Terms and Conditions of the Plans comprising the National's Dividend Package

 B. Dividend Reinvestment Plan (DRP)

The terms and conditions set out in clauses 13, 14, 15 and 16 relate specifically to the DRP and references in these clauses to a ‘Participant’ and ‘Participating Shares’ are to Participants and Participating Shares in the DRP.

13. Participation in the DRP
(a) Subject to these Terms and Conditions, participation is optional, may be either full or partial, and is open to all Eligible Persons. Notwithstanding any other term of the DRP, a Participant’s Participating Shares at any time must not be greater than any applicable Participation Limit, provided that if the Participating Shares are held in a broker’s clearing account (as defined in the Listing Rules of the Australian Securities Exchange Limited) or by a trustee or nominee, the broker, trustee or nominee will be permitted to participate up to such limit in respect of each person whose Ordinary Shares are held that way. References to Participating Shares in clauses 14 and 15 will be construed accordingly.

(b) The Directors may determine any maximum number of shares that may be or become Participating Shares in the DRP. A maximum of 15,000 Participating Shares are permitted (or such other number as the Directors determine from time to time).

(c) If a Participant elects a number of shares greater than the Participation Limit to be Participating Shares, the election will be deemed to be an election to participate in respect of the maximum Participation Limit at the relevant time.

14. Agreement to Participate
An agreement on the terms and subject to the conditions set out in these Terms and Conditions between the National and an Applicant for participation, either as a Full Participant or a Partial Participant, shall be made when the National accepts an Application in respect of the DRP from the Applicant.

15. Operation of the DRP
A Cash Dividend which is payable to a Participant in respect of Participating Shares will be applied by the National either on the Participant’s behalf in subscribing for, or for the acquisition by the Participant of additional Ordinary Shares on the terms set out in this clause. The Directors will establish and maintain a Plan account for each shareholding account of each Participant. In respect of each such Plan account at the time of each Dividend payment, the Directors will:

(a) determine the number of Ordinary Shares which shall be issued to or purchased on behalf of each Participant by the application of the following formula:

D + R - T
       C

Where:
 
D is the Cash Dividend payable to the Participant in respect of or by reference to their Participating Shares as at the Record Date for that Cash Dividend;
 
R is the carry forward residual (if any) in the Participant’s Plan account from previous dividends

T is any impost, withholding tax or other sum which the National or the Subsidiary is required to or may deduct for any reason from the Cash Dividend referred to in ‘D’;
 
C is the Current Market Price.

(b) apply the total amount of the Cash Dividend payable to the Participant by either or both subscribing for on behalf of and in the name of the Participant and arranging for the transfer to the Participant of, a number of Ordinary Shares equal to the number of shares determined under sub-clause 15(a); and

(c) either or both issue to the Participant and arrange for the transfer to the Participant of a number of Ordinary Shares equal to the number of shares determined under sub-clause 15(a).

Where the application of the formula in sub-clause 15(a) results in a fractional entitlement, the fractional entitlement will be carried forward to the Participant’s Plan account, without interest, to be applied towards the calculation at the time of the next dividend. The Directors have the discretion to determine that any residual positive balances will be paid to Participants (either by direct credit or cheque) where, in the opinion of the Directors, it would be unlawful or impractical for these balances to be carried forward to the next dividend. The amount carried forward (if any) will be detailed in the Plan Statement referred to in clause 16.

After a person ceases to be a Participant in the DRP (Former Participant), and the balance (if any) of their Plan account exceeds AUD $10, the National will either pay this balance into any Australian or U.K. bank account nominated by the Former Participant (amounts cannot be paid into other foreign bank accounts), or alternatively provide payment by cheque. Residual balance payments will be made annually. Residual amounts of AUD $10 or less will automatically be donated to ShareGift Australia.

If you are an Australian resident shareholder, and an amount of AUD $2 or more is donated on your behalf, you consent to 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.

In the case of a Participant who holds Ordinary Shares which are subject to both the DRP and the U.K. Dividend Plan, an amount equal to the proportion of a dividend on the Income Share payable to the Participant by reference to such Ordinary Shares will be paid to the National (rather than to the Participant) and converted by the National into Australian dollars (on such basis as the Directors may determine). The National will apply the proceeds of conversion (and/or any Related Cash Dividend payable by the National to the Participant in accordance with clause 20) in accordance with sub-paragraphs 15(a) and 15(b) above.

16. Plan Statement
A Plan Statement will be issued to each Participant following each Dividend payment giving the following information:

(a) the number of their Participating Shares in the Plan at the Record Date;

(b) the amount per share applied to the acquisition of shares under the Plan;

(c) the number of Ordinary Shares issued or purchased on their behalf under the Plan and their date of acquisition;

(d) the residual amount carried forward (if any) in the Participants Plan account;

(e) the franked amount (if any) of the Dividend and the franking tax credits (if any) attaching thereto; and

(f) in the case of a Participant in the U.K. Dividend Plan, the amount representing the proportion of the dividend (if any) on the Income Share applied on their behalf to the provision of shares under the Dividend Reinvestment Plan and the amount of any U.K. tax credit attaching thereto, and where appropriate the information in (b) and (d) above in relation to any part of a Related Cash Dividend applied as aforesaid on their behalf.

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.