Document:

EXHIBIT 4.6

SERVICE AGREEMENT

between

THE ROYAL BANK OF SCOTLAND plc

and

GUY WHITTAKER

19 December
2005

The Royal Bank of Scotland plc

36 St Andrew Square

Edinburgh

EH2 2YB 

	 

        	 

        	 

        	 INDEX
        
	
Clause
        	 

        	
Page
        	 

        
	 	 	 	 
	
1	
.	
4	
Definitions, Interpretation and Construction

Main Terms and Conditions

	
2	 
        	
7	
Position
	
3	 
        	
7	
Commencement, Duration & Notice
	
4	 
        	
7	
Continuous Employment
	
5	 
        	
7	
Duties
	
6	 
        	
9	
Place of Employment
	
7	 
        	
9	
Hours of Work
	
8	 
        	
9	
Other Interests

Main Terms & Conditions - Benefits & Reward

	
9	 
        	
10	
RBSelect
        
	
10	 
        	
11	
Bonuses
	
11	 
        	
12	
Profit Sharing
	
12	 
        	
12	
Executive Share Option Scheme
	
13	 
        	
12	
Pension Scheme and Death-in-Service
	
14	 
        	
13	
Holidays
	
15	 
        	
14	
House Purchase and Staff Borrowing

Supplementary Information

	
16	 
        	
15	
Expenses
	
17	 
        	
15	
Dealings in Investments
	
18	 
        	
15	
Sickness
	
19	 
        	
18	
Confidentiality
	 20.	 	19	  Property in Confidential
               Material
	 21.	 	19	  Intellectual Property -
               Patents & Trademarks
	 	 	 	 

	
22.	 	20	
 Redundancy and Early Retirement
	
23.	 	20	
 Termination
	
24.	 	22	
 Restrictive Covenant
	
25.	 	25	
 Deductions
	
26.	 	25	
 Power of Attorney
	
27.	 	26	
 Grievance Procedure
	
28.	 	26	
 Disciplinary Procedures
	
29.	 	26	
 Notices
	 

	
Other
        	 
        	 

        	 

        
	
30	 
        	
27	
Change of Control
	
31	 
        	
28	
Declaration of Secrecy
	
32	 
        	
28	
Continuing Provisions
	
33	 
        	
28	
Whole Agreement and Severability
	
34	 
        	
29	
Collective Agreements
	
35	 
        	
29	
Governing Law

Schedule 

Executive Severance Arrangements 

3

SERVICE AGREEMENT

Between

THE ROYAL BANK OF SCOTLAND plc a company incorporated in Scotland (No 90312) and having its registered office at 36 St Andrew Square, Edinburgh EH2 2YB
(hereinafter called “the Company”) of the one part 

and

Guy Whittaker, residing at

(hereinafter called “the Executive”) of the other part

THE AGREEMENT BETWEEN THE PARTIES IS AS FOLLOWS:

	
1.	
DEFINITIONS, INTERPRETATION AND CONSTRUCTION   
	 
	 	
(a)	
In this Agreement, unless otherwise stated, the following definitions apply:
	 
	 	 	
(i)	
“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 the Company or (ii) a holding company of the Company or
any subsidiary of any such holding company;
	 
	 	 	
(ii)	
“the Board” means the Board of Directors of the Company or an authorised committee of the Board of Directors of the Company;
	 
	 	 	
(iii)	
“the Main Board” means the Board of Directors of the Company;
	 

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	 	 	 (iv)	 “the Group” means
                    the Company and its Associated Companies.
	 
	 	 	 (v)	 “the Remuneration
                    Committee” means the Remuneration Committee of the Board
                    or any committee empowered by the Board in substitution for
                    the Remuneration Committee;
	 
	 	 	 (vi)	 “RBSG” means
                    The Royal Bank of Scotland Group plc having its registered
                    office at 36 St Andrew Square, Edinburgh EH2 2YB;
	 	 	 	 
	 	 	
(vii)	
the expressions “subsidiary” and “holding company” have the same meanings in this Agreement as they have in Section 736 of Companies Act 1985; and
	 
	 	 	
(viii)	
the expressions “associated company”, “associate” and “control” have the same meanings in this Agreement as they respectively bear in Sections 416, 417 and 840 of the Income and
Corporation Taxes Act 1988.
	 
	 	
(b)	
In this Agreement:
	 
	 	 	
(i)	
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;
	 
	 	 	
(ii)	
the masculine gender shall include the feminine gender and singular number shall include the plural and vice versa;
	 
	 	 	
(iii)	
unless otherwise stated, references
to clauses and sub-clauses are references to clauses and sub-clauses of this
Agreement;

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(iv)	
the headings to clauses are for convenience only and shall not affect the construction or interpretation of this Agreement; and
	 
	 	 	
(v)	
the provisions of the Schedule and any additional terms entered into in writing by or on behalf of the parties shall be read and construed as part of this Agreement and shall be enforceable
accordingly.
	 

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2.	
POSITION       
	 
	 	
The Executive will be employed as Group Finance Director and agrees to accept the position on the terms and conditions set out in this Agreement. The Company shall be entitled from time to time to appoint any
other person or persons to act jointly with the Executive.
	 
	
3.	
COMMENCEMENT, DURATION & NOTICES   
	 
	 	
(a)	
This Agreement and the Executive’s employment commences on a date to be agreed and will continue unless terminated, subject to the provisions of Clauses 22 and 23, by the Company giving to the Executive
twelve months’ prior written notice of termination or by the Executive giving to the Company twelve months’ prior written notice of termination.
	 
	 	
(b)	
This Agreement shall automatically terminate without notice on the Executive reaching the retirement age of sixty (60) years of age subject always to any UK legislation relating to retirement in force at that
time.
	 
	
4.	
CONTINUOUS EMPLOYMENT  
	 
	 	
The Executive’s period of continuous employment with the Company commenced on, date to be agreed.
	 
	
5.	
DUTIES 
	 
	 	
(a)	
The Executive shall, in his role as Group Finance Director, devote the whole of his time, attention and skill during his hours of work as specified in Clause 7 to the business of the Company and shall faithfully,
efficiently, competently and diligently perform such duties and exercise such powers, authorities and discretions which may be assigned to or vested in him by the Board and shall obey all reasonable and lawful directions given by or under the
authority of the Board and use his best endeavours to promote and extend the business of the Company and to protect and further its interests and reputation.
	 

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	 	 (b)	 The Executive may be
                    required to perform services not only for the Company but
                    also for the benefit of any Associated Company and to hold
                    such offices in the Company or any Associated Company as
                    the Board may reasonably require, but without further remuneration
                    (except as otherwise agreed in writing between the parties).
                    The Executive may, without prejudice to his rights, be required
                    to be seconded to the employment of any Associated Company.
                    However, the Executive will not be required to perform such
                    services which he cannot reasonably be expected to perform
                    or which are inconsistent with his role as Group Finance
                    Director.
	 	 	 

	 	
(c)	
The duties of the Executive as an officer of the Company or of any Associated Company shall be subject to the Articles of Association of the relevant company and shall be separate from and in addition to his
duties under this Agreement.
	 
	 	
(d)	
The Executive will report to Fred Goodwin, Group Chief Executive or to such other person as the Board may specify from time to time.
	 
	 	
(e)	
Once notice to terminate the Executive’s employment has been given by the Company or by the Executive under Clause 3, the Company may at its absolute discretion require the Executive not to attend work and/or
not to undertake any of the Executive’s duties during any period of notice, provided that the Company shall continue to pay the Executive his salary and provide his contractual benefits under this Agreement.
	 
	 	
(f)	
Further, at any time during such period of notice referred to in Clause 5(e) above the Executive shall at the request of the Board immediately resign without claim for compensation from any office as a director of
the Company or Associated Company and from such office held by the Executive in the Company or Associated Company.
	 
	 	 	 
	 	(g)	Any period of notice during which, pursuant to Clause 5(e), the Executive shall be required not to attend at work and/or not to undertake any of the Executive’s duties shall count towards any period of restriction set out in Clauses 24(b) (i), (ii) (iii) or (iv).
	 	 	 

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	6.	PLACE
                         OF EMPLOYMENT
	 	 	 
	 	The
                    Executive will normally work between London and Edinburgh,
                    but may be required to travel and reside on a temporary basis
                    elsewhere in the United Kingdom or abroad in the performance
                    of his duties. The Executive shall not be required to reside
                    permanently outside the United Kingdom, without his consent,
                    but can be required to work at any place within reasonable
                    travelling distance of either the Executive’s home or
                    the Executive’s normal place of work.
	 	 	 
	
7.	
HOURS OF WORK  
	 
	 	
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. The Executive agrees that the maximum working week set out in Regulation 4 of the Working Time Regulations 1998 will not apply. The Executive agrees to give the Company three months’
written notice should the Executive wish Regulation 4 of the Working Time Regulations 1998 to apply.
	 
	
8.	
OTHER INTERESTS        
	 
	 	
The Executive shall not, during the term of this Agreement (except with the Board’s prior consent in writing) be directly or indirectly engaged or concerned in the conduct of any business other than the
business of the Group or be directly or indirectly interested in any other business 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.
	 

9

	 9.	 RBSelect 
	 
	 	 (a)	 The Company operates
                    a flexible compensation and benefits package called RBSelect.
                    The Salary Element forms part of the Executive’s ValueAccount
                    under RBSelect and
                    is used to calculate certain benefits such as pension, Profit
                    Share and any discretionary bonus payment or any other payment
                    directly linked to salary. The Salary Element would also
                    be used to calculate severance payments including redundancy.
	 
	 	 	 As of the date of this
                    Agreement, the Executive’s ValueAccount is £726,019
                    which includes the Salary Element of £700,000 per annum.
                    Full details of RBSelect are
                    contained in the Company’s guidebook in relation to
                    the scheme.
	 
	 	 (b)	 The Executive’s
                    ValueAccount less the cost of any benefits elected through
                    RBSelect will
                    be paid monthly on 18th day of each month (or on the last
                    preceding working day where 18th day falls on a weekend)
                    and shall be at the absolute discretion of the Company subject
                    to review 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.
	 
	 	
(c)	
All remuneration payable in cash to the Executive under this Agreement shall be credited to a bank account to be maintained by the Executive with the Company or with another company in the Group.
	 
	 	
(d)	
Stock and Option Buy Out
	 
	 	 	
In lieu of the Executive’s CitiGroup restricted stock and unvested options the Executive will receive the following awards subject to the production of suitable supporting documentation, e.g. stock and option
cancellation certificates:
	 
	 	
(e)	
Unrestricted Stock
	 

 

10

	 	 	
Ordinary shares in the Royal Bank of Scotland Group (RBSG) worth £1,000,000. This award will be subject to tax and national insurance at the time of the award and will be granted upon the Executive joining
RBSG. Should the Executive join during a restricted period the shares will be issued at the earliest possible date thereafter.
	 
	 	
(f)	
Restricted Stock
	 
	 	 	
RBSG Restricted stock worth £1,450,000. This award will be granted upon the Executive joining RBSG. Should the Executive join during a restricted period the shares will be issued at the earliest possible date
thereafter. No further performance conditions will apply and the timing and vesting will be as shown below, subject to the Executive’s continued employment with the Group at the time of vesting. If the Executive is serving notice at the vesting
date the awards will not vest. The awards will be subject to tax and National Insurance at time of vesting.
	 	 	 
	 	 	1st tranch (value at grant
          of £850,000) to vest in February 2007
	 	 	 
	 	 	2nd tranch (value at grant
          of £350,000) to vest in February 2008
	 	 	 
	 	 	3rd tranch (value at grant
          (£250,000) to vest in February 2009 

	 	 
	
10.	
BONUSES        
	 
	 	
(a)	
Subject to Clause 10 (b) below, the Executive may, at the absolute discretion of the Remuneration Committee, be entitled to participate in any Executive Bonus Scheme as approved by the Remuneration
Committee.
	 

	 	
(b)	
If the Executive is serving out notice whether given by the Executive or the Company, or is dismissed, the Executive will not be entitled to receive a bonus which would or may otherwise be due to the Executive
whether paid in cash or in shares as set out in Clause 10 (a) above save in the case of the Executive serving out notice of redundancy given by the Company, in which case the award of any bonus shall be at the absolute discretion of the Remuneration
Committee.

11

	 11.	 PROFIT
                         SHARING 
	 
	 	 The Executive
                    shall be eligible to participate in the RBSG’s Profit
                    Sharing Scheme, the terms and conditions of which will be
                    made available to the Executive. Any entitlement is calculated
                    by reference to the Executive’s Salary Element.
	 
	 12.	 EXECUTIVE
                         SHARE OPTION SCHEME 
	 
	 	 The Executive
                    shall, at the absolute discretion of the Remuneration Committee,
                    be eligible to participate in the Company’s Executive
                    Share Option Scheme.
	 
	 13.	 PENSION
                         SCHEME AND DEATH-IN-SERVICE 
	 
	 	 (a)	 Subject to the appropriate
                    Inland Revenue approval and to the Rules of The Royal Bank
                    of Scotland Staff Pension Scheme (the “Pension Scheme”)
                    in force, from time to time the Executive shall automatically
                    become a non-contributory member of the “Pension Scheme” unless
                    or until the Executive provides to the Company and the Trustees
                    written confirmation of his intention to opt out.
	 
	 	 (b)	 A Contracting Out Certificate
                    issued in terms of Part III of the Pension Schemes Act 1993
                    is in force in relation to the Executive’s employment.
	 
	 	 (c)	 Should the Executive
                    wish to transfer any pension rights already accrued in other
                    schemes to the Pension Scheme, the - Pension Scheme is fully
                    approved by the Inland Revenue and has power to accept transfer
                    payments.
	 

12

        	 	 (d)	 The Company operates
                    a voluntary contributions plan under which the Executive
                    can augment his pension within certain limits and further
                    details will be provided by the Company upon request
	 
	 	 (e)	 Whilst the Executive
                    is a member of the Pension Scheme and receives a basic salary
                    in excess of the Pension Cap, the Bank will make contributions
              to The Royal Bank of Scotland Group plc Funded Unapproved Retirement
              Benefits Scheme the “FURBS” for the Executive. For the
              tax year 2005/2006 the total contribution (including tax and National
              Insurance) will be 30% of the Executive’s Relevant Salary
              (as defined in the FURBS rules). At the current rates of tax and
              National Insurance, this would provide a contribution to the FURBS
              amount of approximately 16%. The Company reserves the right to
              vary the rate of the FURBS contribution from time to time. The
              contributions will be paid into an individual FURBS trust in the
              Executive’s name and the Executive will be able to choose
              from a range of investment options within his own FURBS trust.
              Under UK pensions legislation the Executive’s pensionable
              salary is restricted to the general earnings capped figure – this
              is the “Pensions Cap”. 
	 
	 	
(f)	
To the extent that any salary related lump-sum payment made by the Pension Scheme in respect of the death of the Executive while in service before the Normal Pension Date as defined in the Pension Scheme is less
than four times the Executive’s Salary Element by reason only of Section 590C of the Income and Corporation Taxes Act 1988 (which deals with the earnings cap), the Company shall ensure that a payment is made equal to the amount of the
difference. This benefit will be subject to any restrictions imposed by an insurance company with which it is insured.
	 
	
14.	
HOLIDAYS       
	 
	 	
(a)	
The Company’s holiday year runs
from 1 January to 31 December. The Executive will be entitled to 30 working days
holiday to be taken at such time or times as the Executive shall request and
agree with the Company plus a further 8 days to be taken at times to be determined
by 

13

	 	 	the Company (which would
                    normally be Bank Holidays). The Company reserves the right
          to request the Executive to work on Bank Holidays.
	 	 	 
	 	 (b)	 In the event that the
                    Executive is not employed throughout a full holiday year,
                    the Executive’s future or accrued holiday entitlement
                    shall be reduced pro rata according to each completed month
                    of employment during that holiday year.
	 
	 	 (c)	 There shall, subject
                    to the following provisions of this Clause 14, be no right
                    to payment in lieu of unused holiday entitlement. The Executive
                    shall be entitled to be paid in respect of any holiday entitlement
                    accrued due but not taken at the date of termination of
	 
	 	 
	this Agreement provided that such termination has not occurred under the provisions of Clause 23(a).
	 
	 	
(e)	
During any period of notice the Company shall be entitled, at its own discretion, to require the Executive to take accrued and outstanding holiday entitlement or to make payment in lieu of such outstanding
entitlement.
	 
	 	
(f)	
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. Any sums due to the Company may be deducted by the
Company from any monies owed to the Executive.
	 
	
15.	
HOUSE PURCHASE AND STAFF BORROWING     
	 
	 	
(a)	
The Executive shall be entitled to participate in the Company’s Staff House Purchase Scheme. The details will be made available by the Company,
	 
	 	
(b)	
Concessionary interest rates will be available to the Executive for personal loans, subject to the terms for such staff lending in force from time to time.
	 

14

	
16.	
EXPENSES       
	 
	 	
The Executive shall, subject to the
production of the relative receipts or other satisfactory evidence and compliance
with the Company’s Travel & Expenses policy in force from time to time,
be reimbursed  for all out-of-pocket expenses incurred in the performance of
his duties, including expenses of entertainment, subsistence and travelling.
In order to facilitate payment of expenses, the Executive will be supplied with
a credit card for use solely  in this connection.
	 
	
17.	
DEALING IN INVESTMENTS 
	 
	 	
(a)	
The Executive will be subject to the Company’s Staff Dealing Rules which require prior permission to be obtained before dealing in most types of securities transactions and for requests and authorisations to
deal to be confirmed in writing on the appropriate Company form. The Company also operates a closed period during which the Executive will not be permitted deal in RBSG shares. Failure to abide by these rules will constitute serious misconduct for the purposes of any disciplinary action.
	 

	 	
(b)	
Details of the Company’s Staff Dealing Rules are contained in the Conduct of Accounts Manual.
	 
	
18.	
SICKNESS       
	 
	 	
(a)	
There is no contractual right to payment in respect of any periods of absence due to sickness or incapacity and any such payments will be made at the Company’s sole discretion.
	 
	 	
(b)	
If the Executive is absent from work due to illness, injury, or accident the Company may, at its sole discretion, continue to pay Company sick pay at 100% of the Executive’s ValueAccount rate for the first
182 days of incapacity. Thereafter, an income protection benefit equal to 55% of his ValueAccount rate (inclusive of any state sickness benefit payable) may be paid for up to a further five years subject to the qualifying criteria set out in Clauses
18 (a) - 18 (e) and 18 (h) being met;
	 

15

	 	 	 (i)	 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;
	 
	 	 	 (ii)	 during any extended
                    absence period beyond the initial 182 days absence and up
                    to five years, the overall level of benefit will increase
                    each January in line with any increase applied to payments
                    under the Company’s pension fund;
	 
	 	 	 (iii)	 during the entire extended
                    absence period, the Executive will continue to receive additional
                    Company benefits, including non-contributory pension scheme
                    and RBSG’s Profit Sharing Scheme and will remain eligible
                    to participate in the RBSG Sharesave Scheme. With the exception
                    of the Company pension, all salary-related benefits will
                    be linked to the current level of income protection benefit
                    as defined in Clause 18 (b). Pension benefits will be based
                    on the Executive’s Salary Element before his sickness
                    absence and will be increased each year in line with any
                    increase applied to payments under the Company’s pension
                    fund;
	 
	 	 	 (iv)	 at the end of the five
                    year extended absence period, if the Executive is unable
                    to return to work he will be considered for ill-health retirement.
                    Ill-health retirement will only be considered where the Executive
                    satisfies the relevant ill- health retirement criteria; and
	 	 	 
        	 
	 	 	
(v)	
all periods of long-term sickness absence will be regarded as continuous service for the purpose of pension and other benefit calculations.
	 
	 	
(c)	
The Executive will self-certify his incapacity for absences of up to seven consecutive days (including weekends and statutory holidays).
	 

16

	 	
(d)	
A doctor’s certificate must be submitted to the Company for absences of more than seven consecutive days. Thereafter, the Executive must submit a new doctor’s certificate on a weekly basis to cover
further periods of absence.
	 
	 	
(e)	
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.

	 	 	 
	For the purposes of assessing
               the entitlement of the Executive to Statutory Sick Pay, the qualifying
          days will be Monday to Friday inclusive. 
	 	 	 
	 	
(f)	
If the Executive is incapable of performing his duties because of injuries sustained wholly 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 (“the third party”) or if the Executive is covered by any health insurance scheme (“the insurance policy”) all payments made to the Executive under Clause 18(b) above shall (to the extent that
compensation for loss of earnings is recoverable from the third party or under the insurance policy), constitute loans by the Company (or 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.
	 
	 	
(g)	
Without prejudice to the provisions of the immediately preceding Clause 18(f), 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 the insurance policy, the Company shall be entitled to require the Executive either:
	 

	 	 
        	(i)	(subject to the Company agreeing to indemnify the Executive against all reasonable legal expenses) to take legal proceedings to enforce his rights against any third party who has committed such an actionable negligence against him and/or to pursue a claim under
the insurance policy; or
	 

17

	 	 	 (ii)	 to assign his right
                    to do so to the Company or any Associated Company in an attempt
                    to recover from such third party and/or the relevant insurance
                    company compensation for any loss of earnings sustained by
                    the Executive.
	 
	 	
(h)	
The Executive shall (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        
	 
	 	
(a)	
The Executive shall not (except as required in the proper performance of his duties or with proper authority) at any time directly or indirectly divulge or communicate to any person or make use of any of any
information obtained or acquired by the Executive relating to the Group, its customers, its business and policy and its management which is, or is deemed by the Company to be confidential, commercially sensitive or price sensitive howsoever obtained
or acquired and in whatever form including information which belongs to or pertains to customers or customers’ businesses (“the Confidential Information”). This restriction shall continue to apply after the termination of the
Executive’s employment without limit in time but shall cease to apply to
information which shall come into the public domain (other than in breach of
this Clause 19). The Executive shall use reasonable endeavours to prevent the
publication or disclosure of any Confidential Information particular but not
limited to, actual or proposed transactions, or the partnerships, companies,
bodies and corporations having accounts with or in any way connected or in discussion
with the Group and all other matters relating to such customers and connections.
Any breach by the Executive of the provisions of this Clause 19 will be 
	 

18

	 	 	regarded by the Company as
          a disciplinary matter liable to result in dismissal without notice.
	 	 	 
	 	
(b)	
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 his
employment.
	 
	
20.	
PROPERTY IN CONFIDENTIAL MATERIAL      
	 
	 	
All reports, files, notes, accounts, documents or other material and all notes and memoranda of any Confidential Information (including all copies thereof) made or received by the Executive during the course of
his employment (whether heretofore or hereafter) are and shall remain the property of the Company or the appropriate Associated Company and shall be surrendered by the Executive to someone duly authorised by the Company upon the termination of this
Agreement or at the request of the Company at any time during the course of his employment.
	 
	
21.	
INTELLECTUAL PROPERTY - PATENTS & TRADEMARKS       
	 
	 	
The business of the Group comprises inter alia the creation, development and exploitation of innovative technology, techniques, markets and operations and as part of his duties the Executive may be involved in the
furtherance of these interests. Each and every creation, development or improvement effected or conceived by the Executive at any time whether before or after the date hereof, but after he became an employee of the Company, whether capable of being
patented or registered or not (and whether or not effected or conceived in the course of his employment hereunder) in connection with or in any way affecting or relating to the business of the Group or capable of being used or adapted for use
therein or in connection therewith shall forthwith be disclosed to the Company and shall belong to and be the absolute property of the Company or such Associated Company as the Company may nominate for the purpose. If and whenever required so to do
(whether during or after the termination of his employment with the Company) the Executive shall, at the Company’s
expense, apply or join in applying for letters patent or other equivalent protection
in the United Kingdom or any other part of the world for any such material. The 
	 	 

19

	 	 	Executive will execute
               all instruments and things necessary for vesting the patent letters
               or other equivalent protection when obtained. (Provided that nothing
               shall prejudice the Executive’s rights under Sections 40
          to 43 Patents Act 1977.)
	 	 	 
	
22.	
REDUNDANCY AND EARLY RETIREMENT        
	 
	 	The provisions set out in the Schedule to this Agreement on Executive Severence Arrangements shall apply to this Agreement and the Executive is one of the Executives for the purposes of the Schedule.
	 

	
23.	
TERMINATION    
	 
	 	
(a)	
Notwithstanding the provisions of Clause 3, the Company has the right to terminate the Executive’s employment by notice in writing having immediate effect in any of the following events:
	 
	 	 	
(i)	
if the Executive commits any serious breach (whether by one or several acts or omissions) or repeats or continues after written warning any material breach of his obligations, or is, in the opinion of the Board,
guilty of conduct tending to bring himself or the Company or any Associated Company into disrepute;
	 
	 	 	
(ii)	
if the Executive is guilty of dishonesty, gross incompetence, wilful neglect of duty, or of mismanagement of his financial affairs through failure to observe the Company’s rules and procedures for the
operation of bank accounts and/or borrowing;
	 
	 	 	
(iii)	
if the Executive is found guilty of any criminal offence (other than a minor offence under the Road Traffic Acts);
	 
	 	 	
(iv)	
if the Executive is or becomes of unsound mind or lunatic or a patient for the purpose of the Mental Health Act 1983;
	 

20

	 	 	
(v)	
if the Executive commits any act of bankruptcy or takes advantage of any statute for the time being in force offering relief to insolvent debtors;
	 
	 	 	
(vi)	
if the Executive resigns as an officer of the Company or any Associated Company without the agreement of the Board; or
	 
	 	 	
(vii)	
if, as the result of any default on the part of the Executive, he is prohibited by law from acting as an officer of the Company or any Associated Company.
	 
	 	
The Company shall be entitled to suspend the Executive with pay and benefits to enable it to carry out an investigation into any matter referred to in Clauses 23 (a) (i) to (vii) above. The period of such
suspension will not normally exceed twelve weeks but may be more if circumstances dictate.
	 

	 	(b)	
The Executive’s performance and
discharge of his duties and responsibilities hereunder shall be the subject of
an annual appraisal process, the object of which is to assess his 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  or such other
person or body as the Board shall nominate, the Executive fails, to achieve performance
standards as set out in the annual appraisal process or such other interim appraisal
process , the Company shall be entitled to terminate the  Executive’s employment
in accordance with the provisions of Clause 3 (a).
	 	 	 
	 	(c)	The parties agree that the
               termination of this Agreement in accordance with this Clause 23
               shall be deemed to be for a substantial reason of a kind such
               as to justify the Executive’s dismissal and from holding
               the position which the Executive then holds and that it would
               be fair and reasonable for the Company to give notice of termination
          in the circumstances provided for by this Clause.

21

	 	
(d)	
Without prejudice to the Executive’s rights as an employee, he shall (at any time after notice has been served by either party to terminate his employment) immediately resign upon the Board’s request
without claim for compensation from any office held by him in the Company or any Associated Company and transfer (without payment) to the Company or its nominee any qualifying or nominee shares registered in the name of the Executive in the company
or any Associated Company.
	 
	 	
(e)	
Upon the termination of his employment for any reason whatsoever the Executive shall immediately deliver to the Company in accordance with its instructions all 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 and the Executive shall, if so required by the Company, confirm in writing his compliance with his obligations under this Clause 23 (e).
	 
	 	
(f)	
The Executive shall have no claim
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.
	 	 	 
	24.	RESTRICTIVE COVENANT 
	 	 	 

	 	 (a)	 In this Clause
                    the expression “Termination Date” means the date
                    on which this Agreement shall determine irrespective of the
                    cause or manner (the event of the Executive’s death
                    only excluded).
	 
	 	 (b)	 Considering
                    that the Executive has obtained and is likely to obtain in
                    the course of his employment knowledge of trade secrets,
                    know-how, business information or other confidential information
                    relating to the 

22

	 	 	Company
                    or any Associated Company and also to their customers, the
                    Executive agrees that he will be bound by the following restrictions
                    in order to safeguard such trade secrets, know-how, business
                    information or other confidential information and the goodwill
                    of the Company or any such Associated Company, in addition
          to the restrictions contained in Clauses 19, 20 and 21.
	 	 	 	 
	 	 	
(i) 	he will not, either in contemplation of the termination of his employment or during the period of 12 months from the Termination Date, canvass or solicit or endeavour to canvass or solicit away from the Company or any Associated Company in the United Kingdom, the custom or business of any person, firm or company carrying on business in the United Kingdom who is or was at any time during the twelve months prior to the Termination Date a client or customer of the Company or of any Associated Company with whom he had business dealings during the course of his employment in that twelve month period or in relation to whose requirements he had knowledge of a material kind; 
	 
	 	 	
(ii) 	he will
          not, during the period of 6 months from the Termination Date, carry
          on, set up, engage in or be directly or indirectly interested or concerned
          in any business or activity anywhere in the United Kingdom carried
          on or about to be carried on by any person, firm or company in competition
          with any business or activity in which the Executive was actively involved
          during the course of twelve months immediately prior to the Termination
          Date. This is providing that nothing contained in this sub-Clause 24(b)(ii)
          shall prohibit the carrying on of, or being engaged, concerned or interested
          in, any business not in direct or indirect competition with the business
          of the Company or any Associated Company; 
	 	 	 	 
	 	 	(iii)	he will not either in contemplation
               of the termination of his employment or during the period of 6
               months from the Termination Date entice, solicit or endeavour
          to entice or 

23

	 	 	 
	
solicit away any person who is employed
or engaged by the Company or any Associated Company either as a director or in
a managerial or executive capacity or who is in possession of confidential information
belonging to the Company and/or any Associated Company and with whom the Executive
had business dealings during the course of his employment in the twelve month
period prior to the Termination Date;
	 
	 	 	
(iv)	
he will not either in contemplation of the termination of his employment hereunder or during the period of six months from the Termination Date, interfere or seek to interfere with the supply to the Company or any
Associated Company of any goods or services by any supplier who, during the twelve months preceding the Termination Date, supplied goods or services to the Company or such Associated Company, being a supplier of goods or services with whom during
the twelve month period immediately prior to the Termination Date he had dealings of a material kind in his capacity as an employee or director of the Company, nor will he interfere or seek to interfere with the continuance of such supply or the
terms on which such supply has during such period as stated above been made.
	 
	 	
(c)	
The restrictions set out in Clauses 24 (b) (i), (ii), (iii) and (iv) above shall (without prejudice to their generality) apply to any action taken by the Executive, whether as agent, representative, principal,
employee or consultant or as a director or other officer of any company or by any associated company controlled by him or any associate of his.
	 
	 	
(d)	
The Executive will, in the event of receiving an offer of employment either during the continuance of this Agreement or during the continuance in force of any of the restrictions set out in this Clause 24,
immediately provide to the offeror a copy of this Clause 24 and will inform the Company of the identify of the offeror and the terms of the offer.
	 

24

	 	
(e)	
While the restrictions and Clause
24 of this Agreement are considered by the Executive to be reasonable and necessary
in all the circumstances for the protection of the Group’s
legitimate interests, it is recognised by the parties that restrictions of the
nature in question may fail for technical reasons unforeseen. Accordingly it
is agreed that if any of such restrictions shall be adjudged to be void as going
beyond what is reasonable in all the circumstances for the protection of the
interests of the Group but would be valid if part of the wording were deleted
and/or the periods (if any) reduced and/or area dealt with reduced in scope the
restrictions shall apply with such modifications as may be necessary to make
them valid and effective.
	 	 	 

	
25.	
DEDUCTIONS     
	 
	 	
The Company can at any time during the Executive’s employment or upon termination, be entitled to deduct from his remuneration any monies due by him to the Company including any outstanding loans, advances,
relocation expenses, the cost of repairing any damage or loss to the Company’s property caused by him (and of receiving the same), salary paid in respect of excess holidays, and any other monies owed by him to the Company or any Associated
Company PROVIDED that the Company’s rights under this Clause 25 will not apply to any monies or benefits which have accrued to the Executive under any pension scheme.
	 
	
26.	
POWER OF ATTORNEY      
	 
	 	
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 but only in so
far as may be necessary to secure that the full benefit and advantage of the rights arising under Clauses 21 and 23 (d) are obtained by the Company (or, where appropriate, its nominee or any Associated Company). A letter signed by any Director or
Secretary of the Company certifying that any thing or any document has been done or executed within the authority hereby conferred shall be conclusive evidence that any letter/s of resignation executed on the Executive’s
behalf will be on terms which do not prejudice any rights or claims which he
may have
	 

25

	 	 against the relevant
               company arising out of this Agreement or the termination of his
          employment under this Agreement.
	 	 
	27.	GRIEVANCE PROCEDURE 
	 	 
	 	
If the Executive feels he has a grievance
relating directly to his employment it should be raised with the ultimate executive
director to whom the Executive reports for his consideration. Such executive
director will notify the Executive in writing of his findings and of any action
to be taken to redress any justifiable grievance found to exist. If  the Executive
considers that the matter remains unresolved he should raise it with the Group
Director Human Resources or such other person as the Group Director Human Resources
may nominate whose decision, without prejudice to any rights the  Executive may
have arising from such grievance, will be final and binding on the Executive.
	 
	
28.	
DISCIPLINARY PROCEDURES        
	 
	 	
Without prejudice to the terms of Clause 23, the Company reserves the right to take disciplinary action against the Executive in circumstances of misconduct by the Executive, a breach by the Executive of his
obligations under this Agreement or unsatisfactory performance by the Executive of his duties. Such action may include suspension with or without pay or dismissal with or without notice. Any grievance relating directly to disciplinary matters should
be raised with the ultimate executive director to whom the Executive reports in accordance with Clause 27.
	 
	
29.	
NOTICES        
	 
	 	
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.
	 

26

	 30.	 CHANGE
                         OF CONTROL 
	 
	 	 (a)	 If there is a change
                    of control of the ultimate holding company of the Company
                    (being at the date of this Agreement RBSG) and if within
                    one year of such a change of control the employment of the
                    Executive is terminated by the Company (otherwise than with
                    cause under Clause 23) then the Executive’s employment
                    will be terminated forthwith and the Company shall pay and
                    provide the following by way of liquidated damages:
	 
	 	 (b)	 a payment equivalent
                    to the Executive’s salary element in respect of the
                    period of notice required for the Company to terminate this
                    Agreement under Clause 23,
	 
	 	
(c)	
all other remuneration benefits which the Executive would reasonably have expected to receive during such period of notice.
	 
	 	
(d)	
The same provision shall be made, again by way of liquidated damages, if within one year of such change of control the Executive terminates his employment and is entitle to do so by reason of the Company’s
conduct.
	 
	 	
(e)	
Any payment made under 30(a) or 30(b) above shall be in full and final settlement of any claim which the Executive may then have against the Company arising out of the contract of employment or the termination
thereof.
	 
	 	
(f)	
For the purposes of this Clause 30, “change of control” means that share capital conferring voting rights of at least 50% of the votes entitled to be cast comes under the control of any person (or
persons acting in concert) not having such control at the date of this Agreement.
	 

27

	 	 (g)	 The provisions of this
                    Agreement intended to apply after termination shall continue
                    to apply after termination in accordance with this Clause
                    30.
	 
	 31.	 DECLARATION
                         OF SECRECY 
	 
	 	 The Executive
                    will be required to sign the Declaration of Secrecy in such
                    form as may be required by the Company from time to time.
	 
	 32.	 CONTINUING
                         PROVISIONS 
	 
	 	 The expiry
                    or determination of this Agreement shall not affect such
                    provisions in accordance with their terms as expressed to
                    operate or have effect.
	 
	 33.	 WHOLE
                         AGREEMENT AND SEVERABILITY 
	 
	 	 (a)	 The terms and conditions
                    contained herein constitute a written statement of the terms
                    of the Executive’s employment in compliance with the
                    provisions of the Employment Rights Act 1996 (as amended).
                    Any previous agreements relating to the employment of the
                    Executive by the Company are revoked (without prejudice to
                    the rights of either party in respect of any antecedent breach)
                    and replaced by this Agreement from the date on which this
                    Agreement commences.
	 
	 	
(b)	
The provisions of the Company’s
Procedures Manuals (as amended from time to time) shall, except to the extent
that they are inconsistent with the terms of this Agreement, also govern the
Executive’s
employment. The Company may from time to time vary the terms of the Procedures
Manuals by intimating such changes in staff notices, on the Company’s
intranet (Insite), circulars and supplements and copies of the Procedures Manuals
together such amending notices, circulars and supplements will be available to
the Executive at his principal place of employment. The Procedures Manuals shall
have the same force and effect and be as binding upon the Executive and the Company
as if they formed part of this Agreement. Further information on Employment policies
can be found on the Company’s Intranet, Insite.
	 

28

	 	
(c)	
The various provisions and sub-provisions of this Agreement and the Schedule attached hereto are severable. If any provision or subprovision (or identifiable part thereof) is held to invalid or unenforceable, then
such invalidity or unenforceability shall not affect the remaining provisions (or identifiable parts thereof) in this Agreement or its Schedule.
	 
	
34.	
COLLECTIVE AGREEMENTS  
	 
	 	
There are no collective agreements applicable to your employment.
	 
	
35.	
GOVERNING LAW  
	 
	 	
The interpretation and enforcement of this Agreement shall be governed by and construed in all respect in accordance with the Law of Scotland.
	 

	Signed for and on behalf of	 
	THE ROYAL BANK OF SCOTLAND plc	/s/ Neil Roden
	on [9 December 2005]	

	by Neil Roden, Group Director, Human Resources	Neil Roden
	 	 
	 	 
	Signed by	/s/ Guy Whittaker
	On [19/12/05] 	

	before the undernoted witness:	Guy Whittaker 
	 	 
	 	 
	Emily MacDonald (Witness)	 
	Full Name	Emily MacDonald 	 
	Address	63 Craven
          Gardens	 
	 	Wimbledon	 
	Occupation	HR
          Business Partner	 

29

Schedule

ROYAL BANK OF SCOTLAND EXECUTIVE SEVERANCE
ARRANGEMENTS

1. Introduction

It is the policy of the Company to seek to provide security of employment for every member of staff whilst having regard to the need for continued profitability and efficiency. The Company shall strive to cope
with future fluctuations in staffing requirements by endeavouring to find alternative employment for employees within the Group. However, should circumstances arise where the Company’s policy of safeguarding the current or future employment of
staff cannot be maintained in respect of members of the executive staff of the Company (“the Executives”), then, as a last resort, the methods and arrangements for terminating employment of Executives as outlined in this Schedule will
apply.

2. Notification of Potential Redundancies and Redeployment 

Where staff redundancies are anticipated, the Company shall, wherever possible: 

	
(a)	
as soon as practicable notify Executives who are likely to be affected; and
	 
	
(b)	
attempt to re-deploy surplus Executives in one area to suitable alternative employment elsewhere within the Group. The Bank will in the first instance, conduct an executive assessment process using the Bank’s
chosen executive selection partner. This process combines a systematic interview and completion of a range of occupational questionnaires designed to measure
	 
	 	
	

	
Functional, Technical Competence
	 
	 	
	

	
Achieved Results
	 
	 	
	

	
Intellectual Calibre
	 
	 	
	

	
Personal Qualities
	 
	 	
	

	
Business Acumen
	 

30

  
    Should there be no distinguishing difference between individuals additional factors which would then be taken into account would include, in no particular order:

  	Current levels of performance and conduct
	Specific knowledge or skills
	Length of service and reckonable service for pension purposes

  
    All offers of redeployment, including any training, shall be made by the Company in writing and acceptances by Executives shall be in writing. The exact terms and conditions upon which Executives shall be
  redeployed shall be a matter for negotiation between the Company and the relevant Executives, ultimately the choice will be continued employment on the terms the Bank is prepared to offer or the severance package. 

3. Voluntary Early Retirement

When the Company has, in accordance with paragraph 2, advised Executives of a situation which may involve surplus staff and the arrangements for redeployment, etc have not resolved, or are unlikely to resolve the
situation, the Company, other than in exceptional circumstances, shall invite applications from such Executives for voluntary early retirement. Whether or not such applications are accepted will be at the absolute discretion of the Bank. Since no
pension can be paid to staff below age 50, this section covers only Executives in excess of that age who are members of the Company’s Pension Scheme. The terms of voluntary early retirement are as follows: 

	
(a)	
Pension        
	 
	 	
For Executives who qualify for a pension, such pension is payable immediately, as calculated within the terms of the Company’s Pension Scheme, without actuarial discount, including commutation rights, based
on pensionable service at the date of termination of service.
	 

31

	
(b)	
Cash Payment   
	 

	  	 1 year’s service
                    and over 	 – 	 13 weeks’ pay 
	  	 2 years’ service
                    and over 	 – 	 17 weeks’ pay 
	  	 3 years’ service
                    and over 	 – 	 22 weeks’ pay 
	  	 4 years’ service
                    and over 	 – 	 27 weeks’ pay 
	  	 5 years’ service and over 	 – 	 32 weeks’ pay 
	  	10 to 14 years’ service	 – 	 38 weeks’ pay 
	  	15 to 19 years’ service	 – 	 46 weeks’ pay 
	  	20 years’ service and over 	 – 	 52 weeks’ pay 

  
    The following conditions shall apply to such Cash Payment:-

	 	
(i)	
service is continuous service calculated as at the date of termination by reference to the commencement date specified in Clause 4 of the Agreement;
	 
	 	
(ii)	
the calculation of a week’s or month’s (where appropriate) pay is on basic salary inclusive of any Job-related Allowances where these have been in payment for twelve months or more as at the effective
date of termination, but excluding all other allowances or payments;
	 
	 	
(iii)	
the cash payment is inclusive of entitlement to statutory redundancy payment (if any); and
	 
	 	 (iv)	 the number of weeks or months (where appropriate) on which the cash payment is based will not exceed the period of employment that remains prior to normal retirement date regardless of whether payment in lieu of notice is made. 
	 	 	 
	(c)	Staff House Purchase Loans
	 	 	 
	 	Existing loans under the Company’s Staff House Purchase Scheme shall be allowed to continue on the existing terms and conditions arranged, provided they allow for the loan to be repaid by the normal retirement date.
	 

32

	 	 	If employment is obtained which offers mortgage facilities, the Staff House Purchase loan shall be repaid as soon as eligibility under the new employer’s scheme is attained.
	 	 	 
	 	 	The Company will not consider applications for increases in borrowing. However, it will consider applications to move house, within the existing facility and subject to the approval of the property to be purchased. In such cases, the retention of any surplus arising on sale within the facility will be subject to the provisions of the Company’s Staff House Purchase Scheme in force at the time of sale.

	 	 
	 	
All other conditions of the Company’s Staff House Purchase Scheme shall apply to the loan.
	 
	
(d)	
Other Banking Facilities       
	 
	 	
All other banking facilities shall be on the Company’s terms and conditions for the conduct of staff pensioners’ accounts.
	 
	
(e)	
Car Schemes    
	 
	 	
The same arrangements will apply to members of the Company’s Executive Car Scheme as subsist in respect of Executives retiring at the normal retirement age and in accordance with the scheme rules under
RBSelect.

4. Voluntary Redundancy

Where the arrangements for redeployment, etc and/or voluntary early retirement have not resolved, or are unlikely to resolve, the situation, the Company, other than in exceptional circumstances, shall invite
applications from Executives for voluntary redundancy. Whether or not such applications are accepted will be at the absolute discretion of the Company and in making its assessment the criteria outlined in paragraph 3 above will apply. This section
applies only to Executives not covered by voluntary early retirement, i.e. those below age 50 or those aged 50 or over who do not qualify for a pension under the Company’s Pension Scheme. Executives below age 50 who are members of the

33

Company’s Pension Scheme will have payment of their pensions deferred and paid at normal retirement age. Deferred pensions of such Executives will be increased during the period of deferment by the greater of: 

	
1.	
the annual increases as awarded in respect of pensions in payment; or
	 
	
2.	
the statutory increases in accordance with the Social Security Act 1985.

The Social Security Act 1985 requires that the deferred pension in excess of the Guaranteed Minimum Pension, in respect of pensionable service since 1 January 1985, will be increased by the lower of the increase
in the Retail Price Index or 5% per annum, over the period of deferment. 

The terms for Voluntary Redundancy, other than pension, are as follows: 

	(a) 	Cash payments will be made on the basis of the higher of:  

	 	
(i)	
a cash payment calculated by reference to the Executive’s period of employment as outlined in paragraph 3(b) of this Agreement; or if higher
	 
	 	(ii)	9 months’ salary (see also paragraph 7)
	 	 	 
	 	each on the conditions outlined in paragraph 3(b) of this Agreement.
	 	 	 
	 	 Reference to the Profit Sharing Scheme Deeds of Trust and Supplementary Deeds will indicate the situation with regard to payments under the Scheme. 

	 	 	 
	(b)	Additional Payment 
	 	 
	 	 In addition to the cash payment as outlined in paragraph 4(a), and in respect of Executives aged 40 but /under 50, an additional payment will be made related to age and service as at date of termination based on the following number of weeks’ pay for each year of service: provided that the total of the cash payment as outlined in paragraph 4(a) and the additional payment outlined in this paragraph 4(b) shall not exceed 52 weeks’ pay in total.- 

	 

34 

	 	 Age in Years/Months 	 No. of Weeks’ Pay 
	 	 40 to 40/11 	 0.20 
	 	 41  to 41/11 	 0.38 
	 	 42  to 42/11 	 0.55 
	 	 43  to 43/11 	 0.71 
	 	 44  to 44/11 	 0.86 
	 	 45  to 45/11 	 1.00 
	 	 46  to 46/11 	 1.13 
	 	 47  to 47/11 	 1.25 
	 	 48  to 48/11 	 1.36 
	 	 49  to 49/11 	 1.47 

	 	 
	 (c)	 Staff House Purchase Loans 
	 
	 	 Existing Loans under the
              Company’s Staff House Purchase Scheme shall be allowed to
              continue on the existing terms and conditions arranged, subject
              to the additional conditions set out below, for a period of up
              to five years. Five years after the date of termination of employment,
              any outstanding borrowing will be subject to the terms and conditions
              which subsist in respect of House Purchase Loans to customers of
          the Company.
         The rate
                   of interest on each Staff House Purchase Loan shall be increased
                   by 2% on each of the first four anniversaries of the date
                   of termination of employment subject to the rate not exceeding
                   that charged to the Company’s customers. 

          Executives
                   shall sign a mandate authorising variation of the monthly
                   repayments in line with changes in the interest rate and these
                   variations shall be calculated in such a way that repayment
                   of the loan is achieved without extension of the original
                   term of the loan. 

          If employment
                   is obtained which offers mortgage facilities, the Staff House
                   Purchase loan shall be repaid as soon as eligibility under
          the new employer’s scheme is attained. 

	 	 

35

	 	The Company
                    will not consider applications for increases in borrowing. However,
                    it will consider applications to move house, within the existing
                    facilities and subject to the approval of the property to
                    be purchased, normally for the purpose of taking up new employment.
                    In such cases, the retention of any surplus arising on sale
                    within the facility will be subject to the provisions of
                    the Company’s Staff House Purchase Scheme in force at
                    the time of sale. 

           All other
                    conditions of the Company’s Staff House Purchase Scheme
          shall apply to the loan. 

	 	 
	
(d)	
Other Banking Facilities       
	 
	 	
On termination of employment, Current Accounts, Deposit Accounts and any other loans not mentioned elsewhere, shall immediately become subject to the rates and terms applicable to customers of the
Company.
	 
	 	
Loans repayable within 4 years or less of being granted other than where a loan has been granted to purchase a car previously allocated under the terms of a Car Scheme - see paragraph 5(e) below, shall continue on
the terms and conditions arranged at staff rates until the agreed repayment date, at which time any outstanding borrowing must be repaid.
	 
	
(e)	
Car Schemes    
	 
	 	
The same arrangements will apply to members of the Company’s Executive Car Scheme as subsist in respect of Executives retiring at the normal retirement age and in accordance with the rules under
RBSelect.
	 
	
(f)	
Wrongful Dismissal     
	 	 
	 	The Executives whose applications
               for Voluntary Redundancy are accepted shall receive the Voluntary
               Redundancy terms in full and final settlement of all claims for
          wrongful dismissal (if any).

36

       

5. Compulsory Redundancy

Where all the foregoing procedures and voluntary measures have been implemented and as a last resort the Company considers that compulsory redundancy is unavoidable, the terms for any compulsory redundancies
deemed necessary by the Company will be those which apply in either Voluntary Early Retirement (paragraph 3) or Voluntary Redundancy (paragraph 4) depending on the age of Executives and membership of the Company’s Pension Scheme. Executives who
are made Compulsorily Redundant shall receive the Compulsory Redundancy terms in full and final settlement of all claims for wrongful dismissal (if any). The date of termination of employment shall be notified in writing by the Company. 

6. Notice of Redundancy to Employees

Notwithstanding the provisions of Clause 2 of this Agreement the minimum period of notice of redundancy to Executives shall be three months or such longer period as may be required by legislation. The notice
period to the date of termination of employment will normally be worked. The Company may at its absolute discretion require the Executive not to attend work and/or not to undertake any of the Executive’s duties during any period of notice,
provided that the Company shall continue to pay the Executive his salary and provide his contractual benefits under this Agreement. There shall be no payment in lieu of notice. 

7. Executives Leaving Prior to Completion of Notice

Executives may apply to leave before their period of notice expires and hence waive part or all of their notice. Agreement to this shall not be unreasonably withheld but shall be judged in light of individual
circumstances and the operational requirements of the Company. Where such agreement has been given in writing, entitlement to redundancy or retirement terms shall not be withheld. However, Executives who leave before their period of notice expires,
without the agreement of the Company in writing, may forfeit their entitlement to redundancy or retirement terms outside of the scope of the Company’s Pension Scheme. 

37

	8. Assistance
          to Redundant Executives
	 	 
	 (a)	 In addition to the
                    procedures in this Schedule, to minimise the effect of redundancy,
                    the Bank will endeavour to assist Executives made redundant
                    to find other employment.
	 	 
	
(b)	
Any reasonable request for time off to seek other employment will be approved.
	 
	
(c)	
A counselling service will be offered to all Executives under notice of redundancy in accordance with this Schedule. Each Executive will be interviewed by the Director, Human Resources to discuss his or her
personal position and severance entitlements.
	 

9. Exception

None of the arrangements in this Schedule shall apply in circumstances where the Company is promoting or transferring Executives in accordance with established procedures and the terms of individual contracts of
employment. 

10. Dismissal other than on the Grounds of Redundancy or Early Retirement 

Where it is necessary to dismiss for some other reason an Executive already under notice of redundancy or whose application or early retirement has been accepted, entitlement to all benefits under the terms of
this Schedule will be lost other than those which apply under the terms of the Company’s Pension Scheme which include a right to set-off in favour the Company in certain circumstances. 

/s/Guy Whittaker

Guy Whittaker 

/s/Neil Roden

Neil Roden, Group Director, Human Resources

38 

	Neil Roden	               RBS
	Group Director, Human Resources	The Royal Bank of Scotland Group
	 	 
	 	Gogarburn 

      Edinburgh

      EH12 1HQ 

      Telephone: 0131 523 2022

      Facsimile: 0131 523 4985 

      www.rbs.com
	 	 

23 January 2006 

Mr Guy Whittaker

Dear Guy,

Further to our previous conversation regarding compensation for forfeiture of your 2005 Citigroup performance bonus, I am writing to confirm the details of the payment. 

Upon joining the Group you will be paid $2,112,000 in the first available payroll (18th February). The amount will be converted to GBP using the rate of exchange on your date of hire. 

In addition, you will receive $1,701,333 (converted to GBP using the rate of exchange on date of hire) worth of RBSG restricted stock. As you join during a restricted period the shares will be issued at the
earliest possible date thereafter. No further performance conditions will apply and the timing and vesting will be as shown below, subject to your continued employment with the Group at the time of vesting. If you are serving notice at the vesting
date the awards will not vest. The awards will be subject to tax and National Insurance at time of vesting. 

1st quarter to vest in February 2007 

2nd quarter to vest in February 2008

3rd quarter to vest in February 2009

4th quarter to vest in February 2010 

If you have any questions regarding this payment, please do not hesitate to contact me. 

Regards /s/ Neil
Roden

	 	 
	 	The Royal Bank of Scotland Group plc

      Registered in Scotland No 45551

      >Registered Office: 36 St Andrew Square

    Edinburgh EH2 2YBExhibit 4.7

SERVICE AGREEMENT

between

THE ROYAL BANK OF SCOTLAND plc

and

MARK ANDREW FISHER

 

17 April 2000

The Royal Bank of Scotland plc

42 St Andrew Square 

Edinburgh 

2 

	
24.	 	
Restrictive Covenant
		 
		
19
	
	 	 	 	 	 
	
25.
		 	
Deductions
		 
		
22
	
	 	 	 	 	 
	
26.
		 	
Power of Attorney
		 
		
22
	
	 	 	 	 	 
	
27.
		 	
Grievance Procedure
		 
		
22
	
	 	 	 	 	 
	
28.
		 	
Disciplinary Procedures
		 
		
23
	
	 	 	 	 	 
	
29.
		 	
Declarations of Secrecy
		 
		
23
	
	 	 	 	 	 
	
30.
		 	
Notices
		 
		
23
	
	 	 	 	 	 
	
Other
		 

		 

		 
		 

	
	 	 	 	 	 
	
31.
		 	
Continuing Provisions
		 
		
23
	
	 	 	 	 	 
	
32.
		 	
Whole Agreement and Severability
		 
		
24
	
	 	 	 	 	 
	
33.
		 	
Collective Agreements
		 
		
24
	
	 	 	 	 	 
	
34.
		 	
Governing Law
		 
		
24
	
	 	 	 	 	 
	
Schedules
		 	 

		 
		 

	
	 	 	 	 	 
	
Schedule 1
		 	
Early Retirement and Redundancy
		 
		
26
	
	 	 	 	 	 
	
Schedule 2
		 

		
Declaration of Secrecy
		 
		
35
	

3

SERVICE AGREEMENT 

Between 

THE ROYAL BANK OF SCOTLAND plc a company incorporated in Scotland (No 90312) and having its registered office at 36 St Andrew Square, Edinburgh EH2 2YB (hereinafter called “the Company”) of the one part and 

Mark Andrew Fisher, residing at 

(hereinafter called “the Executive”) of the other part

THE AGREEMENT BETWEEN THE PARTIES IS AS FOLLOWS:- 

	
1.      		
DEFINITIONS, INTERPRETATION AND CONSTRUCTION	
	 
	 	
(a)      		
In this Agreement, unless otherwise stated, the following definitions apply:	
	 
	 	 	
(i)      		
“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 the Company or (ii) a holding company
of the Company or any subsidiary of any such holding company;	
	 
	 	 	
(ii)      		
“the Board” means the Board of Directors of the Company or an authorised committee of the Board of Directors of the Company;	
	 
	 	 	
(iii)      		
“the Main Board” means the Board of Directors of the Company;	
	 
	 	 	
(iv)      		
“the Group” means
the Company and its Associated Companies;

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(v)      		
“the Remuneration Committee” means the Remuneration Committee of the Board or any committee empowered by the Board in substitution for the Remuneration Committee;	
	 
	 	 	
(vi)      		
“RBSG” means The Royal Bank of Scotland Group plc having its registered office at 36 St Andrew Square, Edinburgh EH2 2YB;	
	 
	 	 	
(vii)      		
the expressions “subsidiary” and “holding company” have the same meanings in this Agreement as they have in Section 736 of Companies Act 1985; and	
	 
	 	 	
(viii)      		
the expressions “associated
company”, “associate” and “control” have the same meanings
in this Agreement as they respectively bear in Sections 416, 417 and 840 of the
 Income and Corporation Taxes Act 1988.	
	 
	 	
(b)      		
In this Agreement:	
	 
	 	 	
(i)      		
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;	
	 
	 	 	
(ii)      		
the masculine gender shall include the feminim gender and singular number shall include the plural and vice versa;	
	 
	 	 	
(iii)      		
unless otherwise stated, references to clauses and sub-clauses are references to clauses and sub-clauses of this Agreement;	
	 
	 	 	
(iv)      		
the headings to clauses are for convenience only and shall not affect the construction or interpretation of this Agreement; and	
	 
	 	 	
(v)      		
the provisions of the Schedules and any additional terms entered into in writing by or on behalf of the parties shall be read and construed as part of this Agreement and shall be enforceable
accordingly.	

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2.      		
POSITION	
	 
	 	
The Executive will be employed
as Chief Executive, Manufacturing, and agrees to accept the position on the terms
and conditions set out in this Agreement. The Company shall be entitled from
time  to time to appoint any other person or persons to act jointly with the
Executive.	
	 
	
3.      		
COMMENCEMENT, DURATION & NOTICES	
	 
	 	
(a)      		
This Agreement and the Executives employment shall, commence on 6th March 2000 and shall continue unless terminated, subject to the provisions of Clauses 22 and 23, by the Company giving to the
Executive six months’ prior written notice of termination or by the Executive giving to the Company six months’ prior written notice of termination.	
	 
	 	
(b)      		
this Agreement shall automatically terminate without notice on the Executive reaching the retirement age of sixty (60) years of age.	
	 
	
4.      		
CONTINUOUS EMPLOYMENT	
	 
	 	
The Executive’s period of continuous employment with the Company commenced on 15th September 1981.	
	 
	
5.      		
DUTIES	
	 
	 	
(a)      		
The Executive shall, in
his role as Chief Executive, Manufacturing, devote the whole of his time, attention
and skill during his hours of work as specified in Clause 7 to the business of
the  Company and shall faithfully, efficiently, competently and diligently perform
such duties and exercise such powers, authorities and discretions which may be
assigned to or vested in him by the Board and shall obey all reasonable and lawful
 directions given by or under the authority of the Board and use his best endeavours
to promote and extend the business of the Company and to protect and further
its interests and reputation.	

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(b)      		
The Executive may be required,
to perform services not only for the Company but also for the benefit of any
Associated Company and to hold such offices in the Company or any Associated
Company as  the Board may reasonably require, but without further remuneration
(except as otherwise agreed in writing between the parties). The Executive may,
without prejudice to his rights, be required to be seconded to the employment
of any Associated  Company. However, the Executive will not be required to perform
such services which he cannot reasonably be expected to perform or which are
inconsistent with his role as Chief Executive, Manufacturing.	
	 
	 	
(c)      		
The duties of the Executive as an officer of the Company or of any Associated Company shall be subject to the Articles of Association of the relevant company and shall be separate from and in
addition to his duties under this Agreement. Save where the Executive is a director of the Main Board if, during the continuance of this Agreement, he ceases to be in office as a director of the Company or of any Associated Company (otherwise than
by resignation or unless the Executive is prohibited by law from acting as an Officer of the Company or an Associated Company) this Agreement shall nevertheless remain in force as if the Executive’s employment is that of executive manager
rather than that of director.	
	 
	 	
(d)      		
The Executive will report to the Group Chief Executive or to such other person as the Board may specify from time to time.	
	 
	 	
(e)      		
Once notice to terminate the Executive’s employment has been given by the Company or by the Executive under Clause 3, the Company may at its absolute discretion require the Executive not to
attend work and/or not to undertake any of the Executive’s duties during any period of notice, provided that the Company shall continue to pay the Executive his salary and provide his contractual benefits under this Agreement.	

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	 	 (f)      	Further, at any time during such period of suspension referred to in Clause 5(e) above the Executive shall at the request of the Board immediately resign without claim for compensation from any office as a director of the Company or Associated Company and from such office held by the Executive in the Company or Associated Company. 
	 	 
	
6.      		
PLACE OF EMPLOYMENT	
	 
	 	
The Executive will normally work in Edinburgh, but may be required to travel and reside on a temporary basis elsewhere in the United Kingdom or abroad in the performance of his duties. The
Executive shall not be required to reside permanently outside the United Kingdom, without his consent, but can be required to work at any place within reasonable travelling distance of either the Executive’s home or the Executive’s normal
place of work.	
	 
	
7.      		
HOURS OF WORK	
	 
	 	
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.	
	 
	 	
The Executive agrees that the maximum working week set out in Regulation 4 of the Working Time Regulations 1998 will not apply. The Executive agrees to give the Company three months’ written
notice should the Executive wish Regulation 4 of the Working Time Regulations 1998 to apply.	
	 
	
8.      		
OTHER INTERESTS	
	 
	 	
The Executive shall not, during the term of this Agreement (except with the Board’s prior consent in writing) be directly or indirectly engaged or concerned in the conduct of any business
other than the business of the Group or be directly or indirectly interested in any other business 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.	

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9.      		
RBSelect	
	 
	 	
(a)      		
The Company operates a flexible compensation and benefits package called RBSelect. The Salary Element forms part of the Executive’s ValueAccount under RBSelect and is
used to calculate certain benefits such as pension, Christmas Bonus, Profit Share and any discretionary bonus payment or any other payment directly linked to salary. The Salary Element would also be used to calculate severance payments including
redundancy.	
	 
	 	 	
The ValueAccount is £273,000, which includes the Salary Element of £260,000 per annum. Full details of RBSelect
are contained in the Company’s guidebook in relation to the scheme.	
	 
	 	
(b)      		
The Executive’s ValueAccount less the cost of any benefits elected through RBSelect will be paid monthly on 25th day of each month (or on the last preceding working day where 25th day falls on a weekend) and shall be at the absolute discretion of the Company subject to review annually on the 1st day of
April of each year or any other day approved by the Group Remuneration Committee with any adjustments having immediate effect.	
	 
	 	
(c)      		
All remuneration payable in cash to the Executive under this Agreement shall be credited to a bank account to be maintained by the Executive with the Company or with another company in the
Group.	

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10.      		
BONUSES	
	 
	 	
(a)      		
Subject to Clause 10(c) below, a cash payment equivalent to two and a half per cent of the Executives Salary Element as at 31 October, based on continuous service from 1 November in the previous
year to 31 October in the year to which the payment relates, shall be made to the Executive in addition to his ValueAccount monthly payment for the month of November.	
	 
	 	 	
If the Executive is in the employment of the Company as at 31 October but has less than twelve months’ continuous service as at that date his entitlement shall be calculated pro rata according to each month of employment completed during the year.	
	 
	 	 	
If whilst in the employment of the Company the Executive dies or retires during the year to 31 October his entitlement shall be calculated pro rata according to continuous months of employment completed during such year up to the date of death or retirement and by reference to the Executive’s Salary
Element as at the date of death or retirement.	
	 
	 	
(b)      		
Subject to Clause 10(c) below, the Executive may, at the absolute discretion of the Remuneration Committee, be entitled to participate in any Executive Bonus Scheme as approved by the
Remuneration Committee.	
	 
	 	
(c)      		
If the Executive is serving out notice whether given by the Executive or the Company, or is dismissed, the Executive will not be entitled to receive a bonus which would or may otherwise be due to
the Executive whether paid in cash or in shares as set out in Clauses 10(a) or (b) above.	
	 
	
11.      		
PROFIT SHARING	
	 
	 	
The Executive shall be eligible to participate in the RBSG’s Profit Sharing Scheme, the terms and conditions of which will be made available to the Executive. Any entitlement is calculated
by reference to the Executive’s Salary Element.	
	 
	
12.      		
EXECUTIVE SHARE OPTION SCHEME	
	 
	 	
The Executive shall, at the absolute discretion of the Remuneration Committee, be eligible to participate in the Company’s Executive Share Option Scheme.	

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13.      		
PENSION SCHEME AND DEATH-IN-SERVICE	
	 
	 	
(a)      		
If the Executive is a member of a National Westminster Pension Scheme, (“NatWest Scheme”), membership will continue in that scheme unless or until the Executive provides to the Company and
the Trustees of the NatWest Scheme written confirmation of his intention to opt out.	
	 
	 	
(b)      		
A Contracting Out Certificate issued in terms of Part III of the Pension Schemes Act 1993 is in force in relation to the Executive’s employment.	
	 
	 	
(c)      		
Should the Executive wish to transfer any pension rights already accrued in other schemes to the NatWest Scheme, the NatWest Scheme is fully approved by the Inland Revenue and has power to accept
transfer payments.	
	 
	 	
(d)      		
The Company operates a
voluntary contributions plan under which the Executive can augment his pension
within certain limits and further details will be provided by the Company upon
 request.
	 
	 	
(e)      		
To the extent that any salary related lump-sum payment made by the NatWest Scheme in respect of the death of the Executive while in service before Normal Pension Age (as defined in the NatWest
Scheme) is less than four times the Executive’s Salary Element by reason only of by Section 590C of the Income and Corporation Taxes Act 1988 (which deals with the earnings cap), the Company shall ensure that a payment is made equal to the
amount of the difference. This benefit will be subject to any restrictions imposed by an insurance company with which it is insured.	
	 
	
14.      		
HOLIDAYS	
	 
	 	
(a)      		
The Company’s holiday year runs from 1 October to 30 September. The Executive will be entitled to 30 working days holiday to be taken at such time or times as the Executive shall request and
agree with the Company plus a further 8 days to be taken at times to be determined by the Company (which would normally be Bank Holidays). The Company reserves the right to request the Executive to work on Bank Holidays.	

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	 	 (c)      	 In the event that the Executive is not employed throughout a full holiday year, the Executive’s future or accrued holiday entitlement shall be reduced pro rata according to each completed month of employment during that holiday year. 
	 	 
	 	 (d)      	 There shall, subject to the following provisions of this Clause 14, be no right to payment in lieu of unused holiday entitlement. The Executive shall be entitled to be paid in respect of any holiday entitlement accrued due but not taken at the date of termination of this Agreement provided that such termination has not occurred under the provisions of Clause 23(a). 
	 	 
	 	 (e)      	 During any period of notice the Company shall be entitled, at its own discretion, to require the Executive to take accrued and outstanding holiday entitlement or to make payment in lieu of such outstanding entitlement. 
	 	 
	 	 (f)      	 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. Any sums due to the Company may be deducted by the Company from any monies owed to the Executive. 
	 	 
	
15.      		
HOUSE PURCHASE AND STAFF BORROWING	
	 
	 	
(a)      		
The Executive shall be entitled to participate in the Company’s Staff House Purchase Scheme. The details will be made available by the Company,	
	 
	 	
(b)      		
Concessionary interest rates will be available to the Executive for personal loans, subject to the terms for such staff lending in force from time to time.	
	 
	
16.      		
EXPENSES	
	 
	 	
The Executive shall, subject to the production of the relative receipts or other satisfactory evidence and compliance with the Company’s Travel & Expenses policy in force from time to
time, be reimbursed for all out-of-pocket expenses incurred in the performance of his duties, including expenses of entertainment, subsistence and travelling. In order to facilitate payment of expenses, the Executive will be supplied with a credit
card for use solely in this connection.	

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17.      		
DEALING IN INVESTMENTS	
	 
	 	
(a)      		
The Executive will be subject to the Company’s Staff Dealing Rules which require prior permission to be obtained before dealing in most types of securities transactions and for requests and
authorisations to deal to be confirmed in writing on the appropriate Company form. The Company also operates a closed period during which the Executive will not be permitted deal in RBSG shares. Failure to abide by these rules will constitute
serious misconduct for the purposes of any disciplinary action.	
	 
	 	
(b)      		
Details of the Company’s Staff Dealing Rules are contained in the Conduct of Accounts Manual.	
	 
	
18.      		
SICKNESS	
	 
	 	
(a)      		
Without prejudice to the terms of sub-Clause 23 (a) (i), if the Executive shall at any time be prevented by illness, injury, accident or other incapacity (“the incapacity”) from
discharging in full his duties the Company may, at its sole discretion, continue to pay the Salary Element of the ValueAccount and continue to provide any benefits which the Executive may have elected under RBSelect or procure payment thereof, (less any sickness benefit entitlement or Statutory Sick Pay to which he may be entitled, whether claimed or not) as
follows:	
	 
	 	 	
(i)      		
If the Executive’s period of continuous employment with the Company is less than ten years as at 1 October 1999, the Executive shall be paid at 100% of his ValueAccount rate for the first
182 days of incapacity and at 55% of his ValueAccount rate (inclusive of any state sickness benefit payable) for up to a further five years subject to certain qualifying criteria being met;	
	 
	 	 	
(ii)      		
if the Executive’s period of continuous employment with the Company is ten years or more as at 1 October 1999, the Executive shall be paid at 100% of his ValueAccount rate for the first 364
days of incapacity and at 55% of his ValueAccount rate (inclusive of any state sickness benefit payable) for up to a further five years subject to certain qualifying criteria being met;	

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(iii)      		
The benefit paid during the initial 182 days’ absence (where sub-Clause 18 (a) (i) applies) or the initial 364 days’ absence (where sub-Clause 18 (a) (ii) applies) will include an
allowance in lieu of holiday entitlement. Consequently normal holiday entitlement will cease to accrue;	
	 
	         	         	
(iv)      		
During any extended absence period of up to five years, the overall level of benefit will increase each January in line with any increase applied to payments under the Company’s pension
scheme;	
	 
	 	 	
(v)      		
During the entire extended absence period, the Executive will continue to receive additional Company benefits, including non-contributory pension scheme, Christmas Bonus and RBSG’s Profit
Sharing Scheme and will remain eligible to participate in the RBSG Sharesave Scheme. With the exception of the Company pension, all salary-related benefits will be linked to the current level of income protection benefit under the Company’s
pension scheme. Pension benefits will be based on the Executive’s Salary Element before his sickness absence, and will be increased each year in line with any increase applied to payments under the Company’s pension scheme.	
	 
	 	 	
(vi)      		
At the end of the five year extended absence period, if the Executive is unable to return to work he will be considered for ill-health retirement. Ill-health retirement will only be considered
where the Executive satisfies the relevant ill—health retirement criteria.	
	 
	 	 	
(vii)      		
All periods of long-term sickness absence will be regarded as continuous service for the purpose of pension and other benefit calculations.	
	 	 	 	 
	 	(b)      		The Executive shall, if required by the Board, provide evidence of the incapacity. For the first seven consecutive days of absence (including weekends and statutory holidays), the Executive shall self-certify his incapacity.

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(c)      		
For the purposes of assessing the entitlement of the Executive to Statutory Sick Pay, the qualifying days will be Monday to Friday inclusive.	
	 
	 	
(d)      		
If the Executive is incapable of performing his duties because of injuries sustained wholly 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 (“the third party”) or if the Executive is covered by any health insurance scheme (“the insurance policy”) all payments made to the Executive under Clause 18 (a) above shall (to the
extent that compensation for loss of earnings is recoverable from the third party or under the insurance policy), constitute loans by the Company (or 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.	
	 
	         	
(e)      		
Without prejudice to the provisions of the immediately preceding Clause 18(d), 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 the insurance policy the Company shall be entitled to require the Executive either:	
	 
	 	 	
(i)      		
(subject to the Company
agreeing to indemnify the Executive against all reasonable legal expenses) to
take legal proceedings to enforce his rights against any third party who has
committed such  an actionable negligence against him and/or to pursue a claim
under the insurance policy; or	
	 
	 	 	
(ii)      		
to assign his right to do so to the Company or any Associated Company in an attempt to recover from such third party and/or the relevant insurance company compensation for any loss of earnings
sustained by the Executive.	

15 

	 	
(f)      		
The Executive shall (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	
	 
	 	
(a)      		
The Executive shall not (except as required in the proper performance of his duties or with proper authority) at any time directly or indirectly divulge or communicate to any person or make use
of any of any information obtained or acquired by the Executive relating to the Group, its customers, its business and policy and its management which is, or is deemed by the Company to be confidential, commercially sensitive or price sensitive
howsoever obtained or acquired and in whatever form including information which belongs to or pertains to customers or customers’ businesses (“the Confidential Information”). This restriction shall continue to apply after the
termination of the Executive’s employment without limit in time but shall cease to apply to information which shall come into the public domain (other than in breach of this Clause 19). The Executive shall use his best endeavours to prevent the
publication or disclosure of any Confidential Information particular but not limited to, actual or proposed transactions, or the partnerships, companies, bodies and corporations having accounts with or in any way connected or in discussion with the
Group and all other matters relating to such customers and connections. Any breach by the Executive of the provisions of this Clause 19 will be regarded by the Company as a disciplinary matter liable to result in dismissal without
notice.	
	 
	 	
(b)      		
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 his employment.	

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20.      		
PROPERTY IN CONFIDENTIAL MATERIAL	
	 
	 	
All reports, files, notes, accounts, documents or other material and all notes and memoranda of any Confidential Information (including all copies thereof) made or received by the Executive
during the course of his employment (whether heretofore or hereafter) are and shall remain the property of the Company or the appropriate Associated Company and shall he surrendered by the Executive to someone duly authorised by the Company upon the
termination of this Agreement or at the request of the Company at any time during the course of his employment	
	 
	
21.      		
INTELLECTUAL PROPERTY - PATENTS & TRADEMARKS	
	 
	 	
The business of the Group
comprises inter
alia the creation,
 development and exploitation of innovative technology, techniques, markets and
operations and as part of his duties the Executive may be involved in the furtherance
of these interests. Each and every creation, development or improvement effected
or  conceived by the Executive at any time whether before or after the date hereof,
but after he became an employee of the Company, whether capable of being patented
or registered or not (and whether or not effected or conceived in the course
of his  employment hereunder) in connection with or in any way affecting or relating
to the business of the Group or capable of being used or adapted for use therein
or in connection therewith shall forthwith be disclosed to the Company and shall
belong to  and be the absolute property of the Company or such Associated Company
as the Company may nominate for the purpose. If and whenever required so to do
(whether during or after the termination of his employment with the Company)
the Executive shall,  at the Company’s expense, apply or join in applying
for letters patent or other equivalent protection in the United Kingdom or any
other part of the world for any such material. The Executive will execute all
instruments and things necessary  for vesting the patent letters or other equivalent
protection when obtained. (Provided that nothing shall prejudice the Executive’s
rights under Sections 40 to 43 Patents Act 1977.)	
	 
	
22.      		
REDUNDANCY AND EARLY RETIREMENT	
	 
	 	
The provisions set out in Schedule 1 to this Agreement on Executive Severence Arrangements shall apply to this Agreement and the Executive is one of the Executives for the purposes of Schedule
1.	

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23.      		
TERMINATION	
	 
	 	
(a)      		
Notwithstanding the provisions of Clause 3, the Company has the right to terminate the Executive’s employment by notice in writing having immediate effect in any of the following
events:-	
	 
	 	 	
(i)      		
if the Executive commits any serious breach (whether by one or several acts or omissions) or repeats or continues after written warning any material breach of his obligations, or is, in the
opinion of the Board, guilty of conduct tending to bring himself or the Company or any Associated Company into disrepute;	
	 
	 	 	
(ii)      		
if the Executive is guilty of dishonesty, gross incompetence, wilful neglect of duty, or of mismanagement of his financial affairs through failure to observe the Company’s rules and
procedures for the operation of bank accounts and/or borrowing;	
	 
	 	 	
(iii)      		
if the Executive is found guilty of any criminal offence (other than a minor offence under the Road Traffic Acts);	
	 
	 	 	
(iv)      		
if the Executive is or becomes of unsound mind or lunatic or a patient for the purpose of the Mental Health Act 1983;	
	 
	 	 	
(vi)      		
if the Executive commits any act of bankruptcy or takes advantage of any statute for the time being in force offering relief to insolvent debtors;	
	 
	 	 	
(vii)      		
if the Executive resigns as an officer of the Company or any Associated Company without the agreement of the Board; or	
	 
	 	 	
(viii)      		
If, as the result of any default on the part of the Executive, he is prohibited by law from acting as an officer of the Company or any Associated Company;	

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	         	The
      Company shall be entitled to suspend the Executive with or without pay
      and benefits to enable it to carry out an investigation into any matter
      referred to in sub-Clauses 23 (a) (i) to (viii) above. The period of such
      suspension will not normally exceed twelve weeks but may be more if circumstances
      dictate.
	 	 	 
	         	
(b)      		
The Executive’s performance and discharge of his duties and responsibilities hereunder shall be the subject of an annual appraisal process, the object of which is to assess his 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 or such other person or body as the Board shall nominate, the Executive fails, to achieve performance
standards as set out in the annual appraisal process or such other interim appraisal process, the Company shall be entitled to terminate the Executive’s employment in accordance with the provisions of Clause 3 (a).	
	 
	 	
(c)      		
The parties agree that
the termination of this Agreement in accordance with this Clause 23 shall be
deemed to be for a substantial reason of a kind such as to justify the Executive’s
 dismissal and from holding the position which the Executive then holds and that
it would be fair and reasonable for the Company to give notice of termination
in the circumstances provided for by this Clause.	
	 
	 	
(d)      		
Without prejudice to the Executive’s rights as an employee, he shall (at any time after notice has been served by either party to terminate his employment) immediately resign upon the
Board’s request without claim for compensation from any office held by him in the Company or any Associated Company and transfer (without payment) to the Company or its nominee any qualifying or nominee shares registered in the name of the
Executive in the company or any Associated Company.	

19

	 	 (e)      	 Upon the termination of his employment for any reason whatsoever the Executive shall immediately deliver to the Company in accordance with its instructions all 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 and the Executive shall, if so required by the Company, confirm in writing his compliance with his obligations under this Clause 23 (e). 
	 
	 	 (f)      	 The Executive shall have no claim 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. 
	 	 	 
	 24.      	 RESTRICTIVE COVENANT 
	 	 	 
	 	
(a)      		
In this Clause the expression “Termination Date” means the date on which this Agreement shall determine irrespective of the cause or manner (the event of the Executive’s death only
excluded).	
	 
	 	
(b)      		
Considering that the Executive has obtained and is likely to obtain in the course of his employment knowledge of trade secrets, know-how, business information or other confidential information
relating to the Company or any Associated Company and also to their customers, the Executive agrees that he will be bound by the following restrictions in order to safeguard such trade secrets, know-how, business information or other confidential
information and the goodwill of the Company or any such Associated Company, in addition to the restrictions contained in Clauses 19, 20 and 21.	

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(i)      		
he will not, either in
contemplation of the termination of his employment or during the period of six
months from the Termination Date, canvass or solicit or endeavour to canvass
or solicit away  from the Company or any Associated Company in the United Kingdom,
the custom or business of any person, firm or company carrying on business in
the United Kingdom who is or was at any time during the twelve months prior to
the Termination Date a  client or customer of the Company or of any Associated
Company with whom he had business dealings during the course of his employment
in that twelve month period or in relation to whose requirements he had knowledge
of a material kind;	
	 
	 	 	
(ii)      		
he will not, during the period of six months from the Termination Date, carry on, set up, engage in or be directly or indirectly interested or concerned in any business or activity anywhere in
the United Kingdom carried on or about to be carried on by any person, firm or company in competition with any business or activity in which the Executive was actively involved during the course of twelve months immediately prior to the Termination
Date. This is providing that nothing contained in this sub- Clause 24 (b) (ii) shall prohibit the carrying on of, or being engaged, concerned or interested in, any business not in direct or indirect competition with the business of the Company or
any Associated Company;	
	 
	 	 	
(iii)      		
he will not either in contemplation of the termination of his employment or during the period of six months from the Termination Date entice, solicit or endeavour to entice or solicit away any
person who is employed or engaged by the Company or any Associated Company either as a director or in a managerial or executive capacity or who is in possession of confidential information belonging to the Company and/or any Associated Company and
with whom the Executive had business dealings during the course of his employment in the twelve month period prior to the Termination Date;	

21 

	         	 	
(iv)      		
he will not either in contemplation of the termination of his employment hereunder or during the period of six months from the Termination Date, interfere or seek to interfere with the supply to
the Company or any Associated Company of any goods or services by any supplier who, during the twelve months preceding the Termination Date, supplied goods or services to the Company or such Associated Company, being a supplier of goods or services
with whom during the twelve month period immediately prior to the Termination Date he had dealings of a material kind in his capacity as an employee or director of the Company, nor will he interfere or seek to interfere with the continuance of such
supply or the terms on which such supply has during such period as stated above been made.	
	 
	         	
(c)      		
The restrictions set out in sub- Clauses 24 (b) (i), (ii), (iii) and (iv) of sub-clause (b) above shall (without prejudice to their generality) apply to any action taken by the Executive, whether
as agent, representative, principal, employee or consultant or as a director or other officer of any company or by any associated company controlled by him or any associate of his.	
	 
	 	
(d)      		
The Executive will, in the event of receiving an offer of employment either during the continuance of this Agreement or during the continuance in force of any of the restrictions set out in this
Clause 24, immediately provide to the offeror a copy of this Clause 24 and will inform the Company of the identify of the offeror and the terms of the offer.	
	 
	 	
(e)      		
While the restrictions and Clause 24 of this Agreement are considered by the Executive to be reasonable and necessary in all the circumstances for the protection of the Group’s legitimate
interests, it is recognised by the parties that restrictions of the nature in question may fail for technical reasons unforeseen. Accordingly it is agreed that if any of such restrictions shall be adjudged to be void as going beyond what is
reasonable in all the circumstances for the protection of the interests of the Group but would be valid if part of the wording were deleted and/or the periods (if any) reduced and/or area dealt with reduced in scope the restrictions shall apply with
such modifications as may be necessary to make them valid and effective.	

22

	
25.      		
DEDUCTIONS	
	 
	 	
The Company can at any time during the Executive’s employment or upon termination, be entitled to deduct from his remuneration any monies due by him to the Company including any outstanding
loans, advances, relocation expenses, the cost of repairing any damage or loss to the Company’s property caused by him (and of receiving the same), salary paid in respect of excess holidays, and any other monies owed by him to the Company or
any Associated Company PROVIDED that the Company’s rights under this Clause 25 will not apply to any monies or benefits which have accrued to the Executive under any pension scheme.	
	 
	
26.      		
POWER OF ATTORNEY	
	 
	 	
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
but only in so far as may be necessary to secure that the full benefit and advantage of the rights arising under Clauses 21 and 23 (d) are obtained by the Company (or, where appropriate, its nominee or any Associated Company). A letter signed by any
Director or Secretary of the Company certifying that any thing or any document has been done or executed within the authority hereby conferred shall be conclusive evidence that any letter/s of resignation executed on the Executive’s behalf will
be on terms which do not prejudice any rights or claims which he may have against the relevant company arising out of this Agreement or the termination of his employment under this Agreement.	
	 
	
27.      		
GRIEVANCE PROCEDURE	
	 
	 	
If the Executive feels he has a grievance relating directly to his employment it should be raised with the ultimate executive director to whom the Executive reports for his consideration. Such
executive director will notify the Executive in writing of his findings and of any action to be taken to redress any justifiable grievance found to exist. If the Executive considers that the matter remains unresolved he should raise it with the
Personnel Committee of the Board or such other person as the Personnel Committee may nominate, whose decision, without prejudice to any rights the Executive may have arising from such grievance, will be final and binding on the
Executive.	

23

	
28.      		
DISCIPLINARY PROCEDURES	
	 
	 	
Without prejudice to the terms of Clause 23, the Company reserves the right to take disciplinary action against the Executive in circumstances of misconduct by the Executive, a breach by the
Executive of his obligations under this Agreement or unsatisfactory performance by the Executive of his duties. Such action may include suspension with or without pay or dismissal with or without notice. Any grievance relating directly to
disciplinary matters should be raised with the ultimate executive director to whom the Executive reports in accordance with Clause 27.	
	 
	
29.      		
DECLARATION OF SECRECY	
	 
	 	
The Executive will be required to sign the Declaration of Secrecy in the form set out in Schedule 2 which binds the Executive both during and after the termination of this Agreement not to
divulge (other than to authorised recipients), inter alia, any details of the Company’s or Associated Company’s technology, procedures, business customer affairs, finance, security arrangements or the layout of the Company’s or
Associated Company’s premises.	
	 
	
30.      		
NOTICES	
	 
	 	
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.	
	 
	
31.      		
CONTINUING PROVISIONS	
	 
	 	
The expiry or determination of this Agreement shall not affect such provisions in accordance with their terms as expressed to operate or have effect.	

24

	
32.      		
WHOLE AGREEMENT AND SEVERABILITY	
	 
	 	
(a)      		
The terms and conditions contained herein constitute a written statement of the terms of the Executive’s employment in compliance with the provisions of the Employment Rights Act 1996. Any
previous agreements relating to the employment of the Executive by the Company are revoked (without prejudice to the rights of either party in respect of any antecedent breach) and replaced by this Agreement from the date on which this Agreement
commences.	
	 
	 	
(b)      		
The provisions of the Company’s Procedures Manuals (as amended from time to time) shall, except to the extent that they are inconsistent with the terms of this Agreement, also govern the
Executive’s employment. The Company may from time to time vary the terms of the Procedures Manuals by intimating such changes in staff notices, on the Bank’s intranet (Orbit), circulars and supplements and copies of the Procedures Manuals
together such amending notices, circulars and supplements will be available to the Executive at his principal place of employment. The Procedures Manuals shall have the same force and effect and be as binding upon the Executive and the Company as if
they formed part of this Agreement.	Further information on Employment policies can be found on the Bank’s Intranet, Orbit. 
	 
	 	
(c)      		
The various provisions and sub-provisions of this Agreement and the Schedules attached hereto are severable. If any provision or sub-provision (or identifiable part thereof) is held to invalid or
unenforceable, then such invalidity or unenforceability shall not affect the remaining provisions (or identifiable parts thereof) in this Agreement or its Schedule.	
	 
	
33.      		
COLLECTIVE AGREEMENTS	
	 
	 	
There are no collective agreements applicable to your employment.	
	 
	
34.      		
GOVERNING LAW	
	 
	 	
The interpretation and enforcement of this Agreement shall be governed by and construed in all respect in accordance with the Law of Scotland.	

25

IN WITNESS WHEREOF these present typewritten on this and the preceding 24 pages are, together with the

Schedules hereto, executed in duplicate as follows:-

	
Signed for and on behalf of
		 	 

	
	
THE ROYAL BANK OF SCOTLAND plc
		 	 

	
	
at
     on the
     day of April
		 	/s/
    Neil Roden
	
2000
by
		 	

	
	
Neil Roden, Group Director Human Resources
		 	
Neil Roden
	
	 

	
	
Signed by Mark Fisher,
		 	 

	
	
at
Edinburgh on the 3 day	 	/s/
	    Mark Fisher

	
	
of
May 2000 before
		 	

	
	
the undernoted witnesses:-
		 	
Mark Fisher
	
	 

	
	
      M. McCallum
      (Witness)
		 	 

	
	
Full Name Mary
McCallum	 	 

	
	
Address Shielfield,
Lauder, TD2 6PG
		 
	 
	
Occupation Personal
Assistant	 

26

     Schedule 1 

ROYAL BANK OF SCOTLAND

  EXECUTIVE SEVERANCE ARRANGEMENTS 

1.          Introduction

It is the
    policy of the Company to seek to provide security of employment for every
    member of staff whilst having regard to the need for continued profitability
    and efficiency. The Company shall strive to cope with future fluctuations
    in staffing requirements by endeavouring to find alternative employment for
    employees within the Group. However, should circumstances arise where the
    Company’s policy of safeguarding the current or future
  employment of staff cannot be maintained in respect of members of the executive
    staff of the Company (“the Executives”),
  then, as a last resort, the methods and arrangements for terminating employment
  of Executives as outlined in this Schedule will apply.

2.          Notification of Potential Redundancies and Redeployment 

Where staff redundancies are anticipated, the Company shall, wherever possible: 

	 	(a)	as soon as practicable notify Executives who are likely to be affected; and	
	 
	 	(b)	
    attempt to re-deploy surplus Executives in one area to suitable alternative employment elsewhere within the Group. The Bank will in the first instance, conduct an executive assessment process
using the Bank’s chosen executive selection partner. This process combines a systematic interview and completion of a range of occupational questionnaires designed to measure	
	 
	 	 		

	
Functional, Technical Competence	
	 
	 	 	
	

	
Achieved Results	
	 
	 	 	
	

	
Intellectual Calibre	
	 
	 	 	
	

	
Personal Qualities	
	 
	 	 	
	

	
Business Acumen	
	 	 	 	 
	 	 	Should
            there be no distinguishing difference between individuals additional
            factors which would then be taken into account would include, in
            no particular order:-	 

  

    27

  

  	 	 		

	 Current
      levels of performance and conduct 
	 	 	 	 
	 	 		

	 Specific knowledge
      or skills
	 	 	 	 
	 	 		

	 Length
      of service and reckonable service for pension purposes

  All offers of redeployment, including any training, shall be made by the Company in writing and acceptances by Executives shall be in writing. The exact terms and conditions upon which Executives
shall be re-deployed shall be a matter for negotiation between the Company and the relevant Executives, ultimately the choice will be continued employment on the terms the Bank is prepared to offer or the severance package.

  3.          Voluntary
    Early Retirement

When the Company has, in accordance with paragraph 2, advised Executives of a situation which may involve surplus staff and the arrangements for redeployment, etc have not resolved, or are
unlikely to resolve the situation, the Company, other than in exceptional circumstances, shall invite applications from such Executives for voluntary early retirement. Whether or not such applications are accepted will be at the absolute discretion
of the Bank. Since no pension can be paid to staff below age 50, this section covers only Executives in excess of that age who are members of the Pension Scheme. The terms of Voluntary Early Retirement are as follows:- 

	(a) 
	Pension 
	 	 
	 	 For
        Executives who qualify for a pension, such pension is payable immediately,
        as calculated within the terms of the Pension Scheme, without actuarial
        discount, including commutation rights, based on pensionable service
    at the date of termination of service. 

28

	(b)	Cash
    Payment 
	 
	 	 1 year’s
    service and over - 13 weeks’ pay 
	 	 2 years’    service and over - 17 weeks’ pay 
	 	 3 years’ service
    and over - 22 weeks’ pay 
	 	 4 years’ service
    and over - 27 weeks’ pay 
	 	 5 years’ service
    and over - 32 weeks’ pay 
	 	 10 to
    14 years’ service - 38 weeks’ pay 
	 	 15 to
    19 years’ service - 46 weeks’ pay 
	 	 20 to
    24 years’ service - 57 weeks’ pay 
	 	 25 to
    29 years’ service - 68 weeks’ pay 
	 	 30 to
    34 years’ service - 79 weeks’ pay 
	 	 35 years’ service
    and over - 90 weeks’ pay 
	 	 	 
	 	The following
          conditions shall apply to such Cash Payment:
	 	 	 
	     		(i) 	service is continuous service calculated as at the date of termination by reference to the commencement date specified in Clause 4 of the Agreement;
	 	 	 
	      	(ii)	the calculation of a week’s or month’s (where appropriate) pay is on basic salary inclusive of any Job-related Allowances where these have been in payment for twelve months or more as at the effective date of termination, but excluding all other allowances or payments; 
	 	 	 
	 	(iii)	the cash payment is inclusive of entitlement to statutory redundancy payment (if any); and 
	 	 	 
	 	(iv)	the number of weeks or months (where appropriate) on which the cash payment is based will not exceed the period of employment remains prior to normal retirement date regardless of whether payment in lieu of notice is made. 
	 
	(c)	 Staff
    House Purchase Loans 
	 
	 	 Existing loans under
      the Company’s Staff House Purchase Scheme shall be allowed to continue
      on the existing
      terms and conditions arranged, provided they allow for the loan to be repaid
      by the normal retirement
    date. 

29

	 	 If employment
    is obtained which offers mortgage facilities, the Staff House Purchase loan
    shall be repaid as soon as eligibility under the new employer’s scheme
    is attained. 
	 	 
	 	 The Company
    will not consider applications for increases in borrowing. However, it will
    consider applications to move house, within the existing facility and subject
    to the approval of the property to be purchased. In such cases, the retention
    of any surplus arising on sale within the facility will be subject to the
    provisions of the Company’s Staff House Purchase Scheme in force at
    the time of sale.
	 	 
	 	 All other conditions
            of the Company’s Staff House Purchase Scheme shall apply to
          the loan. 
	 	 
	
(d) 		Other
    Banking Facilities
	 	 
	 	 All other
    banking facilities shall be on the Company’s terms and conditions for
    the conduct of staff pensioners’ accounts. 
	 	 
	
(e)      		
Car Schemes	
	 	 
	 	 The same arrangements
    will apply to members of the Company’s Executive Car Scheme as subsist
    in respect of Executives retiring at the normal retirement age and in accordance
    with the scheme rules under RBSelect. 
	 	 
	4. 	Voluntary Redundancy 

Where the arrangements for redeployment, etc and/or voluntary early retirement have not resolved, or are unlikely to resolve, the situation, the Company, other than in exceptional circumstances,
shall invite applications from Executives for voluntary redundancy. Whether or not such applications are accepted will be at the absolute discretion of the Company and in making its assessment the criteria outlined in paragraph 3 above will apply.
This section applies only to Executives not covered by voluntary early retirement, ie those below age 50 or those aged 50 or over who do not qualify for a pension under the Pension Scheme. Executives below age 50 who are members of the Pension
Scheme will have payment of their pensions deferred and paid at normal retirement age. Deferred pensions of such Executives will be increased during the period of deferment by the greater of:- 

30

	 
	1.	the
              annual increases as awarded in respect of pensions in payment;
          or
	 	  
	 	2.	the statutory increases
          in accordance with the Social Security Act 1985.
	 	 
	 	 The Social Security
              Act 1985 requires that the deferred pension in excess of the Guaranteed
              Minimum Pension,
              in respect of pensionable service since 1 January 1985, will be
              increased by the lower of the increase
          in the Retail Price Index or 5% per annum, over the period of deferment. 

	 	 	 	 
	 	The terms for
          Voluntary Redundancy, other than pension, are as follows:-
	 	 	 	 
	 	 (a)	 Cash
    payments will be made on the basis of the higher of:- 
	 	 	 	 
	 	 	(i)	 a cash payment
        calculated by reference to the Executive’s period of employment
    as outlined in paragraph 3(b) of this Agreement; or if higher 
	 	 	 	 
	 	 	(ii)	 9
    months’ salary (see also paragraph 7) 
	 	 	 	 
	 	 	each on the conditions
    outlined in paragraph 3(b) of this Agreement. 
	 	 	 	 
	 	 	 Reference
        to the Profit Sharing Scheme Deeds of Trust and Supplementary Deeds will
    indicate the situation with regard to payments under the Scheme. 
	 	 	 	 
	 	(b) 	 Additional
    Payment 
	 	 	 	 
	 	 	 In
        addition to the cash payment, and in respect of Executives aged 40 but
        under 50, a payment will be made related to age and service as at date
        of termination based on the following number of weeks’ pay for each
    year of service:- 

  

31 

	
Age in Years/Months
		
No of Weeks’ Pay
	
	40
 to
 40/11
		
0.20
	
	41
 to
 41/11
		
0.38
	
	42
 to
 42/11
		
0.55
	
	43
 to
 43/11
		
0.71
	
	44
 to
 44/11
		
0.86
	
	45
 to
 45/11
		
1.00
	
	46
 to
 46/11
		
1.13
	
	47
 to
 47/11
		
1.25
	
	48
 to
 48/11
		
1.36
	
	49
 to
 49/11
		
1.47
	

	 	 	 
	 	(c) 	 Staff House
    Purchase Loans 
	 	 	 
	 	 	 Existing Loans
        under the Company’s Staff House Purchase Scheme shall be allowed
        to continue on the existing terms and conditions arranged, subject to
        the additional conditions set out below, for a period of up to five years.
        Five years after the date of termination of employment, any outstanding
        borrowing will be subject to the terms and conditions which subsist in
    respect of House Purchase Loans to customers of the Company. 
	 	 	 
	 	 	 The rate of interest
        on each Staff House Purchase Loan shall be increased by 2% on each of
        the first four anniversaries of the date of termination of employment
        subject to the rate not exceeding that charged to the Company’s
    customers. 
	 	 	 
	 	 	 Executives
        shall sign a mandate authorising variation of the monthly repayments
        in line with changes in the interest rate and these variations shall
        be calculated in such a way that repayment of the loan is achieved without
    extension of the original term of the loan. 
	 	 	 
	 	 	 If employment
        is obtained which offers mortgage facilities, the Staff House Purchase
        loan shall be repaid as soon as eligibility under the new employer’s
    scheme is attained. 

  

32 

	 	 	 The
        Company will not consider applications for increases in borrowing. However,
        it will consider applications to move house, within the existing facilities
        and subject to the approval of the property to be purchased, normally
        for the purpose of taking up new employment. In such cases, the retention
        of any surplus arising on sale within the facility will be subject to
        the provisions of the Company’s Staff House Purchase Scheme in force
    at the time of sale. 
	 	 	 
	 	 	 All other conditions
        of the Company’s Staff House Purchase Scheme shall apply to the
    loan. 
	 	 	 
	 	(d)	 Other Banking
    Facilities 
	 	 	 
	 	 	 On termination
        of employment, Current Accounts, Deposit Accounts and any other loans
        not mentioned elsewhere, shall immediately become subject to the rates
    and terms applicable to customers of the Company. 
	 	 	 
	 	 	 Loans repayable
        within 4 years or less of being granted other than where a loan has been
        granted to purchase a car previously allocated under the terms of a Car
        Scheme - see paragraph 5(e) below, shall continue on the terms and conditions
        arranged at staff rates until the agreed repayment date, at which time
    any outstanding borrowing must be repaid. 
	 	 	 
	 	(e)	 Car Schemes 
	 	 	 
	 	 	 The same arrangements
        will apply to members of the Company’s Executive Car Scheme as subsist
        in respect of Executives retiring at the normal retirement age and in
    accordance with the rules under RBSelect. 
	 	 	 
	 	(f) 	 Wrongful Dismissal 
	 	 	 
	 	 	 The
        Executives whose applications for Voluntary Redundancy are accepted shall
        receive the Voluntary Redundancy terms in full and final settlement of
    all claims for wrongful dismissal (if any). 

  

33

	5. 	
Compulsory
Redundancy	
	 	 	 
	 	
Where all the foregoing procedures and voluntary measures have been implemented and as a last
resort the Company considers that compulsory redundancy is unavoidable, the terms for any
compulsory redundancies deemed necessary by the Company will be those which apply in either
Voluntary Early Retirement (paragraph 4) or Voluntary Redundancy (paragraph 5) depending on the
age of Executives and membership of the Company’s Pension Scheme. Executives who are made
Compulsorily Redundant shall receive the Compulsory Redundancy terms in full and final settlement
of all claims for wrongful dismissal (if any). The date of termination of employment shall be notified
in writing by the Company.
	
	 	 	 
	6.	
      Notice of Redundancy to Employees
	
	 	 	 
	 	 Notwithstanding
      the provisions of Clause 3 of this Agreement the minimum period of notice
      of redundancy to Executives shall be three months or such longer period
      as may be required by
      legislation. The notice period to the date of termination of employment
      will normally be worked.
      Where this is not possible, payment in lieu of notice will be made, subject
      to paragraph
    8. 
	 	 	 
	7.	Executives
	        Leaving Prior to Completion of Notice	
	 	 	 
	 	
Executives may apply to leave before their period of notice expires and hence waive part or all of their
notice. Agreement to this shall not he unreasonably withheld but shall be judged in light of individual
circumstances and the operational requirements of the Company. Where such agreement has been
given in writing, entitlement to redundancy or retirement terms shall not be withheld except that there
shall be no payment in lieu of notice beyond the revised date of termination of employment. However,
Executives who leave before their period of notice expires, without the agreement of the Company in
writing, may forfeit their entitlement to redundancy or retirement terms outside of the scope of the
Pension Scheme.
	
	 	 	 
	8.	
      Assistance to Redundant Executives
	
	 	 	 
	 	
(a)
		
In addition to the procedures in this Schedule, to minimise the effect of redundancy, the Bank will
endeavour to assist Executives made redundant to find other employment.
	

34

	 	
(b)      		
Any reasonable request for time off to seek other employment will be approved.	
	 
	 	
(c)      		
A counselling service will be offered to all Executives under notice of redundancy in accordance with this Schedule. Each Executive will be interviewed by the Director, Human Resources to discuss
his or her personal position and severance entitlements.	
	 	 
	9.	Exception
	 	 
	None of the arrangements in this Schedule shall apply in circumstances where the Company is promoting or transferring Executives in accordance with established procedures and the terms of individual contracts of employment. 
	 	 
	10.	Dismissal other than on the Grounds of Redundancy or Early Retirement
	 	 
	Where it is necessary to dismiss for some other reason an Executive already under notice of redundancy or whose application for early retirement has been accepted, entitlement to all benefits under the terms of this Schedule will be lost other than those which apply under the terms of the Pension Scheme which include a right to set-off in favour of the Company in certain circumstances. 

 

	/s/ Mark Fisher	 
	
	 
	Mark Fisher,	 
	 	 
	 	 
	/s/ Neil Roden	 
	
	 
	Neil Roden, Group Director Human Resources	 

35

Schedule 2

DECLARATION
        OF SECRECY

I, Mark Fisher, do hereby agree
and declare that
I will at all  times, whether I am still in the service of The Royal Bank of
Scotland plc or have left such service, observe secrecy in respect of all the
affairs of The Royal Bank of Scotland plc, its parent, subsidiary and associated
companies (hereinafter together called “the Bank”) and in particular
but without prejudice to the foregoing generality I will keep confidential: 

	
(a)	
all details of customers accounts and all the actual or proposed transactions of the Bank with its customers, suppliers, advisers, and other business connections; and	
	 
	
(b)	
all data belonging to the Bank whether stored electronically or otherwise and all details of the Bank’s premises, information, assets, internal communications, intellectual property,
technical systems, projects, operating procedures, finance, share price sensitive information, negotiating positions and forward planning or any other similar information.	

And I further agree and declare that I will not at any time
disclose, reveal, cause the publication of or otherwise make use of such confidential information whether for my personal gain or otherwise. In making this declaration of secrecy I fully understand that: 

	
(One)		
maintaining absolute confidentiality is crucial to the Bank whose business depends upon the discretion
of its employees and contracted personnel;
	
	 	 
	
(Two)		
a breach of this undertaking of confidentiality may lead to the termination of my employment with the
Bank and/or criminal proceedings;
	
	 	 
	
(Three)  		
this obligation of secrecy will apply to the Bank’s business both within the United Kingdom and
overseas and will remain in full force and effect even after I have left the service of the Bank; and
	
	 	 
	
(Four)		
this obligation of secrecy will apply unless I have express consent from the Bank to disclose the
confidential information or I am required to do so by law.
	

	 	 
	 	 
	/s/ Mark Fisher	 
	
	 
	Mark Fisher,	 
	 	 
	 	 
	/s/ Neil Roden	 
	
	 
	Neil Roden, Group Director Human Resources	 

  

  

  

  	 	Neil
          Roden

Director, Human Resources, UK Bank	
	 	 	Human
      Resources
	Your
      Ref 	 	PO
      Box 31 42 St Andrew Square
	Our
      Ref 	NR/DT	Edinburgh
      EH2 2YE
	 	 	 
	 	 	Telephone:
      0131 523 2022
	 	 	Switchboard:
      0131 556 8555
	Date	17
      April 2000	Facsimile:
      0131 557 3084
	 	 	 

  	 	 
	 	 
	 	STRICTLY
              PRIVATE & CONFIDENTIAL

                Mark
                Fisher 

            Chief
            Executive, Manufacturing 

            42
            St Andrews Square, 

            Edinburgh 

            EH2
      2YE
	 	 
	 	Dear
            Mark

        With
            reference to previous discussions please find attached an amended
            Service Agreement setting out the formal terms of the offer for the
            position of Chief Executive, Manufacturing reporting to the Group
            Chief Executive and effective from the 6th March, 2000.

         I
                 can confirm that you are eligible to participate in the Senior Executive
                 Bonus Scheme which entitles you to up to 50% of your salary per annum.  

        As
                      before there are three key sections which you will need to sign: 

        	 Service
              Agreement
	Schedule
                1 – Executive Severance
	 Schedule
              2 – Declaration of Secrecy

         Additionally
            you will also need to sign, in the presence of a witness, the separate
            Declaration of Secrecy form and return this copy to me. For your
            own records attached are duplicate copies of this information.

         If
                 you have any issues regarding the enclosed documentation please do
             not hesitate to contact me.

        Yours
              sincerely

                    

                    /s/ Neil Roden

                    Group
      Director, Human Resources

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