Document:

EX-10.1

 Exhibit 10.1 

SEPARATION AGREEMENT 
 THIS
SEPARATION AGREEMENT (this “Agreement”) is made and entered into this 11th day of September, 2014, by and between ROBERT B. LEE (“Executive”) and PRGX GLOBAL,
INC., a Georgia corporation (“Company”). Executive and Company are sometimes hereinafter referred to together as the “Parties” and individually as a “Party.” 

BACKGROUND: 
 A.
Executive is employed as the Chief Financial Officer, Treasurer and Controller of Company pursuant to an employment agreement between Executive and Company effective as of June 1, 2009 (“Employment Agreement”). 

B. Executive and Company now mutually desire to (i) provide for the end of Executive’s employment and (ii) terminate the
Employment Agreement effective as of the date hereof. 
 C. Company and Executive wish to avoid any disputes which could arise under
the Employment Agreement and have therefore compromised any claims or rights they have or may have under the Employment Agreement by agreeing to the terms of this Agreement. 

NOW, THEREFORE, FOR AND IN CONSIDERATION of the premises, the mutual promises, covenants and agreements contained herein, and other
good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows: 

1. Termination of Employment. The Parties agree that (a) the Employment Agreement is hereby terminated as of the
date hereof, (b) Executive’s employment with Company shall terminate effective December 31, 2014 or such earlier date as Company in its sole discretion may determine (“Agreed Termination Date”), and (c) all benefits,
privileges and authorities related to Executive’s employment with Company shall hereby cease, except as otherwise specifically set forth in this Agreement.  

2. No Admission. The Parties agree that their entry into this Agreement is not and shall not be construed to be an
admission of liability or wrongdoing on the part of either Party. 
 3. Future Cooperation. Executive agrees
that, notwithstanding the termination of Executive’s employment (the date of termination of Executive’s employment (whether on or before the Agreed Termination Date) being referred to as the “Termination Date”), Executive upon
reasonable notice will make himself available to Company or its designated representatives for the purposes of: (a) providing information regarding the projects and files on which Executive worked for the purpose of transitioning such projects;
and (b) providing information regarding any other matter, file, project and/or client with whom Executive was involved while employed by Company. 

 4. Consideration.  

(a) In consideration for Executive’s agreement to terminate the Employment Agreement, to fully release Company from any and all Claims as
described below, and to perform the other duties and obligations of Executive contained herein (whether or not Executive remains employed through the Agreed Termination Date), Company will, subject to ordinary and lawful deductions and Sections 4(c)
and (d) below: 
 (i) Pay severance to Executive in the form of salary continuation for the twelve (12) months
immediately following the Termination Date (“Severance Period”). Such payments shall be made in accordance with Company’s standard pay practices in an amount equal to ten thousand seven hundred sixty-nine and 23/100 dollars
($10,769.23) per bi-weekly pay period during the Severance Period, except that no payments shall be made during the period that begins immediately after the Termination Date and ends on the earlier of (i) Executive’s death or (ii) six
months after the Termination Date. The payments that would otherwise have been made in such period shall be accumulated and paid in a lump sum on the first bi-weekly pay period after the end of such period. 

(ii) Continue after the Termination Date any health care (medical, dental and vision) plan coverage, other than under a
flexible spending account, provided to Executive and Executive’s spouse and dependents at the Termination Date for the Severance Period, on a monthly or more frequent basis, on the same basis and at the same cost to Executive as available to
similarly-situated active employees during such Severance Period, provided that such continued coverage shall terminate in the event Executive becomes eligible for any such coverage under another employer’s plans. 

(iii) Pay an amount equal to Executive’s actual earned full-year bonus for 2014, pro-rated based on the number of days
Executive was employed for such year on and before the Termination Date (except as set forth in Section 4(b) below), payable at the time Executive’s annual bonus for such year otherwise would have been paid had Executive continued
employment. Payment of any 2014 bonus hereunder will be dependent upon Company’s achievement of certain revenue and adjusted EBITDA performance goals established by the Compensation Committee for 2014 in the same manner as are applicable to
similarly-situated executives of Company who participate in the annual bonus plan for 2014. 
 (iv) Vest in full, effective
as of the date upon which the revocation period for the Release described in Section 4(c) below expires without Executive having elected to revoke the Release, all of Executive’s outstanding unvested options, restricted stock and
management incentive plan units that would have vested based solely on the continued employment of Executive. Additionally, all of Executive’s outstanding vested stock options shall remain outstanding until the earlier of (i) one year
after the Termination Date or (ii) the original expiration date of the options (disregarding any earlier expiration date provided for in any other agreement, including without limitation any related grant agreement, based solely on the
termination of Executive’s employment). 

  
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 (v) Payment of one year of outplacement services from Executrak or an
outplacement service provider of Executive’s choice, limited to $20,000 in total. This outplacement services benefit will be forfeited if Executive does not begin using such services within 60 days after the Termination Date. 

(b) In consideration for Executive’s agreement to remain in the employ of Company through the Agreed Termination Date, Company agrees to
pay to Executive, subject to ordinary and lawful deductions and Sections 4(c) and (d) below, a retention bonus in the amount of twenty thousand and 00/100 dollars ($20,000) (the “Retention Bonus”), provided Executive remains
continuously employed with Company from the date hereof until the Agreed Termination Date. Additionally, if Company in its sole discretion determines that Executive’s employment with Company will terminate before December 31, 2014,
(i) Company agrees to pay to Executive, subject to ordinary and lawful deductions and Sections 4(c) and (d) below, in a single lump sum the aggregate base salary that Executive would have been paid from the Agreed Termination Date through
December 31, 2014 had Executive remained employed by Company through December 31, 2014 (the “Salary Amount”) and (ii) Executive will receive Executive’s full-year actual earned bonus for 2014, if any, as set forth in
Section 4(a)(iii) above (without pro-ration). Both the Retention Bonus and the Salary Amount, if payable, will be paid as soon as administratively practicable (and no later than thirty (30) days) after the revocation period for the Release
described in Section 4(c) below expires without Executive having elected to revoke the Release. Notwithstanding the foregoing, however, Executive shall not be entitled to receive the Retention Bonus or the Salary Amount, and Executive will
receive Executive’s actual earned full-year bonus for 2014, if any, pro-rated as set forth in Section 4(a)(iii) above, if Company terminates Executive’s employment before December 31, 2014 for Cause (as previously defined in the
Employment Agreement). 
 (c) Notwithstanding anything else contained herein to the contrary, no payments shall be made or benefits
delivered under this Agreement (other than the payments required to be made by Company pursuant to Section 5 below) unless, within thirty (30) days after the Termination Date: (i) Executive has signed and delivered to Company a
Release in the form attached hereto as Exhibit A (the “Release”); and (ii) the applicable revocation period under the Release has expired without Executive having elected to revoke the Release. Executive agrees and acknowledges
that Executive would not be entitled to such consideration absent execution of the Release and expiration of the applicable revocation period without Executive having revoked the Release. Any payments to be made, or benefits to be delivered, under
this Agreement (other than any Retention Bonus or Salary Amount required to be made by Company pursuant to Section 4(b) above, the payments required to be made by Company pursuant to Section 5 below and the vesting of outstanding unvested
options, restricted stock and management incentive plan units as set forth in Section 4(a)(iv) above) within the thirty (30) days after the Termination Date shall be accumulated and paid in a lump sum, or as to benefits continued at
Executive’s expense subject to reimbursement, reimbursement shall be made, on the first bi-weekly pay period occurring more than thirty (30) days after the Termination Date, provided Executive delivers the signed Release to Company and the
revocation period thereunder expires without Executive having elected to revoke the Release. 

  
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 (d) As a further condition to receipt of the payments and benefits in Section 4(a) above,
Executive also waives any and all rights to any other amounts payable to him upon the termination of his employment relationship with Company, other than those specifically set forth in this Agreement, including without limitation any severance,
notice rights, payments, benefits and other amounts to which Executive may be entitled under the laws of any jurisdiction and/or his Employment Agreement, and Executive agrees not to pursue or claim any of such payments, benefits or rights. 

5. Other Benefits. Nothing in this Agreement or the Release shall: 

(a) alter or reduce any vested, accrued benefits (if any) Executive may be entitled to receive under any 401(k) plan established by Company;

 (b) affect Executive’s right (if any) to elect and (subject to Section 4(a)(ii) above) pay for continuation of Executive’s
health insurance coverage under Company’s health plans pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (C.O.B.R.A.), as amended; 

(c) affect Executive’s right (if any) to receive (i) any base salary that has accrued through the Termination Date and is unpaid,
(ii) any reimbursable expenses that Executive has incurred before the Termination Date but are unpaid (subject to Company’s expense reimbursement policy) and (iii) any unused paid time off days to which Executive will be entitled to
payment, all of which shall be paid as soon as administratively practicable (and in any event within thirty (30) days) after the Termination Date; or 

(d) affect Executive’s right to continue to receive his base salary and benefits through the Termination Date, as in effect as of the
date hereof, which base salary and benefits will continue through the Termination Date, except with respect to any changes in benefits that are applicable generally to the other executives of Company. 

6. Confidentiality of Agreement Terms. Except as otherwise expressly provided in this Section 6, Executive agrees
that this Agreement and the terms, conditions and amount of consideration set forth in this Agreement are and shall be deemed to be confidential and hereafter shall not be disclosed by Executive to any other person or entity. The only disclosures
excepted by this paragraph are (a) as may be required by law; (b) Executive may tell prospective employers the dates of Executive’s employment, positions held, evaluations received, Executive’s duties and responsibilities and
salary history with Company; (c) Executive may disclose the terms and conditions of this Agreement to Executive’s attorneys and tax advisers; and (d) Executive may disclose the terms of this Agreement to Executive’s spouse, if
any; provided, however, that any spouse, attorney or tax adviser learning about the terms of this Agreement must be informed about this confidentiality provision, and Executive will be responsible for any breaches of this confidentiality provision
by his spouse, attorneys or tax advisers to the same extent as if Executive had directly breached this Agreement.  

  
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 7. Restrictive Covenants. 

(a) Definitions. For purposes of this Agreement, the following terms shall have the following respective meanings: 

(i) “Business of Company” means services to (A) identify clients’ erroneous or improper payments to vendors
and assist clients in the recovery of monies owed to clients as a result of overpayments and overlooked discounts, rebates, allowances and credits, (B) identify and assist clients in recovering amounts owed to them by other third parties,
including amounts owed to clients due to non-compliance with applicable contracts, course of dealing or usual and customary terms, (C) assist clients in efforts to organize, manage and analyze their purchasing and payment data, and
(D) assist clients in analyzing and managing vendor-related risks. 
 (ii) “Confidential Information” means
any information about Company or its subsidiaries and their employees, customers and/or suppliers which is not generally known outside of Company, which Executive learned in connection with Executive’s employment with Company, and which would
be useful to competitors or the disclosure of which would be damaging to Company or any subsidiary of Company. Confidential Information includes, but is not limited to: (A) business and employment policies, marketing methods and the targets of
those methods, finances, business plans, promotional materials and price lists; (B) the terms upon which Company or any subsidiary of Company obtains products from its suppliers and sells services and products to customers; (C) the nature,
origin, composition and development of Company’s or any subsidiary’s services and products; and (D) the manner in which Company or any subsidiary of Company provides products and services to its customers. 

(iii) “Material Contact” means contact in person, by telephone, or by paper or electronic correspondence in
furtherance of the Business of Company. 
 (iv) “Restricted Territory” means, and is limited to, the geographic
area included in the Atlanta-Sandy Springs-Marietta, Georgia metropolitan statistical area. Executive acknowledges and agrees that this is a portion of the area in which Company and its subsidiaries does business at the time of the execution of this
Agreement, and in which Executive had responsibility on behalf of Company. 
 (v) “Trade Secrets” means
Confidential Information of Company and its subsidiaries which meets the definition of a trade secret under applicable law. 
 (b)
Confidentiality. Executive agrees that Executive will not, directly or indirectly, use, copy, disclose, distribute or otherwise make use of on his own behalf or on behalf of any other person or entity (i) any Confidential Information for
a period of five (5) years after the Termination Date or (ii) any Trade Secret at any time such information constitutes a trade secret under applicable law. 

(c) Non-Competition. Executive agrees that for a period of two (2) years following the Termination Date, Executive will not,
either for himself or on behalf of any other 

  
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person or entity, compete with the Business of Company within the Restricted Territory by performing activities which are the same as or similar to those performed by Executive for Company or
Company’s subsidiaries. 
 (d) Non-Solicitation of Customers. Executive agrees that for a period of two (2) years following
the Termination Date, Executive shall not, directly or indirectly, solicit any actual or prospective customers of Company or any subsidiary with whom Executive had Material Contact, for the purpose of selling any products or services which compete
with the Business of Company. 
 (e) Non-Recruitment of Employees or Contractors. Executive agrees that for a period of two
(2) years following the Termination Date, Executive will not, directly or indirectly, solicit or attempt to solicit any employee or contractor of Company or any subsidiary with whom Executive had Material Contact, to terminate or lessen such
employment or contract. 
 (f) Acknowledgments. Executive hereby acknowledges and agrees that the covenants contained in
(b) through (e) of this Section 7 hereof are reasonable as to time, scope and territory given Company’s and Company’s subsidiaries’ need to protect their business, customer relationships, personnel, Trade Secrets and
Confidential Information. For purposes of the covenants contained in (b) through (e) of this Section 7, Company shall refer also to Company’s subsidiaries as applicable. In the event any covenant or other provision in this
Agreement shall be determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it
shall be interpreted to extend only over the maximum period of time for which it may be enforceable and/or over the maximum geographical area as to which it may be enforceable and/or to the maximum extent in all other respects as to which it may be
enforceable, all as determined by such court in such action, and the invalidity of any one or more of the covenants or other provisions in this Agreement shall not cause or render any other covenants or provisions in this Agreement invalid or
voidable. Executive acknowledges and represents that Executive has substantial experience and knowledge such that Executive can readily obtain subsequent employment which does not violate this Agreement. 

(g) Specific Performance. Executive acknowledges and agrees that any breach of the provisions of this Section 7 by him will cause
irreparable damage to Company or Company’s subsidiaries, the exact amount of which will be difficult to determine, and that the remedies at law for any such breach will be inadequate. Accordingly, Executive agrees that, in addition to any other
remedy that may be available at law, in equity, or hereunder, Company shall be entitled to specific performance and injunctive relief, without posting bond or other security, to enforce or prevent any violation of any of the provisions of this
Section 7 by Executive. Additionally, notwithstanding the obligations within Section 11 of this Agreement regarding the exclusive jurisdiction of the United States District Court for the Northern District of Georgia and the State and
Superior Courts of Cobb County, Georgia pertaining to actions arising out of this Agreement, and in addition to Company’s right to seek injunctive relief in any state or federal court located in Cobb County, Georgia, the Parties hereby
acknowledge and agree that Company may seek specific performance and injunctive relief in any jurisdiction, 

  
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court or forum applicable to Executive’s then current residency in order to prevent or to restrain any breach by Executive, or any and all of Executive’s partners, co-venturers,
employers, employees, or agents, acting directly or indirectly on behalf of or with Executive, of any of the provisions of the restrictive covenants contained in this Section 7. 

8. Return of all Property and Information of Company. Executive agrees to return all property of Company and its
subsidiaries within seven (7) days following the execution of this Agreement. Such property includes, but is not limited to, the original and any copy (regardless of the manner in which it is recorded) of all information provided by Company or
any subsidiary thereof to Executive or which Executive has developed or collected in the scope of Executive’s employment related to Company and its subsidiaries or affiliates as well as all Company or subsidiary-issued equipment, supplies,
accessories, vehicles, keys, instruments, tools, devices, computers, cell phones, pagers, materials, documents, plans, records, notebooks, drawings, or papers. Upon request by Company, Executive shall certify in writing that Executive has complied
with this provision, and has deleted all information of Company and its subsidiaries from any computers or other electronic storage devices owned by Executive. Executive may only retain information relating to Executive’s benefit plans and
compensation to the extent needed to prepare Executive’s tax returns.  
 9. No Harassing or Disparaging
Conduct. Executive further agrees and promises that Executive will not engage in, or induce other persons or entities to engage in, any harassing or disparaging conduct or negative or derogatory statements directed at or about Company or its
subsidiaries or affiliates, the activities of Company or its subsidiaries or affiliates, or the Releasees at any time in the future. Notwithstanding the foregoing, this Section 9 may not be used to penalize Executive for providing truthful
testimony under oath in a judicial or administrative proceeding or complying with an order of a court or government agency of competent jurisdiction. 

10. References. Following the Termination Date, Executive agrees to direct any third party seeking an employment
reference to Company’s Senior Vice President-Human Resources or to its Vice-President – Compensation and Benefits and Company agrees to give any potential employers who inquire about Executive’s work history at Company a neutral
reference consisting of Employee’s dates of employment, title and compensation. Company will not be responsible with respect to any references which are directed by Executive to anyone other than Company’s Senior Vice President-Human
Resources or its Vice-President – Compensation and Benefits.  
 11. Construction of Agreement and Venue for
Disputes. This Agreement shall be deemed to have been jointly drafted by the Parties and shall not be construed against either Party. This Agreement shall be governed by the law of the State of Georgia, and the Parties agree that any actions
arising out of or relating to this Agreement or Executive’s employment with Company must be brought exclusively in either the United States District Court for the Northern District of Georgia, or the State or Superior Courts of Cobb County,
Georgia. Notwithstanding the pendency of any proceeding, either Party shall be entitled to injunctive relief in a state or federal court located in Cobb County, Georgia upon a showing of irreparable injury. The Parties consent to personal
jurisdiction and venue solely within these forums and solely in Cobb County, Georgia and waive all otherwise possible objections thereto. The prevailing Party shall be 

  
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entitled to recover its costs and attorneys fees from the non-prevailing Party in any such proceeding no later than 90 days following the settlement or final resolution of any such
proceeding. The existence of any claim or cause of action by Executive against Company or Company’s subsidiaries or affiliates, including any dispute relating to the termination of Executive’s employment or under this Agreement, shall not
constitute a defense to enforcement of said covenants by injunction. 
 12. Severability. If any provision of
this Agreement shall be held void, voidable, invalid or inoperative, no other provision of this Agreement shall be affected as a result thereof, and accordingly, the remaining provisions of this Agreement shall remain in full force and effect as
though such void, voidable, invalid or inoperative provision had not been contained herein. 
 13. No Reliance Upon
Other Statements. This Agreement is entered into without reliance upon any statement or representation of any Party hereto or any Party hereby released other than the statements and representations contained in writing in this Agreement
(including all Exhibits hereto).  
 14. Entire Agreement. This Agreement, including all Exhibits hereto (which
are incorporated herein by this reference), contains the entire agreement and understanding concerning the subject matter hereof between the Parties hereto. No waiver, termination or discharge of this Agreement, or any of the terms or provisions
hereof, shall be binding upon either Party hereto unless confirmed in writing. This Agreement may not be modified or amended, except by a writing executed by both Parties hereto. No waiver by either Party hereto of any term or provision of this
Agreement or of any default hereunder shall affect such Party’s rights thereafter to enforce such term or provision or to exercise any right or remedy in the event of any other default, whether or not similar. 

15. Further Assurance. Upon the reasonable request of the other Party, each Party hereto agrees to take any and all
actions, including, without limitation, the execution of certificates, documents or instruments, necessary or appropriate to give effect to the terms and conditions set forth in this Agreement. 

16. No Assignment. Neither Party may assign this Agreement, in whole or in part, without the prior written consent of the
other Party, and any attempted assignment not in accordance herewith shall be null and void and of no force or effect. 
 17.
Binding Effect. This Agreement shall be binding on and inure to the benefit of the Parties and their respective heirs, representatives, successors and permitted assigns. 

18. Indemnification. Company understands and agrees that any indemnification obligations under its governing documents or
the indemnification agreement between Company and Executive with respect to Executive’s service as an officer of Company remain in effect and survive the termination of Executive’s employment under this Agreement as set forth in such
governing documents or indemnification agreement. 

  
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 19. Nonqualified Deferred Compensation. 

(a) It is intended that any payment or benefit which is provided pursuant to or in connection with this Agreement which is considered to be
deferred compensation subject to Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), shall be paid and provided in a manner, and at such time and form, as complies with the applicable requirements of
Section 409A of the Code to avoid the unfavorable tax consequences provided therein for non-compliance. 
 (b) Neither Company nor
Executive shall take any action to accelerate or delay the payment of any monies and/or provision of any benefits in any manner which would not be in compliance with Section 409A of the Code (including any transition or grandfather rules
thereunder). 
 (c) Because Executive is a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, any
payments to be made or benefits to be delivered in connection with Executive’s “Separation from Service” (as determined for purposes of Section 409A of the Code) that constitute deferred compensation subject to Section 409A
of the Code shall not be made until the earlier of (i) Executive’s death or (ii) six months after Executive’s Separation from Service (the “409A Deferral Period”) as required by Section 409A of the Code. Payments
otherwise due to be made in installments or periodically during the 409A Deferral Period shall be accumulated and paid in a lump sum as soon as the 409A Deferral Period ends, and the balance of the payment shall be made as otherwise scheduled. Any
such benefits subject to the rule may be provided under the 409A Deferral Period at Executive’s expense, with Executive having a right to reimbursement from Company once the 409A Deferral Period ends, and the balance of the benefits shall be
provided as otherwise scheduled. 
 (d) For purposes of this Agreement, all rights to payments and benefits hereunder shall be treated as
rights to receive a series of separate payments and benefits to the fullest extent allowed by Section 409A of the Code. 
 (e)
Notwithstanding any other provision of this Agreement, neither Company nor its subsidiaries or affiliates shall be liable to Executive if any payment or benefit which is to be provided pursuant to this Agreement and which is considered deferred
compensation subject to Section 409A of the Code otherwise fails to comply with, or be exempt from, the requirements of Section 409A of the Code. 

[signature page to follow] 

  
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 IN WITNESS WHEREOF, the Parties have executed, or caused their duly authorized
representatives to execute, this Agreement as of the day and year first above written. 
  

			
	“Executive”
	
	 /s/ Robert B. Lee

	Robert B. Lee
	
	“Company”
	
	PRGX GLOBAL, INC.
		
	By:	 	 /s/ Victor A. Allums

	Title:	 	Senior Vice President and General Counsel

  
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 EXHIBIT A 

Form of Release 

RELEASE 
 In
consideration for the undertakings and promises set forth in that certain Separation Agreement, dated as of September             , 2014 (the “Agreement”), between ROBERT B.
LEE (“Executive”) and PRGX GLOBAL, INC. (“Company”), Executive (on behalf of himself and his heirs, assigns and successors in interest) unconditionally releases, discharges, and holds harmless Company and its
subsidiaries and affiliates and their respective officers, directors, employees, agents, insurers, assigns and successors in interest (collectively, “Releasees”) from each and every claim, cause of action, right, liability or demand of any
kind and nature, and from any claims which may be derived therefrom (collectively “Released Claims”), that Executive had, has, or might claim to have against Releasees at the time Executive executes this Agreement, whether presently known
or unknown to Executive, including, without limitation, any and all claims listed below, other than any such claims Executive has or might have under the Agreement: 

(a) arising from Executive’s employment, pay, bonuses, vacation or any other Executive benefits, and other terms and
conditions of employment or employment practices of Company; 
 (b) arising out of or relating to the termination of
Executive’s employment with Company or the surrounding circumstances thereof; 
 (c) based on discrimination and/or
harassment on the basis of race, color, religion, sex, national origin, handicap, disability, age or any other category protected by law under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, Executive Order 11246, the Age
Discrimination in Employment Act, the Older Workers Benefits Protection Act, the Equal Pay Act, the Americans With Disabilities Act, the Rehabilitation Act of 1973, C.O.B.R.A. (as any of these laws may have been amended) or any other similar labor,
employment or anti-discrimination law under state, federal or local law; 
 (d) based on any contract, tort, whistleblower,
personal injury wrongful discharge theory or other common law theory; or 
 (e) arising under the Employment Agreement or any
other written or oral agreements between Executive and Company or any of Company’s subsidiaries (other than the Agreement). 

Executive covenants not to sue or initiate any claims against any of the Releasees on account of any Released Claim or to incite, assist or
encourage other persons or entities to bring claims of any nature whatsoever against Company or Releasees. Executive further covenants not to accept, recover or receive any monetary damages or any other form of relief which may arise out of or in
connection with any administrative remedies which may be filed with or pursued independently by any governmental agency or agencies, whether federal, state or local. 

 Executive hereby acknowledges that Executive has no interest in reinstatement, reemployment or
employment with Company, and Executive forever waives any interest in or claim of right to any future employment by Company. Executive further covenants not to apply for future employment with Company or otherwise seek or encourage reinstatement.

 By signing this Release, Executive certifies that: 

(a) Executive has carefully read and fully understands the provisions of this Release; 

(b) Executive was advised by Company in writing, via this Release, to consult with an attorney before signing this Release;

 (c) Executive understands that any discussions he may have had with counsel for Company regarding his employment or this
Release does not constitute legal advice to him and that he has retained his own independent counsel to render such advice; 

(d) Executive understands that this Agreement FOREVER RELEASES Company and all other Releasees from any legal action arising
prior to the date of execution of this Agreement; 
 (e) In signing this Agreement, Executive DOES NOT RELY ON AND HAS NOT
RELIED ON ANY REPRESENTATION OR STATEMENT (WRITTEN OR ORAL) NOT SPECIFICALLY SET FORTH IN THIS RELEASE OR THE AGREEMENT by Company or any other Releasee, or by any of their agents, representatives, or attorneys with regard to the subject matter,
basis, or effect of this Agreement or otherwise; 
 (f) Company hereby allows Executive no less than twenty-one
(21) days from its initial presentation to Executive to consider this Release before signing it, should Executive so desire; and 

(g) Executive agrees to its terms knowingly, voluntarily and without intimidation, coercion or pressure. 

Executive may revoke this Release within seven (7) calendar days after signing it. To be effective, such revocation must be received in
writing by the General Counsel of Company at the offices of Company at 600 Galleria Parkway, Suite 100, Atlanta, Georgia 30339. Revocation can be made by hand delivery or facsimile before the expiration of this seven (7) day period. 

[signature page to follow] 

  
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 IN WITNESS WHEREOF, the undersigned has executed this Release as of the date set forth
below. 
  

	
	“Executive”
	
	  

	Robert B. Lee
	
	Dated:                     , 201    

  
 3Exhibit 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 11 ON THE FACE OF THIS SECURITY.

 

 

	
CUSIP   No.  06740D830
    	
ISIN: US06740D8305
    

 

 

BARCLAYS BANK PLC

 

GLOBAL MEDIUM-TERM NOTES, SERIES A

 

 

Barclays Return on Disability ETN

due September 17, 2024

 

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 Return on Disability US LargeCap ETN Total Return USD Index (the “Index”).

 

Inception Date:  September 10, 2014.

 

Initial Valuation Date: September 10, 2014

 

Issue Date: September 15, 2014

 

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

 

Denomination:  $50 per Security.

 

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

 

Holder 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 Holder Redemption Date during the term of the Securities.  If the Holder requires the Company to redeem the Holder’s Securities on any Holder Redemption Date, the Holder will receive a cash payment in U.S. dollars per Security equal to the Closing Indicative Value on the applicable Valuation Date.  The Company shall not be required to redeem fewer than 25,000 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 (“Redemption Amount”) on a consistent basis for all Holders who hold Securities at the time the reduction becomes effective.

 

Holder Redemption Date: The third Business Day following each Valuation Date (other than the Final Valuation Date).  The final Holder Redemption Date will be the third Business Day following the Valuation Date that is immediately prior to the Final Valuation Date.

 

Issuer Redemption:  The Company may redeem the Securities (in whole but not in part) at its sole discretion on any Business Day on or after the Inception Date until and including maturity (“Issuer Redemption”). To exercise its right to redeem the Securities, the Company must

 

 

deliver notice to the Holder of such Securities not less than ten calendar days prior to the Issuer Redemption Date on which the Company intends to redeem the Securities. If the Company redeems the Securities, the Holder will receive a cash payment in U.S. dollars per Security in an amount equal to the applicable Closing Indicative Value on the Valuation Date specified on such notice.

 

Issuer Redemption Date:  The fifth Business Day after the Valuation Date specified by the Company in the issuer redemption notice, which will in no event be prior to the tenth calendar day

 

following the date on which the Company delivers the redemption notice.

 

Redemption Date: The Holder Redemption Date or the Issuer Redemption Date, as the case may be.

 

Index Sponsor: Donovan Group, LLC (the “Index Sponsor”)

 

Calculation Agent:  Barclays Bank PLC.

 

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

 

Listing:  NYSE Arca Stock Exchange.

 

-3-

 

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

 

“Closing Indicative Value” shall be calculated in the following manner:  (i) the Closing Indicative Value for each Security on the Inception Date shall equal $50; and (ii) on each subsequent calendar day, until maturity or early redemption, the Closing Indicative Value for each Security will equal (1) the Closing Indicative Value on the immediately preceding calendar day times (2) the Daily Index Factor on such calendar day (or, if such day is not an Index Business Day, one) minus (3) the Investor Fee on such calendar day.  The Closing Indicative Value is subject to adjustment as described in Section 6 on the face of this Security.

 

“Daily Index Factor” means, for each Security on any given Index Business Day, the amount equal to the closing level of the Index on such Index Business Day divided by (2) the closing level of the Index on the immediately preceding Index Business Day.

 

“Default Amount” means, if an Event of Default occurs and the maturity of the Securities is accelerated, the Closing Indicative Value of the Security on the date of acceleration, as determined by the Calculation Agent.

 

“Final Valuation Date” means September 10, 2024, 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 Business Days.

 

“Index Business Day” means any day that is both a New York Stock Exchange trading day and a NASDAQ trading day.

 

“Index Constituent” means each of the equity securities included in the Index at any given time.

 

“Investor Fee” means the amount calculated on a daily basis in the following manner:  (i) the Investor Fee for each Security on the Inception Date shall equal zero; and (ii) on each subsequent calendar day until maturity or early redemption, the Investor Fee for each Security will be equal to (1) 0.45% times (2) the Closing Indicative Value on the immediately preceding calendar day times (3) the Daily Index Factor on that day (or, if such day is not an Index Business Day, one) divided by (4) 365.

 

“Market Disruption Event” has the meaning set forth under “Reference Assets—Indices—Market Disruption Events for Securities with the Reference Asset Comprised of an Index or Indices of Equity Securities” in the Prospectus Supplement.

 

-4-

 

“Maturity Date” means September 17, 2024, 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 Final Valuation Date referred to above is postponed, the Maturity Date will be the fifth Business Day following the Final Valuation Date, as postponed.

 

“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 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. (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.

 

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

 

“Trading Day” means with respect to the Securities, a day that is an Index Business Day and a Business Day and a day on which trading is generally conducted on NYSE Arca, in each case as determined by the Calculation Agent in its sole discretion.

 

“Valuation Date” means each Trading Day from September 10, 2014 to September 10, 2024, inclusive, subject to postponement due to the occurrence of a Market Disruption Event, such postponement not to exceed five Trading Days.

 

-5-

 

1.         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) “Holder Redemption” and elsewhere on the face this Security on the applicable Holder 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 Maturity Date, or (ii) “Issuer Redemption” and elsewhere on the face of this Security on the applicable Issuer Redemption Date, in case the Company exercises its right to redeem the Securities prior to the Maturity Date (iii) “Payment at Maturity” and elsewhere on the face of this Security on the Maturity Date.

 

2.         Payment of Interest

 

The principal of this Security shall not bear interest.  Any return on this Security that may be deemed to be interest will in no event be higher than the maximum rate permitted by New York law, as it may be modified by U.S. law of general application.

 

3.         Discontinuance or Modification of the Index; Market Disruption Event

 

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

 

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 for any reason, on the date on which the value of the Index is required to be determined, 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 or the method of calculating the Index has been changed at any time in any respect, including, 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, or is due to any other reason, then the Calculation Agent will be permitted (but not required) to make such adjustments to the index level for the Securities as it believes are appropriate to ensure that the Index used to determine the amount payable on the maturity date or upon early redemption is equitable.

 

All determinations and adjustments to be made by the Calculation Agent may be made in the Calculation Agent’s sole discretion.

 

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4.         Payment at Maturity or Upon Holder Redemption or Upon Issuer Redemption

 

The payment on the Securities that becomes due and payable on the Maturity Date, on a Holder Redemption Date or an Issuer Redemption Date, as the case may be, shall be the cash amount that must be paid to redeem the Securities as provided above under “Payment at Maturity,” “Holder Redemption” or “Issuer Redemption,” as applicable.  The payment on the Securities 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 any such payment has been made as provided herein (or such payment has been made available), the principal of the Securities shall be deemed to have been paid in full, whether or not the Securities shall have been surrendered for payment or cancellation.  References to the payment at maturity or upon early redemption of the Securities on any day shall be deemed to mean the payment of cash that is payable on such day as provided in the Securities.  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 the Securities will be deemed to equal the Face Amount.  The Securities shall cease to be Outstanding as provided in the definition of such term in the Indenture or when the principal of the Securities shall be deemed to have been paid in full as provided above.

 

5.         Redemption Mechanics

 

(a) Holder Redemption: Subject to the minimum redemption amount provided under “Holder Redemption”, the Holder may require the Company to redeem the Holder’s Securities on any Holder Redemption Date during the term of the Securities provided that such Holder (i) delivers a notice of redemption to the Company via facsimile or 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 redemption to the Company via facsimile or email 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 Closing Indicative Value on the applicable Valuation Date, facing Barclays DTC 5101; and (iv) causes the Holder’s DTC custodian to deliver the trade as booked for settlement via DTC prior to 10:00 a.m. New York time on the applicable Holder Redemption Date, which shall be the third Business Day following the applicable Valuation Date (other than the Final Valuation Date).  The final Holder Redemption Date shall be the third Business Day following such Valuation Date that is immediately prior to the Final Valuation Date.

 

(b) Issuer Redemption:  If the Company elects to exercise its right to redeem the Securities under “Issuer Redemption”, the Company will deliver written notice of such election to redeem to the Holder of such Securities not less than ten calendar days on which the Company intends to redeem the Securities.  In this scenario, the Final Valuation Date will be the date specified by the Company in such issuer redemption notice (subject to postponement in the event of a Market Disruption Event), and the Securities will be redeemed on the fifth Business Day following such Valuation Date, but in no event prior to the tenth calendar day following the date on which the Company delivers such issuer redemption notice.

 

-7-

 

6.         Split or Reverse Split of the Securities

 

On any Business Day, the Company may elect to initiate a split of the Securities or a reverse split of the Securities. Such date shall be deemed to be the “Announcement Date”, and the Company will issue a notice to holders of the relevant Securities and a press release announcing the split or reverse split, specifying the effective date of the split or reverse split and the split or reverse split ratio.

 

If the Securities undergo a split, the Company will adjust the terms of the Securities accordingly.  For example, if the split ratio is 4 and hence the Securities undergo a 4:1 split, every investor who holds one Security via DTC on the relevant record date will, after the split, hold four Securities, and adjustments will be made as described below.  The record date for the split will be the 9th business day after the Announcement Date.  The Closing Indicative Value on such record date will be divided by 4 to reflect the 4:1 split of the Securities.  Any adjustment of Closing Indicative Value will be rounded to 8 decimal places.  The split will become effective at the opening of trading of the Securities on the Business Day immediately following the record date.

 

In the case of a reverse split, the Company reserves the right to address odd numbers of Securities (commonly referred to as “partials”) in a commercially reasonable manner determined by the Company in its sole discretion.  For example, if the reverse split ratio is 4 and the Securities undergo a 1:4 reverse split, every Holder holding 4 ETNs via DTC on the relevant record date will, after the reverse split, hold only one Security and adjustments will be made as described below.  The record date for the reverse split will be on the 9th Business Day after the Announcement Date.  The Closing Indicative Value on such record date will be multiplied by four to reflect the 1:4 reverse split of your ETNs.  Any adjustment of Closing Indicative Value will be rounded to 8 decimal places.  The reverse split will become effective at the opening of trading of the Securities on the Business Day immediately following the record date.

 

In the case of a reverse split, Holders who own a number of Securities on the record date which is not evenly divisible by the split ratio will receive the same treatment as all other holders for the maximum number of Securities they hold which is evenly divisible by the split ratio, and we will have the right to compensate holders for their remaining or “partial” Securities in a commercially reasonable manner determined by the Company in its sole discretion.  The Company’s current intention is to provide a Holder with a cash payment for such Holder’s partials on the 17th business day following the Announcement Date in an amount equal to the appropriate percentage of the Closing Indicative Value of the reverse split- adjusted Securities on the 14th business day following the Announcement Date.  For example, if the reverse split ratio is 1:4, a Holder who held 23 Securities via DTC on the record date would receive 5 post reverse split Securities on the immediately following Business Day, and a cash payment on the 17th business day following the Announcement Date that is equal to 3/4ths of the Closing Indicative Value of the reverse split-adjusted Securities on the 14th Business Day following the Announcement Date.

 

In the event of a reverse split, the Redemption Amount will be adjusted accordingly by the Company, in its sole discretion and in a commercially reasonable manner, to take into account the reverse split.

 

-8-

 

7.         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; Index Business Days; Trading Days; Valuation Dates; the Closing Indicative Value; the Daily Index Factor; the level of the Index on the Inception Date; the Investor Fee; the Maturity Date; Redemption Dates; the Default Amount; the Redemption Amount; the amount payable in respect of the Securities at maturity or upon Holder Redemption or Issuer Redemption and all such other matters, calculations or determinations 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.

 

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 level 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.

 

8.         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 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.

 

9.         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.

 

-9-

 

10.       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.

 

11.       Prospectus

 

Reference is made to the (i) the Prospectus related to the Securities, dated July 19, 2013, (ii) the Prospectus Supplement, dated July 19, 2013  (iii) and the Pricing Supplement, dated [_______], as each may be amended from time to time (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 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).

 

-10-

 

 

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:
    

 

-11-

 

(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.

 

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

 

(Reverse of Security continued on next page)

-12-

 

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)

-13-

 

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.

 

-14-

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