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Non-executive Director Appointment Letter

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Title: Non-executive director appointment letter
Date: 1/21/2005
Industry: Regional Banks     Sector: Financial

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Non-executive director appointment letter – Mr G Malcolm Williamson




National Australia


Bank Limited


ABN 12 004 044 937



Mr Malcolm Williamson
2 Cumberland Place




6 August 2004


Dear Malcolm,


Letter of Appointment


I am delighted that you have accepted my invitation to you to join:


      the Principal Board of the National and the Board of National Equities Limited, (National Equities Limited has an identical board to National Australia Bank Limited and is the holding company of the National’s international subsidiaries); and


      the boards of three of the National’s main subsidiary companies in Europe, National Australia Group Europe Limited, Clydesdale Bank PLC and Yorkshire Bank PLC.  You are also asked to accept the appointment of Chairman of these European companies.


As part of these appointments, you have also kindly agreed to be:


      a member of the Nominations Committee of the Principal Board; and


      Chairman of the European Board Risk Committee.


Each appointment is subject to receipt of the necessary regulatory approvals and to receipt of your consent to act as a director.  In this respect, the following documents are enclosed for completion and / or signature: -


      Consent to Act and Disclosures on Appointment (for all of your appointments);


      Consumer Credit Act Declaration (in respect of Clydesdale Bank PLC and Yorkshire Bank PLC only);


      Financial Services Authority Form A – Application to Perform Controlled Functions under the Approved Persons regime including background information on FSA Approved Persons regime (also only in respect of Clydesdale Bank PLC and Yorkshire Bank PLC);


      Director’s Deed of Access, Indemnity and Insurance (in duplicate);


      Authority to undertake Credit Reference Search;



A member of the National group of companies



      Non-Executive Directors’ Share Plan – Application Form, Share Preference Form and Explanatory Booklet;


      Form of Consent to obtain Personal Information; and


      Election under section 431 Income Tax (Earnings and Pensions) Act 2003 (together with explanatory note).


The terms and conditions of your appointment are set out in the Appendix to this letter.  By consenting to act as a Director of each of these companies, you are agreeing to these terms and conditions.


These terms and conditions should be read in conjunction with, and are subject to, the memorandum and articles of association of each company (the constitution in the case of the National), and the charters and policies approved from time to time by the board of each company or otherwise produced by or under the direction of the Principal Board of the National and intended to have effect for any of the other companies.  A file of the current versions of these documents and certain other relevant information will be provided to you separately.


I hope that you will accept these appointments.  If you have any immediate queries on this letter, please do not hesitate to contact me on + 613 8641 3754.


Kind regards


Yours sincerely



[Original signed]



Graham J Kraehe





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




15 th August 2004












[Original signed]














Appointment of Non-Executive Director - Terms and Conditions


1.      Definitions


Articles of Association or Articles: shall mean as the context requires the Constitution of the National and the articles of association of each UK Company.  (The articles of association of each of the UK Companies are, broadly, in identical form)


Board: shall mean a board of any of the Companies


Companies: shall mean National Australia Bank Limited, National Equities Limited and the UK Companies (and “ Company ” shall mean any one of them)


Group: shall mean the National and its subsidiaries


UK Companies: shall mean together National Australia Group Europe Limited, Clydesdale Bank Plc and Yorkshire Bank Plc


National or Parent Company: shall mean National Australia Bank Limited


Principal Board: shall mean the board of the Parent Company


Relevant Statutes: shall mean the Australian Corporations Act 2001 (Cwlth) and/or the United Kingdom Companies Act 1985, and any other relevant legislation in Australia (in relation to the Parent Company) and the United Kingdom (in relation to the UK Companies).


2.      Qualifications


To qualify for the office of Director for each Company you must be eligible to be appointed under its Articles of Association, not be disqualified under any of the Relevant Statutes from acting as a director of a company and must otherwise be permitted under the Relevant Statutes to act as a director of a company.


In particular, in relation to the Parent Company, you must hold at least 2,000 fully paid shares in the National in your own right within two months after your appointment.


3.      Appointment and Term


In relation to the National, you hold office until the first annual general meeting of the National held after the date of your appointment.  You are eligible for re-election to the position of director by resolution of the National at that annual general meeting. [National’s Articles 10.12 and 10.13]



Once you have been elected to the office of director by resolution of the National in general meeting, you will be subject to the rotation of Directors provided for in National’s Articles 10.3 to 10.7.  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 office and is eligible for re-election.  Please refer to clause 13 of this letter – 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.  [National’s Articles 10.3-10.7 and 10.14]


The Principal Board has set a limit of 15 years for individual service as a Director, applicable to Directors appointed after 1995, subject to the Director’s age at the time of appointment (please refer below).  The Principal Board regards this as an appropriate period of service.  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 the Board Charter of the National]


The National’s constitution provides that a Director’s office will be vacated upon him reaching the age of 70.  The Articles of the UK companies have similar provisions with a specified age of 72, although it is anticipated that later this year this age will also be set back to the previous age of 70 years.


You agree that you will cease to be a Director of NEL is for any reason you cease to be a Director of the National.


The Articles of Association of the UK Companies provide that a Director may be appointed, with the approval of the Parent Company, for a period of three years and that Directors may be re-appointed after that period with the approval of the Parent Company.  Your appointment by the UK Companies will be for an initial term of three years commencing on the date of your appointment unless terminated earlier by either party upon the giving of 3 months notice in writing.


Although the letter of appointment including this Appendix is in relation to an appointment to the boards of all of the Companies, each appointment is made on a separate basis and the termination of appointment of one Directorship shall not of itself lead to termination of any other appointment.


4.      Vacation of office


Your position becomes vacant if any of the circumstances prescribed under the Relevant Statutes or the Articles of Association arises.


In relation to the National, 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.


Article 12.1 of the Articles of Association of the UK Companies contain similar provisions.


5.      Relationship with the Companies


Once appointed, you hold office as a Director of each Company.  You are not appointed or designated as an employee of the Company nor are you an Executive Director within the meaning of the Articles of Association.


6.      Expectations


The Companies’ expectations of you as a Director are listed in the following sections.  In many cases, you are obliged to meet these expectations because of your legal duties to each Company.  You are encouraged to seek independent legal advice to assist you in the performance of these duties.


7.      Time commitment


You must contribute sufficient time to your Directorships to enable you effectively to fulfil your duties to the Companies.  The National expects you to spend a minimum of 30 business days per annum on the business of the Principal Board and NEL exclusive of preparation and travel time.  You are also expected to spend additional time to the extent that you are a member of any board committees.


While most Board and Board committee meetings of the National and NEL are held in Melbourne, the Board does visit and hold meetings at interstate and international venues from time to time.  It is anticipated that you will attend the majority of National board meetings in person in Melbourne and also attend some meetings from London via video conference link during the UK nights.  The actual number of board meetings attended in person in Melbourne will be a number agreed between yourself and the Chairman of the National.


The UK Companies expect you to spend a minimum of 30 business days per annum on their business, exclusive of preparation and travel time.  Additional time commitment will be required from you in relation to other committee memberships of those companies or any other roles which you agree should be assigned to you.



You should inform each Board of any change in circumstances that could affect your ability to c

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