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

C. United Kingdom Dividend Plan (UKDP)

The terms and conditions set out in clauses 17, 18, 19, 20, 21, and 22 relate specifically to the UKDP and references in these clauses to ‘Participants’ and ‘Participating Shares’ are to Participants and Participating Shares in the UKDP.

17. Participation in the UKDP
Subject to these Terms and Conditions, participation is optional, may be either full or, in the case of a Qualifying Trustee only, part and is open to all Eligible Persons. An Eligible Person (other than a Qualifying Trustee) may only participate in respect of all (and not some only) of those Ordinary Shares which are registered in their name and which are recorded in the Register under the same Shareholder number. There are no minimum or maximum participation limits.

18. 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 is made when the National accepts an Application in respect of the UKDP from the Applicant.

19. Trust of Income Share
(a) During the continuation of the UKDP, the Income Share will be registered in the name of the Trustee and, pursuant to the terms of the Trust Deed, held by the Trustee on trust for the Participants.

(b) Under the terms of the Articles of Association of the Subsidiary:

(i) no dividend may be declared on the Income Share except in circumstances where the National has determined that a Cash Dividend is payable and has announced or specified the Record Date for such Cash Dividend and the date on which such Cash Dividend is to be paid (the Cash Dividend determined by the National hereinafter referred to as a ‘Related Cash Dividend’);

(ii) no dividend on the Income Share may exceed the sterling equivalent (calculated on such basis as the Directors may determine) of the aggregate amount which but for their participation in the Plan the Participants would have been entitled to receive in respect of the Related Cash Dividend; and

(iii) a dividend declared on the Income Share is to be paid by the Subsidiary on the same date, as nearly as practicable, as the Related Cash Dividend.

(c) The Trustee will hold each dividend received in respect of the Income Share on behalf of the persons who were Participants on the Record Date for the Related Cash Dividend on trust to distribute to each such person that amount which bears the same proportion to the amount of the dividend received by the Trustee in respect of the Income Share as the amount of the Related Cash Dividend which that person would otherwise have received in respect of their Participating Shares bears to the aggregate of the amounts of the Related Cash Dividend which all such persons would otherwise have received in respect of their Participating Shares.

(d) The Trustee may round up or down to a whole penny any fractional entitlement of a Participant so as to ensure that the whole of each dividend on the Income Share is distributed.

(e) the National will ensure, so far as it is able, that any dividend on the Income Share is paid on the same date, as nearly as practicable, as the Related Cash Dividend.

20. Operation of the UKDP
(a) A Participant shall not be entitled to a Related Cash Dividend from the National on their Participating Shares. However, if the Australian dollar equivalent (calculated on such basis as the Directors may determine) of that portion of a dividend declared by the Subsidiary on the Income Share attributable to a Participant’s Participating Shares is less than the amount of the Related Cash Dividend which that Participant would (but for their participation in the UKDP) have been entitled to receive in respect of their Participating Shares (the difference between the two amounts hereinafter referred to as the ‘Difference’), the Participant shall then become entitled to participate in the Related Cash Dividend to the extent of the Difference.

(b) If the Subsidiary fails to declare a dividend on the Income Shares prior to the date on which a Related Cash Dividend becomes payable, the Participant shall be entitled to participate in the Related Cash Dividend in respect of their Participating Shares to the same extent that they would have been entitled if they were not a Participant.

21. General
Dividends on the Income Share will only be declared at the discretion of the directors of the Subsidiary and no Shareholder shall have any right, by virtue of their participation in the UKDP, to receive any dividend in respect of the Income Share or any other distribution from the trust established pursuant to the Trust Deed, other than a dividend which is actually declared and paid on the Income Share.

22. Plan Statement
A Plan Statement giving the following information will be issued to each Participant in respect of each distribution of a dividend on the Income Share:

(i) the shareholder number of the Participant under which their Participating Shares are recorded in the Register;

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

(iii) the total net amount, expressed in pounds sterling, payable to the Participant under the Plan (being their proportion of the dividend on the Income Share), and the amount, expressed in pounds sterling, of any U.K. Tax credit attaching thereto.

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