Document:

Exhibit 4(c).11

 

	
  Westpac

  	
   

  
	
  Australia’s First Bank

  	
   

  
	
   

  	
  Westpac Banking
  Corporation ABN 33 007 457 141

  
	
   

  	
   

  
	
   

  	
  David Morgan

  Chief Executive Officer

  Level 27, 60 Martin Place

  Sydney NSW 2000

  

  Telephone: (02) 9226 3004

  Facsimile: (02) 9226 4128

  

 

13 December 2002

 

Ann Sherry

21 Ballast Pt Road

Birchgrove NSW 2041

 

Dear Ann

 

Dear Ann,

 

I would like to formally
offer you the position of Westpac’s Group Executive New Zealand and Pacific
Banking on the terms set out below and those contained in the attached
Executive Employment Agreement.

 

1. DATE OF COMMENCEMENT

The commencement date of
your employment in this new role is 11th November 2002.

 

2. POSITION AND DUTIES

Your role will be that of
Group Executive, Westpac Trust and Pacific Bank, which will report to me. It is
anticipated that the term of this role will be a period of three years.

 

The role is based in
Auckland, New Zealand, where you will be required to live and work on
secondment from Australia.

 

3. REMUNERATION ARRANGEMENTS

 

Fixed Package

 

Your Fixed Package will
be AUD550,000 per annum.

 

This will be paid to you, part in Australia and part in New Zealand,
the exact split to be agreed with you. The amount paid to you in New Zealand
will be calculated at a fixed exchange rate

 

 

of AUD1:NZD0.8679 based
on an average of the previous six months, and will be reviewed every 6 months
in July and January.

 

In addition to your Fixed
Package, Westpac will continue to make superannuation contributions on your
behalf to the Westpac Staff Superannuation Plan (“WSSP”). Your current WSSP
arrangements, linked to Short Term Incentive payments, will also continue. Any
tax incurred in New Zealand on your superannuation payments will be paid by
Westpac.

 

Flexible Choice Benefits

 

The following non-cash
benefits may be selected from your Fixed Package in lieu of cash salary. The
value of these non-cash benefits can be up to a maximum of 40% of your Fixed
Package. Any Fringe Benefits Tax (“FBT”) incurred will be deducted from
your Fixed Package.

 

Employee Superannuation Contributions

 

You may elect to make
nominated contributions to WSSP (see above) from your Fixed Package. These
contributions (plus contributions tax) will be deducted from your Fixed Package
on a pre-tax basis.

 

Motor Vehicle

 

You will be entitled to
package two motor vehicles under a novated lease arrangement. The total running
costs (which include lease payments, petrol, insurance, FBT and registration)
will be deducted from your Fixed Package on a pre-tax basis.

 

Parking

 

If you wish to include
car parking in your package, Westpac will provide a parking space in the
Auckland head office. The notional value, inclusive of FBT, will be deducted
from your Fixed Package on a pre-tax basis.

 

Other items

 

Other non-cash benefits,
such as child-care and personal computers, may be available to you from time to
time. As with the other non-cash benefits, the total cost of these benefits
will be deducted from your Fixed Package.

 

On Transfer Loan

 

The current terms of your
On Transfer Loan will continue throughout the term of your secondment to New
Zealand.

 

2

 

Secondment Arrangements

 

A schedule of additional
benefits during your time in Auckland and their treatment on repatriation is
attached at Schedule 1. The secondment termination arrangements are also at
Schedule 1.

 

4. VARIABLE REMUNERATION

 

In addition to your Fixed
Package, you:

 

•             will
be eligible to participate in the Group Executive Short Term Incentive Plan
(“STI”); and

 

•             may from time to time be invited to acquire
Westpac securities under Westpac’s hurdled employee equity plans (“Long Term
Incentive” or “LTI”).

 

The value of these
components varies with your individual performance and business performance, as
measured against challenging objectives to be agreed between us upon your
commencement and which are subject to annual review.

 

Ann, I am personally very
excited about the opportunity this well deserved promotion represents for you.

 

I am committed to
ensuring that it works well for you.

 

Yours sincerely

 

 

David Morgan

Chief Executive Officer,
Westpac Banking Corporation

 

 

I, Ann Sherry, accept the
terms and conditions as outlined in this letter and its schedule and the
attached Executive Employment Agreement and confirm that these terms and
conditions constitute the entire agreement between me and Westpac concerning my
employment and that I have not relied on any other representations or
warranties by Westpac except as described in this letter, its schedule and the
attached Executive Employment Agreement.

 

	
   

  	
   

  	
  20/December/2002

  

 

3

 

Executive Employment Agreement

 

This Agreement applies to
your employment as Chief Executive, New Zealand and Pacific Banking. It should
be read in conjunction with the accompanying letter of offer.

 

1. Core Business Values

 

Our set of core values
provides the basis for how we go about our business of being a great Australian
company.

 

At Westpac our core
business values are:

 

•             Teamwork

 

•             Integrity

 

•             Performance.

 

These values shape our
decisions and our relationships with all our key stakeholders, including
customers, shareholders and employees.

 

2. Variable Remuneration

 

Short Term Incentive

 

You will be eligible to
be considered for an annual performance bonus under Westpac’s Value Management
Compensation Plan. The plan allows for a range of payment from between 0% and
200% of your target Short Term Incentive (“STI”) depending on performance.

 

A full year target STI of
AUD500,000, is intended to apply for the 2003 performance year. If personal and
Group business results are above plan, you will have the opportunity to earn
STI payments in excess of this range. In future years, the target will be set
annually at the commencement of the new financial year.

 

Where actual STI exceeds
target STI, it is our current policy to defer a portion of the STI payment. The
deferred portion is the amount over your target STI and the deferral period is
up to three years from the first payment date. A portion of the deferred
payment becomes due each year. Interest is applied to the balance outstanding
each year and paid annually. The terms of the deferral will be provided to you
at the time the deferral is made and, in certain circumstances, any unpaid
deferred payment (including interest) may be forfeited.

 

Whatever the
circumstances, to receive your STI payment you must be employed by Westpac on
the date that the payment is to be made. Westpac may, in its discretion, choose
to vary, discontinue or replace its STI plans.

 

4

 

Long Term Incentive

 

You will also be eligible
to participate in Westpac’s hurdled employee equity plans. The decision to
extend an invitation to you to participate and, if you accept the invitation,
the number of securities to be granted to you, are both at the discretion of
the Board or its authorised delegate. Any securities allocated to you will be
subject to performance hurdles which determine the number of securities that
you will be entitled to the benefit of at the expiry of the performance period.
An explanation of the equity schemes and a summary of the plan rules will be
provided to you at the time an invitation is extended to you.

 

For the invitations to be
made at the end of the current financial year, the target value for the securities
you will be invited to acquire is up to AUD975,000, with the actual number
dependent on your assessed personal contribution and potential, and Group
business results. Irrespective of this, the final decision on whether to invite
you to acquire Westpac securities and, if so, the number or value of securities
to be granted to you, is at the sole discretion of the Board or its authorised
delegate. The method of valuing securities granted under Westpac’s hurdled
employee equity plans is also at Westpac’s discretion.

 

3. Annual Remuneration Review

 

Your remuneration will be
reviewed annually, usually shortly after the end of the financial year (30
September), effective I January of the following year. Your remuneration will
not be reviewed after the financial year ending 30 September 2002 and your
first review will be after the next financial year.

 

4. Other Benefits

 

In addition to your Fixed
Package, Westpac will also provide you with the following benefits:

 

	
  Insurance

  	
   

  	
  Westpac will provide
  you with death and total and permanent disability insurance cover of up to
  AUD600,000 in the Westpac Executive Group Life Plan. This is in addition to
  any entitlement you have as a member of WSSP. Your coverage is subject to the
  policy terms and conditions.

  
	
   

  	
   

  	
   

  
	
  Health Checks

  	
   

  	
  You will be invited to
  attend an annual comprehensive health check at Westpac’s expense. This is
  provided as a benefit to you and the results of the health check will not be
  disclosed to Westpac.

  
	
   

  	
   

  	
   

  
	
  Westpac Employee
  Advantage

  	
   

  	
  You may access Westpac’s
  discretionary staff benefits under the Employee Advantage Program, which may
  include priority customer discounts on loans and other Westpac products as
  well as corporate discounts on various third party goods and services
  covering health and lifestyle benefits and other products. If you are not
  already with Westpac Private Bank, we will introduce you for your personal
  banking requirements.

  

 

Please
note that the products and services provided under the Employee Advantage
Program may vary from time to time.

 

5

 

5. Minimum Shareholding Guidelines

 

Westpac’s Board
Remuneration Committee has recently approved Executive Shareholding Guidelines (“Guidelines”).
Any grants made under equity plans will be the subject of the
Guidelines.

 

The broad principles of
the Guidelines are as follows:

 

•             disposal restrictions may, at Westpac’s
discretion, be placed on a proportion of any shares/options to be awarded to a
participant in Proposed Equity Plans until such time as the minimum number of
shares to be held under the Guidelines is met;

 

•             Group
Executives will be required to hold a minimum of 60,000 Westpac shares;

 

•             the
minimum number of shares will be reviewed every 3 years; and

 

•             there
will be no time requirements placed upon executives for meeting the Guidelines,
but it is expected that executives will aim to increase their shareholding each
year with a view to reaching the required shareholding within a reasonable
time..

 

6. Business Expenses

 

Westpac will reimburse
you for all reasonable out of pocket expenses incurred by you on Westpac
business.

 

7. Termination

 

Termination and Notice Period

 

This Agreement and your
employment with Westpac may be terminated at any time by Westpac giving 12
months’ written notice or you giving one month’s notice. Westpac may elect to
make a payment to you (based on your Fixed Package) in lieu of part or all of
this notice period.

 

During any period of
notice of termination, Westpac may direct you to perform different duties or no
duties, depending on the circumstances of your departure.

 

If you have committed
serious misconduct or a serious or persistent breach of this Agreement, Westpac
may terminate this Agreement and your employment with Westpac with immediate
effect and without any payment in lieu of notice.

 

If you are a director of
Westpac or any of its subsidiaries at the time that your employment with
Westpac concludes for any reason, you agree to resign from that office.

 

6

 

The termination of this
Agreement and/or your employment with Westpac does not affect your obligations,
and Westpac’s rights, regarding confidential information and intellectual
property (see sections 8 and 9 of this agreement).

 

Termination and Change in Control

 

Westpac acknowledges that
particular concerns may arise in relation to your appointment conditions in the
event of a change in control of the ownership of Westpac. In consideration for
you agreeing to, if necessary, act as an director of Westpac or any of its
subsidiaries, if Westpac terminates your employment for reasons other than poor
performance or misconduct at any time during a period of up to six months
following a change in control, Westpac will extend your payment in lieu of
notice on termination to 1.5 times your Fixed Package, less your Fixed Package
for any period of actual notice of termination that you receive. In these
circumstances, this payment would replace any other payment in lieu of notice.

 

For this purpose, ‘change
of control’ means where a person or corporate entity becomes the beneficial
owner of at least 35% of the voting shares of Westpac Banking Corporation on
issue.

 

Termination, incentive payments and employee securities

 

If you leave Westpac, in
most cases you will forfeit your rights to unpaid incentive payments and
unvested employee securities.

 

5. Executive Conduct

 

Your duties are such that
you will be involved in the affairs of a number of Westpac companies. For the
purposes of this Agreement, the Westpac Group means Westpac Banking Corporation
and its related bodies corporate (as defined in the Corporations Act, 2001).

 

Requirements

 

As a member of the
executive team you are required to:

 

•             Act
in Westpac’s best interests and use your best endeavours to promote Westpac’s
business interests

 

•             Give
the whole of your time, ability and attention in normal working hours, or when
reasonably required outside those hours (without additional remuneration), to
the business and affairs of Westpac and any other member of the Westpac Group

 

•             Faithfully and diligently perform the
duties and exercise the powers consistent with your position and any other
responsibilities that may be assigned to you by Westpac from time to time

 

•             Comply
with any reasonable direction given to you by the Chief Executive Officer or
the Board

 

•             Comply
with Westpac’s Code of Conduct

 

7

 

•             Disclose any business interests,
activities or decisions which conflict, or appear to conflict, with your duties
or responsibilities to Westpac

 

•             Refrain
from other business activities (including directorships) or employment without
the  written
consent of Westpac

 

•             Refrain
from any business activity or employment outside Westpac that could involve you
having financial dealings with a member of the Westpac Group which may
establish some responsibility of that member to another party

 

•             Not accept any payment or benefit in money
or kind from any person or entity as an inducement or reward for any act or
forbearance in connection with any matter or business transacted by, or on
behalf of Westpac

 

•             Maintain
and disclose a register of your investments that may be made available to
shareholders

 

•             Maintain
and disclose a register of your directorships of companies not related to
Westpac

 

•             Except
in performing your duties to Westpac, not use or disclose, either before or
after the termination of your employment and / or this Agreement, any
confidential information to which you are exposed, or which is disclosed to, or
generated by you in the course of, or in connection with your employment,
including (without limitation):

 

• information concerning the business
of any member of the Westpac Group or any of its customers and any transactions
in which a member of the Westpac Group or any of its customers may be, or may
have been, concerned or interested;

• strategic, business or marketing
plans of a member of the Westpac Group or any of its customers;

• any trade secret of a member of the
Westpac Group or any of its customers; and 

• customer lists and any databases or
other records of a member of the Westpac Group,

 

provided that this
information is not in the public domain, unless its reason for being public is
because you have breached an obligation to Westpac to keep the information
confidential.

 

•             Maintain the confidentiality of your
remuneration and the terms of this Agreement as a private matter between
yourself and Westpac.

 

Policies

 

In particular, you should
ensure that while you are employed with Westpac you read and at all times
observe and foster compliance with the key employment policies including the:

 

•             Code
of Conduct

 

•             Insider
Trading Policy

 

•             Internet
Technologies Code of Use

 

•             discrimination
and harassment policies

 

8

 

•             occupational
health and safety policies

 

•             media
policies

 

•             privacy
policies

 

These policies are
reviewed on a regular basis and amended to meet changing business
circumstances.

 

Further information on
particular issues is also available on Westpac’s intranet.

 

Customers and employees

 

Your appointment to
Westpac will mean that you will come into contact with market sensitive
information concerning the members of the Westpac Group, their customers and
employees that is of significant commercial value. To protect this value, we
require that during your employment and for a period of twelve months after the
termination of your employment, you will not:

 

•             Solicit
or entice away any director or employee of a member of the Westpac Group

 

•             Directly or indirectly employ or engage
any person who has during your employment by Westpac been a director or
employee of or independent contractor to a member of the Westpac Group

 

•             Solicit or entice away from a member of
the Westpac Group any customer, or potential customer, with whom you have had
dealings during your employment

 

•             Attempt
to do any of the above things.

 

Your obligations in this
respect survive the termination of this Agreement and/or your employment with
Westpac.

 

9. Intellectual Property

 

Westpac’s Intellectual Property

 

As an employee of
Westpac, all work created by you during the course of your employment, is owned
by Westpac. This work may be created by you alone, or jointly with other
Westpac employees or third parties (such as consultants used by Westpac from
time to time).

 

This work may include
(but is not limited to):

 

•             development
of products or services

 

•             development
of business processes

 

•             marketing
materials

 

•             registered
and unregistered trade marks and logos

 

9

 

•             technology
developments

 

•             all
material (including, without limitation, business cases, artwork, workflow
diagrams and reports) created by you during the course of your employment in
any form whatsoever.

 

Material

 

It may be the case that
Material is developed during the course of your employment which is ultimately
not used by Westpac. You acknowledge that, regardless of whether or not Westpac
uses that Material, it remains the intellectual property of Westpac. Except to
fulfil your duties as an employee of Westpac, you must not use any Material, or
disclose it to any third party, either during your employment with Westpac, or
after you leave Westpac.

 

You consent to all acts
or omissions of (or for the benefit of) Westpac which would otherwise
constitute a breach of any moral rights you may have in relation to any
Material or other copyright subject matter created by you which is connected
with your employment with Westpac.

 

You agree that, if
requested by Westpac, you will execute any document necessary to transfer
ownership of Material to Westpac.

 

Intellectual property of Third Parties

 

It is a condition of your
employment that you do not infringe the intellectual property rights of any
third party.

 

Previous employers

 

You must not use any
material created during the course of your employment with previous employers
during your employment with Westpac. To do so could infringe their intellectual
property rights in that material and may result in:

 

•             court
action preventing Westpac from using that material; and/or

 

•             costs
being incurred by Westpac if it must cease use of that material; and/or

 

•             reputational
damage to Westpac.

 

Material created for Westpac

 

It is a condition of your
employment that whenever you produce work in the course of your employment
which contains material owned by a third party, you obtain all necessary
consents and licences from that third party for use of that material.

 

10

 

10. Disclosure

 

You should be aware that
the terms of your employment including this Agreement and the accompanying
letter of offer may need to be disclosed to discharge legislative and
regulatory requirements both in Australia and overseas.

 

11

 

SCHEDULE 1

 

Arrangements on Secondment

 

Accommodation

Westpac will cover the
cost of your housing and furniture during your time in Auckland, to allow you
and Michael to live in a broadly comparable standard of accommodation to that
you currently enjoy. We anticipate the weekly rental costs of such
accommodation and furniture in Auckland to be indicatively, around AUD1,500 per
week. Westpac will be responsible for paying any New Zealand taxes incurred as
a result of providing housing and furniture.

 

To assist you in locating
a suitable property, and familiarise yourselves with Auckland, Westpac will
provide you with the assistance of a relocation company for home &
furniture search, and an area orientation.

 

Additional Travel

Westpac will pay for six
return economy class flights for Michael between Auckland and Sydney each year.

 

Relocation Payments

You will receive two
relocation payments, of AUD50,000 and AUD60,000, the first upon relocation to
Auckland, the second after 12 months, based on you still residing in Auckland
and being employed by Westpac. New Zealand tax will be deducted from these
amounts.

 

Medical examinations and immunisations

You and Michael will need
to pass a medical examination before your offshore appointment is confirmed.

 

Westpac covers the cost
of these medical examinations which can be done by your family doctor, or by a
Westpac approved clinic. Please note that this cost is not covered by Medicare.

 

Maintaining Australia health and medical insurance

You should suspend - not
cancel - your membership of any private health fund in Australia. You may enrol
in the Westpac International Health Plan at your own cost which will be
deducted annually from your salary. Once your membership is suspended, you
should ask your health fund to provide written confirmation that they will
allow immediate access on repatriation without the need to serve a waiting
period.

 

On repatriation, it is
your responsibility to arrange resumption of Australian cover.

 

Taxation services

As part of your
international secondment, Westpac will provide you with taxation advice through
Emst & Young. You will be entitled to the following:

 

•             A
pre-departure briefing and appropriate planning assistance

 

12

 

•             Australian tax returns for you and Michael
for your year of transfer overseas, all interim years and the year of transfer
back to Australia;

 

•             New
Zealand tax returns for you and Michael during your secondment; and

 

•             An
end of secondment briefing.

 

Air and sea freight allowances and insurance

Westpac will meet the
freight charges associated with relocation of your personal effects to
Auckland, subject to the following maximum baggage allowances.

 

Seafreight              10m3 per employee, and
2m3 per family member

Airfreight               50 kg per employee, and 5 kg per
family member

 

The following items are
not covered under Westpac’s insurance so you should arrange your own coverage
if needed:

 

•             Jewellery
and watches;

 

•             Currency,
bank notes, bullion;

 

•             Stamp
and or coin collections;

 

•             Paintings/artworks
(unless the insurance coverage for these has been met by Westpac as part of the
overall necessary freight of furnishings/goods to the New Zealand residence. In
this case such items would generally be of low value).

 

Cover for some of these
items which accompany you en route to your location will be provided under the
Westpac International Travel Insurance Policy.

 

Please note that
transport and insurance of excess goods is for your own care and the Bank will
not accept any responsibility for any loss you incur by not insuring goods
appropriately.

 

Storage and insurance of goods and possessions

Westpac will meet the
cost of storing and insuring goods you leave at home within reasonable limits.
Please note that there are some items that are excluded from this cover, and
these are detailed below. To qualify for coverage, all items left in storage
should be noted on the inventory list provided to Westpac’s removalist and
storage providers. Insurance coverage will remain for the period of your
offshore secondment.

 

Items that are excluded
from insurance cover:

 

•             Precious
stones, jewellery & watches

 

•             Bullion
& cash

 

•             Specie

 

•             Medals,
coin or stamp collections

 

13

 

•             Furs

 

•             Alcohol,
food, perishable goods

 

•             Pets,
livestock, living organisms including plants, dried flowers

 

•             Motor
vehicles, motor bikes, trailers, mini and/or trail bikes

 

•             Marine
craft unless transportable on a car roof

 

•             Firearms,
accessories, ammunition, gunpowder, reloading equipment

 

•             Granulated
or powder like substances of over 2kg in weight

 

•             Personal
papers

 

•             Photos

 

•             Data,
information, pictures, videos, audio recordings, computer programs, CD, DVD
etc.

 

Please submit claims
directly to Westpac Group Insurance on arrival in Auckland, and upon
repatriation. Claims must be submitted within twenty-one days of arrival of
goods as above.

 

Personal effects insurance

The insurance of personal
effects and other items taken with you from Australia and/or which you have
purchased while in transit to, or in New Zealand is for your own care and cost.
You will need to arrange appropriate insurance cover of personal effects. This
must be done as soon as possible after your arrival in New Zealand.

 

Insurance coverage under
Westpac’s International Personal Effects Policy, provided to you en route at
the Bank’s expense, will extend to the first two weeks (fourteen days)
following your move to permanent accommodation in New Zealand. The Bank cannot
accept responsibility for any loss incurred by you if you do not arrange
appropriate cover.

 

Driver’s licence fees

Your New Zealand People
and Performance team will arrange to reimburse you the costs associated with
applying for and maintaining the necessary drivers’ licences for both yourself
and Michael (where required) while in New Zealand. Maintenance of Australian
licences is for your care. Please contact New Zealand People and Performance
for New Zealand requirements.

 

14

 

Arrangements on Repatriation

 

Termination of your Secondment

 

There can be several
reasons for returning home at the end of your secondment.

 

•              Completing
the secondment

 

When you return home
having successfully completed the secondment your repatriation is fully covered
by Westpac. You are eligible for normal relocation assistance (for example,
transportation, shipment of personal belongings, etc.).

 

•             You
terminate your secondment or resign

 

You may not terminate
your secondment without Westpac’s agreement, unless you resign at the same
time.

 

If you resign during your
secondment, the provisions relating to Termination in the attached Executive
Agreement will apply. You and your accompanying family members will be returned
to Sydney at minimum cost to Westpac.

 

If you have been in New
Zealand for fewer than six months when you resign, Westpac will require you to
reimburse all relocation expenses that were paid on your behalf to relocate to
New Zealand. If you have spent more than six months in New Zealand, Westpac
will determine the reimbursement payment on a case-by-case basis.

 

•             Westpac
terminates your secondment

 

Westpac may terminate
your secondment with one month’s written notice or as mutually agreed between
you and the Bank. In this case, you and your accompanying family members will
be repatriated to your home base as if the secondment were complete.

 

If any period of sick
leave is expected to exceed eight continuous weeks, Westpac reserves the right
to conclude your secondment and repatriate you and your spouse/family.

 

•             Westpac
terminates your employment

 

If Westpac terminates
your employment, your secondment will first be terminated and you and your
family will be returned to Sydney at minimum cost to Westpac. Unless a shorter
period applies, (for example, summary dismissal) Westpac will give you one
month’s notice of termination of your secondment. Otherwise the provisions
relating to Termination in the attached Executive Agreement will apply. Any
severance arrangements will not, however include your secondment allowances and
benefits.

 

Personal effects insurance on repatriation

While en route to your
Australia (via the most direct route), insurance coverage for your personal
effects will be provided under the Bank’s personal effects travel policy. This
coverage is extended for a period of two weeks (fourteen days) following
arrival in the Australia. You should attend to your own insurance coverage for
these personal items as soon as possible, as coverage provided by the Bank will
not extend past this 14-day period.

 

15

 

Claiming goods from storage

On repatriation, you have
twenty-one days to unpack and examine your goods from the date your goods are
delivered from storage to your home. Claims for damaged goods, etc. will not be
accepted after this time.

 

16Exhibit
4(c).12a

 

Chief Executive
Employment

Agreement

 

 

Westpac Banking
Corporation

 

ABN 33 007  457 141

 

David Raymond Morgan

 

 

Allens Arthur
Robinson

The Chifley Tower

2 Chifley Square

Sydney NSW 2000

Tel 61 2 9230 4000

Fax 612 9230 5333

www.aar.com.au

 

© Copyright Allens
Arthur Robinson 2003

 

 

Chief
Executive Employment Agreement

 

Table of Contents

 

	
  1.

  	
  Interpretation

  
	
   

  	
   

  
	
  2.

  	
  Engagement
  and Term of Employment

  
	
   

  	
  2.1 Engagement and Term

  
	
   

  	
  2.2 Condition precedent

  
	
   

  	
   

  
	
  3.

  	
  Duties

  
	
   

  	
  3.1 Duties

  
	
   

  	
  3.2 Review

  
	
   

  	
   

  
	
  4.

  	
  Remuneration

  
	
   

  	
  4.1 Fixed remuneration

  
	
   

  	
  4.2 Short Term Incentive

  
	
   

  	
  4.3 Long Term incentive

  
	
   

  	
  4.4 Sundry benefits

  
	
   

  	
   

  
	
  5.

  	
  Pre-existing benefits

  
	
   

  	
  5.1
  Superannuation

  
	
   

  	
  5.2 Stock
  Appreciation Rights

  
	
   

  	
  5.3 Preservation

  
	
   

  	
  5.4 Leave

  
	
   

  	
   

  
	
  6.

  	
  Termination of Employment

  
	
   

  	
  6.1 Death or Total and Permanent Disablement

  
	
   

  	
  6.2 Resignation with Board consent and
  Termination without Cause

  
	
   

  	
  6.3
  Resignation or retirement without Board consent

  
	
   

  	
  6.4 Termination for Cause

  
	
   

  	
  6.5
  Termination for poor performance

  
	
   

  	
  6.6 No Disparaging Statements

  
	
   

  	
  6.7 Survival of obligations

  
	
   

  	
  6.8 Return of Bank Property

  
	
   

  	
  6.9 Set-off

  
	
   

  	
  6.10 Resignation as Director

  
	
   

  	
   

  
	
  7.

  	
  No
  Mitigation

  
	
   

  	
   

  
	
  8.

  	
  Reorganisation or business transfer

  
	
   

  	
  8.1 Amalgamation or reconstruction

  
	
   

  	
  8.2 Sale or transfer of business

  
	
   

  	
   

  
	
  9.

  	
  Entire
  Agreement

  
	
   

  	
   

  
	
  10.

  	
  Waiver of
  Breach

  
	
   

  	
   

  
	
  11.

  	
  Notices

  
	
   

  	
   

  
	
  12.

  	
  Governing
  Law

  
	
   

  
	
  Schedule
  1(clause 3.1(c))

  
	
   

  
	
  Schedule
  2 (clause 4.3)

  

 

i

 

	
  Schedule
  3 - (clause 5.1)

  

 

ii

 

Date        14
August, 2003

 

Parties

 

1.                             WESTPAC
BANKING CORPORATION (ABN 33 007 457 141) of 60 Martin Place, Sydney 2000 in
the State of New South Wales (Bank)

2.                             DAVID RAYMOND
MORGAN of C/- Level 27, 60 Martin Place, Sydney, 2000 in the State
of New South Wales (Executive)

 

Recitals

 

A                            Effective
1 March 1999, the Executive was appointed as the Managing Director and Chief
Executive Officer of the Bank for a term of 5 years.

B                              The
Bank has requested the Executive, and the Executive has agreed, to extend the
term of his appointment for period to expire on 31 December 2007, on and
subject to the terms of this Agreement.

 

Operative Provisions

 

1.             Interpretation

 

1.1           In this Agreement,
unless the context or subject matter otherwise indicates or requires:

 

Board  means the directors of the
Bank from time to time, acting as a Board.

 

Business Day  means a day, other than a
Saturday, Sunday or public holiday, on which the Bank is open for business in
Sydney.

 

Cause, in relation to the
Executive, means:

 

(a)          being
convicted of, or pleading guilty to an allegation of, any crime;

 

(b)         any
serious breach of this Agreement;

 

(c)          wilful and continued failure to perform
substantially his duties with the Bank or material breach of this Agreement
(other than any such failure or breach occasioned by physical or mental
illness, Total and Permanent Disablement or absence on approved leave) after a
demand for substantial performance or compliance has been given to the
Executive by or on behalf of the Bank which specifically identifies the manner
in which the Bank believes the Executive has not substantially performed his
duties, or the breach, and which provides the Executive with a reasonable opportunity
to remedy such failure or breach;

 

(d)         engaging in dishonest or fraudulent
conduct, or wilful misconduct, in carrying out his duties with the Bank;

 

(e)          committing an act of bankruptcy, becoming
bankrupt, or entering into any composition or arrangement with his creditors
generally; or

 

3

 

(f)            engaging in conduct or actions in his
personal or business life which in the reasonable opinion of the Board
significantly harm the reputation or damage the good name or image of the Bank

 

Long Term Incentive  means
the benefits provided under clause 4.3.

 

Notice of Termination  means
a written notice given to the Executive by or on behalf of the Bank stating
that:

 

(a)               the Board, by an affirmative vote of not
less than a majority of the directors present and voting at a validly
constituted meeting of the Board, has determined that the Executive has engaged
in conduct which constitutes Cause; and

 

(b)              the Executive’s employment is to
terminate on the date stated in such notice.

 

Performance Criteria  means
the criteria to be determined by the Board, acting reasonably, pursuant to
clause 3.2.

 

Securities Agreement  means
the agreement to be made between the Bank and the Executive in relation to the
grant of certain securities, the terms of which are more particularly described
in Schedule 2 to this Agreement.

 

Sickness  Determination means a
determination by the Board that the Executive’s employment should terminate due
to sickness, which may be made if the Executive has been unable to perform his
duties under clause 3.1 for a continuous period of 6 months due to illness,
injury, or other physical or mental incapacity.

 

Superannuation Fund  means
the Westpac Staff Superannuation Plan.

 

Term  means the term of the
Executive’s employment pursuant to clause 2.1.

 

Total and Permanent Disablement  means
permanent physical or mental incapacity that, in the reasonable opinion of the
Board based on a full medical report and a certificate to that effect from each
of at least 2 registered medical practitioners, is likely to result in the
Executive being incapable of continuing to perform the Executive’s duties as
Managing Director and Chief Executive Officer of the Bank, and the expression Totally and Permanently Disabled  has
a corresponding meaning.

 

1.2       Headings in this Agreement are for convenience only
and do not affect its interpretation.

1.3       Unless the contrary intention appears, reference to a
gender includes all genders and the singular includes the plural and vice
versa.

1.4       A reference to any legislation or to a provision
of any legislation includes any modification or re-enactment of it, any
legislative provision substituted for it and all regulations and statutory
instruments issued under it.

1.5       Reference to a clause, paragraph or schedule is
a reference to a clause or paragraph of or a schedule to this Agreement, as
amended from time to time.

1.6       Where
any word or phrase in this Agreement is given a definite meaning, any part of
speech or other grammatical form of that word or phrase has a corresponding
meaning.

1.7       Words and phrases defined in the Securities
Agreement shall have the same meaning when used in this Agreement, unless the
context requires otherwise.

 

4

 

2.             Engagement and Term of Employment

 

2.1          Engagement and Term

 

Subject to the
satisfaction of the condition precedent in clause 2.2:

 

(a)                    the Bank shall continue to employ the
Executive as Managing Director and Chief Executive Officer of the Bank, and the
Executive will continue to serve the Bank, on and subject to the terms of this
Agreement; and

 

(b)                   the term of the
Executive’s employment under this Agreement shall continue from 1 March 2004
and, subject to clause 6, shall end on 31 December 2007 at which time the Executive
will cease full-time employment with the Bank.

 

2.2          Condition precedent

 

The terms of this
Agreement shall not become binding upon the parties unless and until the grant
of Securities under the Securities Agreement, and the allotment of Shares to be
issued upon the exercise of those Securities, have been approved by a
resolution of shareholders of the Bank for the purposes of Listing rules 10.14
and 10.15A, and the entry by the Bank into the Securities Agreement is approved
by an ordinary resolution of shareholders of the Bank for the purposes of
section 208 of the Corporations Act.

 

3.             Duties

 

3.1          Duties

 

During the Term the
Executive shall:

 

(a)                    serve as the Bank’s Managing Director and
Chief Executive Officer and shall have such duties and responsibilities as are
assigned to him from time to time by the Board;

 

(b)                   report directly to the Chairman of the
Board and shall be accountable to the Board for the performance of his duties
and responsibilities; and

 

(c)                    conduct himself in a lawful and ethical
manner and abide by all relevant employee     obligations
and policies of the Bank, each as more particularly described in Schedule 1 to
this Agreement.

 

3.2          Review

 

The
performance of the Executive will be subject to review annually (in or about
October) and at any other time determined by the Board or its delegate, against
Performance Criteria, which will:

 

(a)                    be determined
by the Board, acting reasonably, after consultation with the Executive;

(b)                   be notified in
writing to the Executive before 1 March 2004 and before 1 October in each year
during the Term; and

(c)                    apply, in the
case of the first such determination, for the period l March 2004 to 30
September 2004 and, in the case of each subsequent determination, from l
October for the ensuing 12 months.

 

The performance
criteria may include:

 

5

 

	
  (i)

  	
   

  	
  financial criteria,
  which may or may not be aligned to short term incentive criteria;

  
	
  (ii)

  	
   

  	
  implementation of
  business and strategic plans of the Bank;

  
	
  (iii)

  	
   

  	
  compliance with the
  reasonable directions of the Board;

  
	
  (iv)

  	
   

  	
  compliance with
  applicable corporate governance standards;

  
	
  (v)

  	
   

  	
  provision of effective
  leadership of the Bank;

  
	
  (vi)

  	
   

  	
  effective management of
  direct reports;

  
	
  (vii)

  	
   

  	
  maintenance of
  confidence and good sentiment of investment markets; and

  
	
  (viii)

  	
   

  	
  willingness and ability to rectify any other
  material deficiency in performance reasonably notified by the Board.

  

 

4.             Remuneration

 

During
the Term, the Executive shall be entitled to receive the following
remuneration. The Executive will not be entitled to directors fees in addition
to this remuneration.

 

4.1          Fixed remuneration

 

The Bank shall pay to the
Executive an annual amount of $1.7 million being fixed employment cost
comprising salary payable in fortnightly instalments (commencing on 4 March
2004), and annual leave loading. The Executive may elect to sacrifice salary to
obtain additional superannuation benefits by making additional contributions up
to 8% of salary under the terms of the Superannuation Fund and/or up to 2 motor
vehicles, in accordance with the Bank’s policies from time to time, calculated
after tax adjustments. The fixed employment cost will not vary during the Term.

 

4.2          Short Term Incentive

 

The Bank shall pay to the
Executive an annual short term incentive payment determined by the Board after
applying performance measurement processes determined by the Board, but not
inconsistent with those applying prior to the commencement of the Term
comprising an economic profit target and a score card of non-financial items.
The target level of the short term incentive amount shall be a percentage of
fixed employment cost, being:

 

(a) 100% for the period
to 30 September 2004;

 

(b) 110% for the period
to 30 September 2005;

 

(c) 120% for the period
to 30 September 2006;

 

(d) 130% for the period
to 30 September 2007,

 

and the Board may
determine a short term incentive amount in respect of the Executive’s
performance in any year between 0% and 200% of the target level. Performance
measurement processes determined prior to the commencement of the Term for the
period to 30 September 2004 will continue to apply for that period under this
Agreement.

 

6

 

4.3          Long Term incentive

 

The
Bank agrees with the Executive that it will submit to the general meeting of
the Bank to be held in December 2003, and recommend for approval by
shareholders a proposal to grant to the Executive certain securities more
particularly described in Schedule 2 to this Agreement.

 

The Executive
acknowledges that the Executive’s rights in relation to those securities, if
approved by shareholders, shall be determined solely and exclusively in
accordance with the Securities Agreement.

 

4.4          Sundry benefits

 

The
Bank agrees that the Executive shall also be entitled to the following benefits
during the Term:

 

(a)                    reimbursement by the Bank of all
reasonable expenses and disbursement (including reasonable entertainment costs,
home telephone, facsimile and business computer costs, and the costs for the
Executive’s wife to accompany him on Bank-related business travel) incurred by
the Executive in carrying out his duties and responsibilities under this
Agreement, and for which the Executive has provided evidence as reasonably
required by the Bank, in accordance with the Bank’s policies from time to time;

(b)                   at the Bank’s
expense, death and total and permanent disability insurance cover of $2
million;

(c)                    annual health
assessment; and

(d)                   a car and
driver as required.

 

5.             Pre-existing benefits

 

5.1          Superannuation

 

The
Executive will be entitled to benefits under the Superannuation Fund in
accordance with Schedule 3 and the defined benefit rules of the Superannuation
Fund.

 

5.2          Stock Appreciation Rights

 

The
Executive and the Bank agree that the incentive award payable in respect of
500,000 stock appreciation rights granted by the Bank to the Executive in 1997
at a notional price of $7.89 each, will become payable by the Bank (net of any
applicable taxes) to the Executive on the earlier of:

 

(a)          1 September 2007;

 

(b)         the date on which the
Executive requests the award to be paid;

 

(c)          the date on which the
Executive’s employment is terminated by the Bank; and

 

(d)         the date on which the Executive otherwise
ceases to be a full-time employee of the Bank.

 

The pre-tax amount of
that award will be included in the superannuation salary of the Executive under
the Superannuation Fund for the period of one year ending on the date that the
award is paid (Relevant Period), in  accordance with Schedule 3.

 

In lieu of a member’s
contribution to the Superannuation Fund by the Executive in respect of the
pre-tax amount of that award the Bank will deduct from the payment of the award
under this clause,

 

7

 

or (if
requested by the Executive) from any other amount payable by the Bank (but not
the Superannuation Fund) to the Executive, an amount equal to the aggregate of
5% of the pre-tax amount of the incentive award and interest on that amount for
a period of one year at the credited interest rate or rates applicable under
the Superannuation Fund during the Relevant Period.

 

5.3          Preservation

 

The
amount of the Executive’s superannuation benefits under the Superannuation Fund
and the stock appreciation rights incentive award payable to the Executive will
not be affected by anything in clause 6 of this Agreement.

 

5.4          Leave

 

The Executive shall be
entitled to:

 

(a) 4
weeks annual leave;

 

(b)
long service leave as provided by the Westpac Employees’ Award 2002; and

 

(c) 10
days sick leave in each full calendar year of his employment and a
proportionate amount of sick leave where he is not employed for the whole of
the calendar year.

 

6.             Termination of Employment

 

6.1          Death or Total and Permanent Disablement

 

The Executive’s employment,
and the Term, shall terminate on the earlier to occur of:

 

(a) 31 December 2007;

(b) the date the
Executive dies or is Totally and Permanently Disabled; and

(c) a Sickness
Determination,

 

in which event the
Executive, or the Executive’s estate, as the case may be, shall be entitled to:

 

(d)         any fixed remuneration,
as described in clause 4.1, that has accrued as at that date but which is
unpaid;

(e)          any short term
incentives, as described in clause 4.2, awarded but unpaid (including any
component of any such incentive the payment of which had been  deferred)
on or prior to that date;

(f)            reimbursement of
reasonable business expenses, as described in clause 4.4(a), incurred prior to
that termination;

(g)         (if the Executive dies or
is Totally and Permanently Disabled or if a Sickness Determination is made
before 31 December 2007) exercise, in accordance with the Securities Agreement,
all Long Term Incentive elements previously granted, which are exerciseable
pursuant to the terms of the Securities Agreement;

(h)         any insurance payable to
the Executive or the Executive’s estate; and

(i)             if the Executive is
Totally and Permanently Disabled, or if a Sickness Determination is made, an
additional payment at the discretion of the Board.

 

8

 

6.2          Resignation with Board consent and Termination without
Cause

 

If,
prior to 31 December 2007:

 

(a) the Executive resigns
with the consent of the Board; or

 

(b) the Bank terminates
the Executive’s employment for any reason other than for Cause or poor
performance,

 

the Executive shall be
entitled to:

 

(c)          an amount in lieu of notice equal to the
fixed remuneration the Executive has received under clause 4.1 during the
immediately preceding 6 months;

 

(d)         an amount equal to the sum of:

 

(i)             the fixed remuneration he would otherwise
have received under clause 4.1 during the 6 months from but excluding, the Last
Employment Date, or (if lesser) the period from the Last Employment Date to 31
December 2007; and

 

(ii)          the last annual short
term incentive amount awarded and paid or deferred under clause 4.2 before the
Last Employment Date, reduced pro rata if the period from the Last Employment
Date to 31 December 2007 is less than 12 months.

 

(e)          exercise, in accordance
with the Securities Agreement, all Long Term Incentive elements previously
granted, which are exerciseable pursuant to the terms of the Securities
Agreement;

 

(f)            any fixed remuneration described in
clause 4.1, which has accrued but which is unpaid.

 

(g)         any short term incentives,
as described in clause 4.2, awarded but unpaid (including any component of any
such incentive the payment of which has been deferred) on or prior to the Last
Employment Date; and

 

(h)         reimbursement of
reasonable business expenses, as described in clause 4.4(a), incurred on or
prior to the Last Employment Date.

 

6.3          Resignation
or retirement without Board consent

 

If,
prior to 31 December 2007, the Executive resigns or retires without the consent
of the Board, the Executive shall be entitled to the amounts described in
clause 6.1(d), (e) and (f). Long Term Incentive elements which have vested on
or before the Last Employment date may be exercised in accordance with the
Securities Agreement.

 

6.4          Termination
for Cause

 

The
Bank may terminate the Executive’s employment for Cause prior to 31 December
2007 by delivering a Notice of Termination to the Executive. The Executive’s
employment, and the Term, shall terminate on the date stated in that Notice of
Termination and the Executive shall only be entitled on that date to the
amounts described in clause 6.1(d), (e) and (f). Long Term Incentive elements
which have vested on or before the Last Employment date may be exercised in
accordance with the Securities Agreement.

 

9

 

6.5          Termination
for poor performance

 

The Bank may terminate
the Executive’s employment for poor performance prior to 31 December 2007,
assessed against the applicable Performance Criteria following a review
pursuant to clause 3.2, in accordance with the following procedure:

 

(a)          the Bank must give the
Executive a notice requiring the Executive to remedy specified material
non-compliance with the Performance Criteria within 3 months of the date of
that notice;

 

(b)         if the non-compliance has
not been remedied within 3 months, the Bank may  deliver a notice to that
effect to the Executive, and the Executive’s employment, and the Term, shall
terminate on the date stated in that notice; and

 

(c)          in the case of the first
notice given by the Bank under clause 6.5(a), any notice given upon a failure
to remedy that non-compliance must specify a termination date not less than 2
months after the date of that notice, and will only be effective if the
non-compliance is not remedied within the further 2 month period.

 

Upon termination for poor
performance, the Executive shall be entitled to the amounts described in
clauses 6.1 (d), (e) and (f) and 6.2(c) and (d)(i). Long Term Incentive
elements which have vested or will vest in accordance with the Securities Agreement
may be exercised in accordance with the Securities Agreement.

 

6.6          No
Disparaging Statements

 

In the
event that the Executive’s employment is terminated or otherwise ceases under
this clause 6, the Executive shall not at any time publicly denigrate, ridicule
or intentionally criticise the Bank, any related body corporate of the Bank or
any of their respective directors or of officers including, without limitation,
by way of media interviews or the expression of personal views, opinions or
judgments to the media. Similarly, neither the Bank nor any of its related
bodies corporate nor any of their respective directors or officers shall
publicly denigrate, ridicule or intentionally criticise the Executive.

 

6.7          Survival of obligations

 

Clauses
4.3, 6.8, 6.9 and 8 and item 5 of Schedule 1, survive the termination of this
Agreement.

 

6.8          Return of Bank Property

 

On termination of this
Agreement, the Executive shall immediately deliver to the Bank all books,  documents,
papers, materials, credit cards, motor vehicles and other property of the Bank
which may then be in the Executive’s possession  or under his power or
control.

 

6.9          Set-off

 

On
termination of his employment, the Executive authorises the Bank to set-off
against and deduct from all or any amounts payable to the Executive, any amount
owing by the Executive to the Bank on any account excluding secured loans. In
this clause 6.9, “Bank” includes each related body corporate and associate of
the Bank.

 

10

 

6.10        Resignation
as Director

 

The Executive shall
resign from any position of director or secretary of the Bank or any related
body corporate or associate of the Bank, on the termination of his employment
if required to do so by the Board.

 

7.             No
Mitigation

 

The Executive shall not
be required to mitigate the amount of any payments to which he becomes entitled
under clause 6 of this Agreement by seeking other employment or otherwise.

 

8.             Reorganisation or business transfer

 

8.1          Amalgamation or reconstruction

 

Notwithstanding clause
6.2, the Executive will have no claim against the Bank in respect of the
termination of this Agreement if:

 

(a)          the Executive’s
employment is terminated because of the liquidation of the Bank for the
purposes of amalgamation or reconstruction; and

 

(b)         the Executive is offered
employment by the entity resulting from that amalgamation or reconstruction on
terms not materially less favourable than the terms of this Agreement.

 

8.2          Sale or transfer of business

 

Notwithstanding clause
6.2, the Executive will have no claim against the Bank in respect of the
termination of this Agreement if:

 

(a)          the Executive’s
employment is terminated because of the sale or transfer of some or all of the
assets of any business of the Bank or any related body corporate or associate
of the Bank to an unrelated entity or entities; and

 

(b)         the Executive is offered
employment with the purchaser or transferee of some or all of those assets on
terms not materially less favourable, and with responsibilities not materially
lesser, than the terms of and responsibilities under this Agreement.

 

9.             Entire Agreement

 

This Agreement and the
Securities Agreement constitute the full and complete understanding and
agreement of the Bank and the Executive with respect to the subject matter of
this Agreement and the Securities Agreement and supersedes all prior
understandings and agreements as to the employment of the Executive by the Bank
(but without affecting the Chief Executive Share Option Agreements dated 26
October 1999 (as amended) and 19 December 2001 many manner whatsoever). This
Agreement can only be amended, varied, modified or terminated by the written
agreement of the Bank and the Executive.

 

11

 

10.          Waiver of Breach

 

The waiver by the Bank or
the Executive of a breach by the other of any term of this Agreement shall not
operate as a waiver of any subsequent breach, whether of the same of some other
term, of this Agreement. Any waiver must be in writing and signed by the
Executive or by or on behalf of the Bank.

 

11.          Notices

 

(a)          Any notice or other
communication to be given under or in connection with this Agreement:

 

(i)                  must be in
writing;

(ii)               must be addressed
to the addressee: and

(iii)            must be handed to the
addressee or left at the address of the addressee, or sent by prepaid ordinary
post to the address of the addressee or sent to the facsimile number of the
addressee specified in paragraph (b) of this clause 11 or, if the
addressee notifies another address or facsimile number, to that other address
or facsimile number.

 

(b)         The address and facsimile
number of each party is:

 

	
  Bank

  	
   

  	
   

  
	
  Address:

  	
   

  	
  Westpac Banking
  Corporation

  Level 27

  60 Martin Place

  SYDNEY NSW 2000

  
	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
  (02) 9226 1234

  
	
  Attention:

  	
   

  	
  Group Executive, People
  & Performance (or such other person as notified from time to time).

  
	
   

  	
   

  	
   

  
	
  Executive

  	
   

  	
   

  
	
  Address:

  	
   

  	
  David R Morgan

  C/- Level 27

  60 Martin Place

  SYDNEY NSW 2000

  
	
   

  	
   

  	
   

  
	
  Facsimile:

  	
   

  	
  (02) 9223 3494

  

 

(c)          A notice or other
communication takes effect from the time it is received by the addressee unless
a later time is specified in that notice or other communication.

 

(d)         A notice or other
communication is taken to be received:

 

(i)                  in the case of
personal delivery, when delivered;

(ii)               in the case of
post, on the third Business Day after posting; and

(iii)            in the  case
of facsimile, on production of a transmission report by the machine from which
the facsimile was sent which indicates that the facsimile was sent in its
entirety to the facsimile number of the addressee.

 

12

 

12.          Governing Law

 

This
Agreement shall be governed by and construed in accordance with the laws for
the time being in force in the State of New South Wales.

 

EXECUTED as an agreement.

 

SIGNED for and on behalf of WESTPAC

BANKING CORPORATION by the authority

of the Board of Directors by the Chairman of the

Board in the presence of:

 

 

	
   

  	
   

  	
   

  	
   

  
	
  Signature of witness

  	
   

  	
  Signature of Chairman

  
	
   

  	
   

  	
   

  
	
  KAREN MILLER

  	
   

  	
  LEONARD ANDREW DAVIS

  	
   

  
	
  Name of witness

  	
   

  	
  Name of Chairman

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  SIGNED
  by DAVID
  RAYMOND MORGAN

  	
   

  	
   

  
	
  in the presence of:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Signature of witness

  	
   

  	
  David Raymond Morgan

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  ILANA ATLAS

  	
   

  	
   

  	
   

  
	
  Name of witness

  	
   

  	
   

  
									

 

13

 

Schedule
1(clause 3.1(c))

 

Set out below are the
principles, obligations and policies of the Bank with which the Executive must
comply and conduct himself during the Term.

 

1. Core Business Values

 

The Bank’s set of core
values provide the basis for how it goes about its business of being a great
Australian company.

 

The Bank’s core business
values are:

 

•                      Teamwork;

 

•                      Integrity;
and

 

•                      Performance.

 

These values shape the
Bank’s decisions and its relationships with all our key stakeholders including
customers, shareholders and employees

 

2. Minimum Shareholding Guidelines

 

The Executive must comply
with the Bank’s Executive Shareholding Guidelines (“Guidelines”), as determined
from time to time by either the Board or the Remuneration Committee of the
Board from time to time. A copy of the current Guidelines has been provided to
the Executive.

 

3. Executive Conduct

 

General Conduct

As a member of the
executive team the Executive shall be required to:

 

•                      Act
in the Bank’s best interests and use his best endeavours to promote the Bank’s
business interests;

 

•                      Give
the whole of his time, ability and attention in normal working hours, or when
reasonably required outside those hours (without additional remuneration), to
the business and affairs of the Bank and any related body corporate of the
Bank.

 

•                      Faithfully
and diligently perform his duties and exercise his powers consistent with his
position and any other responsibilities that may be assigned to him from time
to time by the Board.

 

•                      Comply
with any reasonable direction given to the Executive by the Chairman of the
Board or the Board.

 

•                      Comply
at all time with the Bank’s Code of Conduct.

 

•                      Disclose
to the Board any business interests, activities or decisions which conflict, or
may conflict, with the Executive’s duties and responsibilities to the Bank.

 

14

 

•                      Refrain
from undertaking or engaging in other business activities (including
directorships) or employment, without the prior written consent of the Bank.

 

•                      Refrain
from undertaking or engaging in any business activity or employment outside the
Bank that would or may involve the Executive having financial or other dealings
with the Bank or any related body corporate of the Bank which may establish
some responsibility of the Bank or any related body corporate to another party.

 

•                      Not
accept any payment or benefit in money or in kind from any person or entity as
an inducement or reward for any act or forbearance in connection with any
manner or business transacted by or on behalf of the Bank.

 

•                      Maintain
a register of the Executive’s investments in the Bank and any related body
corporate and disclose details of those investments, and any changes therein,
as soon as practicable (but in any event within two Business Days) to enable
the Bank to meet its disclosure obligations, including under the ASX Listing
Rules.

 

•                      Maintain
and disclose a register of your directorships of companies not related to the
Bank or any related body corporate of the Bank and advise details thereof to
the Bank as and when the same may reasonably be required by the Bank.

 

4.             Policies

 

During the Term, the
Executive must at all times observe and foster compliance with the key
employment policies of the Bank from time to time, including but not limited
to:

 

•                      Code
of Conduct

 

•                      Insider
Trading Policy

 

•                      Internet
Technologies Code of Use

 

•                      Discrimination
and harassment policies

 

•                      Occupational
health and safety policies

 

•                      Media
policies

 

•                      Privacy
policies

 

The Executive
acknowledges that these policies are reviewed by the Bank on a regular basis
and may be amended to meet the needs of changing business circumstances and
that the Executive has a responsibility to keep himself informed in relation to
any such change.

 

These and other policies
are located on the Bank’s intranet site and copies are available on request
through  the
Bank’s Group Executive, People & Performance.

 

5. Confidential Information and
Intellectual Property

 

Confidential Information

 

Except in performing his
duties to Westpac, the Executive must not use or disclose, either before or
after the termination of his employment and/or this Agreement, any confidential
information to which he is exposed, or which is disclosed to, or generated by,
him in the course of, or in connection with, his employment, including (without
limitation):

 

15

 

•             information
concerning the business of the Bank or any related body corporate of the Bank
or any of their respective customers or any transactions in which a the Bank or
any relate body corporate of the Bank any of their respective customers have
been or may have been concerned or interested;

 

•             strategic,
business or marketing plans of the Bank or any related body corporate of the
Bank or any of their respective customers;

 

•             any
trade secret of the Bank or any related body corporate of the Bank or any of
their respective customers; and

 

•             customer
lists and any databases or other records of the Bank or any related body
corporate of the Bank,

 

unless required to do so
by applicable law or unless the information is already in the public domain,
other than as a result of a breach by the Executive of this Agreement.

 

Ownership of Intellectual Property

 

All inventions,
improvements or discoveries (Intellectual Property) conceived
or created by the Executive, alone or jointly with others, during the course of
his employment with the Bank are owned by the Bank. If requested by the Bank,
the Executive will execute all documents and take all steps necessary to transfer
ownership of any such Intellectual Property to the Bank.

 

Use and disclosure of Intellectual Property

 

Except to the extent
necessary to fulfil his duties as an employee of the Bank, the Executive must
not use or disclose or grant, or purport to grant, any person rights to or in
any Intellectual Property, either during or after his employment with the Bank.

 

Intellectual Property of Third Parties

 

The Executive must not,
in the course of his employment with the Bank, act in any way that infringes
the intellectual property rights of any third party.

 

Whenever the Executive
produces any work in the course of his employment with the Bank, which contains
intellectual property owned by a third party, the Executive must obtain or
cause to be obtained all necessary consents and licences from that third party
for use of that intellectual property.

 

Moral Rights

 

The Executive consents to
all acts or omissions of (or for the benefit of) the Bank which would otherwise
constitute a breach of any moral rights the Executive may have in relation to
any Intellectual Property or any other subject matter created by the Executive
which is connected with his employment with the Bank.

 

Disclosure

 

The Executive
acknowledges that the terms of his employment, including the substance of this
Agreement, will need to be disclosed by the Bank in order to discharge
legislative and regulatory obligations and requirements both in Australia and
overseas. The Bank will consult with the Executive before making any such
disclosure.

 

16

 

Schedule
2 (clause 4.3)

 

Long Term Incentive

 

The proposal referred to
in clause 4.3 of the Agreement to be submitted to shareholders is as follows:

 

Date and Number of securities to be granted:

 

(a)                                  713,000
Performance Options to be granted on 1 March 2004 with a 3 year Performance
Period commencing on 1 March 2004;

 

(b)                                 218,000
Performance Share Rights to be granted on 1 March 2004 with a 3 year
Performance Period commencing on 1 March 2004;

 

(c)                                  713,000
Performance Options to be granted on 1 March 2005 with a 3 year Performance
Period commencing on 1 March 2005;

 

(d)                                 218,000
Performance Share Rights to be granted on 1 March 2005 with a 3 year
Performance Period commencing on 1 March 2005;

 

(e)                                  713,000
Performance Options to be granted on 1 March 2006 with a 3 year Performance
Period commencing on 1 March 2006;

 

(f)                                    218,000
Performance Share Rights to be granted on 1 March 2006 with a 3 year
Performance Period commencing on 1 March 2006;

 

(g)                                 594,167
Performance Options to be granted on 1 December 2006 with a 3 year Performance
Period commencing on 1 March 2007;

 

(h)                                 181,667
Performance Share Rights to be granted on 1 December 2006 with a 3 year
Performance Period commencing on 1 March 2007.

 

3.                                      Type
and number of securities to be granted:

 

The following two types of securities will be granted:

 

(a)          Performance Options, each being a right
to subscribe for or acquire one fully paid ordinary share of the Bank at an
exercise price per share equal to the volume weighted average price per share
(rounded to the nearest whole cent, with one-half of one cent being rounded
down) of all the bank’s shares traded on the Australian Stock Exchange Limited
(ASX), excluding all trades
identified by the ASX as carrying Off-SEATS Condition Codes and all special
market trades, during the one week period up to and excluding the date of grant
of the relevant Performance Options; and

 

(b)         Performance Share Rights each being a
right to subscribe for or acquire one fully paid ordinary share of the Bank for
no monetary consideration.

 

No options certificates
or share rights certificate will be issued and the securities will be created
and evidenced by being inscribed in the Bank’s register of options.

 

4.             Vesting:

 

All securities will remain
unvested (i.e. are not exercisable) until all conditions, including performance
hurdles, have been satisfied.

 

17

 

The number, if any, of
Performance Options and Performance Share Rights that will become exercisable
will depend primarily on:

 

(a)          the Bank’s total
shareholder return (TSR) at the
end of the Performance Period relevant to

each grant of securities;

 

(b)         the Bank’s relative TSR
Ranking within a TSR ranking group of 50 other companies; and

 

(c)          whether or not all other
conditions have been met.

 

Subject to all other
conditions being met at that time, the percentage of Performance Options and
Performance Share Rights that will vest at the end of the relevant Performance
Period applicable to each grant will be:

 

(i)             if the Bank’s TSR
ranking is below the 50th percentile — 0% of the securities will vest;

(ii)          if the Bank’s TSR
ranking is at the 50th percentile - 50% of the securities will vest and the
remainder will lapse;

(iii)       if the Bank’s TSR ranking
is at or above the 75th percentile - 100% of the securities will vest; and

(iv)      if the Bank’s TSR ranking is
above the 50th percentile and below the 75th percentile, an additional 2% of
the securities will vest for each whole 1% increase above the 50th percentile.

 

5.             Term of securities:

 

The Securities shall each
have a term of 10 years and, once vested, the latest possible date that those
securities may be exercised is the last day of that term.

 

6.             Early vesting:

 

The Securities may in
certain circumstances vest early in accordance with the Securities Agreement.

 

7.             TSR ranking group:

 

For the purposes of
determining the Bank’s TSR ranking, the TSR ranking group will be the first 50
bodies corporate of a ‘peer group’ that remain listed on the ASX and which have
published sufficient data to enable their respective TSRs to be determined at
the relevant date.

 

The peer group shall be
the 100 bodies corporate comprised in the S&P/ASX 200 Index (excluding the
Bank and all entities in the property trusts sector of that Index) at the
commencement of the performance period applicable to each grant of securities,
having the highest market capitalisation at that time and ranked in descending
order, from highest to lowest, according to their market capitalisation.

 

******************************

 

18

 

Schedule
3 - (clause 5.1)

 

Superannuation

 

Membership

 

The Executive will
continue to be a member of the Superannuation Fund under Schedule B: Defined
Benefit Rules of the Superannuation Fund.

 

Contribution

 

The Executive shall
contribute to the Superannuation Fund at the rate equal to 5% of the
Executive’s superannuation salary from time to time, but the Bank shall meet
the cost of that contribution in respect of that part of superannuation salary
in respect of the Executive’s year of service that consists of the pre-tax
amount of the incentive award payable in respect of the Executive’s stock
appreciation rights (SARs) described in clause 5.2.

 

Superannuation Salary

 

The Executive’s
superannuation salary notified by the Bank to the Trustee shall be calculated
on the standard basis used by the Bank for packaged executives, and shall
include:

 

(a)           the annual short term
incentive payment determined under clause 4.2;

(b)                                the
pre-tax value of the SARs on the basis that the increase operates from the date
the Executive requests payment of the SARs incentive award, if so requested
prior to the Executive ceasing full-time employment with the Bank, or otherwise
from the date 1 year prior to the date the Executive ceases full-time
employment with the Bank.

 

Benefits

 

The superannuation
benefits of the Executive under the Superannuation Fund shall be determined
solely in accordance with the Trust Deed and the B Rules: Defined Benefit Rules
of the Superannuation Fund.

 

19

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