SERVICE AGREEMENT between THE ROYAL BANK OF SCOTLAND plc and STEPHEN HESTER The Royal Bank of Scotland plc Edinburgh EH2 2YB
EXHIBIT
4.1
between
THE
ROYAL BANK OF SCOTLAND plc
and
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The
Royal Bank of Scotland plc
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1
INDEX
Clause
1. Definitions,
Interpretation and Construction
2. Position
3. Commencement
of Employment
4. Duties
5. Other
Interests
6. Place
of Employment
7. Hours
of Work
8. Remuneration
(RBSelect)
9. Deductions
10. Bonuses
11. Profit
Sharing
12. Executive
Long Term Incentives
13. YourBank
14. Expenses
15. Dealings
in Investments
16. Pension
and Life Cover
17. Holidays
18. Sickness
19. Confidentiality
20. Group
Property
21. Intellectual
Property
22. Power
of Attorney
23. Grievance
Procedure
24. Disciplinary
Procedure
25. Summary
Termination
26. Termination
by Notice
27. Redundancy
28. Garden
leave
29. Events
on Termination
30. Restrictions
after termination of employment
2
31. Declaration
of Secrecy
32. Data
Protection
33. Notices
34. Continuing
Provisions
35. Whole
Agreement and Severability
36. Collective
Agreements
37. Governing
Law
3
Between
THE
ROYAL BANK Of SCOTLAND plc having its registered office at ▇▇ ▇▇. ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇ ▇▇▇ (hereinafter called the “Company”)
and
▇▇▇▇▇▇▇
▇▇▇▇▇▇, residing at (hereinafter called the “Executive”)
WHEREAS:
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A.
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Royal Bank of
Scotland Group plc (“RBSG”)
wishes to appoint the Executive as a director and as its Group Chief
Executive.
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B.
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RBSG, the
Company and the Executive have agreed that, to enable the Executive to
fulfil his role as Group Chief Executive of RBSG, he shall be employed by
the Company with the principal duty of discharging such role under the
directions of the Board of Directors of RBSG or an authorised committee of
the Board of Directors of RBSG (the “Board”).
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THE
AGREEMENT BETWEEN THE PARTIES IS AS FOLLOWS:-
1. Definition,
Interpretation and Construction
In this Agreement,
unless otherwise stated, the following definitions apply:
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1.1.1.
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“Associated
Company” means any company (i) having an ordinary share capital of
which not less than 25 per cent is owned directly or indirectly by RBSG or
(ii) a holding company of the Company or any direct or indirect subsidiary
of any such holding company or (iii) any company or other entity in
respect of which the Group exercises management control, including joint
venture operations;
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11.2.
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“the
Board of the Company” means the Board of Directors of the Company
or an authorised committee of the Board of Directors of the
Company;
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1.1.3.
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“the
Group” means the Company and its Associated
Companies;
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4
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1.1.4
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“the
Remuneration Committee” means the Remuneration Committee of the
Board or any committee empowered by the Board in substitution for the
Remuneration Committee;
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1.1.5
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the
expressions “subsidiary”
and “holding
company” have the same meanings in this Agreement as they have in
Section 736 of Companies ▇▇▇ ▇▇▇▇;
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1.1.6.
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“Good
Leaver” means, in relation to Clause 10.2 of this Agreement only
and not for the purposes of any other right or benefit to which the
Executive may be entitled as an employee of the Company, an employee who
leaves the employment of the Company by reason of redundancy (compulsory
or voluntary), by reason of retirement or early retirement or by reason of
the Executive’s resignation as a consequence of a fundamental breach of
this Agreement by the Company.
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1.2.
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In this
Agreement:
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1.2.1
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unless
otherwise stated, references to statutes, rules or regulations or their
provisions will also include amendments, extensions, consolidations or
replacements and will refer to any orders or regulations, instruments or
subordinate legislation;
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1.2.2.
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the masculine
gender shall include the feminine gender and singular number shall include
the plural and vice versa;
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1.2.3
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unless
otherwise stated, references to clauses and sub-clauses are references to
clauses and sub-clauses of this Agreement and references to clauses shall
be deemed to include references to the sub clauses of that
clause;
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1.2.4
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the headings
to clauses are for convenience only and shall not affect the construction
or interpretation of this Agreement;
and
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1.2.5
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the
provisions of the Schedule shall be read and construed as part of this
Agreement and shall be enforceable
accordingly.
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2. Position
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2.1
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Executive
will be employed as the Group Chief Executive or in such other capacity of
like status with the Group as the Company requires and the Executive
agrees to accept the position on the terms and conditions set out in this
Agreement.
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5
The Executive will
be employed as the most senior executive officer of the Group as the Group is
constituted at the date of this Agreement , or any group created by an
amalgamation or reconstruction of the Group as described in clause 25.2, or of
any new group structure which results from RBSG or any company (which is a Group
Company immediately before such acquisition) acquiring any other company, group
or business.
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2.2.
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The Executive
warrants that by virtue of entering into this Agreement, he will not be in
breach of any express or implied terms of any contract or other obligation
binding upon him.
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3. Commencement
of Employment
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3.1.
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The
Executive’s employment under this Agreement will commence on 16 November
2008 and he will assume the duties and responsibilities of Group Chief
Executive from 21 November 2008. The Executive’s continuous employment
with the Company will commence on 16 November 2008 (the “Commencement
Date”)
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3.2.
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No period of
employment with a previous employer counts as part of the Executive’s
period of continuous employment with the
Company.
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4. Duties
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4.1
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The Executive
will report to the Board.
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4.2.
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During his
employment the Executive shall
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4.2.1.
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devote the
whole of his working time, attention and skill to the business of the
Group and shall faithfully, efficiently, competently and diligently
perform those duties and exercise such powers, authorities and discretions
which may be assigned to or vested in him by the Board as are consistent
with his title and status;
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4.2.2.
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comply with
the Group’s rules, policies and regulations as varied from time to time
and obey all reasonable and lawful directions given by or under the
authority of the Board;
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4.2.3.
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comply with
the terms of the Group’s Code of Conduct;
and
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4.2.4
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not do
anything prejudicial to the interests and reputation of the Group and
shall promote and extend the business of the Group and protect and further
its interests and reputation.
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6
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4.3.
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Additionally
the Executive may be required to undertake such other duties as the
Company considers necessary to meet the needs of the business. The
Executive may also be required to perform services for any Associated
Company and may be required to undertake the role and duties of a
non-executive Director of other companies within the Group. No additional
remuneration will be paid in respect of these
appointments.
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4.4.
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The duties of
the Executive as an officer of the Company or of any Associated Company
shall be subject to the Articles of Association (or equivalent) of the
relevant company. Subject to the terms of this Agreement, he shall be
entitled to remain a member of the Board and a director of the
Company.
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4.5.
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The
Executive’s performance and discharge of his duties and responsibilities
hereunder shall be the subject of regular review, the object of which is
to assess performance during the period under review and to set agreed
performance standards for future review periods. In the event that, in the
opinion of the Board and after receiving a warning from it and reasonable
opportunity to cure any failure, the Executive fails to achieve the agreed
personal performance standards, the Company may terminate the Executive’s
employment in accordance with the provisions of Clause
26.4.
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5. Other
Interests
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5.1.
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The Executive
shall not (except with the Board’s prior written consent) be directly or
indirectly engaged or concerned in any capacity in the conduct of, or have
any financial interest in: any business, trade, profession or organisation
(other than Associated Companies) save through holding or being interested
in investments (quoted or unquoted) not representing more than two per
cent of the issued equity capital or any other class of share or debenture
capital of any one company.
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5.2,
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The Executive
will not, other than in the proper performance of his duties, give
lectures, speak in public or publish anything in any form or medium
relating to the affairs of, or matters which may affect
▇▇▇▇.
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▇. ▇▇▇▇▇
of Employment
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6.1.
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The Executive
will normally work in between Edinburgh and London but may be required to
travel elsewhere in the world in the performance of his
duties.
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7. Hours
of Work
7
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7.1.
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The normal
hours of work are from 9.00 a.m. to 5.00 p.m. Monday to Friday inclusive
of one hour for lunch daily, but the Executive is expected to work
reasonable additional hours when necessary for the performance of his
duties without additional
remuneration.
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7.2.
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The Executive
will not receive any additional remuneration for working more than 35
hours per week.
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8. Remuneration
(RBSelect)
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8.1.
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It is the
objective of RBSG to deliver a competitive remuneration package to the
Executive that is comparable with CEOs of similar financial services
organisations. As part of this, the Company operates a flexible
compensation and benefits package called RBSelect
which comprises
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8.1.1.
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individually
calculated basic salary of £1,200,000 (the ‘Salary
Element’)
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8.1.2.
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any regional
allowance the Executive is entitled to
receive
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8.1.3.
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value of the
Managers’ Car Scheme
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8.1.4.
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value of
private medical cover
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8.1.5.
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value of
Managers’ medicals
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The residual amount may be used by
the Executive to select preferred benefits from RBSelect.
The ‘Salary
Element’ is used to calculate certain benefits such as Profit Share and any
discretionary bonus payment or any other payment directly linked to salary. The
Salary Element is also used to calculate severance payments including
redundancy.
The total
ValueAccount (which includes the Salary Element) will be notified to the
Executive by the Chairman of the Board or the Remuneration Committee from time
to time and will include a sum in respect of pension contribution consistent
with Company practice from time to time but not less than that currently
prevailing.
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8.2.
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The monthly
value of the Executive’s ValueAccount less the cost of any benefits
elected through RBSelect
will be paid on the 18th day of each month (or on the last preceding
working day where the 18th day fails on a weekend or public
holiday)
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8
directly into the
Executive’s bank account. Salary will be paid partly in advance and partly in
arrears up to the last day of each calendar month.
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8.3.
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Commencing in
2010, the Executive’s salary will be reviewed annually on the 1st day of
April of each year (or any other day approved by the Remuneration
Committee) with any adjustments having immediate effect. Any review of
salary will be entirely at the Company’s discretion. The Executive has no
automatic right to any increase in
salary.
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8.4.
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All
remuneration payable in cash to the Executive under this Agreement shall
only be credited to a bank account held with the Company or with another
company in the Group, which shall be maintained by the
Executive.
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9. Deductions
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9.1.
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The Executive
agrees that the Company may, at any time during, or in any event upon
termination of the Executive’s employment, deduct from his remuneration,
any monies due by him to the Company including any overpayment made and/or
outstanding loans, advances, relocation expenses, the cost (including the
legal and other costs involved) of repairing any damage or loss to the
Company’s property (including intellectual property; caused by him, salary
paid in respect of excess holidays and any other monies owed by him to the
Company or any Associated Company.
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10. Bonuses
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10.1.
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Subject to
Clause 10.2 below, the Executive may from 1 January 2009, at the
discretion of the Remuneration Committee, be entitled to participate in
any Bonus Scheme as approved by the Remuneration Committee the terms of
which may, at the sole discretion of the Remuneration Committee, require
the Executive to defer a proportion of any bonus awarded to
him.
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10.2.
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Subject to
Cause 26.3, if, on or before the relevant qualifying date for payment of
the bonus, the Executive has given or been issued with notice of dismissal
or has been dismissed (except in circumstances where the Executive is a
Good Leaver), the Executive will not be entitled to receive any bonus
payment which would or may otherwise be due to the Executive (whether paid
in cash or in shares) as set out in Clause 10.1
above.
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11. Profit
Sharing
9
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11.1.
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The Executive
shall be eligible to participate in RBSG’s Profit Sharing Scheme, the
terms and conditions of which will be made available to the Executive. Any
entitlement is calculated by reference the Executive’s Salary
Element.
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12. Executive
Long Term Incentives
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12.1.
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The Executive
may, at the absolute discretion of the Remuneration Committee, be eligible
to participate in the Company’s long term incentive plans, subject to the
rules of these plans.
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13. YourBank
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13.1.
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The Executive
shall be eligible to access preferential rates across a range of financial
products and services from the RBS group through YourBank. YourBank is
available to all UK and Offshore employees and eligible Group
pensioners.
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14. Expenses
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14.1.
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The Company
shall reimburse the Executive for all reasonable out-of-pocket expenses
properly incurred in the performance of his duties, subject to the
Executive producing all relevant receipts or other satisfactory evidence
and his compliance with the Company’s travel and expenses policy as
amended from time to time.
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14.2.
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In order to
facilitate payment of expenses, the Executive may be supplied with a
credit card for use solely in this
connection.
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15. Dealing
in Investments
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15.1.
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The Executive
is subject to the Company’s Staff Dealing Rules (and divisional rules
where applicable) which may require prior permission to be obtained before
the Executive is permitted to deal in most types of securities
transactions. Requests must be submitted in writing on the appropriate
Company form. .The Company also operates a closed period during which the
Executive will not be permitted to deal in RBSG shares. Failure to abide
by these rules will constitute serious misconduct for the purposes of any
disciplinary action and may lead to criminal proceedings and / or the
summary dismissal of the Executive.
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15.2.
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Details of
the Company’s Staff Dealing Rules are contained in the Group compliance
manual (known as the Group Regulatory Risk Policy Handbook) and any local
compliance manual.
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16 Pension
and Life Cover
10
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16.1.
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The Executive
shall be eligible to join The Royal Bank of Scotland Group Retirement
Savings Plan (The Plan). The Executive can elect to join this plan through
RBSelect.
Further details are provided in the enclosed Retirement Savings Plan
guidebook.
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16.2.
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The Plan is
not contracted out of the State Second Pension and no Contracting Out
certificate is required.
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16.3.
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The Executive will be provided
with life assurance cover of four times the Salary Element of his RBSelect
account. This benefit will not be provided through RBSelect.
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17. Holidays
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17
1.
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The Executive
will be entitled to paid holidays, subject to the undernoted
conditions;
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17.1.1
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The Executive
will be entitled to 35 working days’ holiday to be taken at such time or
times as the Executive shall request and agree in advance with the Company
plus a further 8 days to be taken at times to be determined by the Company
(which will normally be Bank Holidays). The Company reserves the right to
request the Executive to work on Bank Holidays in return for which he will
be entitled to holiday, equal to the period worked, to be taken at another
time.
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17.1.2.
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The Company’s
holiday year runs from 1 January to 31 December
inclusive.
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17.1.3.
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If the
Executive’s employment commences or terminates part way through the
holiday year, holiday entitlement will be assessed on a pro-rated basis
for each complete month of service during the holiday
year.
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17.1.4.
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The Execute
may carry over a maximum of 5 days’ unused holiday entitlement not taken
in one year, to the next, but only with the prior written consent of the
Company.
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17.2
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On
termination of employment the Executive will be entitled to payment in
respect of any accrued unused holiday entitlement except where the
Executive’s employment is terminated by the Company for misconduct or
gross misconduct when only accrued unused statutory holiday will be
paid.
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17.3.
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Upon
termination of this Agreement the Executive will repay to the Company any
salary received for holidays taken by him in excess of his accrued
entitlement. The Executive agrees that any sums due to the Company by the
Executive may be
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deducted by the
Company from any monies owed to the Executive in accordance with clause
9.
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17.4.
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During any
period of notice (whether given by the Company or the Executive) whether
being worked or on garden leave the Executive is required to take accrued
and outstanding holiday entitlement at times to be agreed with the
Company. However, the Company retains the discretion to release the
Executive from this obligation and to make a payment in lieu of such
outstanding entitlement or part
thereof.
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18. Sickness
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18.1.
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There is no
contractual right to payment in respect of any period of absence due to
sickness or incapacity and any such payments will be made at the Company’s
sole discretion.
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If the Executive is
absent from work due to illness, injury, or accident the Company may, at its
sole discretion, pay Company sick pay (inclusive of any statutory sickness
benefit) at 100% of the Executive’s ValueAccount rate for the first 182 days of
incapacity. Beyond the initial 182 days, the Executive will be eligible to be
considered on a discretionary basis for Disability Cover. Continued receipt of
payments under the scheme will be at the Company’s discretion and will be
subject to the rules of the scheme which the Company has the right to vary from
time to time. Disability Cover is a core benefit under RBSelect.
The cost will be deducted from the Executive’s ValueAccount. The Executive will
find more information in the RBSelect
guidebook.
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18.2.
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If accepted
for Disability Cover, a payment equal to 50% of the Executive’s
ValueAccount rate may be paid for up to a further five years subject to
the scheme rules and the qualifying criteria set out in sub-clauses 18.3 –
18.5 and 18.9 being met. Other factors during sickness absence
are:
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18.2.1.
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Any benefit
paid during the initial 182 days absence will include an allowance in lieu
of holiday entitlement. Consequently normal holiday entitlement will cease
to accrue;
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18.2.2.
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During any
period of Disability Cover, the overall level of benefit will increase
each year by price inflation subject to a maximum of 2.5% a
year;
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18.2.3.
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During the
entire period of Disability Cover, the Executive will continue to receive
additional Company benefits, including RBSG’s Profit
Sharing
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Scheme and will
remain eligible to participate in the RBSG Sharesave Scheme. All salary-related
benefits will be linked to the current level of Disability Cover payments as
defined in clause 18.2.
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18.2.4.
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All periods
of long-term sickness absence will be regarded as continuous service for
the purpose of pension and other benefit
calculations.
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18.3.
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The Executive
may self-certify his incapacity for absences of up to seven consecutive
days (including weekends and statutory
holidays).
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18.4.
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A doctor’s
certificate must he submitted to the Company for absences of more than
seven consecutive days. Thereafter, the Executive must submit a new
doctor’s certificate as and when necessary to ensure that all periods of
absence are covered.
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18.5.
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The Company
reserves the right to request the Executive to provide evidence for any
Period of absence including those that would normally be
self-certified.
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18.6.
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For the
purposes of assessing the Executive’s entitlement to Statutory Sick Pay,
the qualifying days will be Monday to Friday
inclusive.
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18.7.
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if the
Executive is incapable of performing his duties because of injuries
sustained wildly or partly as a result of actionable negligence, nuisance
or breach of any statutory duty on the part of any person other than a
company in the Group (a “third party”) or if the Executive is covered by
any health or other insurance scheme (an “insurance policy”) all payments
made to the Executive under Clause 18.2 above shall (to the extent that
compensation for loss of earnings is recoverable from the third or under
the insurance policy), constitute loans by the Company for by any
Associated Company from whom the Company may have procured payment of the
Executive’s salary) to the Executive and shall be repaid when the
Executive recovers compensation for loss of earnings from the third party
by action or otherwise or under the insurance
policy.
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18.8.
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Without
prejudice to the provisions of Clause 18.7, in the event that the
Executive has been incapacitated from performing his duties by reason of
injuries sustained wholly or partly as a result of actionable negligence
or as a result of matters which are covered by an insurance policy, the
Company shall be entitled to require the Executive
either:-
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18.8.1.
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(subject to
the Company agreeing to indemnify the Executive against all reasonable
legal expenses) to raise legal proceedings to enforce his
rights
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against any third
party who has committed such an actionable negligence against him and/or to
pursue a claim under the insurance policy; or
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18.8.2.
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to assign his
right to raise legal proceedings to recover from such third party and/or
the relevant insurance company compensation for any loss of earnings
sustained by the Executive to the Company or any Associated
Company.
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18.9.
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The Executive
shall at any time (including during any period of incapacity) at the
request and expense of the Company submit to medical examinations by a
medical practitioner nominated by the Company. The results shall, subject
to the provisions of the Access to Medical Reports ▇▇▇ ▇▇▇▇, be disclosed
to the Company.
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19. Confidentiality
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19.1.
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During the
Executive’s employment, he must treat the business of the Company and any
Associated Company and any information received during the course of or as
a result of his employment about or provided by any third party as
strictly confidential.
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19.2.
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The Executive
may not at any time (whether during his employment or after its
termination) disclose to any unauthorised person, firm or corporation or
use or attempt to use for his own or any other person, firm or
corporation’s advantage, any confidential information relating to the
business affairs or trade secrets of the Company or any Associated
Company, or any confidential information about (howsoever obtained) or
provided by any third party received during the course of or as a result
of his employment (“Confidential
Information”). Confidential Information includes without being
limited to, information relating to employees, customers and suppliers
(former, actual and potential), Group contracts, pricing structures
financial and marketing details, business plans, any technical data,
designs, formulae, product fines, Intellectual Property (as defined in
clause 21), research activities and any Group information which may be
deemed to be commercially or price sensitive in nature. It also includes,
again without limitation, any information contained in documents marked
“confidential” or documents of a higher security classification and other
information which, because of its nature or the circumstances in which the
Executive receives it, he should reasonably consider to be
confidential.
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19.3.
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The Company
reserves the right to modify the categories of Confidential Information
from time to time.
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19.4.
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The Executive
is not permitted to make any copy, abstract, summary or précis of the
whole or any part of any document belonging to the Group unless he has
been
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14
authorised to do so
by the Company, and shall not at any time use or permit to be used any such
items otherwise than for the benefit of the Group.
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19.5.
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The
obligations contained in this clause 19 shall not
apply:
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19.5.1.
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to
information or knowledge which subsequently comes into the public domain
other than by way of unauthorised use or disclosure (whether by the
Executive or a third party);
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19.5.2.
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where the
Executive’s use or disclosure of the information has been properly
authorised by the Company;
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19.5.3.
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to any
information which the Executive discloses in accordance with applicable
public interest disclosure
legislation;
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19.5.4.
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to any
information which is required to be disclosed in accordance with an order
of a Court of competent
jurisdiction.
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19.6.
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The Executive
shall exercise all due care and diligence and shall take all reasonable
steps to prevent the publication or disclosure of any Confidential
Information relating, in particular, but not limited to, actual or
proposed transactions, of any employee, customer, client or supplier
(whether former, actual or potential) of the Company or any Associated
Company including the partnerships, companies, bodies, and corporations
having accounts with or in any way connected to or in discussion with the
Group and all other matters relating to such customers, clients or
suppliers and connections.
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19.7.
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Any breach by
the Executive at the provisions of this Clause 19 will be regarded by the
Company as a serious disciplinary matter and may, if committed while the
Executive is employed by the Company, result in disciplinary action being
taken against the Executive up to and including dismissal without
notice.
|
|
|
19.8
|
The Executive
agrees that the undertakings comprised in this Clause 19 are reasonable
and necessary to protect the legitimate business interests of the Group
both during and after the termination of the Executive’s
employment.
|
20.
Group Property
|
|
20.1
|
All reports,
files, notes memoranda, e mails, accounts, documents or other material
(including all notes and memoranda of any Confidential Information as
defined in clause 19.1 and the items referred to in clause 19.4) and any
copies made or received by the Executive in the course of his employment
(whether during or after)
|
15
are and shall
remain the sole property of the Company or the appropriate Associated Company
and shall be surrendered by the Executive to someone duly authorised by the
Company in accordance with Clause 29.
21.
Intellectual Property
|
|
21.1.
|
For the
purposes of this clause, “Intellectual
Property” means patents, trade marks, service marks, registered
designs (including applications for and rights to apply for any of them),
unregistered design rights, trade or business names, copyright, database
rights, Confidential Information or knowhow and any similar rights in any
country.
|
|
|
21.2.
|
All
Intellectual Property which the Employee develops or produces in the
course of his employment duties, or which the Employee derives from any
material produced by the Employee or any other employee of the Company in
the course of their employment duties, will be owned by the Company
absolutely. The Executive agrees, at the Company’s expense, to sign all
documents and carry out all such acts as will be necessary to achieve
this. The Executive waives all moral rights in all Intellectual Properly
which is owned by the Company, or will be owned by the Company, further to
this clause.
|
22.
Power of Attorney
|
|
22.1
|
The Executive
irrevocably appoints any Director or the Secretary of the Company to be
his authorised attorney to do all such things and to execute all such
documents in his name and on his behalf, which may be necessary or
desirable for the Company to obtain for itself, or its nominees or any
Associated Company the full benefit of the provisions in clauses 21 and
29.
|
|
|
22.2.
|
A letter,
signed by any Director or Secretary of the Company certifying that
anything has been done or that any document has been executed in
accordance with the authority conferred by this clause, shall be
conclusive evidence that such is the case as far as any third party is
concerned save that the Executive may not sign such a letter
himself.
|
23.
Grievance Procedure
|
|
23.1.
|
If the
Executive has a grievance relating directly to his employment the
grievance should be raised either verbally or in writing with the Board
for their consideration. The Board will then make a finding
upon such grievance and notify the Executive in writing of its findings
and of the action to be taken to redress any justifiable
grievance
|
16
found to exist. If
the Executive considers that the matter remains unresolved he shall be given the
opportunity of addressing this grievance, either verbally or in writing to the
Chairman of the Board whose finding on the matter shall, without prejudice to
any rights the Executive may have arising from such grievance, be final and
binding on the Executive.
24. Disciplinary
Procedure
|
|
24.1.
|
Without
prejudice to the terms of clause 25, the Company may take disciplinary
action in circumstances of misconduct by the Executive, a breach of his
obligations under this agreement or unsatisfactory performance by the
Executive of his duties. Such action may include, but not be limited to,
suspension with or without pay or, subject to the terms of this Agreement,
dismissal with or without notice. If the Executive has any grievance
relating to disciplinary matters it should he raised with the Board in
accordance with clause 23.
|
25. Summary
Termination
|
|
25.1.
|
Notwithstanding
the provisions of Clauses 24 and 26 of this Agreement, the Company shall
(without prejudice to the other rights and remedies of the Company) be
entitled to dismiss the Executive without notice or payment in lieu of
notice if the Executive
|
|
|
25.1.1.
|
commits any
serious or persistent breach of his duties, refuses or neglects to comply
with any term of this Agreement, refuses or neglects to comply with any
reasonable order or direction given to him by the Company, or is guilty of
any gross default or gross incompetence or misconduct in connection with
or affecting the business of the Company or conducts himself (whether or
not in connection with his employment) in a manner which, in the
reasonable opinion of the Company, is prejudicial to the Company or may
bring him or the Company into disrepute;
or
|
|
|
25.1.2.
|
is guilty of
dishonesty, gross incompetence, wilful neglect of duty, or of
mismanagement of his financial affairs through failure to observe rules
and procedures for the operation of bank accounts and/or borrowing;
or
|
|
|
25.1.3.
|
is found
guilty of any criminal offence (other than a minor offence under the Road
Traffic Acts which does not result in imprisonment) whether or not in
connection with employment; or
|
17
|
|
25.1.4.
|
is or
becomes, in the reasonable opinion of the Company, of unsound mind;
or
|
|
|
25.1.5.
|
becomes a
patient for any purpose of any statute relating to mental health;
or
|
|
|
25.1.6.
|
is declared
bankrupt or takes advantage of any statute for the time being in force
offering relief to insolvent debtors;
or
|
|
|
25.1.7
|
resigns as an
officer of the Company or any Associated Company without the agreement of
the Board; or
|
|
|
25.1.8
|
if, as the
result of any default on the part of the Executive, is prohibited by law
from acting as an officer of the Company or any Associated
Company;
|
|
|
25.1.9
|
loses any
Registration or Regulatory Status necessary to fulfil his
duties.
|
|
|
25.2.
|
Subject to
clause 2.1 and clause 4.4 the Executive agrees that he shall have no
remedy against the Company if his employment is terminated by reason of
the liquidation of the Company for the purposes of amalgamation or
reconstruction provided that he is offered employment with any concern or
undertaking resulting from such amalgamation or reconstruction on terms
and conditions which taken as a whole are not substantially less
favourable than the terms of this Agreement (and which, for the avoidance
of doubt, entitle him to be a director and the most senior executive
officer of such new entity).
|
26.
Termination by Notice
|
|
26.1.
|
The length of
notice which the Executive is obliged to give the Company when seeking to
leave employment is twelve months. Notice must be given in
writing.
|
|
|
26.2.
|
Subject to
clauses 24 and 25 above, on joining the length of notice which the
Executive is entitled to receive from the Company to terminate his
employment is twenty four months, which will reduce by one day for each
day during the first year of service so that from the first anniversary of
the Commencement Date the notice period is twelve months (the “Applicable
Notice Period”). Notice by the Company will be given in
writing.
|
|
|
26.3.
|
In the event
that the Company terminates the Executive’s employment (other than by
reason of the Executive’s personal underperformance or in circumstances in
which it is entitled to do so pursuant to clause 25.1 above) or if the
Executive resigns as a consequence of a fundamental breach by the Company
of the terms of this
|
18
Agreement, the
Company will make a payment in lieu of the Applicable Notice Period. Other than
in circumstances in which clause 26.4 below applies, any payment in lieu of
notice will be calculated as follows: the sum of (i) the Executive’s total
ValueAccount (as notified to him from time to time in accordance with clause 6.1
above); plus (ii) compensation in lieu of bonus awarded pursuant to clause 10.1
above (calculated by reference to the bonus awarded in respect of the financial
year prior to the year in which the Executive’s employment terminates or, in the
event that the employment terminates before 31 December 2009, the Executive’s
last bonus payment from The British Land Company plc) will be divided by 12 and
multiplied by the number of months (including any part months) of the Applicable
Notice Period. No payment will be made in respect of any other
benefit.
|
|
26.4
|
In the event
that the Executive’s employment is terminated by reason of his personal
underperformance of if the Executive resigns (other than as a consequence
of a fundamental breach by the Company of the terms of this Agreement) the
Company may elect to make a payment in lieu of notice. The payment in lieu
of notice will be a sum equal to Salary Element of the Executive’s
ValueAccount for the Applicable Notice Period. No payment will be made in
respect of any other benefit.
|
|
|
26.5
|
The
Executive’s normal retirement age is 65. This Agreement will automatically
terminate without notice on the Executive reaching the age of
65.
|
|
|
26.6.
|
For the
avoidance of doubt, any payment in lieu of notice made pursuant to this
clause 26 will be subject to such deductions as the Company is required by
law to make.
|
27.
Garden Leave
|
|
27.1.
|
At any stage
of the Executive’s notice period referred to in clause 26 above (whether
notice was given by the Executive or by the Company), the Company may, at
its absolute discretion and without being required to give any reasons,
require the Executive to remain away from work on garden leave. The
Company is under no obligation to provide work tor the Executive in such
circumstances.
|
|
|
27.2.
|
During any
period of garden leave;
|
|
|
27.2.1.
|
the Executive
must (save for periods when he is on holiday, whether pursuant to clause
17.4 or otherwise) be available for work but the Company is not obliged to
provide him with any work and may require him to perform different duties
and/or tasks from his normal
duties.
|
19
|
|
27.2.2.
|
the Executive
will be entitled to receive the salary element of his ValueAccount
together with any benefits under this Agreement but excluding any
discretionary or performance bonus which will not accrue while the
Executive is not carrying out his normal
duties.
|
|
|
27.2.3.
|
the Executive
may not, without the prior written consent of the Company contact or
attempt to contact any client, customer, agent, professional adviser,
employee, supplier or broker of the Company, any Associated Company or any
other company within RBS group.
|
|
|
27.2.4.
|
the Executive
will not be permitted to work for any other organisation or on his own
behalf without the Company’s poor written
consent.
|
|
|
27.2.5.
|
all other
terms and conditions of the Executive's employment (both express and
implied) will remain in full force and effect until the end of the notice
period.
|
|
|
27.2.6
|
the Executive
continues to owe the Company a duty of fidelity and good
faith.
|
|
|
27.3
|
Any period of
garden leave shall count towards any period of restriction set out in
clause 30.2.
|
28.
Events on Termination
|
|
28.1.
|
Upon
termination of the Executive’s employment for any reason whatsoever or at
any other time at the request of the Company, the Executive shall
immediately:
|
|
|
28.1.1.
|
deliver to
the Company, in accordance with its instructions all items referred to in
clause 20 and all other property of the Company (including, but not
limited to, company car, credit cards, equipment, correspondence, data,
disks, tapes, records, specifications, software, models, notes, reports
and other documents together with any extracts or summaries, removable
drives or other computer equipment, keys and security passes) or of any
Associated Company in his possession or under his
control.
|
|
|
28.1.2.
|
resign,
without claim for compensation, from all directorships and other offices
within the Group then held by him and the Executive hereby irrevocably
authorises the Company to appoint some person in his name and on his
behalf to sign any documents and do any things necessary to effect such
resignation should he fail to do
so.
|
20
|
|
28.1.3.
|
transfer
(without payment) to the Company or, if requested by the Company, to the
Company’s nominee, any qualifying or nominee shares registered in the name
of the Executive (either solely or jointly) and held by the Executive as
nominee, beneficial owner or trustee on behalf of the Company or any
Associated Company.
|
|
|
28.2.
|
The Executive
shall, if so required by the Company, confirm in writing that he has
complied with his obligations under this Clause
29,
|
29.
Restrictions after termination of employment
|
|
29.1.
|
In this
clause the following definitions shall
apply;
|
|
|
29.1.1.
|
“Termination
Date” means the date on which the Executive’s employment
ends.
|
|
|
29.1.2.
|
“Restricted
Period” means the period of 12 months starting with the Termination
Date (or such period less than 12 months as reduced by any period spent on
garden leave).
|
|
|
29.1.3.
|
“Business”
means the business carried on at the Termination Date by the Company and
any Associated Company with which the Executive has been closely
associated during the 12 months preceding the Termination
Date,
|
|
|
29.1.4.
|
“Key
Employee” means any employee of the Company or any Associated
Company at appointed, managerial or senior managerial level with whom the
Executive has worked during the 12 months preceding the Termination
Date,
|
|
|
29.1.5
|
“Customer”
means any person, firm, company, organisation who or which was a customer
of, an investor with or an exclusive supplier of services to, the Group or
any such entity who was negotiating with or contemplating doing business
with the Group as at the Termination
Date.
|
|
|
29.2.
|
The Executive
agrees and undertakes in favour of the Company, as separate and
independent obligations, that he will not without first obtaining the
written consent of the Company:-
|
|
|
29.2.1.
|
during the
Restricted Period hold any position as employee, director, officer,
consultant, and partner, agent or principal in or
with:-
|
21
|
|
29.2.1.1
|
any business
which is the same or similar to the Business and which is or is likely to
be or which becomes (during the Restricted Period) a business in
competition with the Business,
|
|
|
29.2.1.2.
|
any person,
firm or company which requires or might reasonably be thought by the
Company to require the Executive to disclose or make use of any of the
Confidential Information (as defined in clause 19) of the Business in
order properly to discharge his duties to or to further his interest in
such person, firm or company.
|
|
|
29.2.2.
|
during the
Restricted Period directly or indirectly and whether on his own or someone
else’s behalf canvass or solicit the custom of any person, firm or
company, with whom he has had dealings, responsibility for or material
knowledge of in the course of his employment and, who has within the 12
months immediately prior to the Termination Date been a
Customer;
|
|
|
29.2.3.
|
during the
Restricted Period seek to influence, be engaged in or have any dealings
with any business, including but not limited to any Customer, where he is
or may be able to influence any trading relationship which has existed
during the period of 12 months immediately prior to the Termination Date
between any business or Customer and the Company or an Associated
Company;
|
|
|
29.2.4.
|
during the
Restricted Period or at any time beforehand, induce or seek to induce or
entice or seek to entice away from the Company or any Associated Company,
any Key Employee.
|
|
|
29.3.
|
Nothing in
clause 30.2 will prevent the Executive from being involved in any business
where his duties relate primarily to goods, services and activities not
sold, provided or carried on by the Company or any Associated
Company.
|
|
|
29.4.
|
The Executive
agrees and acknowledges that the restrictions contained in clause 19
(Confidentiality), clause 20 (Group Property), clause 28 (garden leave),
clause 29 (Events on Termination) and clause 30 (Restrictions after
Termination of Employment) are reasonable and necessary to protect the
business and the Confidential Information of the Company and that the
benefits he receives under this Agreement are sufficient compensation for
these restrictions. However, if any such restriction or restrictions, are
together or individually found to be void or unenforceable but would be
valid and effective if some part or parts of them
were
|
22
deleted, the
restriction or restrictions shall apply with any deletions or amendments
necessary to make it or them valid, effective and enforceable.
|
|
29.5.
|
The Executive
steel not, following the termination of his employment with the Company,
represent himself or hold himself out as being in any way connected with
the business of the Group.
|
30. Declaration
of Secrecy
|
|
30.1.
|
The Executive
will be required to sign a Declaration of Secrecy in such form as may be
required by the Company from time to
time.
|
31. Data
Protection
|
|
31.1.
|
The Executive
undertakes to familiarise himself with the Data Protection policy,
procedures and accountabilities set down by the Company as a result of the
Data Protection ▇▇▇ ▇▇▇▇. The Executive acknowledges that the Company will
view any breach of these procedures as a serious matter of
discipline.
|
|
|
31.2.
|
By signing
this statement, the Executive acknowledges and agrees that the Company is
permitted to hold personal information about him as part of its personnel
and other business records and may use such information in the course of
the Company’s business. The Executive agrees that the Company may disclose
such information to third parties in the event that such disclosure is in
the Company’s view required for the proper conduct of the Company’s
business or that of any Associated Company. This clause applies to
information held, used or disclosed in any
medium.
|
|
|
31.3.
|
The Group
reserves the right to carry out searches about the Executive through
credit reference agencies or through our own customer records at any time
during the employment of the Executive. These searches will provide us
with information that we may use for the purposes of identifying any
serious debt or other significant financial difficulties that the
Executive may have. This will allow us to raise this with the Executive in
order to detect or eliminate any particular risk of employee fraud or
theft and thereafter to take any steps that we consider necessary to
mitigate that risk. We will only retain the information about the
Executive which we obtain from these searches for as long as we need it
for the purposes set out above (subject to any legal (including any
regulatory) obligation which requires us to retain that information for a
longer period). The credit reference agency will record details of the
search but these will not be available for use by lenders to assess the
ability of the Executive to obtain credit. The Executive has the right of
access to his personal records held by credit reference agencies. We will
supply their names and
|
23
addresses upon
request, to help the Executive to exercise his right of access to those
records.
|
|
31.4.
|
For the
reasons referred to above, it is important that the Executive manages his
personal finances responsibly. The Group requires that the Executive draws
to the attention of his manager any serious debt or significant financial
difficulties that he may have including those which result in court action
being taken against him.
|
|
|
31.5.
|
In signing
this contract the Executive hereby gives permission for the Group or its
subsidiary companies and/or their appointed agents to carry out such
credit reference searches in relation to him, including searches of
customer credit records, during the term of this contract, as it considers
necessary from time to time for the purposes set out in this
clause.
|
32. Notices
|
|
32.1
|
Any notice or
other communication may be given by either party by personal delivery or
prepaid first class mail to the other party at (in the case of the
Company) its registered office for the time being marked “For the
Attention of the Company Secretary” or (in the case of the Executive) his
last known usual address and any such notice shall be deemed to have been
served (in the case of first class mail) at the expiry of 48 hours after
the same was posted or (in the case of personal delivery) at the time of
such delivery.
|
33. Continuing
Provisions
|
|
33.1.
|
The
termination of this Agreement shall rot affect the provisions of clause 19
(Confidentiality), clause 20 (Group Property) clause 28 (garden leave),
clause 29 (Events on Termination) and clause 30 (Restrictions after
Termination of Employment).
|
34. Whole
Agreement and Severability
|
|
34.1.
|
These terms
and conditions constitute a written statement of the terms of the
Executive’s employment in accordance with the provisions of the Employment
Rights ▇▇▇ ▇▇▇▇. This Agreement and the terms of the letter to be sent to
the Executive, as and when agreed, setting out details of certain stock
awards to be made to the Executive on joining the Company supersede any
previous agreement, whether oral or in writing, between the Executive and
the Company in relation to the matters dealt with
therein.
|
24
|
|
34.2.
|
In addition
to the terms of this Agreement, the Executive is also required to comply
with all other applicable statutory, divisional or company rules, as
amended from time to time.
|
|
|
34.3.
|
The various
provisions and sub-provisions of this Agreement and the Schedule are
severable. If any provision or sub-provisions (or identifiable part
thereof) is held to be invalid or unenforceable, then such invalidity or
unenforceability shall not affect the remaining provisions (or
identifiable parts thereof) in this Agreement or the
Schedule.
|
35. Collective
Agreements
|
|
35.1.
|
There are no
collective agreements applicable to the Executive’s
employment.
|
36. Governing
Law
|
|
36.1.
|
The
interpretation and enforcement of this Agreement shall be governed by and
construed in all respects in accordance with the Law of England and the
parties submit to the non-exclusive jurisdiction of the English
courts.
|
|
Signed for
and on behalf of
|
|
|
THE ROYAL
BANK OF SCOTLAND plc
|
/s/ ▇▇▇▇
▇▇▇▇▇
|
|
on 4th November
2008
|
▇▇▇▇
▇▇▇▇▇
|
|
by ▇▇▇▇
▇▇▇▇▇, Group Director, Human Resources
|
|
Signed
by
|
|
|
on
|
/s/ ▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
|
before the
undernoted witness:-
|
▇▇▇▇▇▇▇
▇▇▇▇▇▇
|
|
/s/ Guy
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
|
(Witness)
|
|
Full
Name
|
GUY ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
|
|
Address
|
|
|
Occupation
|
BANKER
|
25