|
Further to the ASX Announcement on 9 May 2008, National Australia Bank has amended the Dividend Reinvestment Plan.
The DRP is a convenient way for you to increase your shareholding in the National 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 (including your SecurityHolder Reference Number or Holder Identification Number) of the attached letter by no later than 5.00pm on Thursday, 5 June 2008 (AEST).
The participants in the United Kingdom should complete and return the UK DRP election form (including your SecurityHolder Reference Number or Holder Identification Number) of the attached letter by no later than 5.00pm on Thursday, 5 June 2008 (AEST).
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
-
There is no minimum limit on the number of your shares that may participate in the DRP.
-
Currently, a maximum of 15,000 shares can participate in the plan.
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.
Types of Participation
There are two types of participation.
Full participation
This means that you participate in respect of all of the shares registered in your name as at each record date for a dividend.
Partial participation
This means that you participate in respect of some but not all of the shares registered in your name as at each record date for a dividend. Accordingly, you need to specify the exact number of shares you wish to participate in the DRP when applying to participate.
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 provided to you under the DRP will automatically be added to those already participating in the DRP (subject to any applicable participation limit) unless you change your participation.
Shares you acquire outside the DRP
Full participants
If you are a full participant, any other shares you acquire (for example by buying them on market) will automatically be added to that shareholding already participating in the DRP (subject to any applicable participation limit) unless you change your participation.
Partial participants
If you are a partial participant, any other shares you acquire will not participate in the DRP unless you direct them to do so.
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 consent to the National providing your name and address details to ShareGift Australia so that a tax receipt can be issued to you. Please contact the Share Registry if you do not want your information to be disclosed, in which case it will not be possible for 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:
-
either issue new shares, or arrange for existing shares to be purchased on market and transferred, to shareholders participating in the DRP (shares issued under the DRP rank equally in all respects with existing fully paid ordinary shares);
- arrange for the DRP to be fully or partially underwritten in respect of any dividends;
- at any time vary the participation limits applicable to the DRP; and
- vary, suspend or terminate the DRP at any time.
The terms and conditions of the DRP are set out on page 19 onwards.
Tax
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
You will generally be subject to Australian dividend withholding tax on the unfranked part of a dividend. However, you will not be subject to Australian dividend withholding tax on the unfranked part of the dividend to the extent that it is designated as ‘conduit foreign income’ by the National, or on the franked part of the dividend. The extent to which the dividend is designated as conduit foreign income will be included on each relevant dividend statement. The dividend is not otherwise subject to tax in Australia and you will be unable to use any franking credits attached to it.
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
It is not intended the above information provide definitive financial or taxation advice. Shareholders should choose their form of dividend with care having regard to their individual circumstances. Shareholders uncertain as to which dividend option is best for them are strongly advised to consult their own financial, taxation or legal adviser.
|
