2004,
that you be issued with a tranche of Performance Shares. Subject to obtaining shareholder approval, it
is proposed that you will be offered the following Performance Shares on the
terms and conditions approved by shareholders:

 

	
  Number of Performance Shares:

  	
   

  	
  175,000

  
	
  Date of Grant:

  	
   

  	
  31 December 2004

  
	
  Performance Period:

  	
   

  	
  31 December 2006 to 31 December 2009

  

 

It is proposed that these
terms and conditions will include vesting conditions (as set out below) and
that you will be entitled to receive dividends only from the time the shares
have vested (as set out below).

 

1.3.1                    Vesting of
Performance Shares

 

The vesting of Performance Shares will be subject to time and performance
hurdles being satisfied.

 

•                  The performance hurdle will be
measured during the performance period by comparing ANZ’s Total Shareholder
Return (ANZ TSR) with that of a comparator group of major financial services
companies in the S&P/ASX 100 Index, excluding

 

1

 

the ANZ. 
The companies to be used in the comparator group will be as approved by
the Board.

•                  The percentage of Performance Shares that will
vest will depend upon the TSR achieved by ANZ relative to the companies in the
comparator group.  Performance equal to
the median TSR of the comparator group will result in half the Performance
Shares vesting. For each percentile above the median an additional 2% of
Performance Shares will vest, increasing on a straight-line basis until all of
the Performance Shares vest where ANZ TSR is at or above the 75th
percentile of TSRs in the comparator group.

•                  TSR will be measured for ANZ and the
comparator group over the same period (since grant) and calculated as at the
last trading day of any month, once the performance period has commenced. The
first opportunity for performance shares to vest will be after the second
anniversary of grant, after which the performance shares will continue to be
tested monthly until they are forfeited 5 years after the grant date, or 100%
vest, whichever is the earlier.

 

In case of death or total and permanent disability or where it is
otherwise considered appropriate by the Board, the Board may amend the terms
upon which the Performance Shares may vest.

 

1.3.2       Forfeiture
of Performance Shares

 

You will forfeit ownership of the Performance Shares:

 

•                  If they have not vested by the end of
the Performance Period; or

•                  If you cease to be an employee of the
Company by reason of termination of your employment for:-

•                  Serious misconduct; or

•                  For serious breach of your contract of
employment; or

•                  If you resign without the prior
approval of the Board.

 

1.3.3       Early
Forfeiture Date

 

If you cease to be the Chief Executive Officer of the Company prior to 30
September 2007, and the Performance Shares are not forfeited for one of the
reasons set out in 1.3.2, the forfeiture date for this tranche will then be the
date that is six months after you cease to be Chief Executive Officer or such
longer period as the Board may approve.

 

1.4                              Superannuation

 

Your notional salary is used to calculate your personal
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.

 

In addition to mandatory superannuation contributions, ANZ
will make top–up employer contributions of $300,000 per annum paid quarterly,
to your chosen superannuation fund (either ANZ Staff Superannuation Fund or
your own Self Managed Superannuation Fund).

 

Should you cease to be the Chief Executive Officer of the
Company prior to September 30, 2007, the annual contribution for that year will
be pro-rated to the date of termination.

 

2

 

ACCEPTANCE

 

I, John
McFarlane, have read and understood and agree to the terms of this letter of
variation to my employment agreement (including the Schedule).

 

 

	
  Name:    John
  McFarlane

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  Signature:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  /S/
  J. McFarlane

  	
   

  	
   

  
	
  Dated:
  26/10/04

  	
   

  
							

 

3

 

23 October
2001

 

Mr John
McFarlane

Chief Executive
Officer

ANZ Banking Group Limited

32/100 Queen
Street

Melbourne   Vic  
3000

 

Dear John

 

I am pleased,
on behalf of the Board of the Directors, to confirm your ongoing role of Chief
Executive Officer and an executive member of the Board, of Australia and New
Zealand Banking Group Ltd (ANZ).

 

I would like
to compliment you on the outstanding leadership you have provided to the Bank
over the last four years.  There is an
excellent relationship between you and the Board and you have made a number of
strategic initiatives which have shown good judgment, knowledge of the industry
and an ability for decisive actions. 
Recent positive outcomes in terms of enhanced shareholder value and
other performance indicators have been gratifying.

 

This letter
sets out the terms of your employment, and constitutes your employment
agreement with ANZ (“employment agreement”). 
This employment agreement replaces all existing agreements,
arrangements, or understandings between ANZ and you. (References to ANZ, it
should be noted, include any corporation that is related to ANZ under
Corporations Law).

 

1.                            Current
Position, Reporting Arrangements and Location

 

The
Chief Executive is responsible to the Board of Directors for the successful
management and leadership of the organisation. 
The Chief Executive and his team are responsible for providing a strong,
competitive and sustainable return to shareholders.

 

The
Chief Executive is a full-time position and you are expected to ensure that the
organisation is perceived by customers, staff and the community to be of
outstanding quality wherever it operates, to attract and develop staff of the
highest calibre, and to excel in the way it makes decisions, manages change and
services customers.

 

The
Board looks forward to you successfully accomplishing a number of objectives
which include the ANZ share price outperforming the Banking & Finance Share
Index; a continuous strengthening of the broader executive team; a focus on the
customer; and a significant improvement in our staff satisfaction levels and in
the quality of values and culture being inculcated in the organisation.

 

2.                            Operative
Date

 

This agreement
will commence on 1 October 2002 and is subject to clauses 12.2 and 12.3.  It is for a four year period.  It may be extended or renewed by mutual
agreement.  ANZ will notify you not later
than six months before the end of that period whether or not it intends to
offer to extend or renew this agreement, and if so, for how long.

 

3.                            Remuneration

 

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

 

 

4.                            Leave

 

4.1                     Annual Leave

 

You will
receive 4 weeks’ contracted hours paid annual leave for each completed year of
paid service.  You are required to take
your full annual leave entitlement, 4 weeks, over the course of each bank
financial year and must take at least 10 consecutive days leave in each year.

 

At the
end of each bank financial year ANZ will deem you to have taken your full 4
weeks leave.  Accordingly there will be
no accrual of this leave and your annual leave balance at 1 October each year
will never be more than your balance at 1 October of the previous year.

 

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 service,
and a further 8.66 weeks for each subsequent 10 completed years of
service.  You may access long service
leave on a pro-rata basis after 10 years of 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 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 in this paragraph.

 

6.                            Values
and Ethical Standards

 

ANZ has
developed guiding values and expects you actively to 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 which you are required to maintain.  In particular, you must not in any way,
either directly or indirectly 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 Chairman.

 

2

 

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.

 

8.                            Policies
and Procedures, Performance Agreements

 

8.1                     Policies and Procedures

 

In addition to
the terms and conditions contained in this employment agreement, there are
other policies and procedures that apply to your employment. These policies and
procedures are formulated by ANZ for the efficient and fair administration of
employment and other business matters. You must diligently comply with ANZ’s
policies and procedures, as amended from time to time.

 

8.2                     Performance Agreements

 

Performance
agreements will be agreed annually between you and ANZ, but 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 which 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 one year before the date your employment with ANZ
ends, was a customer or employee of, or in the habit of dealing with, ANZ.

 

Except with
the written consent of the Chairman, you will not for a period of six months
after your employment with ANZ ends, be in any way, either directly or indirectly,
engaged, concerned or interested in any manner whatsoever, whether as
principal, partner, director, agent, promoter or beneficiary in the business of
any other financial institution in Australia.

 

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 (see paragraph 12).

 

3

 

12.                     Resignation
and Termination

 

12.1              Termination Entitlements

 

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

 

These
termination provisions apply even if your current position changes, unless they
are expressly varied under paragraph 13.

 

12.2              Resignation, including Retirement

 

You may
terminate your employment for any reason by giving ANZ 12 months written
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 not include any
payment in respect of the waived period.

 

12.3              Termination by ANZ

 

(a)                       Termination on
Notice

ANZ may end your employment for any reason by giving you written notice
equal to the unexpired term of the employment agreement (which ends on 1
October 2006).  At the election of either
party, payment of TEC in lieu of some or all of the period of notice may be
made, and such payment shall not be reduced by reason of any duty to mitigate
your loss upon termination of employment.

 

(b)                       Serious
Misconduct

ANZ may
end your employment agreement at any time, without notice, because of your:

 

(i)                          serious
misconduct;

 

(ii)                       loss of
qualification to hold office as a director under section 203B of the
Corporations Act (or any successor or equivalent provision);

 

(iii)                    serious neglect of
duty; or

 

(iv)                   serious breach of
any significant term of this employment agreement.

 

In such
circumstances, you will be entitled only to payment of TEC up to the date of
termination.

 

In the
case of termination under (iii) and (iv) above, you will receive not less than
14 days’ notice of the Board meeting at which the termination will be
considered.

 

(c)                        Death or
Permanent Disability

In the event of your death or permanent disability, all of your
entitlements will be those set out in the Schedule.

 

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.

 

4

 

14.                     Relevant
law

 

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

 

15.                     Resolution of Any
Dispute

 

Resolution of any dispute arising out of your employment agreement or
concerning its interpretation will be pursued as follows:

 

(a)                        The dispute
will be discussed between you and the Chairman with a view to resolution;

 

(b)                       If discussions
fail to resolve the dispute within 14 days, it may be referred by either party
to a mediator agreed by the parties;

 

(c)                        If the dispute
remains unresolved for 28 days, the parties may refer the dispute to
arbitration by an arbitrator appointed by the parties under the Commercial
Arbitration Act 1984, whose decision shall be final and binding upon both
parties;

 

(d)                       Nothing in this
clause shall prevent a party from seeking urgent injunctive or similar relief
from a court in appropriate circumstances.

 

16.                     General

 

The Board is confident that you can continue the Group’s current
momentum and continue to enhance shareholder value and it looks forward with
much pleasure to continuing to work with you and to receive your acceptance of
this agreement.

 

I enclose a
duplicate original of this employment agreement.  Please sign and return it to me as acceptance
of the terms of the employment agreement.

 

	
  Yours
  sincerely

  
	
   

  
	
   

  
	
  Charles Goode

  
	
  Chairman

  
	
  Australia
  and New Zealand Banking Group Limited

  

 

5

 

SCHEDULE

REMUNERATION ENTITLEMENTS,

INCLUDING PAYMENTS ON TERMINATION

(TEC BENEFITS)

 

	
  Name:

  	
  John McFarlane

  
	
  Title:

  	
  Chief Executive Officer

  
	
  Location:

  	
  100 Queen Street, Melbourne

  
	
  Reporting
  To:

  	
  Board of Directors, ANZ Banking Group Limited

  
	
  Effective
  Date:

  	
  01 October 2002

  

 

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, in advance of services being
provided, using ANZ’s total employment cost (TEC) methodology. Essentially, TEC
is the fixed component of remuneration. It is comprised of 65% notional TEC and
a 35% cash component (Cashtec) which includes employer and employee
superannuation contributions. Cashtec is a flexible component that can be directed
to motor vehicles, petrol and parking, as well as superannuation. Your salary
and superannuation will be paid fortnightly and other benefits will be provided
as applicable.

 

Bonus payments
are at the discretion of the Board.

 

Salary is
defined as notional salary - that is, 65% of 
TEC.

 

1.0                     Total
Target Reward

 

Your Total Target Reward (TTR) is a combination of fixed reward - TEC
(60%) plus Variable Reward (40%).  Your
annualised TTR is $2,500,000.

 

1.1                     Fixed Reward -
TEC

 

Your TEC package remains at $1,500,000.

 

You must take a minimum of 65% of TEC as notional salary and the
balance is available to you as cash benefit or optional benefits.

 

1.2                     Variable Reward -
Executive Remuneration Scheme

 

Unless otherwise specified, bonuses will be paid to you in cash.  Prior to any bonus being approved by the
Board, you may elect to sacrifice up to 100% of the bonus to purchase shares
under the Director’s Share Plan.

 

1.3                     ANZ Share Options

 

The Board will
put a proposal before shareholders at the Annual General Meeting in December
2001, that you be issued with the following four tranches of options

 

	
  Ist
  Tranche

  	
   

  
	
  Number of
  options:

  	
  500,000

  
	
  Date of
  grant:

  	
  31 December
  2001

  
	
  Exercise
  Period:

  	
  31 December
  2003 to the Expiry Date

  
	
  Expiry Date:

  	
  31 December
  2007 or such earlier date as may be provided for in notes 1.3.3 and 1.3.4.

  

 

6

 

	
  2nd
  Tranche

  	
   

  
	
  Number of
  options:

  	
  1,000,000

  
	
  Date of
  grant:

  	
  31 December
  2002

  
	
  Exercise
  Period:

  	
  31 December
  2004 to the Expiry Date

  
	
  Expiry Date:

  	
  31 December
  2007 or such earlier date as may be provided for in notes 1.3.3 and 1.3.4.

  

 

	
  3rd
  Tranche

  	
   

  
	
  Number of
  options:

  	
  1,000,000

  
	
  Date of
  grant:

  	
  31 December
  2003

  
	
  Exercise
  Period:

  	
  31 December
  2005 to the Expiry Date

  
	
  Expiry Date:

  	
  31 December
  2008 or such earlier date as may be provided for in notes 1.3.3 and 1.3.4.

  

 

	
  4th
  Tranche

  	
   

  
	
  Number of
  options:

  	
  500,000

  
	
  Date of
  grant:

  	
  31 December
  2004

  
	
  Exercise
  Period:

  	
  31 December
  2006 to the Expiry Date

  
	
  Expiry Date:

  	
  31 December
  2008 or such earlier date as may be provided for in notes 1.3.3 and 1.3.4.

  

 

Each tranche will only be granted provided
you are CEO of the Company at the date for that grant.

 

1.3.1                     Exercise price

The
issue price for each share upon exercise of an option will be the weighted
average sale price of all fully paid ordinary shares in the Company sold on the
Australian Stock Exchange during the five trading days immediately after the Annual General Meeting of the Company held in
respect of the financial year of the Company that ended before the date of the
grant of the relevant tranche of options.

 

1.3.2.                  Exercise of Options

The
exercise of the options is subject to a performance hurdle being
satisfied.  The performance hurdle to be
satisfied is:

•                                          one-half of the options in any tranche may be exercised only if the
ANZ Total Shareholder Return (“ANZ TSR”)
calculated over the period commencing on the date of grant of the relevant
tranche and ending on the last day of any month after the second
anniversary of their date of grant of the relevant tranche (the “relevant period”) exceeds the percentage change in the
Accumulated Banks and Finance Index over that same period (very broadly, ANZ
TSR is the increase in the market price of shares in the Company plus dividends
and distributions on those shares over the relevant period); and

•                                          the other half of the options in the tranche may be exercised only
if the ANZ TSR calculated over the relevant period exceeds the percentage
change in the S & P /ASX 100 Accumulation Index over that same period.

In case
of death or total and permanent disability or where it is otherwise considered
appropriate by the Board, the Board may amend the terms upon which the options
may be exercised.

 

1.3.3.      Expiry of Options

 

Options in a tranche lapse:

 

•                  if they have not been exercised by their expiry date; or

 

•                  if you cease to be an employee of the Company by reason of
termination of your employment for:-

 

•                  serious misconduct; or

 

7

 

•                  for serious breach of your contract of employment; or

 

•                  if you resign without the prior approval of the Board.

 

1.3.4.                           Earlier
Expiry Date

 

If you cease to be Chief Executive Officer of the Company
prior to 30 September 2006, and the options do not lapse for one of the reasons
set out in 1.3.3, the expiry date for each tranche will then be the date that
is six months after you cease to be Chief Executive Officer or such longer
period as the Chairman may approve.

 

1.4                                        Superannuation

 

You are entitled to superannuation in accordance with the member’s booklet
for the ANZ Australian Staff Superannuation Scheme.

 

1.5                                        Payments upon Termination of Employment

 

•                                You
will be entitled to the statutory entitlements of Long Service leave (paid on
the basis of notional salary) and Annual Leave (paid on the basis of notional
salary plus cashtec).

 

•                                In
addition to any payment in clause 12 of your employment agreement, the
following benefits will also apply on termination of your employment:

 

•                                On resignation (see clause 12.2), you are:

•            not entitled to any
unvested deferred shares issued under the incentive arrangements unless agreed
otherwise by the Board;

 

On termination by notice or retirement, (see clauses 12.3(a)),
you will be entitled to:

•            any
deferred shares issued to you under the ANZ incentive arrangements.

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

 

•                                If terminated by ANZ for serious misconduct, serious
neglect of duty or serious breach of any of the terms of your
employment agreement (see clause 12.3(b), you will only be entitled to the payments
specified in clause 12.3 (b) and all vested compensation as at the date of
departure.

 

•                                On death or total
permanent  disability
(see definition 1 below and clause 12.3(c)), you will be entitled to:

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

•            any deferred shares issued to you under the ANZ incentive
arrangements.

 

 

Definitions

 

(d1)                “total permanent
disability” for the purpose of this
contract shall mean:

(a)                        in circumstances where you are a member of an ANZ superannuation
fund, total permanent disability as determined by the trustee of that fund; or

(b)                       in circumstances where you are not a member of an ANZ superannuation
fund, total permanent disability as determined by ANZ after assessment by a
medical practitioner nominated by ANZ.

 

(d2)                “retirement” for the purposes of this agreement, shall mean circumstances where
you choose to resign from ANZ and have no intention to be employed in a
full-time remunerated capacity by another employer at any time in the future.

 

8

 

I, John
McFarlane, have read, understood and agreed to the terms of employment outlined
in this employment agreement (including schedule).

 

 

	
  Name:

  	
     John
  McFarlane

  	
   

  
	
   

  
	
   

  
	
  Signature:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  
	
   

  
	
  /S/
  J. McFarlane

  	
   

  
	
  Dated:
  24/10/01

  
							

 

9Exhibit 4.1.5

 

16 June 2004

 

Mr Grahame Miller

11 Blackfriars Close

TOORAK 3142

 

Dear Grahame,

 

On behalf of
Australia and New Zealand Banking Group Limited (“ANZ”), I am pleased to
formally advise you of your appointment to the position of Head of Integration,
ANZ New Zealand.

 

This letter
sets out the terms of your secondment, and constitutes your secondment
agreement with ANZ (“secondment agreement”). 
This secondment agreement is to be read in conjunction with your
existing employment agreements, arrangements, or understandings between you and
ANZ. In the event of a conflict intent appearing in your agreements, this
letter of secondment will be subservient in nature to your existing employment
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 Head of Integration, ANZ National Bank
Limited reporting to Sir John Anderson, Chief Executive Officer ANZ
National Bank Limited and Dr Bob Edgar, Chief Operating Officer ANZ Banking
Group and located in Wellington, New Zealand.

 

You will be seconded to this position by ANZ for
a period of 8 to 12 months.  It is
acknowledged that this period is longer than the initial secondment period
proposed in October 2003.  You will
remain an employee of ANZ Banking Group Limited throughout this period.

 

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                               Operative
Date

 

This
secondment agreement, and your obligations under it, will commence on 1
December 2003.  This agreement does not
affect your continuity of service for the purposes of leave entitlements and
any other employment benefits.

 

3                               Remuneration

 

The details of
your remuneration are set out in the attached Schedule.  The Schedule forms part of this secondment
agreement.

 

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

 

1

 

4                               Performance
Management Plans

 

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

 

5                               Termination
of Employment

 

Should your employment terminate for any reason whatsoever you will be
deemed to have returned to Australia following to conclusion of your secondment
and your Australian contractual entitlements will apply.

 

6                               Relevant
law

 

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

 

A copy of this
secondment 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

 

 

Shane
Freeman

Group
General Manager, People Capital

 

2

 

SCHEDULE

REMUNERATION ENTITLEMENTS, INCLUDING
PAYMENTS ON TERMINATION

 

	
  Name:

  	
  Grahame Miller

  
	
  Title:

  	
  Head of Integration, ANZ National Bank Limited

  
	
  Location:

  	
  Wellington, New Zealand

  
	
  Reporting
  To:

  	
  Sir John Anderson, Chief Executive Officer
  ANZ New Zealand and Dr Bob Edgar, Chief Operating Officer ANZ Banking Group

  
	
  Schedule Issued:

  	
  June 2004

  	
   

  	
  Effective Date:

  	
  December 1, 2003

  

 

This Schedule
forms part of your employment agreement.

 

Your remuneration will be a combination of salary 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.

 

While
in New Zealand your mandatory superannuation contributions will be suspended.
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 and does not increase).

 

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 other than
those specifically referred to as exempt in this secondment agreement 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 AUD $833,333.  Your equivalent NZ
dollar TTR package is NZD $956,000 per annum for the Bank year to 30 September
2004.

 

1.1                     Fixed Reward -
TEC

 

Your
TEC package on commencement of work in your new position is AUD $500,000 per annum.  Your equivalent NZ dollar TEC package is NZD
$573,600 per annum.

 

You
must take 65% of TEC as notional salary. 
The balance, less any mandatory superannuation contributions (should
they become applicable), 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.  Your bonus entitlements
will  be determined in Australian dollars
and then converted to New Zealand dollars as set out in 1.3 below.

 

i

 

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.

 

1.3                     Application of exchange rates for
conversion of reward from Australian dollars into New Zealand dollars

 

Your fixed reward will
convert from Australian dollars into New Zealand dollars using the average
exchange rate applicable for the 12 months prior to 30 September of any
year.  In the event that your fixed reward
is amended at a time other than 1 October in any year the average exchange rate
for the year prior to the date of the change will be applied.

 

Variable rewards that are normally determined by ANZ for the period of
either 31 March or 30 September in any given year.  Your variable reward will convert from
Australian dollars into New Zealand dollars using the average exchange rate
applicable for the month of either March of any given year or using the
average exchange rate applicable for the month of September of any given
year.  In the event that you receive a
variable reward at a time other than the time variable rewards that are
determined in either 31 March or 30 September in any given year, the conversion
rate will be the average exchange rate applicable to the month prior to the
determination of such variable entitlement.

 

2                              Superannuation

 

As you will
not be able to contribute to ANZ Australian Staff Superannuation Scheme other
than on an after tax basis the following information is set out as the basis on
which your entitlements would be determined had you remained an Australian
resident for income tax purposes and not come under New Zealand income tax
requirements.  The determination of any
insured component of your death and total and permanent disablement benefit
will remain defined by your notion salary had you had remained employed
directly in Australia.

 

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.

 

3                               Relocation

 

ANZ will pay
for the following expenses and any applicable Fringe Benefit Tax in relation to
your relocation to New Zealand:

 

•                  Full rental cost of a two bedroom, fully
furnished accommodation in Wellington of a mutually acceptable standard for the
duration of your employment in New Zealand;

 

•                  Business class airfares for your spouse to
travel to and from Melbourne and Wellington on the following basis:

•                  Accompanying you where your travel to Melbourne
requires an overnight stay

•                  Otherwise up to one trip per month

Total cost to ANZ not exceed
AUD25,000 per annum;

 

•                  Lease expenses of an acceptable quality vehicle
for the duration of your secondment to New Zealand;

•                  Transportation and insurance of required
personal effects to and from New Zealand;

 

ii

 

•                  Coverage of taxis, hire cars, etc as required
in the nature of conducting business;

 

•                  Medical insurance in New Zealand for you and
your spouse;

 

•                  Reimbursement of all fees relating to moving money from New Zealand to
Australia and from Australia to New Zealand (these fees are normally in the
order of $25.00 per transaction).  It is
agreed that one transfer per fortnight will occur with your pay, and other
reasonable transactions will be required from time to time;

 

•                  Coverage of the additional Fringe Benefits Tax accumulated due to the
inability to meet agreed mileage on your Australian leased vehicle;

 

•                  At the conclusion of the secondment ANZ will provide: airfares for your
and your spouse back to Melbourne; cost of transportation and insurance of
personal belongings back to Melbourne; any break costs on leased vehicles
and/or accommodation; short term accommodation in Wellington on departure and
in Melbourne on arrival (if required).

 

•                  Reimbursement of any one-off unusual costs incurred due to relocation to
and from New Zealand;

 

4                               Taxation

 

For the
duration of your secondment to New Zealand, ANZ will equalize your tax
obligations in order to ensure that you pay no more or less personal tax than
you would have had you remained in Australia. 
Further information relevant to tax equilisation is set out in 4.2 New
Zealand Income Tax Arrears.

 

4.1                     Tax Returns

 

ANZ will
arrange and pay for the following taxation support by ANZ’s Taxation Service
provider (currently PricewaterhouseCoopers):

 

•                  a pre-departure consultation

 

•                  a post-arrival consultation, and

 

•                  completion and filing of tax returns in both Australia and New Zealand
for each year of the term and any subsequent year that is directly impacted by
New Zealand taxation implications that arose out of your New Zealand
appointment.

 

4.2                     New Zealand
Income Tax Arrears

 

As a result of delays in
confirming the duration of your appointment it has become a requirement that
under New Zealand taxation legislation that New Zealand income tax is payable
on the Australian income you have received since your commencement of work in
New Zealand.  This taxation liability has
been determined by Pricewaterhouse Coopers to be NZD $66,100.  As ANZ is unable to provide you with a loan
to cover this double taxation liability it is requested that you take a
personal loan on normal commercial terms and pay this amount to the New Zealand
Inland Revenue Department and in turn claim a refund from the Australian Tax
office when you file your Australian income tax return.  ANZ agrees to meet all holding costs for any
personal loan draw upon to meet your double taxation obligations. You will be
reimbursed any set up fees, interest costs and early repayment frees incurred
as a result of the personal loan for NZD $66,100.  Likewise when you have received a double
taxation credit from the Australian Tax Office or offset against other
personal tax liabilities, should you incur an exchange rate disadvantage on the
repatriation of Australian dollars to meet your repayment of the NZD $66,100
personal loan, ANZ will reimburse you these costs.  All interest, fees and

 

iii

 

exchange rate losses
rebated to you will incur Fringe Benefits Tax Liability and ANZ agrees to meet
such Fringe Benefit Tax liabilities.  It
is not envisaged that transactions of this nature will be required in the
future as you will be paid through New Zealand payroll, however in the event
that such an arrangement was required this transition should act as a
precedent.

 

 

ACCEPTANCE

 

I, Grahame Miller, have read and understood
and agree to the terms of my secondment set out in this secondment agreement
(including the Schedule).

 

 

	
  Name:

  	
   

  	
   

  	
   

  	
   

  
	
   

  
	
   

  
	
  Signature:

  	
   

  	
   

  	
  Date:

  	
   

  	
   

  
	
   

  
	
  /S/
  G. Miller

  	
   

  
	
  Dated:
  22/06/04

  
										

 

iv

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