Telos 20-F 2005 FY Annual report (foreign)

Exhibit 4.2

Ziggy Switkowski
Chief Executive Officer

242 Exhibition Street	T 03 9204 9999	400 George Street	T 02 9204 9999
Melbourne VIC 3000	F 03 9204 9991	Sydney NSW 2000	F 02 9204 9991
Australia		Australia
Locked Bag 5639		Locked Bag 6600	.
Melbourne VIC 8100		Sydney NSW 1100

16 September 2003

Mr John Stanhope
40/242 Exhibition Street
Melbourne VIC 3000

Dear John

I am very pleased to confirm the offer to you of the following revised terms of employment with Telstra Corporation Limited (‘Telstra’),

The success of Telstra and its related companies depends very much on our senior team and I am sure that you will continue to enjoy contributing to, and being a key part of, Telstra’s leadership processes.

This Agreement, together with the attachments, sets out the terms and conditions of your employment and is made under the laws of Victoria. Please indicate your acceptance of the terms and conditions outlined in this letter of offer by signing below and the duplicate copy on each page, and returning it to me as soon as possible.

I look forward to working closely with you as part of the Telstra leadership team.

Yours sincerely

Ziggy E Switkowski

Chief Executive Officer

I confirm acceptance of the terms and conditions set out in this letter.

	24/9/03
Name J.V. Stanhope	Date

ZES	JVS
(signatory initials)	(signatory initials) million Limited
	ABN 33 051 775-556

Page 1

CONTENTS

1.	COMMENCEMENT
2.	ROLE AND LOCATION
3.	PERFORMANCE
4.	HOURS OF WORK
5.	REMUNERATION
6.	SUPERANNUATION
7.	LEAVE
8.	REASSIGNMENT AND RELOCATION
9.	RESOLVING DISAGREEMENTS
10.	RECOVER OF OVERPAYMENTS
11.	TERMINATION OF YOUR EMPLOYMENT
12.	INDEMNITY
13.	ENTIRE AGREEMENT
14.	DICTIONARY
	CONFIDENTIALITY AND FUTURE EMPLOYMENT

ZES	JVS
(signatory initials)	(signatory initials)

Page 2

1 COMMENCEMENT

1.1 The commencement date of your new Agreement is 1 October 2003.

2 ROLE AND LOCATION

2.1	You will be assigned to the Chief Finance Officer and Group Managing Director, Finance & Administration role reporting to Ziggy Switkowski, Chief Executive Officer. Your duties and the reporting requirements of this role may be varied from time to time in accordance with the needs of Telstra.
2.2	You will be located in the Melbourne office in Victoria.

3 PERFORMANCE

3.1	You are required to perform your role in a proper and efficient manner. You will be expected to devote your time, attention and energy to the performance of your duties and achieving your accountabilities and to use your best endeavours to promote and enhance the interests of the Telstra Group, in a manner that is consistent with the Telstra Values.
3.2	Except with the written consent of Telstra you must not undertake, be employed in connection with or have any interest in any other business or profession during your employment under this Agreement, other than by way of holding any shares or other securities which are publicly listed or in a private family company or otherwise available to the genera! public by way of investment.

4	HOURS OF WORK
	Hours of work will be normal business hours and such further hours reasonably necessary to do the job.
5	REMUNERATION

5.1	Your remuneration has fixed and variable or at risk elements which make up your Total Remuneration.
5.2	The Remuneration Summary annexed to this Agreement shows your Fixed Remuneration and Total Remuneration at the commencement of this Agreement.
5.3	Your Fixed Remuneration includes salary, superannuation and any benefits (which also may include fringe benefit tax).
5.4	The variable and/or at risk element of your Total Remuneration is to be paid through participation in Telstra’s Manager Incentive Plan (as amended or replaced from time to time). Any payment due to you from these plans will be paid in accordance with the plan rules.
5.5	Telstra reviews remuneration levels each year and will take into account relevant factors including performance and prevailing market conditions in establishing your remuneration level. Your first remuneration review will be in October 2004. Any change to your remuneration level will be reflected in a new Remuneration Summary.

ZES	JVS
(signatory initials)	(signatory initials)

Page 3

6	SUPERANNUATION
	A company superannuation benefit is included in your Fixed Remuneration. At all times you must allocate at least the minimum Superannuation Guarantee (as varied from time to time) to a complying superannuation scheme in accordance with Telstra Policy. Additional superannuation contributions above this amount can be paid from your Total Remuneration, subject to statutory limits.
7	LEAVE

7.1	You will accrue 4 weeks leave annually, to be taken in accordance with Telstra policy, at a time agreed between you and your manager.
7.2	Long service leave will accrue and be paid in accordance with Telstra Policy subject to any minimum requirements under applicable legislation. Currently, Telstra Policy provides for three months long service leave after ten years employment with Telstra.
7.3	Subject to your manager’s approval, the company allows for a total of up to 3 months paid sick leave in any one calender year. Any additional periods of paid sick leave must be agreed with your manager. There is no sick leave accumulation.
7.4	Your annual leave accruals and long service leave accruals will continue to be recognised by Telstra whilst you are employed under this Agreement.

8 REASSIGNMENT AND RELOCATION

8.1	In the event that business needs change, you may be re-assigned to an equivalent role for which your manager judges you to be suitably qualified and experienced, either within Telstra or via secondment within the Telstra Group.
8.2	Unless otherwise agreed in writing, your assignment (or any re-assignment) within Telstra or any secondment within the Telstra Group will occur under the terms and conditions of this Agreement. Any re-assignment or secondment will not constitute termination of this Agreement or your employment with Telstra.
8.3	In the event you agree to move residence to perform a role, Telstra will provide you with relocation assistance in accordance with Telstra Policy.

9	RESOLVING DISAGREEMENTS
	If any disagreement arises about your employment or terms of this Agreement, it shall be resolved by applying the Telstra Fair Treatment Process (as amended from time to time),
10	RECOVERY OF OVERPAYMENTS

10.1	In the event an overpayment is made to you, Telstra is entitled to recover it by giving you at least 7 days notice. Overpayments will be recovered through Deduction(s) to your pay in accordance with Telstra Policy until the Overpayment is recovered.
10.2	If your employment ceases for whatever reason, Telstra may offset any amounts owing by you to Telstra (or its Related Bodies Corporate or other specified entities) against any amounts otherwise payable to you upon termination.

ZES	JVS
(signatory initials)	(signatory initials)

Page 4

11 TERMINATION OF YOUR EMPLOYMENT

11.1	Subject to relevant legislation, your employment may be terminated by either party giving six
11.2	If Telstra terminates your employment on notice, you may be required to:

• remain in Telstra’s service for all or part of the notice period;

• be paid at your Fixed Remuneration rate in lieu of notice; or

• be paid at your Fixed Remuneration rate for the notice period but not required to attend for work during the notice period.

11.3	Telstra may terminate your employment if you commit any act of serious misconduct, which includes breach of Telstra Policy. In the event of such termination you will be entitled only to Fixed Remuneration to the date of termination, which shall be immediate.
11.4	If Telstra terminates your employment due to redundancy, you will also receive a severance payment determined in accordance with Telstra Policy. Should this severance payment be less than the termination payment provided for in clause 11.5, the termination payment provided for in clause 11.5 will apply.
11.5	If Telstra terminates your employment for any reason other than serious misconduct or redundancy, you will receive in addition to any notice or payment in lieu of notice a termination payment equivalent to twelve months Fixed Remuneration.
11.6	You must immediately return all Property at the request of any authorised representative, at any time.

12	INDEMNITY
	The Telstra Directors’ and Officer Liability Policy will apply to your appointments to positions of statutory responsibility and accountability in any company formed or acquired by Telstra.
13	ENTIRE AGREEMENT

13.1	This document together with any Attachments records the agreement between the parties. No previous negotiations, understandings, contracts, agreements, representations, warranties, memoranda or commitments will affect the terms and conditions of your employment by Telstra.
13.2	No oral explanation or information provided by any party to another shall

(a)	affect the meaning or interpretation of this document, or
(b)	constitute any collateral agreement, warranty or understanding between any of the parties.

ZES	JVS
(signatory Initials)	(signatory initials)

Page 5

14	DICTIONARY
	In this Agreement:
	“Confidential Information” means any trade secret, technical knowledge, concepts, ideas, designs, programs, processes, procedures, innovations, inventions, data bases, data surveys, customer lists or information, sales plans or marketing plans, research, software, records or other information concerning Telstra or its Related Bodies Corporate or any of their customers or suppliers which is secret and confidential of which you became aware during your employment with Telstra;
	“Deduction” means the authorised repayment by you of such Overpayment;
	“Overpayment” means money paid by Telstra to you, whether by error or otherwise, to which you are not entitled under this Agreement, or Telstra Policy;
	“Related Body Corporate” has the same meaning as in the Corporations Act 2001;
	“Related Entity” has the same meaning as in the Corporations Act 2001;
	“Telstra” means Telstra Corporation Limited;
	“Telstra Group” means the Telstra Group of companies, and unless otherwise specified, includes Telstra, its business units or functional divisions, its Related Bodies Corporate and any other Related Entities or entities in which Telstra has any share holding of any kind;
	“Telstra Policy” means the policies, procedures, business rules, and processes of Telstra, its business units or functional divisions, as varied or added to from time to time.
	“Property” means any property of the Telstra Group which is in your possession, custody or control, including any documents and papers and all copies of such documents and papers.

ZES	JVS
(signatory initials)	(signatory initials)

Page 6

14.1 SIGNING PAGE

Signed by John Stanhope
on 24/9/03 in the
presence of:

Signature of witness	John Stanhope

TRACEY KLIPPEL

Full Name and address of witness

(please print) 35/242 EXHIBITION ST.
                       MELBOURNE VIC 3000

Signed for and on behalf of	)
Telstra Corporation Limited	)
on ___/___/___by its authorised	)
representative in the presence of:	)

Signature of witness	Dr Ziggy Switkowski

SIMONE ASENBERGER

Full Name and address of witness

(please print) 242 EXHIBITION ST
                       MELBOURNE 3000

ZES	JVS
(signatory initials)	(signatory initials)

Page 7

CONFIDENTIALITY AND FUTURE EMPLOYMENT

A Confidentiality and Protection of Business Interests

(a)	In entering this Agreement you agree and undertake:
(1)	that at all times during and after your employment under this Agreement you will not disclose any Confidential Information to any person other than in the performance of your duties, as required by law or with the prior written consent of the Telstra Group; and
(2)	that you will not at any time during or after your employment under this Agreement use any Confidential Information for the benefit of any person except where authorised to do so by Telstra; and
(3)	that immediately upon the request of Telstra or upon the termination of your employment with Telstra you will:

(A)	1.1 deliver to Telstra all Confidential Information which is in your control and which is physically capable of delivery; and
(B)	1.2 destroy any Confidential Information which is stored in any electronic, magnetic or optical form but which is not capable of delivery to Telstra so that it cannot be recovered or in any way reconstructed or reconstituted.

(4)	These obligations shall lapse in relation to any of the Confidential Information which comes into the public domain other than through your wrongful act.
(b)	Except with the written consent of Telstra you must not undertake, be employed in connection with or have any interest in any other business or profession during your employment under this Agreement, other than by way of holding any shares or other securities that are publicly listed, in a private family company or otherwise available to the general public by way of investment.

B

Future Employment

If your employment with Telstra ceases for any reason you must not (without the prior written consent of Telstra) be employed by, or provide services as an agent, independent contractor or in any other capacity to, any telecommunications business or any business of a like or similar nature to that conducted by Telstra, whether in Australia or overseas, for the minimum period of notice specified in clause 11.1 of the Agreement (whether or not a payment is made in lieu of this period). This period will commence from the date that the notice period commences or the payment in lieu of notice is made. Each element of this restraint operates to the extent to which it is deemed reasonable by any court. Part of the remuneration and benefits provided to you by Telstra is specifically referable to this obligation and your agreement to this term is an acknowledgment that this term is reasonable and goes no further than is necessary to protect the interests and Confidential Information of Telstra and its Related Bodies Corporate.

ZES	JVS
(signatory initials)	(signatory initials)

Page 8

Remuneration Summary

LEVEL 1

Name:	John Stanhope
Employee No:	22827607
Business Unit:	Finance & Administration
Effective Date	1-Oct-03

			Proposed Level 2		Level 1
	2002/03 on Target		From 1/10/2003		From 01/10/2003(2)
Fixed Remuneration
(1) Fixed Remuneration	$	461,760	$	496,760	$	650,000
At Risk Remuneration
Target Incentive	$	197,897	$	212,897	$	350,000
(At Risk)

	30% of Total		30% of Total		35% of Total
	Remuneration		Remuneration		Remuneration
Total Remuneration (including At Risk Component)
Total Potential Remuneration	$	659,657	$	709,657	$	1,000,000

(1)	Fixed Remuneration is inclusive of company superannuation contribution, benefits and FBT. For information on Telstra’s company superannuation contribution, please refer to the remuneration packaging document available from your remuneration consultant Payroll Services or from the HR Intranet Site (Remuneration),
(2)	Rounded to nearest $’000

ZES JVS

Page 9