2016 STI Deferral Share Offer Guide

Transcription

1 2016 STI Deferral Share Offer Guide May 2016 This guide explains the terms and conditions of your invitation to participate in the Offer. The NAB shares on offer are provided under the Plan which, together with this guide, sets out the terms and conditions of the NAB shares. You can obtain a copy of the Plan, without charge, by contacting Computershare during AEST business hours. Copies are also available on the NAB Employee Online Website. The terms set out in this guide may vary from those previously communicated and you should read them carefully. In the event of any inconsistency, the terms in this guide expressly prevail over any communications relating to your NAB shares. The information in this guide, any accompanying information and any advice provided by NAB in connection with the Offer is general advice only and does not take into account your personal objectives, financial situation and needs. You should consider obtaining your own financial product advice from an independent person who is appropriately authorised or licenced to give such advice. This document has not been reviewed by or registered with any regulatory authority in any jurisdiction. National Australia Bank Limited ABN

2 1. Key dates Key dates Performance Period The period 1 October 2015 to 31 March 2016 Offer period 2 May 2016 to 16 May 2016 Opt-out Date WASP Period 5:00pm 16 May 2016 (AEST) The five trading days from 17 May 2016 to 23 May 2016 inclusive Conversion Date 23 May 2016 Anticipated Allocation Date 26 May 2016 End of Restriction Period NAB Private Wealth Advisory Incentive Plan Tranche 1-24 February 2017 Tranche 2-26 May 2017 Personal Banking Star Sales Incentive Plan Mobile Banker Star Sales Incentive Plan Broker Partnerships Sales Incentive Plan Tranche 1 26 May 2017 End of the Retention Period 1 NAB Private Wealth Advisory Incentive Plan Tranche 1-24 August 2017 Tranche 2-26 November 2017 Personal Banking Star Sales Incentive Plan Mobile Bankers Star Sales Incentive Plan Broker Partnerships Sales Incentive Plan Tranche 1 26 November 2017 Note: The Retention Periods listed above only apply if you are a UK Material Risk Taker (as advised by NAB). 1 Only applicable if you are a UK Material Risk Taker (as advised by NAB). NAB STI Deferral Share Offer Grant Guide Page 2

3 2. Details of the offer Key questions What s on offer? How many NAB shares are on offer? NAB shares. A certain portion of the STI award you earn under each NAB STI plan listed in section 1 (NAB STI Plans) must be deferred in the form of NAB shares (Deferral Award). The number of NAB shares on offer is worked out using the following formula: the value of your Deferral Award (converted to A$ on the Conversion Date if any award is shown in a foreign currency) WASP at which NAB shares are traded on the ASX during the WASP Period (rounded up to the nearest whole number of NAB shares) This WASP can differ from the average closing prices over the WASP Period because it reflects the volume of NAB shares traded and the price at which they were traded. Who can participate in the offer? What do I need to do to participate? What do I do if I don t want to participate? Your eligibility to receive NAB shares will be determined in accordance with the following process: Complete your performance review Around the end of the Performance Period, your People Leader will review your performance for that period. You will only be eligible to receive an STI award if you meet the eligibility criteria set out in the relevant NAB STI Plan. Following the announcement of NAB s annual results NAB will determine the STI award you have earned under the relevant NAB STI Plan, including the amount to be provided in the form of NAB shares. If NAB determines that you are eligible to receive NAB shares, you will only receive those NAB shares if you continue to be employed by a company within the NAB Group on the day the NAB shares are allocated (which is expected to be on the Anticipated Allocation Date). You are not eligible to receive NAB shares simply because you have received this guide. You do not need to take any action to participate in the offer and you do not need to pay anything to be allocated the NAB shares if you become eligible to receive them. If you DO NOT want to participate, then you need to opt-out before 5pm AEST on the Opt-out Date. You can opt-out by completing and signing the Opt-Out Form included in this guide. The completed Opt-Out Form must be ed to Employee_Share_Offer@nab.com.au If you opt out then you will not receive the deferred component of your STI award if you qualify for such an award. The deferred component of your STI award under a NAB STI Plan can only be provided in NAB shares and cash will not be provided as an alternative. How will I know if I have received the NAB shares? If you are eligible to receive NAB shares, you will receive a confirmation of the share allocation from Computershare shortly after the Allocation Date. NAB STI Deferral Share Offer Grant Guide Page 3

4 3. Dealing in the NAB shares Key questions Will I be free to deal with my NAB shares from the Allocation Date? What can I do at the end of the Restriction Period? 3 Can I ever be forced to forfeit my NAB shares? No. If you participate, your NAB shares will be held by the Trustee on your behalf until the earlier of: the relevant Milestone Date; and the date you are notified that an Acceleration Event has occurred. This period is called the Restriction Period. You can t deal in your NAB shares during that time. 2 You can choose to either sell or keep the NAB shares. Information on how to do this can be obtained from Computershare at the end of the Restriction Period. If you decide to sell the NAB shares you will then receive the proceeds of sale (after sale costs have been deducted). If you don t give any instructions about how you want to deal with the NAB shares, the Trustee can still decide to sell them on your behalf or alternatively it can transfer them into your name. The Trustee may require you to reimburse costs associated with any transfer or sale. Yes - you will forfeit some or all of your NAB shares (as determined by the Board or its delegate) if during the Restriction Period: you resign from the NAB Group; your employment with the NAB Group is terminated by your employer for any reason other than redundancy (unless the Board determines, in its absolute discretion and subject to compliance with law, that the NAB shares not be forfeited); you breach the NAB Code of Conduct or equivalent (eg you receive a Red Conduct Gate rating) or it is determined that you have engaged in conduct that would have caused you to breach the NAB Code of Conduct or equivalent if you were still employed by the NAB Group; it is found that the allocation of NAB shares to you was made in error or your performance outcome has changed and that outcome means you have been allocated too many NAB shares; or the Board determines that you should forfeit all or some of your NAB shares in certain circumstances. Participants in the Wholesale Banking Proprietary Traders Specialist Incentive Plan: some or all of your NAB shares may be forfeited (as determined by the Board or its delegate) having regard to the terms of that plan. What happens to my NAB shares if I cease employment with the NAB Group? As noted above, if you cease employment with the Group before the Restriction Period is over, you may forfeit your NAB shares. If your NAB shares are not forfeited, they will remain in trust subject to the forfeiture conditions listed above. You will still be restricted from dealing in your shares until the Restriction Period has ended. 4 2 UK Employees Only: If you are a UK Material Risk Taker (as advised by NAB): at the end of the Restriction Period there is a further Retention Period which ends on the earlier of: the End of the Retention Period (as described in the Key Dates section); or the date that you are notified that an Acceleration Event has occurred; you can t deal in your NAB shares during the Restriction Period or the Retention Period although, where required by law, the Trustee may transfer or deal with your shares even though the Restriction Period or Retention Period has not ended; and if you have a tax liability at the Milestone Date, the default position is that NAB (and/or your employer or former employer) will sell or procure the sale of a sufficient number of your NAB shares at the Milestone Date to fund your tax liability (unless the liability is met by deducting the necessary amount from your remuneration or you paying the necessary amount directly to the NAB Group) and only a net number of shares will be subject to the Retention Period. 3 Or, if you are a UK Material Risk Taker (as advised by NAB), at the end of the Retention Period. 4 If you are a UK Material Risk Taker (as advised by NAB), you will be restricted from dealing in the NAB shares until the Retention Period has ended. NAB STI Deferral Share Offer Grant Guide Page 4

5 4. Other important information 5 Key questions Will I receive dividends on my NAB shares? Can I vote my NAB shares? Can I participate in rights issues and bonus issues? What are the risks? Are there insider trading rules I need to consider? All dividends earned from the NAB shares are yours from the Allocation Date. 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. You will need to ensure that your banking details for any future dividends are up to date. Any dividend paid will be credited to the account into which NAB pays your salary. 6 If you do not want your dividend to be paid into that account and would prefer to provide alternative payment instructions you can update your payment details by submitting instructions online at NAB shares acquired under the offer are eligible to participate in NAB s Dividend Reinvestment Plan even while they are held in trust. 7 You can vote at shareholder meetings while the NAB shares are held by the Trustee but to do so you must instruct the Trustee in writing how to vote on your behalf. To be valid, your instructions must be received by the Trustee no later than 72 hours before the start of the relevant shareholder meeting. To receive notices of meeting, you must first contact the Trustee and instruct it that you wish to receive the notices for that particular calendar year. The Trustee can be contacted through Computershare. While the NAB shares are held by the Trustee, you will be able to participate in any NAB bonus issues and rights issues. You will be contacted directly if NAB conducts a bonus issue or rights issue. There are a number of potential risks that you should consider before accepting the NAB shares, including risks that may affect NAB s business and financial performance. A selection of those risks, which have been based on an assessment of a combination of the probability of the risk occurring and the impact of the risk if it did occur, are included in NAB s most recent annual report which is available at Before accepting any NAB shares, you should consider whether NAB shares are suitable for you. Yes - 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 NAB share price when made public. You are not allowed to make financial gain for yourself using this knowledge. You should check NAB s Group Securities Trading Policy (available at before applying for, buying, selling or transferring NAB shares. If you believe you have price-sensitive information you cannot buy, sell or otherwise transfer your NAB shares. If you are uncertain of your position, you should discuss your circumstances with Group Governance on (+61 3) It is a condition of the Offer that you comply with NAB s Group Securities Trading Policy in relation to your NAB shares at all times. 5 Important notice for Hong Kong employees: The contents of this document have not been reviewed by any regulatory authority in Hong Kong. You are advised to exercise caution in relation to the Offer. If you are in doubt about any of the contents of this document, you should obtain independent professional advice. Important notice for Singapore employees: This document has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, this document and any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of NAB shares may not be circulated or distributed, nor may NAB shares be offered or sold, or be made the subject of an invitation for subscription or purchase, whether directly or indirectly, to persons in Singapore other than pursuant to, and in accordance with, the conditions of an exemption under any provision of Subdivision (4) of Division 1 of Part XIII of the Securities and Futures Act, Chapter 289 of Singapore. 6 Not applicable to employees based in Asia. 7 Employees based in the United States will not be entitled to participate in NAB s Dividend Reinvestment Plan. NAB STI Deferral Share Offer Grant Guide Page 5

6 Key questions How do I obtain NAB s share price and most recent annual report? Are there any other key terms of the Plan I need to be aware of? What happens if NAB is required to account to a tax authority for any tax on my behalf? What do I need to know about privacy? Who do I contact if I have a question? 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 Australian major newspapers contain a list of daily share prices in the business section. Computershare can also provide you with the current market price of NAB shares and will ensure that you get this information promptly by phone or . You may obtain a copy of NAB's most recent annual report and the most recent published financial statements at You may also request printed copies, free of charge, from Computershare either by at nabservices@computershare.com.au or by telephone on (within Australia) or (outside Australia). NAB may amend the Plan from time to time, provided that the amendment does not reduce the existing rights of participating employees (except in certain limited circumstances). The Board s decision as to the interpretation, effect or application of the Plan is final and conclusive. The Board may make further rules for the operation of the Plan, which are consistent with the Plan. Any powers or discretions that are conferred on the Board under the Plan may be exercised by the Board or any person or persons appointed to act on its behalf. The Board can decide to suspend or cancel the Plan at any time. The suspension or cancellation of the Plan will not prejudice the existing rights of participating employees. Nothing in the Plan confers on any employee the right to receive NAB shares or to continue as an employee of the Group, nor affects any rights of the Group to terminate an employee s employment. If NAB (or a member of the Group) is required to account to a tax authority for any tax, levy or charge on your behalf in relation to your NAB shares, then the relevant Group company may recover an amount equal to the tax liability from you in any manner that the Board thinks fit. Subject to applicable law, this may involve: deducting an amount equal to the tax liability from your remuneration; you paying an amount equal to the tax liability directly to the relevant Group company; or procuring the sale of a sufficient number of your NAB shares to meet the tax liability. You may also forfeit your NAB shares if you fail to comply with any of these obligations. NAB Group will collect, use and disclose your personal information for the purpose of administering your participation in the Offer and the Plan, and as otherwise permitted by law. Your personal information may also be disclosed to third parties (such as share registries, print and mail service providers and investment advisers) for these purposes (Third Parties). NAB Group and Third Parties may operate in countries other than Australia; please see Please note that if you do not provide any of the information requested by NAB it may not be possible for you to participate in the Offer or to process your request to opt-out. If you would like to access or correct your personal information, or for further information, including about complaint handling, please see Contact Computershare: GPO Box 658, Melbourne, Victoria, 3001, Australia Phone: or (+613) nabshareplans@computershare.com.au Visit the NAB Employee Centre at NAB Performance and Rewards at Employee_Share_Offer@nab.com.au NAB STI Deferral Share Offer Grant Guide Page 6

7 5. Glossary A$ Australian dollars Acceleration Event Allocation Date ASX Board Computershare keeping records Group or NAB Group NAB NAB Code of Conduct NAB Employee Online Website NAB shares Offer Plan Restriction Period STI Trustee WASP An event which occurs when: a takeover bid is made to NAB shareholders (other than as a result of an allotment approved by the Board); a statement is lodged with ASX to the effect that a person has become entitled to not less than 15% of NAB s shares (other than as a result of an allotment approved by the Board); 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; NAB passes a resolution for voluntary winding up; or an order is made for the compulsory winding up of NAB The date the NAB shares are allocated to you Australian Securities Exchange Limited or the securities market operated by it All or some NAB directors acting as a board or a committee of directors (or delegate) Computershare Plan Managers maintains records of NAB shares, NAB shareholders and Plan participants. The records maintained by Computershare are relied on for such things as the payment of dividends and dispatch of notices to employee shareholders it s important to let them know if you change your address and other personal details NAB and its subsidiary companies National Australia Bank Limited Sets out the standards of responsibility and ethical conduct required of every employee and everyone working on NAB s behalf including contractors, consultants and directors. Ordinary fully paid shares in NAB STI Deferral Share Offer The National Australia Bank Staff Share Ownership Plan The period during which your NAB shares will be held by the Trustee on your behalf and you cannot deal with those NAB shares Short Term Incentive 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. The current trustee is National Australia Trustees Limited Weighted average share price NAB STI Deferral Share Offer Grant Guide Page 7

8 Tax guide Australia This summary contains general information about the tax implications of participating in the Offer. You should review this information and seek your own tax advice taking into account your personal circumstances. If you are a foreign resident for tax purposes, a temporary resident of Australia for tax purposes or engaged in employment outside Australia, this information may not be applicable to you and you should seek your own taxation advice. Note: Tax Year means the period from 1 July to 30 June. Key questions Do I need to pay income tax on the NAB shares I receive? Do I get to choose when I pay income tax on the NAB shares? At what point in time will I be taxed? What is the Annual Employee Share Scheme Tax Statement Summary? What is the amount to be included in assessable income? Yes. The tax law requires you to pay income tax on the value of any NAB shares allocated to you under the Offer. No. You do not have the choice as to when you will be taxed. The forfeiture conditions of the Offer mean it qualifies for a deferral of the taxing point as described below (unless you have indicated your intention to retire from the Group, in which case, the taxing point will be the Allocation Date). You will be taxed on the NAB shares allocated to you on the earlier of: (a) the Milestone Date 8 ; or (b) the date that you cease your employment with the Group (unless you forfeit the shares under the forfeiture conditions prior to ceasing your employment); or (c) the date that you are notified that an Acceleration Event has occurred. This is called the Deferred Taxing Point. For example, if the Deferred Taxing Point falls on a date during the 2017 Tax Year, your 2017 income tax return should include the amount you are assessed on in relation to your NAB shares. No income tax is payable if the NAB shares are forfeited before the Milestone Date. If your shares are forfeited after you were taxed (e.g. on cessation of employment), you may seek a refund of the tax by amending your prior year tax return to exclude the value of the shares that have subsequently been forfeited.. NAB is required to report to both employees and the Australian Tax Office (ATO) on any NAB shares, options and/or rights that are or may be subject to income tax in the particular Tax Year. Shortly after 30 June each year, you will receive an employee share scheme Tax Statement Summary which will detail any employee equity which may have a taxing point during the relevant Tax Year, and the amount of taxable income (if any). This statement can be used to assist in preparing your income tax return. You are required to include the market value of the NAB shares at the Deferred Taxing Point in your tax return in the relevant year. The tax legislation does not define market value nor does it prescribe any method for determining the market value of shares acquired under an employee share offer. NAB currently uses the five-day volume-weighted average share price (WASP) method in reporting the value of your NAB shares in the Tax Statement Summary and for reporting to the ATO. You can use this method or choose to adopt a different valuation method that best fits your circumstances. More information will be included in your Tax Statement Summary. 8 The Deferred Taxing Point may be different to the Milestone Date if, at the Milestone Date, you are restricted from dealing with your shares due to NAB s Group Securities Trading Policy or if you dispose of your shares within 30 days of the Milestone Date. NAB STI Deferral Share Offer Grant Guide Page 8

9 Key questions What happens if I dispose of the NAB shares? Do I need to pay tax on dividends received on the NAB shares? Do I need to provide my Tax File Number (TFN)? When is withholding tax payable? Unless your Deferred Taxing Point occurs at the time you sell your NAB shares (or within 30 days prior to the sale date), you should realise a capital gain or loss when you dispose of your NAB shares. For the purposes of determining the amount of any such capital gain or loss, the cost base of your NAB shares should be equal to the amount you were taxed on the shares at the Deferred Taxing Point. You may also be entitled to reduce the amount of any capital gain which arises by the capital gains tax discount of up to 50% if you sell your NAB shares 12 months or more after the Deferred Taxing Point. Further information as to how the capital gains tax legislation will apply to your NAB shares will be provided in the yearly Australian tax guides which are available at the NAB Employee Online Website. Each dividend paid to you on your NAB shares will be assessable income for income tax purposes in the Tax Year that the dividend is paid. You may be entitled to claim a tax offset in respect of any franked dividends. Your distribution statement from Computershare Plan Managers, will indicate whether a dividend paid to you is franked (including the extent to which it is franked) or unfranked. You will need to include in your assessable income the amount of any franking credits in addition to the cash dividend received. Generally, your tax offset will be equal to the amount of franking credits included in your assessable income. You may be able to obtain a refund of tax if your franking credits in a Tax Year exceed the amount of tax you are assessed as having to pay in that Tax Year. NAB is authorised under the Income Tax Assessment Act 1936 to ask for your TFN if you participate in the Offer. If you have already provided your TFN to NAB in the course of your employment, NAB will provide it to Computershare who will use it to report to the Australian Taxation Office (ATO) (pursuant to NAB s obligations under the tax laws): details of any employee equity which may have had a Taxing Point during the Tax Year; and any payments of interest, dividends, distributions and other entitlements (such as rights or shares) that have been provided to you by NAB during the Tax Year. By accepting the Offer, you consent to NAB and Computershare using your TFN as set out above unless you contact Computershare and withdraw that consent. You don't have to provide your TFN and it's not an offence if you decide not to. If you don't provide your TFN, NAB may be required to remit 'Pay As You Go Withholding Tax' to the ATO at the highest marginal tax rate (plus the Medicare Levy) on the value of any NAB shares which may have had a Taxing Point during the Tax Year. Tax may also be deducted at this rate from the unfranked portion of dividends, distributions and other entitlements in respect of your NAB shares. Any tax which has been remitted on your behalf will be recovered from you by NAB. NAB STI Deferral Share Offer Grant Guide Page 9

10 Opt Out Form NAB 2016 Short Term Incentive Deferral Share Offer (Offer) Opt-Out Form Only complete and return this form if you DO NOT wish to apply for the offer of shares under the Offer. By opting-out, you will not receive any reward under the Offer. Cash will not be provided as an alternative. Please complete and sign the form and return by to before 5pm AEST on 16 May A. Opt-Out of the Offer I opt-out of the offer of shares under the Offer. I understand that by completing this opt-out form and returning it that I am NOT applying for shares, that I will NOT be allocated any NAB shares and that cash will NOT be provided as an alternative. B. Authorisation and contact details Name ABN Address Employee Number Address Employee Signature Date Day Month Year C. Guide to completing this form Opt-out from the Offer by completing the details in section B then sign and date to acknowledge that you do NOT wish to apply for NAB shares and return this form as directed above. Before completing this form you should carefully read the Offer Guide. You should consider obtaining your own advice from an appropriately licensed independent person if you are unsure about how to proceed. By returning this form, you confirm that you have read, understood and accepted the terms and conditions of the Offer, as set out in the Offer Guide. This form must be completed by you personally or by your power of attorney. If completed by an attorney, the relevant power of attorney must be ed with this form. By completing this opt-out form the attorney warrants to the NAB Group and the Trustee that the attorney has no notice of revocation of the power of attorney under authority of which this form is completed. National Australia Bank Limited ABN