Document:

EX-10.35

 EXHIBIT 10.35 
  

 
 

 
  
  

			
	CFG Special (IPO) Award 2014 - Award Certificate	  	[DATE]
		
	[Full Name]	  	
		
	Shareholder Reference Number (SRN): [—]	  	Employee ID: [—]

  
  

What you need to know 
 Congratulations on receiving a CFG
Special (IPO) Award (the ‘Award’) as detailed below. 
 Citizens Financial Group, Inc. (‘CFG’), which is currently a subsidiary of RBS,
is in the process of preparing to undergo an initial public offering (the ‘IPO’) (defined in more detail in paragraph 1.1.5 of the Vesting Conditions section below). 

The success of the IPO is a critical component of RBS’s overall strategic plan, and CFG’s ability to successfully and effectively complete the IPO
is dependent on its ability to retain its key talent and maintain their focus on revenue growth and expense initiatives. You have been selected to receive the Award in recognition of your work to date and your future commitment to the success of the
IPO and of CFG thereafter. 
 This Award Certificate (the ‘Certificate’) is an important document and should be kept in a safe place. 

Award details 
 The Award is being granted: 

(i) RBS Shares 
 50% in the form of a conditional right to
receive [—] ordinary shares of The Royal Bank of Scotland Group plc (respectively, ‘RBS shares’ and ‘RBS’). This part of the Award is being granted under the RBS 2010 Long Term
Incentive Plan (‘LTIP’) and is subject to (a) the IPO Conversion Condition and the Service Condition (in each case, as defined and described below and, together, the ‘Vesting Conditions’); and (b) the rules of the LTIP,
including Schedule 3, save as modified by this Certificate (together with equivalent provisions for the convertible bond part described in paragraph (ii) below, and following the satisfaction of the IPO Conversion Condition, any equivalent CFG
plan, the ‘Governing Provisions’); and 
 (ii) Convertible Bond 

50% in the form of a convertible bond with a value of $[—]. This part of the Award is being granted on a
stand-alone basis outside the terms of the LTIP and is subject to (a) the Vesting Conditions and (b) the Governing Provisions. 
 The vesting of
your Award will at all times be subject to the Governing Provisions. The decision of the RBS Performance & Remuneration Committee (or, following the satisfaction of the IPO Conversion Condition, and subject to any agreement entered into
between RBS and CFG relating to remuneration governance post IPO, the CFG equivalent committee) (the ‘Committee’)) is final in connection with any interpretation of the Vesting Conditions or the Governing Provisions. 

 

															
	 Award Date
	  	Principal
Award Amount	 	 	Scheduled
Vesting Date	  	Number of Conditional
RBS Shares Awarded1	 	 	Convertible
Bond Awarded	 
	 [DATE]
	  	$	[—	] 	 	7 March 2016	  	 	[—	] 	 	$	[—	] 
	 [DATE]
	  	$	[—	] 	 	7 March 2017	  	 	[—	] 	 	$	[—	] 
		  	  
	  
	 	 		  	  
	  
	 	 	  
	  
	 
	 Total Value of Award
	  	$	[—	] 	 		  	 	[—	] 	 	$	[—	] 

  

	1	The number of RBS shares has been calculated by converting 50% of the total grant date value of your Award into GBP Sterling using the average USD:GBP currency exchange rate over the five dealing days on the London
Stock Exchange (“LSE”) between 28 February 2014 and 6 March 2014, inclusive, and dividing the resulting GBP Sterling amount by the average daily closing RBS Share price on the LSE over the same period, which was £3.278.

  

	  	Each part of the Award is due to vest subject to the satisfaction of Vesting Conditions (as defined below) 

Where to go for more information 
 You can find the Plan
rules when you log into your own Your Shares account using your shareholder reference number and PIN. For questions about your Award, please contact your compensation manager or human resources business partner. 

  

 

 
  
  

 Vesting Conditions 

1.1 The IPO Conversion Condition 
 1.1.1 Subject to
paragraphs 1.1.2, 1.2 and 1.3 below, each part of your Award will vest conditionally on the closing of the IPO of CFG (defined in more detail in paragraph 1.1.5 below) occurring on or before 31 December 2014 (the ‘IPO Conversion
Condition’). 
 1.1.2 If the IPO Conversion Condition is not met for any reason, the Committee will have discretion to determine that all or any part
of your Award should continue to vest, subject to such terms as determined appropriate by the Committee. 
 1.1.3 If the IPO Conversion Condition is met,
each part of your Award will be converted into the right to receive a number of CFG shares determined as follows: 
 (i) in respect of the
part represented by the conditional right to receive RBS shares, such number of shares will be multiplied by the average RBS share price over the 30 LSE dealing days immediately prior to the IPO and converted into US Dollars using the average USD:
GBP currency rate over the same period, which product will be divided by the IPO price; and 
 (ii) in respect of the part represented by the
convertible bond, the value of the convertible bond will be divided by the IPO price. 
 1.1.4 If the IPO Conversion Condition is met, then from the IPO
date, the Governing Provisions will be modified to ensure that, where applicable, references to “RBS” and “RBS shares” are treated as references to “CFG” and “CFG shares” respectively, and also to make such
other minor administrative changes considered necessary or desirable to reflect the IPO. For the avoidance of doubt, the Awards will remain subject to the Service Condition (defined in paragraph 1.2. below) and the Governing Provisions (as modified
by this paragraph). 
 1.1.5 For purposes of this Certificate, ‘IPO’ means the first firm commitment underwritten public offering of shares of
common stock of CFG pursuant to an effective registration statement under the Securities Act of 1933, as amended, filed with the Securities and Exchange Commission on Form S-1 (or a successor form) after which sale such shares of common stock are
(a) listed on a national securities exchange or authorized to be quoted on an inter-dealer quotation system of a registered national securities association and (b) registered under the Securities Exchange Act of 1934, as amended
(‘Exchange Act’). 
 1.2 Continuity of Employment/Service Condition 

Subject to paragraph 1.3 below, in addition to the IPO Conversion Condition, your Award is subject to (i) your continuous employment with
RBS, CFG or any of its subsidiaries through each applicable Vesting Date and (ii) your achieving a minimum performance rating of 3 for the performance years 2014, 2015 (in respect of the part of the Award due to vest on 7 March 2016) and
additionally for the performance year 2016 (in respect of the part of the IPO Award due to vest on 7 March 2017) (both (i) and (ii) together, the ‘Service Condition’). 

1.3 Termination Provisions 
 1.3.1 Pre-IPO 

1.3.1.1 If you cease to be employed by RBS, CFG and their respective subsidiaries prior to the IPO Conversion Condition being met: 

(i) in any of the exceptional circumstances set out in rule 6.2 of the LTIP (or in the case of the portion of your Award delivered as a
convertible bond, equivalent provisions), your Award will remain outstanding and will vest on its originally scheduled Vesting Dates, pro-rated to reflect any proportion of the vesting period that you are not so employed, subject to the IPO
Conversion Condition and the Governing Provisions; 
 (ii) in the event of your death, your Award will vest in full on the date of your death
in accordance with rule 6.4 of the LTIP (or in the case of the portion of your Award delivered as a convertible bond, equivalent provisions), subject to the Governing Provisions; 

  

 

 
  
  

 (iii) under any circumstances other than those described in paragraphs 1.3.1.1(i) or
1.3.1.1(ii) above, your Award will lapse without any payment or consideration due to you. 
 1.3.1.2 For the avoidance of doubt, if you
transfer (with CFG’s agreement) from CFG or any of its subsidiaries to any other RBS entity prior to the IPO Conversion Condition being met, you will not be treated as having ceased to be employed for the purposes of paragraph 1.3.1.1 and your
Award will continue to vest on its originally scheduled Vesting Dates, subject to the Service Condition and the Governing Provisions, save that paragraphs 1.1.1, 1.1.2, 1.1.3 and 1.1.4 above will be disapplied (for purposes of clarity, this means
your Award will not be converted into the right to receive CFG shares and the IPO Conversion Condition will not apply). 
 1.3.2 Post-IPO 

1.3.2.1 If you cease to be employed by CFG and its subsidiaries after the IPO Conversion Condition has been met in any of the exceptional
circumstances set out in rule 6.2 of the LTIP (or in the case of the portion of your Award delivered as a convertible bond, equivalent provisions), except as otherwise provided in paragraph 1.3.2.2 below, your Award will remain outstanding and will
vest on its originally scheduled Vesting Dates, pro-rated to reflect any proportion of the vesting period that you are not so employed, subject to the Governing Provisions. 

1.3.2.2 If you cease to be employed by CFG and its subsidiaries after the IPO Conversion Condition has been met due to (1) redundancy,
(2) disability, (3) retirement (with CFG’s agreement), or (4) a transfer from CFG or any of its subsidiaries to any other RBS entity (with CFG’s agreement), your Award will remain outstanding and will vest on its originally
scheduled Vesting Dates (i.e., not pro-rated to reflect any proportion of the vesting period that you are not so employed), subject to the 

Governing Provisions. 
 1.3.2.3 If
you cease to be employed by CFG and its subsidiaries after the IPO Conversion Condition has been met due to your death, your Award will vest in full on the date of your death in accordance with rule 6.4 of the LTIP (or in the case of the portion of
your Award delivered as a convertible bond, equivalent provisions), subject to the Governing Provisions. 
 1.3.2.4 If you cease to be
employed otherwise than in any of the circumstances set out in paragraphs 1.3.2.1, 1.3.2.2 or 
 1.3.2.3 above, your Award will lapse without
any payment or consideration due to you. 

  

 

 
  
  

 Important General Information 

Malus and Clawback 
 During the period between the award
date and the vesting date and for such period after the vesting date that the Committee determines is appropriate, your Award will be subject to Malus (reduction) and Clawback (repayment) as set out in the Plan rules. 

Malus and/or Clawback can be applied even if you leave CFG. Clawback will normally only be applied in respect of any ‘net of tax/social security’
amounts received on vesting and will normally only apply for six months after vesting, but this is subject to any legislative or regulatory requirements and/or the CFG or RBS remuneration policy from time to time in force. 

Nothing will oblige CFG or RBS to make, or you to receive, any payment which would contravene any relevant legislative or regulatory requirements or CFG or
RBS remuneration policy. 
 Clawback and risk underpin 

Your Award is subject to Malus and/or clawback, further to which the Committee will review financial and operational performance against the business strategy
and risk performance prior to agreeing the vesting of your Award. In assessing this, the Committee will be advised independently by the RBS and/or CFG Risk Committees, as applicable. If the Committee considers that the vesting outcome outlined above
does not reflect underlying financial results, or if the Committee is not satisfied that conduct and risk management during the vesting period has been effective, then the terms of your Award allow for an underpin to be used to reduce vesting of
your Award, or to allow your Award to lapse in its entirety. 
 Personal investment strategies 

It’s a condition of your Award that you must not use any personal hedging strategies, or remuneration-related or liability-related contracts of insurance,
designed to lessen the impact of a reduction in value of your Award. For example, you can’t enter into any arrangement with a third party under which you would receive a payment that is linked to any reduction in the value and/or number of
shares subject to your Award. This condition is one of the ways the Bank evidences that its remuneration policy encourages sound and effective risk management and is required under the UK Prudential Regulatory Authority’s Remuneration Code. If
you breach this condition, your Award may lapse. 
 Special rules applicable under US tax regulations 

FICA taxes, together with Federal, State and local income taxes, will be collected from your Award when it vests. 

For purposes of Section 409A, each payment and benefit payable under this award certificate is hereby designated as a separate payment. The parties
intend that the Award provided under this award certificate and shares issuable hereunder comply with the requirements of Section 409A so that none of the payments or benefits will be subject to the adverse tax penalties imposed under
Section 409A, and any ambiguities herein will be interpreted to so comply. Notwithstanding the foregoing, RBS and CFG make no representations that terms of the Award comply with Section 409A, and in no event will RBS or CFG be liable for
any taxes, interest, penalties or other expenses that may be incurred by you on account of non-compliance with Section 409A. Any payments to be made under this award certificate upon a termination of employment will only be made upon a
‘separation from service’ under Section 409A. Further, and notwithstanding anything in the LTIP (or similar plan) or this Certificate to the contrary, if (x) the Award to be provided in connection with your separation from
service does not qualify for any reason to be exempt from Section 409A, (y) you are, at the time of such separation from service, a ‘specified employee’ (as defined in Treasury Regulation Section 1.409A-1(i)) and
(z) the payment of the Award would result in the imposition of additional tax under Section 409A if paid to you on or within the six (6) month period following your separation from service, then, to the extent necessary to avoid the
imposition of such additional taxation, the payment of the Award (or any portion of such Award) otherwise payable to your during such six (6) month period will accrue and will not be made until the date six (6) months and one (1) day
following the date of your separation from service and on such date (or, if earlier, the date of your death), you will receive all payments and benefits that would have been paid during such period in a single lump sum. 

Participation in the LTIP 
 Your participation or right to
participate in the LTIP does not affect, or form part of, your contract of employment. Participation in the LTIP is governed by the LTIP rules. These rules contain specific provisions limiting your rights under the LTIP. You’ll not have any
rights to compensation or damages for any loss of rights, benefits or prospective benefits under the LTIP, whether in consequence of the termination of your employment, or otherwise. There is no guarantee that the LTIP will be operated in any future
years or if it’s operated that you’ll be selected to participate in it. Your Award is personal to you and cannot be transferred. You’ll be liable to pay any tax and social security due in connection with your Award. 

  

 

 
  
  

 Amendments to the LTIP 

RBS or CFG may amend, suspend or terminate all or any part of the LTIP, or any similar plan, at any time, but may only do so in accordance with the relevant
plan rules. 
 Personal Information 
 We’ll process
certain personal information which you provide in connection with the administration of your Award, in order to facilitate your Award, or for any purposes required by law, or for any other legitimate business purposes. We may make your personal
information available to other parts of RBS or CFG and/or to third parties for these purposes, though some are situated outside your jurisdiction and may not offer as high a level of protection for personal information as the laws of your
jurisdiction. 
 Disclaimer 
 This Certificate confirms
the grant to you of an Award as detailed above, partially under the rules of the 2010 Long Term Incentive Plan, including Schedule 3. Words and expressions defined in the rules of the 2010 Long Term Incentive Plan, or any equivalent provisions, will
apply for the purposes of this Certificate. In the event of any conflict between this Certificate or the relevant plan rules, or any applicable legislation, the relevant plan rules and such legislation will take precedence. This Certificate does not
guarantee the amounts you’ll receive and the vesting of your Award remains subject to the rules and conditions referred to above.EX-10.36

 Exhibit 10.36 
  

 
 Private & Confidential 

[NAME] 
 [POSITION] 

[DATE] 
 Dear [NAME], 

Identification as RBS Material Risk Taker 
 As part
of the Basel 3 response to the financial crisis and under the EU Capital Requirements Directive (“CRD IV”), a range of qualitative and quantitative measures are being implemented to strengthen the world’s financial sector and the
banks that operate within it. RBS’ strategy reflects this and our determination to build a safer and more sustainable business for the long term that meets the needs of our customers, regulators and shareholders. 

Some of the Basel 3 changes will impact the pay for certain staff with Material Risk Taker (“MRT”) roles i.e. staff whose professional activities
have a material influence over the bank’s performance or risk profile. As a result we are obliged to identify all staff who meet the criteria of an MRT, as detailed under CRD IV, to comply with this regulatory change. This new criteria replaces
the previous Code Staff designation. Following a review by your Business CEO/function head, your current role has been identified as an MRT role. 
 The
information overleaf will help you understand the definition of an MRT and what that means in practice for how pay will now be structured. It also explains how we will disclose pay information to our regulators. 

The accompanying letter sets out how these regulatory changes and holding an MRT role will impact your pay. 

If you have any questions, please contact your line manager. 

Yours sincerely, 
 David Stephen 

Chief Risk Officer 

 

 
  

 What are Material Risk Taker Roles? 

The European Banking Authority (“EBA”) has issued criteria for identifying MRT roles i.e. staff whose professional activities have a material
influence over the bank’s performance or risk profile. 
 The criteria for identifying MRTs are both Qualitative (based on the nature of the role) and
Quantitative (i.e. those who 
 exceed the stipulated total remuneration threshold based on the previous year’s total remuneration). 

The Qualitative criteria can be summarised as: 
 1. staff within
the management body; 
 2. senior management; 
 3. other staff
with key functional or managerial responsibilities; and 
 4. staff, individually or as part of a Committee, with authority to approve new business products
or to commit to credit risk exposures and market risk transactions above certain levels. 
 The Quantitative Remuneration criteria are: 

1. Individuals earning €500k or more in the previous year; or 

2. Individuals in the top 0.3% of earners in the previous year; or 

3. Individuals who earned more than the lowest paid identified staff per the Qualitative criteria, excluding Non- Executive Directors, support and control
functions 
 In addition we are required to include any existing Code Staff roles, even if they do not meet the EBA criteria. 

The MRT criteria will supersede the current Code Staff criteria. 

What does this mean in practice? 
 Performance
management 
 Given the importance of MRTs in driving the performance and culture of the bank, there is additional governance for your performance rating
and pay - your performance document tells us what you’ve achieved, how you’ve gone about it and progress with your development: 
  

	•	 	Your Business reviews the timely completion and quality of your performance document at key stages each year 

  

	•	 	The bank’s Chief HR Officer and Group Performance & Remuneration Committee oversee your performance rating and performance award. 

How does this affect how we pay? 
 Our pay structures must
comply with relevant regulations. Therefore, if any agreement is made and/or an amount is paid to you which would breach the regulations, such agreement would be void and any amounts paid subject to recovery or termination. 

Bonus Cap affecting variable pay 
 From the start of 2014
the EU Capital Requirements Directive introduces a ‘bonus cap’ for all MRTs. This means your variable pay must not exceed your fixed pay. 
  

							
	Your variable pay may be made up of:	 	Your fixed pay may be made up of:
	•	  	Annual bonus	 	•	  	Salary
	•	  	Incentives	 	•	  	Fixed allowance
	•	  	Long term incentive	 	•	  	Role based allowance
		  		 	•	  	Pension & benefit funding

 Deferral 
 As with Code
Staff currently, any variable pay granted to you will be subject to the bank’s deferral policy. Additional deferral terms apply to MRTs. At least 40% of any performance award will be deferred and at least 50% will be delivered in shares or
other instruments. Additional retention requirements apply to the share elements of awards. Currently the retention period is six months post vesting. 

Disclosure 
 RBS will be regularly required to make
disclosures to regulators around the identification of MRTs and their respective remuneration arrangements and this letter confirms that we will make those necessary disclosures as required. 

 

 
  

 Private & Confidential 

[NAME] 
 [POSITION] 

[DATE] 
 Dear [NAME], 

Material Risk Taker - Role Based Allowance 

Further to the communication you received regarding your role, which has been identified as a “Material Risk Taker” (“MRT”) role, this
letter now sets out what that means for your pay. 
 Your Fixed Pay 

The table below details changes to the make up of your fixed pay. 
  

					
	 Pay Element
	  	Current Annual Amount	  	New Annual Amount
	 Salary
	  	[—]	  	[—]
	 Role Based Allowance
	  	[—]	  	[—]
	 Total Fixed Pay
	  	[—]	  	[—]

 Total fixed pay also includes any pension or benefit funding in addition to the fixed pay amounts set out above and is taken
into account when determining maximum total compensation opportunity. 
 Your Role Based Allowance 

The table below details the form of your RBA for performance year [—]. 

 

					
	 RBA Payment Type
	  	Allowance Effective Start Date	  	Annual Amount
	 Citizens shares
	  	[—]	  	[—]
	 Cash
	  	[—]	  	[—]
	 Total RBA effective from [DATE]
	  		  	[—]

 Terms of the RBA are detailed on the following page. 

Your Role Based Allowance is subject to all terms and conditions contained in this letter and its Appendices. 

 

 
  

 Terms of the RBA 

 
 Payment Basis 

The RBA will accrue daily from the Allowance effective start date. 

Delivery of RBA 
 The RBA will be delivered in [a
combination of cash and shares] [shares] in Citizens Financial Group (CFG) as detailed above. Delivery of CFG shares is subject to the proposed initial public offering, or IPO, of CFG occurring on or before the share portion of the RBA is delivered
in [DATE]. 
 In the event the IPO of CFG does not occur on or before this date, [the share portion of] your RBA will instead be delivered in shares in The
Royal Bank of Scotland Group plc (RBS), with the number of shares to be delivered calculated with reference to such currency exchange rate or method of exchange as RBS considers appropriate. 

Any shares delivered under your RBA will be subject to a Retention Period and subject to tax withholding, in each case as set forth below. 

Allowance Installment Payment Dates 
 [The first payment
of your RBA in cash will be made on [DATE], for amounts accrued up to [DATE], with payment via regular payroll for amounts accrued thereafter.] Your first payment of your RBA in shares will be made in [DATE] for amounts accrued up to the payment
date, subject to there being no dealing restrictions applying on that date that would prevent delivery. In the event that any dealing restrictions do apply, shares will be delivered on the first date on which such restrictions no longer apply. 

Retention Period 
 Any shares delivered to you, following
any applicable tax withholding, will be subject to a [—] year retention period and will be released in installments over this period. During this retention period, you must not sell, or arrange for
the future sale of, your shares. Voting and dividend rights attached to your shares are unrestricted during this retention period. 
 In the event of your
death, the requirement to hold shares during the retention period will no longer apply. 
 Associated pay impact 

Your RBA will not form part of your remuneration for the purpose of determining entitlement to any benefit of employment including any pension or retirement
benefit, life assurance, permanent health insurance or other similar benefit, whether existing or subsequently introduced. RBAs will not be included in determination of severance, termination or redundancy payments or payments in lieu of notice.

 Ceasing to be an MRT 
 Your RBA is linked to your MRT
role rather than to you individually. This means that if you cease to undertake your current MRT role, cease to be an MRT or leave CFG you will not be entitled to receive any RBA for the period following the cessation date. The next scheduled [cash
and/or shares] [share] payment of your RBA will [each] be reduced pro- rata to reflect the RBA accrued up to the cessation date, and you will retain any shares received subject to the retention period. 

Tax Withholding 
 CFG or RBS (as applicable) may withhold
any amounts or make such other arrangements as it considers necessary to meet any liability to taxation, social security contributions or other appropriate levies due in respect of your RBA. 

 

 
  

 Alternative Settlement 

The portion of your RBA to be delivered in shares may be settled in cash, as determined in the discretion of the CFG Compensation and Human Resources Committee
(CompCo) (or in the event the share portion of your RBA is delivered in the form of RBS shares, the RBS Group Performance & Remuneration Committee (RBS RemCo)). 

Review of RBA 
 CFG reserves the right to adjust
(including downwards) or remove the RBA at such time as the CFG Compensation Committee or RBS Group Performance & Remuneration Committee considers appropriate. Any adjustments will have immediate effect unless otherwise specified. 

An Allowance Installment Payment will not be made if to the extent required or prevented by any legal or regulatory requirement applicable to CFG or RBS or,
in the opinion of either CFG or RBS, such Allowance Installment Payment would be inappropriate or impractical. In such circumstances or for any other reason deemed appropriate by the CFG Compensation Committee or the RBS Group Performance &
Remuneration Committee, all or any part of your Role Based Allowance may be modified, amended, suspended or terminated. 
 Interpretation of terms

 The decision of the CFG Compensation Committee, or the RBS Group Performance & Remuneration Committee, as applicable, in connection with the
interpretation of these terms, or in any dispute relating to any matter concerning your RBA, will be final and conclusive. 
 Acceptance 

By participating and accepting payment of your Role Based Allowance, you accept and consent to the terms and conditions of your Role Based Allowance as set out
in the this letter and its Appendices. 
 If you have any questions, please contact your line manager. 

Yours sincerely, 
 Elaine Arden 

Chief HR Officer 
 Appendices 

Appendix 1: Important information about the RBA 
 Appendix 2: US
Prospectus 

 Appendix 1 

Important Information 
  

	1.	Your Role Based Allowance (or RBA) is being delivered in accordance with the terms set out in the letter communicating your Role Base Allowance and the accompanying appendices. In the event the proposed initial public
offering of CFG does not occur on or before the share portion of your RBA is delivered in [DATE], the share portion of your Role Based Allowance will be delivered in RBS shares subject also to the provisions of Schedule 1 to the RBS 2014 Employee
Share Plan (the Allowance Schedule). To the extent that the Allowance Schedule applies, in the event of a conflict between the Allowance Schedule and the letter communicating your Role Based Allowance or its appendices, the Allowance Schedule will
take precedence. 

  

	2.	The receipt of your Role Based Allowance does not affect, or form part of, your contract of employment or create any right to, or expectation of, continued employment. There is no guarantee that you will receive a Role
Based Allowance in any future years. Your Role Based Allowance cannot be transferred. You will not have any claim or right to compensation or damages or any other sum or benefit in respect of your RBA, including, without limitation, in relation to:

  

	 	(1)	Your eligibility to participate, or ceasing to be eligible to participate, or ceasing to participate in the delivery of RBAs; 

  

	 	(2)	any exercise of discretion or a decision taken in relation to RBAs (whether or not this is to your disadvantage) even it if is unreasonable, irrational or might otherwise be regarded as being in breach of the duty of
trust and confidence (and/or any other implied duty) between you and your employer; 

  

	 	(3)	any loss or reduction of any rights or expectations in respect of your RBA in any circumstances or for any reason (including lawful or unlawful termination of employment or the employment relationship);

  

	 	(4)	any loss of tax or any other fiscal detriment suffered in relation to the reduction or forfeiture of your RBA; and 

  

	 	(5)	the operation, suspension, termination of or amendments to your RBA. 

  

	3.	Participation in delivering of your RBA is permitted only on the basis that any rights that are not expressly set out in your RBA terms and conditions are excluded. You will be deemed to have waived any such excluded
rights in consideration for, and as a condition of, participating in the delivery of your RBA. 

  

	4.	Nothing in the terms and conditions of your RBA confers any benefit, right or expectation on a person other than you. No such third party will have any rights to enforce any term of your RBA. But this does not affect
any other right or remedy of a third party which exists or is available. 

  

	5.	The terms and conditions of your RBA apply throughout your employment, after the termination of your employment, and during any period when you have given or received notice to terminate your employment (whether such
termination is lawful or unlawful). 

  

	6.	CFG and RBS will process certain personal information in connection with your Role Based Allowance in order to facilitate payment, or for any purposes required by law, or for any other legitimate business purposes. We
may make your personal information available to other parts of RBS and/or to third parties for these purposes. This may result in certain of your personal information being transferred to a jurisdiction which may not offer the same statutory
protections for personal information as the laws of your home jurisdiction. 

  

	7.	The CFG CompCo or the RBS RemCo may from time to time vary the operational policy, or guidelines relating to the administration and operation of your Role Based Allowance. 

 

	8.	 By participating in and accepting payment of your RBA, you agree and acknowledge that the restrictions contained in the terms and conditions of your
RBA are reasonable and necessary to protect the business of CFG and RBS and that the benefit you receive under your RBA is sufficient compensation of these restrictions. Each of the

	 	
restrictions set out in the terms and conditions of your RBA is an entire, separate and independent restriction, despite the fact that they may be contained in the same phrase and if any part is
found to be invalid or unenforceable, the remainder will remain valid and enforceable. If any of the restrictions is judged to be void or ineffective, but would be treated as valid and effective if modified, they will apply with such modifications
as necessary as necessary to make them valid and effective. 

 Where to go for more information 

Details of the tax treatment of your Role Based Allowance (to the extent delivered in cash or RBS shares) can be found at [—]. 

 THIS DOCUMENT FORMS PART OF A PROSPECTUS COVERING SECURITIES THAT HAVE BEEN REGISTERED UNDER THE SECURITIES
ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”). THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND EXCHANGE COMMISSION (THE “SEC”). NOR HAS THE SEC PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENCE. 
 Appendix 2 – Operation of RBAs – USA 

This Appendix applies only to the extent that you receive RBS shares as a component of your RBA. 

Securities offered as part of the RBA 
 Any RBS shares
forming part of an RBA will be delivered under the RBS 2014 Employee Share Plan (the “Plan”) and are fully paid ordinary shares in the capital of The Royal Bank of Scotland Group plc (the “Company”). RBS shares may be newly
issued shares or market purchase shares acquired to satisfy Role Based Allowances. The Plan was adopted by the board of directors of the Company (the “Board of Directors”) and approved by the Company’s shareholders on 25 June
2014 and is maintained by the Company for the benefit of employees of the Company and its subsidiaries. The Plan should be read in conjunction with this Appendix and letter. 

Share limits 
 In any 10 year period, not more than
10 per cent of the issued ordinary share capital of the Company, including Class B shares of the Company (“B Shares”), may be issued or committed to be issued in respect of awards under the Plan (including fixed RBAs) and all other
employee share plans operated by the Company. In addition, in any 10 year period, not more than 5 per cent of the issued ordinary share capital of the Company, including B Shares, may be issued or committed to be issued in respect of awards
under the Plan (including RBAs but excluding awards granted in mandatory substitution of annual bonuses) and any other discretionary share plans operated by the Company. 

Administration of the Plan 
 The Plan is managed by the
Group Performance and Remuneration Committee (the “Committee”) of the Board of Directors. However, the Committee can give permission to any individual or group of people to exercise powers under the Plan. The Committee can establish or
vary the administrative and operational regulations of the Plan. The Committee is made up of at least three independent non-executive directors of the Company. The Board of Directors appoints the members of the Committee from amongst its members.

 Transfer Restrictions 
 Details of the transfer
restrictions are included in the attached letter. 
 Changes to the Plan 

The Committee may amend the Plan at any time and in any respect. However, prior shareholder approval will be required for any amendments to certain provisions
which are to the advantage of participants. These provisions relate to: eligibility; share limits; the basis for determining a participant’s entitlement; any adjustment of entitlements if there is a variation of capital; and the amendment power
itself. 
 Shareholder approval is not required for minor amendments in order to: benefit the administration of the Plan; comply with or take account of any
proposed or existing legislation; take account of any changes in legislation; or obtain or maintain favourable tax, exchange control, or regulatory treatment for the Company or any of its subsidiaries or any participant. This enables the Committee
to implement further jurisdiction-specific plans based on the Plan, modified to take account of tax, exchange control or securities laws in non-UK jurisdictions, but still subject to the individual and dilution share limits set out above. 

In addition, shareholder approval will not be required to amend the leaver rules if such amendment is considered by the Committee necessary to comply with any
requirements imposed under the UK Prudential Regulatory Authority’s Remuneration Code, as amended or any other legislation or regulation. 

Termination of the Plan 
 The Plan will end on
25 June 2024, but the Committee can close the Plan at any time before then. 
 Governing law 

The Plan is governed by English law. The Plan is not regarded, in the United States, as a qualified plan under Section 401(a) of the Code. Further, the Plan is
not subject to any of the provisions of the United States Employee Retirement Income Security Act of 1974, as amended (often referred to as ERISA). 

 Incorporation of documents by reference 

RBS has filed a Registration Statement on Form S-8 (Registration No. 333-197023) (the “Registration Statement”) with the United States
Securities and Exchange Commission (the “SEC”) covering the RBS shares to be delivered pursuant to the Plan. 
 The SEC allows RBS to
“incorporate by reference” in the Registration Statement the information filed by RBS with the SEC, which means RBS can disclose important information to you by referring to those documents. The information incorporated by reference is an
important part of this prospectus. Information RBS files later with the SEC will automatically update and supersede information pertaining to the same subject in this prospectus or in earlier filings with the SEC. RBS incorporates by reference into
this prospectus the following documents filed with the SEC: 
 (i) Annual Report of the Company on Form 20-F (File No. 001-10306) for
the fiscal year ended December 31, 2013; and 
 (ii) The registrant’s reports filed pursuant to Sections 13(a) and 15(d) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”) since December 31, 2013. 
 To the extent designated therein, certain
current reports of RBS in the United States on Form 6-K, and all documents filed by RBS in the United States under Sections 13(a), 13(c), 14 or 15(d) of the Exchange Act after the date of this prospectus, but prior to the filing of a post-effective
amendment which indicates that all securities offered hereby have been sold or which deregisters all securities then remaining unsold, will be deemed to be incorporated by reference in this prospectus and to be part of this prospectus from the date
of filing of such documents. 
 If you would like more information about the Plan or its administrators, or if you would like copies of the documents
incorporated by reference or any of the documents constituting part of this prospectus that RBS is required to deliver to employees, upon written or oral request, pursuant to Rule 428(b) of the Securities Act, free of charge, please contact [—]. You can also email [—]. Some of these documents are also available for viewing in the Investors section of our website at www.investors.rbs.com.
Our Annual Report on Form 20- F filed with the SEC for the fiscal year ended December 31, 2013 can be found under the Investors section of www.RBS.com.

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