Document:

Unassociated Document

 

 

 EXECUTION VERSION

 

THE ROYAL BANK OF SCOTLAND GROUP PLC

 

as Company

 

and

 

THE BANK OF NEW YORK MELLON, ACTING THROUGH ITS LONDON BRANCH

 

as Trustee

 

 

FIRST SUPPLEMENTAL INDENTURE

 

dated as of April 1, 2014

 

to the

 

AMENDED AND RESTATED INDENTURE

 

dated as of September 13, 2011

$700,000,000 1.875% Senior Notes due 2017

 

$300,000,000 Floating Rate Notes due 2017

  

  

  

  

This FIRST SUPPLEMENTAL INDENTURE, dated as of April 1, 2014, among THE ROYAL BANK OF SCOTLAND GROUP PLC, a corporation incorporated in Scotland with registered number SC045551, as issuer (the “Company”) and THE BANK OF NEW YORK MELLON, acting through its London Branch, a banking corporation duly organized and existing under the laws of the State of New York, as trustee (the “Trustee”) having its Corporate Trust Office at One Canada Square, London E14 5AL.

 

WITNESSETH:

 

WHEREAS, the Company and the Trustee have executed and delivered an Amended and Restated Indenture dated as of September 13, 2011 (the “Base Indenture”) to provide for the issuance of the Company’s Senior Debt Securities from time to time;

 

WHEREAS, Section 9.01(f) of the Base Indenture provides that the Company and the Trustee may enter into a supplemental indenture to establish the forms or terms of the Senior Debt Securities of any series without the consent of Holders as permitted under Sections 2.01 and 3.01 of the Base Indenture;

 

WHEREAS, the Company desires to issue, as a further series of Senior Debt Securities under the Base Indenture, $700,000,000 1.875% Notes due March 31, 2017 (the “Fixed Rate Notes”) and $300,000,000 Floating Rate Notes due March 31, 2017 (the “Floating Rate Notes” and together with the Fixed Rate Notes, the “Notes”) to be issued pursuant to this First Supplemental Indenture dated as of April 1, 2014 (the “First Supplemental Indenture” and, together with the Base Indenture, the “Indenture”);

 

WHEREAS, this First Supplemental Indenture shall amend and supplement the Base Indenture except where this First Supplemental Indenture only applies to the Notes; to the extent that the terms of the Base Indenture are inconsistent with such provisions of this First Supplemental Indenture, the terms of this First Supplemental Indenture shall govern;

 

WHEREAS, the entry into of this First Supplemental Indenture has been authorized pursuant to a Board Resolution as required by Section 9.01 of the Base Indenture;

 

WHEREAS, the Company has requested that the Trustee execute and deliver this First Supplemental Indenture, and whereas all actions required by it to be taken in order to make this First Supplemental Indenture a valid, binding and enforceable instrument in accordance with its terms have been taken and performed, and the execution and delivery of this First Supplemental Indenture has been duly authorized in all respects; and

 

  

  

  

 

NOW, THEREFORE, the Company and the Trustee mutually covenant and agree as follows:

 

ARTICLE 1

DEFINITIONS

 

Section 1.01.    Definition of Terms. For all purposes of this First Supplemental Indenture:

 

(a)      a term defined anywhere in this First Supplemental Indenture has the same meaning throughout;

 

(b)      capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Base Indenture;

 

(c)      the singular includes the plural and vice versa;

 

(d)      headings are for convenience of reference only and do not affect interpretation; and

 

(e)      for purposes of this First Supplemental Indenture and the Base Indenture, the term “series” shall mean the series of securities designated as the Notes.

 

ARTICLE 2

THE SENIOR DEBT SECURITIES

 

Section 2.01.    Terms of the Fixed Rate Notes. The following terms relating to the Fixed Rate Notes are hereby established pursuant to Section 3.01 of the Base Indenture:

 

(a)      The title of the Fixed Rate Notes shall be the “1.875% Senior Notes due 2017”;

 

(b)      The aggregate principal amount of the Fixed Rate Notes that may be authenticated and delivered under the Indenture shall not initially exceed $700,000,000 (except as otherwise provided in the Indenture);

 

(c)      Principal on the Fixed Rate Notes shall be payable on March 31, 2017;

 

(d)      The Fixed Rate Notes shall be issued in global registered form on April 1, 2014; and shall bear interest from April 1, 2014 at an annual rate of 1.875%, payable semi-annually in arrear on March 31 and September 30 in each year commencing on September 30, 2014 (each, an “Interest Payment Date”).  Interest on the Fixed Rate Notes will be calculated on the basis of a 360-day year

 

  

  

  

 

divided into twelve months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed in such period.  The Regular Record Dates for the Fixed Rate Notes will be the March 17 and September 16 in each year, whether or not a Business Day, immediately preceding the relevant Interest Payment Date.

 

(e)      No premium, upon redemption or otherwise, shall be payable by the Company on the Fixed Rate Notes;

 

(f)      Principal of and any interest on the Fixed Rate Notes shall be paid to the Holder through The Bank of New York Mellon, as paying agent of the Company having offices in London, United Kingdom;

 

(g)      The Fixed Rate Notes shall not be redeemable except as provided in Article 11 of the Base Indenture.  In connection with any redemption of Fixed Rate Notes pursuant to Section 11.08 of the Base Indenture, the date referenced therein shall be March 27, 2014;

 

(h)      The Company shall have no obligation to redeem or purchase the Notes pursuant to any sinking fund or analogous provision;

 

(i)      The Fixed Rate Notes shall be issued only in denominations of $100,000 and integral multiples of $1,000 in excess thereof;

 

(j)      The principal amount of, and any accrued interest on, the Fixed Rate Notes shall be payable upon the declaration of acceleration thereof pursuant to Section 5.02 of the Base Indenture;

 

(k)      Additional Amounts shall only be payable on the Fixed Rate Notes pursuant to Section 10.04 of the Base Indenture;

 

(l)      The Fixed Rate Notes shall not be converted into or exchanged at the option of the Company for stock or other securities of the Company;

 

(m)        The Fixed Rate Notes shall be denominated in U.S. Dollars;

 

(n)      The payment of principal of and interest, if any, on the Fixed Rate Notes shall be payable in U.S. Dollars;

 

(o)      The payment of principal of and interest, if any, on the Fixed Rate Notes shall be payable only in the coin or currency in which the Notes are denominated which, pursuant to (m) above, shall be U.S. Dollars;

 

(p)      The Fixed Rate Notes will be issued in the form of one or more global securities in registered form, without coupons attached, and the initial

 

  

  

  

 

Holder with respect to each such global security shall be Cede & Co., as nominee of The Depository Trust Company;

 

(q)      Except in limited circumstances, the Fixed Rate Notes will not be issued in definitive form;

 

(r)      There is no Calculation Agent for the Fixed Rate Notes;

 

(s)      The Events of Default on the Fixed Rate Notes are as set forth in Section 5.01 of the Base Indenture as amended by ‎Section 3.02 of this First Supplemental Indenture;

 

(t)      The form of the Fixed Rate Note shall be evidenced by one or more global Notes in registered form (each, a “Global Note”) substantially in the form of Exhibit A attached to this First Supplemental Indenture and made a part thereof; and

 

(u)      The Company may issue additional Fixed Rate Notes (“Additional Notes”) after the date hereof having the same ranking and same interest rate, maturity date, redemption terms and other terms as the Notes except for the price to the public and issue date, provided however that if such additional notes have the same CUSIP, ISIN and/or Common Code as the outstanding Notes, such additional notes must be fungible with the Notes for U.S. federal income tax purposes.  Any such Additional Notes, together with the Fixed Rate Notes will constitute a single series of securities under the Indenture. There is no limitation on the amount of notes or other debt securities that the Company may issue under the Indenture.

 

Section 2.02.                      Terms of the Floating Rate Notes. The following terms relating to the Floating Rate Notes are hereby established pursuant to Section 3.01 of the Base Indenture:

 

(a)      The title of the Floating Rate Notes shall be “Floating Rate Notes due 2017”;

 

(b)      The aggregate principal amount of the Floating Rate Notes that may be authenticated and delivered under the Indenture shall not initially exceed $300,000,000 (except as otherwise provided in the Indenture);

 

(c)      Principal on the Floating Rate Notes shall be payable on March 31, 2017;

 

(d)      The Floating Rate Notes shall be issued in global registered form on April 1, 2014 and shall bear interest from April 1, 2014 payable quarterly on the 30th day of March, June, September and December of each year, commencing on

 

  

  

  

 

June 30, 2014 (each, an “Interest Payment Date”), except that the final Interest Payment Date will be March 31, 2017.

 

The interest rate for the Floating Rate Notes for the first Floating Rate Interest Period (as defined below) will be LIBOR (as defined below) as determined on March 28, 2014 plus the Spread.  Thereafter, the interest rate for any Floating Rate Interest Period will be LIBOR as determined on the applicable Interest Determination Date (as defined below) plus the Spread, in each case calculated on the basis of a 360-day year and the actual number of days elapsed. The Spread is 94 basis points.

 

Interest on the Floating Rate Notes will be paid quarterly in arrear on March 30, June 30, September 30 and December 30 of each year, commencing on June 30, 2014 (each a “Floating Rate Interest Payment Date”), except that the final Floating Rate Interest Payment Date will be the Maturity Date, March 31, 2017.  However, if a Floating Rate Interest Payment Date would fall on a day that is not a business day, the Floating Rate Interest Payment Date will be postponed to the next succeeding day that is a business day, except that if the business day falls in the next succeeding calendar month, the applicable Floating Rate Interest Payment Date will be the immediately preceding business day.  In each such case, except for the Floating Rate Interest Payment Date falling on the maturity date, the Floating Rate Interest Periods (as defined below) and the Interest Reset Dates (as defined below) will be adjusted accordingly to calculate the amount of interest payable on the notes.

 

The interest rate will be reset on March 30, June 30, September 30 and December 30 of each year, commencing  on June 30, 2014 (each, an “Interest Reset Date”).  However, if any Interest Reset Date would otherwise be a day that is not a business day, that Interest Reset Date will be postponed to the next succeeding day that is a business day, except that if the business day falls in the next succeeding calendar month, the applicable Interest Reset Date will be the immediately preceding business day.

 

The first interest period will be the period from and including April 1, 2014 to but excluding the immediately succeeding Interest Reset Date.  Thereafter, the interest periods will be the periods from and including an Interest Reset Date to but excluding the immediately succeeding Interest Reset Date (together with the first interest period, each a “Floating Rate Interest Period”).  However, the final Interest Period will be the period from and including the Interest Reset Date immediately preceding the maturity date to the maturity date.

 

  

  

  

 

The calculation agent in respect of the Floating Rate Notes will determine LIBOR (as defined below) for each Floating Rate Interest Period on the second London business day prior to the first day of such Floating Rate Interest Period (an “Interest Determination Date”).  LIBOR for the first Floating Rate Interest Period will be determined on March 28, 2014.

 

“LIBOR” means, with respect to the Interest Determination Date for each Floating Rate Interest Period, the offered rate for deposits of US dollars having a maturity of three months that appears on the Reuters Screen LIBOR01 display page, or any successor page, on Reuters or any successor service (or any such other service(s) as may be nominated by the British Bankers’ Association, or any successor thereof, for the purpose of displaying London interbank offered rates for US dollar deposits) (the “Designated LIBOR Page”).

 

If no rate appears on the Designated LIBOR Page, LIBOR will be determined for such Interest Determination Date on the basis of the rates at approximately 11:00 a.m., London time, on such Interest Determination Date at which deposits in US dollars are offered to prime banks in the London inter-bank market by four major banks in such market selected by the calculation agent, after consultation with us, for a term of three months and in a principal amount equal to an amount that in the judgment of the calculation agent is representative for a single transaction in US dollars in such market at such time (a “Representative Amount”).  The calculation agent will request the principal London office of each of such banks to provide a quotation of its rate.  If at least two such quotations are provided, LIBOR for such Interest Period will be the arithmetic mean (rounded, if necessary, to the nearest one-hundred-thousandth of a percentage point, with five millionths of a percentage point rounded upwards) of the rates quoted at approximately 11:00 a.m. in the City of New York on such Interest Determination Date by three major banks in New York City, selected by the calculation agent, after consultation with us, for loans in US dollars to leading European banks, for a term of three months and in a Representative Amount, provided, however, that if the banks so selected are not quoting as mentioned above, the then-existing LIBOR rate will remain in effect for such Interest Period.

 

The calculation agent shall exercise due care to determine the interest rates on the Floating Rate Notes and shall communicate the same to the Company, the Trustee, The Depository Trust Company and any paying agent identified to it in writing as soon as practicable after each determination.

 

  

  

  

 

The regular record dates for the Floating Rate Notes will be March 16, June 16, September 16 and December 16 of each year.

 

The interest rate on the Floating Rate Notes will in no event be higher than the maximum rate permitted by law.

 

(e)      No premium, upon redemption or otherwise, shall be payable by the Company on the Floating Rate Notes;

 

(f)      Principal of and any interest on the Floating Rate Notes shall be paid to the Holder through The Bank of New York Mellon, as paying agent of the Company having offices in London, United Kingdom;

 

(g)       The Floating Rate Notes shall not be redeemable except as provided in Section 11.08 of the Base Indenture. In connection with any redemption of Senior Notes pursuant to Section 11.08 of the Base Indenture, the date referenced therein shall be March 27, 2014;

 

(h)      Other than with respect to any redemption of the Floating Rate Notes pursuant to Section 11.08 of the Base Indenture, the Company shall have no obligation to redeem or purchase the Floating Rate Notes pursuant to any sinking fund or analogous provision;

 

(i)      The Floating Rate Notes shall be issued only in denominations of $100,000 and integral multiples of $1,000 in excess thereof;

 

(j)      The principal amount of, and any accrued interest on, the Floating Rate Notes shall be payable upon the declaration of acceleration thereof pursuant to Section 5.02 of the Base Indenture;

 

(k)      Additional Amounts shall only be payable on the Floating Rate Notes pursuant to Section 10.04 of the Base Indenture;

 

(l)      The Floating Rate Notes shall not be converted into or exchanged at the option of the Company or otherwise for stock or other securities of the Company;

 

(m)        The Floating Rate Notes shall be denominated in U.S. Dollars;

 

(n)      The payment of principal of and  interest, if any, on the Floating Rate notes shall be payable in U.S. Dollars;

 

(o)      The payment of principal of (and premium, if any) or interest, if any, on the Floating Rate notes shall be payable only in the coin or currency in which the Floating Rate Notes are denominated which, pursuant to (n) above, shall be the coin or currency of the United States of America;

 

  

  

  

 

(p)      The Floating Rate Notes will be issued in the form of one or more global securities in registered form, without coupons attached, and the initial Holder with respect to each such global security shall be Cede & Co., as nominee of The Depository Trust Company;

 

(q)      Except in limited circumstances, the Floating Rate Notes will not be issued in definitive form;

 

(r)      The Calculation Agent for the Floating Rate Notes will be The Royal Bank of Scotland plc pursuant to the terms of a Calculation Agency Agreement dated April 1, 2014;

 

(s)      The Events of Default on the Floating Rate Notes are as set forth in Section 5.01 of the Base Indenture as amended by Section 3.02 of this First Supplemental Indenture;

 

(t)      The form of the Floating Rate Note shall be evidenced by one or more global Notes in registered form (each, a “Global Note”) substantially in the form of Exhibit B attached to this First Supplemental Indenture and made a part thereof; and

 

(u)      The Company may issue additional Floating Rate Notes (“Additional Notes”) after the date hereof having the same ranking and same interest rate, maturity date, redemption terms and other terms as the Notes except for the price to the public and issue date, provided however that if such additional notes have the same CUSIP, ISIN and/or Common Code as the outstanding Notes, such additional notes must be fungible with the Notes for U.S. federal income tax purposes.  Any such Additional Notes, together with the Floating Rate Notes will constitute a single series of securities under the Indenture. There is no limitation on the amount of notes or other debt securities that the Company may issue under the Indenture.

 

ARTICLE 3

AMENDMENTS TO THE BASE INDENTURE

 

Section 3.01.                      Addition of Definitions.  With respect to the Notes only, Section 1.01 of the Base Indenture is amended to include the following definitions (which shall be deemed to arise in Section 1.01 in their proper alphabetical order):

 

“Beneficial Owners” shall mean (a) if the Notes are in global form, the beneficial owners of the Notes (and any interest therein) and (b) if the Notes are held in definitive form, the holders in whose names the Notes are registered in the Senior Debt Security Register and any beneficial owners holding an interest in such Notes held in definitive form.

 

  

  

  

 

“relevant U.K. resolution authority” means any authority with the ability to exercise a U.K. bail-in power.

 

“U.K. bail-in power” means any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company or other members of the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of a European Union directive or regulation of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and/or within the context of a U.K. resolution regime by way of amendments to the Banking Act 2009, as the same may be amended from time to time (whether pursuant to the U.K. Financial Services (Banking Reform) Act 2013 or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, transferred and/or converted into shares or other securities or obligations of the obligor or any other person.

 

Section 3.02.    Notices to Trustee. With respect to any series of Senior Debt Securities issued under the Base Indenture, including the Notes, Section 1.05(a) of the Base Indenture is amended and restated in part to read as follows:

 

Section 1.05. Notices, Etc. to Trustee and Company. Any request, demand, authorization, direction, notice, consent, waiver or Act of Holders or other document provided or permitted by this Amended and Restated Indenture to be made upon, given or furnished to, or filed with,

 

(a)              the Trustee by any Holder or by the Company shall be sufficient for every purpose hereunder (unless otherwise herein expressly provided) if made, given, furnished or filed in writing (which may be via facsimile or email delivery of a copy of such document) to the Trustee at its Corporate Trust Office with a copy to The Bank of New York Mellon, Merck House, Seldown, Poole, Dorset BH15 1PX, United Kingdom (Facsimile : +44 207 964 2536; email : corpsov5@bnymellon.com) , and the Trustee agrees to accept and act upon facsimile or email transmission of written instructions pursuant to this Amended and Restated Indenture; provided, however, that (x) the party providing such written instructions,

 

  

  

  

 

subsequent to such transmission of written instructions, shall provide the originally executed instructions or directions to the Trustee in a timely manner, and (y) such originally executed instructions or directions shall be signed by an authorized representative of the party providing such instructions or directions; or

 

Section 3.03.    Appointment of Agent for Service. With respect to any series of Senior Debt Securities issued under the Base Indenture, including the Notes, Section 1.14 of the Base Indenture is amended and restated in its entirety and shall read as follows:

 

Section 1.14. Appointment of Agent for Service. The Company has designated and appointed CT Corporation System, 111 Eight Avenue, 13th Floor, New York, NY 10011, United States, as its authorized agent upon which process may be served in any suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York arising out of or relating to the Notes or this First Supplemental Indenture, but for that purpose only, and agrees that service of process upon said CT Corporation System shall be deemed in every respect effective service of process upon it in any such suit or proceeding in any Federal or State court in the Borough of Manhattan, The City of New York, New York. Such appointment shall be irrevocable so long as any of the Notes remain Outstanding until the appointment of a successor by the Company and such successor’s acceptance of such appointment. Upon such acceptance, the Company shall notify the Trustee of the name and address of such successor. The Company further agrees to take any and all action, including the execution and filing of any and all such documents and instruments, as may be necessary to continue such designation and appointment of said CT Corporation System in full force and effect so long as any of the Notes shall be Outstanding. The Trustee shall not be obligated and shall have no responsibility with respect to any failure by the Company to take any such action. The Company hereby submits (for the purposes of any such suit or proceeding) to the jurisdiction of any such court in which any such suit or proceeding is so instituted, and waives, to the extent it may effectively do so, any objection it may have now or hereafter to the laying of the venue of any such suit or proceeding.

 

  

  

  

 

Section 3.04.    Events of Default.  With respect to the Notes only, Section 5.01 of the Base Indenture is amended by adding the following sentence at the end of the section:

 

The exercise of any U.K. bail-in power by the relevant U.K. resolution authority shall not constitute a default or an Event of Default under this Section 5.01.

 

Section 3.05.    Compensation and Reimbursement.  With respect to the Notes only, Section 6.07 of the Base Indenture is amended in part to add the following sentence at the end of the section:

 

The provisions of this Section shall survive the termination of this Indenture or the earlier resignation or removal of the Trustee and any exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Notes.

 

ARTICLE 4

 

Section 4.01.    Agreement with Respect to Exercise of U.K. Bail-In Power. The following provisions relate solely to the Notes established pursuant to this Supplemental Indenture:

 

(a)      By purchasing the Notes, each Holder (including each Beneficial Owner) of the Notes acknowledges, agrees to be bound by and consents to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority that may result in (i) the cancellation of all, or a portion, of the principal amount of, or interest on, the Notes and/or (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Notes into shares or other securities or other obligations of the Company or another person, which U.K. bail-in power may be exercised by means of variation of the terms of the Notes solely to give effect to the above. Each Holder (including each Beneficial Owner) of the Notes further acknowledges and agrees that the rights of the holders under the Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority expressed to implement such a cancellation or conversion.

 

(b)      By purchasing the Notes each Holder (including each Beneficial Owner) of the Notes:

 

(i)     acknowledges and agrees that upon the exercise of the U.K. bail-in power by the relevant U.K. resolution authority it shall not give rise to a Default or an Event of Default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act;

 

  

  

  

 

(ii)     to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Notes; and

 

(iii)     acknowledges and agrees that, upon the exercise of any U.K. bail-in power by the relevant U.K. resolution authority, (a) the Trustee shall not be required to take any further directions from holders of the Notes under Section 5.12 of the Base Indenture, and (b) neither the Base Indenture nor this First Supplemental Indenture shall impose any duties upon the Trustee whatsoever with respect to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.  Notwithstanding the foregoing, if, following the completion of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority, the Notes remain outstanding (for example, if the exercise of the U.K. bail-in power results in only a partial write-down of the principal of the Notes), then the Trustee’s duties under the Indenture shall remain applicable with respect to the Notes following such completion to the extent that the Company and the Trustee shall agree pursuant to a supplemental indenture or an amendment to this First Supplemental Indenture.

 

(c)      By purchasing the Notes, each Holder (including each Beneficial Owner) that acquires its Notes in the secondary market shall be deemed to acknowledge and agree to be bound by and consent to the same provisions specified in the Indenture to the same extent as the Holders and Beneficial Owners of the Notes that acquire the Notes upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the Notes related to the U.K. bail-in power.

 

(d)      By its purchase of the Notes, each Holder and Beneficial Owner shall be deemed to have (i) consented to the exercise of any U.K. bail-in power as it may be imposed without any prior notice by the relevant U.K. resolution authority of its decision to exercise such power with respect to the Notes and (ii) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Notes to take any and all necessary action, if required, to implement the exercise of any U.K. bail-in power with respect to the Notes as it may be imposed, without any further action or direction on the part of such Holder or Beneficial Owner.

 

(e)      No repayment of the principal amount of the Notes or payment of interest on the Notes shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. resolution authority unless, at the time that

 

  

  

  

 

such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made by the Company under the laws and regulations of the United Kingdom and the European Union applicable to the Company or other members of the Group.

 

(f)      Upon the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Notes, the Company shall provide a written notice to DTC as soon as practicable regarding such exercise of the U.K. bail-in power for purposes of notifying Holders of such occurrence. The Company shall also deliver a copy of such notice to the Trustee for information purposes.

 

ARTICLE 5

MISCELLANEOUS

 

Section 5.01.    Effect of Supplemental Indenture.  Upon the execution and delivery of this First Supplemental Indenture by the Company and the Trustee, and the delivery of the documents referred to in ‎Section 5.02 herein, the Base Indenture shall be amended and supplemented in accordance herewith, and this First Supplemental Indenture shall form a part of the Base Indenture, as amended, for all purposes in respect of the Notes.

 

Section 5.02.    Other Documents to Be Given to the Trustee. As specified in Section 9.03 of the Base Indenture and subject to the provisions of Section 6.03 of the Base Indenture, the Trustee shall be entitled to receive an Officer’s Certificate and an Opinion of Counsel stating the recitals contained in Section 1.02 of the Base Indenture, and in the case of such Opinion of Counsel, that this First Supplemental Indenture is permitted by the Base Indenture, conforms to the requirements of the Trust Indenture Act, and (subject to Section 1.03 of the Base Indenture) constitutes valid and binding obligations of the Company enforceable in accordance with their terms, subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally, concepts of reasonableness and equitable principles of general applicability, as conclusive evidence that this First Supplemental Indenture complies with the applicable provisions of the Base Indenture.

 

Section 5.03.    Confirmation of Indenture. The Base Indenture, as amended and supplemented by this First Supplemental Indenture with respect to the Notes, is in all respects ratified and confirmed, and the Base Indenture, this First Supplemental Indenture and all indentures supplemental thereto shall, in respect of the Notes, be read, taken and construed as one and the same instrument. This First Supplemental Indenture constitutes an integral part of the Base Indenture with respect to the Notes. In the event of a conflict between the terms and conditions of the Base Indenture and the terms and conditions of this First Supplemental Indenture, the terms and conditions of this First Supplemental Indenture shall prevail with respect to the Notes.

 

  

  

  

 

Section 5.04.    Concerning the Trustee. The Trustee does not make any representations as to the validity or sufficiency of this First Supplemental Indenture. The recitals and statements herein are deemed to be those of the Company and not the Trustee. In entering into this First Supplemental Indenture, the Trustee shall be entitled to the benefit of every provision of the Base Indenture relating to the conduct of or affecting the liability of or affording protection to the Trustee.

 

Section 5.05.    Governing Law. This First Supplemental Indenture and the Notes shall be governed by and construed in accordance with the laws of the State of New York, irrespective of conflicts of laws principles, except as stated in Section 1.12 of the Base Indenture, and except that the authorization and execution by the Company of this First Supplemental Indenture and the Notes shall be governed by (in addition to the laws of the State of New York relevant to execution) the respective jurisdictions of the Company and the Trustee, as the case may be.

 

Section 5.06.    Reparability. In case any provision contained in this First Supplemental Indenture shall be invalid, illegal or unenforceable, the validity, legality and enforceability of the remaining provisions shall not in any way be affected or impaired thereby.

 

Section 5.07.    Counterparts. This First Supplemental Indenture may be executed in any number of counterparts, each of which shall be an original, but such counterparts shall together constitute but one and the same instrument.

 

[Signature Page Follows]

 

  

  

  

 

IN WITNESS WHEREOF, the parties hereto have caused this First Supplemental Indenture to be duly executed as of the date first written above.

 

 

	 	
THE ROYAL BANK OF SCOTLAND GROUP PLC, 

      as Company

	 	 
	 	 
	 	
By:

	/s/ Vandita Pant
	 	 	Name:	Vandita Pant
	 	 	Title:	Head of Capital Management & Markets, RBS Treasury 

 

	 	
THE BANK OF NEW YORK MELLON, LONDON BRANCH, 

      as Trustee

	 	 
	 	 
	 	
By:

	/s/ Paul Cattermole
	 	 	Name:	Paul Cattermole
	 	 	Title:	Vice President

 

 

[Signature Page to First Supplemental Indenture]

 

  

  

  

 

EXHIBIT A

 

FORM OF FIXED RATE SENIOR NOTE

 

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

 

 

CUSIP No. [●]

ISIN No. [●]

 

THE ROYAL BANK OF SCOTLAND GROUP plc

 

[●]% SENIOR NOTES DUE [●]

 

 

	No. [●]	$[●]

 

THE ROYAL BANK OF SCOTLAND GROUP plc (herein called the “Company,” which term includes any successor person under the Indenture (as defined on the reverse hereof)), for value received, hereby promises to pay to CEDE & CO., or registered assignees, the principal sum of $[●] ([●] million dollars) on [●] or on such earlier date as the principal hereof may become due in accordance with the terms hereof and to pay interest thereon semi-annually in arrear on [●] and [●] of each year, commencing [●], and ending on [●] (each, a “Payment Date”).  Interest so payable on any Payment Date shall be paid to the holder in whose name this Senior Note is registered on the [●] day of [●] and [●] of each year (each a “Regular Record Date”).  Any interest which is payable, but is not punctually paid or duly provided for, on any Payment Date is herein called “Default Interest”. Default Interest shall cease to be payable to the registered holder on the relevant Regular Record Date by virtue then of having been such holder, and such Default Interest may be paid by the Company, at its election in each case, as provided in clause (x) or (y) below: (x) the Company may elect to make payment of any Default Interest to registered holders at the close of business on a Special Record Date (a “Special Record Date”) for the payment of such Default Interest, such Special Record Date to be fixed in accordance with Section 3.07(a) of the Indenture

 

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or, (y) the Company may make payment of any Default Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Note may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment, such manner of payment shall be deemed practicable by the Trustee.

 

Interest shall accrue on this Senior Note from day to day from the date of issuance hereof or from the most recent Payment Date at the rate of [●]% per annum, until the principal amount hereof is paid or made available for payment.

 

Payments of interest on this Senior Note shall be computed on the basis of a 360-day year divided into twelve months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed in such period.

 

Payment of the principal amount of, and any interest on, this Senior Note will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  Such payment shall be made to the Holder including through a Paying Agent of the Company outside the United Kingdom for collection by the Holder.  If the date for payment of the principal amount hereof or interest thereon is not a Business Day, then (subject as provided in the Indenture) such payment shall be made on the next succeeding Business Day with the same force and effect as if made on such date for payment and without any interest or other payment in respect of such delay.

 

Prior to due presentment of this Senior Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Senior Note is registered as the owner of such Senior Note for the purpose of receiving payment of principal and interest, if any, on such Senior Note and for all other purposes whatsoever, whether or not such Senior Note be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

 

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

 

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

 

The exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority may result in (i) the cancellation of all, or a portion, of the principal

 

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amount of, or interest on, the Senior Notes and/or (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Senior Notes into shares or other securities or other obligations of the Company or another person, which U.K. bail-in power may be exercised by means of variation of the terms of the Senior Notes solely to give effect to the above. Each Holder (including each Beneficial Owner) of the Senior Notes further acknowledges and agrees that the rights of the holders under the Senior Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority expressed to implement such a cancellation or conversion.

 

For these purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company or other members of the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of a European Union directive or regulation of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and/or within the context of a U.K. resolution regime by way of amendment to the Banking Act 2009 as the same may be amended from time to time (whether pursuant to the Banking Reform Act 2013 or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).

 

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

 

 

Dated: [●]

 

 

	 	Executed by
	 	 
	 	
THE ROYAL BANK OF SCOTLAND GROUP PLC

	 	 
	 	 
	 	
By:

	 
	 	 	Name:	[●]
	 	 	Title:	
Authorized Signatory

 

	 	 	 
	 	 	Name:	[●]
	 	 	Title:	
Authorized Signatory

 

  

  

  

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Senior Notes of the series designated herein referred to in the within-mentioned Indenture.

 

Dated: [●]

 

	  	
THE BANK OF NEW YORK MELLON, LONDON BRANCH

	  	
as Trustee

	 
	 	 	 
	 	 	 
	  	
By:

	  	 
	  	  	
Authorized Signatory

	 

 

  

  

  

 

[Reverse of Note]

 

This note is one of a duly authorized issue of securities of the Company (herein called the “Senior Notes”) issued and to be issued in one or more series under an amended and restated indenture dated as of September 13, 2011 (herein called the “Base Indenture”), as supplemented by the First Supplemental Indenture dated as of April 1, 2014 (the “First Supplemental Indenture” and together with the Base Indenture, the “Indenture”) in each case among the Company, as issuer, and The Bank of New York Mellon, acting through its London Branch as trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture). Reference is hereby made to the Indenture and all indentures supplemental thereto for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Senior Notes and of the terms upon which the Senior Notes are, and are to be, authenticated and delivered.

 

This Senior Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $[·].  The Company may, from time to time, without the consent of the holders of the Senior Notes, issue Additional Senior Debt Securities having the same ranking and interest rate, maturity date, redemption terms and other terms as the Senior Notes of this series, except for the price to the public and issue date. Any such Additional Senior Debt Securities, together with the Senior Notes of this series, will constitute a single series of Senior Notes under the Indenture and shall be included in the definition of “Senior Debt Securities” in the Indenture where the context requires; provided, however, that if such Additional Senior Debt Securities are not fungible with the Outstanding Senior Notes of this series for U.S. federal income tax purposes, the Additional Senior Debt Securities must have a CUSIP, ISIN and/or other identifying number (as the case may be) different from those used for the Outstanding Senior Notes of this series.  The Senior Notes will initially be issued in the form of one or more global Senior Notes (each, a “Global Senior Note”).  Except as provided in the Indenture, a Global Senior Note shall not be exchangeable for one or more definitive Senior Notes.

 

The Senior Notes of this series will constitute unsecured and unsubordinated obligations of the Company, as described herein, and will rank pari passu without any preference among themselves.

 

If an Event of Default with respect to the Senior Notes of this series shall have occurred and be continuing, the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Senior Notes of this series may declare the principal amount of, and any accrued interest on, all the Senior Notes to be due and payable immediately, in the manner, with the effect and subject to the conditions provided in the Indenture.

 

If a Default with respect to the Senior Notes of this series shall have occurred and be continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of Holders of Senior Notes by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the

 

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specific enforcement of any covenant or agreement in the Indenture or in aid of the exercise of any power granted thereon, or to enforce any other proper remedy, including the institution of proceedings in Scotland (but not elsewhere) for the winding up of the Company.

 

By acceptance of the Senior Notes of this series, the Holder will be deemed to have waived any right of set-off or counterclaim with respect to such Senior Notes that they might otherwise have against the Company, whether before or during a winding-up of the Company.

 

Subject to the provisions of this paragraph, all amounts of principal and interest on any Senior Notes of this Series will be paid by the Company without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholding now or hereafter imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any U.K. political subdivision or authority thereof or therein having the power to tax (the “Taxing Jurisdiction”), unless such deduction or withholding is required by law.  If deduction or withholding of any such taxes, levies, imposts, duties, charges, fees, deductions or withholdings shall at any time be required by the Taxing Jurisdiction, the Company will pay such additional amounts of, or in respect of, the principal amount of, and interest on, the Senior Notes of this series (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holders after such deduction or withholding shall equal the respective amounts of principal and interest which would have been payable in respect of such Senior Notes had no such deduction or withholding been required, provided, however, that the foregoing will not apply to any such tax, levy, impost, duty, charge, fee, deduction or withholding which would not have been payable or due but for the fact that:

 

(i) the Holder or the beneficial owner of the Senior Note is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or is physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the holding or ownership of a Senior Note, or the collection of any payment of (or in respect of) principal of, or interest on, any Senior Note,

 

(ii) except in the case of a winding-up of the Company in the United Kingdom, the relevant Senior Note is presented (where presentation is required) for payment in the United Kingdom,

 

(iii) the relevant Senior Note is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to such Additional Amount on presenting the same for payment at the close of such 30 day period,

 

(iv) the Holder or the beneficial owner of the relevant Senior Note or the beneficial owner of any payment of (or in respect of) principal of, premium, if any, or

 

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interest, on such Senior Note failed to comply with a request of the Company or its liquidator or other authorized person addressed to the Holder (x) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (y) to make any declaration or other similar claim to satisfy any requirement, which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative practice of the Taxing Jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge,

 

(v) the withholding or deduction is imposed on a payment to or for the benefit of an individual and is required to be made pursuant to European Council Directive 2003/48/EC on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such Directive,

 

(vi) the Senior Note is presented (where presentation is required) for payment by or on behalf of a Holder who would have been able to avoid such withholding or deduction by presenting the Senior Note to another paying agent in a Member State of the European Union, or

 

(vii) any combination of clauses (i) through (vi) above,

 

nor shall Additional Amounts be paid with respect to the principal of, and interest on, the Senior Note to any Holder who is a fiduciary or partnership or settlor with respect to such fiduciary or a member of such partnership other than the sole beneficial owner of such payment to the extent such payment would be required by the laws of any Taxing Jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts, had it been the holder.

 

Whenever in the Indenture there is mentioned, in any context, the payment of the principal of (and premium, if any) or interest, if any, on, or in respect of, any Senior Notes of any series such mention shall be deemed to include mention of the payment of Additional Amounts provided for in the foregoing paragraph to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of the foregoing paragraph and as if express mention of the payment of Additional Amounts (if applicable) were made in any provisions hereof where such express mention is not made.

 

The Senior Notes of this series are redeemable, as a whole but not in part, at the option of the Company, on not less than 5 business days nor more than 60 calendar days’ notice, on any Payment Date, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, in respect of the Senior Notes to the date fixed for redemption, if, at any time, the Company shall determine that as a result of a change in or amendment to the laws or regulations of the Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or any change in the official application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective on or after [·]:

 

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(a) in making payment under the Senior Notes in respect of principal or interest it has or will or would on the next Payment Date become obligated to pay Additional Amounts;

 

(b) the payment of interest on the next Payment Date in respect of any of the Senior Notes would be treated as a “distribution” within the meaning of Chapter 2 of Part 23 of the Corporation Tax Act 2010 of the United Kingdom (or any statutory modification or re-enactment thereof for the time being); or

 

(c) on the next Payment Date the Company would not be entitled to claim a deduction in respect of such payment of interest in computing its United Kingdom taxation liabilities (or the value of such deduction to the Company would be materially reduced).

 

In any case where the Company shall determine that as a result of any change in the official application or interpretation of any laws or regulations it is entitled to redeem the Senior Notes of this series, the Company shall be required to deliver to the Trustee prior to the giving of any notice of redemption a written legal opinion of independent United Kingdom counsel of recognized standing (selected by the Company) in a form satisfactory to the Trustee confirming that the relevant change in the official application or interpretation of such laws or regulations has occurred and that the Company is entitled to exercise its right of redemption.

 

If the Company elects to redeem the Senior Notes of this series, the Senior Notes will cease to accrue interest from the date of redemption, provided the redemption price has been paid in accordance with the Indenture.

 

Upon payment of (i) the amount of principal so declared due and payable and (ii) accrued and unpaid interest, all of the Company’s obligations in respect of the payment of the principal of, and accrued and unpaid interest on, the Senior Notes of this series shall terminate.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Senior Debt Securities of each series to be affected thereby by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Senior Debt Securities at the time outstanding of each such series.  The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the outstanding Senior Debt Securities of each series, on behalf of the Holders of all Senior Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past Events of Default under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Senior Note shall be conclusive and binding upon such Holder and upon all future Holders of this Senior Note and of any Senior Note issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Senior Note.

 

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No reference herein to the Indenture and no provision of this Senior Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay, if and when due and payable, the principal of, and interest on, this Senior Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Senior Note of this series will have the right to institute any proceeding with respect to the Indenture, this Senior Note or any remedy thereunder; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal or interest as and when the same shall have become due and payable in accordance with the terms hereof and the Indenture.

 

No reference herein to the Indenture and no provision of this Senior Note or of the Indenture shall alter or impair the right of the Holder of this Senior Note, which is absolute and unconditional, to receive payment of the principal of, and interest on, this Senior Note when due and payable in accordance with the provisions of this Senior Note and the Indenture.

 

By purchasing the Senior Notes, each Holder (including each Beneficial Owner) of the Senior Notes acknowledges, agrees to be bound by and consents to the exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in (i) the cancellation of all, or a portion, of the principal amount of, or interest on, the Senior Notes and/or (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Senior Notes into shares or other securities or other obligations of the Company or another person, which U.K. bail-in power may be exercised by means of variation of the terms of the Senior Notes solely to give effect to the above.  Each Holder (including each Beneficial Owner) of the Senior Notes further acknowledges and agrees that the rights of the holders under the Senior Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority expressed to implement such a cancellation or conversion.

 

For these purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company or other members of the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of a European Union directive or regulation of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and/or within the context of a U.K. resolution regime by way of amendment to the Banking Act 2009 as the same may be amended from time to time (whether pursuant to the Banking Reform Act 2013 or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, transferred and/or converted into shares or other securities or obligations of the obligor or any other

 

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person (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).

 

By purchasing the Senior Notes each Holder (including each Beneficial Owner) of the Senior Notes:

 

(a)           acknowledges and agrees that upon the exercise of the U.K. bail-in power by the relevant U.K. resolution authority it shall not give rise to a Default or an Event of Default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act;

 

(b)           to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Senior Notes; and

 

(c)           acknowledges and agrees that, upon the exercise of any U.K. bail-in power by the relevant U.K. resolution authority, (a) the Trustee shall not be required to take any further directions from holders of the Senior Notes under Section 5.12 of the Base Indenture, and (b) neither the Base Indenture nor the First Supplemental Indenture shall impose any duties upon the Trustee whatsoever with respect to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.  Notwithstanding the foregoing, if, following the completion of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority, the Senior Notes remain outstanding (for example, if the exercise of the U.K. bail-in power results in only a partial write-down of the principal of the Senior Notes), then the Trustee’s duties under the Indenture shall remain applicable with respect to the Senior Notes following such completion to the extent that the Company and the Trustee shall agree pursuant to a supplemental indenture or an amendment to the First Supplemental Indenture.

 

By purchasing the Senior Notes, each Holder (including each Beneficial Owner) that acquires its Senior Notes in the secondary market shall be deemed to acknowledge and agree to be bound by and consent to the same provisions specified in the Indenture to the same extent as the Holders and Beneficial Owners of the Senior Notes that acquire the Senior Notes upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the Senior Notes related to the U.K. bail-in power.

 

By its purchase of the Senior Notes, each Holder and Beneficial Owner shall be deemed to have (i) consented to the exercise of any U.K. bail-in power as it may be imposed without any prior notice by the relevant U.K. resolution authority of its decision to exercise such power with respect to the Senior Notes and (ii) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Senior Notes to take any and all necessary action, if required, to implement

 

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the exercise of any U.K. bail-in power with respect to the Senior Notes as it may be imposed, without any further action or direction on the part of such Holder or Beneficial Owner.

 

No repayment of the principal amount of the Senior Notes or payment of interest on the Senior Notes shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. resolution authority unless, at the time that such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made by the Company under the laws and regulations of the United Kingdom and the European Union applicable to the Company or other members of the Group.

 

Upon the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Senior Notes, the Company shall provide a written notice to DTC as soon as practicable regarding such exercise of the U.K. bail-in power for purposes of notifying Holders of such occurrence. The Company shall also deliver a copy of such notice to the Trustee for information purposes.

 

This Senior Note will be governed by the laws of the State of New York.

 

Unless otherwise defined herein, all terms used in this Senior Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

 

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EXHIBIT B

 

FORM OF FLOATING RATE GLOBAL NOTE

 

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

 

 

 

CUSIP No. [●]

ISIN No. [●]

 

THE ROYAL BANK OF SCOTLAND GROUP plc

 

FLOATING RATE NOTES DUE [●]

 

 

	No. [●]	

$[●]

 

THE ROYAL BANK OF SCOTLAND GROUP plc (herein called the “Company,” which term includes any successor person under the Indenture (as defined on the reverse hereof)), for value received, hereby promises to pay to CEDE & CO., or registered assignees, the principal sum of $[●] ([●] million dollars) on [●] or on such earlier date as the principal hereof may become due in accordance with the terms hereof and to pay interest thereon quarterly in arrear on [●],[●],[●] and [●] of each year, commencing [●], and ending on [●] (each, a “Floating Rate Interest Payment Date”).  Interest so payable on any Floating Interest Payment Date shall be paid to the holder in whose name this Senior Note is registered on the [●] day of [●],[●],[●] and [●] of each year (each a “Regular Record Date”).  Any interest which is payable, but is not punctually paid or duly provided for, on any Floating Interest Payment Date is herein called “Default Interest”. Default Interest shall cease to be payable to the registered holder on the relevant Regular Record Date by virtue then of having been such holder, and such Default Interest may be paid by the Company, at its election in each case, as provided in clause (x) or (y) below: (x) the Company may elect to make payment of any Default Interest to registered holders at the close of business on a Special Record Date (a 

 

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“Special Record Date”) for the payment of such Default Interest, such Special Record Date to be fixed in accordance with Section 3.07(a) of the Indenture or, (y) the Company may make payment of any Default Interest in any other lawful manner not inconsistent with the requirements of any securities exchange on which this Note may be listed, and upon such notice as may be required by such exchange, if, after notice given by the Company to the Trustee of the proposed payment, such manner of payment shall be deemed practicable by the Trustee.

 

Payment of the principal amount of, and any interest on, this Senior Note will be made in such coin or currency of the United States of America as at the time of payment is legal tender for payment of public and private debts.  Such payment shall be made to the Holder including through a Paying Agent of the Company outside the United Kingdom for collection by the Holder.  If the date for payment of the principal amount hereof or interest thereon is not a Business Day, then (subject as provided in the Indenture) such payment shall be made on the next succeeding Business Day with the same force and effect as if made on such date for payment and without any interest or other payment in respect of such delay.

 

Prior to due presentment of this Senior Note for registration of transfer, the Company, the Trustee and any agent of the Company or the Trustee may treat the Person in whose name this Senior Note is registered as the owner of such Senior Note for the purpose of receiving payment of principal and interest, if any, on such Senior Note and for all other purposes whatsoever, whether or not such Senior Note be overdue, and neither the Company, the Trustee nor any agent of the Company or the Trustee shall be affected by notice to the contrary.

 

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

 

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

 

The exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority may result in (i) the cancellation of all, or a portion, of the principal amount of, or interest on, the Senior Notes and/or (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Senior Notes into shares or other securities or other obligations of the Company or another person, which U.K. bail-in power may be exercised by means of variation of the terms of the Senior Notes solely to give effect to the above. Each Holder (including each Beneficial Owner) of the Senior Notes further acknowledges and agrees that the rights of the holders under the Senior Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail

 

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-in power by the relevant U.K. resolution authority expressed to implement such a cancellation or conversion.

 

For these purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company or other members of the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of a European Union directive or regulation of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and/or within the context of a U.K. resolution regime by way of amendment to the Banking Act 2009 as the same may be amended from time to time (whether pursuant to the Banking Reform Act 2013 or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, transferred and/or converted into shares or other securities or obligations of the obligor or any other person (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).

 

 

 

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

 

 

Dated: [●]

 

 

	 	Executed by
	 	 
	 	
THE ROYAL BANK OF SCOTLAND GROUP PLC

	 	 
	 	 
	 	
By:

	 
	 	 	Name:	[●]
	 	 	Title:	
Authorized Signatory

 

	 	 	 
	 	 	Name:	[●]
	 	 	Title:	
Authorized Signatory

 

  

  

  

 

 

 

CERTIFICATE OF AUTHENTICATION

 

This is one of the Senior Notes of the series designated herein referred to in the within-mentioned Indenture.

 

Dated: [●]

 

 

	  	
THE BANK OF NEW YORK MELLON, LONDON BRANCH

	  	
as Trustee

	 
	 	 	 	 
	 	 	 	 
	  	
By:

	  	 
	  	  	
Authorized Signatory

	 

 

  

  

  

 

[Reverse of Note]

 

This note is one of a duly authorized issue of securities of the Company (herein called the “Senior Notes”) issued and to be issued in one or more series under an amended and restated indenture dated as of September 13, 2011 (herein called the “Base Indenture”), as supplemented by the First Supplemental Indenture dated as of April 1, 2014 (the “First Supplemental Indenture” and together with the Base Indenture, the “Indenture”) in each case among the Company, as issuer, and The Bank of New York Mellon, acting through its London Branch as trustee (herein called the “Trustee,” which term includes any successor trustee under the Indenture). Reference is hereby made to the Indenture and all indentures supplemental thereto for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee and the Holders of the Senior Notes and of the terms upon which the Senior Notes are, and are to be, authenticated and delivered.

 

This Senior Note is one of the series designated on the face hereof, initially limited in aggregate principal amount to $[·].  The Company may, from time to time, without the consent of the holders of the Senior Notes, issue Additional Senior Debt Securities having the same ranking and interest rate, maturity date, redemption terms and other terms as the Senior Notes of this series, except for the price to the public and issue date. Any such Additional Senior Debt Securities, together with the Senior Notes of this series, will constitute a single series of Senior Notes under the Indenture and shall be included in the definition of “Senior Debt Securities” in the Indenture where the context requires; provided, however, that if such Additional Senior Debt Securities are not fungible with the Outstanding Senior Notes of this series for U.S. federal income tax purposes, the Additional Senior Debt Securities must have a CUSIP, ISIN and/or other identifying number (as the case may be) different from those used for the Outstanding Senior Notes of this series.  The Senior Notes will initially be issued in the form of one or more global Senior Notes (each, a “Global Senior Note”).  Except as provided in the Indenture, a Global Senior Note shall not be exchangeable for one or more definitive Senior Notes.

 

The Senior Notes of this series will constitute unsecured and unsubordinated obligations of the Company, as described herein, and will rank pari passu without any preference among themselves.

 

The interest rate for the Senior Notes for the first Floating Rate Interest Period (as defined below) will be LIBOR (as defined below) as determined on [●] plus the Spread.  Thereafter, the interest rate for any Floating Rate Interest Period will be LIBOR as determined on the applicable Interest Determination Date (as defined below) plus the Spread, in each case calculated on the basis of a 360-day year and the actual number of days elapsed. The Spread is [●] basis points.

 

Interest on the Senior Notes will be paid quarterly in arrear on [●],[●],[●] and [●] of each year, commencing on [●] (each a “Floating Rate Interest Payment Date”).  However, if a Floating Rate Interest Payment Date would fall on a day that is not a business day, the Floating Rate Interest Payment Date will be postponed to the next

 

 

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succeeding day that is a business day, except that if the business day falls in the next succeeding calendar month, the applicable Floating Rate Interest Payment Date will be the immediately preceding business day.  In each such case, except for the Floating Rate Interest Payment Date falling on the maturity date, the Floating Rate Interest Periods (as defined below) and the Interest Reset Dates (as defined below) will be adjusted accordingly to calculate the amount of interest payable on the notes.

 

The interest rate will be reset on [●],[●],[●] and [●] of each year, commencing  on [●] (each, an “Interest Reset Date”).  However, if any Interest Reset Date would otherwise be a day that is not a business day, that Interest Reset Date will be postponed to the next succeeding day that is a business day, except that if the business day falls in the next succeeding calendar month, the applicable Interest Reset Date will be the immediately preceding business day.

 

The first interest period will be the period from and including [●] to but excluding the immediately succeeding Interest Reset Date.  Thereafter, the interest periods will be the periods from and including an Interest Reset Date to but excluding the immediately succeeding Interest Reset Date (together with the first interest period, each a “Floating Rate Interest Period”).  However, the final Interest Period will be the period from and including the Interest Reset Date immediately preceding the maturity date to the maturity date.

 

The calculation agent in respect of the Senior Notes will determine LIBOR (as defined below) for each Floating Rate Interest Period on the second London business day prior to the first day of such Floating Rate Interest Period (an “Interest Determination Date”).  LIBOR for the first Floating Rate Interest Period will be determined on March 28, 2014.

 

“LIBOR” means, with respect to the Interest Determination Date for each Floating Rate Interest Period, the offered rate for deposits of US dollars having a maturity of three months that appears on the Reuters Screen LIBOR01 display page, or any successor page, on Reuters or any successor service (or any such other service(s) as may be nominated by the British Bankers’ Association, or any successor thereof, for the purpose of displaying London interbank offered rates for US dollar deposits) (the “Designated LIBOR Page”).

 

If no rate appears on the Designated LIBOR Page, LIBOR will be determined for such Interest Determination Date on the basis of the rates at approximately 11:00 a.m., London time, on such Interest Determination Date at which deposits in US dollars are offered to prime banks in the London inter-bank market by four major banks in such market selected by the calculation agent, after consultation with the Company, for a term of three months and in a principal amount equal to an amount that in the judgment of the calculation agent is representative for a single transaction in US dollars in such market at such time (a “Representative Amount”).  The calculation agent will request the principal London office of each of such banks to provide a quotation of its rate.  If at least two such quotations are provided, LIBOR for such Interest Period will be the arithmetic mean (rounded, if necessary, to the nearest one-hundred-thousandth of a percentage point, with five millionths of a percentage point rounded upwards) of the rates quoted at 

 

 

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approximately 11:00 a.m. in the City of New York on such Interest Determination Date by three major banks in New York City, selected by the calculation agent, after consultation with the Company, for loans in US dollars to leading European banks, for a term of three months and in a Representative Amount, provided, however, that if the banks so selected are not quoting as mentioned above, the then-existing LIBOR rate will remain in effect for such Interest Period.

 

The calculation agent shall exercise due care to determine the interest rates on the Floating Rate Notes and shall communicate the same to the Company, the Trustee, The Depository Trust Company and any paying agent identified to it in writing as soon as practicable after each determination.

 

The interest rate on the Senior Notes will in no event be higher than the maximum rate permitted by law.

 

If an Event of Default with respect to the Senior Notes of this series shall have occurred and be continuing, the Trustee or the Holder or Holders of not less than 25% in aggregate principal amount of the Outstanding Senior Notes of this series may declare the principal amount of, and any accrued interest on, all the Senior Notes to be due and payable immediately, in the manner, with the effect and subject to the conditions provided in the Indenture.

 

If a Default with respect to the Senior Notes of this series shall have occurred and be continuing, the Trustee may in its discretion proceed to protect and enforce its rights and the rights of Holders of Senior Notes by such appropriate judicial proceedings as the Trustee shall deem most effectual to protect and enforce any such rights, whether for the specific enforcement of any covenant or agreement in the Indenture or in aid of the exercise of any power granted thereon, or to enforce any other proper remedy, including the institution of proceedings in Scotland (but not elsewhere) for the winding up of the Company.

 

By acceptance of the Senior Notes of this series, the Holder will be deemed to have waived any right of set-off or counterclaim with respect to such Senior Notes that they might otherwise have against the Company, whether before or during a winding-up of the Company.

 

Subject to the provisions of this paragraph, all amounts of principal and interest on any Senior Notes of this Series will be paid by the Company without deduction or withholding for, or on account of, any and all present and future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholding now or hereafter imposed, levied, collected, withheld or assessed by or on behalf of the United Kingdom or any U.K. political subdivision or authority thereof or therein having the power to tax (the “Taxing Jurisdiction”), unless such deduction or withholding is required by law.  If deduction or withholding of any such taxes, levies, imposts, duties, charges, fees, deductions or withholdings shall at any time be required by the Taxing Jurisdiction, the Company will pay such additional amounts of, or in respect of, the principal amount of, and interest on, the Senior Notes of this series (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holders after such deduction or

 

 

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withholding shall equal the respective amounts of principal and interest which would have been payable in respect of such Senior Notes had no such deduction or withholding been required, provided, however, that the foregoing will not apply to any such tax, levy, impost, duty, charge, fee, deduction or withholding which would not have been payable or due but for the fact that:

 

(i) the Holder or the beneficial owner of the Senior Note is a domiciliary, national or resident of, or engaging in business or maintaining a permanent establishment or is physically present in, the Taxing Jurisdiction or otherwise has some connection with the Taxing Jurisdiction other than the holding or ownership of a Senior Note, or the collection of any payment of (or in respect of) principal of, or interest on, any Senior Note,

 

(ii) except in the case of a winding-up of the Company in the United Kingdom, the relevant Senior Note is presented (where presentation is required) for payment in the United Kingdom,

 

(iii) the relevant Senior Note is presented (where presentation is required) for payment more than 30 days after the date payment became due or was provided for, whichever is later, except to the extent that the Holder would have been entitled to such Additional Amount on presenting the same for payment at the close of such 30 day period,

 

(iv) the Holder or the beneficial owner of the relevant Senior Note or the beneficial owner of any payment of (or in respect of) principal of, premium, if any, or interest, on such Senior Note failed to comply with a request of the Company or its liquidator or other authorized person addressed to the Holder (x) to provide information concerning the nationality, residence or identity of the Holder or such beneficial owner or (y) to make any declaration or other similar claim to satisfy any requirement, which in the case of (x) or (y), is required or imposed by a statute, treaty, regulation or administrative practice of the Taxing Jurisdiction as a precondition to exemption from all or part of such tax, assessment or other governmental charge,

 

(v) the withholding or deduction is imposed on a payment to or for the benefit of an individual and is required to be made pursuant to European Council Directive 2003/48/EC on the taxation of savings income or any law implementing or complying with, or introduced in order to conform to, such Directive,

 

(vi) the Senior Note is presented (where presentation is required) for payment by or on behalf of a Holder who would have been able to avoid such withholding or deduction by presenting the Senior Note to another paying agent in a Member State of the European Union, or

 

(vii) any combination of clauses (i) through (vi) above,

 

nor shall Additional Amounts be paid with respect to the principal of, and interest on, the Senior Note to any Holder who is a fiduciary or partnership or settlor with respect to such fiduciary or a member of such partnership other than the sole beneficial owner of such

 

 

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payment to the extent such payment would be required by the laws of any Taxing Jurisdiction to be included in the income for tax purposes of a beneficiary or partner or settlor with respect to such fiduciary or a member of such partnership or a beneficial owner who would not have been entitled to such Additional Amounts, had it been the holder.

 

Whenever in the Indenture there is mentioned, in any context, the payment of the principal of (and premium, if any) or interest, if any, on, or in respect of, any Senior Notes of any series such mention shall be deemed to include mention of the payment of Additional Amounts provided for in the foregoing paragraph to the extent that, in such context, Additional Amounts are, were or would be payable in respect thereof pursuant to the provisions of the foregoing paragraph and as if express mention of the payment of Additional Amounts (if applicable) were made in any provisions hereof where such express mention is not made.

 

The Senior Notes of this series are redeemable, as a whole but not in part, at the option of the Company, on not less than 5 business days nor more than 60 calendar days’ notice, on any Floating Interest Payment Date, at a redemption price equal to 100% of the principal amount, together with accrued but unpaid interest, in respect of the Senior Notes to the date fixed for redemption, if, at any time, the Company shall determine that as a result of a change in or amendment to the laws or regulations of the Taxing Jurisdiction (including any treaty to which such Taxing Jurisdiction is a party), or any change in the official application or interpretation of such laws or regulations (including a decision of any court or tribunal) which change or amendment becomes effective on or after [·]:

 

(a) in making payment under the Senior Notes in respect of principal or interest it has or will or would on the next Floating Interest Payment Date become obligated to pay Additional Amounts;

 

(b) the payment of interest on the next Floating Interest Payment Date in respect of any of the Senior Notes would be treated as a “distribution” within the meaning of Chapter 2 of Part 23 of the Corporation Tax Act 2010 of the United Kingdom (or any statutory modification or re-enactment thereof for the time being); or

 

(c) on the next Floating Interest Payment Date the Company would not be entitled to claim a deduction in respect of such payment of interest in computing its United Kingdom taxation liabilities (or the value of such deduction to the Company would be materially reduced).

 

In any case where the Company shall determine that as a result of any change in the official application or interpretation of any laws or regulations it is entitled to redeem the Senior Notes of this series, the Company shall be required to deliver to the Trustee prior to the giving of any notice of redemption a written legal opinion of independent United Kingdom counsel of recognized standing (selected by the Company) in a form satisfactory to the Trustee confirming that the relevant change in the official application

 

 

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or interpretation of such laws or regulations has occurred and that the Company is entitled to exercise its right of redemption.

 

If the Company elects to redeem the Senior Notes of this series, the Senior Notes will cease to accrue interest from the date of redemption, provided the redemption price has been paid in accordance with the Indenture.

 

Upon payment of (i) the amount of principal so declared due and payable and (ii) accrued and unpaid interest, all of the Company’s obligations in respect of the payment of the principal of, and accrued and unpaid interest on, the Senior Notes of this series shall terminate.

 

The Indenture permits, with certain exceptions as therein provided, the amendment thereof and the modification of the rights and obligations of the Company and the rights of the Holders of the Senior Debt Securities of each series to be affected thereby by the Company and the Trustee with the consent of the Holders of not less than a majority in principal amount of the Senior Debt Securities at the time outstanding of each such series.  The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the outstanding Senior Debt Securities of each series, on behalf of the Holders of all Senior Debt Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past Events of Default under the Indenture and their consequences.  Any such consent or waiver by the Holder of this Senior Note shall be conclusive and binding upon such Holder and upon all future Holders of this Senior Note and of any Senior Note issued in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Senior Note.

 

 

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No reference herein to the Indenture and no provision of this Senior Note or of the Indenture shall alter or impair the obligation of the Company, which is absolute and unconditional, to pay, if and when due and payable, the principal of, and interest on, this Senior Note at the times, place and rate, and in the coin or currency, herein prescribed.

 

As set forth in, and subject to, the provisions of the Indenture, no Holder of any Senior Note of this series will have the right to institute any proceeding with respect to the Indenture, this Senior Note or any remedy thereunder; provided, however, that such limitations do not apply to a suit instituted by the Holder hereof for the enforcement of payment of the principal or interest as and when the same shall have become due and payable in accordance with the terms hereof and the Indenture.

 

No reference herein to the Indenture and no provision of this Senior Note or of the Indenture shall alter or impair the right of the Holder of this Senior Note, which is absolute and unconditional, to receive payment of the principal of, and interest on, this Senior Note when due and payable in accordance with the provisions of this Senior Note and the Indenture.

 

By purchasing the Senior Notes, each Holder (including each Beneficial Owner) of the Senior Notes acknowledges, agrees to be bound by and consents to the exercise of any U.K. bail-in power (as defined below) by the relevant U.K. resolution authority that may result in (i) the cancellation of all, or a portion, of the principal amount of, or interest on, the Senior Notes and/or (ii) the conversion of all, or a portion, of the principal amount of, or interest on, the Senior Notes into shares or other securities or other obligations of the Company or another person, which U.K. bail-in power may be exercised by means of variation of the terms of the Senior Notes solely to give effect to the above.  Each Holder (including each Beneficial Owner) of the Senior Notes further acknowledges and agrees that the rights of the holders under the Senior Notes are subject to, and will be varied, if necessary, solely to give effect to, the exercise of any U.K. bail-in power by the relevant U.K. resolution authority expressed to implement such a cancellation or conversion.

 

For these purposes, a “U.K. bail-in power” is any write-down and/or conversion power existing from time to time under any laws, regulations, rules or requirements relating to the resolution of banks, banking group companies, credit institutions and/or investment firms incorporated in the United Kingdom in effect and applicable in the United Kingdom to the Company or other members of the Group, including but not limited to any such laws, regulations, rules or requirements which are implemented, adopted or enacted within the context of a European Union directive or regulation of the European Parliament and of the Council establishing a framework for the recovery and resolution of credit institutions and investment firms and/or within the context of a U.K. resolution regime by way of amendment to the Banking Act 2009 as the same may be amended from time to time (whether pursuant to the Banking Reform Act 2013 or otherwise), pursuant to which obligations of a bank, banking group company, credit institution or investment firm or any of its affiliates can be reduced, cancelled, transferred and/or converted into shares or other securities or obligations of the obligor or any other

 

 

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person (and a reference to the “relevant U.K. resolution authority” is to any authority with the ability to exercise a U.K. bail-in power).

 

By purchasing the Senior Notes each Holder (including each Beneficial Owner) of the Senior Notes:

 

(a)           acknowledges and agrees that upon the exercise of the U.K. bail-in power by the relevant U.K. resolution authority it shall not give rise to a Default or an Event of Default for purposes of Section 315(b) (Notice of Default) and Section 315(c) (Duties of the Trustee in Case of Default) of the Trust Indenture Act;

 

(b)           to the extent permitted by the Trust Indenture Act, waives any and all claims against the Trustee for, agrees not to initiate a suit against the Trustee in respect of, and agrees that the Trustee shall not be liable for, any action that the Trustee takes, or abstains from taking, in either case in accordance with the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Senior Notes; and

 

(c)           acknowledges and agrees that, upon the exercise of any U.K. bail-in power by the relevant U.K. resolution authority, (a) the Trustee shall not be required to take any further directions from holders of the Senior Notes under Section 5.12 of the Base Indenture, and (b) neither the Base Indenture nor the First Supplemental Indenture shall impose any duties upon the Trustee whatsoever with respect to the exercise of any U.K. bail-in power by the relevant U.K. resolution authority.  Notwithstanding the foregoing, if, following the completion of the exercise of the U.K. bail-in power by the relevant U.K. resolution authority, the Senior Notes remain outstanding (for example, if the exercise of the U.K. bail-in power results in only a partial write-down of the principal of the Senior Notes), then the Trustee’s duties under the Indenture shall remain applicable with respect to the Senior Notes following such completion to the extent that the Company and the Trustee shall agree pursuant to a supplemental indenture or an amendment to the First Supplemental Indenture.

 

By purchasing the Senior Notes, each Holder (including each Beneficial Owner) that acquires its Senior Notes in the secondary market shall be deemed to acknowledge and agree to be bound by and consent to the same provisions specified in the Indenture to the same extent as the Holders and Beneficial Owners of the Senior Notes that acquire the Senior Notes upon their initial issuance, including, without limitation, with respect to the acknowledgement and agreement to be bound by and consent to the terms of the Senior Notes related to the U.K. bail-in power.

 

By its purchase of the Senior Notes, each Holder and Beneficial Owner shall be deemed to have (i) consented to the exercise of any U.K. bail-in power as it may be imposed without any prior notice by the relevant U.K. resolution authority of its decision to exercise such power with respect to the Senior Notes and (ii) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Senior Notes to take any and all necessary action, if required, to implement

 

  

  

  

 

the exercise of any U.K. bail-in power with respect to the Senior Notes as it may be imposed, without any further action or direction on the part of such Holder or Beneficial Owner.

 

No repayment of the principal amount of the Senior Notes or payment of interest on the Senior Notes shall become due and payable after the exercise of any U.K. bail-in power by the relevant U.K. resolution authority unless, at the time that such repayment or payment, respectively, is scheduled to become due, such repayment or payment would be permitted to be made by the Company under the laws and regulations of the United Kingdom and the European Union applicable to the Company or other members of the Group.

 

Upon the exercise of the U.K. bail-in power by the relevant U.K. resolution authority with respect to the Senior Notes, the Company shall provide a written notice to DTC as soon as practicable regarding such exercise of the U.K. bail-in power for purposes of notifying Holders of such occurrence. The Company shall also deliver a copy of such notice to the Trustee for information purposes.

 

This Senior Note will be governed by the laws of the State of New York.

 

Unless otherwise defined herein, all terms used in this Senior Note which are defined in the Indenture shall have the meanings assigned to them in the Indenture.

 

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EXHIBIT 4.5

 

PRECISION DRILLING CORPORATION

EMPLOYEE SHARE PURCHASE PLAN

(Effective April 1, 2014)

 

1.           PURPOSE

 

The purpose of this Employee Share Purchase Plan (the “Plan”) is to encourage full-time U.S. and Canadian employees to accumulate savings on an after-tax basis through ownership of common shares of Precision Drilling Corporation (the “Corporation”).  The Corporation believes the Plan will aid in attracting, retaining and encouraging Employees (as defined below) to acquire a proprietary interest in the Corporation.

 

2.           DEFINITIONS

 

2.1         In this Plan, unless the context otherwise requires:

 

	
  

	
(a)

	
“Administrative Agent” means Solium Capital Inc. or such other person or company as may from time to time be appointed or designated by the Corporation to administer the Plan and with whom the Corporation enters into a services agreement with respect thereto;

 

	
  

	
(b)

	
“Board” means the board of directors of the Corporation;

 

	
  

	
(c)

	
“Business Day means a day on which there is trading on the TSX (or, if the Shares are not then listed and posted for trading on the TSX, such other stock exchange on which the Shares are then listed and which had the greatest volume of trading of Shares on that particular day) and, if none, a day that is not a Saturday or Sunday or a statutory holiday in the Province of Alberta;

 

	
  

	
(d)

	
“Code” means the United States Internal Revenue Code of 1986, as amended from time to time, and any applicable treasury regulations and other binding regulatory guidance thereunder;

 

	
  

	
(e)

	
“Corporation” means Precision Drilling Corporation, a corporation formed under the laws of the Province of Alberta and includes any successor thereto;

 

	
  

	
(f)

	
“Eligible Earnings” means the gross basic earnings received by an Employee from the Employer (excluding overtime, all benefits realized from stock options, commissions and all bonuses);

 

	
  

	
(g)

	
“Employee” means a permanent, full-time employee of the Employer subject to Canadian federal income taxation under the Tax Act or U.S. federal income taxation under the Code;

 

  

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(h)

	
“Employer” means, as the case may be, the Corporation or a Subsidiary of the Corporation;

 

	
  

	
(i)

	
“Employer Contribution” means a cash contribution made by the Employer on behalf of a Participant pursuant to Section 6 of the Plan;

 

	
  

	
(j)

	
“Open Market” means, in the case of U.S. Participants, the New York Stock Exchange and in the case of non-U.S. Participants, the TSX.

 

	
  

	
(k)

	
“Participant” means an Employee who has enrolled in the Plan, and for whom a Personal Account is maintained, in accordance with the provisions of the Plan;

 

	
  

	
(l)

	
“Pay Period” means a pay period of an Employee;

 

	
  

	
(m)

	
“Personal Account” means the account maintained for record keeping purposes by the Administrative Agent in the name of a Participant for Employer Contributions and Personal Contributions;

 

	
  

	
(n)

	
“Personal Contribution” means a cash contribution made by a Participant pursuant to Subsection 5.1 of the Plan;

 

	
  

	
(o)

	
“Plan” means this Employee Share Purchase Plan, as may be further amended or varied from time to time;

 

	
  

	
(p)

	
“Plan Year” means the fiscal year of the Corporation;

 

	
  

	
(q)

	
“Share Purchase Date” means, in respect of each Pay Period, the date on which the Shares are purchased by the Administrative Agent on behalf of the Participants;

 

	
  

	
(r)

	
“Shares” means common shares without nominal or par value of the Corporation or any subsequent security to which the Shares have been converted, exchanged or changed as reasonably determined by the Board;

 

	
  

	
(s)

	
“Subsidiary” means any corporation, partnership, joint venture or other entity a majority of whose shares or ownership interests normally entitled to vote in electing directors or selecting persons charged with managing the business and affairs of such entity is owned directly or indirectly by the Corporation;

 

	
  

	
(t)

	
“Tax Act” means the Income Tax Act (Canada), including the regulations promulgated thereunder, as amended from time to time;

 

	
  

	
(u)

	
“TSX” means the Toronto Stock Exchange; and

 

	
  

	
(v)

	
“U.S. Participant” means a Participant who is a citizen or permanent resident of the United States of America for the purposes of the Code.

 

  

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2.2         Unless the context otherwise requires, words importing the singular include the plural and vice versa and words importing a male person include a female person and a corporation and other bodies corporate.

 

2.3         Captions and headings used in the Plan are included for convenience of reference only and shall not be used in interpreting the provisions of the Plan.

 

2.4         In the case of Participants who receive their Eligible Earnings in Canadian dollars, all payments and benefits shall be in the lawful currency of Canada.  In the case of Participants who receive their Eligible Earnings in U.S. dollars, all payments and benefits shall be in the lawful currency of the United States.

 

 

3.           ELIGIBILITY

 

3.1         Subject to Section 11.5, any individual who is an Employee shall be eligible to enrol and become a Participant in the Plan at any time after that Employee has completed one year of continuous service with the Employer.

 

3.2         Notwithstanding any other provision of this Plan, the Employer, in its absolute discretion, shall have the right to refuse any Employee the right of participation or continued participation in the Plan.

 

3.3         The Corporation shall advise the Administrative Agent of the names of Employees who are eligible to participate in the Plan.

 

 

4.           ENROLMENT IN THE PLAN

 

4.1         To enrol in the Plan, an Employee who is eligible to become a Participant in accordance with the provisions of Section 3 must complete the enrolment procedures prescribed by the Corporation authorizing the Employer to deduct from the Employee’s Eligible Earnings, after taxes, the amount designated by the Employee in accordance with Subsection 5.1 (unless and until such authorization is changed or terminated in accordance with the Plan) and/or direct the payment of such amounts to the Administrative Agent, and agreeing to the terms and conditions of the Plan.

 

4.2         All funds and Shares acquired by the Administrative Agent pursuant to the Plan are held on behalf of and for the account of the respective individual Participants.

 

4.3         Upon becoming a Participant in the Plan, each Participant will be deemed to have appointed the Administrative Agent to act on behalf of the Participant for the purposes of the Plan.

 

 

5.           PARTICIPANT CONTRIBUTIONS

 

5.1         A Participant who has elected to make a Personal Contribution and has not suspended contributions may make a Personal Contribution to the Plan for each Pay Period in an amount equal to a percentage of his or her Eligible Earnings which shall be a whole number between 1% and 10%, inclusive, as specified in that Participant’s enrolment notice.  The Employer will deduct from the 

 

  

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Participant’s Eligible Earnings and remit to the Administrative Agent the amount of that Participant’s Personal Contribution as soon as practicable following the end of each  Pay Period.  Until remitted to the Administrative Agent, all payroll deductions for Personal Contributions shall be held on behalf of a Participant by the Employer.  No interest shall be payable on such funds to any Participant.

 

5.2         A Participant may vary the amount of, or voluntarily suspend, his or her Personal Contributions no more than two times in each Plan Year.

 

5.3         Any variation or voluntary suspension of Personal Contributions pursuant to Subsection 5.2 will take effect as soon as reasonably possible following the date such notice is provided to the Administrative Agent, in the manner prescribed by the Employer for this purpose.

 

5.4         Personal Contributions not made during a period of suspension of Personal Contributions may not be accumulated or carried forward for later payment. During a period of suspension of Personal Contributions, a Participant will continue to be a member of the Plan, if enrolled, for all purposes other than the making of Personal Contributions until that Participant’s participation terminates pursuant to Section 11.

 

5.5         No Personal Contributions may be made by a Participant in any period during which the Participant is not receiving pay/earnings from the Employer or is on a leave of absence (i.e. layoff/furlough) from employment with the Employer.

 

 

6.           EMPLOYER CONTRIBUTIONS

 

The Employer shall make an Employer Contribution to the Plan for the benefit of each Participant in an amount equal to 20% of the Participant’s Personal Contribution made in respect of each Pay Period.

 

 

7.           PERSONAL ACCOUNTS

 

The Administrative Agent shall establish a Personal Account for each Participant and shall record in each Personal Account the amount of all Personal Contributions made by the Participant and all Employer Contributions made for the benefit of the Participant, the number of Shares purchased for that Personal Account with Personal Contributions, the number of Shares purchased for that Personal Account with Employer Contributions, the amount of cash or number of Shares acquired in any other manner for that Personal Account, the amount of cash attributable to each Personal Account and not yet used to purchase Shares and the amount of any expenses allocated to such Personal Account.

 

 

8.           INVESTMENT OF FUNDS

 

8.1         On or as soon as practicable after the end of each Pay Period, the Employer will deposit with the Administrative Agent the aggregate Personal Contributions and Employer Contributions, if any, of all Participants for such Pay Period and advise the Administrative Agent of the amount to be allocated to each respective Participant (including the amount attributable as a Personal Contribution and the amount attributable as an Employer Contribution) in respect of such Pay Period.

 

  

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8.2         Upon receipt of the funds and the information set forth in Subsection 8.1, the Administrative Agent will record in each Participant’s Personal Account the amount of such Participant’s Personal Contribution and the amount of any Employer Contribution made for the benefit of such Participant.

 

8.3         Subject to Subsection 8.6, the Administrative Agent shall use all funds received by it from Personal Contributions, Employer Contributions and any cash dividends paid on the Shares held of record by the Administrative Agent to purchase, for and on behalf of the Participants, Shares on the Open Market.  For greater certainty, and notwithstanding any other provision of the Plan, the Administrative Agent shall not use any portion of the funds to acquire Shares from any corporation that does not deal at arm’s length with the Corporation.

 

8.4         Subject to Subsection 8.6, the Administrative Agent shall, on the Share Purchase Date, purchase such number of whole Shares as will utilize to the greatest extent possible the Personal Contributions from all Participants and all Employer Contributions, if any, from the Employer, received for the applicable Pay Period under the Plan.  Each Participant shall thereupon acquire ownership of the Shares purchased by the Administrative Agent in proportion to such Participant’s Personal Contribution and Employer Contribution made on behalf of such Participant in respect of such Pay Period.

 

8.5         Subject to Subsection 8.6, the Administrative Agent shall allocate the Shares purchased on each Share Purchase Date on behalf of the Participants, as appropriate, to the Personal Account of each Participant in proportion to the Personal Contribution and Employer Contribution made on behalf of the Participant.

 

8.6         If, for any reason, the Administrative Agent is unable to purchase a sufficient number of Shares on a Share Purchase Date to utilize all Personal Contributions, Employer Contributions and dividends received during the applicable Pay Period, the Administrative Agent will purchase Shares as they become available on the Open Market and will allocate the Shares so purchased to each of the Participants’ Personal Accounts once the purchase is complete.  Until such time as such funds are used to purchase additional Shares, or are distributed to a Participant upon his or her earlier withdrawal from participation in the Plan, such unused funds will be deposited by the Administrative Agent in a non-interest bearing account with a Canadian chartered bank, trust company or other financial institution approved by the Corporation and the Administrative Agent will record the amount of unused funds attributable to each respective Participant.

 

8.7         All warrants, options, rights or any other securities (other than Shares), or any dividends of property (other than cash or additional Shares), received by the Administrative Agent in respect of any Shares held pursuant to the Plan shall be sold by the Administrative Agent on behalf of the Participants at a price determined and negotiated in good faith by the Administrative Agent.  The net proceeds from the sale of any such securities or property and any cash dividends, investment income earned and other cash distributions received by the Administrative Agent in respect of Shares held pursuant to the Plan shall be used to purchase additional Shares, subject to Section 8.6, which shall be allocated to each of the respective Participants’ Personal Accounts as to Personal Contributions or Employer Contributions, as the case may be, in proportion to the number of Shares in those Personal Accounts prior to the payment of the dividend or the issue of the warrants, options, rights or other securities.  Any Shares distributed by the Corporation pursuant to a stock dividend to which a 

 

  

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Participant is entitled by virtue of any Shares held for the Participant under the Plan will be retained by the Administrative Agent, and the Administrative Agent will credit such stock dividends to the Personal Account of the Participant during the next Pay Period.

 

8.8         For the purpose of effecting the purchase and sale of Shares pursuant to this Plan, the Administrative Agent shall utilize brokerage services of one or more brokers designated from time to time by the Employer.  Brokerage commissions, transfer taxes and other charges or expenses relating to the purchase of Shares or other transactions effected in relation to this Plan will be paid by the Corporation.  Brokerage commissions, transfer taxes and other charges, fees or expenses relating to the sale or withdrawal of Shares from the Plan or other transactions effected in relation to sales or withdrawals pursuant to this Plan will be paid by the Participants.

 

 

9.           RIGHTS AS SHAREHOLDER; REGISTRATION AND VOTING

 

9.1         Except as otherwise specifically provided in the Plan, no person shall be entitled to the rights and privileges of Share ownership as a result of participation hereunder until such Shares have been issued to that person.

 

9.2         Shares purchased or otherwise acquired by the Administrative Agent under the Plan shall be registered in the name of the financial intermediary approved by the Administrative Agent and held for and on behalf of the respective Participants.

 

9.3         Shares allocated to a Participant’s Personal Account shall, to the extent permitted by law and the constating documents and applicable resolutions of the Corporation, be voted in accordance with the directions, if any, of the Participant.

 

 

10.         WITHDRAWALS WHILE A PARTICIPANT

 

10.1       Except for the limitations imposed or during applicable blackout periods established in accordance with the Corporation’s insider trading policy, as amended from time to time, a Participant may make withdrawals of Shares from his or her Personal Account as set out in this Section 10.

 

10.2       A Participant may, at any time by sending a notice to the Employer and the Administrative Agent in a manner prescribed by the Corporation, request that:

 

	
  

	
(a)

	
definitive certificate(s) representing all or a portion of the Shares in the Participant's Personal Account be issued as directed, in which case the Administrative Agent shall make the necessary arrangements for the issuance and delivery of the certificate(s) representing the Shares to the Participant or as otherwise directed as soon as practicable following receipt of any such notice;

 

	
  

	
(b)

	
all or a portion of the Shares in the Participant’s Personal Account be electronically registered in book-entry form as directed, in which case the Administrative Agent shall make the necessary arrangements to have such Shares registered as directed and to deliver or cause to be delivered written confirmation of such registration to the

 

  

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Participant or as otherwise directed as soon as practicable following receipt of any such notice; or

 

	
  

	
(c)

	
all or a portion of the Shares in the Participant's Personal Account be sold and the proceeds distributed to him or her or as directed, in which case the Administrative Agent shall sell such Shares as directed and forward the proceeds (net of any brokerage commissions and sales administration fees) to such Participant or as otherwise directed as soon as practicable following receipt of any such notice.

 

10.3       The Participant shall be responsible for ensuring compliance with the provisions of the Tax Act and the Code, as applicable, in respect of the tax consequences resulting from any transfer or sale of Shares pursuant to Subsection 10.2.

 

 

11.         TERMINATION OF PARTICIPATION

 

11.1       A Participant’s participation in the Plan will terminate if:

 

	
  

	
(a)

	
the Participant ceases to be an Employee for any reason;

 

	
  

	
(b)

	
the Participant withdraws all Shares or other funds held in his or her Personal Account;

 

	
  

	
(c)

	
the Participant sends a notice of termination to the Administrative Agent in the manner prescribed by the Corporation;

 

	
  

	
(d)

	
the Participant breaches Subsection 12.2; or

 

	
  

	
(e)

	
the Participant becomes deceased.

 

11.2       A Participant whose participation in the Plan has terminated as provided in Subsection 11.1 or his or her executors or administrators, as the case may be, may elect to deal with the Shares in the Participant’s Personal Account by completing a notice in the form prescribed by the Employer and filing it with the Administrative Agent following termination of the Participant’s participation in the Plan requesting that:

 

	
  

	
(a)

	
definitive certificate(s) representing all of the Shares in the Participant's Personal Account be issued as directed, in which case the Administrative Agent shall make  the necessary arrangements for the issuance and delivery of the certificate(s) representing the Shares to the Participant or to his or her executors or administrators, as the case may be, as soon as practicable following receipt of any such notice;

 

	
  

	
(b)

	
all of the Shares in the Participant’s Personal Account be electronically registered in book-entry form as directed, in which case the Administrative Agent shall make the necessary arrangements to have such Shares registered as directed and to deliver or cause to be delivered written confirmation to the Participant or to his or her executors or administrators, as the case may be, of such registration as soon as practicable following receipt of any such notice; or

 

  

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(c)

	
all of the Shares in the Participant's Personal Account be sold and the proceeds distributed to him or her or as directed, in which case the Administrative Agent shall sell all such Shares as directed and forward the proceeds (net of any brokerage commissions and sales administration fees) to such Participant or as otherwise directed, or to his or her executors or administrators, as the case may be, as soon as practicable following receipt of any such notice.

 

11.3       If no notice is filed pursuant to Subsection 11.2 within 90 days after the termination of a Participant’s participation in the Plan, the Participant or his or her executors or administrators, as the case may be, shall be deemed to have elected to request that all of the Shares in the Participant’s Personal Account be sold and the proceeds distributed to the Participant, or to his or her executors or administrators, as the case may be, who shall be responsible for paying any applicable fees in connection therewith.

 

11.4       The Participant or his or her executors or administrators, as the case may be, shall be responsible for ensuring compliance with the provisions of the Tax Act and the Code, as applicable, in respect of the tax consequences resulting from any transfer or sale or Shares pursuant to Subsections 11.2 or 11.3.

 

11.5       Any Employee whose participation in the Plan has been terminated pursuant to Section 11.1(c) will not be permitted to enrol and become a Participant in the Plan or entitled to make Personal Contributions again for a period of 2 years following the date of his or her termination notice.

 

11.6       If any Participant has not made any Personal Contributions during any Plan Year, the Corporation shall have the option to give written notice requiring such Participant to terminate his or her participation in this Plan and forthwith withdraw all Shares from the Plan.  The effective date of such termination shall be the date of the issuance of such notice or any other date specified as such in the notice.

 

11.7       The provisions of this Section 11 shall be subject to any limitations imposed or applicable blackout period established in accordance with the Corporation’s insider trading policy, as may be amended from time to time.

 

 

12.         PROHIBITION OF ASSIGNMENT OF INTEREST

 

12.1       All rights of participation in the Plan are personal and, to the extent permitted by law, the property administered pursuant to the Plan shall be exempt from attachment, execution, garnishment, registration, or other seizure under any legal, equitable or other process for the debts of any Participant.

 

12.2       Any right or any interest that any Participant may have in or pursuant to the Plan may not be assigned, transferred, encumbered, or otherwise disposed of by any Participant in whole or in part except as permitted by the Plan.  Any breach of this Subsection 12.2 by a Participant shall result in immediate termination of his or her participation in the Plan, and in such case the value of the 

 

  

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Participant’s Personal Acount shall be distributed to him or her in accordance with the provisions of Section 11.

 

 

13.         TAXES

 

13.1       Unless otherwise provided for in this Plan, each Participant shall be responsible for paying all income tax and other taxes applicable to Employer Contributions and to transactions involving the Shares held by the Administrative Agent on his or her behalf, including, without limitation, any taxes payable on:

 

	
  

	
(a)

	
Employer Contributions made for the benefit of the Participant;

 

	
  

	
(b)

	
the transfer of Shares to the Participant or a person designated by the Participant, including transfers from a Personal Account;

 

	
  

	
(c)

	
the sale or other disposition of the Shares; and

 

	
  

	
(d)

	
dividends (whether cash or otherwise) or other distributions paid on the Shares.

 

13.2       The Administrative Agent or the Employer, as applicable, is authorized to deduct, or cause to be deducted, from any amounts payable to a Participant any amounts which are required to be withheld on account of taxes, and the Administrative Agent or the Employer must remit all amounts deducted in accordance with the Tax Act, the Code and other applicable national, provincial and territorial legislation.

 

13.3       Following the end of each calendar year, the Administrative Agent shall provide each Participant with tax reporting forms as required in respect of dividend and other investment income earned during such calendar year by such Participant pursuant to the Plan.

 

13.4       Employer Contributions will be a taxable benefit to a Participant for purposes of the Tax Act and the Code and will be reported as such by the Employer.

 

13.5       Personal Contributions deposited directly to a Participant’s Personal Account will be subject to income tax withholding and will be reported as employment income by the Employer.

 

 

14.         VESTING

 

All funds and Shares held in the Personal Account of a Participant shall at all times be vested immediately in such Participant.

 

15.         OFFER FOR SHARES

 

In the event that, at any time, an offer to purchase is made to all holders of Shares, notice of such offer shall be given by the Administrative Agent or, on direction by the Administrative Agent, the transfer agent for the Shares, to each Participant to enable a Participant to tender his or her Shares should he or she desire to do so.

 

  

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16.         SUBDIVISION, CONSOLIDATION, CONVERSION OR RECLASSIFICATION

 

In the event that the Shares are subdivided, consolidated, converted or reclassified by the Corporation, or any action of a similar nature affecting such Shares is taken by the Corporation, then the Shares held by the Administrative Agent for the benefit of the Participants shall be appropriately adjusted.

 

17.         AMENDMENT OR TERMINATION OF THE PLAN

 

17.1       The Board or any committee of the Board may at any time and from time to time amend or terminate the Plan in whole or in part. However, the Board or any committee of the Board may not amend or terminate the Plan in a manner that would deprive a Participant of any benefits that have accrued to the date of amendment or termination or that would cause or permit any Shares or cash held pursuant to the Plan or any Personal Contributions or Employer Contributions to revert to or become the property of the Corporation.

 

17.2       If the Plan is terminated, all Shares and cash belonging to a Participant as shown in the Participant’s Personal Account shall be paid to the Participant or as directed by the Participant within 90 days of the termination of the Plan in accordance with the provisions of Section 11.

 

 

18.         ADMINISTRATION

 

18.1       The Board or any committee of the Board, if applicable, shall have full power and authority to construe, interpret and administer the Plan, including the power to appoint any person or persons to carry out its provisions in conformity with the objectives of the Plan and under such rules as the Corporation may from time to time establish. Decisions of the Corporation shall be final and binding upon the Employees and the Participants.

 

18.2       The Corporation has entered into a services agreement with the Administrative Agent initially appointed as administrative agent to administer the Plan and keep the records for the Plan.

 

18.3       The Corporation may from time to time enter into such further agreements with the Administrative Agent or other parties as it may deem necessary or desirable, in its sole discretion, to carry out and implement the Plan.

 

18.4       The Administrative Agent may from time to time enter into such further agreements with other parties as it may deem necessary or desirable, in its sole discretion, to carry out its responsibilities pursuant to the Plan.

 

18.5       The Corporation will, upon request, provide a copy of the Plan to all new Participants or make it available on an Internet website maintained by the Corporation.

 

18.6       Records of the Administrative Agent and the Corporation will be conclusive as to all matters involved in administration of the Plan.

 

  

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18.7       Except wherein set forth under the terms of this Plan and where proceeds are distributed net of brokerage commissions, sales administration fees and withholding tax, all costs and expenses of administering the Plan, including the compensation of the Administrative Agent will be paid by the Corporation.

 

18.8       If the Plan requires a notice to be in a form prescribed by the Corporation, then the Corporation must prescribe the form of the notice and may prescribe the manner in which it is to be given including, without limitation, in an electronic form such as the completion of electronic forms on an Internet website maintained by the Corporation or the Administrative Agent.

 

18.9       Any notice to a Participant from the Corporation or Employer under the Plan to be given in writing may be delivered or sent by email to the email address of the Participant maintained in the internal email system of the Corporation (in which case it is deemed to be given on the first Business Day following the delivery or transmission) or may be sent by mail (in which case it is deemed to have been received on the fifth Business Day following the mailing).

 

18.10     Any notice from a Participant under the Plan that is not required to be in a form prescribed by the Corporation must be given in writing and delivered or sent by registered mail to the Corporation or Employer. Such notice is not effective until it is actually received by the Corporation.

 

18.11     No member of the Board shall be liable personally by reason of any contract or other instrument executed by such member or on his or her behalf in his or her capacity as a member of the Board or for any mistake of judgment made in good faith, and the Corporation shall indemnify and hold harmless each member of the Board and each other employee, officer, or director of the Corporation to whom any duty or power relating to the administration or interpretation of the Plan may be allocated or delegated, against all costs and expenses (including counsel fees) and liabilities (including sums paid in settlement of a claim) arising out of any act or omission to act in connection with the Plan, unless arising out of such person’s own fraud or willful misconduct.

 

 

19.          REPORTING

 

On a real-time basis, the Administrative Agent shall furnish to each Participant access on a web-based application to a statement of his or her Personal Account.

 

 

20.          FORMS

 

The  Corporation shall be entitled (acting reasonably) to prescribe or by written notice request that the Administrative Agent prescribe forms from time to time for use in connection with the implementation, administration, variation, termination or restructuring of this Plan or any matters incidental thereto or as referred to in this Plan.

 

 

21.          LIMITATION OF RIGHTS OF THE EMPLOYEE

 

The Plan is a voluntary program on the part of the Corporation and does not constitute an inducement to or condition of the employment of any Employee. Nothing contained in the Plan shall give any Employee, whether a Participant or not, the right to be retained in the service of the 

 

  

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Employer or shall interfere with the right of the Employer to discharge any Employee, whether a Participant or not, at any time. Enrolment in the Plan will not give any Participant or executor, administrator or beneficiary of a Participant any right or claim to any benefit except to the extent provided for in the Plan.

 

 

22.          PROFESSIONAL/ADVICE RECOMMENDATION

 

The Corporation recommends that Participants consult with their professional advisers as to the effects of the provisions of the Tax Act and Code, as applicable, upon individual Participants in relation to the Participant’s participation in this Plan and specific actions taken by a Participant pursuant to this Plan.

 

 

23.          MARKET DECLINE LOSS

 

Neither the Corporation nor the Administrative Agent shall be liable to any Employee or any executor, administrator or beneficiary of a Participant for any loss resulting from a decline in the market value of or the amount (if any) of dividends payable in respect of any Shares purchased or held by or on behalf of the Administrative Agent pursuant to this Plan.  Unless the Corporation shall otherwise agree, a Participant’s entitlement to exercise elections, options or other rights under this Plan shall be suspended during any period in which the Participant is not in compliance with all of the terms and conditions of this Plan.  Without limitation, neither the Corporation nor the Administrative Agent shall be liable to any Employee or any executor, administrator or beneficiary of a Participant for any change in the market price of the Shares or the amount (if any) of dividends payable in respect of Shares between the time a Participant authorizes the purchase or sale of the Shares and the time such purchase or sale takes place.

 

 

24.          ADMINISTRATIVE AGENT

 

24.1        In the event of the resignation of the Administrative Agent, its successor may be appointed by the Corporation in its sole discretion. Any successor Administrative Agent shall be vested with all the powers, rights, duties and immunities of the Administrative Agent hereunder to the same extent as if originally named as the Administrative Agent.  The Board, or any committee of the Board, may elect to terminate the services of the Administrative Agent at any time and for any reason.

 

24.2        The Corporation assumes no liability or responsibility for the actions, errors or omissions of the Administrative Agent or anyone engaged by such parties to carry on any activities in connection with this Plan.  The Corporation assumes no liability or responsibility for any actions, errors or omissions of the broker referred to in section 8.8.

 

 

25.          EXTENSION OF TIME

 

The Corporation may in its discretion extend any grace or limitation period or any other period required for the doing or the taking of any action pursuant to the terms of this Plan.

 

  

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26.          RIGHT TO PERFORM ALTERNATE ACTS

 

Without limiting the foregoing, if it becomes impossible for the Corporation or the Administrative Agent to perform any act specifically and expressly required by this Plan, then the Corporation, with the written approval of the Administrative Agent, may perform such alternative act which most clearly carries out the intent and purpose of this Plan and the Administrative Agent, with the approval of the Corporation, may do likewise.

 

 

27.          SEVERABILITY

 

The invalidity or unenforceability of any provision of the Plan shall not affect the validity or enforceability of any other provision and any invalid or unenforceable provision shall be severed from this Plan.

 

 

28.          GOVERNING LAW

 

The Plan shall be construed and the rights and obligations of the parties under the Plan shall be determined in accordance with the laws of the Province of Alberta and the federal laws of Canada applicable therein.

 

 

29.          GOVERNMENT REGULATION

 

The obligation of the Corporation or Administrative Agent to purchase and distribute Shares shall be subject to all applicable laws, rules, and regulations, and to such approvals by governmental agencies as may be required.  The Corporation shall be under no obligation to offer to sell or to sell, and shall be prohibited from offering to sell or selling, any Shares unless such Shares have been properly registered for sale pursuant to the applicable law or regulation or unless the Corporation has received an opinion of counsel, satisfactory to the Corporation, that such Shares may be offered or sold without such registration pursuant to and in compliance with the terms of an available exemption.  The Corporation shall be under no obligation to register for sale under applicable law any of the Shares to be offered or sold under the Plan.  The Board shall have the authority to provide that all Shares or other securities of the Corporation or any affiliate delivered under the Plan shall be subject to such stop transfer orders and other restrictions as the Board may deem advisable under the Plan, applicable securities laws, or the rules, regulations and other requirements of any securities exchange or inter-dealer quotation service upon which such Shares or other securities are then listed or quoted and any other applicable laws, rules, regulations and other requirements, and, the Board may cause a legend or legends to be put on any certificates of Shares or other securities of the Corporation or any affiliate delivered under the Plan to make appropriate reference to such restrictions or may cause such Shares or other securities delivered under the Plan in book-entry form to be held subject to the Corporation’s instructions or subject to appropriate stop-transfer orders.

 

 

30.          EXEMPTION FROM SECTION 409A

 

It is intended that the Plan shall be exempt from the application of Section 409A of the Code pursuant to the application of the exemption for short-term deferrals set forth in United States 

 

  

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Department of Treasury Regulation Section 1.409A-1(b)(4) and the Plan shall be administered in a manner that is consistent with this intention.  In no event shall the Share Purchase Date with respect to any applicable Pay Period be later than 2 1⁄2 months following the end of the Employee’s taxable year in which the Pay Period begins. If for any reason it is not feasible for Shares to be purchased within this time frame, the Employee’s Personal Contributions for the affected Pay Periods and the Employer Contributions attributable to those Personal Contributions shall be refunded to the Employee, without interest, within 2 1⁄2 months following the end of the Employee’s taxable year in which the Pay Period begins.

 

 

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