Director appointment letter – Mr Ahmed Fahour
Office of the Chairman
500 Bourke Street
7 October 2004
Dear Mr Fahour
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 Michael Ullmer 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
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.
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 10 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 doc