Information  X 
Enter a valid email address

Nat.Australia Bank (NAB)

  Print      Mail a friend

Monday 04 December, 2006

Nat.Australia Bank

Notice of AGM

National Australia Bank Ld
03 December 2006

National Australia Bank Limited

ABN 12 004 044 937 Registered Office: 35th Floor, 500 Bourke Street Melbourne,
Victoria 3000 Australia







                        Notice of Annual General Meeting


The Annual General Meeting of National Australia Bank Limited ('the National')
will be held at the Adelaide Convention Centre, Adelaide,

South Australia, on Wednesday 31 January 2007 at 9am.

1            Presentations by the Chairman and the Group Chief Executive Officer

2            Discussion of financial statements and reports


To consider the National's financial statements and the reports for the year
ended 30 September 2006.

3.    Re-election of Directors

In accordance with Article 10.3 of the National's Constitution:

           (a)           Mr Michael Chaney retires and offers himself for 
                         reelection;

           (b)           Mr Ahmed Fahour retires and offers himself for 
                         re-election;

           (c)           Mr Paul Rizzo retires and offers himself for 
                         re-election; and

           (d)           Mr Michael Ullmer retires and offers himself for 
                         re-election.

4.    Remuneration Report

To adopt the Remuneration Report for the year ended 30 September 2006.

5.    Non-executive Directors' Share Plan

To consider and, if thought fit, to pass the following resolution as an ordinary
resolution:

'That the issue of National shares to or on behalf of non-executive directors
under the Non-Executive Directors' Share Plan as described in the Explanatory
Notes be approved.'

6.    Shares - Group Chief Executive Officer

To consider and, if thought fit, to pass the following resolution as an ordinary
resolution:

'That the grant of shares to the Group Chief Executive Officer, Mr John Stewart,
under the National's short term incentive plan as described in the Explanatory
Notes be approved.'

7.    Shares, performance options and performance rights - Executive Director &
Chief Executive Officer, Australia

To consider and, if thought fit, to pass the following resolution as an ordinary
resolution:

'That the grant of shares, performance options and performance rights to the
Executive Director & Chief Executive Officer, Australia, Mr Ahmed Fahour, under
the National's short term incentive and long term incentive plans as described
in the Explanatory Notes be approved.'

8.    Shares, performance options and performance rights - Finance Director and
Group Chief Financial Officer

To consider and, if thought fit, to pass the following resolutions as ordinary
resolutions:

(a)           'That the grant of shares, performance options and performance
rights to the Finance Director and Group Chief Financial Officer (an Executive
Director), Mr Michael Ullmer, under the National's short term incentive and long
term incentive plans as described in the Explanatory Notes be approved.'

(b)           'That the grant of shares to the value of $1,000,000 to the
Finance Director and Group Chief Financial Officer (an Executive Director), Mr
Michael Ullmer, as described in the Explanatory Notes be approved.'



9.    National Income Securities

To consider and, if thought fit, to pass the following resolution as a special
resolution:

'That the terms and conditions of the selective buy-back scheme relating to the
preference shares associated with the National Income Securities as described in
the Explanatory Notes be approved.'

Please refer to the accompanying Explanatory Notes on the agenda items, which
form part of this Notice of Meeting, for more information on the proposed
resolutions.



By Order of the Board Michaela Healey Company Secretary 1 December 2006

Information for Shareholders


Asking questions at the meeting

The Annual General Meeting is intended to give shareholders the opportunity to
hear both the Chairman and the Group Chief Executive Officer  talk about the
year that has just passed and also give some insight to the National's prospects
for the year ahead.  We welcome shareholders' questions at the meeting. However,
in the interests of all present we ask that you confine your questions to
matters before  the meeting that are relevant to the shareholders as a whole.
Our staff at the Customer Service Desk or the Shareholder Services Desk in the
foyer on the day of the  meeting will be happy to deal with any questions that
relate to the private affairs of any individual shareholders or customers. 


Shareholders who are entitled to vote

The Board has determined that for the purposes of voting at the meeting,
shareholders will be taken to be those persons recorded on the National's
register of shareholders as at 7.00pm (Melbourne time) on 29 January 2007.

Proxy votes

You can appoint a proxy to attend and vote for you at the meeting in accordance
with the directions on the proxy form. If no directions are given to the proxy
on the form, the proxy may vote as he or she thinks fit.  A proxy does not need
to be a shareholder of the National.

A proxy form and a return envelope are enclosed.  Some helpful information on
proxies is included on the reverse of that form, including how to appoint
proxies, specifying the proportion of votes per proxy where two proxies are
appointed and a discussion of voting by proxies.

To be effective, a completed proxy form must be received by the National no
later than 9.00am (Australian Eastern Summer time) on 29 January 2007 at Level
35, 500 Bourke Street, Melbourne, Victoria 3000, Australia or by fax on (+61 3)
9473 2555 by that time.

Voting restrictions

The National will disregard any vote cast on:

Resolutions 5, 6, 7 and 8 - by any director of the
National or any of their associates; and

   •               Resolution 9 - by any person who holds
preference shares associated with the National Income Securities or by any of
their associates.

However, the National does not need to disregard votes:

              by such a person as proxy for another person who is
entitled to vote and the vote is cast in accordance with the directions on the
proxy form; or

              if the vote is cast by the person chairing the meeting
as a proxy for a person who is entitled to vote, in accordance with the
direction on the proxy form as the proxy decides.



Chairman's comments and explanatory notes

Item 2: Discussion of financial statements and reports

While shareholders are not required to vote on the financial statements and
reports, shareholders will be given reasonable opportunity at the meeting to
raise questions on the statements and reports. They will also be able to ask the
National's auditor questions.

Item 3: Re-election of Directors

The following four directors retire by rotation in accordance with Article 10.3
of the National's Constitution and, being eligible, present themselves for
re-election.

Each re-election will be conducted as a separate resolution.

Following are details in relation to the directors standing for re-election.


Mr Michael Chaney AO, BSc, MBA, Hon LLD W.Aust, FAIM, FAICD

Appointed a non-executive director in 2004. Mr Chaney was appointed Chairman in
September 2005.  Mr Chaney is 56 years of age.

Mr Chaney is a highly respected business leader, with significant experience in
a range of industries, including finance. He joined the Board shortly before
retiring from Wesfarmers Limited, where he spent 22 years in various roles,
including Managing Director and Chief Executive Officer.

He is currently President of the Business Council of Australia, Chancellor of
the University of Western Australia, a director of Woodside Petroleum Ltd,
Chairman of Gresham Partners Holdings Limited, Governor of the Committee for the
Economic Development of Australia (CEDA) and a Council Member of the Australian
National Gallery.

Mr Ahmed Fahour BEc (Hons), MBA, FAIM

Appointed an executive director in 2004. Mr Fahour was appointed Chief Executive
Officer Australia in September 2004. Mr Fahour is 40 years of age.

Mr Fahour brings almost 20 years experience in international economic and
financial services, including corporate and investment banking, consumer banking
and investment management, predominantly with Boston Consulting Group and
Citigroup.

He is currently a non-executive director of RipCurl Pty Ltd.

Mr Paul Rizzo BCom, MBA

Appointed a non-executive director in September 2004. Mr Rizzo is 62 years of
age.

Mr Rizzo has had 36 years experience in banking and finance and his broad
management experience and skills add valuable financial service capabilities to
the Board. Mr Rizzo was formerly Dean and director of Melbourne Business School,
Group Managing Director, Finance and Administration of Telstra Corporation
Limited, and held senior roles at Commonwealth Bank of Australia, Australia and
New Zealand Banking Group Limited and was Chief Executive Officer of State Bank
of Victoria.

Mr Rizzo is currently a non-executive director of Bluescope Steel Limited.



Mr Michael Ullmer BSc (Maths)(Hons), FCA, SF Fin

Appointed Group Chief Financial Officer in September 2004. Mr Ullmer was
appointed to the Board as Finance Director and Group Chief Financial Officer in
October 2004. Mr Ullmer is 55 years of age.

Mr Ullmer brings more than 30 years experience in financial services and risk
management to the Board. He worked in senior executive roles with the
Commonwealth Bank of Australia for 7 years and as a former partner with Coopers
& Lybrand and KPMG he contributes significant financial advisory experience to
the Board.

Recommendation

Following the annual review of performance of all directors conducted by the
Board, the Board (other than the director who is the subject of the relevant
resolution) recommends the re-election of each director.



Item 4: Remuneration Report

Shareholders will be given a reasonable opportunity at the meeting to comment on
and ask questions about the National's Remuneration Report.

The Remuneration Report is contained in the Annual Financial Report and also in
the Concise Annual Report. Copies of these reports are also available on the
National's website at www.nabgroup.com or can be obtained from the Office of the
Company Secretary by telephoning (+61 3) 8641 3240.

The Remuneration Report includes:

1                     an explanation of the National's policy for determining
the remuneration of directors and executives;

2                     a discussion of the relationship between that policy and
the National's performance; and

3                     details of the performance conditions associated with the
remuneration of the directors and executives.


The vote on the proposed resolution in this item 4 is advisory and will not bind
the directors of the National. However, the Board will take the outcome of the
vote into consideration when reviewing remuneration practices and policies.

Recommendation
The directors recommend that you vote in favour of resolution 4.


Item 5: Non-executive Directors' Share Plan ('NED Share Plan')

Under the National's NED Share Plan, non-executive directors are provided part
of their remuneration in National shares (known as 'NED Shares').  This plan
helps to align the director's interests with those of shareholders.

(a) Why are we seeking shareholder approval?

Under the ASX Listing Rules, we must seek your approval whenever we wish to
issue National shares to directors.  That approval was last obtained at the
December 2003 Annual General Meeting and lasted for 3 years. We are now seeking
to refresh that approval for an additional 3 years.

There have been no material changes to the terms of the NED Share Plan since
2003.  The provision of NED Shares does not involve any additional
remuneration for the non-executive directors.

A summary of the key terms of the NED Share Plan is set out in Note 41 in the
National's Annual Financial Report for the year ended 30 September 2006.

The ASX Listing Rules require the following information to be included in this
notice.

(b) What is the maximum number of NED Shares that can be issued to non-executive
directors under the NED Share Plan and what price are they issued at?

The maximum number of NED Shares that may be issued cannot be determined at this
time. However, the formula used to determine the maximum number of shares that
may be issued under the plan is set out below.

Australian resident non-executive directors are provided with a minimum of 10%
and a maximum of 40% of their annual remuneration in the form of NED Shares.

Overseas non-executive directors are eligible to participate in the NED Share
Plan but are not required to do so.

The number of NED Shares issued to a non-executive director is based on the
market price of National shares.  That price is the weighted average price at
which National shares were traded on the ASX in the one week up to and including
the day of allocation. The actual number of NED Shares that will be issued
cannot be precisely calculated at this time, as it depends on the extent of each
director's participation in the NED Share Plan and the price at which the shares
are issued.

A summary of all shares issued under the plan is included in each year's annual
report.

As a guide, if all non-executive directors are provided 40% of their
remuneration in NED Shares, then the number of NED Shares issued in the first
year of the approval would represent 0.002175% of total issued capital (based on
current share prices, remuneration and total capitalisation levels).

If shareholders do not approve the issue of NED Shares at the meeting or if
legal requirements otherwise prevent the issue of shares to non-executive
directors, the National will provide the remuneration wholly in cash.

(c) When will the shares be issued?

NED Shares are normally issued on a 6 monthly basis. If resolution 5 is approved
by shareholders, NED Shares will not be issued at any stage after
3 years from the date of the meeting without obtaining further shareholder
approval.

(d) Who is entitled to participate in the NED Share Plan?

Non-executive directors of the National can participate in the NED Share Plan.

(e) How many shares have been issued under the NED Share Plan since the December
2003 Annual General Meeting?

The table below sets out the names of all current non-executive directors who
have been issued NED Shares since December 2003, the number of
NED Shares issued to them and the price at which they were allocated.

Name of director        Total number of     Allocation Prices*
                        shares issued
Mr Michael Chaney       2,322               $31.70, $33.23, $36.64 and $39.52
Mrs Patricia Cross      1,900               $36.64 and $39.52
Mr Peter Duncan         4382                $34.48, $34.51, $29.23, $30.45, $30.08, $28.17, $31.70, $33.23, $36.64
                                            and $39.52
Mr Daniel Gilbert       3,525               $28.17, $31.70, $33.23, $36.64 and $39.52
Mr Paul Rizzo           1,397               $28.17, $31.70, $33.23, $36.64 and $39.52
Ms Jillian Segal        4,261               $28.17, $31.70, $33.23, $36.64 and $39.52
Mr John Thorn           3,138               $30.08, $28.17, $31.70, $33.23, $36.64 and $39.52
Mr Geoffrey Tomlinson   12,728              $28.81,$33.05,$34.48, $34.51, $29.23, $30.45, $30.08, $28.17, $31.70,
                                            $33.23, $36.64 and $39.52

*Shares are typically allocated twice annually and, as indicated in paragraph
(b) above, are allocated on a price based on the market price of National shares


(f) Are any loans provided by the National under the NED Share Plan?

Loans are not made available by the National in connection with the acquisition
of NED Shares.

(g) What about further information?

Details of any NED Shares issued to non-executive directors in a particular year
will be published in each annual report for that year. The annual report will
also state that approval for the issued of NED Shares was obtained in accordance
with the ASX Listing Rules.

Recommendation

As the resolution relates directly to them, the non-executive directors do not
make a recommendation.

Item 6: Shares - Group Chief Executive Officer

(a) Why are we seeking approval and how many shares will be issued?

Under the ASX Listing Rules, we must seek your approval to issue National shares
to Mr Stewart. We are now seeking this approval to enable the National to issue
shares to Mr Stewart under our short term incentive ('STI') plan as a reward to
reflect his performance for the year ended 30 September 2006.

At the January 2006 Annual General Meeting, shareholders approved the issue of
performance options and performance rights to Mr Stewart under the National's
long term incentive ('LTI') plan. At that time it was stated that no further
grants of performance options or performance rights to Mr Stewart were
anticipated in the 3 years from the date of the January 2006 Annual General
Meeting.

The issue of the shares is provided for under Mr Stewart's employment contract.
The key terms and conditions of his contract were disclosed by the National in a
release to the ASX on 12 December 2005 and are also summarised in the
Remuneration Report in the Concise Annual Report.

As with all other executives at the National, Mr Stewart's performance has been
reviewed under the National's Performance Management and Executive Talent
frameworks (as described in the Remuneration Report in the Concise Annual
Report).  That review process has led to a recommendation to issue 37,260
National shares to Mr Stewart under the STI plan. Mr Stewart's employment
arrangements require him to receive at least 50%, and he may elect to receive up
to 100%, of any STI awarded in National shares, subject to any necessary
shareholder approval. The shares would be issued under the terms of the National
Australia Bank Staff Share Ownership Plan. If shareholders do not approve the
issue of shares, the whole of the STI will be paid in cash.

(b) Mr Stewart's remuneration package

Mr Stewart's remuneration package is based on the National's 'Total Reward'
framework. This framework applies equally to all employees and seeks to provide
fair and appropriate rewards and recognition to employees with a view to
attracting, retaining and motivating excellent people. Consistent with that
framework, Mr Stewart receives a balance of fixed and 'at risk' remuneration -
the issue of shares under the STI plan is part of his at risk remuneration.

The non-executive directors have concluded that Mr Stewart's remuneration
package (including the proposed issue of shares under the STI plan) is
reasonable and appropriate having regard to the circumstances of the National
and Mr Stewart's duties and responsibilities.

The National's reward and recognition programs are described in more detail in
the Remuneration Report in the Concise Annual Report. Details of the terms
applying to the shares proposed to be issued to Mr Stewart, which are similar to
those applying to other employees participating in the National's STI plan are
set out in the Remuneration Report in the Concise Annual Report with additional
forfeiture conditions. If Mr Stewart resigns from the Group (without the Board's
approval) within 2 years of the date of allocation of the shares they will be
forfeited. If he resigns after that time he will retain the shares. If Mr
Stewart's employment is summarily terminated by the National, Mr Stewart will
forfeit the shares. If terminated with notice or due to material change of
circumstances he will retain the shares.

(c) What is the maximum number of shares that can be issued to Mr Stewart and
what price are they issued at?

Approval is being sought to issue 37,260 National shares to Mr Stewart. This
represents 50% of his STI for the year ended 30 September 2006 and is based on a
market price of $A39.52 which is the weighted average price at which National
shares were traded on the ASX in the one week up to and including 14 November
2006.

This is the same price used for the allocation of shares made to other employees
under the STI plan on that date in relation to the year ended 30 September 2006.

(d) When will the shares be issued?

(e) Which directors have received shares under the
National's STI plan since the last Annual General Meeting?



The shares will be issued within 12 months of the date of this meeting.

In accordance with approvals obtained at the January 2006 Annual General
Meeting, the following directors were issued shares under the National's
STI plan since the last Annual General Meeting:

             Mr Stewart was issued 42,206 National shares;

             Mr Fahour was issued with 86,669 National shares; and

             Mr Ullmer was issued with 19,275 National shares.



All of these shares were issued at a price of $A33.23 per share.

(f) Which directors are entitled to participate in the STI plan?

Mr Stewart, Mr Fahour, Mr Ullmer are the only directors who are entitled to
participate in the National's STI plan.

(g) Are any loans provided by the National under the STI plan?

Loans are not made available by the National in connection with the STI plan.

Recommendation

Mr Stewart, who has a personal interest in the subject of this resolution, has
abstained from making a recommendation. The other directors recommend
that shareholders vote in favour of the proposed resolution.  Items 7, 8(a) and
8(b): Shares, performance options and performance rights -
Executive Director & Chief Executive Officer, Australia and Finance Director and
Group Chief Financial Officer

(a) Why are we seeking approval?

Under the ASX Listing Rules, we must seek your approval to issue National
shares, performance options and performance rights to Mr Fahour and Mr Ullmer.

(b) Mr Fahour's and Mr Ullmer's short term incentive and long term incentive
arrangements

Accordingly, we are now seeking shareholder approval to enable the National to
provide shares, performance options and performance rights under our short term
incentive ('STI') and long term incentive ('LTI') plans to Mr Fahour and Mr
Ullmer as a reward to reflect their performance for the year ended 30 September
2006.

The provision of these securities is provided for under both Mr Fahour's and Mr
Ullmer's employment contracts. The key terms and conditions of those contracts
were disclosed by the National in a release to the ASX dated 11 August 2004 and
are also summarised in the Remuneration Report in the Concise Annual Report.

As with all other executives at the National, Mr Fahour's and Mr UIlmer's
performance has been reviewed under the National's Performance Management and
Executive Talent frameworks. That review process has led to a recommendation to
seek approval of shareholders to issue shares, performance options and
performance rights outlined below under the National's STI and LTI plans.

As with Mr Stewart, Mr Fahour's and Mr Ullmer's employment arrangements on
appointment as executive directors require them to receive at least 50%, and
they may elect to receive up to 100%, of any STI awarded in National shares,
subject to any necessary shareholder approval. Those shares would be issued
under the National Australia Bank Staff Share Ownership Plan. The performance
options will be granted under the National Australia Bank Executive Share Option
Plan No. 2 and the performance rights granted under the National Australia Bank
Performance Rights Plan. If shareholders do not approve the issue of these
securities at this Meeting, the whole of the STIs and the LTIs will be provided
in cash.

(c) Mr Ullmer's retention arrangements

Approval is also being sought to issue National shares to Mr Ullmer under his
retention arrangements.

The Board's Remuneration Committee has recently reviewed the contract and
retention arrangements of each Group Executive member to ensure that the
National retains an experienced and effective senior management group. That
review has led to a recommendation to issue to Mr Ullmer a number of National
shares to the value of $A1,000,000 (which is approximately 100% of his current
fixed annual remuneration) as a retention reward, subject to shareholder
approval.

This recommendation reflects that Mr Ullmer is responsible for the successful
completion of long term projects that are critical to the National Group and his
remuneration and equity holdings are currently lower than other senior
executives.

The shares will be issued under the terms of the National Australia Bank Staff
Share Ownership Plan and will be subject to similar terms and conditions that
apply to other National employees who have received retention rewards. The
shares will be held on trust for Mr Ullmer and he will not be able to sell or
otherwise deal with those shares until January 2011 and the completion of the
relevant long term projects. Mr Ullmer will also forfeit any interest in these
shares if he resigns, retires, or his employment is terminated for cause, or if
he fails to complete the projects to the satisfaction of the Board. The shares
will be retained (and released from restriction) on death or retrenchment.  Mr
Ullmer will be entitled to dividends while the shares are held in trust.

Approval for the issue of these shares to Mr Ullmer will be sought as a separate
resolution. If shareholders do not approve the issue of these shares, the whole
of the retention reward will be paid in cash.

(d) Mr Fahour's and Mr Ullmer's remuneration packages

Mr Fahour's and Mr Ullmer's remuneration packages, like that of Mr Stewart, are
based on the National's Total Reward Framework. The balance between fixed and
'at risk' rewards is consistent with the approach taken with all of the
National's executives and the applicable STI and LTI arrangements have been
established to deliver reward to Mr Fahour and Mr Ullmer upon attainment of
sustainable returns to shareholders. The provision of shares, performance
options and performance rights is part of their 'at risk' remuneration and, in
the case of Mr Ullmer, the provision of shares under his retention arrangements
reflects his key role in leading a number of long term projects for the
National.

The non-executive directors have concluded that Mr Fahour's and Mr Ullmer's
remuneration packages (including the proposed grant of shares, performance
options and performance rights) are reasonable and appropriate having regard to
the circumstances of the National and their respective duties and
responsibilities.

The National's reward and recognition programs are described in more detail in
the Remuneration Report in the Concise Annual Report. In particular, details of
the performance conditions attaching the exercise of the performance options and
the performance rights granted to executives (including Mr Fahour and Mr Ullmer)
are in the Remuneration Report in the Concise Annual Report. The same
performance conditions will apply to the performance options and performance
rights proposed to be granted in 2007 and they are designed to ensure that Mr
Fahour and Mr Ullmer can only exercise those securities if the National's
performance compares favourably to other companies.

(e) What is the maximum number of securities that can be provided to Mr Fahour
and Mr Ullmer and what price are they issued at?

Plan Maximum number of securities and prices

STI plan (shares provided under the National Australia Bank Staff Share
Ownership Plan) Mr Fahour - 42,587 ordinary shares Mr Ullmer - 19,661 ordinary
shares

This represents 50% of each of Mr Fahour's and Mr Ullmer's short term incentive
for the year ended 30 September 2006 and is based on a market price of $A39.52,
which is the weighted average price at which National shares were traded on the
ASX in the one week up to and including 14 November 2006.

This is price used for the allocation made to other employees under the same
program in the year ended 30 September 2006.

LTI plan (performance options provided under the National Australia Bank
Executive Share Option Plan No. 2) Mr Fahour - 284,250 performance options Mr
Ullmer - 152,514 performance options

No price is payable for the grant of performance options. If the applicable
performance hurdle is met, and Mr Fahour or Mr Ullmer wishes to exercise any
performance options, he must pay the exercise price. The exercise price will be
the weighted average price at which National shares are traded on the
ASX in the one week following the Annual General Meeting. This will be the price
used for all other executives under the same program at that time.

LTI plan (performance rights provided under the National Australia Bank
Performance Rights Plan) Mr Fahour - 71,063 performance rights Mr Ullmer -
38,129 performance rights

No price is payable for the grant of performance rights. If the applicable
performance hurdle is met, and Mr Fahour or Mr Ullmer wishes to exercise his
performance rights, he must pay a nominal exercise price to acquire the shares.
The total exercise price payable on the exercise of any performance rights on a
particular day will be $A1.00, irrespective of the number of performance rights
exercised on that day. The same price applies to all other executives to whom
performance rights are granted.

Mr Ullmer - ordinary shares to the value of $A1,000,000 Retention arrangements

This represents an amount equal to approximately 100% of Mr Ullmer's current
fixed annual remuneration. The actual number of shares issued to him will be
based on the market price of National shares (that is, the weighted average
price at which National shares were traded on the ASX in the one week following
the Annual General Meeting).



(f) When will the securities be issued?

The securities will be issued within 12 months of the date of this meeting. In
particular, as indicated above it is anticipated that performance options and
performance rights will be granted in February 2007.

(g) Which directors have received securities under since the last Annual General
Meeting?

In accordance with approvals obtained at the January 2006 Annual General
Meeting, the following directors were granted performance options and
performance rights under the National's LTI plans since the last Annual General
Meeting:

            Mr Stewart was granted 500,000 performance options and
140,000 performance rights;

            Mr Fahour was granted 284,000 performance options and
71,000 performance rights; and

            Mr Ullmer was granted 159,000 performance options and
39,750 performance rights.


The directors who have received shares under the National's STI plan since the
January 2006 Annual General Meeting are outlined in the explanatory notes to
resolution 6 on page 7.  No directors have received any National shares as part
of retention arrangements since the January 2006 Annual General Meeting.

(h) Which directors are entitled to participate?

Mr Stewart, Mr Fahour and Mr Ullmer are the only directors who are entitled to
participate in the STI and LTI plans and are the only directors who could be
eligible to receive National shares under any retention arrangements.

(i) Are any loans provided

Mr Fahour and Mr Ullmer cannot participate in the loan scheme that is available
in relation to the payment of the exercise price of performance options.

Loans are not made available by the National in connection with performance
rights, the STI plan or National shares provided under retention arrangements.

Recommendation

Mr Fahour and Mr Ullmer, who have a personal interest in the subject of this
resolution, have abstained from making a recommendation.

The other directors recommend that shareholders vote in favour of the proposed
resolutions.

Resolution 9: National Income Securities

Why are we seeking shareholder approval?

Shareholders approved the buy-back of 20 million unpaid preference shares ('
Preference Shares') forming part of the National Income Securities ('NIS') at
the 2006 Annual General Meeting. Shareholders are now being asked to refresh
that approval so that the National has the continued flexibility to exchange the
NIS at a future date without the need to convene an extraordinary general
meeting. No decision has yet been made to exchange the NIS, but, potentially,
the NIS could be exchanged at any time after shareholder approval is obtained.

What are the NIS?

On 29 June 1999, the National issued 20 million Preference Shares as part of the
issue of the NIS. A NIS comprises a note ('Note') with a face value of $A100
issued by the National through its New York branch and a Preference Share issued
by the National. The Note and Preference Share are stapled and cannot be
transferred separately. Holders of the Preference Shares are not entitled to
dividends until the Preference Shares have become fully paid. Currently, none of
the Preference Shares are fully paid.

Subject to obtaining the consent of the Australian Prudential Regulation
Authority ('APRA'), the National has the right to exchange the NIS at any time
after 29 June 2004. To do so, the National redeems the Notes by paying the face
value of $A100 plus any unpaid accrued interest and buys back (or redeems,
reduces capital on or cancels) the Preference Share (together 'Exchange'). The
Preference Share has no economic value and is to be bought back for no cash
payment. To implement the buy-back, the terms of buy-back scheme must be
approved in accordance with the Corporations Act, which includes obtaining
shareholder approval.

What are the advantages and disadvantages of approving the buy-back scheme?

Approving the buy-back scheme will give the National the continued flexibility
to exchange the NIS if a decision is made to do so. Under the terms of the
NIS each holder has agreed to accept the buy-back offer for their Preference
Shares if the notes are redeemed.

The Board will only make a decision to exchange the NIS if it considers it is in
the best interests of the National to effect the Exchange. This may depend,
among other things, on conditions in the capital markets and changes in
prudential regulation.

The terms of the buy-back scheme are described below. The purpose of these
explanatory notes is to set out all information known to the National that is
material to the decision as to whether shareholders should vote in favour of the
resolution to approve the buy-back scheme.

Where can I obtain further details?

The terms of issue of the Preference Shares, the Notes and the NIS were
contained in a prospectus dated 10 May 1999 which was lodged with the
Australian Securities & Investments Commission on 11 May 1999. You can obtain a
copy of that prospectus free of charge by contacting the Office of the
Company Secretary on (61 3) 8641 3240. Copies of the terms of issue of the
Preference Shares are also available.

Information you should consider

The following information may be material to the decision to vote in favour of
resolution 9:

(a) The number of shares affected

There are currently 20 million unpaid Preference Shares on issue. Ordinary
shares in the National would not be affected. Following the
buy-back scheme, all these Preference Shares would be cancelled.

(b) The buy-back scheme terms

As indicated above, the buy-back scheme would be conducted simultaneously and in
conjunction with the redemption of the Notes. The terms of the
redemption of the Notes are described below.

Under the term of the NIS, the National's New York branch must give not less
than 30 days' notice to the NIS holders if it intends to redeem the Notes
on a specified date. This notice is irrevocable and must be made in whole and
not in part. The National's New York branch must redeem all Notes in respect
of which any notice is given on the date specified on the notice, subject to
obtaining the prior approval of APRA.

The amount payable to the NIS holders for the redemption of the Notes is equal
to $A100 each, together with interest (if any) which has accrued from
(and including) the last interest payment date to the date of the redemption.

Pursuant to the buy-back scheme, upon redemption of the Note, the National must
at the same time as giving notice of the redemption make a buy-back offer
for the Preference Share that is stapled to the Note under which the National
will buy-back the Preference Share for no consideration.

Holders are deemed to have accepted any buy-back offer made for the Preference
Shares held by that holder which are not fully paid when the buy-back offer is
made in conjunction with the redemption of the Note stapled to that Preference
Share.

(c) The buy-back scheme price

Under the buy-back scheme, the National proposes to make offers for the
Preference Shares for no consideration. However, the buyback scheme would be
conducted simultaneously and in conjunction with the redemption of the Notes for
$A100 (plus any accrued interest) each. This price is prescribed in the terms of
issue of the NIS.

(d) Reasons for the buy-back scheme

As stated above, the National wishes to have the flexibility to Exchange the NIS
where it is in the best interests of the National to effect the Exchange.

No decision has yet been made as to the Exchange of the NIS, including as to
timing.

(e) Interests of directors

(f) The financial effect of the buy-back scheme on the National



At 1 December 2006 the following directors have a beneficial interest in the
following numbers of NIS (and the associated Preference Shares):

Mr Gilbert 1,253, Ms Segal 180 and Mr Tomlinson 350.

The buy-back scheme would be conducted simultaneously and in conjunction with
the redemption of the Notes. The redemption of a Note requires a payment by the
National of $A100 (plus any accrued interest) for each NIS.  As of 24 November
2006, the cost of redemption of all the Notes would be $A2 billion, plus the
cost of accrued interest to that date of approximately $A3,756,970. The offer to
buy-back the Preference Shares pursuant to the buy-back scheme will be made for
no consideration (and therefore the buyback scheme itself will have no financial
effect on the National).

The National will not Exchange the NIS if to do so would have a materially
adverse impact on the National's financial or regulatory capital position
or if there would be any material prejudice to the National's creditors.

(g) Source of funds for the buy-back scheme

The buy-back scheme would be conducted simultaneously and in conjunction with
the redemption of the Notes. The National maintains significant reserves of cash
and other funding alternatives that could be implemented to effect the
redemption of the Notes. The directors would, at the relevant time, consider the
best alternative or combination of alternatives for funding the redemption of
the Notes.

The National would be proposing to make an offer to buy-back the Preference
Shares for no consideration. Therefore, no funds are required for the buy-back
scheme itself.

(h) Effect of buy-back scheme on the control of the National

The Preference Share only entitles the holder to very limited voting rights.
Holders of the Preference Shares are entitled to vote together with the holders
of ordinary shares in the National (to the extent that these shareholders are
entitled to vote) on the basis of one vote per Preference Share on a limited
number of matters, including any proposal to wind-up the National or any
proposal to affect the rights attaching to the Preference Shares. In these
circumstances, the total number of votes capable of being exercised by the
holders of the Preference Share would be 20 million or approximately
1.23% of the National's total issued share capital as of 24 November 2006.

(i) The identity of the affected shareholders

The holders of the NIS (and the Preference Shares) are retail and institutional
investors predominantly based in Australia.

(i) The current share market price

While the NIS are listed on the Australian Stock Exchange, the Preference Shares
cannot be traded separately at this time. The Preference Shares are
not convertible into ordinary shares of the National. Once the Notes are repaid
the Preference Shares will have no economic value.

The current market price of the NIS at the close of trading on 24 November 2006
was $A101.50 per NIS (including accrued interest).

Recommendation

The directors who hold NIS as set out in (e) above have abstained from making a
recommendation in relation to this resolution. The other
directors recommend that shareholders vote in favour of resolution 9.



(c)2005 National Australia Bank Limited ABN 12 004 044 937. 29024_AGM (11/06)




                      This information is provided by RNS
            The company news service from the London Stock Exchange                                                                                                                                                                                                                                                    

a d v e r t i s e m e n t