Document:

exv10w83

Exhibit 10.83

QUALCOMM INCORPORATED

EXECUTIVE RETIREMENT

MATCHING CONTRIBUTION PLAN

Amended and Restated Effective: April 1, 2009

 

 

TABLE
OF CONTENTS

	 	 	 	 	 	 	 
	 	 	 	 	Page
	ARTICLE I
	 	INTRODUCTION	 	 	1	 
	ARTICLE II
	 	DEFINITIONS	 	 	1	 
	ARTICLE III
	 	ELIGIBILITY AND PARTICIPATION	 	 	7	 
	ARTICLE IV
	 	DEFERRALS AND CONTRIBUTIONS	 	 	7	 
	ARTICLE V
	 	ACCOUNTS	 	 	10	 
	ARTICLE VI
	 	PLAN INVESTMENTS AND EARNINGS ON PARTICIPANTS’
ACCOUNTS	 	 	10	 
	ARTICLE VII
	 	BENEFICIARIES	 	 	11	 
	ARTICLE VIII
	 	VESTING	 	 	11	 
	ARTICLE IX
	 	BENEFIT DISTRIBUTIONS	 	 	13	 
	ARTICLE X
	 	ADMINISTRATION	 	 	17	 
	ARTICLE XI
	 	AMENDMENT AND TERMINATION	 	 	19	 
	ARTICLE XII
	 	PLAN TRANSFERS	 	 	20	 
	ARTICLE XIII
	 	MISCELLANEOUS	 	 	21	 

i

 

ARTICLE I

INTRODUCTION

     1.1 History. Qualcomm Incorporated (the “Company”) previously established the
Qualcomm Incorporated Voluntary Executive Retirement Contribution Plan (the “ERC”) and the Qualcomm
Incorporated Executive Retirement Matching Contribution Plan (the “Plan”), both non-qualified
deferred compensation plans for a select group of management or highly compensated employees of the
Employer, and both originally effective as of December 1, 1995.

     1.2 Consolidation, Amendment and Restatement. The Company consolidated the ERC and
the Plan as set forth in this document and amended and restated the Plan effective as of October 1,
2008. The Company amended and restated the Plan in its entirety effective as of December 30, 2008.

ARTICLE II

DEFINITIONS

     2.1 “Account(s)” means the book entry account(s) established under the Plan for each
Participant to which are credited the Participant’s Basic Deferrals, Bonus Deferrals,
Performance-Based Compensation Deferrals, Matching Contributions, Discretionary Company
Contributions and any Investment Returns with respect thereto. Account balances shall be reduced
by any distributions made to the Participant or the Participant’s Beneficiary(ies) from the Plan
and any charges that may be imposed on such Account(s) pursuant to the terms of the Plan. Separate
Subaccounts may be established under the Plan as set forth herein. As the context may require,
“Account” shall also refer to such Subaccounts.

     2.2 “Affiliate” means any entity which controls, is controlled by or is under common control
with the Company.

     2.3 “Base Salary” means the annual base salary to be paid by the Employer, without regard to
Basic Deferrals hereunder Base Salary shall not include, unless specifically authorized by the
Committee, bonuses, overtime, distributions from this Plan, commissions, the value of any proceeds
from the exercise of any qualified or non-qualified stock option, the proceeds from any stock
purchase right under the Company’s employee stock purchase plans, incentive payments, non-monetary
awards, auto allowances or any other form of compensation, whether taxable or non-taxable.

     2.4 “Basic Deferral(s)” means the percentage of a Participant’s Base Salary and/or Director
Fees which the Participant elects to defer pursuant to Section 4.1 of the Plan.

     2.5 “Benchmark Fund(s)” means one or more of the mutual funds or contracts selected by the
Committee pursuant to Article 6 of the Plan.

     2.6 “Beneficiary(ies)” means the beneficiary(ies) designated by the Participant who are
entitled to receive any distributions from the Plan payable upon the death of the Participant.

1

 

     2.7 “Benefit(s)” means the total of the vested amount(s) credited to a Participant’s Account.

     2.8 “Board of Directors” or “Board” means the Company’s Board of Directors.

     2.9 “Bonus” means the annual cash incentive bonus normally paid to an Eligible Employee after
the end of the fiscal year or such other amounts payable under the bonus policies maintained by the
Employer determined without regard to any Bonus Deferral .

     2.10 “Bonus Deferral” means the percentage of a Participant’s Bonus which the Participant
defers pursuant to Section 4.2 of the Plan.

     2.11 “Cause” means any of the following: (i) theft, dishonesty, or falsification of any
Company documents or records; (ii) improper use or disclosure of the Company’s confidential or
proprietary information; (iii) any action which has a detrimental effect on the Company’s
reputation or business; (iv) failure or inability to perform any reasonable assigned duties after
written notice from the Company of, and a reasonable opportunity to cure, such failure or
inability; (v) any material breach of any employment or service agreement between the Participant
and the Company, which breach is not cured pursuant to the terms of such agreement; (vi) conviction
(including any plea of guilty or nolo contendere) of any criminal act which impairs the
Participant’s ability to perform his or her duties; or (vii) violation of a material Company
policy.

     2.12 “Change in Control” means an Ownership Change Event or a series of related Ownership
Change Events, as defined below (collectively, a “Transaction”), wherein the stockholders of the
Company immediately before the Transaction do not retain immediately after the Transaction, in
substantially the same proportions as their ownership of shares of the Company’s voting stock
immediately before the Transaction, direct or indirect beneficial ownership of more than fifty
percent (50%) of the total combined voting power of the outstanding voting securities of the
Company or, in the case of a Transaction described in clause (iii) below, the corporation or other
business entity to which the assets of the company were transferred (the “Transferee”), as the case
may be. The Board shall determine in its discretion whether multiples sales or exchanges of the
voting securities of the Company or multiple Ownership Change Events are related. Notwithstanding
the preceding sentence, a Change in Control shall not include a Spinoff Transaction, as defined in
Section 2.1 of the LTIP. For purposes of the foregoing, an “Ownership Change Event” shall be
deemed to have occurred if any of the following occurs with respect to the company: (i) the direct
or indirect sale or exchange in a single or series of related transactions by the stockholders of
the Company of more than fifty percent (50%) of the voting stock of the Company; (ii) a merger or
consolidation in which the Company is a party; (iii) the sale, exchange or transfer of all or
substantially all, as determined by the Board in its discretion, of the assets of the Company; or
(iv) a liquidation or dissolution of the Company.

     2.13 “Code” means the Internal Revenue Code of 1986, as amended.

2

 

     2.14 “Committee” means the Committee composed of such individuals who may be appointed by the
Compensation Committee, and which shall function as the administrator of the Plan.

     2.15 “Common Stock” means the common stock of the Company, par value $0.0001 per share.

     2.16 “Company” means Qualcomm Incorporated, a Delaware corporation, and any successor thereto.

     2.17 “Compensation Committee” means the Compensation Committee of the Company’s Board of
Directors.

     2.18 “Deferrals” means, as applicable to a Participant, Basic Deferrals, Bonus Deferrals
and/or Performance-Based Compensation Deferrals made pursuant to the terms of the Plan.

     2.19 “Deferral Subaccount” means a Subaccount under the Participant’s Account to which
Deferrals are credited for a given Plan Year.

     2.20 “Director Fees” shall mean all fees and retainers, including meeting fees, paid in cash
to Non-Employee Directors of the Company, and specifically excludes any annual board retainer paid
in stock units.

     2.21 “Disability” means, to the extent applicable, a determination of disability in accordance
with the Company’s long-term disability insurance policy covering the Participant, or, if none,
“Disability” under this Plan shall mean the Participant is unable to engage in any substantial
activity by reason of any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not less than twelve
months.

     2.22 “Discretionary Company Contribution” means a Company contribution awarded to an Eligible
Employee pursuant to Section 4.6 of the Plan.

     2.23 “Distribution Date” means the date on which distribution of a Participant’s Benefits is
made or commences pursuant to Article 9 of the Plan.

     2.24 “Effective Date” means December 30, 2008.

     2.25 “Election(s)” means the form or forms on which a Participant: (i) elects to make
Deferrals, (ii) elects a Distribution Date for Plan Benefits, (iii) elects the method by which his
or her Benefits will be distributed; and (iv) specifies his or her Beneficiary(ies) under the Plan.
An Election shall be in such form or forms as may be prescribed by the Committee, including
specifically an electronic form.

     2.26 “Eligible Employee” means an employee of the Employer who is a member of a select group
of management or highly compensated employees and who has been designated as eligible to
participate in the Plan in accordance with Article 3 of the Plan.

3

 

     2.27 “Employer” means the Company and any other Affiliate of the Company that has adopted the
Plan.

     2.28 “Fair Market Value” shall have the same meaning given such term in the LTIP.

     2.29 “Good Reason” means any one or more of the following: (i) without the Participant’s
express written consent, the assignment of any duties, or any limitation of responsibilities,
substantially inconsistent with the Participant’s positions, duties, responsibilities and status
with the Company immediately prior to the date of a Change in Control; (ii) without the
Participant’s express written consent, the relocation of his or her principal place of employment
or service to a location that is more than fifty (50) miles from the principal place of employment
or service immediately prior to the date of a Change in Control, or the imposition of travel
requirements substantially more demanding than those existing immediately prior to the date of a
Change in Control; (iii) any failure by the Company to pay, or any material reduction by the
Company of, (A) base salary in effect immediately prior to the date of a Change in Control (unless
reductions comparable in amount and duration are concurrently made for all other employees of the
Company with comparable responsibilities, organizational level and title, or (B) bonus
compensation, if any, in effect immediately prior to the date of a Change in Control (subject to
applicable performance requirements with respect to the actual amount of bonus compensation
earned); any failure by the Company to (A) continue to provide the Participant with the opportunity
to participate, on terms no less favorable than those in effect for the benefit of any employee or
service provider group which customarily includes a person holding the employment or service
provider position or a comparable position with the Company then held by the Participant, in any
benefit or compensation plans and programs, including, but not limited to, the Company’s life,
disability, health, dental, medical, savings, profit sharing, stock purchase and retirement plans,
if any, in which the Participant was participating immediately prior to the date of the Change in
Control, or their equivalent, or (B) provide the Participant with all other fringe benefits (or
their equivalent) from time to time in effect for the benefit of any employee group which
customarily includes a person holding the employment or service provider position or a comparable
position with the Company then held by the Participant; any breach by the Company of any material
agreement between the Participant and the Company concerning the Participant’s employment; or any
failure by the Company to obtain the assumption of any material agreement between the Participant
and the Company concerning he Participant’s employment by successor or assign of the Company.

     2.30 “In-Service Distribution Date” means the date prior to a Separation from Service on which
the distribution of a Participant’s Deferral Subaccount(s) is made or commences pursuant to an
Election made under Article 9 of the Plan.

     2.31 “Investment Return” means the investment return or loss determined in accordance with
Article 6 of the Plan, which shall be credited to Participants’ applicable Subaccounts pursuant to
the terms of the Plan.

     2.32 “LTIP” shall mean the Qualcomm Incorporated 2006 Long-Term Incentive Plan, as amended, or
any successor thereto.

4

 

     2.33 “Matching Contributions” means the Company’s matching contributions of its Common Stock
to the Plan on behalf of an Eligible Employee who is a Participant, as determined in accordance
with Section 4.5 of the Plan.

     2.34 “Non-Employee Director” means a director who is not an Employee.

     2.35 “Open Enrollment Period” means such period as the Committee may specify for Participants
to submit an Election to make Deferrals under the Plan. The Open Enrollment Period shall begin on
the date selected by the Committee and end no later than (i) with respect to Basic Deferrals for
any Plan Year, the first day of such Plan Year; (ii) with respect to Bonus Deferrals, the first day
of the period for which the Bonus may be earned; (iii) with respect to Performance-Based
Compensation Deferrals, the date that is six months before the end of the applicable performance
period, provided the Participant performs services continuously from the later of the beginning of
the performance period or the date the performance criteria are established through the date the
Deferral Election is made and, provided, further that in no event may a Performance-Based
Compensation Deferral Election be made after such Performance Based Compensation has become readily
ascertainable within the meaning of Section 1.409A-2(a)(8) of the Treasury Regulations; and (iv)
with respect to an Eligible Employee or Non-Employee Director who first becomes eligible to
participate in the Plan, the date that is no later than thirty (30) days after first becoming an
Eligible Employee or Non-Employee Director, with respect to compensation paid for services
performed after the Election and, provided further, that where a Performance-Based Compensation
Deferral Election is made in the first year of eligibility but after the beginning of the
applicable performance period, the Election must apply only to the compensation paid for services
performed after the Election.

     2.36 “Participant” means an Eligible Employee or Non-Employee Director who becomes a
Participant in the Plan as provided in Article 3.

     2.37 “Performance-Based Compensation” means any cash compensation paid to an Eligible Employee
which is contingent on the satisfaction of pre-established organizational or individual performance
criteria relating to a performance period of at least 12 consecutive months, determined without
regard to any Performance-Based Compensation Deferral.

     2.38 “Performance-Based Compensation Deferral” means the percentage of a Participant’s
Performance-Based Compensation which the Participant defers pursuant to Section 4.2 of the Plan.

     2.39 “Plan” means this Qualcomm Incorporated Executive Retirement Matching Contribution Plan,
effective as of October 1, 2008, as amended from time to time.

     2.40 “Plan Year” means the 12 consecutive month period beginning on each January 1 and ending
on the following December 31.

     2.41 “Retirement” means the Participant’s Separation from Service with the Employer after
obtaining the earlier of: (i) age sixty-five (65) or (ii) age sixty-two and one-half (62 1/2) with
at least ten (10) Years of Service.

5

 

     2.42 “Separation from Service” means separation from Service with the Employer whether by
termination of employment or Board service. A Participant will be presumed to have had a
Separation from Service where the level of bona fide services performed by such individual
decreases to a level that is 20% less than the average level of bona fide services performed in the
12-month period immediately preceding the Separation from Service. Subject to the foregoing and
the requirements of Section 409A of the Code and the regulations issued thereunder, the Committee,
in its discretion, shall determine whether a Participant has had a Separation from Service and the
effects thereof.

     2.43 “Service” means an Eligible Employee’s employment or service with the Employer in the
capacity of an employee or a member of the Board. An Eligible Employee’s Service shall include
periods of employment or service with the Company and any subsidiary, regardless of whether the
Company has determined that such a subsidiary will not be an Employer for purposes of the Plan.

     2.44 “Specified Employee” means any Participant who, as of the date of Separation from
Service, is a key employee of the Employer by reason of meeting the requirements of Section
416(i)(1)(A)(i), (ii) or (iii) of the Code (applied in accordance with the regulations thereunder
and disregarding Section 416(i)(5)) at any time during the 12-month period ending on the last day
of the Plan Year, or such other date as may be established by the Committee in a separate document
applicable to all deferred compensation plans sponsored by the Company.

     2.45 “Subaccount(s)” means the subaccount(s) established within a Participant’s Account with
respect to the various types of Deferrals and Company contributions made under the Plan.

     2.46 “Total Compensation” for a Plan Year means wages as defined in Section 3401(a) of the
Code, any annual cash incentive bonus which is normally paid by the Employer to an Eligible
Employee after the end of the fiscal year, and all other payments of compensation to an Eligible
Employee by the Employer (in the course of the Employer’s trade or business) for which the Employer
is required to furnish the Eligible Employee a written statement under Section 6041(d) or Section
6051(a)(3) of the Code for such Plan Year, excluding the following items: any bonus other than an
annual cash incentive bonus which is normally paid by the Employer to an Eligible Employee after
the end of the fiscal year, commissions, the value of a qualified, incentive or non-qualified stock
option granted to the Eligible Employee by the Company to the extent such value is includable in
the Eligible Employee’s taxable income, reimbursements or other expense allowances, fringe benefits
(cash and non-cash), moving expenses, deferred compensation and welfare benefits, but including
amounts that are not includable in the gross income of the Eligible Employee under a salary
reduction agreement by reason of the application of Section 125, 402(e)(3), 402(h), or 403(b) of
the Code or by reason of an election of the Eligible Employee to defer amounts of Base Salary under
this Plan. Total Compensation must be determined without regard to any rules under Section 3401(a)
of the Code that limit the remuneration included in wages based on the nature or location of the
employment or the services performed (such as the exception for agricultural labor in Section
3401(a)(2) of the Code).

     2.47 “Trust” means the legal entity created by the Trust Agreement(s).

6

 

     2.48 “Trust Agreement” means the trust agreement entered into between the Company and the
Trustee(s) to hold assets with respect to this Plan.

     2.49 “Trustee(s)” means the person(s) or entity named as Trustee(s) in the Trust Agreement
established to hold assets with respect to this Plan and any duly appointed and acting successor
Trustee(s) appointed by the Employer pursuant to the terms of the Trust Agreement.

     2.50 “Year of Service” means each 12 consecutive month period of completed Service.

ARTICLE III

ELIGIBILITY AND PARTICIPATION

     3.1 Eligibility. Participation in the Plan shall be limited to Eligible Employees and
Non-Employee Directors. Eligible Employees shall be notified as to their eligibility to participate
in the Plan. Until changed by the Committee, an Eligible Employee shall be an employee designated
by the Executive Vice President, Human Resources, of the Company; provided, however, that the
Compensation Committee shall approve participation by any Eligible Employee whose transactions
under the Plan are subject to Section 16 of the Securities Exchange Act of 1934, as amended. The
Committee, in its discretion, may also limit the ability of Participants to make certain types of
Deferrals or be credited with Company contributions under the Plan.

     3.2 Commencement of Participation. Participation in the Plan is voluntary. An
Eligible Employee or Non-Employee Director may begin participation in the Plan upon the execution
and submission of an Election during the applicable Open Enrollment Period.

ARTICLE IV

DEFERRALS AND CONTRIBUTIONS

     4.1 Basic Deferrals.

     4.1.1. An Eligible Employee or Non-Employee Director may elect to reduce his or her Base
Salary or Director Fees, as applicable, by the percentage of Base Salary or Director Fees, as
applicable, set forth in an Election filed with the Committee, subject to the provisions of this
Article 4. Basic Deferrals shall not be paid to the Participant, but shall be withheld from
amounts otherwise payable to the Participant, and an amount equal to the Basic Deferrals for the
Plan Year shall be credited to the Participant’s Basic Deferral Subaccount under the Plan.

     4.1.2. The Election to make Basic Deferrals must be filed with the Committee during the Open
Enrollment Period for the Plan Year to which such Election applies. A Participant’s Election with
respect to Basic Deferrals shall remain in effect until changed by the Participant during a
subsequent Open Enrollment Period. Each Election to make Basic Deferrals shall apply only to Base
Salary or Director Fees, as applicable, earned after the effective date of such Election.
Elections with respect to Basic Deferrals, once made, shall be irrevocable for the Plan Year.

7

 

     4.2 Bonus Deferrals and Performance-Based Compensation Deferrals.

          4.2.1 An Eligible Employee may elect to defer a percentage of any Bonus and/or
Performance-Based Compensation by filing a written Election with the Committee, subject to the
provisions of this Article 4. Such Bonus Deferrals and/or Performance-Based Compensation Deferrals
shall not be paid to the Participant, but shall be withheld from the amounts otherwise payable to
the Participant and credited to the Participant’s applicable Deferral Subaccount under the Plan.

          4.2.2 The Bonus Deferral Election and/or Performance-Based Compensation Deferral Election must
be filed with the Committee during the applicable Open Enrollment Period. A Bonus and/or
Performance-Based Compensation Deferral Election shall remain in effect until changed by the
Participant during a subsequent Open Enrollment Period. Elections with respect to Bonus Deferrals
and Performance-Based Compensation Deferrals, once made, shall be irrevocable for the applicable
fiscal year or performance period.

     4.3 Maximum Deferrals; Cash Deferrals Only. Subject to such further limits as the
Committee may establish in its sole discretion:

     (a), An Eligible Employee may not defer Base Salary in an amount that exceeds Base Salary
reduced by the sum of (i) applicable employment tax withholding amounts (including, but not limited
to, FICA and FUTA taxes); (ii) the applicable dollar amount that may be contributed to the
Company’s 401(k) Plan for the Plan Year in accordance with Section 402(g)(B) of the Code (without
regard to “catch-up contributions” pursuant to Code Section 402(g)(C)); (iii) the maximum amount
that may be contributed to the Company’s employee stock purchase plan(s) for the Plan Year; and
(iv) the actual amounts contributed under the Company’s Code Section 125 plan and all other ERISA
welfare benefit plans for the Plan Year.

     (b) An Eligible Employee may not defer Bonus and/or Performance-Based Compensation in an
amount that exceeds Bonus and/or Performance-Based Compensation reduced by applicable employment
tax withholding amounts (including, but not limited to, FICA and FUTA taxes) attributable to such
Bonus and/or Performance Based Compensation; as applicable.

     (c) ADirector may elect to defer up to 100% of his or her cash Director Fees.

     (d) Notwithstanding anything herein to the contrary, no Participant shall be permitted to
defer stock-based compensation under the Plan.

     4.4 No Withdrawal. Except as otherwise set forth herein, amounts credited to a
Participant’s Account may not be withdrawn by a Participant and shall be paid only in accordance
with the provisions of this Plan.

     4.5 Matching Contributions. The Company will credit Matching Contributions to the
Accounts of Eligible Employees equal to fifty percent (50%) of the Eligible Employee’s Deferrals
credited to his or her Account for the Plan Year; provided, however, that the total Matching
Contribution credited to the Account of any Eligible Employee for any Plan Year shall not exceed
the remainder of (i) 10% of such Eligible Employee’s Total Compensation for the applicable Plan
Year, reduced by (ii) 50% of the maximum 401(k) plan contribution limit

8

 

established under Section 402(g) of the Code for the Plan Year, determined without regard to
“catch-up contributions” pursuant to Section 414(v) of the Code (the “401(k) Maximum Deferral”).
With respect to the determination of Matching Contributions for an Eligible Employee who is
employed for less than the entire Plan Year, the 401(k) Maximum Deferral shall be calculated on a
pro-rated basis by multiplying the 401(k) Maximum Deferral as defined in the preceding sentence by
a fraction, the numerator of which shall be the number of whole and partial months remaining in the
Plan Year after the Eligible Employee’s date of hire, and the denominator of which shall be twelve
(12).

          4.5.1 Quarterly Crediting of Matching Contributions. The Matching Contribution
credited to an Eligible Employee’s Account for each of the first three calendar quarters of each
Plan Year shall be equal to fifty percent (50%) of the Basic Deferrals credited to the Eligible
Employee’s Account for such calendar quarter; provided, however, that the maximum amount of the
Matching Contribution credited for any quarter shall not exceed the remainder of (i) 10% of the
Participant’s Base Salary for such quarter, reduced by (ii) 12.5% of the 401(k) Maximum Deferral.
The Company’s Matching Contribution credited to an Eligible Employee’s Account for the fourth
calendar quarter of the Plan Year shall be equal to the remainder of (i) the Matching Contribution
for the Plan Year determined under Section 4.5, reduced by (ii) the sum of the Matching
Contribution credited to the Eligible Employee’s Account for the first three calendar quarters of
the Plan Year.

          4.5.2 Timing of Quarterly Matching Contributions. Matching Contributions credited for
the first calendar quarter shall be credited as soon as administratively reasonable after March 31;
Matching Contributions for the second calendar quarter shall be credited as soon as
administratively reasonable after June 30; Matching Contributions for the third calendar quarter
shall be credited as soon as administratively reasonable after September 30; and Matching
Contributions for the fourth calendar quarter shall be credited as soon as administratively
reasonable after December 31.

          4.5.3 Matching Contributions in the Form of Common Stock. All Matching Contributions
to the Plan shall be credited to an Eligible Employee’s Account solely in the form of whole shares
of the Company’s Common Stock. For purposes of converting a Company Matching Contribution from a
dollar value to a number of whole shares of the Company’s Common Stock, the Fair Market Value of
the Company’s Common Stock shall be the average of the Fair Market Value of the Company’s Common
Stock over the ten (10) trading days immediately preceding the last day of the applicable calendar
quarter. Notwithstanding any other Plan provision to the contrary, the Company’s Matching
Contribution for a given Eligible Employee for a specific quarterly contribution period shall be
rounded up to the next whole number of shares of the Company’s Common Stock.

     4.6 Discretionary Company Contributions. From time to time the Company may, as
recommended by the Compensation Committee and approved by the Board in its complete discretion,
credit to an Eligible Employee’s Account a Discretionary Company Contribution, in such amounts and
at such times as the Company may determine. Such Discretionary Company Contributions may be
denominated in cash or shares of Company Common Stock, as determined by the Board. The Company
shall be under no obligation to continue to make Discretionary Company Contributions and may
discontinue such contributions at any time.

9

 

     4.7 Adjustments. Shares to be issued under the Plan are reserved for issuance under
the LTIP, and shall be subject to adjustment in the event of a change in the Company’s capital
structure, in accordance with Section 4.2 of the LTIP.

ARTICLE V

ACCOUNTS

     Accounts; Subaccounts. Separate Accounts and Subaccounts shall be established and
maintained for each Participant in accordance with the terms of the Plan. Each Participant’s
applicable Subaccounts shall be credited with the Participant’s Basic Deferrals, Bonus and/or
Performance-Based Compensation Deferrals, Matching Contributions and Discretionary Company
Contributions, if any. Participants’ Accounts shall be credited (or debited) with the applicable
Investment Return as set forth in Article 6. Participants’ Accounts shall be reduced by losses,
distributions and any other charges which may be imposed on the Accounts pursuant to the terms of
the Plan.

ARTICLE VI

PLAN INVESTMENTS AND EARNINGS ON PARTICIPANTS’ ACCOUNTS

     6.1 Investment of Matching Contributions and Discretionary Company Contributions Credited
in Stock.

          6.1.1 As set forth in Article 4, each Participant’s Matching Contributions and Discretionary
Company Contributions Subaccount (to the extent a contribution is denominated in Company Common
Stock) shall be credited to the Participant’s Account in shares of the Company’s Common Stock, and
shall be accounted for and reported in terms of whole shares of the Company’s Common Stock.

          6.1.2 In the event that the Trust established with respect to Matching Contributions or
Discretionary Company Contributions in the form of the Company’s Common Stock for any reason holds
cash or other property sufficient to purchase a whole share of the Company’s Common Stock, the
Trustee shall first arrange to acquire additional shares of the Company’s Common Stock, either by
purchasing such shares in the public market or by acquiring such shares directly from the Company,
unless the Committee, in its discretion, determines to credit such cash or other property to
Participants’ Accounts. In the event that the Trust for any reason holds cash or other property in
an amount insufficient to purchase a whole share of the Company’s Common Stock, such amount shall
be held in cash or a cash equivalent determined by the Committee. Notwithstanding any other
provision of the Plan to the contrary, in the event there are insufficient shares of the Company’s
Common Stock reserved and available for issuance to make Matching or Discretionary Company
Contributions in the form of Company Common Stock, the Company may credit cash amounts in lieu of
shares of Company Common Stock to the applicable Subaccounts of one or more Participants for some
or all of the Matching and Discretionary Company Contribution amounts.

10

 

          6.1.3 Earnings on Matching Contributions and Discretionary Company Contributions shall be
calculated and allocated to a Participant’s Account as of the last day of each Plan Year and such
other dates as shall be determined by the Committee in its discretion.

     6.2 Investment of Deferrals and Discretionary Company Contributions Denominated in Cash.

          6.2.1 The Committee may designate the particular funds or contracts which shall constitute the
Benchmark Funds with respect to Basic Deferrals, Bonus and/or Performance-Based Compensation
Deferrals and Discretionary Company Contributions awarded in cash and the Company may, in its sole
discretion, change or add to the Benchmark Funds; provided, however, that the Committee shall
notify Participants of any such change prior to the effective date of the change.

          6.2.2 Each Participant may select among the Benchmark Funds and specify the manner in which
each of his or her applicable Subaccounts shall be deemed to be invested, solely for purposes of
determining the Participant’s Investment Return. The Committee shall establish and communicate the
rules, procedures and deadlines for making and changing Benchmark Fund selections. The Company
shall have no obligation to acquire investments corresponding to the Participant’s Benchmark Fund
selections.

          6.2.3 The Investment Return is based on the asset unit value, net of administrative fees and
investment management fees and other applicable fees or charges, of the Benchmark Fund(s)
designated by the Committee. The Investment Return may be negative if the applicable Benchmark
Fund(s) sustain a loss. The Investment Return shall be credited (or debited) monthly, or more
frequently as the Committee may specify.

ARTICLE VII

BENEFICIARIES

     A Participant shall have the right to designate on an Election prescribed by the Committee one
or more Beneficiaries to receive any Benefits due under the Plan in the event of the Participant’s
death.

     If the Participant has not properly designated a Beneficiary, or if for any reason such
designation shall not be legally effective, or if said designated Beneficiary shall predecease the
Participant, then the Participant’s Beneficiary shall be the Participant’s surviving spouse. In
the event there is no surviving spouse, the Participant’s Beneficiary shall be the Participant’s
estate.

     The Participant shall have the right at any time to revoke a previous Beneficiary designation
and to substitute one or more other Beneficiary(ies); provided, however, that the most recent
Beneficiary Designation received prior to a Participant’s death shall supersede all prior
Beneficiary designations made under the Plan.

ARTICLE VIII

VESTING

11

 

     8.1 Vesting of Deferrals. All Deferrals credited to a Participant’s Account shall
always be 100% vested.

     8.2 Vesting of Matching and Discretionary Company Contributions. A Participant’s
Matching and Discretionary Company Contribution Subaccounts shall vest in accordance with whichever
one of the following vesting schedules results in the largest vested balance in the Participant’s
Account.

          8.2.1 One hundred percent (100%) shall be vested upon the Participant’s death, Disability, or
attainment of age 65 while employed by the Employer.

          8.2.2 For a Participant who has attained age 61 and completed three (3) Years of Service, the
Participant’s Matching and Discretionary Company Contribution Subaccounts shall be vested on the
day on which the foregoing conditions are satisfied, provided that the Participant has not
terminated employment with all Employers by that date (the “Age 61 and 3 Vesting Date”), in an
amount determined by multiplying the value of such Participant’s Account, on such date, by the
product of 20% multiplied by the number of whole years (with fractional years rounded down) by
which such Participant’s age exceeds 60. On each anniversary of the Age 61 and 3 Vesting Date
thereafter, the vested value of such Participant’s Subaccounts shall be recalculated by using the
formula for calculating the vested value of such Participant’s Subaccounts on the Age 61 and 3
Vesting Date, provided that the Participant has not terminated employment by that date.

          8.2.3 A Participant shall be partially or fully vested in the discretion of the Compensation
Committee.

          8.2.4 A Participant shall be one hundred percent (100%) vested upon involuntary termination of
employment without Cause or voluntary termination of employment for Good Reason, in either case at
any time within twenty-four (24) months following a Change in Control. 

          8.2.5 Twenty-five percent (25%) of the Matching Contributions and Company Discretionary
Contributions credited to a Participant’s Account in any Plan Year (including any Investment Return
with respect thereto) shall vest on the first day of the second, third, fourth and fifth Plan Years
thereafter (the “Vesting Dates”); provided, however, that the Participant is an employee of the
Employer on such Vesting Date and makes deferrals into the Plan in the Plan Year immediately
preceding such Vesting Date. If the Participant is not making deferrals into the Plan during the
Plan Year immediately preceding the Vesting Date, then all further vesting under this provision
shall be suspended for that Participant. Suspended vesting installments shall vest as follows:
(i) the suspended vesting installment shall vest on the first day of any Plan Year following a Plan
Year in which (A) the Participant is an employee of the Employer for the entire duration of such
Plan Year, and (B) the Participant is making deferrals into the Plan during such Plan Year; and
(ii) only the oldest suspended vesting installment relating to contributions made for a particular
Plan Year shall vest as a result of a Participant satisfying the conditions set forth in clause (i)
of this sentence. Other suspended vesting installments relating to contributions made to a
Participant’s Account for a particular Plan Year shall vest one at a time on the first day

12

 

of each later Plan Year following satisfaction of the conditions set forth in clause (i) of
the preceding sentence.

     8.3 Amounts credited to a Participant which are not vested at the time that the Participant
has a Separation from Service with the Employer shall be forfeited. A Participant who forfeits any
such amounts shall have no rights to the restoration of such amounts in the event that he or she
once again becomes eligible to participate in the Plan.

ARTICLE IX

BENEFIT DISTRIBUTIONS

     9.1 Benefit Amount. The value of a Participant’s Benefit shall equal the vested value
of the Participant’s Subaccount(s) on the applicable Distribution Date. Distributions from a
Participant’s Matching Contributions or Discretionary Company Contributions Subaccount credited as
shares of Company Common Stock shall be paid in whole shares of the Company’s Common Stock.

     9.2 Timing of Distributions. In accordance with the Participant’s Election made at
the time of the original deferral (or a permissible later election, if applicable), Benefits shall
be paid (or payments shall commence) within sixty (60) days following the earliest of:

          9.2.1 The date of the Participant’s Separation from Service (including due to Retirement);

          9.2.2 The In-Service Distribution Date designated by the Participant (solely with respect to
distributions of Deferral Subaccounts);

          9.2.3 The date of the Participant’s death or Disability; or

          9.2.4 The date of a Change in Control of the Company.

          Notwithstanding anything herein to the contrary, Participants shall not be entitled to elect
an In-Service Distribution Date with respect to their Matching and Discretionary Company
Contribution Subaccounts. Any Matching Contribution or Company Discretionary Contribution that
vests pursuant to Section 8.2.4 of the Plan after the date of a Change of Control shall be
distributed upon the Participant’s subsequent Separation from Service.

     9.3. Methods of Distribution.

          9.3.1 Distribution Methods. A Participant’s Benefit shall be paid in a single lump
sum payment, unless the Participant specifies in an Election that (1) a distribution of Deferrals
made pursuant to such Election and any Matching Contributions credited with respect to such
Election in the event of Retirement or Disability or (2) a distribution of Deferrals made pursuant
to such Election (but not any Matching Contributions credited with respect to such Election) upon
an In-Service Distribution Date shall be paid in quarterly or annual installment payments of
substantially equal amounts over a period as provided below:

13

 

	 	 	 
	Reason for Distribution	 	Installment Period
	Retirement

	 	5 or 10 Years
	 
	Disability

	 	5 or 10 Years
	 
	In-Service Distribution Date

	 	2/3/4/5 Years

          9.3.2 A Participant may amend a previous lump sum payment Election to take a distribution upon
Retirement, Disability or an In-Service Distribution Date in installments, by filing an amended
Election at least twelve (12) months in advance of the date specified in the original Election.
With respect to a distribution upon Retirement or an In-Service Distribution Date, the new
Distribution Date must be at least five (5) years after the date of the first distribution
specified in the original Election. No such amendment may accelerate the date that any
distribution would be made from the Plan.

          9.3.3 The Participant’s method of distribution selected in his or her Election shall remain in
effect for all future similar Deferrals until changed by the Participant during a subsequent Open
Enrollment Period. The Participant’s method of distribution may be changed only in accordance with
the requirements of Section 9.3.2.

          9.3.4 Failure to Properly Specify Form of Distribution. If, at the time of his or her
Distribution Date, a Participant has failed to elect a form of distribution or a Participant who
elects an installment distribution does not satisfy the requirements for the installment term
elected, then such Participant’s Benefits shall be distributed in a single lump sum payment.

          9.3.5 Installment Amounts. For purposes of this Section 9.3, installment
distributions shall commence within sixty (60) days following a Participant’s Retirement or
Disability, and shall thereafter be paid within the thirty (30) day period beginning on the last
business day of each calendar quarter beginning with the calendar quarter next following the
quarter in which the initial payment date occurred (for quarterly installments) or on a date that
is within 30 days of each anniversary of the initial payment date (for annual installments).
Installment distributions with respect to an In-Service Distribution Date shall commence on the
business day corresponding with or immediately following the date elected by the Participant and be
paid within the 30-day period beginning on the last business day of each calendar quarter beginning
with the calendar quarter next following the quarter in which the initial payment date occurred
(for quarterly installments) or on a date that is within 30 days of each subsequent anniversary of
the In-Service Distribution Date (for annual installments).

          9.3.6 Reemployed After Installments Begin. If a former Participant is reemployed
after having begun to receive installment distributions from the Plan, then such former
Participant, upon once again becoming an Eligible Employee, may begin a new period of participation
in the Plan; provided, however, that the installment distributions previously commenced will
continue to be paid to the Participant over the specified installment period.

          9.3.7 Minimum Account Balance Necessary for Installments. Notwithstanding anything in
the Plan to the contrary, if a Participant’s Account balance is less than $50,000 at the

14

 

time elected to begin installment distributions, the Participant’s Benefit will automatically
be distributed in a single lump sum.

     9.4 Election of In-Service Distribution Date.

          9.4.1 Initial Election. Upon filing an Election to make Deferrals for any Plan Year,
a Participant may specify an In-Service Distribution Date for the Subaccount to which such
Deferrals are credited, subject to the following:

               9.4.1.1 A Participant must elect an In-Service Distribution Date for all of the Deferrals
credited to such Subaccounts for the Plan Year.

               9.4.1.2 The In-Service Distribution Date elected for any Deferral Subaccount must be at least
two (2) years after the end of the Plan Year for which the Deferrals to such Subaccount are made.

               9.4.1.3 Benefits shall be paid (or payments shall commence in accordance with Section 9.3.5)
on the elected In-Service Distribution Date elected for such Deferral Subaccount.

          9.4.2 Revocation or Amendment of In-Service Distribution Election. A Participant who
has elected an In-Service Distribution Date may revoke and/or amend the In-Service Distribution
Date Election by filing a revocation or an amended Election at least twelve (12) months in advance
of the In-Service Distribution Date specified in the Election being revoked or amended. The
amended In-Service Distribution Date must be in a Plan Year that is at least five (5) years after
the In-Service Distribution Date specified in the prior Election. An In-Service Distribution Date
Election for any Deferral Subaccount may be amended only once. Nothing in this Section 9.4.2 shall
preclude a Participant from amending his or her Election as to the method of distribution in
accordance with Section 9.3.3, above.

          9.4.3 Separation from Service Before the Planned In-Service Distribution Date. If the
Participant has a Separation from Service with the Employer before his In-Service Distribution Date
for any reason (other than Retirement or Disability, to the extent of a valid Retirement or
Disability election), distribution of the Participant’s Account shall be made in a single lump sum
payment within sixty (60) days after the Participant’s Separation from Service.

          9.4.4 Separation from Service After Commencement of Installment In-Service
Distributions. Notwithstanding any prior Election, if the Participant has a Separation from
Service with the Employer for any reason (other than Retirement or Disability, to the extent of a
valid Retirement or Disability election) while receiving In-Service Distributions in the form of
installments, distribution of the Participant’s remaining installments shall be made in a single
lump sum payment within sixty (60) days after the Participant’s Separation from Service.

     9.5 Distribution Upon Death of Participant. If a Participant dies before his or her
Benefit payments have commenced, then such Participant’s Benefits shall be paid to his or her
designated Beneficiary in a single lump sum cash payment within sixty (60) days following the date
of the Participant’s death. If a Participant dies after installment payments have commenced,

15

 

his or her remaining Account balance shall be paid to the Beneficiary in a single lump sum
payment within sixty (60) days after the Participant’s death.

     9.6 Specified Employees. In the event of a distribution to a Specified Employee based
upon such individual’s Separation from Service, no distributions will be made, irrespective of any
Election or provision of this Plan to the contrary, before the date which is six (6) months and ten
(10) days after the date of Separation from Service, or if earlier, the date of death of the
Specified Employee.

     9.7 Limitation on Distributions to Covered Employees. Notwithstanding any other
provision of this Article 9, and subject to the requirements of Section 409A of the Code, in the
event the Participant is a “covered employee” as that term is defined in Section 162(m)(3) of the
Code, or would be a covered employee if Benefits were distributed in accordance with his or her
Election, the maximum amount which may be distributed from the Participant’s Account in any Plan
Year shall not exceed one million dollars ($1,000,000), less the amount of compensation paid to the
Participant in such Plan Year which is not “performance-based” (as defined in Code Section
162(m)(4)(C)), which amount shall be reasonably determined by the Committee at the time of the
proposed distribution. Any amount which is not distributed to the Participant in a Plan Year as a
result of this limitation shall be distributed to the Participant during the first Plan Year in
which the Company reasonably anticipates that the deduction will not be barred by application of
Section 162(m) of the Code, subject to compliance with the foregoing limitations set forth in this
Section 9.7.

     9.8 Tax Withholding. Distributions under this Article 9 shall be subject to all
applicable withholding requirements for federal, state and local income or other taxes. Amounts
required to be withheld pursuant to this Section 9.8 shall be taken first from distributions of
cash and second, to the extent necessary to satisfy the minimum tax withholding requirements, from
the proceeds of the sale of shares of Company Common Stock distributed to the Participant, which
sale the Participant authorizes as a condition of participation in the Plan.

     9.9 Section 280G Parachute Payment. In the event that any distribution from the Plan
received or to be received by a Participant (a “Distribution”) would (i) constitute a “parachute
payment” within the meaning of Section 280G of the Code, and (ii) but for this Section 9.9, cause
the Participant to become subject to the excise tax imposed by Section 4999 of the Code (the
“Excise Tax”) or increase such Participant’s Excise Tax liability, then such Distribution may be
reduced to the largest amount which the Participant, in his or her sole discretion, determines
would result in no portion of the Distribution being subject to the Excise Tax. The determination
by a Participant of any reduction shall be conclusive and binding upon the Employer, the Company,
and the Committee. The Committee shall reduce a Distribution and/or shall accept the return of
some or all of a Distribution previously made to a Participant only upon written notice by the
Participant indicating the amount of such reduction. Any amounts returned to the Plan pursuant to
this Section 9.9 shall be treated as a forfeiture and shall be used to reduce the Company’s future
contributions to the Plan or to pay costs associated with the operation and administration of the
Plan.

     9.10 409A Transition Rule Elections. The Plan Committee, in its sole discretion and
to the extent it deems appropriate, may permit Participants to make changes to existing payment

16

 

elections to be made prior to December 31, 2008 or such earlier date as the Committee may
specify. Any election changes made pursuant to this Section 9.10 may not defer into later years
amounts that would have been payable in 2008 or cause payment of amounts payable in later years to
be accelerated into 2008. Elections under this Section 9.10 shall comply in all respects with the
provisions of IRS Notice 2007-86 and other applicable IRS and Treasury guidance. In addition,
notwithstanding anything in this Plan to the contrary, deferral elections may be made prior to
January 1, 2009, pursuant to the rules specified in IRS Notice 2007-86. Any deferral or election
changes made after January 1, 2009 shall be required to comply with the requirements set forth in
this Plan.

ARTICLE X

ADMINISTRATION

     10.1 Committee Structure. The initial number of Committee members shall be three (3),
until such number is changed by the approval of the majority of the Compensation Committee. A
member of the Committee must be an employee of the Employer or a member of the Board and shall
continue to serve until such member (i) resigns, (ii) is removed or (iii) terminates employment
with the Employer and no longer serves on the Board for any reason. The approval of at least
two-thirds (2/3) of the members of the Compensation Committee shall be required to remove a member
of the Committee. A majority of the remaining members of the Committee may fill one or more
vacancies on the Committee. The Committee may allocate and delegate some or all of its
responsibilities described in this Article 10 and otherwise as set forth in the Plan. The
Committee’s authority under this Article 10 shall at all times be subject to the ability of the
Compensation Committee to remove any or all of the members of the Committee for any reason, change
the number of members of the Committee, fill vacancies on such committee, and establish rules and
procedures for the Committee.

     10.2 Committee Powers and Responsibilities. The Committee shall have control of the
administration of the Plan, with all powers necessary to enable it properly to carry out its duties
in that respect, including, but not limited to, the power and authority to:

          10.2.1 Construe the Plan and any Trust Agreement(s) to determine all questions that shall
arise as to interpretations of the Plan’s provisions, including determinations of which individuals
are Eligible Employees and the extent of their eligibility to participate in the Plan, which
individuals are Specified Employees, and determinations related to the amounts credited to a
Participant’s Account and the appropriate timing and method of Benefit payments;

          10.2.2 Establish reasonable rules and procedures which shall be applied to Elections, the
establishment of Accounts and Subaccounts, and all other discretionary provisions of the Plan;

          10.2.3 Establish rules, procedures and formats for the electronic administration of the Plan,
including specifically the distribution of Participant communications, Elections and tax
information;

17

 

          10.2.4 Establish the rules and procedures by which the Plan will operate that are consistent
with the terms of the Plan documents and Code Section 409A;

          10.2.5 Compile and maintain all records it determines to be necessary, appropriate or
convenient in connection with the administration of the Plan;

          10.2.6 Adopt amendments to the Plan which are deemed necessary or desirable to facilitate
administration of the Plan and/or to bring Plan-related documents into compliance with all
applicable laws and regulations; provided, however, that the Committee shall not have the authority
to adopt any Plan amendment that will result in substantially increased costs to the Company unless
such amendment is contingent upon ratification by the Compensation Committee before becoming
effective;

          10.2.7 Employ such persons or organizations to perform services with respect to the
administrative responsibilities of the Committee under the Plan as the Committee determines to be
necessary and appropriate, including, but not limited to, attorneys, accountants, and benefit,
financial and administrative consultants;

          10.2.8 Select, review and retain or change the Benchmark Funds which are used for determining
the Investment Return under the Plan;

          10.2.9 Direct the investment of the assets of the Trust(s);

          10.2.10 Review the performance of the Trustee(s) with respect to the Trustee’s duties,
responsibilities and obligations under the Plan and the Trust Agreement(s); and

          10.2.11 Take such other actions as may be necessary or appropriate to the management and
investment of the assets held with respect to this Plan.

     10.3 Decisions of the Committee. Decisions of the Committee made in good faith upon
any matter within the scope of its authority shall be final, conclusive and binding upon all
persons, including Participants and their legal representatives or Beneficiaries. Any discretion
granted to the Committee shall be exercised in accordance with rules and policies established by
the Committee.

     10.4 Indemnification. To the extent permitted by law, the Company shall indemnify
each member of the Committee, and any other Employee or member of the Board with duties under the
Plan, against losses and expenses (including any amount paid in settlement) reasonably incurred by
such person in connection with any claims against such person by reason of such person’s conduct in
the performance of his or her duties under the Plan, except in relation to matters as to which such
person has acted fraudulently or in bad faith in the performance of his or her duties.
Notwithstanding the foregoing, the Company shall not indemnify any person for any expense incurred
through any settlement or compromise of any action unless the Company consents in writing to the
settlement or compromise.

     10.5 Claims Procedure. Benefits shall be provided from this Plan through procedures
initiated by the Committee, and the Participant need not file a claim. However, if a Participant
or

18

 

Beneficiary believes he or she is entitled to a Benefit different from the one received, then
the Participant or Beneficiary may file a claim for the Benefit by writing a letter to the
Committee.

          10.5.1 If any claim for Benefits under the Plan is wholly or partially denied, the claimant
shall be given notice in writing of such denial within 90 days of the date the letter claiming
benefits is received by the Committee. If special circumstances require an extension of time,
written notice of the extension shall be furnished to the claimant within the initial 90-day
period.

          10.5.2 Notice of the denial shall set forth the following information: (a) the specific reason
or reasons for the denial; (b) specific references to pertinent Plan provisions on which the denial
is based; (c) a description of any additional material or information necessary for the claimant to
perfect the claim and an explanation of why such material or information is necessary; (d) an
explanation that a full review by the Committee of the decision denying the claim may be requested
by the claimant or his or her authorized representative by filing with the Company, within 60 days
after such notice has been received, a written request for such review; and (e) if such request is
so filed, the claimant or his or her authorized representative may review pertinent documents and
submit issues and comments in writing within the same 60 day period.

          10.5.3 The decision of the Committee upon review shall be made promptly, and not later than 60
days after the Committee’s receipt of the request for review, unless special circumstances require
an extension of time for processing, in which case the claimant shall be so notified and a decision
shall be rendered as soon as possible, but not later than 120 days after receipt of the request for
review. If the claim is denied, wholly or in part, the claimant shall be promptly given a copy of
the decision. The decision shall be in writing and shall include specific reasons for the denial,
specific references to the pertinent Plan provisions on which the denial is based and shall be
written in a manner calculated to be understood by the claimant. No further legal action may be
initiated claiming benefits under this Plan until the claims procedure set forth in this Article 10
is complete.

     10.6 Plan Expenses. The Company shall pay all costs and expenses related to the
operation and administration of the Plan.

ARTICLE XI

AMENDMENT AND TERMINATION

     11.1 Right to Amend. The Committee shall have the right to amend the Plan, at any
time and with respect to any of its provisions, and all parties claiming any interest under the
Plan shall be bound by such amendment; provided, however, that no such amendment shall deprive a
Participant of a right accrued under the Plan prior to the date of the amendment, unless such an
amendment is required by applicable law or deemed necessary to preserve the preferred tax treatment
of the Plan. Notwithstanding anything herein to the contrary, only the Compensation Committee
shall have the authority to adopt amendments that result in a change to the matching contribution
formula under Section 4.5 of the Plan.

19

 

     11.2 Amendments to Ensure Proper Characterization of Plan. Notwithstanding the
provisions of Section 11.1, the Plan may be amended by the Committee or the Compensation Committee
at any time, and retroactively if required, if found necessary, in the opinion of the Committee or
the Compensation Committee, in order to conform the Plan to the provisions and requirements of
applicable law (including, but not limited to, Section 409A of the Code, and other applicable
portions of ERISA and the Code). No such amendment shall be considered prejudicial to any interest
of a Participant hereunder.

     11.3 Plan Termination or Plan Suspension. The Company reserves the right, by action
of the Compensation Committee, to terminate the Plan at any time, to suspend the operation of the
Plan for a fixed or indeterminate period of time, or to terminate the Plan and provide for all
amounts to be distributed in a lump sum, to the extent permitted under Section 409A of the Code and
the regulations issued thereunder.

     11.4 Successor to Company. Any corporation or other business organization which is a
successor to the Company by reason of a consolidation, merger or purchase of all or substantially
all of the assets of the Company, or any other Change in Control, shall have the right to become a
party to the Plan by means of a resolution of the entity’s board of directors or other appropriate
governing body.

ARTICLE XII

PLAN TRANSFERS

     12.1 Transfers to Other Plans. In the event that a Participant becomes employed by
any affiliated company, subsidiary corporation, parent corporation or unrelated corporation with
which the Company enters into a transaction to acquire the assets or stock of such unrelated
corporation, the Committee shall have the right, but not the obligation, to direct the Trustee to
transfer funds in an amount equal to the amount credited to such Participant’s Account (the
“Transferred Account”) to a trust established under a Transferee Plan. The Committee shall
determine, in its sole discretion, whether such transfer shall be made and the timing of such
transfer. Such transfer shall be made if, and only to the extent that, approval of such transfer
is obtained from the Trustee.

          12.1.1 Transferee Plan. For purposes of this Section 12.1, “Transferee Plan” shall
mean an unfunded, nonqualified deferred compensation plan described in Sections 201(2), 301(a)(3)
and 401(a)(l) of ERISA maintained by any of the Company’s affiliated entities, subsidiary
corporations, parent corporations or any corporation unrelated to the Company with which the
Company has successfully closed a transaction in which the Company acquired the assets or the
outstanding stock of such unrelated corporation.

     12.2 Transfers in from Other Plans. There may be transferred directly from the
trustee of another nonqualified, funded, deferred compensation plan (an “Other Plan”) to the
Trustee, subject to the approval of the transferor corporation maintaining the Other Plan and the
Committee, funds in an amount not to exceed the amounts credited to the Other Plan accounts
maintained for the benefit of that Eligible Employee. Amounts transferred pursuant to this Section
12.2, and any gains or losses allocable thereto, (i) shall be accounted for separately

20

 

(“Transfer Account”) from amounts otherwise allocable to the Eligible Employee under this
Plan, and (ii) the Transfer Account shall be distributed in accordance with the Eligible Employee’s
deferral election under the Other Plan, as such election may be amended pursuant to the terms of
the Other Plan. Subsequent earnings on the amount in the Transfer Account shall be credited to a
separate Account for the Eligible Employee established pursuant to this Plan and shall be
determined under the Plan’s investment procedures in Article 6.

     12.3 Effect of Section. This Section 12 shall only be operable to the extent the
Committee determines and in its sole and absolute discretion at the time of any proposed transfer
that such transfer will not impact the Plan and any deferred amounts in a tax disadvantageous
manner under Section 409A of the Code.

ARTICLE XIII

MISCELLANEOUS

     13.1 No Assignment. The right of any Participant, any Beneficiary or any other person
to the payment of any benefits under this Plan shall not be assigned, transferred, pledged or
encumbered, including pursuant to domestic relations orders.

     13.2 No Secured Interest. The obligations of the Company to Participants under this
Plan shall not be funded or otherwise secured, and shall be paid out of the general assets of the
Company. Participants are general unsecured creditors of the Company with respect to the Company’s
contributions hereunder and shall have no legal or equitable interest in the assets of the Company,
including any assets the Company may set aside or reserve against its obligations under this Plan.

     13.3 Successors. This Plan shall be binding upon and inure to the benefit of the
Employer, its successors and assigns and the Participant and his or her heirs, executors,
administrators and legal representatives.

     13.4 No Employment Agreement. Nothing contained herein shall be construed as
conferring upon any Participant the right to continue in the Service of the Company or any
Affiliate.

     13.5 Attorneys’ Fees. If the Employer, the Participant, any Beneficiary and/or
successor in interest to any of the foregoing, brings legal action to enforce any of the provisions
of this Plan, the prevailing party in such legal action shall be reimbursed by the other party for
the prevailing party’s legal costs, including, without limitation, reasonable fees of attorneys,
accountants and similar advisors and expert witnesses.

     13.6 Entire Agreement. This Plan constitutes the entire understanding and agreement
with respect to the subject matter contained herein, and supersedes any and all agreements,
understandings, restrictions, representations or warranties among any Participant and the Employer
other than those set forth or provided for in this Plan.

     13.7 Severability. If any provision of this Plan is held to be invalid, illegal or
unenforceable, such invalidity, illegality, or unenforceability shall not affect any other
provision

21

 

of this Plan, and the Plan shall be construed and enforced as if such provision had not been
included. In addition, if such provision is invalid, illegal or unenforceable due to changes in
applicable law or accounting requirements, the Company may amend the Plan, without the consent and
without providing any advance notice to any Participant, as may be necessary or desirable to comply
with changes in the applicable law or financial accounting of deferred compensation plans.

     13.8 Governing Law. This Plan shall be construed under the laws of the State of
California, except to the extent preempted by federal law.

22EXHIBIT
4.1

    
      
         

         

         

        SERVICE
AGREEMENT

         

         

        between

         

         

        THE
ROYAL BANK OF SCOTLAND plc

         

         

        and

         

         

        STEPHEN
HESTER

        ---------------------------

         

         

         

         

        The
Royal Bank of Scotland plc

        36
St Andrew Square

        Edinburgh

        EH2
2YB

         

         

        
          
            
            

          

          
            1

            
              

            

          

          
            
            

          

        

         

         

        
 

         

        INDEX

         

        Clause

         

        1.            Definitions,
Interpretation and Construction

        
        

        2.            Position

         

        3.            Commencement
of Employment

         

        4.            Duties

         

        5.            Other
Interests

         

        6.            Place
of Employment

         

        7.            Hours
of Work

         

        8.            Remuneration
(RBSelect)

         

        9.            Deductions

         

        10.           Bonuses

         

        11.           Profit
Sharing

         

        12.           Executive
Long Term Incentives

         

        13.           YourBank

         

        14.           Expenses

         

        15.           Dealings
in Investments

         

        16.           Pension
and Life Cover

         

        17.           Holidays

         

        18.           Sickness

         

        19.           Confidentiality

         

        20.           Group
Property

         

        21.           Intellectual
Property

         

        22.           Power
of Attorney

         

        23.           Grievance
Procedure

         

        24.           Disciplinary
Procedure

         

        25.           Summary
Termination

         

        26.           Termination
by Notice

         

        27.           Redundancy

         

        28.           Garden
leave

         

        29.           Events
on Termination

         

        30.           Restrictions
after termination of employment

         

         

        
          
            
            

          

          
            2

            
              

            

          

          
            
            

          

        

         

         

        31.           Declaration
of Secrecy

         

        32.           Data
Protection

         

        33.           Notices

         

        34.           Continuing
Provisions

         

        35.           Whole
Agreement and Severability

         

        36.           Collective
Agreements

         

        37.           Governing
Law

         

         

         

        
          
            
            

          

          
            3

            
              

            

          

          
            
            

          

        

         

         

        SERVICE
AGREEMENT

         

        Between

         

        THE
ROYAL BANK Of SCOTLAND plc having its registered office at 36 St. Andrew
Square, Edinburgh EH2 2YB (hereinafter called the “Company”)

         

        and

         

        STEPHEN
HESTER, residing at (hereinafter called the “Executive”)

         

        WHEREAS:

         

        
          	
                  A.

                	
                  Royal Bank of
      Scotland Group plc (“RBSG”)
      wishes to appoint the Executive as a director and as its Group Chief
      Executive.

                

        

         

        
          	
                  B.

                	
                  RBSG, the
      Company and the Executive have agreed that, to enable the Executive to
      fulfil his role as Group Chief Executive of RBSG, he shall be employed by
      the Company with the principal duty of discharging such role under the
      directions of the Board of Directors of RBSG or an authorised committee of
      the Board of Directors of RBSG (the “Board”).

                

        

         

        THE
AGREEMENT BETWEEN THE PARTIES IS AS FOLLOWS:-

         

        1.      Definition,
Interpretation and Construction

         

        In this Agreement,
unless otherwise stated, the following definitions apply:

         

        
          	
                   
      

                	
                   
      1.1.1.

                	
                  “Associated
      Company” means any company (i) having an ordinary share capital of
      which not less than 25 per cent is owned directly or indirectly by RBSG or
      (ii) a holding company of the Company or any direct or indirect subsidiary
      of any such holding company or (iii) any company or other entity in
      respect of which the Group exercises management control, including joint
      venture operations;

                

        

         

        
          	
                   
      

                	
                  11.2.

                	
                  “the
      Board of the Company” means the Board of Directors of the Company
      or an authorised committee of the Board of Directors of the
      Company;

                

        

         

        
          	
                   
      

                	
                   
      1.1.3.

                	
                  “the
      Group” means the Company and its Associated
    Companies;

                

        

         

         

        
          
            
            

          

          
            4

            
              

            

          

          
            
            

          

        

         

         

        
          	
                   
      

                	
                  1.1.4

                	
                  “the
      Remuneration Committee” means the Remuneration Committee of the
      Board or any committee empowered by the Board in substitution for the
      Remuneration Committee;

                

        

         

        
          	
                   
      

                	
                  1.1.5

                	
                  the
      expressions “subsidiary”
      and “holding
      company” have the same meanings in this Agreement as they have in
      Section 736 of Companies Act 1985;

                

        

         

        
          	
                   
      

                	
                   
      1.1.6.

                	
                  “Good
      Leaver” means, in relation to Clause 10.2 of this Agreement only
      and not for the purposes of any other right or benefit to which the
      Executive may be entitled as an employee of the Company, an employee who
      leaves the employment of the Company by reason of redundancy (compulsory
      or voluntary), by reason of retirement or early retirement or by reason of
      the Executive’s resignation as a consequence of a fundamental breach of
      this Agreement by the Company.

                

        

         

        
          	
                   
      

                	
                  1.2.

                	
                  In this
      Agreement:

                

        

         

        
          	
                   
      

                	
                  1.2.1

                	
                  unless
      otherwise stated, references to statutes, rules or regulations or their
      provisions will also include amendments, extensions, consolidations or
      replacements and will refer to any orders or regulations, instruments or
      subordinate legislation;

                

        

         

        
          	
                   
      

                	
                   
      1.2.2.

                	
                  the masculine
      gender shall include the feminine gender and singular number shall include
      the plural and vice versa;

                

        

         

        
          	
                   
      

                	
                  1.2.3

                	
                  unless
      otherwise stated, references to clauses and sub-clauses are references to
      clauses and sub-clauses of this Agreement and references to clauses shall
      be deemed to include references to the sub clauses of that
      clause;

                

        

         

        
          	
                   
      

                	
                  1.2.4

                	
                  the headings
      to clauses are for convenience only and shall not affect the construction
      or interpretation of this Agreement;
and

                

        

         

        
          	
                   
      

                	
                  1.2.5

                	
                  the
      provisions of the Schedule shall be read and construed as part of this
      Agreement and shall be enforceable
accordingly.

                

        

         

        2.      Position

         

        
          	
                   
      

                	
                  2.1

                	
                  Executive
      will be employed as the Group Chief Executive or in such other capacity of
      like status with the Group as the Company requires and the Executive
      agrees to accept the position on the terms and conditions set out in this
      Agreement.

                

        

         

         

        
          
            
            

          

          
            5

            
              

            

          

          
            
            

          

        

         

         

        The Executive will
be employed as the most senior executive officer of the Group as the Group is
constituted at the date of this Agreement , or any group created by an
amalgamation or reconstruction of the Group as described in clause 25.2, or of
any new group structure which results from RBSG or any company (which is a Group
Company immediately before such acquisition) acquiring any other company, group
or business.

         

        
          	
                   
      

                	
                  2.2.

                	
                  The Executive
      warrants that by virtue of entering into this Agreement, he will not be in
      breach of any express or implied terms of any contract or other obligation
      binding upon him.

                

        

         

        3.      Commencement
of Employment

         

        
          	
                   
      

                	
                  3.1.

                	
                  The
      Executive’s employment under this Agreement will commence on 16 November
      2008 and he will assume the duties and responsibilities of Group Chief
      Executive from 21 November 2008. The Executive’s continuous employment
      with the Company will commence on 16 November 2008 (the “Commencement
      Date”)

                

        

         

        
          	
                   
      

                	
                  3.2.

                	
                  No period of
      employment with a previous employer counts as part of the Executive’s
      period of continuous employment with the
  Company.

                

        

         

        4.      Duties

         

        
          	
                   
      

                	
                  4.1

                	
                  The Executive
      will report to the Board.

                

        

         

        
          	
                   
      

                	
                  4.2.

                	
                  During his
      employment the Executive shall

                

        

         

        
          	
                   
      

                	
                   
      4.2.1.

                	
                  devote the
      whole of his working time, attention and skill to the business of the
      Group and shall faithfully, efficiently, competently and diligently
      perform those duties and exercise such powers, authorities and discretions
      which may be assigned to or vested in him by the Board as are consistent
      with his title and status;

                

        

         

        
          	
                   
      

                	
                   
      4.2.2.

                	
                  comply with
      the Group’s rules, policies and regulations as varied from time to time
      and obey all reasonable and lawful directions given by or under the
      authority of the Board;

                

        

         

        
          	
                   
      

                	
                   
      4.2.3.

                	
                  comply with
      the terms of the Group’s Code of Conduct;
and

                

        

         

        
          	
                   
      

                	
                  4.2.4

                	
                  not do
      anything prejudicial to the interests and reputation of the Group and
      shall promote and extend the business of the Group and protect and further
      its interests and reputation.

                

        

         

         

        
          
            
            

          

          
            6

            
              

            

          

          
            
            

          

        

         

         

        
          	
                   
      

                	
                  4.3.

                	
                  Additionally
      the Executive may be required to undertake such other duties as the
      Company considers necessary to meet the needs of the business. The
      Executive may also be required to perform services for any Associated
      Company and may be required to undertake the role and duties of a
      non-executive Director of other companies within the Group. No additional
      remuneration will be paid in respect of these
  appointments.

                

        

         

        
          	
                   
      

                	
                  4.4.

                	
                  The duties of
      the Executive as an officer of the Company or of any Associated Company
      shall be subject to the Articles of Association (or equivalent) of the
      relevant company. Subject to the terms of this Agreement, he shall be
      entitled to remain a member of the Board and a director of the
      Company.

                

        

         

        
          	
                   
      

                	
                  4.5.

                	
                  The
      Executive’s performance and discharge of his duties and responsibilities
      hereunder shall be the subject of regular review, the object of which is
      to assess performance during the period under review and to set agreed
      performance standards for future review periods. In the event that, in the
      opinion of the Board and after receiving a warning from it and reasonable
      opportunity to cure any failure, the Executive fails to achieve the agreed
      personal performance standards, the Company may terminate the Executive’s
      employment in accordance with the provisions of Clause
    26.4.

                

        

         

        5.      Other
Interests

         

        
          	
                   
      

                	
                  5.1.

                	
                  The Executive
      shall not (except with the Board’s prior written consent) be directly or
      indirectly engaged or concerned in any capacity in the conduct of, or have
      any financial interest in: any business, trade, profession or organisation
      (other than Associated Companies) save through holding or being interested
      in investments (quoted or unquoted) not representing more than two per
      cent of the issued equity capital or any other class of share or debenture
      capital of any one company.

                

        

         

        
          	
                   
      

                	
                  5.2,

                	
                  The Executive
      will not, other than in the proper performance of his duties, give
      lectures, speak in public or publish anything in any form or medium
      relating to the affairs of, or matters which may affect
    RBSG.

                

        

         

        6.      Place
of Employment

         

        
          	
                   
      

                	
                  6.1.

                	
                  The Executive
      will normally work in between Edinburgh and London but may be required to
      travel elsewhere in the world in the performance of his
      duties.

                

        

         

        7.      Hours
of Work

         

         

        
          
            
            

          

          
            7

            
              

            

          

          
            
            

          

        

         

         

        
          	
                   
      

                	
                  7.1.

                	
                  The normal
      hours of work are from 9.00 a.m. to 5.00 p.m. Monday to Friday inclusive
      of one hour for lunch daily, but the Executive is expected to work
      reasonable additional hours when necessary for the performance of his
      duties without additional
remuneration.

                

        

         

        
          	
                   
      

                	
                  7.2.

                	
                  The Executive
      will not receive any additional remuneration for working more than 35
      hours per week.

                

        

         

        8.      Remuneration
(RBSelect)

         

        
          	
                   
      

                	
                  8.1.

                	
                  It is the
      objective of RBSG to deliver a competitive remuneration package to the
      Executive that is comparable with CEOs of similar financial services
      organisations. As part of this, the Company operates a flexible
      compensation and benefits package called RBSelect
      which comprises

                

        

         

        
          	
                   
      

                	
                   
      8.1.1.

                	
                  individually
      calculated basic salary of £1,200,000 (the ‘Salary
      Element’)

                

        

         

        
          	
                   
      

                	
                   
      8.1.2.

                	
                  any regional
      allowance the Executive is entitled to
receive

                

        

         

        
          	
                   
      

                	
                   
      8.1.3.

                	
                  value of the
      Managers’ Car Scheme

                

        

         

        
          	
                   
      

                	
                   
      8.1.4.

                	
                  value of
      private medical cover

                

        

         

        
          	
                   
      

                	
                   
      8.1.5.

                	
                  value of
      Managers’ medicals

                

        

         

        The residual amount may be used by
the Executive to select preferred benefits from RBSelect.

         

        The ‘Salary
Element’ is used to calculate certain benefits such as Profit Share and any
discretionary bonus payment or any other payment directly linked to salary. The
Salary Element is also used to calculate severance payments including
redundancy.

         

        The total
ValueAccount (which includes the Salary Element) will be notified to the
Executive by the Chairman of the Board or the Remuneration Committee from time
to time and will include a sum in respect of pension contribution consistent
with Company practice from time to time but not less than that currently
prevailing.

         

        
          	
                   
      

                	
                  8.2.

                	
                  The monthly
      value of the Executive’s ValueAccount less the cost of any benefits
      elected through RBSelect
      will be paid on the 18th day of each month (or on the last preceding
      working day where the 18th day fails on a weekend or public
      holiday)

                

        

         

         

        
          
            
            

          

          
            8

            
              

            

          

          
            
            

          

        

         

         

        directly into the
Executive’s bank account. Salary will be paid partly in advance and partly in
arrears up to the last day of each calendar month.

         

        
          	
                   
      

                	
                  8.3.

                	
                  Commencing in
      2010, the Executive’s salary will be reviewed annually on the 1st day of
      April of each year (or any other day approved by the Remuneration
      Committee) with any adjustments having immediate effect. Any review of
      salary will be entirely at the Company’s discretion. The Executive has no
      automatic right to any increase in
salary.

                

        

         

        
          	
                   
      

                	
                  8.4.

                	
                  All
      remuneration payable in cash to the Executive under this Agreement shall
      only be credited to a bank account held with the Company or with another
      company in the Group, which shall be maintained by the
      Executive.

                

        

         

        9.      Deductions

         

        
          	
                   
      

                	
                  9.1.

                	
                  The Executive
      agrees that the Company may, at any time during, or in any event upon
      termination of the Executive’s employment, deduct from his remuneration,
      any monies due by him to the Company including any overpayment made and/or
      outstanding loans, advances, relocation expenses, the cost (including the
      legal and other costs involved) of repairing any damage or loss to the
      Company’s property (including intellectual property; caused by him, salary
      paid in respect of excess holidays and any other monies owed by him to the
      Company or any Associated Company.

                

        

         

        10.           Bonuses

         

        
          	
                   
      

                	
                  10.1.

                	
                  Subject to
      Clause 10.2 below, the Executive may from 1 January 2009, at the
      discretion of the Remuneration Committee, be entitled to participate in
      any Bonus Scheme as approved by the Remuneration Committee the terms of
      which may, at the sole discretion of the Remuneration Committee, require
      the Executive to defer a proportion of any bonus awarded to
      him.

                

        

         

        
          	
                   
      

                	
                  10.2.

                	
                  Subject to
      Cause 26.3, if, on or before the relevant qualifying date for payment of
      the bonus, the Executive has given or been issued with notice of dismissal
      or has been dismissed (except in circumstances where the Executive is a
      Good Leaver), the Executive will not be entitled to receive any bonus
      payment which would or may otherwise be due to the Executive (whether paid
      in cash or in shares) as set out in Clause 10.1
  above.

                

        

         

        11.           Profit
Sharing

         

         

        
          
            
            

          

          
            9

            
              

            

          

          
            
            

          

        

         

         

        
          	
                   
      

                	
                  11.1.

                	
                  The Executive
      shall be eligible to participate in RBSG’s Profit Sharing Scheme, the
      terms and conditions of which will be made available to the Executive. Any
      entitlement is calculated by reference the Executive’s Salary
      Element.

                

        

         

        12.           Executive
Long Term Incentives

         

        
          	
                   
      

                	
                  12.1.

                	
                  The Executive
      may, at the absolute discretion of the Remuneration Committee, be eligible
      to participate in the Company’s long term incentive plans, subject to the
      rules of these plans.

                

        

         

        13.           YourBank

         

        
          	
                   
      

                	
                  13.1.

                	
                  The Executive
      shall be eligible to access preferential rates across a range of financial
      products and services from the RBS group through YourBank. YourBank is
      available to all UK and Offshore employees and eligible Group
      pensioners.

                

        

         

        14.           Expenses

         

        
          	
                   
      

                	
                  14.1.

                	
                  The Company
      shall reimburse the Executive for all reasonable out-of-pocket expenses
      properly incurred in the performance of his duties, subject to the
      Executive producing all relevant receipts or other satisfactory evidence
      and his compliance with the Company’s travel and expenses policy as
      amended from time to time.

                

        

         

        
          	
                   
      

                	
                  14.2.

                	
                  In order to
      facilitate payment of expenses, the Executive may be supplied with a
      credit card for use solely in this
connection.

                

        

         

        15.           Dealing
in Investments

         

        
          	
                   
      

                	
                  15.1.

                	
                  The Executive
      is subject to the Company’s Staff Dealing Rules (and divisional rules
      where applicable) which may require prior permission to be obtained before
      the Executive is permitted to deal in most types of securities
      transactions. Requests must be submitted in writing on the appropriate
      Company form. .The Company also operates a closed period during which the
      Executive will not be permitted to deal in RBSG shares. Failure to abide
      by these rules will constitute serious misconduct for the purposes of any
      disciplinary action and may lead to criminal proceedings and / or the
      summary dismissal of the Executive.

                

        

         

        
          	
                   
      

                	
                  15.2.

                	
                  Details of
      the Company’s Staff Dealing Rules are contained in the Group compliance
      manual (known as the Group Regulatory Risk Policy Handbook) and any local
      compliance manual.

                

        

         

        16           Pension
and Life Cover

         

         

        
          
            
            

          

          
            10

            
              

            

          

          
            
            

          

        

         

         

        
          	
                   
      

                	
                  16.1.

                	
                  The Executive
      shall be eligible to join The Royal Bank of Scotland Group Retirement
      Savings Plan (The Plan). The Executive can elect to join this plan through
      RBSelect.
      Further details are provided in the enclosed Retirement Savings Plan
      guidebook.

                

        

         

        
          	
                   
      

                	
                  16.2.

                	
                  The Plan is
      not contracted out of the State Second Pension and no Contracting Out
      certificate is required.

                

        

         

        
          	
                   
      

                	
                  16.3.

                	
                  The Executive will be provided
      with life assurance cover of four times the Salary Element of his RBSelect
      account. This benefit will not be provided through RBSelect.

                

        

         

        17.           Holidays

         

        
          	
                   
      

                	
                  17
      1.

                	
                  The Executive
      will be entitled to paid holidays, subject to the undernoted
      conditions;

                

        

         

        
          	
                   
      

                	
                   
      17.1.1

                	
                  The Executive
      will be entitled to 35 working days’ holiday to be taken at such time or
      times as the Executive shall request and agree in advance with the Company
      plus a further 8 days to be taken at times to be determined by the Company
      (which will normally be Bank Holidays). The Company reserves the right to
      request the Executive to work on Bank Holidays in return for which he will
      be entitled to holiday, equal to the period worked, to be taken at another
      time.

                

        

         

        
          	
                   
      

                	
                   
      17.1.2.

                	
                  The Company’s
      holiday year runs from 1 January to 31 December
  inclusive.

                

        

         

        
          	
                   
      

                	
                   
      17.1.3.

                	
                  If the
      Executive’s employment commences or terminates part way through the
      holiday year, holiday entitlement will be assessed on a pro-rated basis
      for each complete month of service during the holiday
  year.

                

        

         

        
          	
                   
      

                	
                   
      17.1.4.

                	
                  The Execute
      may carry over a maximum of 5 days’ unused holiday entitlement not taken
      in one year, to the next, but only with the prior written consent of the
      Company.

                

        

         

        
          	
                   
      

                	
                  17.2

                	
                  On
      termination of employment the Executive will be entitled to payment in
      respect of any accrued unused holiday entitlement except where the
      Executive’s employment is terminated by the Company for misconduct or
      gross misconduct when only accrued unused statutory holiday will be
      paid.

                

        

         

        
          	
                   
      

                	
                  17.3.

                	
                  Upon
      termination of this Agreement the Executive will repay to the Company any
      salary received for holidays taken by him in excess of his accrued
      entitlement. The Executive agrees that any sums due to the Company by the
      Executive may be

                

        

         

         

        
          
            
            

          

          
            11

            
              

            

          

          
            
            

          

        

         

         

        deducted by the
Company from any monies owed to the Executive in accordance with clause
9.

         

        
          	
                   
      

                	
                  17.4.

                	
                  During any
      period of notice (whether given by the Company or the Executive) whether
      being worked or on garden leave the Executive is required to take accrued
      and outstanding holiday entitlement at times to be agreed with the
      Company. However, the Company retains the discretion to release the
      Executive from this obligation and to make a payment in lieu of such
      outstanding entitlement or part
thereof.

                

        

         

        18.           Sickness

         

        
          	
                   
      

                	
                  18.1.

                	
                  There is no
      contractual right to payment in respect of any period of absence due to
      sickness or incapacity and any such payments will be made at the Company’s
      sole discretion.

                

        

         

        If the Executive is
absent from work due to illness, injury, or accident the Company may, at its
sole discretion, pay Company sick pay (inclusive of any statutory sickness
benefit) at 100% of the Executive’s ValueAccount rate for the first 182 days of
incapacity. Beyond the initial 182 days, the Executive will be eligible to be
considered on a discretionary basis for Disability Cover. Continued receipt of
payments under the scheme will be at the Company’s discretion and will be
subject to the rules of the scheme which the Company has the right to vary from
time to time. Disability Cover is a core benefit under RBSelect.
The cost will be deducted from the Executive’s ValueAccount. The Executive will
find more information in the RBSelect
guidebook.

         

        
          	
                   
      

                	
                  18.2.

                	
                  If accepted
      for Disability Cover, a payment equal to 50% of the Executive’s
      ValueAccount rate may be paid for up to a further five years subject to
      the scheme rules and the qualifying criteria set out in sub-clauses 18.3 –
      18.5 and 18.9 being met. Other factors during sickness absence
      are:

                

        

         

        
          	
                   
      

                	
                   18.2.1.

                	
                  Any benefit
      paid during the initial 182 days absence will include an allowance in lieu
      of holiday entitlement. Consequently normal holiday entitlement will cease
      to accrue;

                

        

         

        
          	
                   
      

                	
                   18.2.2.

                	
                  During any
      period of Disability Cover, the overall level of benefit will increase
      each year by price inflation subject to a maximum of 2.5% a
      year;

                

        

         

        
          	
                   
      

                	
                   18.2.3.

                	
                  During the
      entire period of Disability Cover, the Executive will continue to receive
      additional Company benefits, including RBSG’s Profit
    Sharing

                

        

         

         

        
          
            
            

          

          
            12

            
              

            

          

          
            
            

          

        

         

         

        Scheme and will
remain eligible to participate in the RBSG Sharesave Scheme. All salary-related
benefits will be linked to the current level of Disability Cover payments as
defined in clause 18.2.

         

        
          	
                   
      

                	
                   18.2.4.

                	
                  All periods
      of long-term sickness absence will be regarded as continuous service for
      the purpose of pension and other benefit
  calculations.

                

        

         

        
          	
                   
      

                	
                  18.3.

                	
                  The Executive
      may self-certify his incapacity for absences of up to seven consecutive
      days (including weekends and statutory
  holidays).

                

        

         

        
          	
                   
      

                	
                  18.4.

                	
                  A doctor’s
      certificate must he submitted to the Company for absences of more than
      seven consecutive days. Thereafter, the Executive must submit a new
      doctor’s certificate as and when necessary to ensure that all periods of
      absence are covered.

                

        

         

        
          	
                   
      

                	
                  18.5.

                	
                  The Company
      reserves the right to request the Executive to provide evidence for any
      Period of absence including those that would normally be
      self-certified.

                

        

         

        
          	
                   
      

                	
                  18.6.

                	
                  For the
      purposes of assessing the Executive’s entitlement to Statutory Sick Pay,
      the qualifying days will be Monday to Friday
  inclusive.

                

        

         

        
          	
                   
      

                	
                  18.7.

                	
                  if the
      Executive is incapable of performing his duties because of injuries
      sustained wildly or partly as a result of actionable negligence, nuisance
      or breach of any statutory duty on the part of any person other than a
      company in the Group (a “third party”) or if the Executive is covered by
      any health or other insurance scheme (an “insurance policy”) all payments
      made to the Executive under Clause 18.2 above shall (to the extent that
      compensation for loss of earnings is recoverable from the third or under
      the insurance policy), constitute loans by the Company for by any
      Associated Company from whom the Company may have procured payment of the
      Executive’s salary) to the Executive and shall be repaid when the
      Executive recovers compensation for loss of earnings from the third party
      by action or otherwise or under the insurance
  policy.

                

        

         

        
          	
                   
      

                	
                  18.8.

                	
                  Without
      prejudice to the provisions of Clause 18.7, in the event that the
      Executive has been incapacitated from performing his duties by reason of
      injuries sustained wholly or partly as a result of actionable negligence
      or as a result of matters which are covered by an insurance policy, the
      Company shall be entitled to require the Executive
  either:-

                

        

         

        
          	
                   
      

                	
                   18.8.1.

                	
                  (subject to
      the Company agreeing to indemnify the Executive against all reasonable
      legal expenses) to raise legal proceedings to enforce his
      rights

                

        

         

         

        
          
            
            

          

          
            13

            
              

            

          

          
            
            

          

        

         

         

        against any third
party who has committed such an actionable negligence against him and/or to
pursue a claim under the insurance policy; or

         

        
          	
                   
      

                	
                  18.8.2.

                	
                  to assign his
      right to raise legal proceedings to recover from such third party and/or
      the relevant insurance company compensation for any loss of earnings
      sustained by the Executive to the Company or any Associated
      Company.

                

        

         

        
          	
                   
      

                	
                  18.9.

                	
                  The Executive
      shall at any time (including during any period of incapacity) at the
      request and expense of the Company submit to medical examinations by a
      medical practitioner nominated by the Company. The results shall, subject
      to the provisions of the Access to Medical Reports Act 1988, be disclosed
      to the Company.

                

        

         

        19.           Confidentiality

         

        
          	
                   
      

                	
                  19.1.

                	
                  During the
      Executive’s employment, he must treat the business of the Company and any
      Associated Company and any information received during the course of or as
      a result of his employment about or provided by any third party as
      strictly confidential.

                

        

         

        
          	
                   
      

                	
                  19.2.

                	
                  The Executive
      may not at any time (whether during his employment or after its
      termination) disclose to any unauthorised person, firm or corporation or
      use or attempt to use for his own or any other person, firm or
      corporation’s advantage, any confidential information relating to the
      business affairs or trade secrets of the Company or any Associated
      Company, or any confidential information about (howsoever obtained) or
      provided by any third party received during the course of or as a result
      of his employment (“Confidential
      Information”). Confidential Information includes without being
      limited to, information relating to employees, customers and suppliers
      (former, actual and potential), Group contracts, pricing structures
      financial and marketing details, business plans, any technical data,
      designs, formulae, product fines, Intellectual Property (as defined in
      clause 21), research activities and any Group information which may be
      deemed to be commercially or price sensitive in nature. It also includes,
      again without limitation, any information contained in documents marked
      “confidential” or documents of a higher security classification and other
      information which, because of its nature or the circumstances in which the
      Executive receives it, he should reasonably consider to be
      confidential.

                

        

         

        
          	
                   
      

                	
                  19.3.

                	
                  The Company
      reserves the right to modify the categories of Confidential Information
      from time to time.

                

        

         

        
          	
                   
      

                	
                  19.4.

                	
                  The Executive
      is not permitted to make any copy, abstract, summary or précis of the
      whole or any part of any document belonging to the Group unless he has
      been

                

        

         

         

        
          
            
            

          

          
            14

            
              

            

          

          
            
            

          

        

         

         

        authorised to do so
by the Company, and shall not at any time use or permit to be used any such
items otherwise than for the benefit of the Group.

         

        
          	
                   
      

                	
                  19.5.

                	
                  The
      obligations contained in this clause 19 shall not
  apply:

                

        

         

        
          	
                   
      

                	
                   
      19.5.1.

                	
                  to
      information or knowledge which subsequently comes into the public domain
      other than by way of unauthorised use or disclosure (whether by the
      Executive or a third party);

                

        

         

        
          	
                   
      

                	
                   
      19.5.2.

                	
                  where the
      Executive’s use or disclosure of the information has been properly
      authorised by the Company;

                

        

         

        
          	
                   
      

                	
                   
      19.5.3.

                	
                  to any
      information which the Executive discloses in accordance with applicable
      public interest disclosure
legislation;

                

        

         

        
          	
                   
      

                	
                   
      19.5.4.

                	
                  to any
      information which is required to be disclosed in accordance with an order
      of a Court of competent
jurisdiction.

                

        

         

        
          	
                   
      

                	
                  19.6.

                	
                  The Executive
      shall exercise all due care and diligence and shall take all reasonable
      steps to prevent the publication or disclosure of any Confidential
      Information relating, in particular, but not limited to, actual or
      proposed transactions, of any employee, customer, client or supplier
      (whether former, actual or potential) of the Company or any Associated
      Company including the partnerships, companies, bodies, and corporations
      having accounts with or in any way connected to or in discussion with the
      Group and all other matters relating to such customers, clients or
      suppliers and connections.

                

        

         

        
          	
                   
      

                	
                  19.7.

                	
                  Any breach by
      the Executive at the provisions of this Clause 19 will be regarded by the
      Company as a serious disciplinary matter and may, if committed while the
      Executive is employed by the Company, result in disciplinary action being
      taken against the Executive up to and including dismissal without
      notice.

                

        

         

        
          	
                   
      

                	
                  19.8

                	
                  The Executive
      agrees that the undertakings comprised in this Clause 19 are reasonable
      and necessary to protect the legitimate business interests of the Group
      both during and after the termination of the Executive’s
      employment.

                

        

         

        20.
Group Property

         

        
          	
                   
      

                	
                  20.1

                	
                  All reports,
      files, notes memoranda, e mails, accounts, documents or other material
      (including all notes and memoranda of any Confidential Information as
      defined in clause 19.1 and the items referred to in clause 19.4) and any
      copies made or received by the Executive in the course of his employment
      (whether during or after)

                

        

         

         

        
          
            
            

          

          
            15

            
              

            

          

          
            
            

          

        

         

         

        are and shall
remain the sole property of the Company or the appropriate Associated Company
and shall be surrendered by the Executive to someone duly authorised by the
Company in accordance with Clause 29.

         

        21.
Intellectual Property

         

        
          	
                   
      

                	
                  21.1.

                	
                  For the
      purposes of this clause, “Intellectual
      Property” means patents, trade marks, service marks, registered
      designs (including applications for and rights to apply for any of them),
      unregistered design rights, trade or business names, copyright, database
      rights, Confidential Information or knowhow and any similar rights in any
      country.

                

        

         

        
          	
                   
      

                	
                  21.2.

                	
                  All
      Intellectual Property which the Employee develops or produces in the
      course of his employment duties, or which the Employee derives from any
      material produced by the Employee or any other employee of the Company in
      the course of their employment duties, will be owned by the Company
      absolutely. The Executive agrees, at the Company’s expense, to sign all
      documents and carry out all such acts as will be necessary to achieve
      this. The Executive waives all moral rights in all Intellectual Properly
      which is owned by the Company, or will be owned by the Company, further to
      this clause.

                

        

         

        22.
Power of Attorney

         

        
          	
                   
      

                	
                  22.1

                	
                  The Executive
      irrevocably appoints any Director or the Secretary of the Company to be
      his authorised attorney to do all such things and to execute all such
      documents in his name and on his behalf, which may be necessary or
      desirable for the Company to obtain for itself, or its nominees or any
      Associated Company the full benefit of the provisions in clauses 21 and
      29.

                

        

         

        
          	
                   
      

                	
                  22.2.

                	
                  A letter,
      signed by any Director or Secretary of the Company certifying that
      anything has been done or that any document has been executed in
      accordance with the authority conferred by this clause, shall be
      conclusive evidence that such is the case as far as any third party is
      concerned save that the Executive may not sign such a letter
      himself.

                

        

         

        23.
Grievance Procedure

         

        
          	
                   
      

                	
                  23.1.

                	
                  If the
      Executive has a grievance relating directly to his employment the
      grievance should be raised either verbally or in writing with the Board
      for their consideration.  The Board will then make a finding
      upon such grievance and notify the Executive in writing of its findings
      and of the action to be taken to redress any justifiable
      grievance

                

        

         

         

        
          
            
            

          

          
            16

            
              

            

          

          
            
            

          

        

         

         

        found to exist. If
the Executive considers that the matter remains unresolved he shall be given the
opportunity of addressing this grievance, either verbally or in writing to the
Chairman of the Board whose finding on the matter shall, without prejudice to
any rights the Executive may have arising from such grievance, be final and
binding on the Executive.

         

        24.           Disciplinary
Procedure

         

        
          	
                   
      

                	
                  24.1.

                	
                  Without
      prejudice to the terms of clause 25, the Company may take disciplinary
      action in circumstances of misconduct by the Executive, a breach of his
      obligations under this agreement or unsatisfactory performance by the
      Executive of his duties. Such action may include, but not be limited to,
      suspension with or without pay or, subject to the terms of this Agreement,
      dismissal with or without notice. If the Executive has any grievance
      relating to disciplinary matters it should he raised with the Board in
      accordance with clause 23.

                

        

         

        25.           Summary
Termination

         

        
          	
                   
      

                	
                  25.1.

                	
                  Notwithstanding
      the provisions of Clauses 24 and 26 of this Agreement, the Company shall
      (without prejudice to the other rights and remedies of the Company) be
      entitled to dismiss the Executive without notice or payment in lieu of
      notice if the Executive

                

        

         

        
          	
                   
      

                	
                   
      25.1.1.

                	
                  commits any
      serious or persistent breach of his duties, refuses or neglects to comply
      with any term of this Agreement, refuses or neglects to comply with any
      reasonable order or direction given to him by the Company, or is guilty of
      any gross default or gross incompetence or misconduct in connection with
      or affecting the business of the Company or conducts himself (whether or
      not in connection with his employment) in a manner which, in the
      reasonable opinion of the Company, is prejudicial to the Company or may
      bring him or the Company into disrepute;
or

                

        

         

        
          	
                   
      

                	
                   
      25.1.2.

                	
                  is guilty of
      dishonesty, gross incompetence, wilful neglect of duty, or of
      mismanagement of his financial affairs through failure to observe rules
      and procedures for the operation of bank accounts and/or borrowing;
      or

                

        

         

        
          	
                   
      

                	
                   
      25.1.3.

                	
                  is found
      guilty of any criminal offence (other than a minor offence under the Road
      Traffic Acts which does not result in imprisonment) whether or not in
      connection with employment; or

                

        

         

         

        
          
            
            

          

          
            17

            
              

            

          

          
            
            

          

        

         

         

         

        
          	
                   
      

                	
                   
      25.1.4.

                	
                  is or
      becomes, in the reasonable opinion of the Company, of unsound mind;
      or

                

        

         

        
          	
                   
      

                	
                   
      25.1.5.

                	
                  becomes a
      patient for any purpose of any statute relating to mental health;
      or

                

        

         

        
          	
                   
      

                	
                   
      25.1.6.

                	
                  is declared
      bankrupt or takes advantage of any statute for the time being in force
      offering relief to insolvent debtors;
or

                

        

         

        
          	
                   
      

                	
                   
      25.1.7

                	
                  resigns as an
      officer of the Company or any Associated Company without the agreement of
      the Board; or

                

        

         

        
          	
                   
      

                	
                   
      25.1.8

                	
                  if, as the
      result of any default on the part of the Executive, is prohibited by law
      from acting as an officer of the Company or any Associated
      Company;

                

        

         

        
          	
                   
      

                	
                   
      25.1.9

                	
                  loses any
      Registration or Regulatory Status necessary to fulfil his
      duties.

                

        

         

        
          	
                   
      

                	
                  25.2.

                	
                  Subject to
      clause 2.1 and clause 4.4 the Executive agrees that he shall have no
      remedy against the Company if his employment is terminated by reason of
      the liquidation of the Company for the purposes of amalgamation or
      reconstruction provided that he is offered employment with any concern or
      undertaking resulting from such amalgamation or reconstruction on terms
      and conditions which taken as a whole are not substantially less
      favourable than the terms of this Agreement (and which, for the avoidance
      of doubt, entitle him to be a director and the most senior executive
      officer of such new entity).

                

        

         

        26.
Termination by Notice

         

        
          	
                   
      

                	
                  26.1.

                	
                  The length of
      notice which the Executive is obliged to give the Company when seeking to
      leave employment is twelve months. Notice must be given in
      writing.

                

        

         

        
          	
                   
      

                	
                  26.2.

                	
                  Subject to
      clauses 24 and 25 above, on joining the length of notice which the
      Executive is entitled to receive from the Company to terminate his
      employment is twenty four months, which will reduce by one day for each
      day during the first year of service so that from the first anniversary of
      the Commencement Date the notice period is twelve months (the “Applicable
      Notice Period”). Notice by the Company will be given in
      writing.

                

        

         

        
          	
                   
      

                	
                  26.3.

                	
                  In the event
      that the Company terminates the Executive’s employment (other than by
      reason of the Executive’s personal underperformance or in circumstances in
      which it is entitled to do so pursuant to clause 25.1 above) or if the
      Executive resigns as a consequence of a fundamental breach by the Company
      of the terms of this

                

        

         

         

        
          
            
            

          

          
            18

            
              

            

          

          
            
            

          

        

         

         

        Agreement, the
Company will make a payment in lieu of the Applicable Notice Period. Other than
in circumstances in which clause 26.4 below applies, any payment in lieu of
notice will be calculated as follows: the sum of (i) the Executive’s total
ValueAccount (as notified to him from time to time in accordance with clause 6.1
above); plus (ii) compensation in lieu of bonus awarded pursuant to clause 10.1
above (calculated by reference to the bonus awarded in respect of the financial
year prior to the year in which the Executive’s employment terminates or, in the
event that the employment terminates before 31 December 2009, the Executive’s
last bonus payment from The British Land Company plc) will be divided by 12 and
multiplied by the number of months (including any part months) of the Applicable
Notice Period. No payment will be made in respect of any other
benefit.

         

        
          	
                   
      

                	
                  26.4

                	
                  In the event
      that the Executive’s employment is terminated by reason of his personal
      underperformance of if the Executive resigns (other than as a consequence
      of a fundamental breach by the Company of the terms of this Agreement) the
      Company may elect to make a payment in lieu of notice. The payment in lieu
      of notice will be a sum equal to Salary Element of the Executive’s
      ValueAccount for the Applicable Notice Period. No payment will be made in
      respect of any other benefit.

                

        

         

        
          	
                   
      

                	
                  26.5

                	
                  The
      Executive’s normal retirement age is 65. This Agreement will automatically
      terminate without notice on the Executive reaching the age of
      65.

                

        

         

        
          	
                   
      

                	
                  26.6.

                	
                  For the
      avoidance of doubt, any payment in lieu of notice made pursuant to this
      clause 26 will be subject to such deductions as the Company is required by
      law to make.

                

        

         

        27.
Garden Leave

         

        
          	
                   
      

                	
                  27.1.

                	
                  At any stage
      of the Executive’s notice period referred to in clause 26 above (whether
      notice was given by the Executive or by the Company), the Company may, at
      its absolute discretion and without being required to give any reasons,
      require the Executive to remain away from work on garden leave. The
      Company is under no obligation to provide work tor the Executive in such
      circumstances.

                

        

         

        
          	
                   
      

                	
                  27.2.

                	
                  During any
      period of garden leave;

                

        

         

        
          	
                   
      

                	
                   
      27.2.1.

                	
                  the Executive
      must (save for periods when he is on holiday, whether pursuant to clause
      17.4 or otherwise) be available for work but the Company is not obliged to
      provide him with any work and may require him to perform different duties
      and/or tasks from his normal
duties.

                

        

         

         

        
          
            
            

          

          
            19

            
              

            

          

          
            
            

          

        

         

         

        
          	
                   
      

                	
                   
      27.2.2.

                	
                  the Executive
      will be entitled to receive the salary element of his ValueAccount
      together with any benefits under this Agreement but excluding any
      discretionary or performance bonus which will not accrue while the
      Executive is not carrying out his normal
duties.

                

        

         

        
          	
                   
      

                	
                   
      27.2.3.

                	
                  the Executive
      may not, without the prior written consent of the Company contact or
      attempt to contact any client, customer, agent, professional adviser,
      employee, supplier or broker of the Company, any Associated Company or any
      other company within RBS group.

                

        

         

        
          	
                   
      

                	
                   
      27.2.4.

                	
                  the Executive
      will not be permitted to work for any other organisation or on his own
      behalf without the Company’s poor written
  consent.

                

        

         

        
          	
                   
      

                	
                   
      27.2.5.

                	
                  all other
      terms and conditions of the Executive's employment (both express and
      implied) will remain in full force and effect until the end of the notice
      period.

                

        

         

        
          	
                   
      

                	
                   
      27.2.6

                	
                  the Executive
      continues to owe the Company a duty of fidelity and good
      faith.

                

        

         

        
          	
                   
      

                	
                  27.3

                	
                  Any period of
      garden leave shall count towards any period of restriction set out in
      clause 30.2.

                

        

         

        28.
Events on Termination

         

        
          	
                   
      

                	
                  28.1.

                	
                  Upon
      termination of the Executive’s employment for any reason whatsoever or at
      any other time at the request of the Company, the Executive shall
      immediately:

                

        

         

        
          	
                   
      

                	
                   
      28.1.1.

                	
                  deliver to
      the Company, in accordance with its instructions all items referred to in
      clause 20 and all other property of the Company (including, but not
      limited to, company car, credit cards, equipment, correspondence, data,
      disks, tapes, records, specifications, software, models, notes, reports
      and other documents together with any extracts or summaries, removable
      drives or other computer equipment, keys and security passes) or of any
      Associated Company in his possession or under his
  control.

                

        

         

        
          	
                   
      

                	
                   
      28.1.2.

                	
                  resign,
      without claim for compensation, from all directorships and other offices
      within the Group then held by him and the Executive hereby irrevocably
      authorises the Company to appoint some person in his name and on his
      behalf to sign any documents and do any things necessary to effect such
      resignation should he fail to do
so.

                

        

         

         

        
          
            
            

          

          
            20

            
              

            

          

          
            
            

          

        

         

         

        
          	
                   
      

                	
                   
      28.1.3.

                	
                  transfer
      (without payment) to the Company or, if requested by the Company, to the
      Company’s nominee, any qualifying or nominee shares registered in the name
      of the Executive (either solely or jointly) and held by the Executive as
      nominee, beneficial owner or trustee on behalf of the Company or any
      Associated Company.

                

        

         

        
          	
                   
      

                	
                  28.2.

                	
                  The Executive
      shall, if so required by the Company, confirm in writing that he has
      complied with his obligations under this Clause
  29,

                

        

         

        29.
Restrictions after termination of employment

         

        
          	
                   
      

                	
                  29.1.

                	
                  In this
      clause the following definitions shall
apply;

                

        

         

        
          	
                   
      

                	
                   
      29.1.1.

                	
                  “Termination
      Date” means the date on which the Executive’s employment
      ends.

                

        

         

        
          	
                   
      

                	
                   
      29.1.2.

                	
                  “Restricted
      Period” means the period of 12 months starting with the Termination
      Date (or such period less than 12 months as reduced by any period spent on
      garden leave).

                

        

         

        
          	
                   
      

                	
                   
      29.1.3.

                	
                  “Business”
      means the business carried on at the Termination Date by the Company and
      any Associated Company with which the Executive has been closely
      associated during the 12 months preceding the Termination
      Date,

                

        

         

        
          	
                   
      

                	
                   
      29.1.4.

                	
                  “Key
      Employee” means any employee of the Company or any Associated
      Company at appointed, managerial or senior managerial level with whom the
      Executive has worked during the 12 months preceding the Termination
      Date,

                

        

         

        
          	
                   
      

                	
                   
      29.1.5

                	
                  “Customer”
      means any person, firm, company, organisation who or which was a customer
      of, an investor with or an exclusive supplier of services to, the Group or
      any such entity who was negotiating with or contemplating doing business
      with the Group as at the Termination
Date.

                

        

         

        
          	
                   
      

                	
                  29.2.

                	
                  The Executive
      agrees and undertakes in favour of the Company, as separate and
      independent obligations, that he will not without first obtaining the
      written consent of the Company:-

                

        

         

        
          	
                   
      

                	
                   
      29.2.1.

                	
                  during the
      Restricted Period hold any position as employee, director, officer,
      consultant, and partner, agent or principal in or
  with:-

                

        

         

         

        
          
            
            

          

          
            21

            
              

            

          

          
            
            

          

        

         

         

        
          	
                   
      

                	
                   
      29.2.1.1

                	
                  any business
      which is the same or similar to the Business and which is or is likely to
      be or which becomes (during the Restricted Period) a business in
      competition with the Business,

                

        

         

        
          	
                   
      

                	
                   
      29.2.1.2.

                	
                  any person,
      firm or company which requires or might reasonably be thought by the
      Company to require the Executive to disclose or make use of any of the
      Confidential Information (as defined in clause 19) of the Business in
      order properly to discharge his duties to or to further his interest in
      such person, firm or company.

                

        

         

        
          	
                   
      

                	
                   
      29.2.2.

                	
                  during the
      Restricted Period directly or indirectly and whether on his own or someone
      else’s behalf canvass or solicit the custom of any person, firm or
      company, with whom he has had dealings, responsibility for or material
      knowledge of in the course of his employment and, who has within the 12
      months immediately prior to the Termination Date been a
      Customer;

                

        

         

        
          	
                   
      

                	
                   
      29.2.3.

                	
                  during the
      Restricted Period seek to influence, be engaged in or have any dealings
      with any business, including but not limited to any Customer, where he is
      or may be able to influence any trading relationship which has existed
      during the period of 12 months immediately prior to the Termination Date
      between any business or Customer and the Company or an Associated
      Company;

                

        

         

        
          	
                   
      

                	
                   
      29.2.4.

                	
                  during the
      Restricted Period or at any time beforehand, induce or seek to induce or
      entice or seek to entice away from the Company or any Associated Company,
      any Key Employee.

                

        

         

        
          	
                   
      

                	
                  29.3.

                	
                  Nothing in
      clause 30.2 will prevent the Executive from being involved in any business
      where his duties relate primarily to goods, services and activities not
      sold, provided or carried on by the Company or any Associated
      Company.

                

        

         

        
          	
                   
      

                	
                  29.4.

                	
                  The Executive
      agrees and acknowledges that the restrictions contained in clause 19
      (Confidentiality), clause 20 (Group Property), clause 28 (garden leave),
      clause 29 (Events on Termination) and clause 30 (Restrictions after
      Termination of Employment) are reasonable and necessary to protect the
      business and the Confidential Information of the Company and that the
      benefits he receives under this Agreement are sufficient compensation for
      these restrictions. However, if any such restriction or restrictions, are
      together or individually found to be void or unenforceable but would be
      valid and effective if some part or parts of them
  were

                

        

         

         

        
          
            
            

          

          
            22

            
              

            

          

          
            
            

          

        

         

         

        deleted, the
restriction or restrictions shall apply with any deletions or amendments
necessary to make it or them valid, effective and enforceable.

         

        
          	
                   
      

                	
                  29.5.

                	
                  The Executive
      steel not, following the termination of his employment with the Company,
      represent himself or hold himself out as being in any way connected with
      the business of the Group.

                

        

         

        30.           Declaration
of Secrecy

         

        
          	
                   
      

                	
                  30.1.

                	
                  The Executive
      will be required to sign a Declaration of Secrecy in such form as may be
      required by the Company from time to
time.

                

        

         

        31.           Data
Protection

         

        
          	
                   
      

                	
                  31.1.

                	
                  The Executive
      undertakes to familiarise himself with the Data Protection policy,
      procedures and accountabilities set down by the Company as a result of the
      Data Protection Act 1998. The Executive acknowledges that the Company will
      view any breach of these procedures as a serious matter of
      discipline.

                

        

         

        
          	
                   
      

                	
                  31.2.

                	
                  By signing
      this statement, the Executive acknowledges and agrees that the Company is
      permitted to hold personal information about him as part of its personnel
      and other business records and may use such information in the course of
      the Company’s business. The Executive agrees that the Company may disclose
      such information to third parties in the event that such disclosure is in
      the Company’s view required for the proper conduct of the Company’s
      business or that of any Associated Company. This clause applies to
      information held, used or disclosed in any
  medium.

                

        

         

        
          	
                   
      

                	
                  31.3.

                	
                  The Group
      reserves the right to carry out searches about the Executive through
      credit reference agencies or through our own customer records at any time
      during the employment of the Executive. These searches will provide us
      with information that we may use for the purposes of identifying any
      serious debt or other significant financial difficulties that the
      Executive may have. This will allow us to raise this with the Executive in
      order to detect or eliminate any particular risk of employee fraud or
      theft and thereafter to take any steps that we consider necessary to
      mitigate that risk. We will only retain the information about the
      Executive which we obtain from these searches for as long as we need it
      for the purposes set out above (subject to any legal (including any
      regulatory) obligation which requires us to retain that information for a
      longer period). The credit reference agency will record details of the
      search but these will not be available for use by lenders to assess the
      ability of the Executive to obtain credit. The Executive has the right of
      access to his personal records held by credit reference agencies. We will
      supply their names and

                

        

         

         

        
          
            
            

          

          
            23

            
              

            

          

          
            
            

          

        

         

         

        addresses upon
request, to help the Executive to exercise his right of access to those
records.

         

        
          	
                   
      

                	
                  31.4.

                	
                  For the
      reasons referred to above, it is important that the Executive manages his
      personal finances responsibly. The Group requires that the Executive draws
      to the attention of his manager any serious debt or significant financial
      difficulties that he may have including those which result in court action
      being taken against him.

                

        

         

        
          	
                   
      

                	
                  31.5.

                	
                  In signing
      this contract the Executive hereby gives permission for the Group or its
      subsidiary companies and/or their appointed agents to carry out such
      credit reference searches in relation to him, including searches of
      customer credit records, during the term of this contract, as it considers
      necessary from time to time for the purposes set out in this
      clause.

                

        

         

        32.           Notices

         

        
          	
                   
      

                	
                  32.1

                	
                  Any notice or
      other communication may be given by either party by personal delivery or
      prepaid first class mail to the other party at (in the case of the
      Company) its registered office for the time being marked “For the
      Attention of the Company Secretary” or (in the case of the Executive) his
      last known usual address and any such notice shall be deemed to have been
      served (in the case of first class mail) at the expiry of 48 hours after
      the same was posted or (in the case of personal delivery) at the time of
      such delivery.

                

        

         

        33.           Continuing
Provisions

         

        
          	
                   
      

                	
                  33.1.

                	
                  The
      termination of this Agreement shall rot affect the provisions of clause 19
      (Confidentiality), clause 20 (Group Property) clause 28 (garden leave),
      clause 29 (Events on Termination) and clause 30 (Restrictions after
      Termination of Employment).

                

        

         

        34.           Whole
Agreement and Severability

         

        
          	
                   
      

                	
                  34.1.

                	
                  These terms
      and conditions constitute a written statement of the terms of the
      Executive’s employment in accordance with the provisions of the Employment
      Rights Act 1996. This Agreement and the terms of the letter to be sent to
      the Executive, as and when agreed, setting out details of certain stock
      awards to be made to the Executive on joining the Company supersede any
      previous agreement, whether oral or in writing, between the Executive and
      the Company in relation to the matters dealt with
  therein.

                

        

         

         

        
          
            
            

          

          
            24

            
              

            

          

          
            
            

          

        

         

         

        
          	
                   
      

                	
                  34.2.

                	
                  In addition
      to the terms of this Agreement, the Executive is also required to comply
      with all other applicable statutory, divisional or company rules, as
      amended from time to time.

                

        

         

        
          	
                   
      

                	
                  34.3.

                	
                  The various
      provisions and sub-provisions of this Agreement and the Schedule are
      severable. If any provision or sub-provisions (or identifiable part
      thereof) is held to be invalid or unenforceable, then such invalidity or
      unenforceability shall not affect the remaining provisions (or
      identifiable parts thereof) in this Agreement or the
    Schedule.

                

        

         

        35.           Collective
Agreements

         

        
          	
                   
      

                	
                  35.1.

                	
                  There are no
      collective agreements applicable to the Executive’s
      employment.

                

        

         

        36.           Governing
Law

         

        
          	
                   
      

                	
                  36.1.

                	
                  The
      interpretation and enforcement of this Agreement shall be governed by and
      construed in all respects in accordance with the Law of England and the
      parties submit to the non-exclusive jurisdiction of the English
      courts.

                

        

         

         

         

        
          	
                  Signed for
      and on behalf of

                	 
    
	
                  THE ROYAL
      BANK OF SCOTLAND plc

                	
                  /s/ Neil
      Roden

                
	
                  on 4th November
      2008

                	
                  Neil
      Roden

                
	
                  by Neil
      Roden, Group Director, Human Resources

                	 
    

        

         

         

        
          	
                  Signed
      by

                	 
    
	
                  on

                	
                  /s/ Stephen
      Hester

                
	
                  before the
      undernoted witness:-

                	
                  Stephen
      Hester

                

        

         

         

        
          	
                  /s/ Guy
      Robert Whitaker

                	
                  (Witness)

                

        

        
          	
                  Full
      Name

                	
                  GUY ROBERT
      WHITAKER

                
	
                  Address

                	
                   

                
	
                  Occupation

                	
                  BANKER

                

        

         

         

      

    

     25

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00157-of-00352.parquet"}]]