Document:

Exhibit 4.3

 

NATIONAL AUSTRALIA BANK
LIMITED

(ABN 12 004 044 937)

 

National Australia Bank
Executive Share Option

Plan No.2

 

1              Definitions and interpretation

 

1.1           In this Plan, the following
words and expressions have the meanings indicated unless the contrary intention
appears:

 

ASX means Australian Stock
Exchange Limited.

 

Bank means National Australia Bank
Limited.

 

Board means all or some of the
Directors acting as a board or a committee of Directors.

 

Bonus Share means the shares issued in
respect of Loan Shares held by a Participant as part of a bonus issue to
shareholders of the Bank.

 

Cash Dividend means a dividend declared or
paid with respect to Shares which is payable wholly in cash or, in the case of
a dividend declared or paid with respect to Shares which is payable only partly
in cash, that part of the dividend which is payable in cash.

 

Director means a director of the Bank.

 

Effective Date means the date an Option is
granted to an Option Holder, unless determined otherwise by the Board.

 

Executive means a person in the
employment of a body corporate in the Group whom the Board determines to be in
an executive position.

 

Expiry Date means for an Option, a date
determined by the Board not earlier than the day prior to the fifth anniversary
of the Effective Date of the Option and not later than the tenth anniversary of
the Effective Date of the Option.

 

Former Executive means a person who was
formerly an Executive.

 

Group means the Bank and each body
corporate that is a subsidiary of the Bank under Division 6 of Part 1.2 of the
Corporations Act.

 

Listing Rules means the Listing Rules of
ASX.

 

Loan means a loan from the Bank to
a Participant under clause 6 for the purpose of acquiring a Share by the
exercise of an Option.

 

Loan Share means:

 

1

 

(a)            a Share acquired by the exercise of an Option where
the exercise price is funded, in whole or part, with a Loan; and

 

(b)            a Bonus Share which is deemed to be a Loan Share by
virtue of clause 8.3.

 

Loan Shareholder means the holder of a Loan
Share.

 

Market Price of a Share on a day means the
weighted average of the prices at which Shares in that class were traded on the
stock market of ASX during the one week up to and including that day.

 

Option means an option granted under
the Plan for Shares.

 

Option Holder means the holder of an
Option.

 

Participant means an Option Holder or a Loan
Shareholder who is an Executive or a Former Executive.

 

Plan means the National Australia
Bank Executive Share Option Plan No. 2.

 

Retirement in relation to a Participant
means retirement by the Participant from employment of any body corporate in
the Group at age 55 or over.

 

Rights means any rights to acquire
shares or securities issued or to be issued by the Bank.

 

Share means a fully paid ordinary
share in the capital of the Bank.

 

Share Registry means the share registry
appointed from time to time by the Bank to administer its company sponsored
sub-register of holders of Loan Shares.

 

1.2           In this Plan unless the
contrary intention appears:

 

(a)            the singular includes the
plural and vice versa;

 

(b)            reference to a rule, a statute
or other law includes regulations and other instruments under it and
consolidations, amendments, re-enactments or replacements of any of them; and

 

(c)            a reference to a person
includes a reference to the person’s legal personal representatives, executors,
administrators and successors, a firm or a body corporate.

 

1.3           Headings are inserted for
convenience and do not affect the interpretation of this Plan.

 

2

 

2              Grant of Options

 

Eligibility

 

2.1           The Board may in its absolute
discretion, without being bound to do so and subject to any approvals of
shareholders of the Bank required by law or the Listing Rules, at intervals
determined by the Board, grant Options to Executives selected by the
Board.  The grant of an Option
constitutes an irrevocable offer by the Bank to allot a Share to the Option
Holder on the exercise of the Option.

 

Exercise
of Options

 

2.2           On exercise of an Option, a
Participant accepts the irrevocable offer made by the Bank pursuant to
clause 2.1  Acceptance may only be
made if the terms and conditions for exercise have been satisfied and the Option
has not lapsed.

 

3              Maximum number of Options

 

3.1           In the case of an offer or
grant of Shares or options for issue, the number of Shares the subject of the
offer or grant or to be received on exercise of an option when aggregated with:

 

(a)            the number of Shares in the
same class which would be issued were each outstanding offer or option or
performance right to acquire unissued Shares, being an offer made or option or
performance right acquired pursuant to an employee share scheme of the Bank
extended only to employees or directors of the Bank and of associated bodies
corporate of the Bank, to be accepted or exercised (as the case may be); and

 

(b)            the number of Shares in the
same class issued during the pervious 5 years pursuant to the Plan or any other
employee share scheme of the Bank extended only to employees or directors of
the Bank and of associated bodies corporate of the Bank,

 

but disregarding any offer made, or option or
performance right granted or Share issued by way of or as a result of:

 

(c)            an offer or grant to a person
situated at the time of receipt of the offer or grant outside Australia; or

 

(d)            an offer or grant that was an
excluded offer or invitation within the meaning of the Corporations Act as it
stood prior to the commencement of Schedule 1 to the Corporate Law
Economic Reform Program Act 1999; or

 

(e)            an offer or grant that did not
need disclosure to investors because of section 708 of the Corporations
Act;

 

must not exceed 5% of the total number of issued
Shares in that class of the Bank as at the time of the offer or grant.

 

3

 

4              Option
terms

 

4.1           Options must be granted on the
terms set out in Schedule One unless the Board determines otherwise.

 

4.2           Without limiting clause 4.1,
the Board may impose such conditions upon the exercise of Options as it
considers appropriate and these conditions must be notified to the Executive at
the time of grant.  Without in any way
limiting the Board’s discretion in this regard, the conditions of exercise may
include conditions relating to:

 

(a)            the profitability of the Bank;

 

(b)            the price at which the Bank’s
shares are traded on a stock market of ASX or any other stock exchange; and

 

(c)            limits on the number or
proportion of the Options that may be exercised in any one or more time
periods.

 

5              Overriding restrictions on grant and
exercise

 

5.1           Notwithstanding the Plan or
the terms of any Option, no Option may be granted or exercised if to do so:

 

(a)            would contravene the
Corporations Act or the Listing Rules; or

 

(b)            would contravene the local
laws or customs of Executive’s country of residence or in the opinion of the
Board would require actions to comply with those local laws or customs which
are impractical.

 

6              Loans to Participants

 

Application
for Loan

 

6.1           The Board may invite an Option
Holder who is an Executive to apply for a loan from the Bank under this Plan
for the purposes of funding in whole or in part the subscription by the Option
Holder of the Shares to be issued if the Option Holder exercises Options.

 

6.2           An application for a Loan
must:

 

(a)            be in the form prescribed by
the Board from time to time;

 

(b)            be made solely by the Option
Holder and in the name of the Option Holder; and

 

(c)            include a confirmation that
the Option Holder agrees to be bound by the terms of the Loan set out in the
Plan.

 

Amount
of Loan

 

6.3           The maximum amount of a Loan
for which an Option Holder may apply is an amount equal to the aggregate issue
price of the Shares to be issued on exercise of the Options.

 

4

 

Use
of Loan

 

6.4           If an application by an Option
Holder who is an Executive for a Loan pursuant to clause 6.2 is accepted
by the Board, the entire amount of the Loan must be applied in or towards
paying in full on subscription for Shares which, at or about the time the Loan
is made, are subscribed for by the Option Holder under the Plan.  The Bank may only make a Loan under this Plan
to an Option Holder who is an Executive.

 

6.5           The proceeds of a Loan to an
Option Holder must be applied by the Bank on behalf of the Option Holder in the
manner outlined in clause 6.4.

 

Interest
on a Loan

 

6.6           Unless the Board determines
otherwise, a Loan Shareholder must pay on each Loan made to that Loan
Shareholder interest on the daily balance of the principal amount outstanding
under that Loan at the rate applicable to that Loan Shareholder under
clause 6.7.

 

Interest
rate

 

6.7           The rate of interest
applicable to a Loan Shareholder in relation to a Loan is:

 

(a)            if that Loan has not become
immediately due and payable under clause 6.15:

 

(i)             while the Loan Shareholder
remains an Executive the Bank’s Base Lending Rate plus any margin determined by
the Board;

 

(ii)            after the Loan Shareholder has
ceased to be an Executive the Bank’s Base Lending Rate plus any margin
determined by the Board;

 

(b)            if that Loan has become
immediately due and payable under clause 6.15, the Bank’s Base Lending
Rate plus any margin determined by the Board; or

 

(c)            such other rate as the Board
determines.

 

6.8           Unless otherwise determined by
the Board interest on a Loan:

 

(a)            accrues from day to day;

 

(b)            is payable monthly on the
first day of each month; and

 

(c)            unless paid by the Loan
Shareholder, may at the option of the Bank be capitalised by the Bank on the
first day of the month on which it falls due.

 

6.9           Where an amount of interest
payable by a Loan Shareholder on a Loan is capitalised under
clause 6.8(c), interest is payable on the amount so capitalised at the
rate applicable for the time being to that Loan Shareholder under
clause 6.7.

 

5

 

Repayment
from Dividends

 

6.10         Each Cash Dividend which is
payable in respect of a Loan Share is to be applied by the Bank on behalf of
the Loan Shareholder who owns that Loan Share:

 

(a)            first, in payment of any
interest which is due in respect of the Loan in relation to that Loan Share;

 

(b)            secondly, in repayment of the
principal amount outstanding under that Loan.

 

6.11         A Loan Shareholder cannot
participate in the Bank’s Bonus Share Plan, Dividend Reinvestment Plan or UK
Dividend Plan in respect of a Loan Share until all amounts outstanding in
relation to the Loan taken out to acquire that Loan Share have been paid in
full.

 

Sale
of Loan Shares

 

6.12         A Loan Shareholder who wishes
to sell any Loan Shares must forward to the secretary of the Bank:

 

(a)            a request (in the form
prescribed by the Board from time to time) that the Bank, on behalf of the
Participant, sell or arrange the sale of the Loan Shares; and

 

(b)            such other documents as the
Bank prescribes.

 

6.13         The proceeds of sale of the
Loan Shares (after deducting the costs of sale including, without limitation,
any brokerage, taxes and duties) will be applied by the Bank towards paying any
amounts outstanding in relation to the Loan in relation to those Loan Shares.

 

6.14         After applying the net
proceeds of sale of Loan Shares in the manner outlined in clause 6.13, the
Bank will pay to the Loan Shareholder the balance (if any) of such proceeds.

 

Repayment
of Loan

 

6.15         The whole of the principal
amount outstanding under a Loan (and any interest which has accrued and is
unpaid) will become immediately due and payable at the option of the Board upon
the earliest to occur of:

 

(a)            the Loan Shareholder ceasing
for any reason (including death) to be an Executive;

 

(b)            the Loan Shareholder disposing
of the legal or beneficial interest in any Loan Shares except in accordance
with clause 6.12; and

 

(c)            the Loan Shareholder becoming
an insolvent under administration as defined in section 9 of the
Corporations Act.

 

6.16         If a Participant ceases to be
an Executive for any reason (including death), then, to the extent permitted by
law or applicable award, any amounts (other than amounts relating to
superannuation entitlements) payable to the Participant by the Bank or any related
body corporate of 

 

6

 

the
Bank in relation to the cessation of his or her employment (including, without
limitation, wages, salary, employee allowances and loadings, annual leave
entitlements and long service leave entitlements) may (at the discretion of the
Bank) be applied towards paying all amounts outstanding in relation to any Loan
and that any remaining balance of such moneys (after any other application
authorised by the Participant) shall then be paid to the Participant or as may
be otherwise required.

 

6.17         A Loan Shareholder may elect
to repay the whole or any of the principal amount outstanding under a Loan.

 

7              Transfer of Shares

 

7.1           This clause 7 applies to a
Loan Share held by a Loan Shareholder.

 

Ten year
restriction on transfer

 

7.2           A Loan Shareholder may not
transfer or deal in a Loan Share prior to the expiration of ten years after the
Effective Date of the Option (pursuant to which the Share was allotted) except
in the circumstances set out in this clause 7 or unless compelled by law.

 

7.3           If no amount remains
outstanding on the Loan, the Loan Shareholder may, at any time, transfer or
deal in the Loan Shares to which the Loan relates.

 

No
transfer

 

7.4           The Bank must not register or
permit the Share Registry to register a transfer of Loan Shares until the Loan
in relation to the Loan Shares has been repaid.

 

Entry
on sub-register

 

7.5           On issue of Loan Shares, the
Bank must enter the Loan Shares on the Australian company-sponsored sub-register
of holders of Loan Shares and the Loan Shares must remain entered in the
Company-sponsored sub-register until the Loan in relation to the Loan Share is
repaid.

 

Segregation in sub-register

 

7.6           The Bank must instruct the
Share Registry to segregate the Loan Shares in the sub-register and to record
in the sub-register that the Shares are Loan Shares until the Loan in relation
to the Loan Shares is repaid.

 

Sale
of Loan Shares

 

7.7           A Loan Shareholder may request
the Bank to sell the Loan Shares as agent of the Loan Shareholder in accordance
with clause 6.12 and clause 6.13.

 

8              Rights attaching to Loan Shares

 

Dividends

 

8.1           Each Cash Dividend on Loan
Shares under clause 6.10 will be applied by the Bank on behalf of the Loan
Shareholder in reduction of the Loan in relation to the Loan Shares made to the
Loan Shareholder.

 

7

 

Bonus
Shares

 

8.2           A Loan Shareholder is entitled
to any Bonus Shares which accrue to Loan Shares held by the Loan Shareholder.

 

8.3           Upon allotment to the Loan
Shareholder,

 

(a)            the Bonus Shares will for the
purposes of the Plan be treated as allotted to the Loan Shareholder at a time
determined by the Board; and

 

(b)            the Bonus Shares are deemed to
be Loan Shares for the purposes of this Plan.

 

8.4           The Bonus Shares are to be
registered in the name of the Loan Shareholder.

 

Rights

 

8.5           Any Rights which accrue to
Loan Shares acquired by the Loan Shareholder may be sold by the Loan
Shareholder.

 

8.6           The Loan Shareholder must pay
the proceeds of sale of such Rights or such proportion of the proceeds of sale
as the Board determines to the Bank.  The
Bank must apply the proceeds of sale, or the proportion of those proceeds, in
reduction of the Loan made by the Bank to the Loan Shareholder in relation to
the Loan Shares.

 

9              Administration of the Plan

 

9.1           The Plan will be administered
by the Board in accordance with the terms of this Plan.  The Board may make further rules for the
operation of the Plan which are consistent with this Plan.

 

9.2           Any power or discretion which
is conferred on the Board by this Plan must be exercised by the Board in the
interests or for the benefit of the Bank, and the Board is not, in exercising
any such power or discretion, under any fiduciary or other obligation to any other
person.

 

9.3           Any power or discretion which
is conferred on the Board by this Plan may be exercised by the Board or by any
person or persons appointed by the Board to act on its behalf.

 

9.4           The decision of the Board as
to the interpretation, effect or application of this Plan, the exercise by the
Board of any power or discretion under this Plan or the giving of any consent
or approval by the Board in connection with this Plan will be final and
conclusive.

 

9.5           The Board may from time to
time suspend the operation of the Plan and may at any time cancel the
Plan.  The suspension or cancellation of
the Plan will not prejudice the existing rights of Participants.

 

10            Rights of Participants

 

Except as
expressly provided in this Plan, nothing in this Plan:

 

8

 

(a)            confers on any Executive the
right to be granted any Options;

 

(b)            confers on any Participant the
right to continue as an employee of the Bank or any of its subsidiaries;

 

(c)            affects any rights which the
Bank or a subsidiary may have to terminate the employment of any employee;

 

(d)            may be used to increase
damages in any action brought against the Bank or a subsidiary in respect of
any such termination; or

 

(e)            confers on an Executive any
expectation to become a Participant.

 

11            Amendment of this Plan

 

11.1         Subject to clause 11.2 and
11.3, the Bank may at any time by written instrument or by resolution of the
Board, amend all or any of the provisions of this Plan (including this clause
11).

 

11.2         No amendment of the provisions
of this Plan is to reduce the rights of any Participant in respect of Options
granted, Loans made or Loan Shares issued under the Plan prior to the date of
the amendment, other than an amendment introduced primarily:

 

(a)            for the purpose of complying
with or conforming to present or future State, Territory or Commonwealth legal
requirements governing or regulating the maintenance or operation of the Plan
or like plans;

 

(b)            to correct any manifest error
or mistake;

 

(c)            to enable contributions or
other amounts paid by any body corporate in the Group in respect of the Plan to
qualify as income tax deductions for that body corporate, the company or any
other body corporate within the Group; or

 

(d)            to enable any body corporate
in the Group to comply with the Corporations Act, the Listing Rules or relevant
instruments of relief issued by the Australian Securities and Investments
Commission from time to time.

 

11.3         No amendment may be made
except in accordance with and in the manner stipulated (if any) by the Listing
Rules.

 

11.4         No amendment may be made to
extend the period during which an Option may be exercised.

 

11.5         Subject to the above
provisions of this clause 11, any amendment made pursuant to clause 11.1 may be
given such retrospective effect as is specified in the written instrument or
resolution by which the amendment is made and, if so stated, amendments to this
Plan, including the terms of Options, have the effect of automatically amending
the terms of granted but unexercised options.

 

9

 

12            Notices

 

12.1         Any notice regarding Options
granted under the Plan will be sent to the registered address of the Option
Holder as recorded in the register of Option Holders maintained by the Bank.

 

13            Governing Law and jurisdiction

 

13.1         The Plan is governed by and
shall be construed and take effect in accordance with the laws of Victoria.

 

13.2         All disputes arising in
connection with or under this Plan will be submitted to the exclusive
jurisdiction of the Courts of Victoria.

 

10

 

Schedule One: Option
Terms

 

1.             Entitlement

 

1.1           Subject
to Option Term 7, the grant of an Option constitutes an irrevocable offer by
the Bank that entitles the holder to subscribe for and be allotted, credited as
fully paid, one Share at an exercise price of the Market Price of a Share on
the Effective Date of the Option.

 

On exercise of the Option, the holder accepts
the irrevocable offer made by the Bank.

 

1.2           Subject
to the Listing Rules, the Bank must allot a Share on exercise of an Option in
accordance with the Plan.

 

1.3           Unless
the Option Terms provide otherwise, Shares issued on the exercise of Options
will rank pari passu with all existing Shares from the date of issue and will
be entitled in full to those dividends which have a record date for determining
entitlements after the date of issue.

 

2.             Conditions
for exercise of Options

 

2.1           An
Option may be exercised:

 

(a)            subject to any conditions
imposed by the Board under clause 4.2 of the Plan, at any time after the
expiration of three years from the Effective Date of the Option and on or
before the Expiry Date of the Option, unless the Option lapses under Term 2.2;
or

 

(b)           if the Board gives notice to a
Participant under Term 3; or

 

(c)            if the Board so determines.

 

2.2           An
Option not exercised will lapse on the first to occur of:

 

(a)            the Expiry Date of the Option;

 

(b)           30 days after an Executive ceases to be
employed by the Group, unless the Board otherwise determines; and

 

(c)           notice
from the Participant that the Participant wishes the Option to lapse.

 

11

 

3                  Notice
to Participant

 

3.1                  The
Board may give a notice to an Option Holder for the purposes of Term 2.1(b) if:

 

(a)            a
takeover bid is made to the holders of Shares (other than as a result of an
allotment approved by the Board);

 

(b)           a
statement is lodged with the ASX to the effect that a person has become
entitled to not less than 15% of the Shares (other than as a result of an
allotment approved by the Board);

 

(c)            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 the Bank or its amalgamation
with any other companies;

 

(d)           the
Bank passes a resolution for voluntary winding up; or

 

(e)            an
order is made for the compulsory winding up of the Bank.

 

4.             Method
of exercise of Options

 

4.1           An
Option is exercised by the holder lodging the notice of exercise of Options and
application for Shares, together with the exercise price for each Share to be
issued on exercise, with the Company Secretary of the Bank or such other person
as the Board designates.

 

4.2           The
notice of exercise of Options and application for Shares must include a
confirmation that the Participant agrees to be bound by the constitution of the
Bank.

 

4.3           Options
must be exercised in multiples of 100, unless the Option Holder exercises all
Options able to be exercised at that time. 
The exercise of some Options only does not affect the Option Holder’s
right to exercise other Options at a later time.

 

5.             No
Transfers

 

Options may not be transferred.

 

6.             Quotation
of Options and Shares

 

Options will not be quoted on ASX.  The Bank will make application to ASX for
official quotation of Shares issued on the exercise of Options, if other 

 

12

 

Shares of the Bank are listed at that time,
as soon as practicable after the Shares are issued.

 

7.             Participation
in future issues

 

7.1           Participation generally

 

A Participant may only participate in new
issues of securities to holders of Shares if the Option has been exercised, if
that is permitted by its terms, and the shares in respect of the Option have
been allotted before the record date for determining entitlements to the issue.

 

7.2           Bonus issues

 

If the Bank makes a bonus issue of shares or
other securities pro rata to holders of Shares (other than an issue in lieu or
in satisfaction of dividends or by way of dividend reinvestment) and no Shares
have been allotted in respect of an Option before the record date for
determining entitlements to the bonus issue then the rights attaching to that
Option will be altered as follows:

 

(i)             the
number of Shares which the Option Holder is entitled to subscribe for on
exercise of the Option (S) is determined by the formula:

 

S = N + (N x
R)

 

(ii)            the
exercise price per Share of an Option is the greater of the par value (if any)
of the Share and the sum (EP) determined by the formula:

 

 

(fractions are
to be rounded up to the nearest cent)

 

where:

 

N =          The
number of Shares per Option which the Participant is entitled to subscribe for
on the record date to determine entitlements to the bonus issue.

 

R =          The
number of Shares (including fractions) offered under the bonus issue for each
Share held.

 

OP =        The
exercise price per Share on exercise of the Option which applies on the record
date to determine entitlements to the bonus issue.

 

13

 

7.3           Rights issues

 

If the Bank makes an offer of ordinary shares
pro rata to all or substantially all holders of Shares (other than an issue in
lieu or in satisfaction of dividends or by way of dividend reinvestment) for a
subscription price which is less than the market price (defined below as P) and
no Shares have been allotted in respect of an Option before the record date for
determining entitlements to the rights issue then the exercise price per Option
will be reduced by an amount (R) determined by the formula:

 

 

(fractions are to be rounded up to the
nearest cent)

 

where:

 

E =           The
number of Shares an Option Holder is entitled to subscribe for on exercise of
one Option.

 

P =           The
weighted average market price of fully paid ordinary Shares sold in the
ordinary course of trading on ASX during the five trading days ending on the
day before the ex rights date.

 

S =           The
subscription price of new shares issued under the rights issue.

 

D =          Any
dividends due but not yet paid on existing Shares which will not be payable in
respect of new Shares issued under the rights issue.

 

N =          Number
of cum rights Shares required to be held to receive a right to one new Share.

 

The exercise price per Share cannot be
reduced below the par value (if any) of the Share.

 

The number of Shares which the participant is
entitled to subscribe for on exercise of the Option will not change.

 

7.4           Aggregation

 

If Options are exercised simultaneously then
the Option Holder may aggregate the number of shares or fractions of shares or
other securities to which the Option Holder is entitled to subscribe under
those Options.  Fractions in the
aggregate number only will 

 

14

 

be disregarded in determining the total
entitlement to subscribe.

 

7.5           Reconstruction

 

In the event of any reconstruction of the
issued ordinary capital of the Bank the number of shares attaching to each
Option or the exercise price per Share of an Option or both will be
reconstructed in the manner specified below. 
If the manner is not specified then the Board will determine the
reconstruction.  In any event the
reconstruction will not result in any additional benefits being conferred on
Option Holders which are not conferred on shareholders of the Bank (subject to
the same provisions with respect to rounding of entitlements as sanctioned by
the meeting of shareholders approving the reconstruction of capital) and in all
other respects the terms for the exercise of Options will remain unchanged.

 

In the event of any consolidation or
sub-division of shares or reduction or cancellation of capital then the
reconstruction will be determined by the following formulae:

 

(a)            Consolidation;  and

 

(b)           Subdivision:

 

 

 

(c)            Reduction
of capital by return of share capital:

 

S =                C

 

EP =             D
less the amount per fully paid ordinary share returned to a Shareholder.

 

(d)           Reduction
of capital by cancellation of ordinary shares that is either lost or not
represented by available assets:

 

S = C;

 

EP = D

 

(e)            Pro
rata cancellation of fully paid ordinary shares (not within (c) or (d)):

 

15

 

 

 

where:

 

A =          The
total number of Shares in issue before the capital reconstruction;

 

B =          The
total number of Shares in issue after the capital reconstruction;

 

C =          The
number of Shares which the Option Holder is entitled to subscribe for on
exercise of an Option before the reconstruction;

 

S =           The
number of Shares which the Option Holder is entitled to subscribe for on exercise
of an Option after the reconstruction;

 

D =          The
exercise price per Share of an Option before the capital reconstruction;

 

EP =        The
exercise price per Share of an Option after the capital reconstruction,
fractions being rounded up to the nearest cent.

 

7.6           Lapse

 

An Option Holder may request that some or all
of the Options held by that Option Holder lapse.

 

7.7           Advice

 

The Bank must give notice to each Option
Holder of any adjustment to the number of shares which the Option Holder is
entitled to subscribe for or be issued on exercise of an Option or the exercise
price per share in accordance with the Listing Rules.

 

7.8           Notices

 

Notices may be given by the Bank to the
Option Holder in the manner prescribed by the constitution of the Bank for the
giving of notices to members of the Bank and the relevant provisions of the
constitution of the Bank apply with all necessary modification to notices to
Option Holders.

 

16

 

 

 

National
Australia Bank

Executive Share Option Plan

No. 2

 

 

(Consolidated to include
amendments
 to facilitate the new offer process
first

introduced in 2003/04 and Effective

Date and other miscellaneous

amendments approved by the Board

in
[                     ],
2003)

 

 

Contents                National
Australia Bank Executive Share Option Plan No.2

 

	
   

  	
  1  Definitions and
  interpretation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  2  Grant of Options

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Eligibility

  	
   

  
	
   

  	
   

  	
  Exercise of Options

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  3  Maximum number of
  Options

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  4  Option terms

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  5  Overriding
  restrictions on grant and exercise

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  6  Loans to Participants

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Application for Loan

  	
   

  
	
   

  	
   

  	
  Amount of Loan

  	
   

  
	
   

  	
   

  	
  Use of Loan

  	
   

  
	
   

  	
   

  	
  Interest on a Loan

  	
   

  
	
   

  	
   

  	
  Interest rate

  	
   

  
	
   

  	
   

  	
  Repayment from Dividends

  	
   

  
	
   

  	
   

  	
  Sale of Loan Shares

  	
   

  
	
   

  	
   

  	
  Repayment of Loan

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  7  Transfer of Shares

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Ten year restriction
  on transfer

  	
   

  
	
   

  	
   

  	
  No transfer

  	
   

  
	
   

  	
   

  	
  Entry on sub-register

  	
   

  
	
   

  	
   

  	
  Segregation in sub-register

  	
   

  
	
   

  	
   

  	
  Sale of Loan Shares

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  8  Rights attaching to
  Loan Shares

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Dividends

  	
   

  
	
   

  	
   

  	
  Bonus Shares

  	
   

  
	
   

  	
   

  	
  Rights

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  9  Administration of the Plan

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  10 

  	
  Rights of Participants

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  11 

  	
  Amendment of this Plan

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  12 

  	
  Notices

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  13 

  	
  Governing Law and jurisdictionExhibit 4.4

 

NATIONAL AUSTRALIA BANK
LIMITED

(ABN 12 004 044 937)

 

National Australia Bank
Performance Rights Plan

 

1                                          Definitions and interpretation

 

1.1                                  In this Plan, the following words and
expressions have the meanings indicated unless the contrary intention appears:

 

ASX means Australian Stock Exchange Limited
(ABN 98 008 624 691).

 

Board means all or some of the Directors acting
as a board or a committee of directors.

 

Corporations Act means the Corporations Act
2001 (Cwlth)

 

Director means a director of the National.

 

Effective Date means the date a Performance
Right is granted to a Performance Right Holder, unless determined otherwise by
the Board.

 

Executive means a person in the employment of a body
corporate in the Group whom the Board determines to be in an executive
position.

 

Expiry Date means for a Performance Right, a date
determined by the Board not earlier than the day prior to the fifth anniversary
of the Effective Date of the Performance Right and not later than the tenth
anniversary of the Effective Date of the Performance Right.

 

Former Executive means a person who was
formerly an Executive.

 

Group means the National and each body corporate
that is a subsidiary of the National under the Corporations Act.

 

Listing Rules means the Listing Rules of ASX.

 

National means National Australia Bank Limited (ABN
12 004 044 937)

 

Participant means a Performance Right
Holder who is an Executive or a Former Executive.

 

Performance
Right means
a right granted under the Plan for Shares.

 

Performance
Right Holder means the holder of a Performance Right.

 

Plan means this National Australia Bank
Performance Rights Plan.

 

1

 

Retirement in relation to a Participant means
retirement by the Participant from employment with any body corporate in the
Group at age 55 or over.

 

Share means a fully paid ordinary share in the
capital of the National.

 

1.2                                  In this Plan unless the contrary intention
appears:

 

(a)                                    the singular includes the plural and vice
versa;

 

(b)                                   reference to a rule, a statute or other law
includes regulations and other instruments under it and consolidations,
amendments, re-enactments or replacements of any of them; and

 

(c)                                    a reference to a person includes a
reference to the person’s legal personal representatives, executors,
administrators and successors, a firm or a body corporate.

 

1.3                                  Headings are inserted for convenience and
do not affect the interpretation of this Plan.

 

2                                          Grant of Performance Rights

 

Eligibility

 

2.1                                  The Board may in its absolute discretion,
without being bound to do so and subject to any approvals of shareholders of
the National required by law or the Listing Rules, at intervals determined by
the Board, grant Performance Rights to Executives selected by the Board.  The grant of a Performance Right constitutes
an irrevocable offer by the National to allot a Share to the Performance Right
Holder on the exercise of the Performance Right.

 

Exercise
of Performance Rights

 

2.2                                  On exercise of a Performance Right, a
Participant accepts the irrevocable offer made by the National pursuant to
clause 2.1.  Acceptance may only be
made if the terms and conditions for exercise have been satisfied and the
Performance Right has not lapsed.

 

3                                          Maximum number of Performance Rights

 

3.1                                  In the case of an offer or grant of
Performance Rights, the number of Shares to be received on exercise of a
Performance Right when aggregated with:

 

(a)                                    the number of Shares in the same class
which would be issued were each outstanding offer or option or Performance Right
to acquire unissued Shares, being an offer made or option or Performance Right
acquired pursuant to an employee share scheme of the National extended only to
employees or directors of the National and of associated bodies corporate of
the National, to be accepted or exercised (as the case may be); and

 

2

 

(b)                                   the number of Shares in the same class
issued during the pervious 5 years pursuant to the Plan or any other employee
share scheme of the National extended only to employees or directors of the
National and of associated bodies corporate of the National,

 

but disregarding
any offer made, or option or Performance Right granted or Share issued by way
of or as a result of:

 

(c)                                    an offer or grant to a person situated at
the time of receipt of the offer or grant outside Australia; or

 

(d)                                   an offer or grant that was an excluded
offer or invitation within the meaning of the Corporations Act as it stood
prior to the commencement of Schedule 1 to the Corporate Law Economic Reform
Program Act 1999; or

 

(e)                                    an offer or grant that did not need
disclosure to investors because of section 708 of the Corporations Act;

 

must not exceed 5%
of the total number of issued Shares in that class of the National as at the
time of the offer or grant.

 

4                                          Performance Rights terms

 

4.1                                  Subject to the Listing Rules, Performance
Rights will be granted on the terms set out in Schedule One unless the Board
determines otherwise.

 

4.2                                  Without limiting 4.1, the Board may impose
such conditions upon the exercise of Performance Rights as it considers
appropriate and these conditions must be notified to the Executive at the time
of grant.  Without in any way limiting
the Board’s discretion in this regard, the conditions of exercise may include
conditions relating to:

 

(a)                                    the profitability of the National;

 

(b)                                   the price at which the National’s shares
are traded on a stock market of the ASX or any other stock exchange; and

 

(c)                                    limits on the number or proportion of the
Performance Rights that may be exercised in any one or more time periods.

 

5                                          Overriding restrictions on grant and
exercise

 

5.1                                  Notwithstanding the Plan or the terms of
any particular Performance Right as granted, no Performance Right may be
granted or exercised if to do so:

 

(a)                                    would contravene the Corporations Act or
the Listing Rules; or

 

(b)                                   would contravene the local laws or customs
of Executive’s country of residence or in the opinion of the Board would

 

3

 

require
actions to comply with those local laws or customs which are impractical.

 

6                                          Administration of the Plan

 

6.1                                  The Plan will be administered by the Board
in accordance with the terms of this Plan. 
The Board may make further rules for the operation of the Plan which are
consistent with this Plan.

 

6.2                                  Any power or discretion which is conferred
on the Board by this Plan must be exercised by the Board in the interests or
for the benefit of the National, and the Board is not, in exercising any such
power or discretion, under any fiduciary or other obligation to any other
person.

 

6.3                                  Any power or discretion which is conferred
on the Board by this Plan may be exercised by the Board or any person or
persons appointed by the Board to act on its behalf.

 

6.4                                  The decision of the Board as to the
interpretation, effect or application of this Plan, the exercise by the Board
of any power or discretion under this Plan or the giving of any consent or
approval by the Board in connection with this Plan will be final and
conclusive.

 

6.5                                  The Board may from time to time suspend the
operation of this Plan and may at any time cancel this Plan.  The suspension or cancellation of this Plan
will not prejudice the existing rights of Participants.

 

7                                          Rights of Participants

 

7.1                                  Except as expressly provided in this Plan,
nothing in this Plan:

 

(a)                                    confers on any Executive the right to be
granted any Performance Rights;

 

(b)                                   confers on any Participant the right to
continue as an employee of the National or any of its subsidiaries;

 

(c)                                    affects any rights which the National or a
subsidiary may have to terminate the employment of any employee;

 

(d)                                   may be used to increase damages in any
action brought against the National or a subsidiary in respect of any such
termination; or

 

(e)                                    confers on an Executive any expectation to
become a Participant.

 

8                                          Amendment of the Plan

 

8.1                                  Subject to rules 8.2 and 8.3, the National
may at any time by written instrument or by resolution of the Board, amend all
or any of the provisions of this Plan (including this clause 8).

 

4

 

8.2                                  No amendment of the provisions of this Plan
is to reduce the rights of any Participant in respect of Performance Rights
granted under the Plan prior to the date of the amendment, other than an
amendment introduced primarily:

 

(a)                                    for the purpose of complying with or
conforming to present or future State, Territory or Commonwealth legal
requirements governing or regulating the maintenance or operation of the Plan
or like plans;

 

(b)                                   to correct any manifest error or mistake;

 

(c)                                    to enable contributions or other amounts
paid by any body corporate in the Group in respect of the Plan to qualify as
income tax deductions for that body corporate the company or any other body
corporate within the Group; or

 

(d)                                   to enable any body corporate in the Group
to comply with the Corporations Act, the Listing Rules or relevant instruments
of relief issued by the Australian Securities and Investments Commission from
time to time.

 

8.3                                  No amendment may be made except in accordance
with and in the manner stipulated (if any) by the Listing Rules.

 

8.4                                  No amendment may be made to extend the
period during which a Performance Right may be exercised.

 

8.5                                  Subject to the above provisions of this
clause 8, any amendment made pursuant to clause 8.1 may be given such
retrospective effect as is specified in the written instrument or resolution by
which the amendment is made and, if so stated, amendments to this Plan,
including the terms of Performance Rights, have the effect of automatically
amending the terms of granted but unexercised Performance Rights.

 

9                                          Notices

 

9.1                                  Any notice regarding Performance Rights
granted under the Plan will be sent to the registered address of the
Performance Rights Holder as recorded in the register of Performance Rights
Holders maintained by the National.

 

10                                   Governing Law and jurisdiction

 

10.1                            The Plan is governed by and will be
construed and take effect in accordance with the laws of Victoria.

 

10.2                            All disputes arising in connection with or
under this Plan will be submitted to the exclusive jurisdiction of the courts
of Victoria.

 

5

 

Schedule One: Performance Rights
Terms

 

1.                                       Entitlement

 

1.1                                  Subject
to term 7, the grant of a Performance Right constitutes an irrevocable offer by
the National that entitles the holder to subscribe for and be allotted,
credited as fully paid, one Share at an exercise price of:

 

	
  $1

  
	
  The number of Performance

  
	
  Rights exercised on any particular day

  

 

On exercise of a Performance Right, the
holder accepts the irrevocable offer made by the National.

 

1.2                                  Subject
to the Listing Rules, the National must allot a Share on exercise of a
Performance Right in accordance with the Plan.

 

1.3                                  Shares
issued on the exercise of Performance Rights will rank pari passu with all
existing Shares from the date of issue and will be entitled in full to those
dividends which have a record date for determining entitlements after the date
of issue.

 

2.                                       Exercise
of Performance Rights

 

2.1                                  A
Performance Right may be exercised:

 

(a)                                   subject to any conditions
imposed by the Board under clause 4.2 of the Plan, at any time after the
expiration of three years from the Effective Date of the Performance Right and
on or before the Expiry Date of the Performance Right, unless the Performance
Right lapses under term 2.2;

 

(b)                                  if the Board gives notice to a
Participant under term 3; or

 

(c)                                   if the Board so determines.

 

2.2                                  A
Performance Right not exercised will lapse on the first to occur of:

 

(a)                                   the Expiry Date of the Performance Right;

 

(b)                                  30 days after an Executive ceases to be
employed by the Group, unless the Board otherwise determines; and

 

(c)                                   notice
from the Participant that the Participant wishes the Performance Right to
lapse.

 

6

 

3                                          Notice
to Participant

 

3.1                                  The
Board may give a notice to a Participant for the purposes of term 2.1(b) if:

 

(a)                                   a
takeover bid is made to the holders of Shares (other than as a result of an
allotment approved by the Board);

 

(b)                                  a
statement is lodged with the ASX to the effect that a person has become
entitled to not less than 15% of the Shares (other than as a result of an
allotment approved by the Board);

 

(c)                                   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 the National or its
amalgamation with any other companies;

 

(d)                                  the
National passes a resolution for voluntary winding up; or

 

(e)                                   an
order is made for the compulsory winding up of the National.

 

4.                                       Method
of exercise of Performance Rights

 

4.1                                  A
Performance Right is exercised by the holder lodging the notice of exercise of
Performance Rights and application for Shares, together with the exercise
price, with the Company Secretary of the National or such other person as the
Board designates.

 

4.2                                  The
notice of exercise of Performance Rights and application for Shares must
include a confirmation that the Participant agrees to be bound by the National’s
Constitution.

 

4.3                                  Performance
Rights must be exercised in multiples of 100, unless the Performance Right
Holder exercises all Performance Rights able to be exercised at that time.  The exercise of some Performance Rights only
does not affect the Performance Right Holder’s right to exercise other
Performance Rights at a later time.

 

5.                                       No
Transfers

 

Performance Rights may not be transferred.

 

7

 

6.                                       Quotation
of Performance Right and Shares

 

Performance Rights will not be quoted on the
ASX.  The National will make application
to the ASX for official quotation of Shares issued on the exercise of
Performance Rights, if other Shares are listed at that time, as soon as
practicable after the Shares are issued.

 

7.                                       Participation
in future issues

 

7.1                                  Participation generally

 

A Participant may only participate in new
issues of securities to holders of Shares if the Performance Right has been
exercised, if that is permitted by its terms, and the Shares in respect of the
Performance Right have been allotted before the record date for determining
entitlements to the issue.

 

7.2                                  Bonus issues

 

If the National makes a bonus issue of shares
or other securities pro rata to holders of Shares (other than an issue in lieu
or in satisfaction of dividends or by way of dividend reinvestment) and no
Shares have been allotted in respect of a Performance Right before the record
date for determining entitlements to the bonus issue then the rights attaching to
that Performance Right will be altered as follows:

 

(i)                                      the
number of Shares which the Performance Right Holder is entitled to subscribe
for on exercise of the Performance Right (S) is determined by the formula:

 

S = N + (N x R)

 

where:

 

N =                              The
number of Shares per Performance Right which the Participant is entitled to
subscribe for on the record date to determine entitlements to the bonus issue.

 

R =                               The
number of Shares (including fractions) offered under the bonus issue for each
Share held; and

 

(ii)                                   the exercise price per Performance Right
will not be changed.

 

8

 

7.3                                  Rights issues

 

If the National makes an offer of ordinary
shares pro rata to all or substantially all holders of Shares (whether or not
an issue in lieu or in satisfaction of dividends or by way of dividend
reinvestment) then neither the exercise price per Performance Right nor the
number of Shares which the Participant is entitled to subscribe for on exercise
of the Performance Right will be changed.

 

7.4                                  Aggregation

 

If Performance Rights are exercised
simultaneously then the Performance Right Holder may aggregate the number of
shares or fractions of shares or other securities to which the Performance
Right Holder is entitled to subscribe under those Performance Rights.  Fractions in the aggregate number only will
be disregarded in determining the total entitlement to subscribe.

 

7.5                                  Reconstruction

 

In the event of any reconstruction of the
issued ordinary capital of the National before the exercise of a Performance
Right, the number of shares attaching to each Performance Right will be
reconstructed in the manner specified below.

 

If the manner is not specified then the Board
will determine the reconstruction.  In
any event the reconstruction will not result in any additional benefits being
conferred on Performance Right Holders which are not conferred on shareholders
of the National (subject to the same provisions with respect to rounding of
entitlements as sanctioned by the meeting of shareholders approving the
reconstruction of capital) and in all other respects the terms for the exercise
of Performance Right will remain unchanged.

 

In the case of any reconstruction of the
issued capital of the National, the exercise price performance Right will not
be changed.

 

In the event of any consolidation or
sub-division of shares or reduction or cancellation of capital then the
reconstruction will be determined by the following formulae:

 

(a)                                   Consolidation;  and

 

(b)                                  Subdivision:

 

9

 

 

(c)                                   Reduction
of capital by return of share capital:

 

S = C;

 

(d)                                  Reduction
of capital by cancellation of ordinary shares that is either lost or not
represented by available assets:

 

S = C;

 

(e)                                   Pro
rata cancellation of fully paid ordinary shares (not within (c) or (d)):

 

 

where:

 

A =                             The
total number of Shares in issue before the capital reconstruction;

 

B =                               The
total number of Shares in issue after the capital reconstruction;

 

C =                               The
number of Shares which the Performance Right Holder is entitled to subscribe
for on exercise of an Performance Right before the reconstruction;

 

S =                                The
number of Shares which the Performance Right Holder is entitled to subscribe
for on exercise of a Performance Right after the reconstruction.

 

7.6                                  Lapse

 

A Performance Right Holder may request that
some or all of the Performance Rights held by that Performance Right Holder
lapse.

 

7.7                                  Advice

 

The National must give notice to each
Performance Right Holder of any adjustment to the number of Shares which the
Performance Right Holder is entitled to subscribe for or be issued on exercise
of a Performance Right or the exercise price per share in accordance with the
Listing Rules.

 

10

 

7.8                                  Notices

 

Notices may be given by the National to the
Performance Right Holder in the manner prescribed by the National’s
Constitution for the giving of notices to members of the National and the
relevant provisions of the National’s Constitution apply with all necessary
modification to notices to Performance Right Holders.

 

11

 

 

National Australia Bank

Performance Rights Plan

 

(Consolidated to include amendments to

facilitate the new offer process first

introduced in 2003/04 and Effective Date

and other miscellaneous amendments, as

approved by the Board in [     ] 2003)

 

 

	
  Contents

  	
  National
  Australia Bank Performance Rights Plan

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  1  Definitions and
  interpretation

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  2  Grant of Performance Rights

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Eligibility

  	
   

  
	
   

  	
  Exercise of Performance Rights

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  3 
  Maximum number of Performance Rights

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  4  Performance Rights terms

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  5 
  Overriding restrictions on grant and exercise

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  6  Administration of the Plan

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  7  Rights of Participants

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  8  Amendment of the Plan

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  9  Notices

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  10      Governing Law and jurisdiction

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