Dividend Reinvestment Plan
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Further to the ASX Announcement on 28 October 2009, National Australia Bank (NAB) has amended its Dividend Reinvestment Plan. The DRP is a convenient way for you to increase your shareholding in the NAB by reinvesting some or all of your dividends in additional shares. If you would like to participate in the DRP or vary your existing instructions, please complete and return the DRP election form or by registering online by no later than 5.00pm on Thursday, 19 November 2009 (AEDT). The participants in the United Kingdom should complete and return the UK DRP election form or by registering online by no later than 5.00pm on Thursday, 19 November 2009 (AEDT). Eligibility All shareholders are eligible to participate in the DRP. However, shareholders in some countries may not be able to participate because of legal and administrative requirements in their country. The Directors of the National have the discretion to determine whether any such shareholders are excluded from the DRP. For example, the Directors have determined that United States shareholders are currently not able to participate, including where shares are held in a broker’s clearing account or by a trustee or nominee. Limits on Participating in the DRP Participation in the DRP is voluntary, however there are some limits. Number of shares that can participate
The Directors of the National can change or remove this limit from time to time. The National will announce any change to the maximum participation limit before any dividend payment to which it relates. If you have split your accounts, any applicable limit will apply across your total holding. If you have split your accounts, any applicable limit will apply across your total holding. Participation in the DRP and the U.K. Dividend Plan The cash dividends you receive under the U.K. Dividend Plan can also be reinvested in shares through the DRP.
There are two types of participation. Full participation Partial participation However, whether you are a full participant or a partial participant, you are always subject to the overall limits on participation in the DRP outlined above. Dividends on the part of your shareholding (if any) that does not participate in the DRP will be paid to you in cash. Participation by additional shares Shares provided to you under the DRP Shares you acquire outside the DRP Full participants Partial participants Dividend Nomination Advice To apply to participate in the DRP, you need to complete a Dividend Nomination Advice and return it to the Share Registry. However, you do not need to complete and return a Dividend Nomination Advice for each dividend paid by the National. Your participation will remain in force until you choose to withdraw from the DRP or you vary your participation. Price Shares will be issued or transferred to you at a price based on the current market price. The price is the average of the daily volume weighted average market price of the National’s ordinary shares sold on the Australian Securities Exchange (excluding not ‘at-market’ trades) during the seven trading days starting on the Trading Day after the Record Date for that particular Dividend, calculated to two decimal places. The Directors can specify another time period to determine the price and the National will make an announcement to the ASX if they do so. Number of shares you receive under the DRP and treatment of residual balances The number of shares you receive is calculated by multiplying the number of your shares participating in the DRP by the dividend on those shares (in Australian dollars), deducting any withholding tax (if applicable) and then dividing this amount by the price outlined above. If, after this calculation there is a residual positive balance, that balance will be carried forward, (without interest) and added to your next dividend for the purpose of calculating the number of shares you secure under the DRP at that time. If you stop participating in the DRP (either because you cease to be a shareholder or you withdraw fully from the plan), and the balance of your Plan account is more than AUD$10, the National will either pay this balance into any Australian or U.K bank account you nominate (amounts cannot be paid into other foreign bank accounts), or alternatively provide you with payment by cheque. Residual Balance Payments will be made annually. Contact the Share Registry for information on how to give this direction. Residual amounts of AUD$10 or less will automatically be donated to ShareGift Australia. ShareGift Australia is a not-for-profit organisation and will arrange for the funds to be donated to its beneficiary charities across Australia. You can obtain further information about ShareGift Australia at www.sharegiftaustralia.org.au. Amounts over AUD $2 are tax deductible for Australian resident taxpayers. If you are an Australian resident shareholder, and an amount of AUD$2 or more is donated on your behalf, you may request receipt of a tax receipt to be issued to you. Please contact the Share Registry if you would like ShareGift Australia to provide a tax receipt. The shares are provided to you at the same time that the cash dividend is paid. Administration Costs All administration costs of the DRP are met by the National. You do not have to pay any brokerage, commission or other administration costs on shares transferred or issued under the DRP and, under current law, no stamp duty is payable by you in respect of those shares. Statements Following each dividend payment, you will be sent a statement that sets out the number of shares provided to you under the DRP and the cash balance carried forward on any residual amount remaining (representing a fraction of a share after the calculation of the number of shares to be allotted under the DRP in relation to that dividend). Operation of the DRP In operating the DRP, the National may in its discretion:
The terms and conditions of the DRP are set out on page 19 onwards. Australian resident shareholders Any dividend applied to acquire shares under the DRP forms part of your Australian taxable income. The dividend may also be fully or partly franked under Australia’s dividend imputation system. Any franking credits attached to the dividend also form part of your Australian taxable income. However, you are generally entitled to a rebate of tax based on the franking credits attached to the dividend. You are subject to Australian tax on any capital gain made when you dispose of shares you receive under the DRP. For the purpose of calculating any capital gain (or capital loss), the cost of the shares acquired under the DRP is the price calculated in accordance with the formula for calculating the ‘current market price’ described on page 19. The price will be included on each relevant dividend statement. Non-Australian resident shareholders If you dispose of shares you receive under the DRP, you are currently not subject to Australian tax on any capital gain, and you are not entitled to any capital loss where, broadly, you owned less than 10% of the ordinary shares in the National at all times in the 5 years before the disposal. Proposed amendments to Australia’s non-resident capital gains rules will, if they become law, introduce a broader exemption from the date the new law comes into effect. Please refer to the National’s Group website www.nabgroup.com for further details of these proposed amendments. You should seek independent tax advice in respect of the tax treatment in your country of residence of dividends reinvested under the DRP and the disposal of shares provided under the DRP. Terms and Conditions of the Plans comprising the National's Dividend Package
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