Document:

EXHIBIT 4.22

 

Director appointment letter – Mr Michael J Ullmer

 

 

Office
of the Chairman

 

 

500 Bourke Street

Melbourne

Victoria   3000

Australia

 

7 October 2004

 

 

Dear Mr Ullmer

 

Letter
of appointment

 

I am pleased
to advise you that the Board of Directors of National Australia Bank Limited
(the “National”) has approved your appointment as an Executive Director of the
National and National Equities Limited (the holding company for the major
offshore assets) with effect on 7 October 2004, subject to the Australian
Prudential Regulation Authority having no objection to your appointment and
receipt from you of a signed “Consent to Act as a Director”. Enclosed is a “Consent
to Act as a Director & Disclosures on Appointment” form which I would ask
you to complete and return to the Company Secretary, Mr Garry Nolan, as soon as
possible.  Garry’s fax number is 03 8641
4927.  Would you also return the original
to Mr Nolan.  In addition to expressing
our delight that you will be joining the Board of the National, this letter
sets out the terms of your appointment to the office of Executive Director of
the National and National Equities Limited. 
It should be read in conjunction with, and is subject to, the National’s
Constitution (a copy of which is attached to this letter), and the Charters and
policies approved from time to time by the Board, including the Board Charter
(a copy of which is attached to this letter). 
Charters and policies may be changed by the Board from time to time.

 

Upon
appointment as a Director, you will hold office until the next Annual General
Meeting of the National which will be held on 31 January 2005, at which
time you will be entitled to stand for election by the shareholders as a
Director of the National.

 

Please
acknowledge that you have read, understood and accept the contents of this
letter by signing the enclosed copy and returning it to the Company Secretary.

 

1                                          Board
members

 

The Chairman of the Board is Mr Graham Kraehe, a
Non-Executive Director.

 

The other Non-Executive Directors, at present, are:

 

•                                           Mr Peter Duncan;

 

•                                           Mr Robert Elstone

 

•                                           Mr Danny Gilbert;

 

•                                           Mr Paul Rizzo;

 

•                                           Ms Jillian Segal

 

•                                           Mr John Thorn;

 

•                                           Mr Geoff Tomlinson; and

 

•                                           Mr Malcolm Williamson.

 

 

The appointment of Mr Michael Chaney as a
non-executive director in December 2004 and as Chairman of the Board in September 2005
has been announced.

 

Mr John Stewart is the Managing Director & Group
Chief Executive, the only executive director at this time.  Mr Ahmed Fahour is to join the Board as an
executive director in October 2004.

 

The Company Secretary is Mr Garry Nolan.  Mr Nolan can be contacted on (03) 8641 3505.

 

Further details of Board members can be obtained from
the Company Secretary.

 

2                                          Terms of
appointment

 

2.1                                Qualifications

 

To qualify for the office of Director of the National,
you must:

 

•                                           be under 70 years of age; [Article 10.9]

 

•                                           not be disqualified or suspended from managing corporations and must
otherwise be permitted by law to act as a director of a company; [s203B Corporations Act and Part 2D.6]

 

•                                           sign a Confidentiality Deed which prohibits you from disclosing any
matters, affairs or concerns of the National; [to comply
with Article 11.8 of the National’s Constitution] and

 

•                                           hold at least 2,000 fully paid shares in the National in your own
right within two months after your appointment. 
[Article 10.8] See 3.4 below for restrictions.

 

2.2                                Term

 

Following your appointment by the Board, you hold
office as an Executive Director until the first Annual General Meeting of the
National after the date of your appointment. 
You are then eligible for election to the position of Director by
resolution of the shareholders of the National at that Annual General
Meeting.  [Articles
10.12 and 10.13]

 

Once you have been elected to the office of Director
by resolution of the shareholders of the National in General Meeting, you will
be subject to the rotation of Directors provided for in Articles 10.3 to 10.7
of the National’s Constitution.  Broadly,
these Articles provide that at each Annual General Meeting one-third of the
Directors for the time being and any other Director not in such one-third who
has held office for three years or more must retire from the office and is
eligible for re-election. The National may remove a Director from office as a
Director at any time by a resolution passed at a General Meeting.  [Articles 10.3-10.7 and
10.14]

 

 

2.3                                Vacation
of office

 

Your office as a Director becomes vacant if any of the
circumstances prescribed under the Corporations Act 2001
(Cth) or the National’s Constitution arise, including the following:

 

•                                           you are disqualified from managing corporations; [s203B Corporations Act and Part 2D.6]

 

•                                           you resign from office or refuse to act; [Article 10.28(b)]

 

•                                           you are removed from office by resolution passed at a General
Meeting of the National; [Article 10.28(d)]

 

•                                           you accept or hold any office in another bank without the consent of
the Board.  [Article 10.28(f)]

 

•                                           you cease to be an employee of the National. (Article 10.11
– see 2.5 below)

 

Article 10.28 of the National’s Constitution
contains a list of circumstances that, in addition to those prescribed by the
Corporations Act, will result in the office of a Director becoming vacant.

 

Among other matters, clause 2.5 of this letter of
appointment contains additional provisions in respect of your employment with
the National if you cease to hold office as a Director.

 

2.4                                Relationship
with the National

 

Once appointed, you hold office as a Director of the
National.  As you are also an employee of
the National, you are an Executive Director within the meaning of the National’s
Constitution.

 

2.5                                Holding
office as a Director and your employment

 

(a)                                   Cessation
as an employee

 

As you are an employee of the National, the
Constitution of the National provides in Article 10.11 that your office as
a Director becomes vacant upon you ceasing to be an employee of the National.

 

(b)                                  Variations
to your employment agreement

 

In consideration of your appointment as an officer of
the National, you agree to a variation of the terms and conditions of your
employment with the National (as set out in the letter to you from the Managing
Director and Chief Executive Officer of the National dated 24 August 2004
(“your employment agreement”)) as follows:

 

(i)                                      in addition to all other
powers of the National under your employment agreement, the National may
terminate your employment effective immediately by giving written notice to you
if your office as a Director becomes vacant or is vacated by force of the
Corporations Act or of the provisions of Article 10.14 or Article 10.28
of the Constitution;

 

 

(ii)                                  in addition to all other
powers of the National under your employment agreement, the National may
terminate your employment in accordance with the provisions of sub-paragraph
21.5 to 21.7 (inclusive) of your employment agreement if:

 

(A)                                in accordance with the Constitution or the Corporations Act, you are
removed or dismissed from office as an Executive Director; or

 

(B)                                  you cease to hold office as a Director (other than by reason of your
office as an Executive Director or Director being vacated or becoming vacant).

 

(iii)                               Resignation from offices

 

You may, from time to time, hold office as a director
of a subsidiary of the National.  If you
cease to be an employee of the National and thereby the office of Executive
Director of the National held by you becomes vacant, you agree to resign with
immediate effect from each office held by you in the National and in each
subsidiary of the National.

 

(iv)                               For the purposes of
sub-clause 2.5(b)(iii), you irrevocably appoint the Chairman of the
National, as elected from time to time, to be your attorney and in your name
and on your behalf to execute any document or do anything necessary to comply
with your obligations under the provisions of sub-clause 2.5(b)(iii).  The power of attorney granted to the Chairman
under subclause 2.5(b)(iii) shall remain in force both during your
employment with the National and after it ceases.

 

(v)                                  Extent of operation of certain
obligations

 

The provisions of your employment agreement as varied
by this letter, operate only to the extent permitted by:

 

(A)                                law, in particular, the Corporations Act; and

 

(B)                                  any other obligations with which the National must comply under the
Listing Rules.

 

(vi)                               If any provision or part of a
provision of your employment agreement as varied by this letter goes beyond
that which is permitted by law, or does not comply with the obligations
referred to in sub-clause 2.5(b)(v), that provision or part of a provision
shall be interpreted in such a way as to be permitted by law or to comply with
the obligations or, if such an interpretation is not open, that provision or
part of the provision must be severed.

 

(c)                                   While
you are an Executive Director and an employee of the National, 50 per cent of
any “short-term incentive reward” allocated to you under the terms of the
National’s short-term incentive-based plan for executive employees (referred to
in your employment agreement), will be provided in National shares, generally
restricted for a minimum period of 12 months from the date of issue.  Any issue or allocation of shares to you as
an employee of the National, as part of your short-term incentive reward, will
be provided under the National Australia Bank Staff Share Ownership Plan, and
subject to the specific terms of issue or allocation applicable at the time and
will also be subject to approval by shareholders if required by law or under
any obligations with which the National must comply under the ASX Listing
Rules.

 

 

3                                          Expectation

 

3.1                                Overview

 

The National’s expectations of you as a Director are
listed in this section.  In many cases,
you are obliged to meet these expectations because of your legal duties to the
National.  You are encouraged to seek
independent legal advice to assist you in the performance of these duties.

 

3.2                                Board
meetings

 

Whilst most Board and Board committee meetings are
held in Melbourne, the Board does visit and hold meetings at interstate and
international venues from time to time. Board meetings are scheduled ten times
a year and normally have a duration of two days, with the exception of the
annual Board meeting in the United Kingdom, which usually has a duration of
five days.  A list of the Board Meeting
dates for the remainder of 2004 and for 2005 is attached.  It is necessary from time to time to convene
an unscheduled meeting.  The National
endeavours to keep such meetings to a minimum, however, a Director may convene
additional Board meetings at any time.  [Article 12.2]

 

You are expected to:

 

•                                           attend Board meetings and ensure that you have fully read all papers
relating to agenda items;

 

•                                           apply your mind to the matters before you and bring your own special
skills and experience to your position;

 

•                                           raise questions and make enquiries when you need more information;

 

•                                           make sure that any of the Board’s delegates are qualified, reliable
and competent to carry out the duties given to them; and

 

•                                           make sure that you have been provided with accurate, relevant and
timely information to reach any decision that will affect the National.  You should not make a decision, and you may
refuse to consider any matter, until appropriate information has been provided
to you.

 

3.3                                Board
committees and subsidiaries

 

Currently there are four standing Board
committees:  the Audit Committee, Risk
Committee, Compensation Committee and the Nomination Committee, and the Board
may, from time to time, convene other Board committees.

 

At present, all Directors are members of the
Nomination Committee.

 

You may also be appointed as a director of a subsidiary,
or subsidiaries, of the National.

 

 

3.4                                Insider
trading policy and Code of Conduct

 

Directors are expected to comply with the corporate
policies approved from time to time by the Board, including the Corporate
Governance Guide entitled “Role, Duties, Responsibilities and Rights of the
Directors of Category A Company”.

 

A copy of the Guide is attached to this letter.

 

You are of course required also to comply with the
National’s Code of Conduct (which has been expressly referred to your
employment agreement) and the National’s insider trading policy.

 

The insider trading policy restricts dealings in
National securities by Directors as well as other officers and employees of the
National.  Directors may only deal in
such securities in the eight-week periods immediately following either the
release of the half-year and full-year profit announcements (currently made in
May and November) or following the release of a qualifying prospectus.  However, even during such periods, Directors
may not deal in National securities if they are aware of any share price
sensitive information.  An example of
this may be any merger, acquisition or significant disposal activity occurring
during the window period.  Further, under
the insider trading policy, Directors must not deal in National securities for
short-term gain and, therefore, dealing in the same National securities within
a 12-month period is prohibited. 
Directors must also discuss their intention to deal in National securities
with the Chairman before undertaking any such dealings.

 

Given these restrictions, a new Director appointed to
the Board, who does not already meet the Director share qualification
requirement set out in the National’s Constitution and clause 2.1 of this
letter, should acquire such shares as soon as possible before s/he acquires any
share price sensitive information.

 

3.5                                Confidentiality

 

You are expected to maintain the confidentiality of
all materials and information you obtain in connection with your position as a
Director.

 

You must comply with the Confidentiality Deed you
execute in accordance with Article 11.8 of the National’s Constitution.

 

These obligations are separate from and are in
addition to obligations of confidentiality you have accepted and agreed to as
an employee of the National.

 

4                                          Duties
and powers

 

4.1                                Duties

 

At the most
general level, your role in your capacity as a Director is to monitor the
National’s business results and to set goals and formulate strategy.  In performing this role, you are subject to a
number of legal duties to the National.

 

A detailed
explanation of your duties is provided in the Corporate Governance Guide
entitled “Role, Duties, Responsibilities and Rights of the Directors of
Category A Company” referred to earlier and attached to this letter.

 

 

4.2                                Disclosure
of conflicts and material personal interests

 

If a conflict
of interest arises in relation to a matter that will be considered by the
Board, you must give the other Directors notice of the conflict, and, if the
conflict is a material personal interest in the matter (as defined by section 191(2)
of the Corporations Act), you must not be present while the matter is being
considered at a Board meeting or vote on the matter.

 

Further
guidance in relation to conflicts and material personal interests is given in
the Corporate Governance Guide attached.

 

4.3                                Powers

 

The Board has the power to exercise all of the
National’s powers, other than the powers which the Constitution and the
Corporations Act require to be exercised by the National in General
Meeting.  [Article 11.1
and s198A(2) of Corporations Act]

 

Decisions of the Board are decided by a majority of
votes of Directors present and entitled to vote.  Each Director has one vote.  [Articles 12.3 and 12.4]

 

4.4                                Appointment
of Alternate Director

 

Articles 12.6 - 12.14 of the National’s Constitution
provides for a Director to appoint an Alternate Director to act in his / her
place, subject to the approval of the majority of the other Directors.  However, it has not been the practice in the
National to appoint Alternate Directors.

 

5                                          Remuneration

 

5.1                                Remuneration

 

As you are an employee of the National, you are not
provided with and have no entitlement to any additional remuneration in respect
of holding the office of Director.

 

5.2                                Insurance
and indemnity

 

As a Director, you have the benefit of the indemnity
provided to you in the National’s Constitution. 
This indemnity is broad; however, it does not provide protection if the
National is prohibited from indemnifying you, for example, where liability is
owed to the National.  [Article 21.1 and s199A(2) of the Corporations Act]

 

You are invited to enter into a Deed of Access,
Indemnity and Insurance which mirrors the protection afforded to you under the
National’s Constitution.  That deed also
includes an undertaking by the National to effect and maintain an appropriate
Directors’ and Officers’ Insurance Policy. 
A copy of that deed is attached. 
Could you please sign the deed and return it.

 

You may also be protected under the National’s
Directors & Officers Insurance Policy. 
Details of the insurance policy are provided in the brochure attached.

 

It is important that, if you become aware of any
matter that may give rise to an actual or potential claim, or of any
circumstances that may lead to such a claim, you contact Global Operational
Risk, Insurance & Compliance (Melbourne).

 

 

6                                          Training

 

The National
is committed to providing its Directors with opportunities to update and
enhance their skills and knowledge.

 

In your
capacity as a Director, you are entitled to attend external seminars, workshops
and other training programs that are relevant to your directorship.  The National will reimburse you for any
reasonable costs of such additional training.

 

7                                          Access to
information

 

7.1                                Access to
financial records and company books

 

Under the
Corporations Act, a Director has rights of access to the National’s financial
records and, for the purposes of legal proceedings to which the Director is a
party, the National’s books, at all reasonable times.  [Section 198F and section 290
of the Corporations Act]

 

The Deed of
Access, Indemnity and Insurance grants you access to Board papers and related
material.

 

7.2                                Access to
the Company Secretary

 

The Company
Secretary is responsible for providing advice and support to the Board and for
ensuring that Directors have sufficient information to make decisions at
meetings of the Board.  The Company
Secretary also prepares minutes of all Board meetings.

 

In your
capacity as a Director, you have access to, and are entitled to request
additional assistance and information from, the Company Secretary.

 

7.3                                Authority
to appoint independent professional advisers

 

In your capacity as a Director, you are entitled to
seek independent professional advice in relation to your duties and powers as a
Director of the National.  The National
will reimburse Directors for all reasonable expenses incurred in obtaining such
advise, provided that the expenses have been approved by the Chairman and,
where appropriate, a copy of the advice is made available to the Board.

 

 

8                                          Further
guidance and information

 

If you have any queries about your appointment, please
contact the Company Secretary.

 

My other Board colleagues and I are looking forward to
working with you in the future.

 

Yours sincerely

 

	
  [Original signed]

  	
   

  

 

 

GRAHAM J KRAEHE AO

CHAIRMAN

 

 

I acknowledge that I have read and understood and I
hereby accept the contents of this letter.

 

 

	
  Signed:

  	
  [Original signed]

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  MICHAEL ULLMER

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  19/10/04

  	
   

  

 

 

When you have signed the attached copy of this letter,
please return the signed copy, and signed copies of the other documents
attached to this letter which require your signature, to:

 

Mr GF Nolan

Company Secretary

National Australia Bank Limited

Level 24

500 Bourke Street

MELBOURNE   VIC   3000EXHIBIT 4.23

 

Non-executive director appointment letter – Mr Robert
G Elstone

 

 

Mr Robert
George Elstone

 

 

9 August 2004

 

Dear Robert

 

Letter of Appointment

 

I am pleased
to advise you that at the meeting of the Board of Directors of National
Australia Bank Limited (the National) held on 5 – 6 August 2004, the Board
approved your appointment as a Non-Executive Director of the National and
National Equities Limited (the holding company for the major offshore assets),
subject to the regulator, the Australian Prudential Regulation Authority,
having no objection to your appointment and receipt of a signed Consent to Act
as a Director.

 

We are
delighted that you have indicated that you would accept such an appointment if
an invitation was extended to you.  We look
forward to your contribution during this period of renewal for the National.

 

Enclosed is a
Consent to Act as a Director & Disclosures on Appointment form which I
would ask you to complete and return to the Company Secretary, Mr Garry Nolan,
as soon as possible.  Garry’s fax number
is 03 8641 4927.  Could you also return
the original by post to the address at the end of this letter.  In addition, a BR4 form is enclosed which I
would ask you to complete and return. 
This form is required to be lodged with the Companies House in Britain.

 

We are
preparing a draft announcement to the market and the media concerning your
appointment and Garry will provide a copy of this to you for your
consideration, prior to its release.

 

Also enclosed
is a form headed Staff in Confidence which I would ask you to complete and
return.  Through this form you authorise
to National to undertake a police check on you as required by the National’s
internal policies and by the regulators.

 

In addition
to expressing our delight that you will be joining the Board of the National,
when all of the formalities are completed, this letter is intended to inform
you of the terms of your appointment to the office of Non-Executive Director of
the National and National Equities Limited. 
It should be read in conjunction with, and is subject to, the National’s
Constitution (a copy of which is attached to this letter), and the charters and
policies approved from time to time by the Board, including the Board Charter
(a copy of which is attached to this letter). 
Such charters and policies may be changed by the Board from time to
time.

 

 

Following your
formal appointment, you will hold office until the next Annual General Meeting
of the National which will be held on 31 January 2005, at which time you
will stand for election by the shareholders as a Director of the National.

 

Please
acknowledge that you have read, understand and accept the contents of this
letter by signing the enclosed copy of this letter and returning it to the
Company Secretary.

 

1                                          Board
members

 

The Chairman of the Board is Mr Graham Kraehe, an
Independent Non-Executive Director.

 

The other Independent Non-Executive Directors, at
present, are:

 

•                                           Dr Brian Clark (standing down in late August 2004);

 

•                                           Mr Peter Duncan;

 

•                                           Dr Ken Moss (standing down in late August 2004);

 

•                                           Mr Geoff Tomlinson;

 

•                                           Dr Ed Tweddell (standing down in late August 2004); and

 

•                                           Mr Malcolm Williamson.

 

Mr John Stewart is the Managing Director & Group
Chief Executive, the only executive director at this time.

 

The Company Secretary is Mr Garry Nolan.  Mr Nolan can be contacted on (03) 8641 3505.

 

Further details of Board members can be obtained from
the Company Secretary.

 

2                                          Terms of
appointment

 

2.1                                Qualifications

 

To qualify for the office of Director of the National,
you must:

 

•                                           be under 70 years of age; [Article 10.9]

 

•                                           not be disqualified or suspended from managing corporations and must
otherwise be permitted by law to act as a director of a company; [s203B Corporations Act and Part 2D.6]

 

•                                           sign a Confidentiality Deed which prohibits you from disclosing any
matters, affairs or concerns of the National; [Article 11.8
of the National’s Constitution] and

 

•                                           hold at least 2,000 fully paid shares in the National in your own
right within two months after your appointment. 
[Article 10.8]

 

 

2.2                                Term

 

Following your appointment by the Board, you hold
office until the first Annual General Meeting of the National after the date of
your appointment.  You are then eligible
for election to the position of Director by resolution of the shareholders of
the National at that Annual General Meeting. 
[Articles 10.12 and 10.13]

 

Once you have been elected to the office of Director
by resolution of the shareholders of the National in General Meeting, you will
be subject to the rotation of Directors provided for in Articles 10.3 to 10.7
of the National’s Constitution.  Broadly,
these Articles provide that at each Annual General Meeting one-third of the
Directors for the time being and any other Director not in such one-third who
has held office for three years or more must retire from the office and is
eligible for re-election.  Please refer
to the clause 3.8 – Performance evaluation, concerning the process undertaken
by the Board to determine if the Board will recommend to shareholders that a
Director be re-elected to office.

 

The National may remove a Director from office as a
Director at any time by a resolution passed at a General Meeting.  [Articles 10.3-10.7 and
10.14].

 

Appointment and removal of Directors is a matter for
shareholders.  However, the Board has set
a policy limit of 10 years for individual service as a Director, subject to an
annual review thereafter.  The Board
regards this as an appropriate period of service.  This provided an opportunity for renewal of the
Board whilst recognising that Directors who have served on the Board for an
extended period of time have gained valuable experiences, insights and
historical perspectives regarding the National that would not be easily
replaced.  [Clause 7.5
of Board Charter]

 

2.3                                Vacation
of office

 

Your position becomes vacant if any of the
circumstances prescribed under the Corporations Act 2001
(Cwlth) or the National’s Constitution, arise, including the following:

 

•                                           you are disqualified from managing corporations; [s203B Corporations Act and Part 2D.6]

 

•                                           you resign from office or refuse to act; [Article 10.28(b)]

 

•                                           you are removed from office by resolution passed at a General
Meeting of the National; [Article 10.28(c)]

 

•                                           you are not present personally or by an alternate director or proxy
at meetings for a continuous period of two months without a leave of absence
from the Board; or [Article 10.28(d)]

 

•                                           you accept or hold any office in another bank without the consent of
the Board.  [Article 10.28(f)]

 

Article 10.28 of the National’s Constitution
contains a list of circumstances that, in addition to those prescribed by the
Corporations Act, will result in the office of a Director becoming vacant.

 

 

2.4                                Relationship
with the National

 

Once appointed, you hold office as a Director of the
National.  You are not appointed or
designated as an employee of the National nor are you an Executive Director
within the meaning of the National’s Constitution.

 

3                                          Expectations

 

3.1                                Overview

 

The National’s expectations of you as a Director are
listed in this section.  In many cases,
you are obliged to meet these expectations because of your legal duties to the
National.  You are encouraged to seek
independent legal advice to assist you in the performance of these duties.

 

3.2                                Time
commitment

 

You must contribute sufficient time to your
directorship to enable you to effectively fulfil your duties to the
National.  You may also be expected to
spend additional time if you are a Board committee member or if you are the
Chairman, or a director of a subsidiary of the National.

 

While most Board and Board committee meetings are held
in Melbourne, the Board does visit and hold meetings at interstate and
international venues from time to time.

 

You should inform the Board of any change in circumstances
that could affect your ability to commit time to the position.

 

3.3                                Board
meetings

 

Board meetings are scheduled ten times a year and
normally have a duration of two days, with the exception of the annual Board
meeting in the United Kingdom which usually has a duration of five days.  A list of the Board Meeting dates for the
remainder of 2004 and for 2005 is attached. 
It is necessary from time to time to convene an unscheduled
meeting.  The National endeavours to keep
such meetings to a minimum, however, a Director may convene additional Board
meetings at any time.  [Article 12.2]

 

You are expected to:

 

•                                           attend Board meetings and ensure that you have fully read all papers
relating to agenda items;

 

•                                           apply your mind to the matters before you and bring your own special
skills and experience to your position;

 

•                                           raise questions and make enquiries when you need more information;

 

•                                           make sure that any of the Board’s delegates are qualified, reliable
and competent to carry out the duties given to them; and

 

 

•                                           make sure that you have been provided with accurate, relevant and
timely information to reach any decision that will affect the National.  You should not make a decision, and you may
refuse to consider any matter, until appropriate information has been provided
to you.

 

3.4                                Board
committees and subsidiaries

 

Currently there are four standing Board
committees:  the Audit Committee, Risk
Committee, Compensation Committee and the Nomination Committee, and the Board
may, from time to time, convene other Board committees.

 

At present, all Directors are members of the
Nomination Committee.

 

You are expected to serve on one additional committee,
and may be asked to serve on more than one, of these Board committees in
accordance with the written charters of those committees.  Charters for all Board committees are
approved by the Board.

 

You may also be appointed a director of a subsidiary,
or subsidiaries, of the National.

 

3.5                                Independence

 

Non-Executive Directors are appointed on the basis
that they remain independent of management and free from any business or other
relationship that could materially interfere with, or could reasonably be
perceived to materially interfere with, the exercise of their unfettered and
independent judgment.

 

The Board has approved the definition of ‘independence’
which is set out in the Board Charter.

 

The Board regularly reviews Director
independence.  You should immediately
report to the Board any change in your relationship or the relationship of your
associates with the National, or with its management team, which could affect
your independence.

 

3.6                                Insider
trading policy and Code of Conduct

 

Directors are expected to comply with the corporate
policies approved from time to time by the Board, including:

 

•                                             the National’s insider trading policy;

 

•                                             the National’s Code of Conduct; and

 

•                                             the Corporate Governance Guide entitled “Role, Duties,
Responsibilities and Rights of the Directors of Category A Company”.

 

Copies of these key policies and codes are attached to
this letter.

 

The insider trading policy restricts dealings in
National securities by Directors as well as other officers and employees of the
National.  Directors may only deal in
such securities in the eight-week periods immediately following either the
release of the half year and full year profit announcements (currently made in
May and

 

 

November) or following the release of a qualifying
prospectus.  However, even during such
periods, Directors may not deal in National securities if they are aware of any
share price sensitive information.  An
example of this may be any merger, acquisition or significant disposal activity
occurring during the window period. 
Further, under the insider trading policy, Directors must not deal in
National securities for short-term gain and therefore dealing in the same
National securities within a 12-month period is prohibited.  Directors must also discuss their intention
to deal in National securities with the Chairman before undertaking any such
dealings.

 

Given the above restrictions, a new Director appointed
to the Board, who does not already meet the Director share qualification
requirement set out in the National’s Constitution and clause 2.1 of this
letter, should acquire such shares as soon as possible before s/he acquires any
share price sensitive information.

 

3.7                                Confidentiality

 

You are expected to maintain the confidentiality of
all materials and information you obtain in connection with your position.  You are also expected to ensure that your
representative, if applicable, maintains the confidentiality of such materials
and information.

 

You must
comply with the Confidentiality Deed you execute in accordance with Article 11.8
of the National’s Constitution.

 

3.8                                Performance
evaluation

 

The Board regularly conducts an assessment of its
effectiveness using an external facilitator. 
This review may include an assessment of individual director
performance.

 

In addition, in advance of you being presented to
shareholders for re-election in accordance with the retirement by rotation
provisions in the National’s Constitution, a peer review process will be
undertaken.  That is, the Board (in your
absence) will consider whether the Board will make a recommendation to
shareholders in support of your re-election as a Director of the National.

 

The Nomination Committee will oversee the
implementation of this process.

 

4                                          Duties
and powers

 

4.1                                Duties

 

At the most
general level, your role is to oversee management on behalf of the National, to
monitor the National’s business results and to set goals and formulate
strategy.  In performing this role, you
are subject to a number of legal duties to the National.

 

A detailed
explanation of your duties is provided in the Corporate Governance Guide
entitled “Role, Duties, Responsibilities and Rights of the Directors of
Category A Company” referred to earlier and attached to this letter.

 

 

4.2                                Disclosure
of conflicts and material personal interests

 

If a conflict
of interest arises in relation to a matter that will be considered by the
Board, you must give the other Directors notice of the conflict, and, if the
conflict is a material personal interest in the matter (as defined by section 191(2)
of the Corporations Act), you must not be present while the matter is being
considered at a Board meeting or vote on the matter.

 

Further
guidance in relation to conflicts and material personal interests is given in
the Corporate Governance Guide attached.

 

4.3                                Powers

 

The Board has the power to exercise all of the
National’s powers, other than the powers which the Constitution and the
Corporations Act require to be exercised by the National in General
Meeting.  [Article 11.1
and s198A(2) of Corporations Act]

 

Decisions of the Board are decided by a majority of
votes of Directors present and entitled to vote.  Each Director has one vote.  [Articles 12.3 and 12.4]

 

4.4                                Appointment
of Alternate Director

 

Articles 12.6 - 12.14 of the National’s Constitution
provides for a Director to appoint an Alternate Director to act in his / her
place, subject to the approval of the majority of the other Directors.  However, it has not been the practice in the
National to appoint Alternate Directors.

 

5                                          Remuneration

 

5.1                                Remuneration

 

Non-Executive Directors do not participate in schemes
designed to remunerate executives and do not receive share options, performance
rights, bonuses or other types of performance based remuneration.

 

The National does not provide retirement benefits to
Non-Executive Directors, other than the superannuation payments described
below.

 

Each Non-Executive Director will receive the fees set
out in Schedule 1 of this letter for their directorship.

 

Additional fees are payable for membership of any
Board committees, subsidiary directorships and for the position of Chairman, in
accordance with the National’s Constitution.

 

The Board approves these fees within the limits set by
the shareholders of the National in General Meeting.

 

Shares

 

Under the National’s Non-Executive Director Share
Plan, you will be provided at least 10% of your annual remuneration in the form
of National shares, except in limited, unusual circumstances.  There is flexibility to provide a maximum of
40%

 

 

of your annual emoluments in the form of National
shares.  The Company Secretary will
provide you with further information on the Non-Executive Director Share Plan.

 

Superannuation

 

Directors may elect to receive part of their
remuneration in the form of superannuation contributions.  As a minimum, in accordance with the relevant
superannuation guarantee (“SG”) legislation, the National is generally obliged
to pay into an approved superannuation fund, superannuation guarantee
contributions on behalf of Directors at the rate of 9% of the fees (and any
other amounts which fall within the description of “ordinary time earnings” for
SG purposes) paid to you.

 

Other non-cash benefits

 

If required, the National will provide Directors with
a laptop computer to facilitate the electronic receipt of Board papers and
receipt of electronic communication material to enable Directors to effectively
perform their duties to the National. 
Subject to applicable law, financial services may also be provided by
the National to Directors under terms and conditions that would normally apply
to the public.  [Clause 13.5
of Board Charter]

 

The Company Secretary will assist you to make
arrangements in this regard.

 

5.2                                Expenses

 

You are entitled to be reimbursed out of the funds of
the National such reasonable travelling, accommodation and other expenses as
you may incur when travelling to or from Board meetings or Board committee
meetings or when you are otherwise engaged in the business of the
National.  [Article 10.18]  I should mention that it is the
National’s policy that no more than two Directors should travel by air together
at any time.

 

5.3                                Insurance
and indemnity

 

You have the benefit of the indemnity provided to you
in the National’s Constitution.  This
indemnity is broad, however, it does not provide protection if the National is
prohibited from indemnifying you, for example, where liability is owed to the
National.  [Article 21.1
and s199A(2) of the Corporations Act]

 

You are invited to enter into a Deed of Access,
Indemnity and Insurance which mirrors the protection afforded to you under the
National’s Constitution.  That deed also
includes an undertaking by the National to effect and maintain an appropriate
Directors’ and Officers’ Insurance Policy. 
A copy of that deed is attached. 
Could you please sign the deed and return it at your convenience.

 

You may also be protected under the National’s Directors
& Officers Insurance Policy.  Details
of the insurance policy are provided in the brochure attached.

 

It is important that, if you become aware of any
matter that may give rise to an actual or potential claim, or of any
circumstances that may lead to such a claim, you contact Global Operational
Risk, Insurance & Compliance (Melbourne).

 

 

6                                          Induction
and training

 

6.1                                Induction

 

The National’s Induction Program for Non-Executive
Directors is designed to assist them to participate fully and actively in Board
decision-making from the date of appointment.

 

The program enables appointees to gain an
understanding of:

 

•                                             the National’s financial, strategic, operational and risk management
position;

 

•                                             their rights, duties and responsibilities; and

 

•                                             the role of Board Committees.

 

The National’s Induction Program involves the supply
of reading material, informal discussions with the Group Chief Executive and
Executive General Managers, and technical workshops.

 

From time to time, the Nominations Committee reviews
the effectiveness of the Induction Program.

 

Continuing education

 

The National is committed to providing its Directors
with opportunities to update and enhance their skills and knowledge.  Directors are regularly provided with updates
from management and external advisers about key developments in the company and
the banking and funds management industries.

 

Directors are also entitled to attend external
seminars, workshops and other training programs that are relevant to the
National or to their directorship.  The
National will reimburse a Director for any reasonable costs of such additional
training.

 

7                                          Access to
information

 

7.1                                Access to
financial records and company books

 

Under the
Corporations Act, a Director has rights of access to the National’s financial
records and, for the purposes of legal proceedings to which the Director is a
party, the National’s books, at all reasonable times.  [Section 198F and section 290
of the Corporations Act]

 

The Deed of
Access, Indemnity and Insurance grants you access to Board papers and related
material.

 

7.2                                Access to
the Company Secretary

 

The Company
Secretary is responsible for providing advice and support to the Board and for
ensuring that Directors have sufficient information to make decisions at meetings
of the Board.  The Company Secretary also
prepares minutes of all Board meetings.

 

 

Directors have
direct access to, and are entitled to request additional assistance and
information from, the Company Secretary.

 

7.3                                Authority
to appoint independent professional advisers

 

Directors are entitled to seek independent
professional advice in relation to their duties and powers as Directors of the
National.  The National will reimburse
Directors for all reasonable expenses incurred in obtaining such advice, provided
that the expenses have been approved by the Chairman and, where appropriate, a
copy of the advice is made available to the Board.

 

8                                          Further
guidance and information

 

If you have any queries about your appointment, please
contact the Company Secretary.

 

The next Board
meeting is on 2 – 3 September in Melbourne and the following meeting after
that will be in New Zealand on 7 – 8 October. 
I will call you to discuss what would be the most suitable starting date
for you.

 

Robert, I and
my other Board colleagues and I are looking forward to working with you in the
future.

 

 

Yours sincerely

 

	
  [Original signed]

  	
   

  

 

 

GRAHAM J KRAEHE AO

CHAIRMAN

 

 

I acknowledge that I have read, understood and
accepted the contents of this letter.

 

 

	
  Signed:

  	
  [Original signed]

  	
   

  
	
   

  	
   

  	
   

  
	
  Name:

  	
  ROBERT ELSTONE

  	
   

  
	
   

  	
   

  	
   

  
	
  Date:

  	
  12th AUGUST 2004

  	
   

  

 

 

When you have signed the attached copy of this letter,
please return the signed copy to –

 

Mr GF Nolan

Company Secretary

National Australia Bank Limited

Level 24

500 Bourke Street

MELBOURNE   VIC   3000

 

 

Schedule 1: Directors’ Fees as at 9 August 2004

 

	
  BOARD/COMMITTEE

  	
   

  	
  CHAIRMAN

  	
   

  	
  MEMBER

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal Board and Board Nomination
  Committee

  	
   

  	
   

  	
   

  	
   

  	
  A$

  	
  137,150

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal Board Audit Committee

  	
   

  	
  A$

  	
  39,000

  	
   

  	
  A$

  	
  19,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Principal Board Risk Committee

  	
   

  	
  A$

  	
  39,000

  	
   

  	
  A$

  	
  19,500

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Compensation Committee

  	
   

  	
  A$

  	
  17,550

  	
   

  	
  A$

  	
  7,364

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