NAB s Australia June 2010 Supplementary Restricted Share Program Share Offer Guide

Transcription

1 NAB s Australia June 2010 Supplementary Restricted Share Program Share Offer Guide Performance & Rewards National Australia Bank Limited ABN

2 Contents Overview Key Dates How to Respond Understanding this Offer Further Information Definitions The information set out in this guide and its attachments and any advice provided by NAB Group in connection with the National Australia Bank Staff Share Ownership Plan or NAB shares provided under it is general advice only and does not take into account your personal financial circumstances. You should consider obtaining your own financial product advice from an independent person who is licensed by the Australian Securities and Investment Commission to give such advice.

3 Overview NAB Group s Restricted Share Plan (RSP) provides for eligible senior managers to receive an annual offer of shares in recognition of the Group s overall performance. The RSP has a target value of A$4,000 per annum adjusted for overall NAB Group outcomes. As a result, the offer value in any year could be greater or less than the target. For the 2009 RSP offer, the target was adjusted by a factor of 0.8 for overall NAB Group performance for the 2008/2009 financial year and the offer value was A$3,200. Any NAB shares or performance rights provided as part of the RSP will be subject to the particular terms and conditions applicable to those shares or performance rights at the relevant time. NAB may in its discretion discontinue, replace or vary the terms of the RSP at any time. Due to administrative error or the recent changes to your performance rating or your job grading, you did not receive an offer for RSP shares or we were unable to allocate your RSP shares to you on 16 December Therefore a supplementary offer of RSP shares is being made ( Supplementary RSP shares ). This guide sets out the terms on which the Supplementary RSP shares will be allocated. These supplementary RSP shares are expected to be allocated on or around 2 June The provision of Supplementary RSP shares is dependent on you being employed by the NAB Group on the date the shares are allocated. Key Dates Offer period 5 May 18 May 2010 Anticipated Allocation Date (the date that the shares are expected to be allocated) Milestone Date (the date until which certain forfeiture conditions apply including forfeiture on resignation from the NAB Group) Restriction End (the latest date the shares will be released from restriction) 2 June December June 2020 How to Respond NAB is making an offer of Supplementary RSP shares. Prior to making decisions about the offer, you should read this offer guide and NAB s Australia June 2010 Supplementary RSP Offer - Shares and Tax Guide - to consider the financial and tax implications of being allocated the shares. You will need to make these decisions by the end of the offer period. This guide includes information about the terms and conditions that apply to the shares including: - How the number of shares allocated is determined; - The restriction period; - The circumstances under which the shares may be forfeited; - Dividends and other shareholder rights; and NAB s Australia June 2010 Supplementary RSP Offer Guide Page 2

4 - How and when the shares may be traded. You should consider seeking advice from a licensed financial and/or tax adviser before making decisions in relation to this offer. Understanding the tax implications of this offer You should read NAB s Australia June 2010 Supplementary RSP Share Offer - Shares and Tax Guide - Australia so that you may understand the tax implications of being provided any Supplementary RSP shares. It is very important to understand the tax implications of this offer: As they may affect your decision to accept the offer or not; and You need to be aware of when you will be taxed on the Supplementary RSP shares allocated to you. Choose your response It is important to note that any nominations or decisions you make now will only apply to Supplementary RSP shares allocated to you under this June 2010 offer in relation to the 2008/2009 financial year. 1) To opt out of this offer If you decide that you do not want to accept this offer and do not want to be allocated any Supplementary RSP shares, then you can opt-out of the share offer by completing and submitting the Opt-Out Form before the end of the offer period. If you choose to opt-out, then Supplementary RSP shares will not be allocated to you. Cash will not be provided as an alternative in this situation. OR 2) To accept this offer of Supplementary RSP shares and be allocated shares If you choose not to complete any forms during the offer period then you will automatically be allocated Supplementary RSP shares if you are still employed by NAB Group on the date the shares are allocated. NAB s Australia June 2010 Supplementary RSP Offer Guide Page 3

5 Understanding this Offer Allocation of Supplementary RSP shares The provision of Supplementary RSP shares will be made under the National Australia Bank Staff Share Ownership Plan ( the Plan ), which will govern the terms and conditions attaching to these shares. Following allocation, the shares will be held in trust for you by the Trustee. This offer guide contains a summary of the terms and conditions of the Plan. A full copy of the Plan trust deed is also available, without charge, from Computershare Plan Managers during EST business hours on and on the Computershare website. These terms may vary from those previously communicated, and you should read them carefully. In the event of any inconsistency, these terms expressly supersede any communications relating to your Supplementary RSP shares. You should make sure that you understand these terms and conditions. If you are eligible for Supplementary RSP shares and do not opt-out of the offer, it is currently anticipated that the Supplementary RSP shares will be allocated on or around the Anticipated Allocation Date. Calculation of the number of Supplementary RSP shares The number of Supplementary RSP shares allocated will be an approximate value of $3,200 divided by the weighted average share price at which NAB shares were traded on the Australian Securities Exchange during the 5 days trading up to and including 11 December 2009 which was $ No payment for these shares is required by you. Example: The RSP value is $3,200, and the WASP is $28.07, then the number of Supplementary RSP shares allocated would be as follows: $3,200 / $28.07 = 114 shares If the number of NAB shares resulting from this calculation (rounded to 2 decimal place) is not a whole number, then the number of shares allocated would be rounded up to the Confirmation nearest whole of number. the Share Allocation Once the shares have been allocated, Computershare Plan Managers will send an confirmation to each participant, including the allocation date and price (WASP). This can be expected within three weeks of the allocation date. The Restriction Period Under the Plan, the shares are held on your behalf by the trustee, and you can t assign, sell, transfer, encumber or otherwise deal with your NAB shares until the end of the restriction period. The restriction period begins on the allocation date of the shares and (if the shares are not forfeited) ends on the earlier of: 1) The date that NAB approves your application to have the Trustee sell or transfer your shares from the trust (as described in the Applying to sell or transfer your shares section below), subject to clearance of the Forfeiture Conditions and NAB s Group Securities Trading Policy restrictions (as set out in this guide); or NAB s Australia June 2010 Supplementary RSP Offer Guide Page 4

6 2) The time you cease your employment with the NAB Group; or 3) The date that you are notified that certain events occur (e.g. the date a takeover bid or resolution for winding-up or other specified events are announced in relation to NAB); or 4) 10 years from the date the shares are allocated to the trustee on your behalf. * * this will be shown as the Restriction End on the Computershare Plan Managers website Note: Items 2 to 4 above relate to the Equity Share Restriction Period definition in the Trust Deed. Item 1 is an additional term determined by the Board (see clauses 14.3 and 14.4 of the Trust Deed). Forfeiture Conditions Until the Milestone Date: Until the Milestone Date, all your Supplementary RSP shares will be forfeited if: 1) you resign from NAB Group; or 2) your employment with the NAB Group is terminated due to your serious misconduct; or 3) you fail to pass the Compliance Gateway (i.e. you receive a red compliance gate) or equivalent in any mid-year or annual performance appraisal. After the Milestone Date: After the Milestone Date, while the shares are held in trust, they will be forfeited if your employment with the NAB Group is terminated due to serious misconduct. Cessation of Employment Your Supplementary RSP shares may be forfeited if you leave NAB Group (see Forfeiture Conditions). In circumstances where you leave NAB Group and your Supplementary RSP shares are not forfeited, then your Supplementary RSP shares will remain in trust. You may request for them to be sold or transferred at any time after the date that your employment ceases. Applying to sell or transfer your shares After the Milestone Date, you may apply for the Trustee to sell or transfer your shares at any time. Approval of your sale or transfer will be subject to a determination by NAB that circumstances do not exist that may result in your shares being forfeited under the Forfeiture Conditions and that the sale or transfer would not constitute a breach of NAB s Group Securities Trading Policy and that you have completed a Compliance Certificate if required to under that policy. In completing your application, you can request the Trustee, via Computershare Plan Managers, to: 1) Sell some or all the shares on your behalf and forward the proceeds of sale to you (after sale costs have been deducted); or 2) Transfer some or all the shares into your own name (e.g. if you want to subsequently sell them through your own broker, or transfer them to another holder). Sell and Transfer forms can be downloaded from the Plan Documentation section of the NAB Employee Centre at Computershare ( NAB s Australia June 2010 Supplementary RSP Offer Guide Page 5

7 While the Trustee holds the shares on your behalf all dividends earned from them are yours and will be paid to you. Other rights you can exercise as a shareholder, including the right to exercise all voting rights attached to the shares (refer to the section Further Information). Irrespective of whether a request has been given to the Trustee, following the end of the restriction period, the Trustee may also, at its discretion, sell the shares on your behalf and forward you the net proceeds or alternatively it can transfer them into your name. The Trustee may require you to bear the costs associated with the sale or transfer (if any). Further Information Why are NAB employee shares held in trust? The trust is a simple mechanism by which restrictions can be placed on trading, and forfeiture conditions enforced. While the shares are held in trust on your behalf, you will receive dividends paid on those shares and will enjoy other shareholder rights (see below). While the shares are held in trust, forfeiture conditions will, however, apply for the protection of NAB (see Forfeiture Conditions). For the June 2010 Supplementary RSP Share Offer the Trustee is National Australia Trustees Limited. Tax File Number (TFN) withholding on employee shares Under new tax legislation, NAB will be liable to pay TFN withholding tax in relation to your employee share allocations, if you have not provided NAB with your TFN or Australian Business Number (ABN) for this purpose. TFN withholding tax is payable on the value of employee shares included in your assessable income for an income year. The new tax legislation enables NAB to recover the amount of withholding tax from your salary and wages once the amount is paid to the ATO. You may provide your TFN or ABN to Computershare Plan Managers. Forms for the provision of your TFN or ABN may be obtained from Computershare Plan Managers via request to nabshareplans@computershare.com.au or alternatively, you may quote your TFN or ABN online via the NAB Employee Centre at NAB or Computershare Plan Managers may contact you with more detail on this if we do not currently hold your TFN or ABN. Dividends NAB s dividends are generally paid twice a year. However, the payment of dividends depends on a number of things including NAB s profitability and dividend policy. Your shares will be eligible for cash dividends from the time they are allocated to the trustee on your behalf. Forms for the provision of your dividend banking instructions may be obtained from Computershare Plan Managers via request to nabshareplans@computershare.com.au or alternatively, you may update them online via the NAB Employee Centre at Shares allocated to you under the Plan are not eligible to participate in NAB s Bonus Share Plan or similar plans introduced by NAB from time to time, while they are held by the Trustee on your behalf. If you do not provide your TFN, NAB may be required to deduct tax prior to giving you a dividend which is not fully franked. If tax is deducted from the dividend, a credit is allowed in your tax assessment for the amount deducted. You may provide your tax file number to Computershare Plan Managers. Forms for the provision of your tax file number may be obtained from Computershare Plan Managers via request to NAB s Australia June 2010 Supplementary RSP Offer Guide Page 6

8 or alternatively, you may quote your tax file number online via the NAB Employee Centre at Shareholder rights You will also be entitled to any bonus shares or other rights to acquire shares in respect of NAB shares. Bonus shares are also held in trust for the remainder of any restriction period applying to the primary shares. They are subject to the same Forfeiture Conditions and Group Securities Trading Policy restrictions. You may also receive notices of any meeting of shareholders of NAB while NAB shares are held in trust under the Plan. If you wish to receive notices you must instruct the Trustee via Computershare Plan Managers, annually in writing. You may instruct the Trustee how to vote on your behalf at a shareholder meeting by requesting the relevant form from Computershare Plan Managers. The Trustee needs to receive written instructions at least 72 hours before any shareholder meeting. If you do not instruct the Trustee how to vote, the Trustee may exercise the voting rights as it sees fit. Insider Trading As an employee of the NAB Group you may be in a privileged position where you know something that is not yet public knowledge but could affect the share price when made public. Basically, you are not allowed to make financial gain for yourself using this knowledge. This is known as insider trading. So you have to be cautious about when you apply to buy, sell or transfer any NAB shares. You should check NAB s Group Securities Trading Policy before applying to buy, sell, transfer or otherwise deal with NAB shares. A copy of the policy is available under the Corporate Governance section at or search on Group Securities Trading Policy on the NAB intranet or on the NAB Employee Centre at Computershare Designated employees should complete a Compliance Certificate and comply with any additional policy applicable to them concerning the acquisition or disposal of NAB shares. The Group Securities Trading Policy applies only to current employees. It is not relevant to individuals who have left the Group, unless at the time of leaving the individual was in possession of inside information that remains relevant for a period after their departure. While not subject to the Group Securities Trading Policy, these individuals are still, however, subject to the usual restrictions at law from dealing in NAB shares when they possess inside information in relation to the Group. If you believe you have price-sensitive information you may not apply for, buy, sell or transfer your shares. If you are uncertain of your position, you should discuss your circumstances with Group Secretariat on (+61 3) Fees apply when selling shares You should also be aware that transaction costs such as brokerage may apply if and when you sell your shares. NAB share price information NAB s Intranet home page and Internet site both contain information on the current share price. Several other sites on the internet provide broader share market information, and most major newspapers contain a list of daily share prices in the business section. Computershare Plan Managers will also provide you with the current market price of ordinary shares in NAB and the formula used to establish the number of shares you may be provided. NAB s Australia June 2010 Supplementary RSP Offer Guide Page 7

9 Computershare Plan Managers will ensure that you get this information promptly by phone. You can contact Computershare Plan Managers by calling General Terms The main terms of the Ownership Plan are summarised throughout this offer guide. You should also note the following additional terms: (a) The Ownership Plan is administered by the Trustee and the Board of the NAB Group. The Board s decision as to the interpretation, effect or application of the trust deed of the Ownership Plan is final and conclusive. The Board may make further rules for the operation of the Ownership Plan which are consistent with the trust deed. The Board may delegate any of its powers or discretions under the trust deed to a committee consisting of any directors, officers and employees of the NAB Group as the Board sees fit. (b) The Board can decide to suspend or cancel the Ownership Plan at any time. The suspension or cancellation of the Ownership Plan will not prejudice the existing rights of participants e.g. it will not disturb already allocated shares. (c) Nothing in the trust deed confers on any employee the right to receive NAB shares or to continue as an employee of the NAB Group, nor affects any right of the NAB Group to terminate an employee s employment. (d) An event occurs when (i) a takeover bid is made to the holders of issued ordinary fully paid shares in NAB (other than as a result of an allotment or transfer approved by the Trustee); or (ii) a statement is lodged with the ASX to the effect that a person has become entitled to not less than 15% of all issued ordinary fully paid shares in NAB (other than as a result of an allotment or transfer approved by the Trustee): or (iii) pursuant to an application made to the Court, the Court orders a meeting to be held in relation to a proposed compromise or arrangement for the purpose of or in connection with a scheme for the reconstruction of NAB or its amalgamation with any other companies; or (iv) NAB passes a resolution for voluntary winding up; or (v) an order is made for the compulsory winding up of NAB. Definitions Here are a few terms that you should understand. Computershare keeping records The role of Computershare Plan Managers is to maintain records of shares, shareholders and employee share plan participants in NAB. The records maintained by Computershare Plan Managers are relied on for such things as the payment of dividends and dispatch of notices to employee shareholders so it s important to let them know if you change your address. Dividends - Income from your shares A dividend is a portion of a company s profits (after company tax) which is distributed to its shareholders. Whether a dividend is paid, and the amount of any dividend, is determined by the Board taking into account the performance and profitability of the company as well as its need for capital. Group or NAB Group who you work for National Australia Bank Limited and its subsidiary companies. NAB National Australia Bank Limited. NAB shares These are ordinary shares in National Australia Bank Limited. NAB s Australia June 2010 Supplementary RSP Offer Guide Page 8

10 Plan National Australia Bank Staff Share Ownership Plan Trust Deed (Plan Rules) NAB s Australia June 2010 Supplementary RSP Share Offer is subject to a formal set of rules. These rules are set out in NAB Australia Bank Staff Share Ownership Plan Trust Deed and are summarised in this offer guide. During the offer period, you can download a copy of the Plan Rules from the offer website, or obtain a copy free of charge from Computershare. Trustee A trustee is a person or company that holds the assets of a trust on behalf of other people. A trustee is given powers, within legal obligations, to administer the trust. For NAB s Australia June 2010 Supplementary RSP Share Offer, the Trustee is National Australia Trustees Limited (ABN ). What number do I ring if I have a question? Computershare Plan Managers GPO Box 658 Melbourne Victoria 3001 Australia Phone: Fax: (03) nabshareplans@computershare.com.au Visit the NAB Employee Centre at NAB s Australia June 2010 Supplementary RSP Offer Guide Page 9