Document:

yuma_ex101.htm

Exhibit 10.1

 

SEPARATION AGREEMENT AND GENERAL RELEASE OF CLAIMS

 

This Separation Agreement and General Release of Claims (this “Agreement”) is made as of December 25, 2014, between Yuma Energy, Inc., a California corporation, its predecessors, subsidiaries and affiliates (“Yuma” or the “Company”), and Michael F. Conlon (“Employee”) (collectively referred to as the “Parties”).

 

WHEREAS, Employee was employed by the Company as its President and Chief Operating Officer pursuant to an Employment Agreement (the “Employment Agreement”) dated September 1, 2012;

 

WHEREAS, Employee provided notice of termination of the Employment Agreement and of his employment with the Company on or about October 8, 2014, with an effective date of December 31, 2014;

 

WHEREAS, Employee and the Company entered into an Indemnification Agreement dated September 11, 2014 (the “Indemnification Agreement”);

 

WHEREAS, the Company and Employee entered into a Notice of Restricted Stock Award and Restricted Stock Agreement dated May 20, 2014 as assumed by the Company in connection with the closing of the Amended and Restated Agreement and Plan of Merger and Reorganization, dated as of August 1, 2014 (the “Merger Agreement”), by and among the Company, Yuma Energy, Inc., a Delaware corporation, and two wholly-owned subsidiaries of the Company (the “May 2014 RSA Agreement”);

 

WHEREAS, the Company and Employee entered into a Restricted Stock Agreement dated April 1, 2013 as amended and restated by the Amended and Restated Notice of Restricted Stock Award and Amended and Restated Restricted Stock Agreement dated August 1, 2014 and as assumed by the Company in connection with the closing of the Merger Agreement (the “April 2013 RSA Agreement”);

 

WHEREAS, the Company and Employee entered into a Restricted Stock Agreement dated June 1, 2013 as amended and restated by the Amended and Restated Notice of Restricted Stock Award and Amended and Restated Restricted Stock Agreement dated August 1, 2014 as assumed by the Company in connection with the closing of the Merger Agreement (the “June 2013 RSA Agreement” and collectively with the May 2014 RSA Agreement and the April 2013 RSA Agreement, the “RSA Agreements”);

 

WHEREAS, the RSA Agreements provide for a total of 254,973 restricted shares of common stock, no par value per share (the “Common Stock”), of the Company, with a vesting date of April 1, 2015 (the “April Restricted Shares”), a total of 18,934 restricted shares  with a vesting date of May 20, 2015 (the “May Restricted Shares”), and a total of 81,285 restricted shares with a vesting date after May 20, 2015 (the “Post-May Restricted Shares” and collectively with the April Restricted Shares and the May Restricted Shares, the “Restricted Shares”);

 

WHEREAS, the Company and Employee desire to enter into a restricted stock unit agreement, in the form attached hereto as Exhibit A (the “RSU Agreement”); and

 

WHEREAS, the Parties wish to reach agreement on all claims by Employee arising out of or in any way related to Employee’s employment with or separation from the Company;

 

NOW, THEREFORE, in consideration of the mutual promises made herein, the Company and Employee hereby agree as follows:

 

1.  Separation.  On or about October 8, 2014, Employee provided written notice of termination of the Employment Agreement and his employment with the Company effective at the close of business on December 31, 2014 (the “Separation Date”).  As a result of such Separation, Employee’s status as an employee, officer and/or committee member of Company shall terminate as of the Separation Date.  Employee covenants and agrees that he will execute any documents necessary to formally effect the termination of his status in such positions.

 

2.  Payments to Employee.  The Company agrees to provide to Employee, and Employee has expressly agreed to accept the following, in full settlement and release and discharge of all possible claims, as further delineated in Section 3 below, and as consideration for the other covenants and agreements of Employee set forth in this agreement:

 

  

  

  

 

2.1.           Employee will receive, if he has not already received it, his current base salary, less state and federal taxes and other required withholding, through the Separation Date, in accordance with the Company’s regular payroll practices.

 

2.2.           Employee shall be entitled to payment for any accrued but unused vacation time earned up to and including the Separation Date (the Parties acknowledge and agree that the Employee has 19.8  days of accrued but unused vacation time amounting to $24,996.86, less applicable withholdings, for which he will be paid) in accordance with the Company’s policies for such payments.

 

2.3.           If Employee is covered under a medical, dental and/or vision benefits plan sponsored by the Company on the Separation Date, Employee has the option to continue his coverage under COBRA.  Information regarding Employee’s rights under COBRA will be provided to him in accordance with the Company’s regular practices and procedures.  If Employee wishes to continue medical, dental and/or vision coverage, he will be responsible for the costs of COBRA continuation after the Separation Date.  Employee must complete and sign the COBRA election form to initiate COBRA coverage.  All other benefits provided through the Company will cease on the Separation Date.

 

2.4.           Employee will receive assignments of overriding royalty interests in accordance with the terms of the Employment Agreement, as set forth in Exhibit B hereto.

 

2.5.           The Company shall grant to Employee the sum of 273,907 restricted stock units (“RSUs”) of the Company, which such RSUs shall vest as set forth in the RSU Agreement (the “RSU Grant”).

 

2.6.           Employee hereby acknowledges and agrees that Employee would not be entitled to certain of the above payments and benefits provided for in this Agreement, including those provided for in paragraph 2.5 above, upon the termination of Employee’s employment with Company on the Separation Date in the absence of this Agreement.  Employee represents and agrees that he has been (and is hereby) advised to and had the opportunity to thoroughly discuss all aspects of this Agreement with his private attorney, that he has carefully read and fully understands all of the provisions of this Agreement, and that he is knowingly and voluntarily entering into this Agreement.

 

2.7.           The RSU Agreement sets forth the Company’s and Employee’s obligations with regard to the payment of withholding taxes with respect to the RSUs.  Employee understands that the RSUs are includible in Employee’s income, and that the Company’s obligation to withhold applicable withholding taxes with respect of the value of the RSUs occurs on the Effective Date (as defined in Section 5.2 below) and on each Vesting Date (as defined in the RSU Agreement).  Employee further agrees to satisfy the entire tax withholding obligation on or before the Effective Date and each Vesting Date by (a) paying to the Company cash or other good and marketable funds (in the form of a cashier’s or certified check, wire transfer or other funds as approved in the sole discretion of the Company); (b) instructing the Company to withhold from other funds currently due to Employee; or (c) a combination of the above. Failure by Employee to comply with this obligation will be a breach of this Agreement, and the Company’s obligation to notify the transfer agent of the vesting of the RSUs is contingent upon Employee fulfilling his obligations pursuant to this Section 2.7.

 

2.8.           The RSA Agreements shall be cancelled and all of the Restricted Shares shall be forfeited on the date hereof.

 

3.  Continuing Obligations.  Employee covenants and agrees that he has continuing obligations to Company pursuant to Article XIV of the Employment Agreement, including but not limited to the non-solicitation obligation, which lasts two years from the Separation Date, and the confidentiality obligation regarding Confidential Information (as defined in the Employment Agreement), which lasts forever, which obligations shall continue in full force and effect, whether this Agreement becomes effective or not.

 

4.  Release.                        Except as described in Sections 4.3, 4.4 and 4.5 below, Employee waives and releases on behalf of the Employee, the Employee’s spouse and children, the Employee’s heirs, beneficiaries, devisees, executors, administrators, attorneys, personal representatives, successors and assigns, any and all claims, whether or not now known to Employee against Yuma, its predecessors, parents, subsidiaries and affiliated companies, and all of its past and present officers, directors, employees, agents and assigns, (collectively, “Releasees”), arising from or relating to any and all acts, events and omissions occurring prior to the date Employee signs this Agreement.

 

  

  

  

 

4.1           Included Claims.  The claims being waived and released by Employee include, without limitation:

 

a. any and all claims arising from or relating to Employee’s recruitment, hire, employment, or separation from employment with Yuma;

 

b. any and all claims of breach of contractual obligations, wrongful discharge, emotional distress, defamation, misrepresentation, fraud, detrimental reliance, promissory estoppel, negligence, assault and battery, and violation of public policy;

 

c. any and all claims of unlawful discrimination, harassment and retaliation under applicable federal law; state law, including, without limitation, Chapter 21 of the Texas Labor Code; and local laws and regulations;

 

d. any and all claims of violation of any federal law; state law, including, without limitation, Chapter 21 of the Texas Labor Code; Title VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in Employment Act (ADEA), the Equal Pay Act (EPA), the Employee Retirement Income Security Act (ERISA), the Family and Medical Leave Act (FMLA), the Americans with Disabilities Act, as amended (ADAAA), the National Labor Relations Act (NLRA) and local laws relating to recruitment, hiring, terms and conditions of employment, and termination of employment;

 

e. any and all claims for monetary damages and any other form of personal relief;

 

f. any and all claims under the Older Workers Benefit Protection Act and the Age Discrimination in Employment Act, as amended;

 

g. any and all claims relating to the RSA Agreements and the taxation of the same, including, without limitation, any and all claims that may arise from or relate to any tax liability, penalties, interest, costs, fees or other liability incurred by the Employee, including, without limitation, as a result of the application of Section 409A and/or Section 83 of the Internal Revenue Code of 1986, as amended (the “Code”); and

 

h. any and all claims relating to the RSU Agreement and the taxation of the same, including, without limitation, any and all claims that may arise from or relate to any tax liability, penalties, interest, costs, fees or other liability incurred by the Employee, including, without limitation, as a result of the application of Section 409A of the Code.

 

4.2           Unknown Claims.  In waiving and releasing any and all claims against the Releasees, whether or not now known to Employee, Employee understands that this means that if he later discovers facts different from or in addition to those facts currently known by him, or believed by him to be true, the waivers and releases of this Agreement will remain effective in all respects – despite such different or additional facts and Employee’s later discovery of such facts, even if Employee would not have agreed to this Agreement if he had prior knowledge of such facts.

 

4.3           Exceptions.  The only claims that are not being waived and released by Employee under this Section are claims Employee may have for:

 

a. unemployment, state disability, and/or paid family leave insurance benefits pursuant to the terms of applicable state law;

 

b. violations of any federal, state, or local statutory and/or public policy right or entitlement that, by applicable law, are not waivable; and

 

c. any wrongful act or omission occurring after the date Employee signs this Agreement.

 

  

  

  

 

4.4           Government Agency Claims Exception.  Nothing in this Agreement prevents or prohibits Employee from filing, cooperating, or assisting in any government investigation or proceeding.  Notwithstanding the foregoing, Employee represents that he has not made any legal claim against Company, and he agrees to waive his right to recover monetary damages in any charge, complaint or lawsuit filed by him or by anyone on his behalf.

 

4.5           Employee does not, however, release or discharge the Releasees from any claim arising out of any nonperformance or failure to perform by the Company of any of its obligations under this Agreement, any rights relating to the RSUs granted to Employee hereunder or other outstanding equity awards under which Employee continues to have rights or benefits which, by their terms, survive the cessation or termination of Employee’s employment, or any indemnification or similar rights Employee may have as a current or former officer of the Company, including, but not limited to the Indemnification Agreement.

 

5. Revocation Period; Effective Date. Employee has been given twenty-one (21) calendar days after the date he receives this Agreement (“21-day Consideration Period”) within which to review and consider it, to discuss it with an attorney of his own choosing, and to decide whether or not to sign it.  Yuma hereby advises Employee to consult with an attorney of his own choosing during this 21-day Consideration Period.

 

5.1           In addition, for the period of seven (7) calendar days after the date Employee signs this Agreement (“7-day Revocation Period”), Employee may revoke it by delivering written notice of revocation to Yuma by hand-delivery or by facsimile or e-mail transmission (and retaining proof of successful transmission).

 

5.2           Because of this 7-day Revocation Period, this Agreement will not become effective and enforceable until the signed Agreement has been delivered to Yuma and no written notice of revocation has been delivered to Yuma during the 7-day Revocation Period (“Effective Date”).

 

6. Judicial Interpretation/Modification; Severability.  In the event that any one or more provisions (or portion thereof) of this Agreement is held to be invalid, unlawful, or unenforceable for any reason, the invalid, unlawful, or unenforceable provision (or portion thereof) shall be construed or modified so as to provide Releasees with the maximum protection that is valid, lawful, and enforceable, consistent with the intent of Yuma and Employee in entering into this Agreement.  If such provision (or portion thereof) cannot be construed or modified so as to be valid, lawful, and enforceable, that provision (or portion thereof) shall be construed as narrowly as possible and shall be severed from the remainder of this Agreement (or provision), and the remainder shall remain in effect and be construed as broadly as possible, as if such invalid, unlawful or unenforceable provision (or portion thereof) had never been contained in this Agreement.

 

7. Changes to Agreement.  No changes to this Agreement can be effective except by another written agreement signed by Employee and an authorized officer of Company.

 

8. Choice of Law/Dispute Resolution.  The parties further agree that any dispute arising under this Agreement, or related in any way to the terms of same, shall be governed by the laws of the State of Texas, without regard to choice of law principles.  Any enforcement of this Agreement or any other future dispute between Employee and the Company or any of its former, current or future parents, subsidiaries, affiliates or employees shall be first submitted to mediation, and if that is unsuccessful, then the dispute shall be finally resolved by arbitration in accordance with the procedures set forth in Article XXI of the Employment Agreement.

 

9. Execution.  This Agreement may be executed in counterparts by facsimile or by transmission via email, all of which taken together shall constitute an instrument enforceable and binding upon the undersigned parties.

 

10. Entire Agreement. Unless specifically provided herein, this Agreement contains all the understandings and representations between Employee and the Company pertaining to the subject matter hereof and supersedes all prior and contemporaneous understandings, agreements, representations and warranties, both written and oral, with respect to such subject matter. In the event of any inconsistency between the statements in the body of this Agreement and the Employment Agreement and the RSA Agreements, the statements in the body of this Agreement shall control.

 

  

  

  

 

	 	 	 	 
	
Dated: December 25, 2014 

	
By: 

	/s/ Sam L. Banks	 
	 	 	Yuma Energy, Inc.	 
	 	 	 	 
	 	Name: 	Sam L. Banks	 
	 	 	 	 
	 	Title: 	President and Chief Executive Officer	 

I HAVE READ THIS AGREEMENT.   I UNDERSTAND THAT I AM GIVING UP IMPORTANT RIGHTS.   I AM AWARE OF MY RIGHT TO CONSULT WITH AN ATTORNEY OF MY OWN CHOOSING DURING THE CONSIDERATION PERIOD, THE COMPANY HAS ADVISED ME TO UNDERTAKE SUCH CONSULTATION BEFORE SIGNING THIS AGREEMENT, AND I HAVE DONE SO.   I SIGN THIS AGREEMENT FREELY AND VOLUNTARILY, WITHOUT DURESS OR COERCION.

	 	 	 	 
	
Dated: December 17, 2014

	
By: 

	/s/ Michael F. Conlon	 
	 	 	Michael F. Conlon	 

 

  

  

  

Exhibit A

Restricted Stock Unit Agreement

(attached hereto)

  

  

  

Yuma Energy, Inc.

2014 LONG-TERM INCENTIVE PLAN

NOTICE OF RESTRICTED STOCK UNIT AWARD

 

	
Award No.:

	  	  	  	  
	  	  
	
Participant:

	
Michael F. Conlon

	
 (the “Participant”)

	  
	  	  
	
Notice:

	
You have been granted the following award of restricted stock units of Yuma Energy, Inc., a California corporation (the “Company”), in accordance with the terms of this Notice of Restricted Stock Unit Award (this “Notice”), the Yuma Energy, Inc. 2014 Long-Term Incentive Plan, as approved by stockholders in September 2014, as amended from time to time (the “Plan”), the attached Restricted Stock Unit Agreement (the “Agreement”), and that certain Separation Agreement and General Release of Claims dated as of December 25, 2014 (the “Separation Agreement”), between the Company and the Participant.

	  	  
	
Date of Grant:

	  	
 (the “Grant Date”)

	  	  	  	  
	
Number of Units:

	
273,907

	
 (the “Units”)

	  
	  	  	  	  	  
	
Vesting Schedule:

	
Number of Units

	
Vesting Date (each, a “Vesting Date”)

	  	  	  
	  	
254,973

	
April 1, 2015

	  	  	  
	  	
18,934

	
May 20, 2015

	  	  	  
	  	  	  	  	  	  
	  	
The vesting of the Units is subject to your continued service as an employee or as a director of the Company through December 31, 2014 and the terms of this Notice, the Plan, the Agreement and the Separation Agreement.

	  	  	  

Your signature below indicates your agreement and understanding that this Notice is subject to all of the terms and conditions contained in the Plan and the Agreement, which includes this Notice. PLEASE BE SURE TO READ ALL OF THIS NOTICE, THE PLAN AND THE AGREEMENT, WHICH CONTAIN THE SPECIFIC TERMS AND CONDITIONS OF THIS NOTICE.

	  	  	
PARTICIPANT

	  	  	
YUMA ENERGY, INC.

	  
	  	  	  	  	  	  	  
	  	  	  	  	  	  	  
	  	  	  	  	
By:

	  	  
	  	  	
Michael F. Conlon

	  	
Name:

	
 Sam L. Banks

	  
	  	  	  	  	
Title:

	
 President and Chief Executive Officer

	  

 

  

  

  

 

YUMA ENERGY, INC.

2014 LONG-TERM INCENTIVE PLAN

RESTRICTED STOCK UNIT AGREEMENT

 

	
1.  

	
Award of Restricted Stock Units.  Yuma Energy, Inc., a California corporation (the “Company”), hereby grants to the Participant under the Plan an award (the “Award”) of the number of restricted stock units (individually, a “Unit” and collectively, the “Units”) set forth in the Notice of Restricted Stock Unit Award (the “Notice”) attached to this Restricted Stock Unit Agreement (this “Agreement”). This Agreement consists of the Notice and the terms and conditions of the Yuma Energy, Inc. 2014 Long-Term Incentive Plan, as amended from time to time (the “Plan”). Unless otherwise provided herein, capitalized terms herein will have the same meanings as in the Plan or in the Notice.

	
2.  

	
Vesting Schedule.

	
(a)  

	
Each Unit held by the Participant will entitle the Participant to receive one share of common stock, no par value per share, of the Company (“Common Stock”), upon the Vesting Date of such Units. Prior to the Vesting Date of a Unit, the Participant will have no ownership interest in the Common Stock represented by such Unit and the Participant will have no right to vote or exercise proxies with respect to the Common Stock represented by such Unit. Furthermore, the Participant will not receive any dividends on unvested Units. No stock certificates will be issued as of the Grant Date set forth in the Notice and the Units will be subject to forfeiture and other restrictions as set forth below.

	
(b)  

	
Units scheduled to vest on a Vesting Date will vest only if the Participant remains in continued service as an employee of the Company through December 31, 2014 (the “Restriction Period”). Should the Participant’s continued service as an employee of the Company end at any time prior to the end of the Restriction Period (a “Separation from Service”), any unvested Units will be immediately forfeited. Participant will receive no payment for unvested forfeited Units. The term “Separation from Service” shall have the same meaning as attributed to it under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”).

	
3.  

	
Change in Control.  Units do not vest upon a Change in Control. This Section 3 supersedes Section 13.4 of the Plan.

	
4.  

	
Settlement.

 

	
(a)  

	
Subject to the terms and conditions of this Agreement, within ninety (90) days following each Vesting Date, except in no event later than December 31st of 2015, the Company will issue one share of Common Stock for each Unit which vested on such Vesting Date in a book-entry account in the name of the Participant with the Company’s transfer agent.

 

	
(b)  

	
Notwithstanding any other provision of this Agreement to the contrary,

 

	
i.  

	
if any payment hereunder is subject to Section 409A of the Code, and

 

	
ii.  

	
if such payment is to be paid on account of the Participant’s Separation from Service (within the meaning of Section 409A of the Code) (an “SFS Payment”),

 

then, if the Participant is a specified employee (within the meaning of Section 409A(a)(2)(B) of the Code), and if any such SFS Payment is required to be made prior to the first day of the seventh month following the Participant’s Separation from Service, such SFS Payment shall be delayed until the first day of the seventh month following the Participant’s Separation from Service.  To the extent that any payments or benefits under this Agreement are subject to Section 409A of the Code and are paid on account of the Participant’s Separation from Service, the determination as to whether the Participant has had a Separation from Service shall be made in accordance with Section 409A of the Code and the guidance issued thereunder.

 

  

  

  

 

	
5.  

	
Taxes.

	
(a)  

	
Tax Liability.  The Participant is ultimately liable and responsible for all taxes owed by the Participant in connection with the Award, regardless of any action the Company takes with respect to any tax withholding obligations that arise in connection with the Award. The Company does not make any representation or undertaking regarding the treatment of any tax withholding in connection with the grant or vesting of the Award or the subsequent sale of Common Stock. The Company does not commit and is under no obligation to structure the Award to reduce or eliminate the Participant’s tax liability.

	
(b)  

	
Payment of Withholding Taxes.  In the event required by federal or state law, the Company will have the right and is hereby authorized to withhold, or to require the Participant to pay upon the occurrence of an event triggering the requirement, any applicable withholding taxes in respect of the Units, their grant, vesting or otherwise and to take such other action as may be necessary in the opinion of the Compensation Committee (the “Committee”) of the Board of Directors (the “Board”) of the Company, to satisfy all obligations for the payment of such withholding taxes. The Participant must satisfy such tax withholding obligations by paying cash to the Company. The Participant agrees to indemnify and hold the Company harmless from any losses, costs, damages, or expenses relating to inadequate withholding. 

	
(c)  

	
THE PARTICIPANT FURTHER ACKNOWLEDGES THAT THE COMPANY HAS DIRECTED HIM OR HER TO SEEK INDEPENDENT ADVICE REGARDING THE APPLICABLE PROVISIONS OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AND THE INCOME TAX LAWS OF ANY MUNICIPALITY OR STATE IN WHICH HE OR SHE MAY RESIDE.

	
6.  

	
No Right to Employment or Service.  Nothing in this Agreement or the Plan will confer upon the Participant any right to employment by the Company or will interfere with, or restrict in any way, the rights of the Company, which are hereby expressly reserved, to terminate the employment of the Participant at any time for any reason whatsoever, with or without good cause. Such reservation of rights can be modified only in an express written contract executed by a duly authorized officer of the Company.

	
7.  

	
Address for Notices.  Any notice to be given to the Company under the terms of this Agreement will be addressed to the Company, Attn: Chief Financial Officer, 1177 West Loop South, Suite 1825, Houston, Texas 77027, or at such other address as the Company may hereafter designate in writing. Any notice to be given to the Participant will be addressed to such Participant at the address maintained by the Company for such person or at such other address as Participant may specify in writing to the Company.

	
8.  

	
Award is Not Transferable.  The Award and the rights and privileges conferred hereby may not be transferred, assigned, pledged or hypothecated in any way (whether by operation of law or otherwise) and may not be subject to sale under execution, attachment or similar process. Upon any attempt to transfer, assign, pledge, hypothecate or otherwise dispose of the Award, or of any right or privilege conferred hereby, or upon any attempted sale under any execution, attachment or similar process, this grant and the rights and privileges conferred hereby immediately will become null and void.

	
9.  

	
Compliance with Laws and Regulations.

	
(a)  

	
If the Participant is an “affiliate” of the Company, as that term is defined in Rule 144 (“Rule 144”) under the Securities Act of 1933, as amended (the “Securities Act”), the Participant may not sell the Common Stock received upon vesting of the Units unless in compliance with Rule 144. Further, the Participant’s subsequent sale of the Common Stock received upon the vesting and settlement of Units will be subject to any market blackout-period that may be imposed by the Company and must comply with the Company’s insider trading policies and any other applicable securities laws. The Participant acknowledges and agrees that, prior to the sale of any Common Stock acquired hereunder, it is the Participant’s responsibility to determine whether or not such sale of such Common Stock will subject the Participant to liability under insider trading rules or other applicable federal securities laws.

 

  

  

  

 

	
(b)  

	
The Units and the obligation of the Company to deliver Common Stock hereunder will be subject in all respects to (i) all applicable federal and state laws, rules and regulations and (ii) any registration, qualification, approvals or other requirements imposed by any government or regulatory agency or body which the Committee may, in its discretion, determine to be necessary or applicable. Moreover, the Company will not issue any Common Stock to the Participant or any other person pursuant to this Agreement if doing so would be contrary to applicable law. If at any time the Company determines, in its discretion, that the listing, registration or qualification of the Common Stock upon any national securities exchange or under any state or federal law, or the consent or approval of any governmental regulatory body, is necessary or desirable, the Company will not be required to issue any Common Stock to the Participant or any other person pursuant to this Agreement unless and until such listing, registration, qualification, consent or approval has been effected or obtained, or otherwise provided for, free of any conditions not acceptable to the Company.

	
(c)  

	
To the extent any payment under this Agreement is subject to Section 409A of the Code, this Agreement, the Notice and the Plan will be interpreted as necessary to comply with Section 409A of the Code. To the extent any provision of this Agreement, the Notice and/or the Plan violates Section 409A of the Code, such provision will hereby be amended to comply or, if it cannot be so amended, such provision is void. The Company does not guarantee the tax treatment of any payment or transfer of shares of Common Stock under this Agreement and the Participant will in all case be responsible for any and all taxes due.

	
10.  

	
Binding Agreement.  This Agreement will be binding upon and inure to the benefit of the heirs, legatees, legal representatives, successors and assigns of the parties hereto.

	
11.  

	
Plan Governs.  Except where explicitly stated in this Agreement, this Agreement is subject to all terms and provisions of the Plan. In the event of a conflict between one or more provisions of this Agreement and one or more provisions of the Plan, the provisions of the Plan will govern.

	
12.  

	
Committee Authority.  The Committee (or the full Board if the Company does not have a compensation committee) will have the power to interpret the Plan and this Agreement and to adopt such rules for the administration, interpretation and application of the Plan as are consistent therewith and to interpret or revoke any such rules (including, but not limited to, the determination of whether or not any Units have vested). All actions taken and all interpretations and determinations made by the Committee will be final and binding upon the Participant, the Company and all other persons, and will be given the maximum deference permitted by law. No member of the Committee will be personally liable for any action, determination or interpretation made in good faith with respect to the Plan or this Agreement.

	
13.  

	
Captions.  Captions provided herein are for convenience only and are not to serve as a basis for interpretation or construction of this Agreement.

	
14.  

	
Provisions Severable.  In the event that any provision in this Agreement will be held invalid or unenforceable, such provision will be severable from, and such invalidity or unenforceability will not be construed to have any effect on, the remaining provisions of this Agreement.

	
15.  

	
Entire Agreement.  This Agreement, including the Notice, and the Plan constitute the entire understanding of the parties relating to the subjects covered herein. The Participant expressly warrants that he or she is not executing the Notice in reliance on any promises, representations or inducements other than those contained herein and in the Plan.

	
16.  

	
Modifications to this Agreement.  No modification of or amendment to this Agreement, nor any waiver of any rights under this Agreement, will be effective unless made in writing signed by the Participant and a duly authorized officer of the Company.  All modifications of or amendments to this Agreement must either (a) comply with Section 409A of the Code or (b) not cause the Award to be subject to Section 409A of the Code if the Award is not already subject to Section 409A of the Code.

	
17.  

	
Amendment, Suspension or Termination of the Plan. The Participant understands that the Plan is discretionary in nature and may be modified, suspended or terminated by the Company at any time.

 

  

  

  

 

	
18.  

	
Recoupment Policy.  Notwithstanding the vesting terms of this Agreement, the Award is subject to any compensatory recovery (clawback) policy in effect at the time of each Vesting Date.

	
19.  

	
Governing Law and Choice of Venue.  This Agreement will be governed by, and construed and enforced in accordance with, the laws of the State of Texas, without regard to its conflict of law provisions. For purposes of litigating any dispute that arises directly or indirectly from the relationship of the parties evidenced by this Agreement, the parties hereby submit to the exclusive jurisdiction of the State of Texas and agree that such litigation shall be conducted only in any state or federal court located in Harris County, Texas, and no other courts, where this grant is made and/or to be performed.

	
20.  

	
Data Protection. By accepting the Award the Participant agrees and consents:

	
(a)  

	
to the collection, use, processing and transfer by the Company of certain personal information about the Participant, including the Participant’s name, home address and telephone number, date of birth, other employee information, details of the Units granted to the Participant, and of Common Stock issued or transferred to the Participant pursuant to this Agreement (“Data”); and

	
(b)  

	
to the Company transferring Data to any subsidiary or affiliate of the Company for the purposes of implementing, administering and managing this Agreement; and

	
(c)  

	
to the use of such Data by any person for such purposes; and

	
(d)  

	
to the transfer to and retention of such Data by third parties in connection with such purposes.

	
21.  

	
Participant Acknowledgements.  The Participant acknowledges receipt of a copy of the Plan and represents that he or she is familiar with the terms and provisions thereof, and hereby accepts the Award subject to all of the terms and provisions hereof and thereof. The Participant has reviewed this Agreement and the Plan in their entirety, has had an opportunity to obtain the advice of counsel prior to executing the Notice and fully understands all provisions of this Agreement and the Plan.

THE PARTICIPANT ACKNOWLEDGES AND AGREES THAT THE UNITS WILL VEST, IF AT ALL, ONLY IF THE PARTICIPANT REMAINS AN EMPLOYEE OF THE COMPANY THROUGH DECEMBER 31, 2014 (NOT THROUGH THE ACT OF BEING GRANTED THE AWARD OR ACQUIRING UNITS HEREUNDER). THE PARTICIPANT FURTHER ACKNOWLEDGES AND AGREES THAT NOTHING IN THE NOTICE, THIS AGREEMENT NOR THE PLAN WILL CONFER UPON THE PARTICIPANT ANY RIGHT WITH RESPECT TO THE PARTICIPANT’S EMPLOYMENT WITH THE COMPANY.

  

  

  

 

Exhibit B

To that Separation Agreement and General Release of Claims

Dated December 25, 2014

Between Yuma Energy, Inc.

and

Michael F. Conlon

Addison and Crosby Projects

Employee has been assigned his contractual overriding royalty interest of 0.50%, subject to proportionate reduction under Articles VI, VII and VIII of the Employment Agreement (“Contractual ORRI”) on the units containing the Crosby 12-1 well and the Crosby 14-1 well.  In addition, Employee will be assigned 25% of his Contractual ORRI on the acreage in any additional designated spacing units (i.e. voluntary, commissioner or by adopted field rule) in the Austin Chalk  Crosby and Addison Projects once the initial well in that spacing unit has been spudded.  Notwithstanding the foregoing and notwithstanding Articles VI, VII and VIII of the Employment Agreement, any proportionate reduction on Employee’s ORRIs in the Addison Project will be pursuant to the terms of the e-mail agreement dated May 3, 2013, attached hereto as Exhibit C. Capitalized terms used herein but not defined herein shall have the meanings given to them in the Employment Agreement.

Amazon 3-D Project

Employee will be assigned the following percentages of his Contractual ORRI amount in the following Prospects once the Prospect is Sold and the initial well has been spudded on such Prospect in the Amazon 3-D Project:

Anaconda                              40%

Bell City North                      50%

Branco                                    50%

Jaguarundi                             50%

N. Spider Monkey                50%

S. Spider Monkey                 50%

Tambo                                    40%

  

  

  

 

Livingston 3-D Project

Employee will be assigned the following percentages of his Contractual ORRI amount in the following Prospects once the Prospect is Sold and the initial well has been spudded on such Prospect in the Livingston 3-D Project:

Aztec                                      40%*

Bandelier                                40%*

Bighorn                                  40%*

Bryce                                      40%*

Carlsbad                                 40%*

Glacier                                    50%

Joshua                                    50%

Mesa Verde                           50%

Ranier                                     40%*

Ripken                                    40%

Ryan                                       40%

*With respect to the Aztec, Bandelier, Bighorn, Bryce, Carlsbad and Ranier Prospects, all leases have expired as of October 15, 2014.  Employee will be entitled to assignments of ORRIs on those prospects if and only if, during the six (6) month period following October 15, 2014, Yuma acquires new leases and starts reassembling the leasehold in that Prospect.Exhibit 4.2

 

(Face of Security)

 

THIS SECURITY IS A GLOBAL SECURITY WITHIN THE MEANING OF THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF A DEPOSITARY OR A NOMINEE THEREOF.  THIS SECURITY MAY NOT BE EXCHANGED IN WHOLE OR IN PART FOR A SECURITY REGISTERED, AND NO TRANSFER OF THIS SECURITY IN WHOLE OR IN PART MAY BE REGISTERED, IN THE NAME OF ANY PERSON OTHER THAN SUCH DEPOSITARY OR A NOMINEE THEREOF, EXCEPT IN THE LIMITED CIRCUMSTANCES DESCRIBED IN THE INDENTURE.

 

UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY TRUST COMPANY, A NEW YORK CORPORATION (“DTC”), TO BARCLAYS BANK PLC, OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE OR PAYMENT, AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC (AND ANY PAYMENT IS MADE TO CEDE & CO. OR TO SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST HEREIN.

 

BY PURCHASING THIS SECURITY, THE HOLDER AGREES TO CHARACTERIZE THIS SECURITY FOR ALL U.S. FEDERAL INCOME TAX PURPOSES AS PROVIDED IN SECTION 10 ON THE FACE OF THIS SECURITY.

 

 

	
CUSIP   No. 06740L493
    	
ISIN: US06740L4932
    

 

 

BARCLAYS BANK PLC

 

GLOBAL MEDIUM-TERM NOTES, SERIES A

 

 

iPath® US Treasury 10-year Bull ETN
  due August 13, 2020

 

The following terms apply to this Security.  Capitalized terms that are not defined the first time they are used in this Security shall have the meanings indicated elsewhere in this Security.

 

Face Amount:  $[     ] equal to [     ] Securities at $50 per Security

 

Index: The Barclays 10Y US Treasury Futures Targeted Exposure IndexTM (the “Index”).

 

Inception Date:  August 9, 2010

 

Original Issue Date:  August 12, 2010

 

Interest Rate:  The principal of this Security shall not bear interest.

 

Denomination:  $50

 

Payment at Maturity:  On the Maturity Date, unless such Securities were previously redeemed on a Redemption Date as provided under “Early Redemption”, the Company shall redeem this Security by paying to the Holder a cash payment per Security equal to the Closing Indicative Note Value on the Final Valuation Date.

 

 

Closing Indicative Note Value:  The Closing Indicative Note Value for each Security on the Inception Date will equal $50.  On each subsequent calendar day until the Maturity Date or an Early Redemption 

Date with respect to such Security, the Closing Indicative Note Value for such Security will equal (1) the Closing Indicative Note Value on the immediately preceding calendar day plus (2) the Daily Index Performance Amount plus (3) the Daily Interest minus (4) the Daily Investor Fee; provided that if such calculation results in a negative value, the Closing Indicative Note Value will be $0.  If the Securities undergo a split or reverse split, the Closing Indicative Note Value will be adjusted accordingly.

 

Daily Index Performance Amount:  The Daily Index Performance Amount for each Security on the Inception Date and on any calendar day that is not an Index Business Day will equal $0.  On any other Index Business Day, the Daily Index Performance Amount for each Security will equal (1) the product of (a) the Index Multiplier times (b) the difference of (i) the closing level of the Index on such Index Business Day minus (ii) the closing level of the Index on the immediately preceding Index Business Day minus (2) the Index Rolling Cost on such Index Business Day.

 

(Face of Security continued on next page)

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Index Multiplier:  $0.10

 

Index Rolling Cost:  On any calendar day that is not a Roll Day, the Index Rolling Cost for each Security will equal $0.  On any Roll Day, the Index Rolling Cost for each Security will equal $0.005.

 

Daily Interest:  The Daily Interest for each Security on the Inception Date will equal $0.  On each subsequent calendar day until the Maturity Date or an Early Redemption Date with respect to such Security, the Daily Interest for such Security will equal (1) the Closing Indicative Note Value on the immediately preceding calendar day times (2) the T-Bill rate divided by (3) 360.

 

T-Bill Rate:  The T-Bill Rate will equal the most recent weekly investment rate for 28-day U.S. Treasury bills effective on the preceding Business Day in New York City as published on Bloomberg under the ticker symbol “USB4WIR”.

 

Daily Investor Fee:  The Daily Investor Fee for each Security on the Inception Date will equal $0.  On each subsequent calendar day until the Maturity Date or an Early Redemption Date with respect to such Security, the Daily Investor Fee for such Security will equal (1) the Closing Indicative Note Value on the immediately preceding calendar day times (2) the Fee Rate divided by (3) 365.

 

Fee Rate:  0.75%.

 

Early Redemption:  The Holder may, subject to the notification requirements provided under Section 5 hereof, require the Company to redeem the Holder’s Securities in whole or in part on any Early Redemption Date during the term of the Securities (“Holder Redemption”).  If the Holder requires the Company to redeem the Holder’s Securities on any Early 

 

Redemption Date, the Holder will receive a cash payment per Security equal to the applicable Closing Indicative Note Value on the applicable Valuation Date.  The Company shall not be required to redeem fewer than 50,000 Securities at one time, provided that the Company may from time to time in its sole discretion reduce, in part or in whole, this minimum redemption amount on a consistent basis for all Holders who hold Securities at the time the reduction becomes effective.

 

Calculation Agent:  Barclays Bank PLC

 

Defeasance:  Neither full defeasance nor covenant defeasance applies to this Security.

 

Listing:  The NASDAQ Stock Market (“NASDAQ”)

 

(Face of Security)

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OTHER TERMS:

 

All terms used in this Security that are not defined in this Security but are defined in the Indenture referred to on the reverse of this Security shall have the meanings assigned to them in the Indenture.  Section headings on the face of this Security are for convenience only and shall not affect the construction of this Security.

 

“Business Day” means a Monday, Tuesday, Wednesday, Thursday or Friday that is not a day on which banking institutions in New York City or London generally are authorized or obligated by law, regulation or executive order to close.

 

“Default Amount” means, on any day, an amount in U.S. dollars, as determined by the Calculation Agent in its sole discretion, equal to the cost of having a Qualified Financial Institution (selected as provided below) expressly assume the due and punctual payment of the principal of this Security, and the performance or observance of every covenant hereof and of the Indenture on the part of the Company to be performed or observed with respect to this Security (or to undertake other obligations providing substantially equivalent economic value to the Holder of this Security as the Company’s obligations hereunder).  Such cost will equal (i) the lowest amount that a Qualified Financial Institution would charge to effect such assumption (or undertaking) plus (ii) the reasonable expenses (including reasonable attorneys’ fees) incurred by the Holder of this Security in preparing any documentation necessary for such assumption (or undertaking).  During the Default Quotation Period, each Holder of this Security and the Company may request a Qualified Financial Institution to provide a quotation of the amount it would charge to effect such assumption (or undertaking).  If either party obtains a quotation, it must notify the other party in writing of the quotation.  The amount referred to in clause (i) of this paragraph will equal the lowest (or, if there is only one, the only) quotation so obtained, and as to which notice is so given, during the Default Quotation Period; provided that, with respect to any quotation, the party not obtaining the quotation may object, on reasonable and significant grounds, to the effectuation of such assumption (or undertaking) by the Qualified Financial Institution providing such quotation and notify the other party in writing of such grounds within two Business Days after the last day of the Default Quotation Period, in which case that quotation will be disregarded in determining the Default Amount.  The “Default Quotation Period” shall be the period beginning on the day the Default Amount first becomes due and ending on the third Business Day after such due date, unless no such quotation is obtained, or unless every such quotation so obtained is objected to within five Business Days after such due date as provided above, in which case the Default Quotation Period will continue until the third Business Day after the first Business Day on which prompt notice of a quotation is given as provided above, unless such quotation is objected to as provided above within five Business Days after such first Business Day, in which case, the Default Quotation Period will continue as provided in this sentence. Notwithstanding the foregoing, if the Default Quotation Period (and the subsequent two Business Day objection period) has not ended prior to the Final Valuation Date, then the Default Amount will equal the Face Amount.

 

“Early Redemption Date” means the third Business Day following each Valuation Date, other than the Final Valuation Date.  The final Early Redemption Date will be the third Business Day following the Valuation Date that is immediately prior to the Final Valuation Date.

 

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“Final Valuation Date” means August 10, 2020, or if such date is not a Trading Day, the next succeeding Trading Day; provided, however, that if the Calculation Agent determines that a Market Disruption Event occurs or is continuing on such date, the Final Valuation Date will be the first following Trading Day on which the Calculation Agent determines that a Market Disruption Event does not occur and is not continuing, provided that in no event will the Final Valuation Date be postponed by more than five Trading Days.

 

“Index Business Day” means a day on which the Chicago Board of Trade (“CBOT”) is open for business.

 

“Index Component” means, with respect to the Securities, the 10-year Treasury futures contracts underlying the Index, as traded on CBOT, as described in the Prospectus.

 

“Index Owner” means Barclays Bank PLC, as owner of the intellectual property and licensing rights relating to the Index.

 

“Index Sponsor” means Barclays Risk Analytics and Index Solutions Limited (BRAIS), a wholly-owned subsidiary of Barclays, or any successor thereto.

 

“Market Disruption Event” means, with respect to the Securities, in the opinion of the Calculation Agent and determined in its sole discretion:  (i) a material limitation, suspension or disruption in the trading of any Index Component which results in a failure by the trading facility on which the relevant contract is traded to report a daily contract reference price (the price of the relevant contract that is used as a reference or benchmark by market participants); (ii) the daily contract reference price for any Index Component has increased or decreased from the previous day’s daily contract reference price by the maximum amount permitted under the applicable rules or procedures of the relevant trading facility; (iii) failure by the Index Sponsor to publish the closing value of the Index or of the applicable trading facility or other price source to announce or publish the daily contract reference price for one of more Index Components; (iv) any other event, if the Calculation Agent determines in its sole discretion that the event materially interferes with the ability of Barclays Bank PLC or the ability of any affiliates of Barclays Bank PLC to unwind all or a material portion of a hedge with respect to the Securities that Barclays Bank PLC or any of its affiliates have effected or may effect.  The following events will not be Market Disruption Events: (a) a limitation on the hours or numbers of days of trading on a trading facility on which any Index Component is traded, but only if the limitation results from an announced change in the regular business hours of the relevant market; or (b) a decision by a trading facility to permanently discontinue trading in any Index Component.

 

“Maturity Date” means August 13, 2020, provided that if such date is not a Business Day, the Maturity Date will be the next succeeding Business Day; provided, however, that if the fifth Business Day preceding August 13, 2020 does not qualify as the Final Valuation Date referred to above, then the Maturity Date will be the fifth Business Day following the Final Valuation Date.

 

“Qualified Financial Institution” means, at any time, a financial institution organized under the laws of any jurisdiction in the United States of America or Europe that at 

 

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such time has outstanding debt obligations with a stated maturity of one year or less from the date of issue and rated A-1 or higher by Standard & Poor’s, a division of The McGraw Hill Companies, Inc., Ratings Group (or any successor) or P-1 or higher by Moody’s Investors Service, Inc. (or any successor) or, in either case, such other comparable rating, if any, then used by such rating agency.

 

“Roll Day” means each of the three Index business Days before the last Index Business Day in each of the months of February, May, August and November in any given year.

 

“Successor Index” means any substitute index approved by the Calculation Agent as a Successor Index pursuant to Section 3 hereof.

 

“Trading Day” means a trading day for the Securities on which (i) it is an Index Business Day, (ii) trading is generally conducted on the NASDAQ and (iii) it is a Business Day in New York City, in each case as determined by the Calculation Agent in its sole discretion.

 

“Valuation Date” means each Business Day from August 9, 2010 to August 10, 2020, inclusive (subject to the occurrence of a Market Disruption Event), or if such date is not a Trading Day, the next succeeding Trading Day, not to exceed five Business Days.

 

 

Promise to Pay at Maturity or Upon Early Redemption

 

Barclays Bank PLC, a public limited company duly organized and existing under the laws of England and Wales (herein called the “Company,” which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay (or cause to be paid) to Cede & Co., as nominee for The Depository Trust Company, or registered assigns, the amount as calculated and provided under (i) “Early Redemption” and elsewhere on the face this Security on the applicable Early Redemption Date, in the case of any Securities in respect of the which the Holder exercises such Holder’s right to require the Company to redeem such Holder’s Securities prior to the Early Maturity Date, or in the case the Company exercises its right to redeem the Securities under “Issuer Redemption”, or (ii) “Payment at Maturity” and elsewhere on the face of this Security on the Maturity Date, in the case of all other Securities.

 

Payment of Interest

 

The principal of this Security shall not bear interest.

 

Discontinuance or Modification of the Index; Market Disruption Event

 

If the Index Sponsor discontinues publication of the Index and it or any other person or entity publishes an index that the Calculation Agent determines is comparable to the discontinued Index and approves as a Successor Index, then the Calculation Agent will determine the value of the Index on the applicable Valuation Date and the amount payable on the Maturity Date or any Redemption Date by reference to such Successor Index.

 

-6-

 

If the Calculation Agent determines that the publication of the Index is discontinued and that there is no Successor Index, or that the closing value of the Index is not available because of a Market Disruption Event or for any other reason, on any Valuation Date, or if for any other reason the Index is not available to the Company or the Calculation Agent on any Valuation Date, the Calculation Agent will determine the amount payable by a computation methodology that the Calculation Agent determines will as closely as reasonably possible replicate the Index.

 

If the Calculation Agent determines that the Index, the Index Components or the method of calculating the Index has been changed at any time in any respect, including, without limitation, any addition, deletion or substitution and any reweighting or rebalancing of the Index Components, and whether the change is made by the Index Sponsor under its existing policies or following a modification of those policies, is due to the publication of a Successor Index, is due to events affecting one or more of the Index Components, or is due to any other reason, then the Calculation Agent will be permitted (but shall not be required) to make such adjustments to the Index or method of calculating the Index as it believes are appropriate to ensure that the value of the Index used to determine the amount payable on the Maturity Date or on an Early Redemption Date is equitable.

 

The Calculation Agent shall have the right to postpone a Valuation Date, and thus the determination of the value of the Index, if the Calculation Agent determines that, on such Valuation Date, a Market Disruption Event occurs or is continuing in respect of any Index Component.  If such a postponement occurs, the Index Components unaffected by the Market Disruption Event shall be determined on the scheduled Valuation Date and the Calculation Agent shall determine the value of the affected Index Component by using the closing value of the Index Component on the first Trading Day after that day on which no Market Disruption Event occurs or is continuing with respect to the Index Component.  In no event, however, may the Calculation Agent postpone a Valuation Date by more than five Trading Days.

 

In the event that a Valuation Date is postponed until the fifth Trading Day following the scheduled Valuation Date, but a Market Disruption Event occurs and is continuing on such day, that day shall nevertheless be a Valuation Date, and the Calculation Agent shall determine the value of the Index on such day by a good faith estimate of the value of the Index that would have prevailed in the absence of a Market Disruption Event.

 

The Calculation Agent shall have the right to make all determinations and adjustments with respect to the Index in its sole discretion.

 

Payment at Maturity or Upon Early Redemption

 

The payment of this Security that becomes due and payable on the Maturity Date or on an Early Redemption Date, as the case may be, shall be the cash amount that must be paid to redeem this Security as provided above under “Payment at Maturity” and “Early Redemption”, respectively.  The payment of this Security that becomes due and payable upon acceleration of the Maturity Date hereof after an Event of Default has occurred pursuant to the Indenture shall be the Default Amount.  When the principal referred to in either of the two preceding sentences has been paid as provided herein (or such payment has been made 

 

-7-

 

available), the principal of this Security shall be deemed to have been paid in full, whether or not this Security shall have been surrendered for payment or cancellation.  References to the payment at maturity or upon early redemption of this Security on any day shall be deemed to mean the payment of cash that is payable on such day as provided in this Security.  Notwithstanding the foregoing, solely for the purpose of determining whether any consent, waiver, notice or other action to be given or taken by Holders of Securities pursuant to the Indenture has been given or taken by Holders of Outstanding Securities in the requisite aggregate principal amount, the principal amount of this Security will be deemed to equal the Face Amount.  This Security shall cease to be Outstanding as provided in the definition of such term in the Indenture when the principal of this Security shall be deemed to have been paid in full as provided above.

 

In the event that payment at maturity is deferred beyond August 13, 2020, penalty interest will not accrue or be payable with respect to that deferred payment.

 

Redemption Mechanics

 

Subject to the minimum redemption amount provided under “Early Redemption”, the Holder may require the Company to redeem the Holder’s Securities on any Early Redemption Date during the term of the Securities provided that such Holder (i) delivers a notice of holder redemption to the Company via electronic mail by no later than 4:00 p.m. New York time on the Business Day prior to the applicable Valuation Date; (ii) delivers a signed confirmation of holder redemption to the Company via facsimile by no later than 5:00 p.m. New York time on the same day; (iii) instructs the Holder’s DTC custodian to book a delivery versus payment trade with respect to the Holder’s Securities on the applicable Valuation Date at a price per Security equal to the applicable Closing Indicative Note Value, facing Barclays DTC 5101; and (iv) causes the Holder’s DTC custodian to deliver the trade as booked for settlement via DTC at or prior to 10:00 a.m. New York time on the applicable Early Redemption Date, which shall be the third Business Day following the applicable Valuation Date (other than the Final Valuation Date).  The final Early Redemption Date shall be the third Business Day following the Valuation Date that is immediately prior to the Final Valuation Date.

 

Role of Calculation Agent

 

The Calculation Agent will be solely responsible for all determinations and calculations regarding the value of the Securities, including at maturity or upon early redemption; Market Disruption Events; Business Days; Trading Days; the Daily Index Performance Amount, the Investor Fee; the Default Amount; the Closing Indicative Note Value of the Securities on any Valuation Date, the closing value of the Index on the Inception Date and on any Valuation Date; the Maturity Date; Early Redemption Dates; the amount payable on the Securities and all such other matters as may be specified elsewhere herein as matters to be determined by the Calculation Agent. The Calculation Agent shall make all such determinations and calculations in its sole discretion, and absent manifest error, all determinations of the Calculation Agent shall be final and binding on the Company, the Holder and all other Persons having an interest in this Security, without liability on the part of the Calculation Agent.

 

-8-

 

The Company shall take such action as shall be necessary to ensure that there is, at all relevant times, a financial institution serving as the Calculation Agent hereunder.  The Company may, in its sole discretion at any time and from time to time, upon written notice to the Trustee, but without notice to the Holder of this Security, terminate the appointment of any Person serving as the Calculation Agent and appoint another Person (including any Affiliate of the Company) to serve as the Calculation Agent.  Insofar as this Security provides for the Calculation Agent to determine the value of the Index on any date or other information from any institution or other source, the Calculation Agent may do so from any source or sources of the kind contemplated or otherwise permitted hereby notwithstanding that any one or more of such sources are the Calculation Agent, Affiliates of the Calculation Agent or Affiliates of the Company.

 

Payment

 

Payment of any amount payable on this Security will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  Payment will be made to an account designated by the Holder (in writing to the Company and the Trustee on or before the applicable Valuation Date) and acceptable to the Company or, if no such account is designated and acceptable as aforesaid, at the office or agency of the Company maintained for that purpose in The City of New York, provided, however, that payment on the Maturity Date or any Early Redemption Date shall be made only upon surrender of this Security at such office or agency (unless the Company waives surrender).  Notwithstanding the foregoing, if this Security is a Global Security, any payment may be made pursuant to the Applicable Procedures of the Depositary as permitted in said Indenture.

 

Reverse of this Security

 

Reference is hereby made to the further provisions of this Security set forth on the reverse hereof, which further provisions shall for all purposes have the same effect as if set forth at this place.

 

Certificate of Authentication

 

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof by manual signature, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

 

Prospectus

 

Reference is made to (i) the Prospectus related to the Securities, dated July 19, 2013, (ii) the Prospectus Supplement, dated July 19, 2013 and (iii) the Pricing Supplement, dated [     ], (together, the “Prospectus”).  The terms and conditions of this Security as fully set forth in the Prospectus are hereby incorporated by reference in their entirety into this Security and binding upon the parties hereto.  In the event of a conflict between the terms of the Prospectus and the terms of this Security, the Prospectus will control and if the Prospectus provides for a specific United States tax characterization, by purchasing a Security, you agree (in the absence of 

 

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a change in law, an administrative determination or a judicial ruling to the contrary) to be bound for United States federal income tax purposes to such tax characterization.  Copies of the Prospectus are available from the Company or any underwriter or any dealer participating in the offering by calling toll free, 1-888-227-2275 (extension 2-3430).

 

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IN WITNESS WHEREOF, the Company has caused this instrument to be duly executed.

 

	
 
    	
BARCLAYS BANK PLC
    
	
 
    	
 
    
	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

This is one of the Securities of the series designated herein and referred to in the Indenture.

 

Dated:

 

	
 
    	
THE BANK OF NEW YORK   MELLON
    
	
 
    	
 
    	
 
    
	
 
    	
 
    	
 
    
	
 
    	
By:
    	
 
    
	
 
    	
 
    	
Name:
    
	
 
    	
 
    	
Title:
    

 

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(Reverse of Security)

 

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities”) issued and to be issued in one or more series under an Indenture, dated as of September 16, 2004 (herein called the “Indenture,” which term shall have the meaning assigned to it in such instrument), between the Company and The Bank of New York Mellon, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture), and reference is hereby made to the Indenture for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered.  Insofar as the provisions of the Indenture may conflict with the provisions set forth on the face of this Security, the latter shall control for purposes of this Security.

 

This Security is one of the series designated on the face hereof.  References herein to “this series” mean the series designated on the face hereof.

 

Payments under the Securities will be made without deduction or withholding for, or on account of, any and all present or future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Taxes”) now or hereafter imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any political subdivision or authority thereof or therein having the power to tax (each a “Taxing Jurisdiction”), unless such deduction or withholding is required by law.  If any such Taxes are at any time required by a Taxing Jurisdiction to be deducted or withheld, the Company will, subject to the exceptions and limitations set forth in Section 10.04 of the Indenture, pay such additional amounts of the principal of such Security and any other amounts payable on such Security (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holder of any Security, after such deduction or withholding, shall equal the amounts of the principal of such Security and any other amounts payable on such Security which would have been payable in respect of such Security had no such deduction or withholding been required.

 

If at any time the Company determines that as a result of a change in or amendment to the laws or regulations of a Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or a change in an official application or interpretation of such laws or regulations (including a decision of any court or tribunal), either generally or in relation to any particular Securities, which change, amendment, application or interpretation becomes effective on or after the Original Issue Date in making any payment of, or in respect of, the principal amount of the Securities, the Company would be required to pay any Additional Amounts with respect thereto, then the Securities will be redeemable upon not less than 35 nor more than 60 days’ notice by mail, at any time thereafter, in whole but not in part, at the election of the Company as provided in the Indenture at a redemption price equal to the principal amount thereof.

 

(Reverse of Security continued on next page)

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The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a majority in principal amount of the Securities at the time Outstanding of all series to be affected (considered together as one class for this purpose).  The Indenture also contains provisions (i) permitting the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of all series to be affected under the Indenture (considered together as one class for this purpose), on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and (ii) permitting the Holders of a majority in aggregate principal amount of the Securities at the time Outstanding of any series to be affected under the Indenture (with each such series considered separately for this purpose), on behalf of the Holders of all Securities of such series, to waive certain past defaults under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

 

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Event of Default with respect to the Securities of this series, the Holders of not less than 25% in aggregate principal amount of the Securities of this series at the time Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Event of Default as Trustee and offered the Trustee reasonable indemnity against the costs, expenses and liabilities to be incurred in compliance with such request, and the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series at the time Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for 60 days after receipt of such notice, request and offer of indemnity.  The foregoing shall not apply to any suit instituted by the Holder of this Security for the enforcement of any payment of principal hereof on or after the respective due dates expressed herein.

 

(Reverse of Security continued on next page)

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No reference herein to the Indenture and no provision of this Security or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay the principal of this Security as herein provided.

 

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Senior Debt Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of this Security is payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Senior Debt Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing.  Thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

 

This Security, and any other Securities of this series and of like tenor, are issuable only in registered form without coupons in denominations of any multiple of $50.  As provided in the Indenture and subject to certain limitations therein set forth, Securities of this series are exchangeable for a like aggregate principal amount of Securities of this series and of like tenor of a different authorized denomination, as requested by the Holder surrendering the same.

 

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

 

Prior to due presentment of this Security for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

 

This Security and the Indenture shall be governed by and construed in accordance with the laws of the State of New York.

 

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