This settlement and release agreement is made on 2005 between the following parties:

Exhibit 4.12

13 JULY 2005

This settlement and release agreement

is made on                      2005 between the following parties:

1. XXXXXX XXXX

of 0 Xxxxxx Xxxxx

Xxxxxxxx Xxx 0000

(Xx Xxxx)

2. COLES XXXX LIMITED

ABN 11 004 089 936

of 000 Xxxxxx Xxxx, Xxxxxxxx, Xxxxxxxx 0000

(Coles Xxxx)

Recitals

A. Xx Xxxx commenced employment with Coles Xxxx on 27 October 2003.

B. The parties have agreed that Xx Xxxx’x employment with Coles Xxxx shall cease.

C. The parties wish to set out the arrangements applicable to the cessation of Xx Xxxx’x employment with Coles Xxxx.

The parties agree

in consideration of, among other things, the mutual promises contained in this agreement:

1 Separation date

1.1 The cessation of Xx Xxxx’x employment with Coles Xxxx shall be effective from close of business on 3 January 2005 (“Separation Date”) until which date Xx Xxxx shall continue to be paid and to receive and have the benefit of all existing entitlements.

2 Payments and Announcement

2.1 Coles Xxxx will pay to Xx Xxxx the following payments less appropriate taxation deductions as required by law:

(a) Within 7 days of the payment referred to in clause 2.2 being made, the sum of AUD$2,082,639 (being 12 months salary in lieu of notice plus a payment in consideration of Xx Xxxx agreeing to extend his restraint period from 12 months to 18 months), less superannuation contributions (being the maximum age-based contribution allowed

for Xx Xxxx for the 2005/06 financial year by any relevant laws or regulations, such payment to be paid into the Coles Xxxx Superannuation Fund at the same time as the payment to Xx Xxxx is made) less any tax payable (payment to be treated as an eligible termination payment);

(b) the sum of $19,687.40 gross ($10,139.40 net) for annual leave entitlements accrued up until the Separation Date, which amount was paid to Xx Xxxx on or around 4 January 2005;

(c) the sum of $7,142.80 gross ($4,000.86 net) for salary up until the Separation Date, which amount was paid to Xx Xxxx on or around 4 January 2005;

2.2 Within 7 days of the provision of certification from Xx Xxxx’x solicitors as to legal costs incurred, Coles Xxxx will pay Xx Xxxx’x solicitors for Xx Xxxx’x reasonable legal expenses relating to the finalisation of this agreement provided that any amount in excess of $10,000 will be deducted from the payment referred to in clause 2.1(a).

2.3 Within 7 days of the provision of an itemised account from Xx Xxxx’x financial adviser, Coles Xxxx will pay for Xx Xxxx’x financial expenses directly relating to tax advice, return preparation and lodgement associated with international hire, up to a maximum amount of $20,350 including GST.

2.4 Xx Xxxx acknowledges that Coles Xxxx will not be obliged to give and Xx Xxxx will have no entitlement to receive any payments other than the payments set out in clauses 2.1, 2.2 and 2.3

3 Xx Xxxx’x acknowledgments and release

3.1 Xx Xxxx acknowledges that:

(a) Coles Xxxx makes the payments in full and final settlement of all claims against Coles Xxxx relating to or arising from Xx Xxxx’x employment at any time with Coles Xxxx or its cessation that Xx Xxxx has now or may have had in the future if the parties had not executed this agreement; and

(b) this agreement is made in order to resolve all differences between the parties. This agreement must not be interpreted as an admission by Coles Xxxx of liability to Xx Xxxx in the total amount of the payments.

3.2 Xx Xxxx by his execution of this agreement releases absolutely and discharges Coles Xxxx from all claims, actions, suits, causes of action, demands, liability, damages and costs (whether at common law, in equity or, to the extent permitted, under any statute) relating to or arising from Xx Xxxx’x employment with Coles Xxxx or its cessation (but excluding any claim for personal injury arising under the Accident Compensation Act (Vic)) that Xx Xxxx has now or may have had in the future if the parties had not executed this agreement.

4 Coles Xxxx’x Release

Coles Xxxx releases absolutely and discharges Xx Xxxx from all claims, actions, suits, causes of action, demands, liability, damages and costs (whether at common law, in equity or, to the extent permitted, under any statute) relating to or arising from Xx Xxxx’x employment with Coles Xxxx or its cessation that Coles Xxxx has now or may have had in the future if the parties had not executed this agreement, save that this release shall not restrict Coles Xxxx from making any claim against Xx Xxxx based upon fraudulent conduct by Xx Xxxx during his employment with Coles Xxxx.

5 Options

5.1 Coles Xxxx acknowledges that Xx Xxxx has 500,000 share options issued under series SE-13 of the Coles Xxxx Ltd Executive Option Plan 2002 (Senior Executives) (“Share Options Plan”) with EPSG hurdles of 12.5% to 15% and 100,000 share options issued under series SE-14 of the Share Options Plan with EPSG hurdles of 15% to 25% for which performance hurdles have been met but for which employment tenure requirements have not been met. Coles Xxxx will do all things necessary to ensure that the Directors of Coles Xxxx resolve that these options are exercisable by Xx Xxxx any time up to and including the date being 60 days following the full year results announcement date after the Separation Date. If Xx Xxxx fails to exercise these options by 60 days following the full year results announcement date after the Separation Date, the options will expire automatically.

5.2 If Xx Xxxx was still employed by Coles Xxxx as at the day following the announcement of Coles Xxxx’x financial results for the financial year to 31 July 2005, Xx Xxxx, subject to performance hurdles being met, would be entitled to exercise up to a further 500,000 share options issued under series SE-13 of the Share Options Plan and up to a further 100,000 share options issued under series SE-14 of the Share Options Plan. Subject to this clause 5.2 and to clause 5.3, Coles Xxxx will permit Xx Xxxx to exercise a pro rata number of options as follows:

NO		x		ND
				365

where

(i) NO means the number of options exercisable by Xx Xxxx as at the day following the announcement of Coles Xxxx’x financial results for the financial year to 31 July 2005, subject to performance hurdles being met (EPSG hurdles of 12.5% to 15% for the series SE-13 allocation and EPSG hurdles of 15% to 25% for the series SE-14 allocation).

(ii) ND means the number of days from 1 August 2004 to the Separation Date.

This pro rata number of options, if exercisable, may be exercised at any time up to and including the date being 60 days following the full year results announcement date after the Separation Date provided:

(iii) the relevant performance hurdles for those options are met at the date(s) the options are required to be tested in accordance with their terms. If Xx Xxxx fails to exercise those options by this date, the options will expire automatically; and

(iv) in the opinion of the Directors of Coles Xxxx, exercised at the Directors’ sole discretion, Xx Xxxx has faithfully and diligently acted in the best interests of Coles Xxxx until the date of exercise.

5.3 If Xx Xxxx breaches his obligations to Coles Xxxx in terms of this agreement including but not limited to clause 7 (Restraint) prior to Xx Xxxx exercising the options referred to in clause 5.2, Coles Xxxx will be entitled to give Xx Xxxx written notice that Xx Xxxx’x rights to any unexercised options referred to in clause 5.2 expire.

5.4 Xx Xxxx acknowledges that he is not entitled to any new Share Options or Shares or to participate in any Coles Xxxx Executive Share Options or Share issues.

5.5 The parties acknowledge that the reference to “invested” in the second paragraph of clause 15 of the Employment Contract dated 11 August 2003 was intended in the context to be “unvested” and the clause is varied accordingly.

6 Assistance in litigation

Xx Xxxx undertakes to be available to provide Coles Xxxx and its advisers with such reasonable assistance and co-operation it may require to defend or prosecute any litigation or to respond to any regulatory inquiry or investigation in which Coles Xxxx may be or become involved relating to any matter which arose during or related to the time of Xx Xxxx’x employment with Coles Xxxx subject to payment of his reasonable expenses and a daily rate equivalent to his daily base rate while an employee of Coles Xxxx.

7 Restraint

7.1 Xx Xxxx acknowledges that the restrictive covenants in clause 17 of Employment Contract dated 8 August 2003 and signed by Xx Xxxx on 11 August 2003 will continue in full force and effect and further agrees that those restrictive covenants will be extended from a period of 12 months to a period of 18 months from the Separation Date. Xx Xxxx also acknowledges that the reference to “employer” in the fourth bullet point of clause 17 of the Employment Contract was intended in the context to be “employee” and is varied accordingly.

7.2 Xx Xxxx confirms that clause 17 of the Employment Contract, as so varied, survives the cessation of his employment with Coles Xxxx.

7.3 Xx Xxxx acknowledges that:

(a) the restrictive covenants contained in clause 17 of the Employment Contract as amended by this clause 7 are reasonable and necessary for the protection of Coles Xxxx’x goodwill;

(b) the remedy of damages may be inadequate to protect Coles Xxxx’x interests and Coles Xxxx is entitled to seek and obtain injunctive relief, or any other remedy, in any court;

(c) the decision of the Board of Coles Xxxx to exercise its discretion in permitting him to exercise his share options and to receive the payment referred to in clause 2.1(a) is adequate consideration for the restrictive covenants contained in clause 17 of the Employment Contract as amended by this clause 7; and

(d) in the view of the importance of the restraints contained in clause 17 of the Employment Contract as amended by this clause 7 for the protection of Coles Xxxx’x proprietary interests, Xx Xxxx agrees not to take any legal action to challenge the validity and enforceability of the restraints.

7.4 Xx Xxxx’x obligations under this clause 7 survive the termination of this agreement.

8 No harmful statements

Subject to clause 10, Coles Xxxx and Xx Xxxx may make statements (whether written or oral) about Xx Xxxx’x employment, its cessation or the subject matter of this agreement only where required by law or where it is relevant to the business of Coles Xxxx and then only in a way which is not critical or harmful of the reputation of Coles Xxxx or Xx Xxxx or does not denigrate Coles Xxxx or Xx Xxxx.

9 Confidential Information

9.1 Xx Xxxx must not, without Coles Xxxx’x prior written consent, disclose to anyone else any confidential information concerning the business, accounts, affairs or finances of Coles Xxxx or any of its secrets, dealings or transactions which have come to Xx Xxxx’x knowledge during Xx Xxxx’x employment or in any other way.

9.2 In clause 9.1 confidential information means information about Coles Xxxx’x business, products and affairs (including, but not limited to, marketing information) for the time being confidential to Coles Xxxx or treated by Coles Xxxx as confidential, and trade secrets (including, but not limited to, formulae, processes, methods, inventions, technical data and know how) about Coles Xxxx’x business, but excludes information which is in the public domain.

10 Obligation of confidentiality

The parties must keep absolutely confidential the terms of this agreement and the discussions leading to this agreement. The parties must not disclose these matters to anyone else except:

(a) as required by law or, at Coles Xxxx’x election, to the Australian Stock Exchange or other regulatory bodies;

(b) with the express authority of the other party;

(c) for the purpose of obtaining confidential accounting or legal advice;

(d) for the purpose of enforcing this agreement; or

(e) for the purpose of producing this agreement to a Court or Tribunal in the event of a breach of this agreement.

11 Severability

If a provision of this agreement is invalid, illegal or unenforceable it must, to the extent that it is invalid, illegal or unenforceable, be treated as severed from this agreement. Severance of a provision will not affect the validity and enforceability of the remaining provisions.

12 Governing law

12.1 This agreement is governed by the laws of Victoria.

12.2 Each party irrevocably submits to the non-exclusive jurisdiction of the Victorian courts.

13 Whole agreement

This agreement is the whole agreement between the parties concerning the subject matter. It replaces any prior agreement, arrangement or understanding concerning the subject matter.

14 Interpretation

14.1 In this agreement, unless the context requires otherwise, a reference to:

(a) a party includes that party’s executors, successors, directors, officers, employees, agents and related bodies corporate;

(b) a person includes an individual, a firm or a corporation.

14.2 Headings in this agreement are for convenience only and do not affect the interpretation of this agreement.

15 Independent legal advice

Xx Xxxx acknowledges that he has:

(a) obtained independent legal advice concerning all aspects of this agreement; and

(b) carefully read and fully understands all the provisions of this agreement.

16 Savings

Nothing in this agreement is intended to affect and/or limit Xx Xxxx’x entitlements from the Coles Xxxx Superannuation Fund and Coles Xxxx will do all things necessary and sign all documents which may be required to ensure that Xx Xxxx receives all of those entitlements in full.

Executed as an agreement:

Signed by
XXXXXX XXXX
in the presence of:
Witness				Xxxxxx Xxxx
Name (please print)
Signed for
COLES XXXX LTD
by its duly authorised representative
in the presence of:
Witness
Name (please print)