[Letterhead of Telstra]
Ziggy Switkowski
Chief Executive Officer
22 February 2002
Mr Ted Pretty
Group Managing Director
Telstra Retail
Level 4, 400 George Street
SYDNEY NSW 2000
Dear Ted
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 part of Telstra's success.
This Agreement, together with any attachments, sets out the terms and
conditions of your employment and is made under the laws of New South
Wales. Please indicate your acceptance of the terms and conditions outlined
in this letter of offer by signing the duplicate copy on each page and
returning it to me as soon as possible.
1 INDIVIDUAL EMPLOYMENT
1.1 This Agreement represents a direct relationship between me, on
behalf of Telstra, and yourself and as such involves mutual
obligations.
1.2 In offering this Agreement, Telstra and I undertake to behave in
ways worthy of your respect and trust. You will be given a clear
understanding of the purpose of your role and any relevant critical
issues. As your manager I will seek your contribution and listen to
your views. You will know what is required of you in terms of both
results and behaviour and will be remunerated and rewarded fairly
based on your performance.
1.3 In accepting this Agreement you undertake to do any work within your
skills and ability. You agree to work flexibly and participate in
continuous improvement of work practices and systems. You are
prepared to be accountable for your performance.
/s/ /s/
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(signatory initials) (signatory initials)
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242 Exhibition Street Melbourne Vic 3000 231 Elizabeth Street Sydney NSW 2000
Australia Australia
Locked Bag 5639 Melbourne Vic 8100 Locked Bag 6600 Sydney NSW 1100
Telephone (03) 9204 9999 Telephone (02) 9204 9999
Facsimile (03) 9632 3336 Facsimile (02) 9264 2044
Telstra Corporation Limited
ACN 051 775 556
2 ENGAGEMENT
2.1 The commencement date of your employment under this Agreement is 1
January 2002 and will be reviewed by 31 December 2006.
2.2 The relevant date for the purposes of annual leave accruals and long
service leave will be your original commencement date.
2.3 You will initially be assigned to the role of Group Managing
Director, Telstra Retail reporting to myself as Chief Executive
Officer. The reporting requirements of this role may be varied from
time to time in accordance with the needs of Telstra.
3 LOCATION
3.1 You will initially be located in the Sydney office in New South
Wales.
3.2 In the event you agree to move residence to perform a role, Telstra
will provide you with relocation assistance in accordance with the
applicable Telstra policy, as varied from time to time.
4 RE-ASSIGNMENT
4.1 Telstra may re-assign you at any time to an equivalent role for
which Telstra judges you to be suitably qualified and experienced,
either within Telstra or on secondment to any related company.
4.2 Unless otherwise agreed in writing, your assignment (or subsequent
re-assignment) within Telstra, its related bodies corporate or other
specified entities will continue on the terms and conditions of this
Agreement. Any re-assignment will not constitute termination of this
Agreement or your employment with Telstra.
5 HOURS OF WORK
Hours of work will be normal business hours and such further hours
reasonably necessary to do the job.
6 PERFORMANCE
6.1 You are required to perform your role in a proper and efficient
manner. You are to devote your time, attention and energy to the
performance of your duties and use your best endeavours to promote
and enhance the interests of Telstra or business to which you have
been assigned pursuant to this Agreement. Your performance will be
regularly reviewed and discussed with you under Telstra's
performance review process.
6.2 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 general public by way of investment.
/s/ /s/
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(signatory initials) (signatory initials)
7 REMUNERATION
7.1 Your remuneration has fixed and variable elements which make up your
Total Remuneration.
7.2 Fixed Remuneration includes salary and superannuation and any
benefits (which also may include fringe benefit tax). Your Fixed
Remuneration for the term of this Agreement will be $1,000,000 per
annum.
7.3 You will participate in the Manager Incentive Plan (as amended or
replaced from time to time) commencing in financial year 2002/2003,
which will represent the variable element of your Total
Remuneration. Any payment due to you from this plan will be paid at
the end of each remuneration year.
7.4 Two Remuneration Summaries are attached. Remuneration Summary A.
outlines your Total Remuneration for the period 1 January 2002 to 30
June 2002. Remuneration Summary B. outlines your Total Remuneration
for the period 1 July 2002 to 31 December 2006.
7.5 The following retention payments shall be payable based on completed
service with the Company. Provided you remain employed by Telstra on
the dates below, you will be paid the specified amounts within 30
days of these dates:
Amount
Qualifying Date Payable
30 June 2002 $ 200,000
1 July 2002 $ 220,000
1 July 2003 $ 240,000
1 July 2004 $ 260,000
1 July 2005 $ 280,000
1 July 2006 $ 300,000
8 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.
9 LEAVE
9.1 You will accrue 4 weeks leave annually, to be taken in accordance
with Telstra policy, at a time agreed between you and your manager.
9.2 Long service leave will accrue and be paid in accordance with
Telstra policy. Currently, Telstra policy provides for three months
long service leave after ten years employment with Telstra.
9.3 Sick leave will be by agreement with your manager. The provision of
sick leave is based on ensuring that all employees receive adequate
paid leave when they are unable to attend work as a result of
illness.
/s/ /s/
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(signatory initials) (signatory initials)
10 SPECIAL LEAVE
10.1 For financial years 2002/2003 and 2003/2004, it is agreed that
special paid leave for personal reasons will be available to you.
The scheduling of this leave will be in agreement with the CEO and
will be for a maximum period of 5 weeks in each of the above
financial years. This leave will lapse if it is not taken during the
above periods.
11 TERMINATION OF YOUR EMPLOYMENT
11.1 Subject to relevant legislation, your employment may be terminated
by either party giving not less than six months written notice to
the other party.
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
or be paid at the Fixed Remuneration rate in lieu of notice.
11.3 Telstra may terminate your employment summarily if you commit any
act of serious misconduct. In the event of such termination you will
be entitled only to Fixed Remuneration to the date of termination.
11.4 If Telstra terminates your employment due to redundancy, you will
receive, in addition to any notice or payment in lieu of notice, 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 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.
12 TRAVEL AND BUSINESS RELATED EXPENSES
You may be required to undertake business related travel at
Telstra's expense or at the expense of your assigned business. In
such circumstances you will receive reimbursement of business
expenses reasonably and actually incurred and verified in accordance
with Telstra's Travel Policy or if relevant your assigned business
Travel Policy.
13 CONFIDENTIALITY
13.1 In entering this Agreement you agree and undertake:
(a) to maintain the confidentiality of the contents of this
Agreement, except as may be necessary for the administration
of your employment and financial affairs; and
(b) that at all times during and after your employment under this
Agreement you will keep confidential and 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 Telstra; and
(c) 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, its Related Bodies Corporate other specified
entities and;
/s/ /s/
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(signatory initials) (signatory initials)
(d) that immediately upon the request of Telstra or upon the
termination of your employment with Telstra you will:
(i) deliver to Telstra all Confidential Information which is
in your control and which is physically capable of
delivery; and
(ii) 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.
These obligations shall lapse in relation to any of the Confidential
information which comes into the public domain other than through
your wrongful act.
13.2 For the purposes of this Agreement:
(a) "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;
and
(b) "Related Body Corporate" has the same meaning as in Section 50
of the Corporations Law.
13.3 It is a condition of your employment that you will be familiar with
and comply with the protection of communications provisions in the
Telecommunications Act 1997 (or its successor).
14 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 set out in
clause 11.1 of this Agreement. This period will commence from the
date that the notice period commences. 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.
/s/ /s/
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(signatory initials) (signatory initials)
15 RETURN OF PROPERTY
Upon termination of your employment with Telstra you must
immediately return to Telstra, (or where on assignment to your
assigned business) or its authorised representative, all property of
Telstra (or property of the assigned business) which is in your
possession custody or control, including any documents and papers
and all copies of such documents and papers.
16 INDEMNITY
In the event that you are appointed to a position of statutory
responsibility and accountability in any company formed or acquired
by Telstra, the Telstra Directors' and Officer Liability Policy will
apply.
17 OTHER CONDITIONS OF EMPLOYMENT
In entering this Agreement you agree that the policies, procedures,
and processes of Telstra, as varied or added to from time to time,
will apply to and govern your employment. These policies,
procedures, and processes can be accessed via Telstra's Intranet. In
addition, you must comply with the individual policies, procedures,
and processes of the business to which you are assigned.
18 ENTIRE AGREEMENT
18.1 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.
18.2 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.
I would like to take this opportunity to congratulate you on your revised
terms of employment and look forward to working closely with you.
Yours sincerely
/s/ Ziggy E Switkowski
-----------------------
Ziggy E Switkowski
Chief Executive Officer
/s/ /s/
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(signatory initials) (signatory initials)
I confirm acceptance of the terms and conditions set out in this letter.
/s/ Ted Pretty 6/3/2002
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Name Date
/s/ /s/
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(signatory initials) (signatory initials)
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Remuneration Summary A
Fixed Remuneration
Fixed Remuneration /1/ $ 1,000,000
Minimum Superannuation Amount $ 8,804
Variable Remuneration
2001/2002 Target Incentive 0% of Total Remuneration $ 0
("At Risk" Component)
Total Remuneration
Total Potential Remuneration $ 1,000,000
-----------
(including "On Target" Incentive Level)
Name: Ted Pretty
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Employee Number: 37133624
----------------------------------------------
Effective Date: 1 January 2002 to 30 June 2002
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/1/ Fixed Remuneration includes the Telstra compulsory superannuation guarantee
contribution.
By agreement, a greater part of your Fixed Remuneration can be paid as
company superannuation contributions, subject to the total contribution
(including the compulsory amount) not exceeding the statutory age-based
deduction limits.
If you are currently in an excess pension Reasonable Benefit Limit (RBL)
position, Telstra may not be required to pay any part of your subject to
the total as superannuation contributions. You should speak to a financial
adviser if this situation applies to you.
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Remuneration Summary B
Fixed Remuneration
Fixed Remuneration /1/ $ 1,000,000
Minimum Superannuation Amount $ 8804 (indexed)
Variable Remuneration
2002/2003 Target Incentive 35% of Total Remuneration $ 539,000
("At Risk" Component)
Total Remuneration
Total Potential Remuneration $ 1,539,000
(including "On Target" Incentive Level)
Name: Ted Pretty
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Employee Number: 37133624
----------------------------------------------
Effective Date: 1 July 2002 to 31 December 2006
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/1/ Fixed Remuneration includes the Telstra compulsory superannuation guarantee
contribution.
By agreement, a greater part of your Fixed Remuneration can be paid as
company superannuation contributions, subject to the total contribution
(including the compulsory amount) not exceeding the statutory age-based
deduction limits.
If you are currently in an excess pension Reasonable Benefit Limit (RBL)
position, Telstra may not be required to pay any part of your subject to
the total as superannuation contributions. You should speak to a financial
adviser if this situation applies to you.
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Remuneration Summary B
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2002/03/1/ 2003/04 2004/05 2005/06 2006/07/2/
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Fixed Remuneration/3/ $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000 $ 1,000,000
Minimum Superannuation Amount - $8804 pa (indexed)
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Variable - assuming on target results $ 539,000 $ 539,000 $ 539,000 $ 539,000 $ 539,000
"At Risk" Component
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Retention Payments $ 220,000 $ 240,000 $ 260,000 $ 280,000 $ 300,000
Paid annual on 1 July
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Total Potential Cash Remuneration at Target $ 1,759,000 $ 1,779,000 $ 1,799,000 $ 1,819,000 $ 1,839,000
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<FN>
<F1>
/1/ MIP commences from 1 July 2002 for the 2002/03 financial year
<F2>
/2/ Arrangements to be reviewed 31 Dec 2006
Name: Ted Pretty
----------------------------------------------
Employee Number: 37133624
----------------------------------------------
Effective Date: 1 July 2002 to 31 December 2006
----------------------------------------------
<F3>
/3/ Fixed Remuneration includes the Telstra compulsory superannuation guarantee
contribution.
By agreement, a greater part of your Fixed Remuneration can be paid as company
superannuation contributions, subject to the total contribution (including the
compulsory amount) not exceeding the statutory age-based deduction limits.
If you are currently in an excess pension Reasonable Benefit Limit (RBL)
position, Telstra may not be required to pay any part of your subject to the
total as superannuation contributions. You should speak to a financial adviser
if this situation applies to you.
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</FN>