TELSTRA GROUP LIMITED — Board/Management Information 2009

Jun 8, 2009

9 June 2009

The Manager

Company Announcements Office Australian Stock Exchange 4th Floor, 20 Bridge Street SYDNEY NSW 2000

Office of the Company Secretary

Level 41 242 Exhibition Street MELBOURNE VIC 3000 AUSTRALIA

General Enquiries 08 8308 1721 Facsimile 03 9632 3215

ELECTRONIC LODGEMENT

Dear Sir or Madam

Telstra Corporation Limited – CEO Contract

In accordance with the listing rules, please find attached the full text of the contract with Mr Thodey, for release to the market.

Regards

Carmel Mulhern Company Secretary

Agreement

Employment agreement

Telstra Corporation Limited

DAVID I THODEY

101 Collins Street Melbourne VIC 3000 Australia GPO Box 128A Melbourne VIC 3001 Australia Sydney Melbourne Perth Brisbane Singapore

Telephone +61 3 9288 1234 Facsimile +61 3 9288 1567 www.freehills.com DX 240 Melbourne

Correspondent offices in Hanoi Ho Chi Minh City Jakarta

Contents

Table of contents

		The agreement
		Operative part	2
1		Definitions and interpretation	2
	1.1 1.2 1.3 1.4	Agreement components Definitions Interpretation Interpretation of inclusive expressions
2	Term		5
3		Executive's duties	5
	3.1 3.2 3.3 3.4 3.5 3.6	General duties Group policies Duty to report Hours of work No other business Inducements
Δ		Disclosure of information	7
	4.1 4,2 4.3	Executive's obligations of confidentiality Separate restrictions Acknowledgments of Executive
5		Intellectual property	8
	5.1 5.2 5.3	Ownership Assistance Survival of obligations
6		Moral Rights	8
		Remuneration and other entitlements	8
	7.1 7.2 7.3 7.4 7.5 7.6 7.7 7.8 7.9	Total Fixed Remuneration Directors' fees Review of remuneration package Superannuation Payment Expenses Leave Public holidays Withholding
8		Incentive arrangements	10
	8.1 8.2	Short Term Incentive Long Term Incentive
9		Termination	11
	9.1 9.2	Termination by Executive Termination for poor performance

Contents

$\hat{\mathcal{F}}$

	9.3 9.4 9.5 9.6 9.7 9.8	Termination by Company for specified causes Termination by Company for other reasons Payment in lieu of notice Resignation as director and officer No compensation General
10		Entitlements upon termination	13
	10.1 10.2 10.3 10.4	Separation entitlements - Fundamental Change or Company gives notice 13 Separation entitlements - resignation or termination for performance reasons 14 Release of Company Accrued entitlements
11		Events on termination or resignation	14
	11.1 11.2 11.3	Amounts owed to the Group Resignation as director Obligations on termination
12		Post-employment restrictions	15
	121 12.2 12.3 12.4 12.5	Restricted areas and Executive's restricted activities Restraints reasonable Acknowledgments by Executive Restraints independent Company's restricted activities
13		Approvals	17
	13.1 13.2 13.3 13.4 13.5	Agreement subject to Board and shareholder approvals Compliance with Corporations Act and ASX Listing Rules Reduction of payments Overpayment Effect of this clause
14		Resolving disagreements	18
15	General		18
	15.1 15.2 15.3 15.4 15.5 15.6 15.7	Governing law and jurisdiction Entire agreement Form of notices Prohibition, enforceability and severance Waiver Legal advice Counterparts	19
		Schedules
		Short Term Incentive	21
		Long Term Incentive	22
		Signing page	23

The agreement

Employment agreement

9 JUNE 2009 Date $\blacktriangleright$

Between the parties

Company	Telstra Corporation Limited
	ABN 33 051 775 556 of
	Level 41, 242 Exhibition Street.
	Melbourne, Victoria 3000
	(Telstra or Company)
Executive	David I Thodey
	of 24 Murdoch Street.
	Cremorne, NSW 2090
	(Executive)
Background	The Company has agreed to employ the Executive in the position 1 of Chief Executive Officer and the Executive has agreed to accept that employment on the terms of this agreement.
	The parties agree that the benefits to which the Executive is $\overline{2}$ entitled under this agreement are in part consideration for the Executive agreeing to accept the office of Chief Executive Officer of the Company.
	The parties acknowledge that each has taken, or has had the 3. opportunity to take, independent legal advice in relation to this agreement.
The parties agree	as set out in the Operative part of this agreement, in consideration of, among other things, the mutual promises contained in this agreement.

Operative part

Definitions and interpretation $\mathbf 1$

$1.1$ Agreement components

This agreement includes any schedule.

$1.2$ Definitions

The meanings of the terms used in this document are set out below.

Term	Meaning
ASX Listing Rules	the official listing rules of ASX Limited.
Board	the board of directors of the Company.
Chairman	the chairman of the Board.
Commencement Date	19 May 2009 or such other date as may be agreed between the Executive and the Chairman.
Confidential Information	any information in respect of the Group or the Group's businesses (including, but not limited to, any idea, concept, process or know-how) which is not in the public domain (or which is only in the public domain as a result of a breach of a Group Company's confidence) which:
	comes to the Executive's notice in the course of the Executive's employment 1. or services provided to the Company from the date of this agreement; or
	is generated by the Executive in the course of performing the Executive's 2 obligations.
Constitution	the constitution of the Company as amended from time to time.
Company Secretary	the company secretary of the Company.
Corporations Act	the Corporations Act 2001 (Cth).
Covenant Area	Australia, New Zealand, China and Hong Kong; or failing that 1.
	Australia and New Zealand; or failing that 2
	the Commonwealth of Australia. 3

Term	Meaning
Covenant Period	The term of the Executive's employment pursuant to this agreement and twelve (12) Months; or failing that 1.
	six (6) Months; or failing that 2.
	three (3) Months, 3.
	after the Termination Date.
Employer Superannuation Component	the minimum superannuation contributions the Company is required to make to a 'complying superannuation fund' in respect of the Executive in order to comply with its obligations under the Superannuation Guarantee (Administration) Act 1992 (Cth).
Entity	an individual, company, partnership, joint venture (whether corporate or incorporate) or any other body (whether corporate or incorporate).
Equity	Shares in the Company or such other equity interest nominated by the Board.
Fundamental Change	the Executive ceasing to be the most senior executive in the Group or the Chief Executive Officer of Telstra or a substantial diminution in the responsibilities or authority of the Executive, but excluding any change or diminution arising:
	through termination pursuant to clause 9.1(a), 9.2, 9.3 or 9.4 of this 1 agreement; or
	with the consent of the Executive. 2.
Group	the Company and each Group Company.
Group Company	a 'related body corporate' of the Company as that expression is defined in the Corporations Act.
Intellectual Property	all present and future rights to intellectual property including any inventions and improvements, trade marks (whether registered or common law trade marks), concepts, designs, slogans, promotion techniques, copyright, any corresponding property rights under the laws of any jurisdiction and any rights in respect of an invention, discovery, trade secret, secret process, know-how, concept, idea, information, process, data or formula.
LTI	long term incentive.
Month	calendar month.
Moral Rights	the right of attribution of authorship, the right not to have authorship falsely attributed and the right of integrity of authorship, as defined in the Copyright Act 1968 (Cth).

Term	Meaning
Prescribed Position	a position as employee, director, secretary, company officer, agent, 1. contractor, consultant or advisor of any Entity;
	a partner, shareholder or member of any Entity; and 2.
	acting as any of the persons referred to in paragraph (1) or (2). 3
Regulatory Consent	the consent of any Entity or governmental body that has statutory or other powers over corporations including without limitation ASX Limited and the Australian Securities and Investment Commission.
STI	short term incentive.
Telstra Policies	the policies, procedures, business rules and processes of Telstra, its business units or functional divisions, as varied or added to from time to time.
Term	the period specified in clause 2.
Termination Date	the date when the Executive ceases to be employed by the Company.
Total Fixed Remuneration	the total fixed component of the remuneration of the Executive for each year of the Term set out in clause 7 (as adjusted from time to time) and determined on the basis of total cost to the Company, which may comprise salary, superannuation contributions and other benefits as agreed pursuant to clause 7.
Works	any works (as defined in the Copyright Act 1968 (Cth)) made by the Executive.

$1.3$ Interpretation

In this agreement:

• Headings and bold type are for convenience only and do not affect the $(a)$ interpretation of this agreement.
• $(b)$ The singular includes the plural and the plural includes the singular.
• Words of any gender include all genders. $\left( \mathsf{c}\right)$
• $(d)$ Other parts of speech and grammatical forms of a word or phrase defined in this agreement have a corresponding meaning.
• $(e)$ An expression importing a person includes any company, partnership, joint venture, association, corporation or other body corporate and any Government Agency as well as an individual.

• $(f)$ A reference to a clause, party, schedule, attachment or exhibit is a reference to a clause of, and a party, schedule, attachment or exhibit to, this agreement and a reference to this agreement includes any schedule, attachment and exhibit.

• A reference to any legislation includes all delegated legislation made under it $(g)$ and amendments, consolidations, replacements or re-enactments of any of them.

• A reference to any thing (including, but not limited to, any right) includes a part $(h)$ of that thing but nothing in this clause 1.3(h) implies that performance of part of an obligation constitutes performance of the obligation.
• A reference to a party to a document includes that party's successors and $(i)$ permitted assigns.
• A reference to a document or agreement includes all amendments or $(i)$ supplements to, or replacements or novations of, that document or agreement.
• No provision of this agreement will be construed adversely to a party because $(k)$ that party was responsible for the preparation of this agreement or that provision.
• A reference to 'dollar', '\$' or 'AUD' is a reference to Australian currency. $($ |

$1.4$ Interpretation of inclusive expressions

Specifying anything in this agreement after the words 'include' or 'for example' or similar expressions does not limit what else is included.

2 Term

The Term starts on the Commencement Date and continues until terminated in accordance with this agreement.

3 Executive's duties

$3.1$ General duties

The Executive must:

• devote the whole of the Executive's time, attention and skill during normal $(a)$ business hours (except for holidays, illness, accidents or other unavoidable circumstances), and at other times as reasonably necessary, to the duties of office:
• faithfully and diligently perform the duties and exercise the powers: $(b)$
• consistent with the position of Chief Executive Officer of the Company; $(1)$ and
• assigned to the Executive by the Board or on its behalf, whether for $(2)$ the Company or a Group Company;
• promote the interests and prosperity and enhance the reputation of the Group; $(c)$ and
• conduct himself in accordance with the commercial and ethical standards $(d)$ commensurate with the position of Chief Executive Officer of a publicly listed company.

$3.2$ Group policies

• The Company may review, vary, add to or withdraw Telstra Policies from time to $(a)$ time in its absolute discretion. The Executive must:
• familiarise himself with these Telstra Policies; and $(1)$
• $(2)$ comply with Telstra Policies that place an obligation on him.
• The Executive may be required to accumulate and maintain minimum levels of $(b)$ shareholding in the Company in accordance with Telstra Policies (which may specify a minimum shareholding based on position, band and remuneration level). The Executive is required to disclose details of his shareholding to the Company in order to verify compliance with Telstra Policies.
• Telstra Policies and any obligations on the Company set out in those Telstra $(c)$ Policies do not form part of the contract of employment with the Executive and are not binding on the Company.

$3.3$ Duty to report

The Executive must:

• report directly to the Board or as directed by the Board or the Chairman on its $(a)$ behalf:
• provide prompt and full information to the Board regarding the conduct of the $(b)$ business of the Company;
• comply with lawful directions given to the Executive by the Board or on its $(c)$ behalf; and
• report to the Chairman or the Board as and when requested, and discuss any $(d)$ aspect of the Company's business or performance as required from time to time by the Chairman or the Board.

Hours of work $3.4$

The Executive:

• will work such hours as are reasonably necessary for the full and proper $(a)$ performance of the Executive's duties under this agreement;
• acknowledges and agrees that any hours that the Executive is required to work $(b)$ in excess of usual business hours are reasonable so far as they are necessary for the full and proper performance of the Executive's duties under this agreement; and
• will not be entitled to payment of overtime or other penalty amounts for any $(c)$ hours worked.

No other business $3.5$

• Subject to clause 3.5(b), the Executive must not during the Term hold any $(a)$ directorship or be engaged, concerned or interested directly or indirectly in any other trade, business or employment of any kind without the prior written consent of the Board.
• This clause 3.5 does not prevent the Executive from acquiring, holding and $(b)$ disposing of any investment in any company listed on a stock exchange, so long as:

• the Executive's total shareholding in any listed company remains less $(1)$ than 5% at all times;

• the investment does not raise a conflict of interest (potential or actual) $(2)$ with the Executive's duties to the Company; and

• the investment does not give rise to a situation where the Executive $(3)$ may contravene the insider trading provisions of the Corporations Act or the Company' policy in relation to dealing in shares.

$3.6$ Inducements

Except as provided in this agreement, the Executive must not accept any payment or other benefit as an inducement or reward for any act in connection with the business of the Group or any Group Entity.

4 Disclosure of information

$4.1$ Executive's obligations of confidentiality

The Executive must:

• keep any Confidential Information secret and confidential, except to the extent $(a)$ that the Executive is required by law to disclose it;
• take all reasonable and necessary precautions to maintain the secrecy and $(b)$ prevent the disclosure of any Confidential Information;
• refrain from using or attempting to use Confidential Information in any manner $(c)$ which will or may cause or be calculated to cause injury or loss to the Group or its clients; and
• not, except in the ordinary and proper course of employment with the Company $(d)$ or as required by law, disclose Confidential Information to any third party without the prior written consent of the Company.

$4.2$ Separate restrictions

The restrictions in clause 4.1 will be regarded as separate, distinct and severable so that the unenforceability of any restriction shall in no way affect the enforceability of any other restriction.

4.3 Acknowledgments of Executive

The Executive acknowledges and agrees that:

• the Executive will obtain Confidential Information in the course of his duties as $(a)$ Chief Executive Officer:
• disclosure of such Confidential Information may diminish the value of the $(b)$ Confidential Information and could materially harm the Group;
• the restrictions in this clause 4 are reasonable in all the circumstances and $(C)$ necessary to protect the goodwill of the Group;
• the remedy of damages may be inadequate to protect the interests of the Group $(d)$ and the Group is entitled to seek and obtain injunctive relief, or any other relief; and
• in view of the importance of the restrictions contained in this clause for the $(e)$ protection of the proprietary interests of the Group, this clause will survive the termination of the Executive's employment with the Company in all circumstances.

5 Intellectual property

$5.1$ Ownership

Subject to any express written agreement to the contrary, all Intellectual Property created by the Executive in the course of the Executive's employment with the Company automatically vests in the Company.

$5.2$ Assistance

The Executive must do all things necessary or desirable to vest in the Company ownership of any Intellectual Property created by the Executive in the course of the Executive's employment with the Company, including executing any documents which are reasonably required by the Company to give effect to clause 5.1.

5.3 Survival of obligations

The Executive's obligations under this clause 5 survive the termination of this agreement.

6 Moral Rights

Where the Executive has Moral Rights in any Intellectual Property owned by the Company, the Executive:

• irrevocably consents to any act or omission by the Company which infringes $(a)$ those Moral Rights;
• $(b)$ agrees that such consent extends to acts and omissions by the Company's licensees and successors in title;
• agrees that such consent further extends to acts and omissions done by any $(c)$ person authorised by the Company or its licensees and successors in title to do acts comprised in the copyright for the Works; and
• agrees that such consent is a genuine consent given under Part 9 of the $(d)$ Copyright Act 1968 (Cth) and has not been induced by duress or any false or misleading statement.

$\overline{7}$ Remuneration and other entitlements

$7.1$ Total Fixed Remuneration

• The Executive's initial Total Fixed Remuneration will be \$2,000,000 per annum. $(a)$
• Total Fixed Remuneration includes the Employer Superannuation Component. $(b)$
• The Executive may elect to receive part of his Total Fixed Remuneration, $(c)$ except for the Employer Superannuation Component, in the form of benefits. The Company's salary packaging guidelines set out details of the benefits currently available and the process for electing to receive them. The Company may withdraw salary packaging at any time in its absolute discretion.
• If the Executive elects to receive part of his Total Fixed Remuneration as $(d)$ benefits, the election must comply with the salary packaging guidelines. The Total Fixed Remuneration includes all costs associated with the election,

including the costs of any fringe benefits tax payable by the Company as a result of complying with the election and, to the extent that benefits are not tax deductible to the Company, the tax cost of the lost income tax deductions.

$7.2$ Directors' fees

The Executive may be required, as part of his functions, to act as a director of one or more Group Companies. The Executive will not receive any compensation for holding any such office additional to the remuneration set out in this Agreement.

7.3 Review of remuneration package

• The Total Fixed Remuneration will be reviewed annually in accordance with $(a)$ Telstra Policies. As a result of this review the Total Fixed Remuneration may be subject to change by the Company. These reviews will take into account, among other things:
• relevant market and general economic information; $(1)$
• the Group's performance; and $(2)$
• $(3)$ the personal performance of the Executive,

in each case as assessed by the Board.

The Total Fixed Remuneration for the period after a review is the amount per $(b)$ annum determined by the Board.

$7.4$ Superannuation

• If the Executive: $(a)$
• elects under clause 7.1(c) to have superannuation contributions made $(1)$ on his behalf in addition to the Employer Superannuation Component made pursuant to clause 7.1(b); or
• the Employer Superannuation Component increases due to operation $(2)$ of law or any other reason, and, to the extent that superannuation contributions are not tax deductible to the Company, by the tax cost of the lost income tax deductions,

the Company will reduce one or more of the other components of the Total Fixed Remuneration to account for that increase.

A superannuation contribution made for the benefit of the Executive must not, $(b)$ when contributed to the relevant fund, result in the Executive becoming entitled to a benefit upon ceasing to hold office which exceeds any applicable limit under the Corporations Act.

7.5 Payment

• Subject to clause 7.5(b), the Company will pay any part of Total Fixed $(a)$ Remuneration that the Executive elects to receive as salary fortnightly by electronic transfer to the Executive's nominated bank account.
• The Executive may not elect to receive the Employer Superannuation $(b)$ Component as salary.

7.6 Expenses

The Company will reimburse the Executive for any expenses reasonably incurred during the performance of his duties. The Company may require the Executive to provide a tax invoice, or other evidence, to substantiate any expenses claim.

$7.7$ Leave

• $(a)$ The Executive is entitled to the equivalent of 4 weeks' paid leave in each year during the Term:
• in addition to the usual public holidays; and $(1)$
• which may be taken at the times agreed with the Chairman. $(2)$
• The Executive is entitled to other leave, including personal leave and long $(b)$ service leave, in accordance with applicable Australian laws, Telstra Policies and requirements from time to time.

7.8 Public holidays

The Executive will be entitled to paid leave on days declared as public holidays in New South Wales. The Executive agrees that from time to time he may be required to work on a public holiday in order to perform his duties. The Executive's remuneration already includes an amount to compensate for this.

7.9 Withholding

• The Company must make all payments of the Total Fixed Remuneration which $(a)$ become due free and clear of withholding or deduction, unless required by law.
• If the Company is required by law to withhold or to make any deduction from the $(b)$ Total Fixed Remuneration, the Company is not under any obligation to gross-up the payment on account of the withholding or deduction.

8 Incentive arrangements

Short Term Incentive $8.1$

• The Executive is eligible to participate in the Company's short term incentive (a) plan (STI Plan).
• Participation is subject to the terms of the STI Plan, which the Company may $(b)$ amend from time to time at its discretion. These terms do not form part of this agreement.
• Subject to Schedule 1 of this agreement, the Executive's participation in the STI $(c)$ Plan, and all payments and benefits under the STI Plan, are at the absolute discretion of the Company.
• Any amounts which are payable for the purposes of this clause 8.1 or Schedule $(d)$ 1 will be inclusive of the Employer Superannuation Component.

8.2 Long Term Incentive

$(a)$ Subject to receiving any required or appropriate shareholder approvals or other Regulatory Consent, the Executive will be eligible to participate in the

Company's LTI arrangements (as amended or replaced) from time to time on terms to be decided by the Board.

• As the Group's LTI arrangements link a part of the Executive's remuneration to $(b)$ the success of the Group as a whole, the actual benefit the Executive may ultimately receive will increase with the success of the Group and decrease where the Group's performance is below expectations.
• Subject to any necessary shareholder approvals being obtained at the $(c)$ Company's 2009 Annual General Meeting, the Executive will receive an LTI award for the financial year commencing 1 July 2009 on the terms set out in Schedule 2.
• Any amounts which are payable for the purposes of this clause 8.2 or Schedule $(d)$ 2 will be inclusive of the Employer Superannuation Component.

Termination 9

Termination by Executive $9.1$

• The Executive may terminate this agreement or his employment at any time by $(a)$ giving 6 Months' notice in writing to the Company.
• Subject to the provisions of this agreement, if a Fundamental Change occurs $(b)$ the Executive may, within 21 days of the occurrence of such Fundamental Change, give the Board a written notice:
• setting out his grievances in this regard; and $(1)$
• giving the Board 21 days (Notice Period) to remedy the situation. $(2)$
• If, at the conclusion of the Notice Period, the Board has failed to rectify the $(c)$ situation, the Executive may resign in writing (on or after the expiration of the Notice Period) with immediate effect.
• If the Executive resigns under clause 9.1(c), clause 9 will apply on the basis it $(\circ)$ would have applied if:
• the Executive had been terminated by the Company in accordance $(1)$ with clause 9.4, including in relation to the treatment of STI and LTI under clause 10.1; and
• the Company had made an election under clause 9.5 to make a $(2)$ payment to the Executive in lieu of all of the notice period.

Termination for poor performance $9.2$

• If the Board reasonably forms the view that the Executive is not performing to $(a)$ the standard required of a Chief Executive Officer of the Company, the Board may issue a written notice to the Executive outlining the areas of concern and specifying the period, not less than 2 Months, in which the Executive must rectify such performance issues.
• If, at the conclusion of the period referred to in clause 9.2(a), the Board $(b)$ reasonably forms the view that the Executive has failed to rectify the performance issues to the Board's satisfaction, the Company may terminate this agreement by providing 4 Months' written notice to the Executive.

$9.3$ Termination by Company for specified causes

• The Company may terminate the Executive's employment immediately, by $(a)$ giving the Executive written notice with immediate effect, if the Executive:
• engages in any serious misconduct including, but not limited to, $(1)$ breach of Telstra Policies, an act of dishonesty, fraud or wilful breach of duty;
• becomes bankrupt or suspends payment or compounds with or $(2)$ assigns his estate for the benefit of his creditors;
• fails to comply with any of his obligations under this agreement in a $(3)$ material way and, where the failure is capable of being remedied, does not remedy it within 21 days of being notified by the Company of the failure:
• refuses or fails, after being informed in writing that the refusal or $(4)$ failure is one the Company regards as potentially triggering the Company's right of termination, to comply with any reasonable and lawful direction given to the Executive in writing by the Board or its delegate that is consistent with his duties under this agreement;
• commits an act, whether at work or otherwise, which brings the $(5)$ Company into disrepute; or
• $(6)$ is convicted of an offence punishable by imprisonment.
• $(b)$ If his employment is terminated under clause 9.3(a), the Executive has no claim against the Company in respect of that termination, other than as provided for in clause 10.4.

Termination by Company for other reasons 9.4

In addition to the rights of termination under clause 9.2 and 9.3, the Company may terminate this agreement or the Executive's employment at any time by giving the Executive 6 Months' notice.

9.5 Payment in lieu of notice

• The Company may elect to pay to the Executive in lieu of part or all of the notice $(a)$ period specified under clause 9.1(a), 9.2 or 9.4 (as applicable), in which case the Company will pay an amount equivalent to the Total Fixed Remuneration which the Executive would otherwise have received during the period of notice not given.
• Where the Company elects to make a payment in lieu of notice under clause $(b)$ 9.5(a), the Executive's employment will end immediately upon the Company making the payment.

9.6 Resignation as director and officer

If the employment of the Executive is terminated and the Executive resigns as a director or as any other officer under clause 11.2, the Executive has no entitlement to any compensation for loss of such office.

9.7 No compensation

The Executive acknowledges that if the Company ends his employment, he has $(a)$ no further claim against any Group Company for compensation.

The Executive agrees that the salary and benefits paid to him under this $(b)$ agreement include specific consideration to ensure the Company may avail itself of all its rights to end his employment contained in this agreement.

9.8 General

• $(a)$ During any notice period referred to in this clause 9.
• the Company may require that the Executive not attend the office, not $(1)$ undertake any work, or undertake only limited work during part or all of this period;
• the Company will continue to pay the Total Fixed Remuneration; $(2)$
• the Executive must continue to comply with his obligations under this $(3)$ agreement, including without limitation clauses 3.5, 4, 5, 6 and 12 of this agreement.
• The provision of the payments and benefits under clause 9.5, clause 10 and this $(b)$ clause 9.8 are contingent on the Executive complying with his obligations under clause 12 of this agreement.

10 Entitlements upon termination

Separation entitlements - Fundamental Change or Company gives $10.1$ notice

• $(a)$ This clause 10.1 applies if the Executive's employment is terminated for any reason other than under clauses 9.1(a), 9.2 or 9.3.
• Where this clause 10.1 applies, the Company must, subject to clause 10.4, pay $(b)$ the Executive a lump sum amount (Separation Amount) equal to the Total Fixed Remuneration for the 12 Months immediately preceding the Termination Date, which sum shall be inclusive of any amount payable to the Executive as pay in lieu of notice pursuant to clause 9.5. For the avoidance of doubt, the total sum payable to the Executive under clause 9.5 and this clause 10.1(b) shall not exceed the Total Fixed Remuneration for the 12 Months immediately preceding the Termination Date.
• Unless the Board determines otherwise either prior to or within a period of 60 $(c)$ days after the Termination Date, any incentives referred to in clauses 8.1 and 8.2 that have:
• been granted but remain unvested as at the Termination Date; or $(1)$
• vested but remain subject to restrictions as at the Termination Date, $(2)$

will continue beyond termination in accordance with the terms of the grant (including in relation to performance conditions and lapse or forfeiture conditions), except that any continuous service requirements will be deemed to have been waived.

• For the avoidance of doubt, nothing in clause 10.1(c) limits the Board's $(d)$ discretion (subject to any applicable terms of grant) to determine that some or all of any unvested or restricted incentives granted to the Executive in accordance with this agreement:
• vest or cease to be restricted; or $(1)$
• lapse or are deemed to have been forfeited, $(2)$

as a result of the Executive ceasing employment.

Nothing in this clause 10.1 gives the Executive an entitlement to an STI or LTI $(e)$ payment in respect of an award contemplated by clause 8.1 or clause 8.2 but not granted prior to the Termination Date, except where otherwise agreed with the Board.

$10.2$ Separation entitlements – resignation or termination for performance reasons

• $(a)$ This clause 10.2 applies where the Executive's employment is terminated under clauses 9.1(a), 9.2 or 9.3.
• $(b)$ Unless the Board determines otherwise, any incentives referred to in clauses 8.1 or 8.2 that have:
• been granted but remain unvested as at the Termination Date; or $(1)$
• $(2)$ vested but remain subject to restrictions as at the Termination Date,

will lapse or be forfeited (as applicable) with effect from the Termination Date.

$10.3$ Release of Company

The Executive agrees that payment by the Company under clause 9.5 and/or clause 10 (as applicable) automatically releases the Company and the Group from any liability (whether then existing or yet to arise) to pay the Executive any other amount as compensation for the termination of the Executive's employment, including any amount that might otherwise be payable to the Executive as:

• a severance payment; $(a)$
• $(b)$ an ex gratia termination payment; or
• $(c)$ a result of the Executive's retrenchment or redundancy.

$10.4$ Accrued entitlements

Irrespective of the reasons for termination, the Executive will be entitled upon termination of employment to payment of:

• Total Fixed Remuneration that has been accrued but not paid as at the $(a)$ Termination Date;
• $(b)$ accrued annual leave and long service leave as at the Termination Date; and
• any other similar entitlements accrued under any legislation (but excluding $(c)$ accrued personal leave which will not be paid out in the event of termination of the Executive's employment for any reason).

$11$ Events on termination or resignation

$11.1$ Amounts owed to the Group

• Subject to applicable laws, any outstanding advances or other payments due to $(a)$ the Group by the Executive will be deducted before payment of any amounts under clause 9.5 or clause 10 are made to the Executive.
• If the amounts owed by the Executive to the Group at the Termination Date $(b)$ exceed amounts payable to the Executive under clause 9.5 and clause 10, the Executive agrees to pay the Company the difference owing within fourteen (14) days of the Termination Date.

$11.2$ Resignation as director

• If, on termination of this agreement for any reason, the Executive is a director or $(a)$ other officer of the Company or of any Group Company or at the request of the Company, is a director of any other company or body that the Company has an interest in or relationship with, the Executive must resign as director or other officer of that company or body as soon as practicable after the Termination Date.
• The Executive irrevocably appoints the Company Secretary, or any other $(b)$ employee of the Company nominated by the Company Secretary, as attorney to sign the Executive's resignation from any Group Board on behalf of the Executive.

$11.3$ Obligations on termination

On termination of this agreement for any reason, the Executive must return to the Company all tangible property of the Company or any Group Company including, but not limited to, all books, documents, papers, materials, credit cards, Company mobile telephone, laptops and keys held by the Executive or under the Executive's control.

$12^°$ Post-employment restrictions

$12.1$ Restricted areas and Executive's restricted activities

Except with the written permission of the Board, the Executive must not (whether directly or indirectly and in any position including a Prescribed Position), during the Covenant Period and within the Covenant Area:

• carry on or otherwise be concerned with or interested in any business which $(a)$ offers or provides products or services similar to or otherwise competitive with those offered or provided by any member of the Group;
• $(b)$ obtain or apply for regulatory licences, permits or privileges that would permit the Executive to carry on or otherwise be concerned with or interested in any business referred to in paragraph (a) above;
• solicit or persuade any service provider who has been engaged by, or any $(c)$ customer or client who has dealt with, the Group during the Executive's employment or is in the process of negotiating with the Group at the Termination Date in relation to any business carried on by the Group at the Termination Date, to cease doing business with the Group or reduce the amount of business which the person would normally do (or otherwise have done) with the Group;
• accept from a person referred to in clause 12.1(c) any business of the kind $(d)$ ordinarily forming part of the business of any member of the Group;
• induce or attempt to induce any director, manager or employee of the Group $(e)$ known personally (in a business capacity) to the Executive to terminate his or her employment or relationship with the Group, whether or not that person would commit a breach of that person's contract of employment;
• employ any person who during the last 12 Months of the Executive's $(f)$ employment has been a director, manager, or employee of the Group and who is known personally (in a business capacity) to the Executive and who is or may be likely to be in possession of any confidential information or trade secrets relating to:

• the business of the Group; or $(1)$

• $(2)$ the customers of the Group.

• disparage or otherwise make any statements that may or may be likely to injure $(g)$ the commercial reputation of the Company or the Group to any person or persons whatsoever; or
• induce or attempt to induce any company who has a commercial relationship $(h)$ with the any Group Company to engage in a commercial relationship, agreement or understanding with a competitor to any Group Company.

$12.2$ Restraints reasonable

• $(a)$ The Executive and the Company consider the restraints contained in this clause to be reasonable and intend the restraints to operate to the maximum extent.
• $(b)$ If the restraints in clause 12.1:
• are void as unreasonable for the protection of the interests of the $(1)$ Group; and
• $(2)$ would be valid if part of the wording was deleted or the period or area was reduced.

the restraints will apply with the modifications necessary to make them effective.

$12.3$ Acknowledgments by Executive

The Executive acknowledges that:

• $(a)$ the restrictive covenants contained in clause 12.1 are reasonable and necessary for the protection of the goodwill of the Group;
• the remedy of damages may be inadequate to protect the interests of the Group $(b)$ and the Company is entitled to seek and obtain injunctive relief, or any other remedy, in any Court;
• $(c)$ in view of the importance of the restraints contained in this clause for the protection of the proprietary interests of the Group, this clause 12 will survive the termination of the Executive's employment with the Company in all circumstances; and
• consideration for the restrictive covenants contained in this clause is included in $(d)$ the benefits provided to the Executive pursuant to this agreement.

$12.4$ Restraints independent

The restraints contained in this clause 12 are separate, distinct and several, so that the unenforceability of any restraint does not affect the enforceability of the other restraints.

$12.5$ Company's restricted activities

Except with the written permission of the Executive, the Board must not, and must use reasonable endeavours to ensure that the Company does not, during the Covenant Period and within the Covenant Area, disparage or otherwise make any statements that may or may be likely to injure the reputation of the Executive to any person or persons whatsoever

13 Approvals

$13.1$ Agreement subject to Board and shareholder approvals

This agreement is subject to:

• $(a)$ all required Board and shareholder approvals;
• $(b)$ any necessary Regulatory Consent; and

all applicable laws.

Compliance with Corporations Act and ASX Listing Rules $13.2$

The Company is not required to:

• $(a)$ pay or provide; or
• procure the payment or provision, $(b)$

of any money or benefits to the Executive which would require shareholder approval under the Corporations Act or which would cause the Company to infringe the ASX Listing Rules.

$13.3$ Reduction of payments

• Any payments or benefits to be provided to the Executive under this agreement $(a)$ must be reduced to a level which does not require shareholder approval under Part 2D.2, Division 2 of the Corporations Act and which does not infringe the ASX Listing Rules.
• Where clause 13.2 applies, there is no obligation on the Company to seek or $(b)$ obtain shareholder approval or to provide any compensation to the Executive except where specifically contemplated under this clause 13.
• The Company must use its reasonable endeavours to obtain shareholder $(c)$ approval in respect of any grant of Equity made to the Executive in connection with this agreement that is, or becomes, subject to shareholder approval under the ASX Listing Rules or any other rule, regulation or law by reason of the fact the grant is a grant of Equity.
• $(d)$ If:
• clause 13.3(c) applies; $(1)$
• $(2)$ a resolution to approve a grant of Equity to the Executive (Resolution) is put to shareholders in general meeting; and
• shareholders in general meeting do not pass the Resolution, $(3)$

the Board may (or if the grant of Equity is one where all or a portion of STI awarded to the Executive is deferred into Equity, must) subject to any other relevant rule, regulation or law, pay to the Executive an amount of cash equivalent to the value of the grant of Equity (or any portion thereof) that the Executive will not receive as a result of the failure to pass the Resolution.

• Where shareholder approval is sought in accordance with clause 13.3(c), the $(e)$ Company has the sole discretion as to:
• the wording of any resolutions or explanatory material or other $(1)$ information to be put to shareholders in connection with the approval; and
• $(2)$ the timing of the request for approval.

13.4 Overpayment

If the Company overpays the Executive, the Executive must, on receiving a written notice from the Company immediately repay any money or benefits specified in such notice. Overpayments may be recovered through deductions to the Executive's pay in accordance with Telstra Policies until the overpayment is recovered.

13.5 Effect of this clause

This clause 13 has effect regardless of any other provision of this agreement.

14 Resolving disagreements

If any disagreement arises about your employment or terms of this agreement, it shall be resolved by using Telstra Policies (as amended from time to time), and co-ordinated by the Company Secretary.

15 General

15.1 Governing law and jurisdiction

• This agreement is governed by the law in force in Victoria. $(a)$
• $(b)$ Each party irrevocably submits to the non-exclusive jurisdiction of courts exercising jurisdiction in Victoria.
• Each of the parties irrevocably waives any objection to the venue of any legal $(c)$ process on the basis that the process has been brought in an inconvenient forum.

$15.2$ Entire agreement

• This agreement states all the express terms of the agreement between the $(a)$ parties in respect of its subject matter. It supersedes all prior discussions, negotiations, understandings and agreements between the Executive and the Company.
• The Executive acknowledges that in accepting employment as Chief Executive $(b)$ Officer the Executive has not relied on any representations regarding his employment made by the Company (or its agents or employees) other than matters expressly set out in this agreement.

Form of notices $15.3$

Any notice or other communication to or by a party to this agreement:

• must be in legible writing and in English addressed as shown at the start of this $(a)$ agreement; and
• can be relied on by the addressee and the addressee is not liable to any other $(b)$ person for any consequences of that reliance if the addressee believes it to be genuine, correct and authorised by the sender.

$15.4$ Prohibition, enforceability and severance

• Any provision of, or the application of any provision of, this agreement which is $(a)$ prohibited in any jurisdiction is, in that jurisdiction, ineffective only to the extent of that prohibition.
• Any provision of, or the application of any provision of, this agreement which is $(b)$ void, illegal or unenforceable in any jurisdiction does not affect the validity, legality or enforceability of that provision in any other jurisdiction or of the remaining provisions in that or any other jurisdiction.
• If a clause is void, illegal or unenforceable, it may be severed without affecting $(c)$ the enforceability of the other provisions in this agreement.

15.5 Waiver

• The failure of either party at any time to require performance by the other party $(a)$ of any provision of this agreement does not affect the party's right to require the performance at any time.
• The waiver by either party of a breach of any provision may not be held to be a $(b)$ waiver of any later breach of the provision or a waiver of the provision itself.

15.6 Legal advice

The Executive represents that they have taken, or had the opportunity of taking, legal advice in relation to the nature, effect and extent of this agreement.

15.7 Counterparts

This agreement may be executed in any number of counterparts and all counterparts, taken together, constitute one instrument. A party may execute this agreement by executing any counterpart.

Schedules

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Table of contents

Short Term Incentive

Long Term Incentive

Schedule 1

Short Term Incentive

• $(a)$ For the period commencing on 1 July 2009 and ending on 30 June 2010, the Executive will be eligible to receive an STI incentive equivalent to:
• 80% of Total Fixed Remuneration if target hurdles are met; and $(1)$
• $(2)$ a maximum of 160% of Total Fixed Remuneration,

subject to the conditions determined by the Board.

$(b)$ The Board may, at its sole discretion, require that up to 50% of any STI incentive awarded to the Executive be deferred for a period of time as determined by the Board in accordance with Telstra Policies.

Schedule 2

Long Term Incentive

$(a)$ For the period commencing on I July 2009 and ending on 30 June 2010, the Executive will be eligible to receive an LTI grant equivalent to a maximum of 200% of Total Fixed Remuneration, subject to the conditions determined by the Board.

Signing page

	Executed as an agreement
	Company
	Telstra Corporation Limited
	sign here > CBhwingstone
	print name Catherine B Livingstone
sign here	in the presence of
	print name SIMONE ASENBERGER
	Executive
	David I Thodey
sign here ▶	THET
print name
sign here $\blacktriangleright$	in the presence of
print name	SIMONE ASENBERGER