Form 6-K BARCLAYS PLC For: Aug 12

August 12, 2020 3:17 PM EDT

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UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

 

 

FORM 6-K

 

 

Report of Foreign Private Issuer

Pursuant to Rule 13a-16 or 15d-16

under the Securities Exchange Act of 1934

For the month of August, 2020

 

 

Barclays PLC

(Name of Registrant)

 

 

1 Churchill Place

London E14 5HP

England

(Address of Principal Executive Offices)

 

 

Indicate by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F.

Form 20-F  ☒            Form 40-F  ☐

Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1):  ☐

Indicate by check mark whether the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7):  ☐

THIS REPORT ON FORM 6-K SHALL BE DEEMED TO BE INCORPORATED BY REFERENCE IN THE REGISTRATION STATEMENT ON FORM F-3 (NO. 333-223156) OF BARCLAYS PLC AND TO BE A PART THEREOF FROM THE DATE ON WHICH THIS REPORT IS FURNISHED, TO THE EXTENT NOT SUPERSEDED BY DOCUMENTS OR REPORTS SUBSEQUENTLY FILED OR FURNISHED.

 

 

 


The Report comprises the following:

 

Exhibit No.

       

Description

1.1       Underwriting Agreement—Standard Provisions, dated as of August 7, 2018, incorporated by reference to Exhibit 1.1 of the registrant’s Report of Foreign Issuer on Form 6-K (File No. 001-09246), filed with the Securities and Exchange Commission on August 14, 2018.
1.2       Pricing Agreement between Barclays PLC and Barclays Capital Inc., dated as of August 5, 2020 for the 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities.
4.1       Contingent Convertible Securities Indenture, dated as of August 14, 2018, among Barclays PLC, The Bank of New York Mellon, London Branch, as Trustee, and The Bank of New York Mellon SA/NV, Luxembourg Branch, as Contingent Convertible Security Registrar, incorporated by reference to Exhibit 4.1 of the registrant’s Report of Foreign Issuer on Form 6-K (File No. 001-09246), filed with the Securities and Exchange Commission on August 14, 2018.
4.2       Fourth Supplemental Indenture to the Contingent Convertible Securities Indenture, dated as of August 12, 2020, among Barclays PLC, The Bank of New York Mellon, London Branch, as Trustee and The Bank of New York Mellon SA/NV, Luxembourg Branch, as Contingent Convertible Security Registrar.
4.3       The form of Global Security for the 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities (incorporated by reference to the Exhibit A to Exhibit 4.2 above).
5.1       Opinion of Cleary Gottlieb Steen & Hamilton LLP, U.S. counsel to Barclays PLC, as to the validity of the 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities.
5.2       Opinion of Clifford Chance LLP, English counsel to Barclays PLC, as to the validity of the 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities.


SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

 

    BARCLAYS PLC
    (Registrant)
Date: August 12, 2020     By:  

/s/ Karen Rowe

      Name: Karen Rowe
      Title:   Assistant Secretary

Exhibit 1.2

Pricing Agreement

August 5, 2020

Barclays Capital Inc.

As representative of the several Underwriters

named in Schedule I (the “Representative”)

Ladies and Gentlemen:

Barclays PLC (the “Company”) proposes to issue $1,500,000,000 aggregate principal amount of 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities (the “Securities”). Each of the Underwriters hereby undertakes to purchase at the subscription price set forth in Schedule II hereto, the amount of Securities set forth opposite the name of such Underwriter in Schedule I hereto, such payment to be made at the Time of Delivery set forth in Schedule II hereto. The obligations of the Underwriters hereunder are several but not joint.

Subject to the following paragraph, each of the provisions of the Underwriting Agreement—Standard Provisions, dated August 7, 2018 (the “Underwriting Agreement”), is incorporated herein by reference in its entirety, and shall be deemed to be a part of this Agreement to the same extent as if such provisions had been set forth in full herein, (i) with the exception of Section 3(b)(iii) and the paragraph immediately thereafter of the Underwriting Agreement; (ii) provided that (x) the reference in Section 3(f) of the Underwriting Agreement to “Regulation 32 of the Securities and Futures (Offers of Investments) (Shares and Debentures) Regulations 2005 of Singapore” shall be deemed a reference to “Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivative Contracts) Regulations 2018”; (y) the reference in Section 8-bis(b) of the Underwriting Agreement to “Regulation 3(b) of the SF (CMP) Regulations” shall be deemed a reference to “Section 309A of the SFA”; and (z) the reference in Section 9(c) of the Underwriting Agreement to “Sullivan & Cromwell LLP” shall be deemed a reference to “Cleary Gottlieb Steen & Hamilton LLP”; and (iii) provided that, for the purposes of this letter, new Section 2(r) shall be included as follows: “The Company will promptly make a valid election in respect of the Securities in accordance with the provisions of Section 475C of the Corporation Tax Act 2009 (“CTA 2009”). Following the making of a valid election pursuant to Section 475C of the CTA 2009, all payments of interest in respect of the Securities will be deductible by the Company in computing its taxable profit for United Kingdom corporate income tax purposes and the Securities will be “hybrid capital instruments” for United Kingdom tax purposes. The Securities are not being issued in consequence of, or otherwise in connection with, any arrangements the main purpose, or one of the main purposes, of which is to secure a tax advantage;” and each of the representations and warranties set forth therein shall be deemed to have been made at and as of the date of this Agreement, except that each representation and warranty with respect to the Prospectus in Section 2 of the Underwriting Agreement shall be deemed to be a representation and warranty as of the date of the Prospectus and also a representation and warranty as of the date of this Agreement in relation to the Prospectus as amended or supplemented relating to the Securities.

Each reference to the Representatives herein and in the provisions of the Underwriting Agreement so incorporated by reference shall be deemed to refer to you. Unless otherwise defined herein, terms defined in the Underwriting Agreement are used herein as therein defined. The Representative designated to act on behalf of each of the Underwriters of Designated Securities pursuant to Section 14 of the Underwriting Agreement and the address referred to in such Section 14 is set forth in Schedule II hereto.


An amendment to the Registration Statement, or one or more supplements to the Prospectus, as the case may be, relating to the Designated Securities, in the form heretofore delivered to you, are now proposed to be filed with the Commission.

The Applicable Time for purposes of this Pricing Agreement is 5.30 p.m. New York time on August 5, 2020. The “free writing prospectus” as defined in Rule 405 under the Securities Act for which each party hereto has received consent to use in accordance with Section 7 of the Underwriting Agreement is listed in Schedule III hereto and is attached as Exhibit A hereto.

Notwithstanding and to the exclusion of any other term of the Underwriting Agreement, this Pricing Agreement or any other agreements, arrangements, or understanding between the parties, each party acknowledges and accepts that a BRRD Liability arising under the Underwriting Agreement or this Pricing Agreement may be subject to the exercise of Bail-in Powers by the Relevant Resolution Authority, and acknowledges, accepts, and agrees to be bound by:

(a) the effect of the exercise of Bail-in Powers by the Relevant Resolution Authority in relation to any BRRD Liability of each Covered Party to it under the Underwriting Agreement or this Pricing Agreement, that (without limitation) may include and result in any of the following, or some combination thereof;

 

  (i)

the reduction of all, or a portion, of the BRRD Liability or outstanding amounts due thereon;

 

  (ii)

the conversion of all, or a portion, of the BRRD Liability into shares, other securities or other obligations of the relevant Covered Party or another person, and the issue to or conferral on the other party of such shares, securities or obligations;

 

  (iii)

the cancellation of the BRRD Liability; or

 

  (iv)

the amendment or alteration of any interest, if applicable, thereon, the maturity or the dates on which any payments are due, including by suspending payment for a temporary period;

(b) the variation of the terms of the Underwriting Agreement or this Pricing Agreement, as deemed necessary by the Relevant Resolution Authority, to give effect to the exercise of Bail-in Powers by the Relevant Resolution Authority.

For these purposes:

“Bail-in Legislation” means in relation to a member state of the European Economic Area which has implemented, or which at any time implements, the BRRD, the relevant implementing law, regulation, rule or requirement as described in the EU Bail-in Legislation Schedule from time to time.

“Bail-in Powers” means (i) any Write-down and Conversion Powers as defined in the EU Bail-in Legislation Schedule, in relation to the relevant Bail-in Legislation and/or (ii) any U.K. Bail-in Power.

“BRRD” means Directive 2014/59/EU (as amended) establishing a framework for the recovery and resolution of credit institutions and investment firms.

“Covered Party” means any party subject to (i) the Bail-in Legislation and/or (ii) the U.K. Bail-in Power.


“EU Bail-in Legislation Schedule” means the document described as such, then in effect, and published by the Loan Market Association (or any successor person) from time to time at http://www.lma.eu.com/pages.aspx?p=499.

“BRRD Liability” means a liability in respect of which the relevant Write Down and Conversion Powers in the applicable Bail-in Legislation or the U.K. Bail-in Power may be exercised.

“Relevant Resolution Authority” means the resolution authority with the ability to exercise any Bail-in Powers in relation to the relevant Covered Party.

“U.K. Bail-in Power” has the meaning given to it in the Base Prospectus (as defined in Schedule II).

Recognition of the U.S. Special Resolution Regimes

(a) In the event that any Underwriter that is a Covered Entity becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer from such Underwriter of this Pricing Agreement, and any interest and obligation in or under this Pricing Agreement, will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if this Pricing Agreement, and any such interest and obligation, were governed by the laws of the United States or a state of the United States.

(b) In the event that any Underwriter that is a Covered Entity or a BHC Act Affiliate of such Underwriter becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under this Pricing Agreement that may be exercised against such Underwriter are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if this Pricing Agreement were governed by the laws of the United States or a state of the United States.

“BHC Act Affiliate” has the meaning assigned to the term “affiliate” in, and shall be interpreted in accordance with, 12 U.S.C. § 1841(k).

“Covered Entity” means any of the following: (i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b); (ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or (iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).

“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.

“U.S. Special Resolution Regime” means each of (i) the Federal Deposit Insurance Act and the regulations promulgated thereunder and (ii) Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act and the regulations promulgated thereunder.

Singapore SFA Product Classification – In connection with Section 309B of the Securities and Futures Act (Chapter 289 of Singapore) (the “SFA”) and the Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore (the “CMP Regulations 2018”), the Issuer has determined, and hereby notifies all relevant persons (as defined in Section 309A(1) of the SFA), that the Securities are “prescribed capital markets products” (as defined in the CMP Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16L Notice on Recommendations on Investment Products).


If the foregoing is in accordance with your understanding, please sign and return to us the counterpart hereof, and upon acceptance hereof by you, on behalf of each of the Underwriters, this letter and such acceptance hereof, including the provisions of the Underwriting Agreement incorporated herein by reference, shall constitute a binding agreement between each of the Underwriters on the one hand and the Company on the other.

[Signature Page Follows]


   Very truly yours,
   BARCLAYS PLC
  

/s/ Miray Muminoglu

   Name: Miray Muminoglu
   Title:   Managing Director

Accepted as of the date hereof

at New York, New York

 

On behalf of itself and each of the other Underwriters

 

BARCLAYS CAPITAL INC.

  

/s/ Kenneth Chang

  
Name: Kenneth Chang   
Title:   Managing Director   

[Signature Page to Contingent Convertible Pricing Agreement]


SCHEDULE I

 

Underwriter   

Principal Amount

of the Securities

 

Barclays Capital Inc.

   $ 937,500,000  

BBVA Securities Inc.

   $ 37,500,000  

Citigroup Global Markets Inc.

   $ 37,500,000  

Commerzbank Aktiengesellschaft

   $ 37,500,000  

Intesa Sanpaolo S.p.A.

   $ 37,500,000  

J.P. Morgan Securities LLC

   $ 37,500,000  

Natixis Securities Americas LLC

   $ 37,500,000  

Nordea Bank Abp

   $ 37,500,000  

Santander Investment Securities Inc.

   $ 37,500,000  

Scotia Capital (USA) Inc.

   $ 37,500,000  

SMBC Nikko Securities America, Inc.

   $ 37,500,000  

Standard Chartered Bank

   $ 37,500,000  

UBS Securities LLC

   $ 37,500,000  

ABN AMRO Securities (USA) LLC

   $ 12,500,000  

BMO Capital Markets Corp.

   $ 12,500,000  

CIBC World Markets Corp.

   $ 12,500,000  

Citizens Capital Markets, Inc.

   $ 12,500,000  

Deutsche Bank Securities Inc.

   $ 12,500,000  

Mizuho Securities USA LLC

   $ 12,500,000  

RB International Markets (USA) LLC

   $ 12,500,000  

American Veterans Group, PBC

   $ 6,250,000  

Blaylock Van, LLC

   $ 6,250,000  

PNC Capital Markets LLC

   $ 6,250,000  

U.S. Bancorp Investments, Inc.

   $ 6,250,000  

Total

   $ 1,500,000,000  


SCHEDULE II

Title of Designated Securities:

$1,500,000,000 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities.

Price to Public:

100.000% of principal amount.

Subscription Price by Underwriters:

99.000% of the aggregate principal amount.

Form of Designated Securities:

The Securities will be represented by one or more global securities registered in the name of Cede & Co., as nominee of DTC issued pursuant to the Contingent Convertible Securities Indenture dated August 14, 2018, between Barclays PLC, The Bank of New York Mellon SA/NV, Luxembourg Branch, as contingent convertible registrar (the “Registrar”) and The Bank of New York Mellon, London Branch, as trustee (the “Trustee”) as supplemented by the Fourth Supplemental Indenture to be dated on or about August 12, 2020, between Barclays PLC, the Registrar and the Trustee.

Securities Exchange, if any:

The International Securities Market of the London Stock Exchange.

Interest Rate:

From (and including) the date of issuance to (but excluding) June 15, 2026, the interest rate on the Securities will be 6.125% per annum. From (and including) each Reset Date (as defined below) to (but excluding) the next following Reset Date, the applicable per annum interest rate will be equal to the sum, as determined by the Calculation Agent, of the applicable U.S. Treasury Rate (as defined below, such term subject to the provisions described under “Description of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities—Determination of Subsequent Interest Rate” in the Preliminary Prospectus Supplement (as defined below)) on the relevant Reset Determination Date (as defined below) and 5.867% (the “Subsequent Interest Rate”).

U.S. Treasury Rate:

The U.S. Treasury Rate shall be the rate described under “Description of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities—Determination of Subsequent Interest RateU.S. Treasury Rate and fallbacks” in the Preliminary Prospectus Supplement.


Determination of Subsequent Interest Rate:

If the U.S. Treasury Rate is not available on the Reset Determination Date (as defined in the Preliminary Prospectus Supplement) for whatever reason, the relevant Subsequent Interest Rate shall instead be determined as set out under “Description of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities—Determination of Subsequent Interest RateU.S. Treasury Rate and Fallbacks” in the Preliminary Prospectus Supplement (as supplemented by the final term sheet dated August 5, 2020).

Interest Payment Dates:

March 15, June 15, September 15 and December 15 of each year (each an “Interest Payment Date”), commencing on December 15, 2020. A payment made on that first Interest Payment Date, if any, would be in respect of the period from (and including) August 12, 2020, to (but excluding) December 15, 2020 (and thus a long first interest period).

Business Day:

The term “Business Day” means any weekday, other than one on which banking institutions are authorized or obligated by law, regulation or executive order to close in London, United Kingdom, or in New York City, New York.

Reset Date:

June 15, 2026, and each fifth anniversary date thereafter (each a “Reset Date”).

Reset Determination Date:

The second Business Day immediately preceding each Reset Date (each a “Reset Determination Date”).

Regular Record Dates:

The regular record dates for the Securities will be the close of business on the Business Day immediately preceding each Interest Payment Date (or, if the Securities are held in definitive form, the close of business on the 15th Business Day preceding each Interest Payment Date).

Sinking Fund Provisions:

No sinking fund provisions.

Redemption Provisions for Securities:

Subject to certain conditions, the Securities are redeemable, in whole but not in part, at the option of the Company, (i) on any day falling in the period commencing on (and including) December 15, 2025 and ending on (and including) the first Reset Date or on any subsequent Reset Date, (ii) in the event of a change in certain U.K. regulatory capital requirements and (iii) upon the occurrence of certain tax events, in each case as specified in the Preliminary Prospectus Supplement (as supplemented by the final term sheet dated August 5, 2020) relating to the Securities.


Time of Delivery:

August 12, 2020 by 9.30 a.m. New York time.

Specified Funds for Payment of Subscription Price of Designated Securities:

By wire transfer to a bank account specified by the Company in same day funds.

Value Added Tax:

(a) If the Company is obliged to pay any sum to the Underwriters under this Agreement and any value added tax (“VAT”) is properly charged on such amount, the Company shall pay to the Underwriters an amount equal to such VAT on receipt of a valid VAT invoice;

(b) If the Company is obliged to pay a sum to the Underwriters under this Agreement for any fee, cost, charge or expense properly incurred under or in connection with this Agreement (the “Relevant Cost”) and no VAT is payable by the Company in respect of the Relevant Cost under paragraph (a) above, the Company shall pay to the Underwriters an amount which:

(i) if for VAT purposes the Relevant Cost is consideration for a supply of goods or services made to the Underwriters, is equal to any input VAT incurred by the Underwriters on that supply of goods and services, but only if and to the extent that the Underwriters are unable to recover such input VAT from HM Revenue & Customs (whether by repayment or credit) provided, however, that the Underwriters shall reimburse the Company for any amount paid by the Company in respect of irrecoverable input VAT pursuant to this paragraph (i) if and to the extent such input VAT is subsequently recovered from HM Revenue & Customs (whether by repayment or credit);

(ii) if for VAT purposes the Relevant Cost is a disbursement properly incurred by the Underwriters under or in connection with this Agreement as agent on behalf of the Company, is equal to any VAT paid on the Relevant Cost by the Underwriters provided, however, that the Underwriters shall use best endeavors to procure that the actual supplier of the goods or services which the Underwriters received as agent issues a valid VAT invoice to the Company.

Closing Location:

Linklaters LLP, One Silk Street, London EC2Y 8HQ, United Kingdom.

Name and address of Representative:

Designated Representative: Barclays Capital Inc.


Address for Notices:

Barclays Capital Inc.

745 Seventh Avenue

New York, NY 10019

Attn: Syndicate Registration

Selling Restrictions:

United Kingdom:

Each Underwriter represents, warrants and agrees with the Company that, in connection with the distribution of the Designated Securities, directly or indirectly, it (i) has only communicated or caused to be communicated, and will only communicate or cause to be communicated, an invitation or inducement to engage in investment activity (within the meaning of Section 21 of the Financial Services and Markets Act 2000, as amended (the “FSMA”)) received by it in connection with the issue or sale of any Designated Securities in circumstances in which Section 21(1) of the FSMA does not apply to the Company; and (ii) has complied and will comply with all applicable provisions of the FSMA with respect to anything done by it in relation to the Designated Securities in, from or otherwise involving the United Kingdom.

Prohibition of Sales to European Economic Area and United Kingdom Retail Investors:

Each Underwriter represents, warrants and agrees with the Company that it has not offered, sold or otherwise made available and will not offer, sell or otherwise make available any Designated Securities to any retail investor in the European Economic Area or in the United Kingdom. For the purposes of this provision, the expression “retail investor” means a person who is one (or more) of the following:

 

  (i)

a retail client as defined in point (11) of Article 4(1) of Directive 2014/65/EU (as amended, “MiFID II”); or

 

  (ii)

a customer within the meaning of the Directive (EU) 2016/97 (as amended), where that customer would not qualify as a professional client as defined in point (10) of Article 4(1) of MiFID II.

Canada:

Each Underwriter represents, warrants and agrees with the Company, with respect to sales of the Designated Securities in Canada, that, directly or indirectly, it shall sell the Designated Securities only to purchasers purchasing as principal that are both “accredited investors” as defined in National Instrument 45-106 Prospectus Exemptions or section 73.3 of the Securities Act (Ontario) and “permitted clients” as defined in National Instrument 31-103 Registration Requirements, Exemptions and Ongoing Registrant Obligations.

Hong Kong:

Each Underwriter represents, warrants and agrees that:

 

  (i)

it has not offered or sold and will not offer or sell in Hong Kong, by means of any document, any Securities other than (a) to “professional investors” as defined in the Securities and Futures Ordinance (Cap. 571) of Hong Kong (the “SFO”) and any rules made under the SFO; or (b) in other circumstances which do not result in the document being a “prospectus” as defined in the Companies (Winding Up and Miscellaneous Provisions) Ordinance (Cap. 32) of Hong Kong (the “C(WUMP)O”) or which do not constitute an offer to the public within the meaning of the C(WUMP)O; and


  (ii)

it has not issued or had in its possession for the purposes of issue, and will not issue or have in its possession for the purposes of issue, whether in Hong Kong or elsewhere, any advertisement, invitation or document relating to the Securities, which is directed at, or the contents of which are likely to be accessed or read by, the public of Hong Kong (except if permitted to do so under the securities laws of Hong Kong) other than with respect to Securities which are or are intended to be disposed of only to persons outside Hong Kong or only to “professional investors” as defined in the SFO and any rules made under the SFO.

Singapore:

Each Underwriter acknowledges that the prospectus supplement, incorporating the Base Prospectus, has not been registered as a prospectus with the Monetary Authority of Singapore. Accordingly, each Underwriter represents, warrants and agrees that it has not offered or sold any Securities or caused the Securities to be made the subject of an invitation for subscription or purchase and will not offer or sell any Securities or cause the Securities to be made the subject of an invitation for subscription or purchase, and has not circulated or distributed, nor will it circulate or distribute, the prospectus supplement and the Base Prospectus or any other document or material in connection with the offer or sale, or invitation for subscription or purchase, of the Securities, whether directly or indirectly, to any person in Singapore other than (i) to an institutional investor (as defined in Section 4A of the SFA) pursuant to Section 274 of the SFA, (ii) to a relevant person (as defined in Section 275(2) of the SFA) pursuant to Section 275(1) of the SFA, or any person pursuant to Section 275(1A) of the SFA, and in accordance with the conditions specified in Section 275 of the SFA, or (iii) otherwise pursuant to, and in accordance with the conditions of, any other applicable provision of the SFA.

Where the Securities are subscribed or purchased under Section 275 of the SFA by a relevant person which is:

 

  (a)

a corporation (which is not an accredited investor (as defined in Section 4A of the SFA)) the sole business of which is to hold investments and the entire share capital of which is owned by one or more individuals, each of whom is an accredited investor; or

 

  (b)

a trust (where the trustee is not an accredited investor) whose sole purpose is to hold investments and each beneficiary of the trust is an individual who is an accredited investor, securities or securities-based derivatives contracts (each term as defined in Section 2(1) of the SFA) of that corporation or the beneficiaries’ rights and interest (howsoever described) in that trust shall not be transferred within six months after that corporation or that trust has acquired the Securities pursuant to an offer made under Section 275 of the SFA except:

 

  (1)

to an institutional investor or to a relevant person or to any person arising from an offer referred to in Section 275(1A) or Section 276(4)(i)(B) of the SFA;

 

  (2)

where no consideration is or will be given for the transfer;

 

  (3)

where the transfer is by operation of law;

 

  (4)

as specified in Section 276(7) of the SFA; or

 

  (5)

as specified in Regulation 37A of the Securities and Futures (Offers of Investments) (Securities and Securities-based Derivatives Contracts) Regulations 2018 of Singapore.


Japan:

The Securities have not been and will not be registered under the Financial Instruments and Exchange Act of Japan (Act No. 25 of 1948, as amended, the “FIEA”) and accordingly, each Underwriter undertakes that it will not offer or sell any Securities directly or indirectly, in Japan or to, or for the benefit of, any resident of Japan or to others for re-offering or resale, directly or indirectly, in Japan or to any resident of Japan except pursuant to an exemption from the registration requirements of, and otherwise in compliance with the FIEA and other relevant laws and regulations of Japan. As used in this paragraph, “resident of Japan” means any person resident in Japan, including any corporation or other entity organized under the laws of Japan.

Australia:

No “prospectus” or other “disclosure document” (as defined in the Corporations Act 2001 of Australia (the “Corporations Act”)) in relation to the Designated Securities has been, or will be, lodged with, or registered by, the Australian Securities and Investments Commission (“ASIC”) or any other regulatory authority in Australia. Each Underwriter represents warrants and agrees that it:

 

  (a)

has not (directly or indirectly) offered or invited applications, and will not offer or invite applications, for the issue, sale or purchase of, any Designated Securities in, to or from Australia (including an offer or invitation which is received by a person in Australia); and

 

  (b)

has not distributed or published, and will not distribute or publish, the prospectus supplement, the accompanying prospectus or any other offering material or advertisement relating to the Designated Securities in Australia,

unless:

 

  (i)

the aggregate consideration payable by each offeree or invitee is at least AUD500,000 (or its equivalent in an alternative currency and, in either case, disregarding moneys lent by the offeror or its associates) or the offer or invitation otherwise does not require disclosure to investors in accordance with Part 6D.2 or Part 7.9 of the Corporations Act and complies with the terms of any authority granted under the Banking Act of 1959 of Australia;

 

  (ii)

the offer or invitation is not made to a person who is a “retail client” within the meaning of section 761G of the Corporations Act;

 

  (iii)

such action complies with all applicable laws, regulations and directives in Australia (including without limitation, the licensing requirements set out in Chapter 7 of the Australian Corporations Act); and

 

  (iv)

such action does not require any document to be lodged with ASIC or any other regulatory authority in Australia.

The prospectus supplement and the accompanying prospectus are not, under any circumstances to be construed as, an advertisement or public offering of any Securities in Australia.

In addition, each underwriter has represented and agreed that it will comply with Banking exemption No. 1 of 2018 dated March 21, 2018 promulgated by the Australian Prudential Regulation Authority and which requires all offers and transfers to be in parcels of not less than AUD500,000 in aggregate principal amount. Banking exemption No. 1 does not apply to transfers which occur outside Australia.


By applying for Securities under the prospectus supplement and the Base Prospectus, each person to whom Securities are issued (an “Investor”):

 

  (a)

will be deemed by the Company and each of the Underwriters to have acknowledged that if any Investor on-sells Securities within 12 months from their issue, the Investor will be required to lodge a prospectus or other disclosure document (as defined in the Corporations Act) with ASIC unless either:

 

  (i)

that sale is to an investor within one of the categories set out in sections 708(8) or 708(11) of the Corporations Act to whom it is lawful to offer Securities in Australia without a prospectus or other disclosure document lodged with ASIC; or

 

  (ii)

the sale offer is received outside Australia; and

will be deemed by the Company and each of the Underwriters to have undertaken not to sell those Securities in any circumstances other than those described in paragraphs (a)(i) and (a)(ii) above for 12 months after the date of issue of such Securities.

Taiwan:

Each Underwriter represents, warrants and agrees with the Company that it has not offered, sold or otherwise made available and will not offer, sell or otherwise make available any Securities within Taiwan, the Republic of China (“Taiwan”) through a public offering or in circumstances which constitute an offer within the meaning of the Taiwan Securities and Exchange Act or relevant laws and regulations that requires a registration, filing or approval of the Financial Supervisory Commission of Taiwan and/or other regulatory authority of the Taiwan. Each Underwriter further represents, warrants and agrees with the Company that no person or entity in Taiwan is authorized to offer, sell or otherwise make available any Securities or the provision of information relating to the prospectus supplement and the Base Prospectus.

Other Terms and Conditions:

As set forth in the prospectus supplement dated August 5, 2020 relating to the Securities (the “Preliminary Prospectus Supplement”), incorporating the Prospectus dated April 6, 2018 relating to the Securities (the “Base Prospectus”).


SCHEDULE III

Issuer Free Writing Prospectus:

Final Term Sheet, dated August 5, 2020 attached hereto as Exhibit A.


EXHIBIT A


Free Writing Prospectus

Filed pursuant to Rule 433

Registration Statement No.

333-223156

 

 

LOGO

$1,500,000,000 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent

Convertible Securities

Barclays PLC

 

 

Pricing Term Sheet

 

Issuer    Barclays PLC (the “Issuer”).
Securities    $1,500,000,000 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities (the “Securities”).
Expected Issue Ratings1    Ba2 (Moody’s) / B+ (S&P) / BBB- (Fitch)
Status    Perpetual Subordinated Contingent Convertible Securities.
Legal Format    SEC Registered.
Principal Amount    $1,500,000,000.
Trade Date    August 5, 2020.
Settlement Date    August 12, 2020 (T+5) (the “Issue Date”).
Maturity Date    Perpetual, with no fixed maturity or fixed redemption date.
Optional Call Dates    On any day falling in the period commencing on (and including) December 15, 2025 and ending on (and including) the first Reset Date (as defined below) or on any subsequent Reset Date.
Preliminary Prospectus Supplement    Preliminary prospectus supplement dated August 5, 2020 (the “Preliminary Prospectus Supplement”) incorporating the Prospectus dated April 6, 2018 relating to the Securities (the “Base Prospectus”). If there is any discrepancy or contradiction between this Pricing Term Sheet and the Preliminary Prospectus Supplement, this Pricing Term Sheet shall prevail.
U.K. Bail-in Power Acknowledgment    Yes. See section entitled “Description of Contingent Convertible Securities—Agreement with Respect to the Exercise of U.K. Bail-in Power” in the Base Prospectus.
Initial Interest Period   
Initial Fixed Rate    6.125% per annum, from and including August 12, 2020 to, but excluding, June 15, 2026.
Initial Interest Payment Dates    Quarterly in arrear on March 15, June 15, September 15 and December 15 of each year up to and including June 15, 2026, commencing on December 15, 2020 (long first interest period).
U.S. Treasury    UST 1.875% due June 30, 2026

 

1 

Note: A securities rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time.


U.S. Treasury Rate / Price    0.305% / 109.05+
Interest Periods Following Any Reset Date   
Interest Rate Following Any Reset Date    The applicable U.S. Treasury Rate (such term subject to the provisions described under “Description of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities—Determination of Subsequent Interest Rate” in the Preliminary Prospectus Supplement) on the relevant Reset Determination Date (as defined below) plus the Margin (as defined below) (the “Subsequent Interest Rate”), from and including the relevant Reset Date to (but excluding) the next following Reset Date.
Reset Date    June 15, 2026, and each fifth anniversary thereafter (each a “Reset Date”).
Interest Payment Dates Following Any Reset Date    Quarterly in arrear on March 15, June 15, September 15 and December 15 of each year commencing on September 15, 2026.
Spread to U.S. Treasury Rate    586.7 bps (the “Margin”).
Reset Determination Date    The second Business Day immediately preceding each Reset Date (each a “Reset Determination Date”).
U.S. Treasury Rate and fallbacks   

“U.S. Treasury Rate” means, with respect to any Reset Period for which such rate applies, the rate per annum equal to: (1) the yield, under the heading which represents the average for the week immediately prior to the applicable Reset Determination Date, appearing in the most recently published statistical release designated “H.15”, or any successor publication that is published by the Board of Governors of the Federal Reserve System that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity, under the caption “Treasury constant maturities”, for the maturity of five years; or (2) if such release (or any successor release) is not published during the week immediately prior to such Reset Determination Date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Reset Determination Date.

 

The U.S. Treasury Rate shall be calculated by the Calculation Agent (as defined below).

 

If the U.S. Treasury Rate cannot be determined, for whatever reason, as described under (1) or (2) above, “U.S. Treasury Rate” means the rate in percentage per annum as notified by the Calculation Agent to the Issuer equal to the yield on U.S. Treasury securities having a maturity of five years as set forth in the most recently published statistical release designated “H.15” under the caption “Treasury constant maturities” (or any successor publication that is published weekly by the Board of Governors of the Federal Reserve System and that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury constant maturities” for the maturity of five years) at 5:00 p.m. (New York City time) on the last available date preceding the Reset Determination Date on which such rate was set forth in such release (or any successor release).


Certain Other Terms and Information   
Business Days    “Business Day” means any weekday, other than one on which banking institutions are authorized or obligated by law, regulation or executive order to close in London, United Kingdom, or in New York City, New York.
Day Count Fraction    30/360, following, unadjusted.
Interest Payments Discretionary    Interest on the Securities will be due and payable only at the sole discretion of the Issuer, as described under “Description of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities—Interest Cancellation—Interest Payments Discretionary” in the Preliminary Prospectus Supplement.
Restriction on Interest Payments    As described in the Preliminary Prospectus Supplement, the Issuer shall not make an interest payment on the Securities on any interest payment date (and such interest payment shall therefore be deemed to have been cancelled and thus shall not be due and payable on such interest payment date) if:
   (1) the Issuer has an amount of Distributable Items on such interest payment date that is less than a certain level; or
   (2) the Solvency Condition is not satisfied in respect of such interest payment, as further described under “Description of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities—Interest Cancellation—Restriction on Interest Payments” in the Preliminary Prospectus Supplement.
Agreement to Interest Cancellation    By subscribing for, purchasing or otherwise acquiring the Securities, holders of the Securities acknowledge and agree to the provisions described under “Description of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities—Interest Cancellation—Agreement to Interest Cancellation” in the Preliminary Prospectus Supplement.
Ranking   

Subordinated to the claims of Senior Creditors (as defined below), as described in further detail in the Preliminary Prospectus Supplement.

 

“Senior Creditors” means creditors of the Issuer (i) who are unsubordinated creditors; (ii) whose claims are, or are expressed to be, subordinated (whether only in the event of the winding-up or administration of the Issuer or otherwise) to the claims of unsubordinated creditors of the Issuer but not further or otherwise; (iii) who are creditors in respect of any secondary non-preferential debts; or (iv) whose claims are, or are expressed to be, junior to the claims of other creditors of the Issuer, whether subordinated or unsubordinated, other than those whose claims rank, or are expressed to rank, pari passu with, or junior to, the claims of the holders of the Securities.


Capital Adequacy Trigger Event   

A “Capital Adequacy Trigger Event” shall occur if at any time the fully loaded CET1 Ratio is less than 7.00%.

 

Whether a Capital Adequacy Trigger Event has occurred at any time shall be determined by the Issuer and such determination shall be binding on the trustee and holders of the Securities.

Automatic Conversion Upon Capital Adequacy Trigger Event   

An Automatic Conversion will occur without delay upon the occurrence of a Capital Adequacy Trigger Event.

 

“Automatic Conversion” means the irrevocable and automatic release of all of the Issuer’s obligations under the Securities (other than the CSO Obligations, if any) in consideration of the Issuer’s issuance of the Conversion Shares at the Conversion Price to the Conversion Shares Depository (on behalf of the holders of the Securities) or to the relevant recipient, in accordance with the terms of the Securities and as described in the Preliminary Prospectus Supplement.

Conversion Price    $2.16 per Conversion Share, subject to certain anti-dilution adjustments, as described under “Description of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities—Anti-Dilution” in the Preliminary Prospectus Supplement and the provisions described under “Description of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities—Conversion Shares Offer” in the Preliminary Prospectus Supplement. On the Issue Date, the Conversion Price is equivalent to the Conversion Shares Offer Price (as defined herein) translated into U.S. dollars at an exchange rate of £1.00 = $1.3116.
Conversion Shares Offer    Following an Automatic Conversion, the Issuer may, in its sole and absolute discretion, elect that the Conversion Shares Depository make an offer of all or some of the Conversion Shares to all or some of the Issuer’s ordinary shareholders at such time at a cash price per Conversion Share equal to the Conversion Shares Offer Price, as further described in the Preliminary Prospectus Supplement.
Conversion Shares Offer Price    £1.65 per Conversion Share (subject to certain anti-dilution adjustments, as described in the Preliminary Prospectus Supplement).
Optional Redemption    The Securities are redeemable, in whole but not in part, on any day falling in the period commencing on (and including) December 15, 2025 and ending on (and including) the first Reset Date or on any subsequent Reset Date at the option of the Issuer, as described under “Description of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities—Redemption—Optional Redemption” in the Preliminary Prospectus Supplement.
Regulatory Event Redemption    The Securities are also redeemable, in whole but not in part, at any time at the option of the Issuer in the event of a change in certain U.K. regulatory capital requirements, as described under “Description of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities—Redemption—Regulatory Event Redemption” in the Preliminary Prospectus Supplement.


Tax Redemption    The Securities are also redeemable, in whole but not in part, at any time at the option of the Issuer upon the occurrence of certain tax events, as described under “Description of Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities—Redemption—Tax Redemption” in the Preliminary Prospectus Supplement.
Denominations    $200,000 and integral multiples of $1,000 in excess thereof.
ISIN / CUSIP / FISN / CFI Code    US06738EBN40 / 06738E BN4 / BARCLAYS PLC/NT CONV 2026 SUB / DCFUPR
Legal Entity Identifier (“LEI”) Code    213800LBQA1Y9L22JB70
Reoffer Yield    6.172%.
Issue Price    100.000%.
Estimated Underwriter Compensation    1.000% of the principal amount of the Securities.
Estimated Net Proceeds    $1,485,000,000
Sole Structuring Adviser and Sole Bookrunner    Barclays Capital Inc.
Joint Lead Managers (no books)    BBVA Securities Inc., Citigroup Global Markets Inc., Commerzbank Aktiengesellschaft, Intesa Sanpaolo S.p.A., J.P. Morgan Securities LLC, Natixis Securities Americas LLC, Nordea Bank Abp, Santander Investment Securities Inc., Scotia Capital (USA) Inc., SMBC Nikko Securities America, Inc., Standard Chartered Bank, UBS Securities LLC
Senior Co-Lead Managers    ABN AMRO Securities (USA) LLC, BMO Capital Markets Corp., CIBC World Markets Corp., Citizens Capital Markets, Inc., Deutsche Bank Securities Inc., Mizuho Securities USA LLC, RB International Markets (USA) LLC
Co-Lead Managers    American Veterans Group, PBC, Blaylock Van, LLC, PNC Capital Markets LLC, U.S. Bancorp Investments, Inc.
Documentation    To be documented under the Issuer’s shelf registration statement on Form F-3 (No. 333-223156) and to be issued pursuant to the Contingent Convertible Securities Indenture dated August 14, 2018, between the Issuer, The Bank of New York Mellon SA/NV, Luxembourg Branch, as contingent convertible registrar (the “Registrar”) and The Bank of New York Mellon, London Branch, as trustee (the “Trustee”), as supplemented by the Fourth Supplemental Indenture, to be entered into on or about the Issue Date, between the Issuer, the Registrar and the Trustee.
Risk Factors    An investment in the Securities involves risks. See “Risk Factors” section beginning on page S-23 of the Preliminary Prospectus Supplement.
Settlement    The Depository Trust Company.
Listing    International Securities Market of the London Stock Exchange.
Calculation Agent    The Bank of New York Mellon, London Branch, or its successor appointed by the Issuer.
Governing Law    New York law, except for subordination provisions and waiver of set-off provisions which will be governed by English law.
Definitions    Unless otherwise defined herein, all capitalized terms have the meaning set forth in the Preliminary Prospectus Supplement.

The Issuer has filed a registration statement (including the Base Prospectus and the Preliminary Prospectus Supplement) with the U.S. Securities and Exchange Commission (the “SEC”) for this offering. Before you invest, you should read each of the Base Prospectus, the Preliminary Prospectus Supplement for this offering in that registration statement, and the other documents the Issuer has filed with the SEC for more complete information about the Issuer and this offering. You may get these documents for free by searching the SEC online database (EDGAR) at www.sec.gov. Alternatively, you may obtain a copy of the Base Prospectus and the Preliminary Prospectus Supplement from Barclays Capital Inc. by calling 1-866-603-5847.


MiFID II professional investors and ECPs target market only/FCA PI Prohibition. No PRIIPs key information document (KID) has been prepared as not available to retail in EEA or in the United Kingdom.

It is expected that delivery of the Securities will be made for value on or about August 12, 2020, which will be the fifth (5th) business day in the United States following the date of pricing of the Securities. Under Rule 15c6-1 under the Securities Exchange Act of 1934, purchases or sales of Securities in the secondary market generally are required to settle within two (2) business days (T+2), unless the parties to any such transaction expressly agree otherwise. Accordingly, purchasers of the Securities who wish to trade the Securities on the date of this prospectus supplement or the next two (2) succeeding business days, will be required, because the Securities initially will settle within five (5) business days (T+5) in the United States, to specify an alternate settlement cycle at the time of any such trade to prevent a failed settlement. Purchasers of the Securities who wish to trade on the date of this prospectus supplement or the next two (2) succeeding business days should consult their own legal advisers.

This communication is being distributed to, and is directed only at, persons in the United Kingdom in circumstances where section 21(1) of the Financial Services and Markets Act 2000, as amended, does not apply (such persons being referred to as “relevant persons”). Any person who is not a relevant person should not act or rely on this communication or any of its contents. Any investment activity (including, but not limited to, any invitation, offer or agreement to subscribe, purchase or otherwise acquire securities) to which this communication relates will only be available to, and will only be engaged with, relevant persons who fall within the manufacturer target market described above.

Singapore SFA Product Classification – In connection with Section 309B of the Securities and Futures Act (Chapter 289 of Singapore) (the “SFA”) and the Securities and Futures (Capital Markets Products) Regulations 2018 of Singapore (the “CMP Regulations 2018”), the Issuer has determined, and hereby notifies all relevant persons (as defined in Section 309A(1) of the SFA), that the Securities are “prescribed capital markets products” (as defined in the CMP Regulations 2018) and Excluded Investment Products (as defined in MAS Notice SFA 04-N12: Notice on the Sale of Investment Products and MAS Notice FAA-N16L Notice on Recommendations on Investment Products).

To the extent any dealer that is not a U.S. registered broker-dealer intends to effect any offers or sales of any Securities in the United States, it will do so through one or more U.S. registered broker-dealers in accordance with the applicable U.S. securities laws and regulations.

Exhibit 4.2

 

 

BARCLAYS PLC,

as Issuer,

THE BANK OF NEW YORK MELLON, LONDON BRANCH,

as Trustee and Paying Agent

and

THE BANK OF NEW YORK MELLON SA/NV, LUXEMBOURG BRANCH,

as Contingent Convertible Security Registrar

 

 

FOURTH SUPPLEMENTAL INDENTURE

Dated as of August 12, 2020

 

 

To the Contingent Convertible Securities Indenture, dated as of August 14, 2018, among

the Issuer, the Trustee and Paying Agent and the Contingent Convertible Security Registrar

$1,500,000,000 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities

 

 


TABLE OF CONTENTS

 

ARTICLE I

 

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

 

SECTION 1.01.

  Definitions      2  

SECTION 1.02.

  Effect of Headings      15  

SECTION 1.03.

  Separability Clause      15  

SECTION 1.04.

  Benefits of Instrument      15  

SECTION 1.05.

  Relation to Base Indenture      15  

SECTION 1.06.

  Construction and Interpretation      16  
ARTICLE II

 

$1,500,000,000 6.125% FIXED RATE RESETTING PERPETUAL SUBORDINATED CONTINGENT CONVERTIBLE SECURITIES

 

SECTION 2.01.

  Creation of Series; Establishment of Form      17  

SECTION 2.02.

  Interest      18  

SECTION 2.03.

  Payment of Principal, Interest and Other Amounts      18  

SECTION 2.04.

  Optional Redemption      19  

SECTION 2.05.

  Optional Tax Redemption      19  

SECTION 2.06.

  Regulatory Event Redemption      20  

SECTION 2.07.

  Notice of Redemption      20  

SECTION 2.08.

  Automatic Conversion upon Capital Adequacy Trigger Event      20  

SECTION 2.09.

  Conversion Shares      24  

SECTION 2.10.

  Conversion Shares Offer      25  

SECTION 2.11.

  Settlement Procedure      26  

SECTION 2.12.

  Failure to Deliver a Conversion Shares Settlement Notice      28  

SECTION 2.13.

  Additional Amounts and FATCA Withholding Tax      28  
ARTICLE III

 

ANTI-DILUTION

 

SECTION 3.01.

  Adjustment of Conversion Price and Conversion Shares Offer Price      29  

SECTION 3.02.

  No Retroactive Adjustments      32  

SECTION 3.03.

  Decision of an Independent Financial Advisor      32  

 

ii


SECTION 3.04.

  Rounding Down and Notice of Adjustment to the Conversion Price and the Conversion Shares Offer Price      32  

SECTION 3.05.

  Qualifying Takeover Event      33  
ARTICLE IV

 

AMENDMENTS TO THE BASE INDENTURE

 

SECTION 4.01.

  Amendments to the Base Indenture      34  
ARTICLE V

 

MISCELLANEOUS PROVISIONS

 

SECTION 5.01.

  Effectiveness      36  

SECTION 5.02.

  Original Issue      36  

SECTION 5.03.

  Ratification and Integral Part      36  

SECTION 5.04.

  Priority      36  

SECTION 5.05.

  Successors and Assigns      36  

SECTION 5.06.

  Counterparts      36  

SECTION 5.07.

  Governing Law      36  

 

EXHIBIT A – Form of Global Security

   A-1

EXHIBIT B – Form of Automatic Conversion Notice

   B-1

EXHIBIT C – Form of Capital Adequacy Trigger Event Officers’ Certificate

   C-1

EXHIBIT D – Form of Conversion Shares Offer Notice

   D-1

EXHIBIT E – Form of Conversion Shares Settlement Request Notice

   E-1

 

iii


FOURTH SUPPLEMENTAL INDENTURE, dated as of August 12, 2020 (the “Fourth Supplemental Indenture”), among BARCLAYS PLC, a public limited company registered in England and Wales, as Issuer (hereinafter called the “Company”), having its registered office at 1 Churchill Place, London E14 5HP, United Kingdom, THE BANK OF NEW YORK MELLON, LONDON BRANCH, a New York banking corporation, as Trustee (herein called the “Trustee”) and Paying Agent, having its Corporate Trust Office at One Canada Square, London E14 5AL, United Kingdom and THE BANK OF NEW YORK MELLON SA/NV, LUXEMBOURG BRANCH, as Contingent Convertible Security Registrar, having an office at 2-4 Rue Eugene Ruppert, Vertigo Building – Polaris, Luxembourg, L-2453, Luxembourg (herein called the “Contingent Convertible Security Registrar”), to the CONTINGENT CONVERTIBLE SECURITIES INDENTURE, dated as of August 14, 2018 among the Company, the Trustee and the Contingent Convertible Security Registrar, as amended and supplemented from time to time (the “Base Indenture” and, together with this Fourth Supplemental Indenture, the “Indenture”).

RECITALS OF THE COMPANY

WHEREAS, the Company, the Trustee and the Contingent Convertible Security Registrar are parties to the Base Indenture, which provides for the issuance by the Company from time to time of Contingent Convertible Securities in one or more series;

WHEREAS, Section 9.01 of the Base Indenture permits supplements thereto without the consent of Holders of Contingent Convertible Securities to establish the form or terms of Contingent Convertible Securities of any series as permitted by Sections 2.01 and 3.01 of the Base Indenture and to add to, change or eliminate any of the provisions of the Base Indenture with respect to Contingent Convertible Securities issued on or after the date hereof;

WHEREAS, as contemplated by Section 3.01 of the Base Indenture, the Company intends to issue a new series of Contingent Convertible Securities to be known as the Company’s “$1,500,000,000 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities” (the “Securities”) under the Indenture;

WHEREAS, the Company and the Trustee desire to amend the Base Indenture to change certain execution formalities with respect to Contingent Convertible Securities issued on or after the date hereof;

WHEREAS, the Company has taken all necessary corporate action to authorize the execution and delivery of this Fourth Supplemental Indenture;

NOW, THEREFORE, THIS FOURTH SUPPLEMENTAL INDENTURE WITNESSETH:

For and in consideration of the premises and the other good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the Company, the Trustee and Paying Agent and the Contingent Convertible Security Registrar mutually agree as follows with regard to the Securities:

 

- 1 -


ARTICLE I

DEFINITIONS AND OTHER PROVISIONS OF GENERAL APPLICATION

SECTION 1.01. Definitions.

Except as otherwise expressly provided or unless the context otherwise requires, all terms used in this Fourth Supplemental Indenture that are defined in the Base Indenture shall have the meanings ascribed to them in the Base Indenture. The following terms used in this Fourth Supplemental Indenture have the following respective meanings with respect to the Securities only:

2018 Order” means the Banks and Building Societies (Priorities on Insolvency) Order 2018.

Acquirer” means the Takeover Person that controls the Company following a Takeover Event. For the purposes of this definition, “control” means the acquisition or holding of legal or beneficial ownership of more than 50% of the votes which may ordinarily be cast on a poll at a general meeting of the Company or the right to appoint or remove a majority of the board of directors of the Company. On and after the date of a Qualifying Takeover Event, references herein to “Ordinary Shares” shall be read as references to “Approved Entity Shares.”

Approved Entity” means a body corporate which, on the occurrence of the Takeover Event and thereafter, has in issue Approved Entity Shares.

Approved Entity Shares” means ordinary shares in the capital of a body corporate that constitutes equity share capital or the equivalent (or depository or other receipts representing the same) which are listed and admitted to trading on a Recognized Stock Exchange and is not share capital which, if the Securities could convert into such share capital in accordance with Section 2.09 of this Fourth Supplemental Indenture, would cause a Relevant Tax Effect in circumstances where, if the Securities could instead only convert into ordinary shares of the Company, would not cause a Relevant Tax Effect. Such shares shall cease to be “Approved Entity Shares” if they do not satisfy the definition above on the Conversion Date. In relation to an Automatic Conversion in respect of which the Conversion Date falls on or after the QTE Effective Date, references herein to “Conversion Shares” shall be deemed to be references to “Approved Entity Shares”.

Automatic Conversion” means the irrevocable and automatic release of all of the Company’s obligations under the Securities (other than the CSO Obligations, if any) in consideration of the Company’s issuance of the Conversion Shares at the Conversion Price to the Conversion Shares Depository (on behalf of the Holders and Beneficial Owners of the Securities) or to the relevant recipient of such Conversion Shares, all in accordance with the terms of the Securities.

 

- 2 -


Automatic Conversion Notice” means the written notice (substantially in the form attached hereto as Exhibit B) to be delivered by the Company to the Trustee directly and to the Holders of the Global Securities via DTC (or, if the Securities are definitive Securities, by the Company to the Trustee directly and to the Holders at their addresses shown on the Contingent Convertible Security Register) specifying (i) that a Capital Adequacy Trigger Event has occurred, (ii) the Conversion Date or expected Conversion Date, (iii) the Conversion Price, (iv) that the Company has the option, at its sole and absolute discretion, to elect that a Conversion Shares Offer be conducted and that the Company will issue a Conversion Shares Offer Notice via DTC within ten (10) Business Days following the Conversion Date notifying Holders of the Company’s election and (v) that the Securities shall remain in existence for the sole purpose of evidencing (a) the right of the Holders to receive Conversion Shares or Conversion Shares Offer Consideration, as applicable, from the Conversion Shares Depository and (b) the Company’s CSO Obligations, if any, and that the Securities may continue to be transferable until the Suspension Date, which shall be specified in the Conversion Shares Offer Notice.

Base Indenture” has the meaning set forth in the first paragraph of this Fourth Supplemental Indenture.

Business Day” means any weekday, other than one on which banking institutions are authorized or obligated by law, regulation or executive order to close in London, United Kingdom, or in New York City, New York.

Calculation Agent” means The Bank of New York Mellon, London Branch, or its successor appointed by the Company pursuant to the calculation agent agreement between the Company and The Bank of New York Mellon, dated as of the date hereof.

Cancellation Date” means (i) with respect to any Security for which a Conversion Shares Settlement Notice is received by the Conversion Shares Depository on or before the Notice Cut-off Date, the applicable Settlement Date and (ii) with respect to any Security for which a Conversion Shares Settlement Notice is not received by the Conversion Shares Depository on or before the Notice Cut-off Date, the Final Cancellation Date.

Capital Adequacy Trigger Event” shall occur if at any time the Fully Loaded CET1 Ratio (as defined herein) is less than 7.00%. Whether a Capital Adequacy Trigger Event has occurred at any time shall be determined by the Company and such determination shall be binding on the Trustee and Holders of the Securities.

Capital Adequacy Trigger Event Officers’ Certificate” has the meaning set forth in Section 2.08(o) hereof.

Capital Regulations” means, at any time, the laws, regulations, requirements, standards, guidelines and policies relating to capital adequacy and/or minimum requirement for own funds and eligible liabilities and/or loss absorbing capacity of credit institutions of either (i) the PRA and/or (ii) any other national or European authority, in each case then in effect in the United Kingdom (or in such other jurisdiction in which the Company may be organized or domiciled) and applicable to the Group (as defined below) including, as at the date hereof, CRD and related technical standards.

 

- 3 -


Capital Requirements Directive” means Directive 2013/36/EU on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, as amended or replaced from time to time (including as amended by Directive (EU) 2019/878 of the European Parliament and of the Council of May 20, 2019) or similar laws in the United Kingdom.

Cash Component” means that portion, if any, of the Conversion Shares Offer Consideration consisting of cash.

Cash Dividend” means any dividend or distribution in respect of the Ordinary Shares to Shareholders of the Company which is to be paid or made in cash (in whatever currency), however described and whether payable out of share premium account, profits, retained earnings or any other capital or revenue reserve or account and including a distribution or payment to Shareholders upon or in connection with a reduction of capital.

CET1 Capital” means, at any time, the sum, expressed in pounds sterling, of all amounts that constitute common equity Tier 1 Capital of the Group at such time, less any deductions from common equity Tier 1 Capital required to be made at such time, in each case as determined by the Company on a consolidated basis in accordance with the Capital Regulations applicable at such time (which determination shall be binding on the Trustee and the Holders and Beneficial Owners). For the purposes of this definition, the term “common equity Tier 1 Capital” shall have the meaning assigned to such term in the Capital Regulations then applicable.

Companies Act” means the Companies Act 2006 (UK).

Company” has the meaning set forth in the first paragraph of this Fourth Supplemental Indenture, and includes any successor entity.

Comparable Treasury Issue” means, with respect to any Reset Period, the U.S. Treasury security or securities selected by the Company with a maturity date on or about the last day of such Reset Period and that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities denominated in U.S. dollars and having a maturity of five years.

Comparable Treasury Price” means, with respect to any Reset Determination Date, (i) the arithmetic average of the Reference Treasury Dealer Quotations for such Reset Determination Date, after excluding the highest and lowest such Reference Treasury Dealer Quotations, or (ii) if fewer than five such Reference Treasury Dealer Quotations are received, the arithmetic average of all such quotations, or (iii) if fewer than two such Reference Treasury Dealer Quotations are received, then such Reference Treasury Dealer Quotation.

Conversion Date” means the date on which the Automatic Conversion shall take place, or has taken place, as applicable.

 

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Conversion Price” means $2.16 per Conversion Share (subject to certain anti-dilution adjustments pursuant to Section 3.01 hereof).

Conversion Shares” means the Ordinary Shares of the Company to be issued to the Conversion Shares Depository (or to the relevant recipient in accordance with the terms of the Securities) following an Automatic Conversion, which Ordinary Shares shall be in such number as is determined by dividing the aggregate principal amount of the Securities Outstanding immediately prior to the Automatic Conversion on the Conversion Date by the Conversion Price, rounded down, if necessary, to the nearest whole number of Ordinary Shares.

Conversion Shares Component” means that portion, if any, of the Conversion Shares Offer Consideration consisting of Conversion Shares.

Conversion Shares Depository” means a financial institution, trust company, depository entity, nominee entity or similar entity to be appointed by the Company on or prior to any date when a function ascribed to the Conversion Shares Depository in the Indenture is required to be performed, to perform such functions and which, as a condition of such appointment, such entity will be required to undertake, for the benefit of the Holders and Beneficial Owners of the Securities, to hold the Conversion Shares (and any Conversion Shares Offer Consideration) on behalf of such Holders and Beneficial Owners of the Securities in one or more segregated accounts, unless otherwise required for the purposes of the Conversion Shares Offer and, in any event, on terms consistent with the Indenture.

Conversion Shares Offer” has the meaning set forth in Section 2.10(a) hereof.

Conversion Shares Offer Agent” means the agent(s), if any, to be appointed on behalf of the Conversion Shares Depository by the Company, in its sole and absolute discretion, to act as placement or other agent of the Conversion Shares Depository to facilitate a Conversion Shares Offer.

Conversion Shares Offer Consideration” means in respect of each Security (i) if all of the Conversion Shares are sold in the Conversion Shares Offer, the pro rata share of the cash proceeds from the sale of the Conversion Shares attributable to such Security translated from sterling into U.S. dollars at a then-prevailing exchange rate (less any foreign exchange transaction costs), (ii) if some but not all of the Conversion Shares are sold in the Conversion Shares Offer, (x) the pro rata share of the cash proceeds from the sale of the Conversion Shares attributable to such Security translated from sterling into U.S. dollars at a then-prevailing exchange rate (less any foreign exchange transaction costs) and (y) the pro rata share of the Conversion Shares not sold pursuant to the Conversion Shares Offer attributable to such Security rounded down to the nearest whole number of Conversion Shares, and (iii) if no Conversion Shares are sold in a Conversion Shares Offer, the relevant Conversion Shares attributable to such Security rounded down to the nearest whole number of Conversion Shares, subject in the case of (i) and (ii)(x) above to deduction from any such cash proceeds of an amount equal to the pro rata share of any stamp duty, stamp duty reserve tax, or any other capital, issue, transfer, registration, financial transaction or documentary tax that may arise or be paid as a consequence of the transfer of any interest in the Conversion Shares to the Conversion Shares Depository as a consequence of the Conversion Shares Offer.

 

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Conversion Shares Offer Notice” means the written notice (substantially in the form attached hereto as Exhibit D) to be delivered by the Company to the Trustee directly and to the Holders of the Global Securities via DTC (or, if the Securities are definitive Securities, by the Company to the Trustee directly and to the Holders at their addresses shown on the Contingent Convertible Security Register) specifying (i) whether or not the Company has elected that a Conversion Shares Offer be made and, if so, the Conversion Shares Offer Period, (ii) the Suspension Date, (iii) details of the Conversion Shares Depository or (iv) if the Company has been unable to appoint a Conversion Shares Depository, such other arrangements for the issuance and/or delivery of the Conversion Shares or the Conversion Shares Offer Consideration, as applicable, to the Holders of the Securities as it shall consider reasonable in the circumstances.

Conversion Shares Offer Period” means the period during which the Conversion Shares Offer may occur, which period shall end no later than forty (40) Business Days after the delivery of the Conversion Shares Offer Notice.

Conversion Shares Offer Price” means £1.65 per Conversion Share (subject to certain anti-dilution adjustments pursuant to Section 3.01 hereof).

Conversion Shares Settlement Notice” means a written notice (substantially in the form attached hereto as Exhibit E) to be delivered by a Holder or Beneficial Owner (or custodian, broker, nominee or other representative thereof) to the Conversion Shares Depository (or to the relevant recipient of the Conversion Shares in accordance with the terms of the Securities), with a copy to the Trustee, no earlier than the Suspension Date containing the following information: (i) the name of the Holder or Beneficial Owner (or custodian, broker, nominee or other representative thereof), (ii) the aggregate amount of the Tradable Amount of the book-entry interests in the Securities held by such Holder or Beneficial Owner (or custodian, broker, nominee or other representative thereof) on the date of such notice, (iii) the name to be entered in the Company’s share register, (iv) the details of the CREST or other clearing system account or, if the Conversion Shares are not a participating security in CREST or another clearing system, the address to which the Conversion Shares (or the Conversion Shares Component, if any, of any Conversion Shares Offer Consideration) and/or cash (if not expected to be delivered through DTC) should be delivered and (v) such other details as may be required by the Conversion Shares Depository.

Conversion Shares Settlement Request Notice” means the written notice to be delivered by the Company to the Trustee directly and to the Holders and Beneficial Owner of the Securities via DTC (or, if the Securities are definitive Securities, by the Company to the Trustee directly and to the Holders at their registered addresses as shown on the Contingent Convertible Security Register) on the Suspension Date requesting that Holders and Beneficial Owners complete a Conversion Shares Settlement Notice and specifying (i) the Notice Cut-off Date and (ii) the Final Cancellation Date.

 

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CRD” means the legislative package consisting of the Capital Requirements Directive and the CRD Regulation.

CRD Regulation” means Regulation (EU) No. 575/2013 on prudential requirements for credit institutions and investment firms of the European Parliament and of the Council of June 26, 2013, as amended or replaced from time to time (including as amended by Regulation (EU) 2019/876 of the European Parliament and of the Council of May 20, 2019, to the extent then in application) or similar laws in the United Kingdom.

CREST” means the relevant system, as defined in the CREST Regulations, or any successor clearing system.

CREST Regulations” means the Uncertificated Securities Regulations 2001 (SI 2001 No. 01/378), as amended.

CSO Obligations” means the obligations of the Company under the Securities that may arise in connection with a Conversion Shares Offer to: (i) facilitate the preparation of a prospectus or other offering document, if applicable, and (ii) take responsibility for such prospectus or other offering document, which obligations (and any claims relating to a failure to facilitate the preparation of, or take responsibility for, such prospectus or other offering document) shall terminate in the event of the winding-up or administration of the Company.

Current Market Price” means, in respect of an Ordinary Share at a particular date, the average of the daily Volume Weighted Average Price of an Ordinary Share on each of the five (5) consecutive Dealing Days ending on the Dealing Day immediately preceding such date; provided that, if at any time during the said five-dealing-day period the Volume Weighted Average Price shall have been based on a price ex-Cash Dividend (or ex- any other entitlement) and during some other part of that period the Volume Weighted Average Price shall have been based on a price cum-Cash Dividend (or cum- any other entitlement), then:

 

  (i)

if the Ordinary Shares to be issued do not rank for the Cash Dividend (or entitlement) in question, the Volume Weighted Average Price on the dates on which the Ordinary Shares shall have been based on a price cum-Cash Dividend (or cum- any other entitlement) shall, for the purposes of this definition, be deemed to be the amount thereof reduced by an amount equal to such Cash Dividend or entitlement per ordinary share as at the date of first public announcement relating to such Cash Dividend or entitlement, in any such case, determined on a gross basis and disregarding any withholding or deduction required to be made on account of tax, and disregarding any associated tax credit; or

 

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  (ii)

if the Ordinary Shares to be issued do rank for the Cash Dividend (or entitlement) in question, the Volume Weighted Average Price on the dates on which the Ordinary Shares shall have been based on a price ex-Cash Dividend (or ex- any other entitlement) shall, for the purposes of this definition, be deemed to be the amount thereof increased by an amount equal to such Cash Dividend or entitlement per ordinary share as at the date of first public announcement relating to such Cash Dividend or entitlement, in any such case, determined on a gross basis and disregarding any withholding or deduction required to be made on account of tax, and disregarding any associated tax credit,

and provided further that, if on each of the said five Dealing Days the Volume Weighted Average Price shall have been based on a price cum-Cash Dividend (or cum- any other entitlement) in respect of a Cash Dividend (or other entitlement) which has been declared or announced but the Ordinary Shares to be issued do not rank for that Cash Dividend (or other entitlement), the Volume Weighted Average Price on each of such dates shall, for the purposes of this definition, be deemed to be the amount thereof reduced by an amount equal to such Cash Dividend or entitlement per ordinary share as at the date of first public announcement relating to such Cash Dividend or entitlement, in any such case, determined on a gross basis and disregarding any withholding or deduction required to be made on account of tax, and disregarding any associated tax credit,

and provided further that, if the Volume Weighted Average Price of an Ordinary Share is not available on one or more of the said five Dealing Days (disregarding for this purpose the proviso to the definition of Volume Weighted Average Price), then the average of such Volume Weighted Average Prices which are available in that five-dealing-day period shall be used (subject to a minimum of two such prices) and if only one, or no, such Volume Weighted Average Price is available in the relevant period, the Current Market Price shall be determined in good faith by an Independent Financial Adviser.

Dealing Day” means a day on which the Relevant Stock Exchange or relevant stock exchange or securities market is open for business and on which Ordinary Shares may be dealt in (other than a day on which the Relevant Stock Exchange or relevant stock exchange or securities market is scheduled to or does close prior to its regular weekday closing time).

Distributable Items” shall have the meaning assigned to such term in the Capital Regulations then applicable to the Company, but amended so that for so long as there is any reference therein to “before distributions to holders of own funds instruments” it shall be read as a reference to “before distributions to holders of Parity Securities, the Securities or any Junior Securities.”

 

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DTC” means The Depository Trust Company, or any successor clearing system.

EEA Regulated Market” means a regulated market as defined by Article 4.1(21) of Directive 2014/65/EU of the European Parliament and of the Council on markets in financial instruments, as the same may be amended or replaced from time to time or similar laws in the United Kingdom.

Effective Date” means, for the purposes of Section 3.01(c) hereof, the first date on which the Ordinary Shares are traded ex-rights on the Relevant Stock Exchange and, for the purposes of Section 3.01(d) hereof, the first date on which the Ordinary Shares are traded ex-the relevant Cash Dividend on the Relevant Stock Exchange.

Equity Share Capital” has the meaning provided in Section 548 of the Companies Act.

Extraordinary Dividend” means any Cash Dividend that is expressly declared by the Company to be a capital distribution, extraordinary dividend, extraordinary distribution, special dividend, special distribution or return of value to shareholders or any analogous or similar term, in which case the Extraordinary Dividend shall be such Cash Dividend.

Final Cancellation Date” means the date, as specified in the Conversion Shares Settlement Request Notice, on which the Securities in relation to which no Conversion Shares Settlement Notice has been received by the Conversion Shares Depository on or before the Notice Cut-off Date shall be cancelled, which date may be up to twelve (12) Business Days following the Notice Cut-off Date.

Fully Loaded” means, in relation to a measure that is presented or described as being on a “Fully Loaded basis,” that such measure is determined without applying the transitional provisions set out in Part Ten of the CRD Regulation in accordance with the Capital Regulations applicable as at the time such measure is determined.

Fully Loaded CET1 Ratio” means, at any time, the ratio of CET1 Capital at such time to the Risk Weighted Assets at such time, expressed as a percentage and on the basis that all measures used in such calculation shall be determined on a Fully Loaded basis.

Group” means the Company (or any successor entity) and its consolidated subsidiaries.

Governmental Entity” means (i) the United Kingdom Government, (ii) an agency of the United Kingdom Government or (iii) a Takeover Person or entity (other than a body corporate) controlled by the United Kingdom Government or any such agency referred to in clause (ii) of this definition. If the Company is then organized in another jurisdiction, the references to “United Kingdom Government” shall be read as references to the government of such other jurisdiction.

Indenture” has the meaning set forth in the first paragraph of this Fourth Supplemental Indenture.

 

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Independent Financial Adviser” means an independent financial institution of international repute appointed by the Company at its own expense.

Initial Interest Rate” has the meaning set forth in Section 2.02(a) hereof.

Interest Payment Date” has the meaning set forth in Section 2.02(a) hereof.

Issue Date” has the meaning set forth in Section 2.01(f) hereof.

Junior Securities” means any Ordinary Shares, securities or other obligations (including any guarantee, credit support or similar undertaking) of the Company ranking, or expressed to rank, junior to the Securities in a winding-up or administration of the Company.

LSE” means the London Stock Exchange plc (or its successor).

Margin” has the meaning set forth in Section 2.02(a) hereof.

New Conversion Condition” means the condition that shall be satisfied if (a) by not later than seven (7) Business Days following the completion of a Takeover Event where the Acquirer is an Approved Entity, there shall be arrangements in place for the Approved Entity to provide for issuance of Approved Entity Shares following an Automatic Conversion of the Securities on terms mutatis mutandis identical to the provisions under Section 2.08 below, and (b) the Company, in its sole and absolute discretion has determined that such arrangements are in the best interest of the Company and its shareholders taken as a whole having regard to the interests of its stakeholders (including, but not limited to, the Holders of the Securities) and are consistent with applicable law and regulation (including, but not limited to, the guidance of any applicable regulatory body).

New Conversion Price” means the amount determined in accordance with the following formula, which shall apply from the QTE Effective Date:

NCP = ECP * (VWAPAES / VWAPOS)

where:

NCP” is the New Conversion Price;

ECP” is the Conversion Price in effect on the Dealing Day immediately prior to the QTE Effective Date;

VWAPAES” means the average of the Volume Weighted Average Price of the Approved Entity Shares (translated, if necessary, into the same currency as the price of the Ordinary Shares at the Prevailing Rate on the relevant dealing day) on each of the five Dealing Days ending on the Dealing Day prior to the closing date of the Takeover Event (and where references in the definition of “Volume Weighted Average Price” to “ordinary share” shall be construed as a reference to the Approved Entity Shares and in the definition of “Dealing Day,” references to the “Relevant Stock Exchange” shall be to the relevant Recognized Stock Exchange); and

 

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VWAPOS” is the average of the Volume Weighted Average Price of the Ordinary Shares on each of the five Dealing Days ending on the Dealing Day immediately prior to the closing date of the Takeover Event.

Notice Cut-off Date” means the date specified as such in the Conversion Shares Settlement Request Notice, which date shall be at least forty (40) Business Days following the Suspension Date.

Ordinary Shares” means (a) prior to the QTE Effective Date, fully paid ordinary shares in the capital of the Company and (b) on and after the QTE Effective Date, the relevant Approved Entity Shares.

Parity Securities” means any preference shares, securities or other obligations (including any guarantee, credit support or similar undertaking) of the Company ranking, or expressed to rank, pari passu with the Securities in a winding-up or administration of the Company.

Prevailing Rate” means, in respect of any currencies on any day, the spot rate of exchange between the relevant currencies prevailing as at or about 12:00 pm, London time, on that date as appearing on or derived from the relevant page on Bloomberg (or such other information service provider that displays the relevant information) or, if such a rate cannot be determined at such time, the rate prevailing as at or about 12:00 pm, London time, on the immediately preceding day on which such rate can be so determined or, if such rate cannot be so determined by reference to the relevant page on Bloomberg (or such other information service provider that displays the relevant information), the rate determined in such other manner as an Independent Financial Adviser shall in good faith prescribe.

Price” means the Conversion Price or the Conversion Shares Offer Price, as applicable.

Prospectus Supplement” means the prospectus supplement with respect to the Securities, dated August 5, 2020, supplementing the prospectus dated April 6, 2018.

Prudential Regulation Authority” or “PRA” means the Prudential Regulation Authority of the United Kingdom or such other governmental authority in the United Kingdom (or if the Company becomes domiciled in a jurisdiction other than the United Kingdom, such other jurisdiction) having primary responsibility for the prudential supervision of the Company.

QTE Effective Date” means the date with effect from which the New Conversion Condition shall have been satisfied.

Qualifying Takeover Event” means a Takeover Event with respect to which: (i) the Acquirer is an Approved Entity; and (ii) the New Conversion Condition is satisfied.

 

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Recognized Stock Exchange” means an EEA Regulated Market or another regulated, regularly operating, recognized stock exchange or securities market in an OECD member state.

Reference Treasury Dealer” means, with respect to any Reset Determination Date, each of up to five banks selected by the Company, or the affiliates of such banks, which are (i) primary U.S. Treasury securities dealers, and their respective successors, or (ii) market makers in pricing corporate bond issues denominated in U.S. dollars.

Reference Treasury Dealer Quotations” means, with respect to each Reference Treasury Dealer and any Reset Determination Date, the arithmetic average, as determined by the Calculation Agent, of the bid and offered prices (such prices being obtained by the Company and furnished to the Calculation Agent) for the applicable Comparable Treasury Issue, expressed in each case as a percentage of its principal amount, as at 11:00 a.m. (New York City time), on such Reset Determination Date.

Regular Record Date” means the close of business on the Business Day immediately preceding each Interest Payment Date (or, if the Securities are held in definitive form, the close of business on the 15th Business Day preceding each Interest Payment Date).

Regulatory Event” has the meaning set forth in Section 2.06 hereof.

Relevant Currency” means sterling or, if at the relevant time or for the purposes of the relevant calculation or determination the LSE is not the Relevant Stock Exchange, the currency in which the Ordinary Shares are quoted or dealt in on the Relevant Stock Exchange at such time.

Relevant Stock Exchange” means the LSE or, if at the relevant time the Ordinary Shares are not at that time listed and admitted to trading on the LSE, the principal stock exchange or securities market on which the Ordinary Shares are then listed, admitted to trading or quoted or accepted for dealing.

Relevant Tax Effect” means a circumstance, as on the date hereof or at any time thereafter, that interest payments (or funding costs of the Company as recognized in its accounts) under or with respect to the Securities are not or would not be deductible for UK corporation tax purposes (whether for the Company, or for companies with which the Company is grouped for United Kingdom tax purposes).

Reset Date” means June 15, 2026 and each fifth anniversary thereafter.

Reset Determination Date” means the second (2nd) Business Day immediately preceding each Reset Date.

Reset Period” has the meaning set forth in Section 2.02(a) hereof.

 

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Risk Weighted Assets” means, at any time, the aggregate amount, expressed in pounds sterling, of the risk weighted assets of the Group at such time, as determined by the Company on a consolidated basis in accordance with the Capital Regulations applicable at such time (which determination shall be binding on the Trustee, the Holders and the Beneficial Owners). For the purposes of this definition, the term “risk weighted assets” means the risk weighted assets or total risk exposure amount, as determined by the Company in accordance with the Capital Regulations.

secondary non-preferential debts” shall have the meaning given to it in the 2018 Order and any other law or regulation applicable to the Company which is amended by the 2018 Order, as each may be amended or replaced from time to time.

Securities” has the meaning set forth in the Recitals.

Senior Creditors” means creditors of the Company (i) who are unsubordinated creditors; (ii) whose claims are, or are expressed to be, subordinated (whether only in the event of the winding-up or administration of the Company or otherwise) to the claims of unsubordinated creditors of the Company but not further or otherwise; (iii) who are creditors in respect of any secondary non-preferential debts; or (iv) whose claims are, or are expressed to be, junior to the claims of other creditors of the Company, whether subordinated or unsubordinated, other than those whose claims rank, or are expressed to rank, pari passu with, or junior to, the claims of the holders of the Securities.

Settlement Date” means (i) with respect to any Security in relation to which a Conversion Shares Settlement Notice is received by the Conversion Shares Depository on or before the Notice Cut-off Date, the later of (a) the date that is two (2) Business Days after the end of the relevant Conversion Shares Offer Period and (b) the date that is two (2) Business Days after the date on which such Conversion Shares Settlement Notice has been received by the Conversion Shares Depository and (ii) with respect to any Security in relation to which a Conversion Shares Settlement Notice is not received by the Conversion Shares Depository on or before the Notice Cut-off Date, the date on which the Conversion Shares Depository delivers the relevant Conversion Shares or Conversion Shares Component, if any, of any Conversion Shares Offer Consideration, as applicable.

Shareholders” means the holders of Ordinary Shares.

Subsequent Interest Rate” has the meaning set forth in Section 2.02(a) hereof.

Suspension Date” means the date specified in the Conversion Shares Offer Notice as the date on which DTC shall suspend all clearance and settlement of transactions in the Securities in accordance with its rules and procedures, which date shall be no later than thirty-eight (38) Business Days after the delivery of the Conversion Shares Offer Notice to DTC (and, if the Company elects that a Conversion Shares Offer be made, such date shall be at least two (2) Business Days prior to the end of the relevant Conversion Shares Offer Period).

Takeover Event” shall mean an offer made to all (or as nearly as may be practicable all) shareholders (or all (or as nearly as may be practicable all) such shareholders other than the offeror and/or any associate (as defined in Section 988(1) of the Companies Act) of the offeror), to acquire all or a majority of the issued Ordinary

 

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Share Capital (as defined in Section 1119 of the Corporation Tax Act 2010, or any successor provision or legislation) of the Company or if any Takeover Person proposes a scheme with regard to such acquisition and (such offer or scheme having become or been declared unconditional in all respects or having become effective) the right to cast more than 50% of the votes which may ordinarily be cast on a poll at a general meeting of the Company has or will become unconditionally vested in any Takeover Person and/or any associate of that Takeover Person (as defined in Section 988(1) of the Companies Act).

Takeover Event Notice” means a notice to the Holders of the Securities notifying them that a Takeover Event has occurred and specifying: (1) the identity of the Acquirer; (2) whether the Takeover Event is a Qualifying Takeover Event or not; (3) in the case of a Qualifying Takeover Event, if determined at such time, the New Conversion Price; and (4) if applicable, the QTE Effective Date.

Takeover Person” includes any individual, company, corporation, firm, partnership, joint venture, undertaking, association, organization, trust, state or agency of a state (in each case whether or not being a separate legal entity) or other legal entity.

Tax Event” has the meaning set forth in Section 2.05(a) hereof.

Tier 1 Capital” means Tier 1 capital for the purposes of the Capital Regulations.

Tradable Amount” has the meaning set forth in 2.01(j) hereof.

Trustee” has the meaning set forth in the first paragraph of this Fourth Supplemental Indenture.

U.S. Treasury Rate” means, with respect to any Reset Period for which such rate applies, the rate per annum equal to: (1) the yield, under the heading which represents the average for the week immediately prior to the applicable Reset Determination Date, appearing in the most recently published statistical release designated “H.15,” or any successor publication that is published by the Board of Governors of the Federal Reserve System that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity, under the caption “Treasury constant maturities,” for the maturity of five years; or (2) if such release (or any successor release) is not published during the week immediately prior to such Reset Determination Date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Reset Determination Date; provided that, if the U.S. Treasury Rate cannot be determined, for whatever reason, as described under (1) or (2) above, “U.S. Treasury Rate” means the rate in percentage per annum as notified by the Calculation Agent to the Company equal to the yield on U.S. Treasury securities having a maturity of five years as set forth in the most recently published statistical release designated “H.15” under the caption “Treasury constant maturities” (or any successor publication that is published weekly by the Board of Governors of the Federal Reserve System and that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury constant maturities” for the maturity of five years) at 5:00 p.m. (New York City time) on the last available date preceding the Reset Determination Date on which such rate was set forth in such release (or any successor release).

 

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Volume Weighted Average Price” means, in respect of an Ordinary Share (or an Approved Entity Share, as applicable) on any Dealing Day, the order book volume-weighted average price of an Ordinary Share (or Approved Entity Shares, as applicable) published by or derived from the relevant page on Bloomberg or such other source as shall be determined in good faith to be appropriate by an Independent Financial Adviser on such Dealing Day, provided that if on any such Dealing Day such price is not available or cannot otherwise be determined as provided above, the “Volume Weighted Average Price” of an ordinary share (or an Approved Entity Shares, as applicable) in respect of such Dealing Day shall be the volume weighted average price, determined as provided above, on the immediately preceding Dealing Day on which the same can be so determined or determined as an Independent Financial Adviser might otherwise determine in good faith to be appropriate.

SECTION 1.02. Effect of Headings.

The Article and Section headings herein are for convenience only and shall not affect the construction hereof.

SECTION 1.03. Separability Clause.

In case any provision in this Fourth 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 1.04. Benefits of Instrument.

Nothing in this Fourth Supplemental Indenture, express or implied, shall give to any person, other than the parties hereto and their successors hereunder and the Holders, any benefit or any legal or equitable right, remedy or claim under the Indenture.

SECTION 1.05. Relation to Base Indenture.

This Fourth Supplemental Indenture constitutes an integral part of the Base Indenture. Except for the provisions set out in Article IV, all provisions of this Fourth Supplemental Indenture are expressly and solely for the benefit of the Holders and Beneficial Owners of the Securities and any such provisions shall not be deemed to apply to any other Contingent Convertible Securities issued under the Base Indenture and shall not be deemed to amend, modify or supplement the Base Indenture for any purpose other than with respect to the Securities. The provisions set out in Article IV apply to Contingent Convertible Securities authenticated, delivered and issued on or after the date of this Fourth Supplemental Indenture.

 

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SECTION 1.06. Construction and Interpretation. Unless the express otherwise requires:

(a) the words “hereof”, “herein” and “hereunder” and words of similar import, when used in this Fourth Supplemental Indenture, refer to this Fourth Supplemental Indenture as a whole and not to any particular provision of this Fourth Supplemental Indenture;

(b) the terms defined in the singular have a comparable meaning when used in the plural, and vice versa;

(c) the terms “U.S. dollars” and “$” refer to the lawful currency for the time being of the United States;

(d) the terms “pounds sterling,” “sterling” and “£” mean British pounds sterling;

(e) references herein to a specific Section, Article or Exhibit refer to Sections or Articles of, or an Exhibit to, this Fourth Supplemental Indenture;

(f) wherever the words “include”, “includes” or “including” are used in this Fourth Supplemental Indenture, they shall be deemed to be followed by the words “without limitation;”

(g) references to a Person are also to its successors and permitted assigns;

(h) the use of “or” is not intended to be exclusive unless expressly indicated otherwise;

(i) for purposes of Article III of this Fourth Supplemental Indenture, references therein to any act or statute or any provision of any act or statute shall be deemed also to refer to any statutory modification or re-enactment thereof or any statutory instrument, order or regulation made thereunder or under such modification or re-enactment; and

(j) references to any issue or offer or grant to Shareholders “as a class” or “by way of rights” shall be taken to be references to an issue or offer or grant to all or substantially all Shareholders, as the case may be, other than Shareholders, as the case may be, to whom, by reason of the laws of any territory or requirements of any recognized regulatory body or any other stock exchange or securities market in any territory or in connection with fractional entitlements, it is determined not to make such issue or offer or grant.

 

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ARTICLE II

$1,500,000,000 6.125% FIXED RATE RESETTING PERPETUAL SUBORDINATED CONTINGENT CONVERTIBLE SECURITIES

SECTION 2.01. Creation of Series; Establishment of Form.

(a) There is hereby established a new series of Contingent Convertible Securities under the Base Indenture entitled the “$1,500,000,000 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities.”

(b) The Securities shall be issued initially in the form of one or more registered Global Securities that shall be deposited with DTC on the Issue Date. The Global Securities shall be registered in the name of Cede & Co. and executed and delivered in substantially the form attached hereto as Exhibit A.

(c) The Company shall issue the Securities in an aggregate principal amount of $1,500,000,000. The Company may from time to time, without the consent of the Holders of the Securities, issue additional securities having the same ranking and same interest rate, interest cancellation terms, redemption terms, Conversion Price and other terms as the Securities described in this Fourth Supplemental Indenture, except for the price to public and date of issue. Any such additional securities subsequently issued shall rank equally and ratably with the Securities in all respects, so that such further securities shall be consolidated and form a single series with the Securities.

(d) Any proposed transfer of an interest in Securities held in the form of a Global Security and shall be effected through the book-entry system maintained by DTC.

(e) The Securities shall not have a sinking fund.

(f) The Securities shall be issued on August 12, 2020 (the “Issue Date”).

(g) The Securities shall have no fixed maturity or fixed redemption date, and shall not be redeemable except as provided in Sections 2.04, 2.05 and 2.06 hereof.

(h) The interest rate on the Securities shall be determined as set forth in Section 2.02(a) hereof.

(i) The Securities shall be issued in denominations of $200,000 in principal amount and integral multiples of $1,000 in excess thereof. The denominations cannot be changed without the consent of the Trustee.

(j) The denomination of each interest in a Global Security shall be the “Tradable Amount” of such book-entry interest. Prior to an Automatic Conversion, the aggregate Tradable Amount of the interests in each Global Security shall be equal to such Global Security’s outstanding principal amount. Following an Automatic Conversion, the principal amount of each Security shall be zero, but the Tradable Amount of the book-entry interests in each Security shall remain unchanged.

 

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SECTION 2.02. Interest.

(a) From (and including) the Issue Date to (but excluding) June 15, 2026 the interest rate on the Securities shall be 6.125% per annum (the “Initial Interest Rate”). From and including each Reset Date to (but excluding) the next following Reset Date (each such period, a “Reset Period”), the applicable per annum interest rate (the “Subsequent Interest Rate”) will, subject to Section 2.02(b) herein, be equal to the sum, as determined by the Calculation Agent, of the then prevailing U.S. Treasury Rate on the relevant Reset Determination Date and 5.867% (the “Margin”). Each Subsequent Interest Rate shall be determined in compliance with the relevant Capital Regulations. Subject to Sections 3.12 and 3.13 of the Base Indenture and the penultimate sentence of this paragraph, interest, if any, shall be payable quarterly in arrear on March 15, June 15, September 15 and December 15 of each year (each, an “Interest Payment Date”), commencing on December 15, 2020; provided that if such Interest Payment Date is not a Business Day, the Interest Payment Date shall be postponed to the next Business Day, but interest on that payment will not accrue during the period from and after the Interest Payment Date. Subject to Sections 3.12 and 3.13 of the Base Indenture, the interest rate on the Securities, if any, will be computed on the basis of a year of 360 days consisting of 12 months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed.

The first date on which interest may be paid will be December 15, 2020 for the period commencing on (and including) August 12, 2020 and ending on (but excluding) December 15, 2020 (and thus a long first interest period). If a date of redemption is not a Business Day, the Company may pay interest (if any) and principal on the next Business Day, but interest on that payment will not accrue during the period from and after the date of redemption.

In addition to any other restrictions on payments of principal and interest contained in the Indenture, no repayment of the principal amount of the Securities or payment of interest on the Securities shall become due and payable after the exercise of any U.K. Bail-in Power by the Relevant U.K. Resolution Authority unless 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.

SECTION 2.03. Payment of Principal, Interest and Other Amounts. Payments of principal of and interest, if any, on the Securities shall 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 and such payments on Securities represented by a Global Security shall be made through one or more Paying Agents appointed under the Base Indenture to DTC or its nominee, as the Holder or Holders of the Global Security. Initially, the Paying Agent for the Securities shall be The Bank of New York Mellon, London Branch, One Canada Square, London E14 5AL, United Kingdom and the Contingent Convertible Security Registrar shall be The Bank of New York Mellon SA/NV, Luxembourg Branch, 2-4 Rue Eugene Ruppert, Vertigo Building – Polaris, Luxembourg, L-2453, Luxembourg. The Company may change the Paying Agent without prior notice to the Holders of the Securities, and in such an event the Company may act as Paying Agent or Contingent Convertible Security Registrar. Payments of principal of and interest on the Securities represented by a Global Security shall be made by wire transfer of immediately available funds; provided, however, that in the case of payments of principal, such Global Security is first surrendered to the Paying Agent.

 

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SECTION 2.04. Optional Redemption. Subject to the limitations specified in Section 2.07 of this Fourth Supplemental Indenture and Section 11.08 of the Base Indenture as amended hereby, the Company may, at the Company’s option, redeem the Securities, in whole but not in part, on any day falling in the period commencing on (and including) December 15, 2025 and ending on (and including) the first Reset Date or on any subsequent Reset Date at a redemption price equal to 100% of the principal amount of the Securities then Outstanding, together with any accrued but unpaid interest (which excludes any interest cancelled or deemed cancelled as described in Sections 3.12 and 3.13 of the Base Indenture to (but excluding) the date fixed for redemption.

SECTION 2.05. Optional Tax Redemption.

(a) Subject to Section 2.07 of this Fourth Supplemental Indenture and Section 11.08 of the Base Indenture as amended hereby, the Company may, at any time, at the Company’s option, redeem the Securities, in whole but not in part, at a redemption price equal to 100% of the principal amount of the Securities then Outstanding, together with any accrued but unpaid interest (which excludes any interest cancelled or deemed cancelled as described in Sections 3.12 and 3.13 of the Base Indenture) to (but excluding) the date fixed for redemption, if the Company determines that as a result of a change in, or amendment to, the laws or regulations of a Taxing Jurisdiction, including any treaty to which the relevant Taxing Jurisdiction is a party, or a change in an official application of those laws or regulations, including any decision of any court or tribunal, which becomes effective on or after the Issue Date (and, in the case of a successor entity, which becomes effective on or after the date of such successor entity’s assumption of the Company’s obligations):

(i) the Company will or would be required to pay to Holders of the Securities Additional Amounts;

(ii) the Company would not be entitled to claim a deduction in respect of any payments in respect of the Securities in computing the Company’s taxation liabilities or the value of such deduction would be materially reduced;

(iii) the Company would not, as a result of the Securities being in issue be able to have the losses or deductions set-off against the profits or gains or profits or gains offset by the losses or deductions, of companies with which the Company is or would otherwise be so grouped for applicable United Kingdom tax purposes (whether under the group relief system current as at the Issue Date or any similar system or systems having like effect as may from time to time exist);

(iv) the Company would, in the future, have to bring into account a taxable credit if the principal amount of the Securities were written down or if the Securities were converted into Conversion Shares, or

(v) the Securities or any part thereof would become treated as a derivative or an embedded derivative for U.K. tax purposes,

(each such change in tax law or regulation or the official application thereof, a “Tax Event”); provided, however, that the Securities may only be redeemed pursuant to this Section 2.05 if, in the case of each Tax Event, the consequences of the Tax Event cannot be avoided by the Company’s taking reasonable measures available to the Company.

 

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(b) Prior to the delivery of any notice of redemption as a result of a Tax Event the Company shall deliver to the Trustee an opinion of independent counsel of recognized standing, chosen by the Company, in a form satisfactory to the Trustee, confirming that the Company is entitled to exercise its right of redemption under this Section 2.05.

SECTION 2.06. Regulatory Event Redemption. Subject to Section 2.07 of this Fourth Supplemental Indenture and Section 11.08 of the Base Indenture as amended hereby, the Company may, at the Company’s option, at any time, redeem the Securities, in whole but not in part, at a redemption price equal to 100% of the principal amount of the Securities then Outstanding, together with any accrued but unpaid interest (which excludes any interest cancelled or deemed cancelled as described in Sections 3.12 and 3.13 of the Base Indenture) to (but excluding) the date fixed for redemption, if, on or after the Issue Date, there is a change in the regulatory classification of the Securities that does, or would be likely to, result in the whole or any part of the outstanding aggregate principal amount of the Securities at any time being excluded from, or ceasing to count towards, the Group’s Tier 1 Capital (a “Regulatory Event”).

SECTION 2.07. Notice of Redemption. Before the Company may redeem the Securities pursuant to Sections 2.04, 2.05 or 2.06, the Company shall deliver via DTC (or, if the Securities are definitive Securities, to the Holders at their addresses shown on the Contingent Convertible Security Register) prior notice of not less than thirty (30) days, nor more than sixty (60) days to the Holders of the Securities. The Company shall deliver written notice of such redemption of the Securities to the Trustee at least five (5) Business Days prior to the date on which the relevant notice of redemption is sent to Holders (unless a shorter notice period shall be satisfactory to the Trustee). Such notice shall specify the Company’s election to redeem the Securities and the date fixed for such redemption and shall be irrevocable except in the limited circumstances described in Sections 11.04(d), (e) and (f) of the Base Indenture. The Company shall not be entitled to deliver a notice of redemption after an Automatic Conversion Notice has been delivered.

SECTION 2.08. Automatic Conversion upon Capital Adequacy Trigger Event.

(a) If a Capital Adequacy Trigger Event has occurred, then the Automatic Conversion shall occur on the Conversion Date, at which point all of the Company’s obligations under the Securities (other than the CSO Obligations, if any) shall be irrevocably and automatically released in consideration of the Company’s issuance of the Conversion Shares to the Conversion Shares Depository (or to the relevant recipient in accordance with the terms of the Securities) on the Conversion Date at the Conversion Price. Under no circumstances shall such released obligations be reinstated. If the Company has been unable to appoint a Conversion Shares Depository, it shall make such other arrangements for the issuance and/or delivery of the Conversion Shares or Conversion Shares Offer Consideration, as applicable, to the Holders of the Securities as it shall consider reasonable in the circumstances (including, without limitation, issuance of the Conversion Shares to another nominee or to the Holders of the Securities directly), and such issuance shall irrevocably and automatically release all of the Company’s obligations under the Securities (other than the CSO Obligations, if any) as if the Conversion Shares had been issued to the Conversion Shares Depository.

 

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(b) The Automatic Conversion shall occur without delay upon the occurrence of a Capital Adequacy Trigger Event.

(c) The Company shall (a) immediately inform the PRA of the occurrence of a Capital Adequacy Trigger Event and (b) deliver an Automatic Conversion Notice to the Trustee directly and to the Holders via DTC as soon as practicable after such time.

(d) The date on which the Automatic Conversion Notice shall be deemed to have been given shall be the date on which it is dispatched by the Company to DTC (or, if the Securities are definitive Securities, to the Trustee).

(e) The Company shall request that DTC post the Automatic Conversion Notice on its Reorganization Inquiry for Participants System pursuant to DTC’s procedures then in effect (or such other system as DTC uses for providing notices to holders of securities). Within two (2) Business Days of its receipt of the Automatic Conversion Notice, the Trustee shall transmit the Automatic Conversion Notice to the direct participants of DTC holding the Securities at such time.

(f) The Automatic Conversion shall occur on the Conversion Date and all of the Company’s obligations under the Securities (other than the CSO Obligations, if any) shall be irrevocably and automatically released in consideration of the Company’s issuance of the Conversion Shares to the Conversion Shares Depository (or to the relevant recipient in accordance with the terms of the Securities), and the principal amount of the Securities shall equal zero at all times thereafter (for the avoidance of doubt, the Tradable Amount shall remain unchanged) as a result of the Automatic Conversion.

(g) Within ten (10) Business Days following the Conversion Date, the Company shall deliver a Conversion Shares Offer Notice to the Trustee directly and to the Holders of the Global Securities via DTC (or, if the Securities are definitive Securities, by the Company to the Trustee directly and to the Holders at their addresses shown on the Contingent Convertible Security Register).

(h) The Conversion Shares shall initially be registered in the name of the Conversion Shares Depository (or the relevant recipient in accordance with the terms of the Securities, as applicable) and each Holder and Beneficial Owner of the Securities shall be deemed to have irrevocably directed the Company to issue the Conversion Shares corresponding to the conversion of its holding of Securities to the Conversion Shares Depository (or to such other relevant recipient).

(i) The Conversion Shares Depository (or the relevant recipient in accordance with the terms of the Securities, as applicable) shall hold the Conversion Shares on behalf of the Holders and Beneficial Owners of the Securities, who shall be entitled to direct (each in respect of their pro rata share of the Conversion Shares) the Conversion Shares Depository or such other relevant recipient, as applicable, to exercise on their behalf all rights of an ordinary shareholder (including voting rights and rights to receive dividends); provided, however, that Holders and

 

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Beneficial Owners shall not be able to sell or otherwise transfer the Conversion Shares until such time as the Conversion Shares have been delivered to the Holders or Beneficial Owners in accordance with the procedures set forth under Section 2.11 hereof. A Holder or Beneficial Owner’s pro rata share of the Conversion Shares at any particular time shall be determined based on the aggregate amount of the Tradable Amount of the Securities held by such Holder or Beneficial Owner as a proportion of the aggregate amount of the Tradable Amount of all Securities outstanding at the relevant time rounded down, if necessary, to the nearest whole number of Conversion Shares.

(j) Provided that the Company issues the Conversion Shares to the Conversion Shares Depository (or the relevant recipient in accordance with the terms of the Securities) in accordance with the terms of the Securities, with effect from the Conversion Date, Holders and Beneficial Owners of the Securities shall have recourse only to the Conversion Shares Depository (or to such other relevant recipient, as applicable) for the delivery to them of Conversion Shares or, if the Company elects that a Conversion Shares Offer be made, of any Conversion Shares Offer Consideration to which such Holders and Beneficial Owners are entitled.

(k) Effective upon, and following, the occurrence of the Automatic Conversion, Holders and Beneficial Owners shall not have any rights against the Company with respect to repayment of the principal amount of the Securities or payment of interest or any other amount on or in respect of such Securities, which liabilities of the Company shall be irrevocably and automatically released, and accordingly the principal amount of the Securities shall equal zero at all times thereafter. Any interest in respect of an interest period ending on any Interest Payment Date falling between the date of a Capital Adequacy Trigger Event and the Conversion Date shall be deemed to have been cancelled pursuant to Section 3.12 of the Base Indenture upon the occurrence of such Capital Adequacy Trigger Event and shall not be due and payable.

(l) By subscribing for, purchasing or otherwise acquiring the Securities, each Holder and each Beneficial Owner shall be deemed to have (i) acknowledged and agreed that an interest payment shall not be due and payable on the relevant Interest Payment Date if it has been cancelled or deemed cancelled (in each case, in whole or in part) for any reason in accordance with the terms of the Securities, (ii) consented to (x) the Automatic Conversion, including the appointment of a Conversion Shares Depository and the issuance of the Conversion Shares thereto (or any related Conversion Shares Offer Consideration, including the appointment of any Conversion Shares Offer Agent and the sale of the Conversion Shares by the Conversion Shares Depository), and acknowledged that such Automatic Conversion of its Securities (and any related Conversion Shares Offer) may occur without any further action on the part of such Holder or Beneficial Owner or the Trustee and (y) 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 Securities and (iii) authorized, directed and requested DTC and any direct participant in DTC or other intermediary through which it holds such Securities to take any and all necessary action, if required, to implement (x) the Automatic Conversion (including any related Conversion Shares Offer) and (y) the exercise of any U.K. Bail-in Power with respect to the Securities as it may be imposed, without any further action or direction on the part of such Holder or Beneficial Owner or the Trustee.

 

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(m) The procedures set forth in this Section 2.08 are subject to change to reflect changes in DTC practices, and the Company may make changes to the procedures set forth in this Section 2.08 to the extent reasonably necessary, in the opinion of the Company, to reflect such changes in DTC practices.

(n) Notwithstanding anything to the contrary contained in the Indenture or the Securities, once the Company has delivered an Automatic Conversion Notice to DTC following the occurrence of a Capital Adequacy Trigger Event (or following an Automatic Conversion (if sooner)), (i) the Holders and Beneficial Owners shall have no rights whatsoever under the Indenture or the Securities to instruct the Trustee to take any action whatsoever and (ii) as of the date of the Automatic Conversion Notice, except for any indemnity and/or security provided by any Holder or by any Beneficial Owner in such direction or related to such direction, any direction previously given to the Trustee by any Holders or by any Beneficial Owners shall cease automatically and shall be null and void and of no further effect; except in each case of (i) and (ii) of this Section 2.08(n), with respect to any rights of Holders or Beneficial Owners with respect to any payments under the Securities that were unconditionally due and payable prior to the date of the Automatic Conversion Notice (if any) or unless the Trustee is instructed in writing by the Company to act otherwise.

(o) On or (if reasonably practicable) prior to delivering the Automatic Conversion Notice, the Company shall deliver to the Trustee a certificate signed by two Authorized Officers, in the form attached hereto as Exhibit C, specifying that a Capital Adequacy Trigger Event has occurred (the “Capital Adequacy Trigger Event Officers’ Certificate”). The Trustee is entitled to conclusively rely on and accept such Capital Adequacy Trigger Event Officers’ Certificate without any duty whatsoever of further inquiry as sufficient and conclusive evidence of the occurrence of a Capital Adequacy Trigger Event, and such Capital Adequacy Trigger Event Officers’ Certificate shall be conclusive and binding on the Trustee, the Holders and the Beneficial Owners.

(p) All authority conferred or agreed to be conferred by each Holder and Beneficial Owner pursuant to this Section 2.08, including the consents given by such Holder and Beneficial Owner, shall be binding upon the successors, assigns, heirs, executors, administrators, trustees in bankruptcy and legal representatives of such Holder and Beneficial Owner.

(q) The Trustee shall not be liable with respect to (i) the calculation or accuracy of the Fully Loaded CET1 Ratio in connection with the occurrence of a Capital Adequacy Trigger Event and the timing of such Capital Adequacy Trigger Event, (ii) the failure of the Company to post or deliver the underlying Fully Loaded CET1 Ratio calculations of a Capital Adequacy Trigger Event to DTC, the Holders or the Beneficial Owners, (iii) any aspect of the Company’s decision to deliver an Automatic Conversion Notice or the related Automatic Conversion or (iv) the adequacy of the disclosure of these provisions in the Prospectus Supplement or for the direct or indirect consequences thereof.

(r) Following the issuance of the Conversion Shares to the Conversion Shares Depository (or to the relevant recipient in accordance with the terms of the Securities) on the Conversion Date, the Securities shall remain in existence until the applicable Cancellation Date for the sole purpose of evidencing (a) the Holders’ and Beneficial Owners’ right to receive Conversion Shares or Conversion Shares Offer Consideration, as applicable, from the Conversion Shares Depository (or such other relevant recipient, as applicable) and (b) the Company’s CSO Obligations, if any.

 

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(s) The Holders and Beneficial Owners shall not at any time have the option to convert to the Securities into Conversion Shares.

(t) The occurrence of an Automatic Conversion shall not constitute a Default.

(u) Notwithstanding any other provision herein, by subscribing for, purchasing or otherwise acquiring the Securities, each Holder and each Beneficial Owner (i) agrees to all of the terms of the Securities, including, without limitation, those related to (x) the occurrence of a Capital Adequacy Trigger Event and any related Automatic Conversion and (y) the appointment of the Conversion Shares Depository, the issuance of the Conversion Shares to the Conversion Shares Depository (or to the relevant recipient in accordance with the terms of the Securities) and the potential sale of the Conversion Shares pursuant to a Conversion Shares Offer, (ii) agrees that effective upon, and following, the occurrence of the Automatic Conversion, no amount shall be due and payable to the Holders or the Beneficial Owners under the Securities and the liability of the Company to pay any such amounts (including the principal amount of, or any interest in respect of, the Securities) shall be automatically released, and the Holders and the Beneficial Owners shall not have the right to give any direction to the Trustee with respect to the Capital Adequacy Trigger Event and any related Automatic Conversion and (iii) waives, to the extent permitted by the Trust Indenture Act, any claim against the Trustee arising out of its acceptance of its trusteeship for the Securities, including, without limitation, claims related to or arising out of or in connection with a Capital Adequacy Trigger Event and/or any Automatic Conversion.

SECTION 2.09. Conversion Shares.

(a) The number of Conversion Shares to be issued to the Conversion Shares Depository on the Conversion Date shall be determined by dividing the (i) aggregate principal amount of the Outstanding Securities immediately prior to the Automatic Conversion on the Conversion Date by (ii) the Conversion Price rounded down, if necessary, to the nearest whole number of Conversion Shares. Fractions of Conversion Shares shall not be issued following an Automatic Conversion and no cash payment shall be made in lieu thereof. Upon Automatic Conversion on the Conversion Date, the number of Conversion Shares to be held by the Conversion Shares Depository for the benefit of each Holder shall be the number of Conversion Shares thus calculated multiplied by a fraction equal to the aggregate amount of the Tradable Amount of the book-entry interests in the Securities held by such Holder on the Conversion Date divided by the aggregate amount of the Tradable Amount of the book-entry interests of all the Outstanding Securities immediately prior to the Automatic Conversion on the Conversion Date rounded down, if necessary, to the nearest whole number of Conversion Shares.

(b) The Conversion Shares issued following an Automatic Conversion shall be fully paid and non-assessable and shall in all respects rank pari passu with the fully paid Ordinary Shares of the Company in issue on the Conversion Date, except in any such case for any right excluded by mandatory provisions of applicable law, and except that the Conversion Shares so issued shall not rank for (or, as the case may be, the relevant Holder or Beneficial Owner shall not be entitled to receive) any rights, the entitlement to which falls prior to the Conversion Date.

 

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(c) Subject to Section 3.05, if a Qualifying Takeover Event occurs, and the Conversion Date falls on or after the QTE Effective Date, then in such case Approved Entity Shares of the Approved Entity shall be issued to the Conversion Shares Depository on the Conversion Date instead of Conversion Shares with the same effect as if Conversion Shares had been issued pursuant to Section 2.09(a) above.

(d) The Conversion Shares or the Conversion Shares Offer Consideration, as the case may be, will be delivered to Holders pursuant to the procedures set forth in Section 2.11 below.

SECTION 2.10. Conversion Shares Offer.

(a) No later than 10 (ten) Business Days following the Conversion Date, the Company may, in its sole and absolute discretion, elect that the Conversion Shares Depository make an offer of all or some of the Conversion Shares to all or some of the Company’s ordinary shareholders at a cash price per Conversion Share equal to the Conversion Shares Offer Price, subject as provided in this Section 2.10 (the “Conversion Shares Offer”). The Company may, on behalf of the Conversion Shares Depository, appoint a Conversion Shares Offer Agent to act as placement or other agent to facilitate the Conversion Shares Offer. The Company will deliver a Conversion Shares Offer Notice to the Trustee directly and to the Holders of the Securities via DTC within ten (10) Business Days following the Conversion Date specifying whether or not it has elected that a Conversion Shares Offer be conducted. If the Company elects a Conversion Shares Offer to be conducted, the Conversion Shares Offer Period, during which time the Conversion Shares Offer may be made, shall end no later than forty (40) Business Days following the delivery of the Conversion Shares Offer Notice.

(b) Any Conversion Shares Offer shall be made subject to applicable laws and regulations in effect at the relevant time and shall be conducted, if at all, only to the extent that the Company, in its sole and absolute discretion, determines that the Conversion Shares Offer is practicable. The Company or the purchasers of the Conversion Shares sold in any Conversion Shares Offer shall bear the costs and expenses of any Conversion Shares Offer (with the exception of any stamp duty, stamp duty reserve tax, or any other capital, issue, transfer, registration, financial transaction or documentary tax that may arise or be paid as a consequence of the transfer of Conversion Shares to the Conversion Shares Depository as a consequence of the Conversion Shares Offer), including the fees of the Conversion Shares Offer Agent, if any. If a prospectus or other offering document is required to be prepared in connection with a Conversion Shares Offer, the Company shall facilitate the preparation of such prospectus or other offering document, and the Company and/or its directors shall take responsibility for such prospectus or other offering document, in each case, if and to the extent then required by applicable laws and regulations then in effect. If so requested by the Conversion Shares Depository as offeror, the Company shall indemnify the Conversion Shares Depository for any losses incurred in connection with any Conversion Shares Offer.

 

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(c) Upon completion of the Conversion Shares Offer, the Company or the Conversion Shares Depository shall provide notice to the Holders of the Securities of the composition of the Conversion Shares Offer Consideration (and of the deductions to the Cash Component, if any, of the Conversion Shares Offer Consideration (as set out in the definition of “Conversion Shares Offer Consideration” in Section 1.01)) per $1,000 Tradable Amount of the Securities. The Company reserves the right, in its sole and absolute discretion, to terminate the Conversion Shares Offer at any time during the Conversion Shares Offer Period by providing at least three (3) Business Days’ notice to the Trustee directly and to the Holders of the Global Securities via DTC (or, if the Securities are definitive Securities, by the Company to the Trustee directly and to the Holders at their addresses shown on the Contingent Convertible Security Register), and, if it does so, the Company may, in its sole and absolute discretion, take steps (including, without limitation, changing the Suspension Date) to deliver to Holders and Beneficial Owners (or the custodian, nominee, broker or other representative thereof) of the Securities the Conversion Shares at a time that is earlier than the time at which such Holders and Beneficial Owners (or the custodian, nominee, broker or other representative thereof) would have otherwise received the Conversion Shares Offer Consideration, had the Conversion Shares Offer been completed.

(d) If the Company elects, in its sole and absolute discretion, that a Conversion Shares Offer be conducted by the Conversion Shares Depository, each Holder or Beneficial Owner, by subscribing for, purchasing or otherwise acquiring the Securities, shall be deemed to have: (i) irrevocably consented to (x) any Conversion Shares Offer and to the Conversion Shares Depository’s using the Conversion Shares to settle any Conversion Shares Offer in accordance with the terms of the Securities and (y) the transfer of the beneficial interest it holds in the Conversion Shares to the Conversion Shares Depository in connection with the Conversion Shares Offer in accordance with the terms of the Securities, and (ii) irrevocably agreed that (x) the Company, the Conversion Shares Depository and the Conversion Shares Offer Agent, if any, may take any and all actions necessary to conduct the Conversion Shares Offer in accordance with the terms of the Securities, (y) none of the Company, the Trustee, the Conversion Shares Depository or the Conversion Shares Offer Agent, if any, shall, to the extent permitted by applicable law, incur any liability to the Holders or Beneficial Owners in respect of the Conversion Shares Offer (except for the obligations of the Conversion Shares Depository in respect of the Holders’ and Beneficial Owners’ entitlement to any Conversion Shares Offer Consideration) and (z) DTC and any direct participant in DTC or other intermediary through which it holds such Securities is authorized, directed and requested to take any and all necessary action, if required, to implement the Automatic Conversion (including any related Conversion Shares Offer).

SECTION 2.11. Settlement Procedure.

(a) Delivery of the Conversion Shares or Conversion Shares Offer Consideration, as applicable, to the Holders and Beneficial Owners of the Securities shall be made in accordance with the procedures set forth in this Section 2.11, which remain subject to change to reflect changes in clearing system practices.

(b) The Conversion Shares Offer Notice shall specify the Suspension Date.

 

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(c) On the Suspension Date, the Company shall deliver, to the Trustee directly and to the Holders and of the Global Securities via DTC (or, if the Securities are definitive Securities, by cheque mailed to the Holders at their addresses shown on the Contingent Convertible Security Register) a Conversion Shares Settlement Request Notice, pursuant to which the Company shall request that Holders and Beneficial Owners complete a Conversion Shares Settlement Notice and shall specify the Notice Cut-off Date and the Final Cancellation Date.

(d) Holders and Beneficial Owners (or the custodian, nominee, broker or other representative thereof) shall not receive delivery of the relevant Conversion Shares or Conversion Shares Component, as applicable, unless such Holders or Beneficial Owners (or the custodian, nominee, broker or other representative thereof) deliver the applicable Conversion Shares Settlement Notice to the Conversion Shares Depository on or before the Notice Cut-off Date; provided that, if such delivery is made after the end of normal business hours at the specified office of the Conversion Shares Depository, such delivery shall be deemed for all purposes to have been made or given on the next following Business Day.

(e) With respect to any Global Securities, the Conversion Shares Settlement Notice must be given in accordance with the standard procedures of DTC (which may include, without limitation, delivery of the notice to the Conversion Shares Depository by electronic means) and in a form acceptable to DTC and the Conversion Shares Depository. With respect to any definitive Securities, the Conversion Shares Settlement Notice must be delivered to the specified office of the Conversion Shares Depository together with the relevant Securities.

(f) Subject to satisfaction of the requirements and limitations set forth in this Section 2.11 and provided that the Conversion Shares Settlement Notice and the relevant Securities, if applicable, are delivered on or before the Notice Cut-Off Date, the Conversion Shares Depository shall deliver the relevant Conversion Shares (rounded down to the nearest whole number of Conversion Shares) or Conversion Shares Component (rounded down to the nearest whole number of Conversion Shares), as applicable, to the Holder or Beneficial Owner (or custodian, nominee, broker or other representative thereof) of the relevant Securities completing the relevant Conversion Shares Settlement Notice or its nominee in accordance with the instructions given in such Conversion Shares Settlement Notice on the applicable Settlement Date.

(g) Each Conversion Shares Settlement Notice shall be irrevocable. The Conversion Shares Depository shall determine, in its sole and absolute discretion, whether any Conversion Shares Settlement Notice has been properly completed and delivered, and such determination shall be conclusive and binding on the relevant Holder or Beneficial Owner. If any Holder or Beneficial Owner fails to properly complete and deliver a Conversion Shares Settlement Notice and the relevant Securities, if applicable, the Conversion Shares Depository shall be entitled to treat such Conversion Shares Settlement Notice as null and void.

(h) Neither the Company, nor any member of the Group shall be liable for any stamp duty, stamp duty reserve tax, or any other capital, issue, transfer, registration, financial transaction or documentary tax that may arise or be paid as a consequence of the delivery of Conversion Shares or Conversion Shares Component, as applicable, which tax shall be borne solely by the Holder, Beneficial Owner or, if different, the person to whom the Conversion Shares or that portion, if any, of any Conversion Shares Offer Consideration consisting of Conversion Shares, as applicable, is delivered.

 

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(i) The Conversion Shares and any Conversion Shares Component shall not be available for delivery (i) to, or to a nominee for, Euroclear or Clearstream, Luxembourg or any other person providing a clearance service within the meaning of Section 96 of the Finance Act 1986 of the United Kingdom or (ii) to a person, or nominee or agent for a person, whose business is or includes issuing depository receipts within the meaning of Section 93 of the Finance Act 1986 of the United Kingdom, in each case at any time prior to the “abolition day” as defined in Section 111(1) of the Finance Act 1990 of the United Kingdom, or, if earlier, such other time at which the Company, in its absolute discretion, determines that no charge under Section 67, 70, 93 or 96 of the Finance Act 1986 or any similar charge (under any successor legislation) would arise as a result of such delivery or (iii) to the CREST account of such a person described in (i) or (ii).

(j) The Company may make changes to the procedures set forth in this Section 2.11 to the extent such changes are reasonably necessary, in the opinion of the Company, to effect the delivery of the Conversion Shares or Conversion Shares Offer Consideration, as applicable, to the Holders and Beneficial Owners of the Securities.

SECTION 2.12. Failure to Deliver a Conversion Shares Settlement Notice. If any Holder or Beneficial Owner (or custodian, nominee, broker or other representative thereof) fails to deliver a Conversion Shares Settlement Notice and the relevant Securities, if applicable, to the Conversion Shares Depository on or before the Notice Cut-off Date, the Conversion Shares Depository shall continue to hold the Conversion Shares or any Conversion Shares Component, as applicable to such Holder or Beneficial Owner, until a Conversion Shares Settlement Notice (and the relevant Securities, if applicable) is so delivered; provided, however, that the relevant Securities shall be cancelled on the Final Cancellation Date, and any Holder or Beneficial Owner (or custodian, nominee, broker or other representative thereof) of Securities delivering a Conversion Shares Settlement Notice after the Notice Cut-off Date shall be required provide evidence of its entitlement to the relevant Conversion Shares or the Conversion Shares Component of any Conversion Shares Offer Consideration, as applicable, satisfactory to the Conversion Shares Depository in its sole and absolute discretion in order to receive delivery of such Conversion Shares or of the Conversion Shares Component of any Conversion Shares Offer Consideration, as applicable. The Company shall have no liability to any Holder or Beneficial Owner of the Securities for any loss resulting from such Holder’s or Beneficial Owner’s failure to receive any Conversion Shares or Conversion Shares Component of any Conversion Shares Offer Consideration, as applicable, or from any delay in the receipt thereof, in each case as a result of such Holder or Beneficial Owner (or custodian, nominee, broker or other representative thereof) failing to duly submit a Conversion Shares Settlement Notice and the relevant Securities, if applicable, on a timely basis or at all.

SECTION 2.13. Additional Amounts and FATCA Withholding Tax. The Company agrees, to the extent the Company has actual knowledge of such information, to provide the Paying Agent with sufficient information about any modification to the terms of the Securities for the purposes of determining whether FATCA Withholding Tax applies to any payment of principal or interest on the Securities.

 

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ARTICLE III

ANTI-DILUTION

SECTION 3.01. Adjustment of Conversion Price and Conversion Shares Offer Price. Upon the occurrence of any of the events described below, the Conversion Price and the Conversion Shares Offer Price shall be adjusted as follows:

(a) If and whenever there shall be a consolidation, reclassification or subdivision in relation to the Ordinary Shares of the Company, each of the Conversion Price and the Conversion Shares Offer Price shall be adjusted by multiplying the relevant Price in effect immediately prior to such consolidation, reclassification or subdivision by the following fraction:

LOGO

where:

 

  A

is the aggregate number of Ordinary Shares of the Company in issue immediately before such consolidation, reclassification or subdivision, as the case may be; and

 

  B

is the aggregate number of Ordinary Shares of the Company in issue immediately after, and as a result of, such consolidation, reclassification or subdivision, as the case may be.

Such adjustment shall become effective on the date the consolidation, reclassification or subdivision, as the case may be, takes effect.

(b) If and whenever the Company shall issue any Ordinary Shares credited as fully paid to the Company’s shareholders as a class by way of capitalization of profits or reserves (including any share premium account or capital redemption reserve) other than (1) where any such Ordinary Shares are or are to be issued instead of the whole or part of a Cash Dividend which the Company’s shareholders would or could otherwise have elected to receive, (2) where the Company’s shareholders may elect to receive a Cash Dividend in lieu of such Ordinary Shares or (3) where any such Ordinary Shares are or are expressed to be issued in lieu of a dividend (whether or not a Cash Dividend equivalent or amount is announced or would otherwise be payable to the Company’s Shareholders, whether at their election or otherwise), each of the Conversion Price and the Conversion Shares Offer Price shall be adjusted by multiplying the relevant Price in effect immediately prior to such issue by the following fraction:

 

LOGO

 

- 29 -


where:

 

  A

is the aggregate number of Ordinary Shares of the Company in issue immediately before such issue; and

 

  B

is the aggregate number of Ordinary Shares of the Company in issue immediately after such issue.

Such adjustment shall become effective on the date of issue of such Ordinary Shares.

(c) If and whenever the Company shall issue any Ordinary Shares to all or substantially all of the Company’s shareholders as a class by way of rights at a price per ordinary share which is less than 95% of the Current Market Price per ordinary share on the Effective Date, each of the Conversion Price and the Conversion Shares Offer Price shall be adjusted by multiplying the relevant Price in effect immediately prior to the Effective Date by the following fraction:

 

LOGO

where:

 

  A

is the aggregate number of Ordinary Shares of the Company in issue on the Effective Date;

 

  B

is the aggregate number of Ordinary Shares of the Company that the aggregate consideration (if any) receivable for the Ordinary Shares issued by way of rights would purchase at such Current Market Price per Ordinary Share on the Effective Date; and

 

  C

is the number of Ordinary Shares to be issued.

Such adjustment shall become effective on the Effective Date.

For the purpose of any calculation of the consideration receivable or price pursuant to this Section 3.01(c), the following provisions shall apply:

 

  (1)

the aggregate consideration receivable or price for Ordinary Shares issued for cash shall be the amount of such cash;

 

  (2)

if the consideration or price determined pursuant to (1) above (or any component thereof) shall be expressed in a currency other than the Relevant Currency, it shall be converted into the Relevant Currency at the Prevailing Rate on the relevant Effective Date;

 

  (3)

in determining the consideration or price pursuant to the above, no deduction shall be made for any commissions or fees (howsoever described) or any expenses paid or incurred for any underwriting, placing or management of the issue of the relevant Ordinary Shares or otherwise in connection therewith

 

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  (4)

the consideration or price shall be determined as provided in clauses (1) – (3) above on the basis of the consideration or price received, receivable, paid or payable, regardless of whether all or part thereof is received, receivable, paid or payable by or to the Company or another entity; and

 

  (5)

references herein to “cash” shall be construed as cash consideration within the meaning of Section 583(3) of the Companies Act.

(d) If and whenever the Company shall pay any Extraordinary Dividend to shareholders of the Company as a class, each of the Conversion Price and the Conversion Shares Offer Price shall be adjusted by multiplying the relevant Price in effect immediately prior to the Effective Date by the following fraction:

 

LOGO

where:

 

  A

is the Current Market Price of one Ordinary Share on the Effective Date; and

 

  B

is the portion of the aggregate Extraordinary Dividend attributable to one ordinary share, with such portion being determined by dividing the aggregate Extraordinary Dividend by the number of Ordinary Shares entitled to receive the relevant Extraordinary Dividend. If the Extraordinary Dividend shall be expressed in a currency other than the Relevant Currency, it shall be converted into the Relevant Currency at the Prevailing Rate on the relevant Effective Date.

Such adjustment shall become effective on the Effective Date.

 

  (e)

Notwithstanding provisions of Sections 3.01(a)–(d) above:

(i) where the events or circumstances giving rise to any adjustment pursuant to this section have already resulted or will result in an adjustment to each of the Prices or where the events or circumstances giving rise to any adjustment arise by virtue of any other events or circumstances that have already given or will give rise to an adjustment to each of the Prices or where more than one event that gives rise to an adjustment to each of the Prices occurs within such a short period of time that, in the opinion of the Company, a modification to the operation of the adjustment provisions is required to give the intended result, such modification shall be made to the operation of the adjustment provisions as may be determined in good faith by an Independent Financial Adviser to be in its opinion appropriate to give the intended result;

 

- 31 -


(ii) such modification shall be made to the operation of the Indenture as may be determined in good faith by an Independent Financial Adviser to be in its opinion appropriate to ensure that an adjustment to each of the Prices or the economic effect thereof shall not be taken into account more than once;

(iii) for the avoidance of doubt, the issue of Ordinary Shares following an Automatic Conversion or upon any conversion or exchange or the exercise of any other options, warrants or other rights shall not result in an adjustment to either of the Prices;

(iv) in respect of any adjustment pursuant to Sections 3.01(a)-(c) above, such adjustment shall be made only up to the extent it does not result in a Conversion Price or Conversion Shares Offer Price that, if applied to the number of relevant Securities at the time of such adjustment, would result in a number of Conversion Shares that constitutes a greater proportion of Conversion Shares as a percentage of the total number of Ordinary Shares issued had the adjustment not been made nor had the corporate event occurred; and

(v) in respect of any adjustment pursuant to Section 3.01(d) above, such adjustment shall be made only up to the extent it does not result in a Conversion Price or Conversion Shares Offer Price that, if applied to the number of relevant Securities at the time of such adjustment, would result in the issue of an additional number of Conversion Shares having a value that is greater than the value of the aggregate Extraordinary Dividend which would be attributable to the Ordinary Shares underlying the Securities had such Ordinary Shares been issued.

SECTION 3.02. No Retroactive Adjustments. The Company shall not issue any additional Conversion Shares if the Automatic Conversion occurs after the record date in respect of any consolidation, reclassification or subdivision as described in Section 3.01(a) above, or after the record date or other due date for the establishment of entitlement for any such issue, distribution, grant or offer (as the case may be) as is described in Sections 3.01(b)–(d) above, but before the relevant adjustment to the relevant Price becomes effective under such Section.

SECTION 3.03. Decision of an Independent Financial Advisor. If any doubt shall arise as to whether an adjustment is required to be made to either of the Prices or as to the appropriate adjustment to such Prices, and following consultation between the Company and an Independent Financial Adviser, a written opinion of such Independent Financial Adviser in respect thereof is delivered, such written opinion shall be conclusive and binding on the Company, the Trustee and the Holders and Beneficial Owners, save in the case of manifest error.

SECTION 3.04. Rounding Down and Notice of Adjustment to the Conversion Price and the Conversion Shares Offer Price.

 

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(a) On any adjustment to the Conversion Price and/or the Conversion Shares Offer Price as provided under this Article III, if the resultant Conversion Price and Conversion Shares Offer Price is a number with more decimal places than the initial Conversion Price or Conversion Shares Offer Price, as the case may be, that number shall be rounded to the same number of decimal places as the initial Conversion Price or Conversion Shares Offer Price, as the case may be. No adjustment shall be made to either of the Prices where such adjustment (rounded down if applicable) would be less than 1% of the relevant Price then in effect. Any adjustment not required to be made, and/or any amount by which the relevant Price has been rounded down, shall be carried forward and taken into account in any subsequent adjustment, and such subsequent adjustment shall be made on the basis that the adjustment not required to be made had been made at the relevant time and/or, as the case may be, that the relevant rounding down had not been made.

(b) Notice of any adjustments to the Conversion Price or the Conversion Shares Offer Price shall be given by the Company to Holders via DTC (or, if the Securities are definitive Securities, via the Trustee) promptly after the determination thereof.

(c) The Conversion Price shall not in any event be reduced to below the U.S. dollar equivalent of the nominal value of the Ordinary Shares (as calculated by the Company on the date any such adjustment becomes effective). The Conversion Shares Offer Price shall not in any event be reduced to below the nominal value of the Ordinary Shares.

SECTION 3.05. Qualifying Takeover Event.

(a) Within ten (10) Business Days following the occurrence of a Takeover Event, the Company shall give notice thereof to the Holders and Beneficial Owners of the Securities by means of a Takeover Event Notice.

(b) If the Takeover Event is a Qualifying Takeover Event, the Securities shall, where the Conversion Date falls on or after the QTE Effective Date, be converted into or exchanged for Approved Entity Shares of the Approved Entity, mutatis mutandis as provided under Section 2.08 above, at a Conversion Price that shall initially be the New Conversion Price, which may be higher or lower than the Conversion Price and references herein to “Conversion Shares” shall be deemed to be references to “Approved Entity Shares.”

(c) The New Conversion Price shall be subject to adjustment in the circumstances provided for under Section 3.01(a) above (if necessary with such modifications and amendments as an Independent Financial Adviser acting in good faith shall determine to be appropriate and references herein to “Conversion Shares” shall be deemed to be references to “Approved Entity Shares”), and the Company shall give notice to the Holders of the Securities of the New Conversion Price and of any such modifications and amendments thereafter.

 

- 33 -


(d) In the case of a Qualifying Takeover Event:

(i) the Company shall, to the extent permitted by applicable law and regulation, on or prior to the QTE Effective Date, enter into such agreements and arrangements (including, without limitation supplemental indentures to the Indenture and amendments and modifications to the terms of the Securities and the Indenture) as may be required to ensure that, effective upon the QTE Effective Date, the Securities shall be convertible into, or exchangeable for, Approved Entity Shares, mutatis mutandis in accordance with, and subject to, the provisions of Sections 2.08 of this Fourth Supplemental Indenture, at the New Conversion Price and any references to the Conversion Price shall be construed as references to the New Conversion Price; and

(ii) upon the occurrence of a Capital Adequacy Trigger Event where the Conversion Date falls on or after the QTE Effective Date, the Company shall procure (to the extent within its control) the issue of the relevant number of Approved Entity Shares mutatis mutandis in the manner provided under Section 2.08 of this Fourth Supplemental Indenture.

(e) The Trustee shall be obliged (at the expense of the Company) to concur with the Company in making any such amendments and modifications to the Indenture, and to execute any supplemental indentures to the Indenture in respect thereof, provided that the Trustee shall not be bound to do so if any such amendments or modifications would, in the opinion of the Trustee, have the effect of (i) exposing the Trustee to any liability against which it is not indemnified and/or secured and/or pre-funded to its satisfaction, (ii) changing, increasing or adding to the obligations or duties of the Trustee or (iii) removing or amending any protection or indemnity afforded to, or any other provision in favor of, the Trustee under the Indenture and/or the terms of the Securities.

(f) For the avoidance of doubt, if for any reason (including, without limitation, because the Acquirer is a Governmental Entity), a Takeover Event is not a Qualifying Takeover Event, there is no provision for any automatic adjustment to the terms of the Securities, whether in the manner provided for in this Article III in respect of Qualifying Takeover Events, or at all, and Section 2.08 shall apply without any automatic adjustment and “Conversion Shares” will continue to have the meaning set out in Section 1.01.

ARTICLE IV

AMENDMENTS TO THE BASE INDENTURE

SECTION 4.01. Amendments to the Base Indenture. The Base Indenture shall hereby be amended as follows:

(a) The first paragraph of Section 3.03 of the Base Indenture is hereby amended and restated in its entirety to read as follows with respect to Contingent Convertible Securities issued on or after the date hereof:

“Section 3.03 Execution, Authentication, Delivery and Dating. The Contingent Convertible Securities and any Coupons shall be executed on behalf of the Company by any two of the following: any of its Authorized Officers or any Director or Vice President in the Capital Markets Execution section (or any successor section thereto) of Barclays Treasury. The signature of any of these officers on the Contingent Convertible Securities or the Coupons may be manual, facsimile or electronic. Contingent Convertible Securities or Coupons bearing the manual, facsimile or electronic signatures of individuals who were at any time the proper officers of the Company shall bind the Company, notwithstanding that such individuals or any of them have ceased to hold such offices prior to the authentication and delivery of such Contingent Convertible Securities or Coupons.”

 

- 34 -


(b) The fifth paragraph of Section 3.03 of the Base Indenture is hereby amended and restated in its entirety to read as follows:

“No Contingent Convertible Security or Coupon appertaining thereto shall be entitled to any benefit under this Contingent Convertible Securities Indenture or be valid or obligatory for any purpose unless there appears on such Contingent Convertible Security a certificate of authentication substantially in the form provided for herein executed by or on behalf of the Trustee by manual, facsimile or electronic signature, and such certificate upon any Contingent Convertible Security shall be conclusive evidence, and the only evidence, that such Contingent Convertible Security has been duly authenticated and delivered hereunder and that such Contingent Convertible Security or Coupon is entitled to the benefits of this Contingent Convertible Securities Indenture. Notwithstanding the foregoing, if any Contingent Convertible Security shall have been authenticated and delivered hereunder but never issued and sold by the Company, and the Company shall deliver such Contingent Convertible Security to the Trustee for cancellation as provided in Section 3.09, for all purposes of this Contingent Convertible Securities Indenture such Contingent Convertible Security shall be deemed never to have been authenticated and delivered hereunder and shall never be entitled to the benefits of this Contingent Convertible Securities Indenture.

(c) In Section 5.04(b) of the Base Indenture, the phrase “Conversion Date” is hereby replaced with “occurrence of a Capital Adequacy Trigger Event.”

(d) In Sections 11.08 and 11.10 of the Base Indenture, the phrase “any other relevant national or European authority” is hereby replaced with “the Relevant U.K. Resolution Authority.”

(e) In Section 11.10 of the Base Indenture, the phrase “applicable to the Group in force at the relevant time” is hereby deleted.

(f) Any supplemental indenture and any other document delivered in connection with the Base Indenture relating to Contingent Convertible Securities authenticated, delivered and issued on or after the date of this Fourth Supplemental Indenture may be signed by or on behalf of the signing party by manual, facsimile or electronic signature.

 

- 35 -


ARTICLE V

MISCELLANEOUS PROVISIONS

SECTION 5.01. Effectiveness. This Fourth Supplemental Indenture shall become effective upon its execution and delivery.

SECTION 5.02. Original Issue. The Securities may, upon execution of this Fourth Supplemental Indenture, be executed by the Company and delivered by the Company to the Trustee for authentication, and the Trustee shall, upon delivery of a Company Order, authenticate and deliver such Securities as in such Company Order provided.

SECTION 5.03. Ratification and Integral Part. The Base Indenture as supplemented and amended by this Fourth Supplemental Indenture, is in all respects ratified and confirmed, including without limitation all the rights, immunities and indemnities of the Trustee, and this Fourth Supplemental Indenture shall be deemed an integral part of the Base Indenture in the manner and to the extent herein and therein provided.

SECTION 5.04. Priority. This Fourth Supplemental Indenture shall be deemed part of the Base Indenture in the manner and to the extent herein and therein provided. The provisions of this Fourth Supplemental Indenture shall, with respect to the Securities and subject to the terms hereof, supersede the provisions of the Base Indenture to the extent the Base Indenture is inconsistent herewith.

SECTION 5.05. Successors and Assigns. All covenants and agreements in the Base Indenture, as supplemented and amended by this Fourth Supplemental Indenture, by the Company shall bind its successors and assigns, whether so expressed or not.

SECTION 5.06. Counterparts. This Fourth Supplemental Indenture may be executed manually, by facsimile or by electronic signature in any number of counterparts, each of which so executed shall be deemed to be an original, but all such counterparts shall together constitute but one and the same instrument.

SECTION 5.07. Governing Law. This Fourth Supplemental Indenture and the Securities shall be governed by and construed in accordance with the laws of the State of New York, except for the subordination provisions set forth in Section 12.01 of the Base Indenture and the waiver of set-off provisions set forth in Section 5.04(d) of the Base Indenture, which are governed by, and construed in accordance with, English law.

 

 

- 36 -


IN WITNESS WHEREOF, the parties hereto have caused this Fourth Supplemental Indenture to be duly executed, all as of the day and year first above written.

 

BARCLAYS PLC
By:  

/s/ Miray Muminoglu

  Name: Miray Muminoglu
  Title:   Managing Director
THE BANK OF NEW YORK MELLON, as Trustee and Paying Agent
By:  

/s/ Anthony Edet

  Name: Anthony Edet
  Title:   Authorized Signatory
THE BANK OF NEW YORK MELLON SA/NV, LUXEMBOURG BRANCH, as Contingent Convertible Security Registrar
By:  

/s/ Anthony Edet

  Name: Anthony Edet
  Title:   Authorized Signatory

[Signature Page to the Fourth Supplemental Indenture]


Exhibit A

Form of Global Security

THIS SECURITY IS A GLOBAL REGISTERED 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.

BY PURCHASING THIS SECURITY, IN THE ABSENCE OF A CHANGE IN LAW OR AN ADMINISTRATIVE OR JUDICIAL RULING TO THE CONTRARY, THE HOLDER AGREES TO CHARACTERIZE THIS SECURITY FOR ALL U.S. FEDERAL INCOME TAX PURPOSES AS PROVIDED ON THE FACE OF THIS SECURITY.

This Security is one of a duly authorized issue of securities of the Company (as defined below) (herein called the “Securities” and each, a “Security”) issued and to be issued in one or more series under and governed by the Contingent Convertible Securities Indenture, dated as of August 14, 2018 (the “Base Indenture”), as supplemented and amended by the Fourth Supplemental Indenture, dated as of August 12, 2020 (the “Fourth Supplemental Indenture” and, together with the Base Indenture, the “Indenture”).

The rights of the Holder and Beneficial Owners of this Security are, to the extent and in the manner set forth in Section 12.01 of the Base Indenture and in the subordination provisions of this Security, subordinated to the claims of other creditors of the Company, and this Security is issued subject to the provisions of that Section 12.01 and in the subordination provisions of this Security, and the Holder of this Security, by accepting the same, agrees to, and shall be bound by, such provisions. The provisions of Section 12.01 of the Base Indenture and the terms of this paragraph are governed by, and shall be construed in accordance with, English law.

The rights of the Holder of this Security are subject to Section 2.08 of the Fourth Supplemental Indenture. Effective upon, and following, the occurrence of the Automatic Conversion, the Holders and Beneficial Owners of the Securities (and any interest therein) prior to the occurrence of such Automatic Conversion shall not have any rights against the Company with respect to repayment of the principal amount of this Security or payment of interest or any other amount in respect of this Security, which liabilities of the Company shall be irrevocably and automatically released, and accordingly the principal amount of this Security shall equal zero at all times thereafter.

Notwithstanding any other agreements, arrangements, or understandings between the Company and any Holder or Beneficial Owner of the Securities, by acquiring the Securities, each Holder and Beneficial Owner of the Securities acknowledges, accepts, agrees to be bound by, and consents to, the exercise of any U.K. Bail-in Power by the Relevant U.K. Resolution Authority (as those terms are defined in the Base Indenture) and the provisions set forth in Section 13.01 of the Base Indenture.

 

A-1


In accordance with Article 14 of the Base Indenture, each Holder and Beneficial Owner that acquires its Securities 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 Securities that acquire the Securities 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 Securities, including in relation to interest cancellation, Automatic Conversion, the Conversion Shares Offer, the U.K. Bail-in Power and the limitations on remedies specified in in this Security and Article V of the Base Indenture.

 

A-2


BARCLAYS PLC

6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities

 

No. 00[●]    $[●]

CUSIP NO. 06738E BN4

ISIN NO. US06738EBN40

BARCLAYS PLC, a company duly incorporated and existing under the laws of England and Wales (herein called the “Company”, which term includes any successor Person under the Indenture hereinafter referred to), for value received, hereby promises to pay to Cede & Co., or registered assigns, the principal sum of $[●], if and to the extent due, and to pay interest thereon, if any, in accordance with the terms hereof and the Indenture.

The Securities shall have no fixed maturity or fixed redemption date. From (and including) the Issue Date to (but excluding) June 15, 2026, the interest rate on the Securities shall be 6.125% per annum (the “Initial Interest Rate”). From and including June 15, 2026 and each fifth anniversary date thereafter, commencing June 15, 2026 (each such date, a “Reset Date”) to (but excluding) the next following Reset Date (each such period, a “Reset Period”), the applicable per annum interest rate (the “Subsequent Interest Rate”) will, subject to Section 2.02(b) of the Fourth Supplemental Indenture, be equal to the sum of the then prevailing U.S. Treasury Rate on the relevant Reset Determination Date and 5.867% (the “Margin”). Each Subsequent Interest Rate shall be determined in compliance with the relevant Capital Regulations. Subject to the provisions on the reverse of this Security relating to cancellation and deemed cancellation of interest and to Sections 3.12 and 3.13 of the Base Indenture and to the following sentence, interest, if any, shall be payable in four equal quarterly installments in arrear on March 15, June 15, September 15 and December 15 of each year (each, an “Interest Payment Date”). The first date on which interest may be paid will be December 15, 2020 for the period commencing on (and including) August 12, 2020 and ending (but excluding) December 15, 2020 (and thus a long first interest period). If a date of redemption is not a Business Day, the Company may pay interest (if any) and principal on the next Business Day, but interest on that payment will not accrue during the period from and after the date of redemption.

The “U.S. Treasury Rate” is, with respect to any Reset Period for which such rate applies, the rate per annum equal to: (1) the yield, under the heading which represents the average for the week immediately prior to the applicable Reset Determination Date, appearing in the most recently published statistical release designated “H.15,” or any successor publication that is published by the Board of Governors of the Federal Reserve System that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity, under the caption “Treasury constant maturities,” for the maturity of five years; or (2) if such release (or any successor release) is not published during the week immediately prior to such Reset Determination Date or does not contain such yields, the rate per annum equal to the semi-annual equivalent yield to maturity of the Comparable Treasury Issue, calculated using a price for the Comparable Treasury Issue (expressed as a percentage of its principal amount) equal to the Comparable Treasury Price for such Reset Determination Date; provided that, if the U.S. Treasury Rate cannot be determined, for whatever reason, as described under (1) or (2) above, “U.S. Treasury Rate” means the rate in percentage per annum as notified by the Calculation

 

A-3


Agent to the Company equal to the yield on U.S. Treasury securities having a maturity of five years as set forth in the most recently published statistical release designated “H.15” under the caption “Treasury constant maturities” (or any successor publication that is published weekly by the Board of Governors of the Federal Reserve System and that establishes yields on actively traded U.S. Treasury securities adjusted to constant maturity under the caption “Treasury constant maturities” for the maturity of five years) at 5:00 p.m. (New York City time) on the last available date preceding the Reset Determination Date on which such rate was set forth in such release (or any successor release).

If any Interest Payment Date is not a Business Day, the Interest Payment Date shall be postponed to the next Business Day, and no further interest or other payment shall be owed or made in respect of such delay.

The interest rate on the Securities, if any, will be computed on the basis of a year of 360 days consisting of 12 months of 30 days each and, in the case of an incomplete month, the actual number of days elapsed.

The interest, if any, so payable, and paid or duly provided for, on any Interest Payment Date will, as provided in the Indenture, be paid to the Person in whose name this Security (or one or more Predecessor Securities) is registered at the close of business on the Regular Record Date for such interest which shall be the close of business on the Business Day immediately preceding each Interest Payment Date (whether or not a Business Day).

In addition to any other restrictions on payments of principal and interest contained in the Indenture, no repayment of the principal amount of the Securities or payment of interest on the Securities shall become due and payable after the exercise of any U.K. Bail-in Power by the Relevant U.K. Resolution Authority unless 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.

Interest on the Securities shall be due and payable only at the sole discretion of the Company, and the Company shall have sole and absolute discretion at all times and for any reason to cancel (in whole or in part) any interest payment that would otherwise be payable on any Interest Payment Date. If the Company does not make an interest payment in respect of the Securities on the relevant Interest Payment Date (or if the Company elects to make a payment of a portion, but not all, of such interest payment), such non-payment shall evidence the Company’s exercise of its discretion to cancel such interest payment (or the portion of such interest payment not paid), and accordingly such interest payment (or the portion thereof not paid) shall not be due and payable. If the Company provides notice to cancel a portion, but not all, of an interest payment in respect of the Securities, and the Company subsequently does not make a payment of the remaining portion of such interest payment on the relevant Interest Payment Date, such non-payment shall evidence the Company’s exercise of its discretion to cancel such remaining portion of such interest payment, and accordingly such remaining portion of the interest payment shall also not be due and payable.

 

A-4


Interest shall only be due and payable on an Interest Payment Date to the extent it is not cancelled or deemed cancelled (in each case, in whole or in part) in accordance with the terms of this Security, and any interest cancelled or deemed cancelled (in each case, in whole or in part) pursuant to this Security shall not be due and shall not accumulate or be payable at any time thereafter, and Holders and Beneficial Owners of the Securities shall have no rights thereto or to receive any additional interest or compensation as a result of such cancellation or deemed cancellation.

Without limitation on the foregoing paragraph and subject to the extent permitted by the following sentence in respect of partial interest payments in respect of the Securities, the Company shall not make an interest payment in respect of the Securities on any Interest Payment Date (and such interest payment shall therefore be deemed to have been cancelled and thus shall not be due and payable on such Interest Payment Date) if either (a) the Company has an amount of Distributable Items on such Interest Payment Date that is less than the sum of (i) all distributions or interest payments made or declared by the Company since the end of the last financial year and prior to such Interest Payment Date on or in respect of any Parity Securities, the Securities and any Junior Securities plus (ii) all distributions or interest payments payable by the Company (and not cancelled or deemed cancelled) on such Interest Payment Date (x) on the Securities and (y) on or in respect of any Parity Securities, in the case of each of (i) and (ii), excluding any payments already accounted for in determining the Distributable Items; or (b) the Solvency Condition is not satisfied in respect of such interest payment. The Company may, in its sole discretion, elect to make a partial interest payment in respect of the Securities on any Interest Payment Date, only to the extent that such partial interest payment may be made without breaching the restrictions of this paragraph. Any interest cancelled pursuant to this paragraph shall be “deemed cancelled” under the terms of this Security and the Indenture and shall not be due and payable. Neither the Trustee nor any agent of the Trustee shall be required to monitor compliance with the restriction on interest payments contained in this paragraph or to perform any calculations in connection therewith.

By subscribing for, purchasing or other acquiring the Securities, each Holder and each Beneficial Owner shall be deemed to have contracted and agreed that (i) interest is payable solely at the discretion of the Company, and no amount of interest shall become due and payable in respect of the relevant interest period to the extent that it has been (x) cancelled (in whole or in part) by the Company at the Company’s sole discretion and/or (y) deemed cancelled (in whole or in part) as a result of the Company’s having insufficient Distributable Items or failing to satisfy the Solvency Condition; and (ii) a cancellation or deemed cancellation of interest (in each case, in whole or in part) in accordance with the terms of the Indenture shall not constitute a default in payment or otherwise under the terms of the Securities or the Indenture. Interest on the Securities shall only be due and payable on an interest payment date to the extent it is not cancelled or deemed cancelled under the terms of this Security and Sections 3.12 and 3.13 of the Base Indenture. Any interest cancelled or deemed cancelled (in each case, in whole or in part) in the circumstances described in this Security shall not be due and shall not accumulate or be payable at any time thereafter, and Holders and Beneficial Owners of the Securities shall have no rights thereto or to receive any additional interest or compensation as a result of such cancellation or deemed cancellation of interest in respect of the Securities.

 

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Payments of principal of and interest, if any, on the Securities shall 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 and such payments shall be made through one or more Paying Agents appointed under the Base Indenture to the Holder or Holders of this Security. Initially, the Paying Agent for the Securities shall be The Bank of New York Mellon, London Branch, One Canada Square, London E14 5AL, United Kingdom, and the Contingent Convertible Security Registrar shall be The Bank of New York Mellon SA/NV, Luxembourg Branch, 2-4 Rue Eugene Ruppert, Vertigo Building – Polaris, Luxembourg, L-2453, Luxembourg. The Company may change the Paying Agent or the Contingent Convertible Security Registrar without prior notice to the Holders of the Securities, and in such an event the Company may act as Paying Agent or Contingent Convertible Security Registrar. Payments of principal of and interest on the Securities shall be made by wire transfer of immediately available funds; provided, however, that in the case of payments of principal, this Security is first surrendered to the Paying Agent.

This Security shall be governed by and construed in accordance with the laws of the State of New York, except for the subordination provisions referred to herein and set forth in Section 12.01 of Base Indenture, and the waiver of set-off provisions referred to herein and set forth in Section 5.04(d) of the Base Indenture, which are governed by, and construed in accordance with, English law.

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

All terms used in this Security which are defined in the Indenture shall have the meanings assigned to them in the Indenture, as defined herein.

THIS SECURITY IS NOT A DEPOSIT LIABILITY OF BARCLAYS PLC AND IS NOT COVERED BY THE UNITED KINGDOM FINANCIAL SERVICES COMPENSATION SCHEME OR INSURED BY THE UNITED STATES FEDERAL DEPOSIT INSURANCE CORPORATION, THE CANADA DEPOSIT INSURANCE CORPORATION OR ANY OTHER GOVERNMENTAL AGENCY OF THE UNITED STATES, THE UNITED KINGDOM, CANADA OR ANY OTHER JURISDICTION.

Unless the certificate of authentication hereon has been executed by the Trustee referred to on the reverse hereof, directly or through an Authenticating Agent, by manual, facsimile or electronic signature of an authorized signatory, this Security shall not be entitled to any benefit under the Indenture or be valid or obligatory for any purpose.

By purchasing this Security, the Holder of this Security agrees (in the absence of a statutory, regulatory, administrative or judicial ruling to the contrary) to treat this Security as equity of the Company for U.S. federal income tax purposes.

 

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

 

Date:                       BARCLAYS PLC
    By:  

 

      Name:
      Title:
    By:  

 

      Name:
      Title:

Trustee’s Certificate of Authentication

This is one of the Securities of the series designated herein referred to in the Indenture.

 

Date:                       THE BANK OF NEW YORK MELLON,
     

as Trustee

    By:  

 

      Authorized Signatory

[Signature Page to Global Security]

 

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(Reverse of Security)

This Security is one of a duly authorized issue of securities of the Company (herein called the “Securities” and each, a “Security”) issued and to be issued in one or more series under and governed by the Contingent Convertible Securities Indenture, dated as of August 14, 2018 (herein called the “Base Indenture”), between the Company and The Bank of New York Mellon, London Branch, as Trustee (herein called the “Trustee,” which term includes any successor trustee under the Base Indenture), as supplemented and amended by the Fourth Supplemental Indenture, dated as of August 12, 2020 (the “Fourth Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), and reference is hereby made to the Indenture, the terms of which are incorporated herein by reference, for a statement of the respective rights, limitations of rights, duties and immunities thereunder of the Company, the Trustee, the Holders of the Securities and of the terms upon which the Securities are, and are to be, authenticated and delivered. Insofar as the provisions of the Indenture may conflict with the provisions set forth in this Security, the former shall control for purposes of this Security. All terms used in this Security that are defined in the Indenture and not otherwise defined herein shall have the meanings assigned to them in the Indenture.

This Security is one of the series designated on the face hereof, limited to an aggregate principal amount of $1,500,000,000, which amount may be increased at the option of the Company if in the future it determines that it may wish to sell additional Securities of this series. References herein to “this series” mean the series designated on the face hereof.

Any amounts to be paid by the Company on the Securities shall be made without deduction or withholding for, or on account of, any and all present or future income, stamp and other taxes, levies, imposts, duties, charges, fees, deductions or withholdings (“Taxes”) now or hereafter imposed, levied, collected, withheld or assessed by, or on behalf of, the United Kingdom or any political subdivision of the United Kingdom or authority thereof or therein having the power to tax (each a “Taxing Jurisdiction”), unless such deduction or withholding is required by law. If any such Taxes shall at any time be required by a Taxing Jurisdiction to be deducted or withheld, the Company shall, subject to the exceptions and limitations set forth in Section 10.04 of the Base Indenture and Section 12.01 of the Base Indenture, pay such additional amounts of, or in respect of, the principal of, and any interest on, the Securities (“Additional Amounts”) as may be necessary in order that the net amounts paid to the Holders of the Securities, after such deduction or withholding, shall equal the respective amounts of principal and interest that would have been payable in respect of such Securities had no such deduction or withholding been required.

Any amounts to be paid by the Company or the Paying Agent on the Securities shall be paid net of any deduction or withholding imposed or required pursuant to Sections 1471 through 1474 of the U.S. Internal Revenue Code of 1986, as amended (the “Code”), any current or future regulations or official interpretations thereof, any agreement entered into pursuant to Section 1471(b) of the Code, or any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement entered into in connection with the implementation of such Sections of the Code (or any law implementing such an intergovernmental agreement) (a “FATCA Withholding Tax”), and neither the Company nor the Paying Agent shall be required to pay Additional Amounts on account of any FATCA Withholding Tax.

 

A-8


Any Paying Agent shall be entitled to make a deduction or withholding from any payment which it makes under the Securities and the Indenture for or on account of (i) any present or future taxes, duties or charges if and to the extent so required by any applicable law and (ii) any FATCA Withholding Tax (together, “Applicable Law”). In either case, the Paying Agent shall make any payment after a deduction or withholding has been made pursuant to Applicable Law and shall report to the relevant authorities the amount so deducted or withheld. However, such deduction or withholding will not apply to payments made under the Securities and the Indenture through the relevant clearing systems. In all cases, the Paying Agent shall have no obligation to gross up any payment made subject to any deduction or withholding pursuant to Applicable Law. In addition, amounts deducted or withheld by the Paying Agent as described in this paragraph will be treated as paid to the Holder of the Securities, and the Company will not pay Additional Amounts in respect of such deduction or withholding, except to the extent the provisions in this paragraph explicitly provide otherwise. The restrictions on interest payments described on the face of this Security apply to any Additional Amounts mutatis mutandis.

The Company agrees, to the extent the Company has actual knowledge of such information, to provide the Paying Agent with sufficient information about any modification to the terms of the Securities for the purposes of determining whether FATCA Withholding Tax applies to any payment of principal or interest on the Securities.

Subject to the limitations specified below, the Company may, at the Company’s option, redeem the Securities, in whole but not in part, on any day falling in the period commencing on (and including) December 15, 2025 and ending on (and including) the first Reset Date or on any subsequent Reset Date at a redemption price equal to 100% of the principal amount of the Securities then Outstanding, together with any accrued but unpaid interest (which excludes any interest cancelled or deemed cancelled as specified below) to (but excluding) the date fixed for redemption.

Subject to the limitations specified below, the Company may also, at any time, at the Company’s option, redeem the Securities, in whole but not in part pursuant to Section 2.05 and/or Section 2.06 of the Fourth Supplemental Indenture.

Any interest payments that have been cancelled or deemed cancelled pursuant to the terms of this Security and the Indenture shall not be payable if the Securities are redeemed pursuant to any of the two preceding paragraphs.

Before the Company may redeem the Securities pursuant to any of the preceding paragraphs relating to the Company’s rights of redemption, the Company shall deliver prior notice of not less than thirty (30) days, nor more than sixty (60) days to the Holders of the Securities pursuant to Section 2.07 of the Fourth Supplemental Indenture.

Notwithstanding any other provision of this Security or the Fourth Supplemental Indenture, the Company may redeem the Securities at the Company’s option only subject to the limitations specified in Section 11.08 of the Base Indenture as amended by the Fourth Supplemental Indenture.

 

A-9


Subject to Section 11.10 of the Base Indenture as amended by the Fourth Supplemental Indenture, the Company or any member of the Group may purchase or otherwise acquire any of the Outstanding Securities at any price in the open market or otherwise in accordance with the Capital Regulations, and subject to the prior consent of the PRA and/or the Relevant U.K. Resolution Authority (in either case if such consent is then required by the Capital Regulations) and to applicable law and regulation.

An Automatic Conversion shall occur without delay upon the occurrence of a Capital Adequacy Trigger Event as set forth in Section 2.08 of the Fourth Supplemental Indenture.

The Conversion Price and the Conversion Shares Offer Price shall be subject to adjustment as provided in Article III of the Fourth Supplemental Indenture.

The Company may, in its sole and absolute discretion, following the occurrence of an Automatic Conversion and no later than 10 (ten) Business Days following the Conversion Date, elect that the Conversion Shares Depository make an offer of all or some of the Conversion Shares to all or some of the Company’s ordinary shareholders at a cash price per Conversion Share equal to the Conversion Shares Offer Price, as set forth in and subject to the provisions of Section 2.10 of the Fourth Supplemental Indenture.

This Security is subject to the provisions regarding the U.K. Bail-in Power Acknowledgement set forth in Section 13.01 of the Base Indenture.

If a Winding-Up Event occurs before the occurrence of a Capital Adequacy Trigger Event, subject to the subordination provisions of Section 12.01 of the Base Indenture, the outstanding principal amount of this Security shall become immediately due and payable, without the need of any further action on the part of the Trustee, the Holders or any other Person.

A “Winding-Up Event” shall result if (i) a court of competent jurisdiction in England (or such other jurisdiction in which the Company may be organized) makes an order for the winding-up of the Company which is not successfully appealed within thirty (30) days of the making of such order, (ii) the Shareholders of the Company adopt an effective resolution for the winding-up of the Company (other than, in the case of either (i) or (ii) above, under or in connection with a scheme of reconstruction, merger or amalgamation not involving a bankruptcy or insolvency) or (iii) following the appointment of an administrator of the Company, the administrator gives notice that it intends to declare and distribute a dividend.

If the Company fails to pay any amount that has become due and payable under this Security and such failure continues for fourteen (14) days, the Trustee may provide a written notice of such failure to the Company. If within a period of fourteen (14) days following the provision of such notice, the failure continues and has not been cured nor waived (a “Non-Payment Event”), the Trustee may, at its discretion, and without further notice to the Company, institute proceedings in England (or such other jurisdiction in which the Company may be organized) (but not elsewhere) for the winding-up of the Company and/or prove in a winding-up of the Company and/or claim in a liquidation or administration of the Company. For the avoidance of doubt, if, pursuant to this Security and Sections 3.12 and 3.13 of the Base Indenture, the Company cancels any interest payment on any Interest Payment Date or if such

 

A-10


interest payment is deemed cancelled (in each case, in whole or in part), then such interest payment shall not be due and payable in respect of such Interest Payment Date, and no Non-Payment Event under the Securities will occur or be deemed to have occurred as a result of such cancellation or deemed cancellation (in each case, in whole or in part).

In addition to the remedies for a Non-Payment Event provided in the paragraph above, the Trustee, may without further notice, institute such proceedings against the Company as the Trustee may deem fit to enforce any term, obligation or condition binding upon the Company under the Securities or the Indenture (other than any payment obligation of the Company under or arising from the Securities or the Indenture, including, without limitation, payment of any principal or interest) (such obligation, a “Performance Obligation”), provided always that the Trustee (acting on behalf of the Holders and Beneficial Owners of the Securities) and the Holders and Beneficial Owners of the Securities may not enforce, and may not be entitled to enforce or otherwise claim, against the Company any judgment or other award given in such proceedings that requires the payment of money by the Company, whether by way of damages or otherwise (a “Monetary Judgment”), except by proving such Monetary Judgment in a winding-up of the Company and/or by claiming such Monetary Judgment in an administration of the Company. For the avoidance of doubt, the sole and exclusive manner by which the Trustee (acting on behalf of the Holders and Beneficial Owners of the Securities) and the Holders and Beneficial Owners of the Securities may seek to enforce or otherwise claim a Monetary Judgment against the Company in connection with the Company’s breach of a Performance Obligation shall be by proving such Monetary Judgment in a winding-up of the Company and/or by claiming such Monetary Judgment in an administration of the Company. By its acquisition of the Securities, each Holder and Beneficial Owner of the Securities acknowledges and agrees that such Holder and Beneficial Owner shall not seek to enforce or otherwise claim, and will not direct the Trustee (acting on behalf of the Holders and Beneficial Owners of the Securities) to enforce or otherwise claim, a Monetary Judgment against the Company in connection with the Company’s breach of a Performance Obligation, except by proving such Monetary Judgment in a winding-up of the Company and/or by claiming such Monetary Judgment in an administration of the Company.

Other than the limited remedies specified in this Security and Article V of the Base Indenture, and subject to the second paragraph below, no remedy against the Company shall be available to the Trustee (acting on behalf of the Holders and Beneficial Owners of the Securities) and to the Holders and Beneficial Owners, whether for the recovery of amounts owing in respect of the Securities or under the Indenture, or in respect of any breach by the Company of any of the Company’s obligations under or in respect of the terms of such Securities or under the Indenture in relation thereto; provided, however, that the Company’s obligations to the Trustee under Section 6.07 of the Base Indenture and the Trustee’s rights to have money collected applied first to pay amounts due to it under such Section pursuant to Section 5.07 of the Base Indenture expressly survive any such Default and are not subject to the subordination provisions of Section 12.01 of the Base Indenture.

In the case of a Default under this Security, the Trustee shall exercise such of the rights and powers vested in it by the Indenture, and use the same degree of care and skill in their exercise, as a prudent person would exercise or use under the circumstances in the conduct of his or her own affairs. A “Default” shall occur upon (i) the occurrence of a Winding-Up Event that occurs before the occurrence of a Capital Adequacy Trigger Event or (ii) the occurrence of a Non-Payment Event or (iii) a breach by the Company of a Performance Obligation.

 

A-11


Notwithstanding the limitations on remedies specified in this Security and under Article V of the Base Indenture, (1) the Trustee shall have such powers as are required to be authorized to it under the Trust Indenture Act in respect of the rights of the Holders and Beneficial Owners of the Securities under the provisions of the Indenture, and (2) nothing shall impair the right of a Holder or Beneficial Owner of the Securities under the Trust Indenture Act, absent such Holder’s or Beneficial Owner’s consent, to sue for any payment due but unpaid with respect to the Securities; provided that, in the case of (1) and (2) above, any payments in respect of, or arising from, the Securities, including any payments or amounts resulting or arising from the enforcement of any rights under the Trust Indenture Act in respect of the Securities, shall be subject to the subordination provisions set forth in Section 12.01 of the Base Indenture. Subject to the provisions of the Trust Indenture Act, no Holder shall be entitled to proceed directly against the Company except as set forth in Section 5.08 of the Base Indenture.

The Securities shall constitute the Company’s direct, unsecured and subordinated obligations, ranking pari passu without any preference among themselves. In the event of a winding up or administration of the Company, the rights and claims of the Holders and Beneficial Owners of the Securities in respect of or arising from the Securities (including any damages (if payable)) shall be subordinated to the claims of Senior Creditors. If (a) an order is made, or an effective resolution is passed, for the winding-up of the Company (except in any such case for a solvent winding-up solely for the purpose of a merger, reconstruction or amalgamation); or (b) following the appointment of an administrator of the Company, the administrator gives notice that it intends to declare and distribute a dividend, then (1) if such events specified in (a) or (b) above occur prior to the date on which a Capital Adequacy Trigger Event occurs, there shall be payable by the Company in respect of each Security (in lieu of any other payment by the Company), such amount, if any, as would have been payable to a Holder of Securities if, on the day prior to the commencement of the winding-up or such administration and thereafter, such Holder of Securities were the holder of the most senior class of preference shares in the capital of the Company, having an equal right to a return of assets in the winding-up or such administration to, and so ranking pari passu with, the holders of such class of preference shares (if any) from time to time issued by the Company that has a preferential right to a return of assets in the winding-up or such administration, and so ranking ahead of the holders of all other classes of issued shares for the time being in the capital of the Company, but ranking junior to the claims of Senior Creditors, and on the assumption that the amount that such Holder of Securities was entitled to receive in respect of such preference shares, on a return of assets in such winding-up or such administration, was an amount equal to the principal amount of the relevant Security, together with any damages (if payable), and (2) if such events specified in (a) or (b) above occur on or after the date on which a Capital Adequacy Trigger Event occurs but prior to the Conversion Date, then for purposes of determining the claim of a Holder of the Securities in such winding-up or such administration, the Conversion Date in respect of an Automatic Conversion shall be deemed to have occurred immediately prior to the occurrence of such events specified in (a) or (b) above. Other than in the event of a winding-up or administration of the Company as described in this paragraph, payments in respect of or arising from the Securities shall be conditional (i) upon the Company’s being solvent at the time of payment by the Company, and (ii) in that no sum in respect of or arising from the Securities may

 

A-12


fall due and be paid except to the extent that the Company could make such payment and still be solvent immediately thereafter (such condition referred to herein as the “Solvency Condition”). For purposes of determining whether the Solvency Condition is met, the Company shall be considered to be solvent at a particular point in time if (x) it is able to pay its debts owed to Senior Creditors as they fall due and (y) the Balance Sheet Condition has been met. An Officer’s Certificate executed in accordance with the Indenture as to the Company’s solvency at any particular point in time shall be treated by the Company, the Trustee, the Holders, the Beneficial Owners and all other interested parties as correct and sufficient evidence thereof. “Senior Creditors” means creditors of the Company (aa) who are unsubordinated creditors; (bb) whose claims are, or are expressed to be, subordinated (whether only in the event of the winding-up or administration of the Company or otherwise) to the claims of unsubordinated creditors of the Company but not further or otherwise; (cc) who are creditors in respect of any secondary non-preferential debt (“secondary non-preferential debts” shall have the meaning given to it in the 2018 Order (as defined below) and any other law or regulation applicable to the Company, which is amended by the 2018 Order, as each may be amended or replaced from time to time; or (dd) whose claims are, or are expressed to be, junior to the claims of other creditors of the Company, whether subordinated or unsubordinated, other than those whose claims rank, or are expressed to rank, pari passu with, or junior to, the claims of the Holders of the Securities. “2018 Order” means the Banks and Building Societies (Priorities on Insolvency) Order 2018. The “Balance Sheet Condition” shall be satisfied in relation to the Company if the value of its assets is at least equal to the value of its liabilities (taking into account its contingent and prospective liabilities), according to the criteria that would be applied by the High Court of Justice of England and Wales (or the relevant authority of such other jurisdiction in which the Company may be organized) in determining whether the Company is “unable to pay its debts” under section 123(2) of the U.K. Insolvency Act 1986 or any amendment or re-enactment thereof (or in accordance with the corresponding provisions of the applicable laws of such other jurisdiction in which the Company may be organized). Any payment of interest not due by reason of the provisions contained in this paragraph shall be deemed canceled pursuant to the terms of this Security and Section 3.13 of the Base Indenture.

Subject to applicable law, no Holder of Securities may exercise, claim or plead any right of set-off, compensation or retention in respect of any amount owed to it by the Company arising under, or in connection with, the Securities and each Holder of Securities shall, by virtue of its holding of any Securities, be deemed to have waived all such rights of set-off, compensation or retention. Notwithstanding the foregoing, if any amounts due and payable to any Holder of this Security by the Company in respect of, or arising under, this Security are discharged by set-off, such Holder shall, subject to applicable law, immediately pay an amount equal to the amount of such discharge to the Company (or, in the event of its winding-up or administration, the liquidator or administrator of the Company, as the case may be) and, until such time as payment is made, shall hold an amount equal to such amount in trust for the Company (or the liquidator or administrator of the Company, as the case may be) and, accordingly, any such discharge shall be deemed not to have taken place. By its acquisition of the Securities, each Holder and Beneficial Owner agrees to be bound by these provisions relating to waiver of set-off.

 

A-13


The Indenture permits, with certain exceptions and subject to certain conditions 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 Securities of each series to be affected under the Indenture at any time by the Company and the Trustee with the consent of the Holders of a specified majority in principal amount of the Securities then Outstanding of each series to be affected. The Indenture also contains provisions permitting the Holders of a majority in aggregate principal amount of the Securities of each series then Outstanding, on behalf of the Holders of all Securities of such series, to waive compliance by the Company with certain provisions of the Indenture and certain past Defaults under the Indenture and their consequences. Any such consent or waiver by the Holder of this Security shall be conclusive and binding upon such Holder and upon all future Holders of this Security and of any Security issued upon the registration of transfer hereof or in exchange herefor or in lieu hereof, whether or not notation of such consent or waiver is made upon this Security.

As provided in and subject to the provisions of the Indenture, the Holder of this Security shall not have any right to institute any proceeding, judicial or otherwise, with respect to the Indenture or for the appointment of a receiver or trustee or for any other remedy thereunder, unless such Holder shall have previously given the Trustee written notice of a continuing Default with respect to the Securities of this series, the Holders of not less than 25% in aggregate principal amount of the Securities of this series then Outstanding shall have made written request to the Trustee to institute proceedings in respect of such Default as Trustee and offered to the Trustee reasonable security or indemnity against the costs, expenses and liabilities to be incurred in compliance with such request, the Trustee shall not have received from the Holders of a majority in principal amount of Securities of this series then Outstanding a direction inconsistent with such request, and shall have failed to institute any such proceeding, for sixty (60) days after receipt of such notice, request and offer of security or indemnity, and, in the case of a proceeding in England (or such other jurisdiction in which the Company may be organized) (but not elsewhere) for the winding-up of the Company, such proceeding is in the name and on behalf of the Trustee to the same extent (but no further or otherwise) as the Trustee would have been entitled so to do.

Notwithstanding any contrary provisions in this Security, nothing shall impair the right of a Holder of this Security under the Trust Indenture Act, absent such Holder’s consent, to sue for any payments due but unpaid with respect to this Security.

As provided in the Indenture and subject to certain limitations therein set forth, the transfer of this Security is registrable in the Contingent Convertible Security Register, upon surrender of this Security for registration of transfer at the office or agency of the Company in any place where the principal of this Security is payable, duly endorsed by, or accompanied by a written instrument of transfer in form satisfactory to the Company and the Contingent Convertible Security Registrar duly executed by, the Holder hereof or his attorney duly authorized in writing. Thereupon one or more new Securities of this series and of like tenor, of authorized denominations and for the same aggregate principal amount, will be issued to the designated transferee or transferees.

This Security, and any other Securities of this series and of like tenor, are issuable only in registered form without coupons in initial denominations of $200,000 and increments of $1,000 thereafter. The denominations cannot be changed without the consent of the Trustee. The denomination of each interest in this Security shall be the “Tradable Amount” of such book-entry

 

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interest. Prior to an Automatic Conversion, the aggregate Tradable Amount of the interests in this Security shall equal this Security’s outstanding principal amount. Following an Automatic Conversion, the principal amount of this Security shall equal zero, but the Tradable Amount of the book-entry interests in this Security shall remain unchanged as a result of the Automatic Conversion.

No service charge shall be made for any such registration of transfer or exchange, but the Company may require payment of a sum sufficient to cover any tax or other governmental charge payable in connection therewith.

Prior to due presentment of this Security 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 Security is registered as the owner hereof for all purposes, whether or not this Security be overdue, and neither the Company, the Trustee nor any such agent shall be affected by notice to the contrary.

This Security shall be governed by and construed in accordance with the laws of the State of New York, except for the subordination provisions referred to herein and set forth in Section 12.01 of the Base Indenture, and the waiver of set-off provisions referred to herein and set forth in Section 5.04(d) of the Base Indenture, which are governed by, and construed in accordance with, English law.

 

 

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Exhibit B

Form of Automatic Conversion Notice1

NOTICE TO DTC, THE TRUSTEE AND FOR PUBLICATION

AS A NOTICE TO HOLDERS AND BENEFICIAL OWNERS

[Barclays Letterhead]

 

To:   

[The Depository Trust Company

55 Water Street, 25th Floor

New York, NY 10041 0099

Attn: Mandatory Reorganization Department

Fax: +1 (212) 855 5488

Email: mandatoryreorgannouncements@dtcc.com]

Cc:   

[The Bank of New York Mellon

Merck House

Seldown

Poole, Dorset BH15 1PX

United Kingdom

Attn: International Corporate Trust Services

Email: corpsov2@bnymellon.com

Fax: 01202 689600

Tel: 01202 689978

  

The Bank of New York Mellon

101 Barclay Street

Floor 7-E

New York, New York 10286

United States of America

Attn: International Corporate Trust

Fax: +1 (212) 815-5366]

Re: Barclays PLC $1,500,000,000 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities (CUSIP: 06738E BN4, ISIN: US06738EBN40) – Notice to DTC, Holders and Beneficial Owners of the Occurrence of a Capital Adequacy Trigger Event

This notice is in relation to Barclays PLC’s (the “Company”) $1,500,000,000 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities (CUSIP: 06738E BN4, ISIN: US06738EBN40) issued on August 12, 2020 (the “Securities”) pursuant to the Contingent Convertible Securities Indenture, dated August 14, 2018, between the Company and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”) and Paying Agent, as supplemented and amended by the Fourth Supplemental Indenture, dated August 12, 2020, between the Company and the Trustee (together, the “Indenture”), and pursuant to the prospectus supplement dated August 5, 2020 supplementing the prospectus dated April 6, 2018. Capitalized terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the Indenture.

Barclays PLC hereby notifies The Depository Trust Company (“DTC”), the Holders and Beneficial Owners of the Securities that a Capital Adequacy Trigger Event has occurred with respect to the Securities. Such Capital Adequacy Trigger Event has occurred because the Group’s Fully Loaded CET1 Ratio as of [Date], as determined by Barclays PLC on a consolidated basis in accordance with the Capital Regulations applicable to the Group on such date, was less than 7.00%.

 

 

1 

Note: Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and to changes in DTC’s (or successor clearing system) policies and procedures.

 

B-1


Upon the occurrence of the Capital Adequacy Trigger Event, the terms of the Securities provide for an Automatic Conversion of the Securities on the Conversion Date, which [was] [is expected to be] [Date], based on the Conversion Price, which is [Price].2 Upon the Automatic Conversion, all of Barclays PLC’s obligations under the Securities (other than with respect to the CSO Obligations, if any) shall be irrevocably and automatically released in consideration of Barclays PLC’s issuance of ordinary shares of Barclays PLC (the “Conversion Shares”) to the Conversion Shares Depository (or other relevant recipient). However, the terms of the Securities provide that the Securities shall remain in existence until the applicable Settlement Date for the sole purpose of evidencing (a) a right to receive Conversion Shares or Conversion Shares Offer Consideration, as applicable, from the Conversion Shares Depository and (b) the Company’s CSO Obligations, if any.

In addition, the terms of the Securities provide that Barclays PLC may, in its sole and absolute discretion, elect that a Conversion Shares Offer be conducted, no later than ten (10) Business Days of the Conversion Date. Barclays PLC will deliver to DTC, the Holders and the Beneficial Owners a Conversion Shares Offer Notice specifying, among other things, whether or not Barclays PLC has elected that a Conversion Shares Offer be conducted and the Suspension Date. The Securities may continue to trade until the Suspension Date.

Accordingly, Barclays PLC hereby instructs DTC to indicate to all participants that payments of principal and interest are no longer payable under the Securities as of the Conversion Date and that the Securities will have no further entitlement to interest or principal as of such date by making a note to that effect in its systems.

Barclays PLC further requests DTC to post this notice on its Reorganization Inquiry for Participants System (or such other system as DTC uses for providing notices to holders of securities).

Should DTC, any Holder or any Beneficial Owner of the Securities have any inquiries, please contact:

[Barclays Contact Person]

[Telephone]

[Fax]

[Email]

 

 

2 

Note: To be completed with the Conversion Date and Conversion Price.

 

B-2


Exhibit C

Form of Capital Adequacy Trigger Event Officers’ Certificate

BARCLAYS PLC

Capital Adequacy Trigger Event Officers’ Certificate

This Capital Adequacy Trigger Event Officers’ Certificate is being delivered in relation to Barclays PLC’s (the “Company”) $1,500,000,000 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities (CUSIP: 06738E BN4, ISIN: US06738EBN40) issued on August 12, 2020 (the “Securities”) pursuant to the Contingent Convertible Securities Indenture (the “Base Indenture”), dated August 14, 2018, between the Company and The Bank of New York Mellon, as Trustee (the “Trustee”) and Paying Agent, as supplemented and amended by the Fourth Supplemental Indenture, dated August 12, 2020, between the Company and the Trustee (the “Fourth Supplemental Indenture”), and pursuant to the prospectus supplement dated August 5, 2020, supplementing the prospectus dated April 6, 2018 (the “Prospectus”).

Pursuant to Section 1.02 of the Base Indenture and Section 2.08 of the Fourth Supplemental Indenture, the undersigned, being authorized signatories of the Company and authorized by the Company to give this certificate, each hereby certify as follows:

 

(a)

I have read the provisions of the Base Indenture and those of the Fourth Supplemental Indenture, setting forth certain provisions in respect of the occurrence of a Capital Adequacy Trigger Event (as defined in the Fourth Supplemental Indenture), including Section 2.08 of the Fourth Supplemental Indenture, and the definitions relating thereto;

 

(b)

I have reviewed such corporate records and such other documents as I have deemed necessary as a basis for the opinion hereinafter expressed;

 

(c)

I have also made such other examinations and investigations as I have deemed necessary to enable me to express an informed opinion as to the matters set forth in (d) below; and

 

(d)

a Capital Adequacy Trigger Event has occurred with respect to the Securities. Such Capital Adequacy Trigger Event has occurred because the Group’s (as defined in the Fourth Supplemental Indenture) Fully Loaded CET1 Ratio (as defined in the Fourth Supplemental Indenture) as of [Date], as determined by Barclays PLC on a consolidated basis in accordance with the capital adequacy standards and guidelines of the Prudential Regulation Authority of the United Kingdom (or such other governmental authority having primary responsibility for the prudential supervision of Barclays PLC) on such date, was less than 7.00%.

Concurrently with the delivery of this Capital Adequacy Trigger Event Officers’ Certificate, the Company is delivering to The Depository Trust Company (“DTC”) an Automatic Conversion Notice (as defined in the Fourth Supplemental Indenture) as a notice to DTC and for publication as a notice to Holders (as defined in the Base Indenture) and Beneficial Owners (as defined in the Fourth Supplemental Indenture) in the form set forth in Exhibit B to the Fourth Supplemental Indenture.

 

C-1


The Trustee is entitled to conclusively rely on and accept this Capital Adequacy Trigger Event Officers’ Certificate without any duty whatsoever of further inquiry as sufficient and conclusive evidence of the occurrence of the Capital Adequacy Trigger Event, and this Capital Adequacy Trigger Event Officers’ Certificate shall be conclusive and binding on the Trustee and the Holders as defined in the Base Indenture) and Beneficial Owners (as defined in the Fourth Supplemental Indenture).

 

Dated:
BARCLAYS PLC
By:  

 

  Name:
  Title:
By:  

 

  Name:
  Title:

 

C-2


Exhibit D

Form of Conversion Shares Offer Notice3

NOTICE TO DTC, THE TRUSTEE AND FOR PUBLICATION

AS A NOTICE TO HOLDERS AND BENEFICIAL OWNERS

[Barclays Letterhead]

 

To:       

[The Depository Trust Company

55 Water Street, 25th Floor

New York, NY 10041-0099

Attn: Mandatory Reorganization Department

Fax: +1 (212) 855-5488

Email: mandatoryreorgannouncements@dtcc.com]

Cc:   

[The Bank of New York Mellon

Merck House

Seldown

Poole, Dorset BH15 1PX

United Kingdom

Attn: International Corporate Trust Services

Email: corpsov2@bnymellon.com

Fax: 01202 689600

Tel: 01202 689978

  

The Bank of New York Mellon

101 Barclay Street

Floor 7-E

New York, New York 10286

United States of America

Attn: International Corporate Trust

Fax: +1 (212) 815-5366]

Re: Barclays PLC $1,500,000,000 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities (CUSIP: 06738E BN4, ISIN: US06738EBN40) – Notice to DTC, Holders and Beneficial Owners of [Election to Conduct a Conversion Shares Offer][Election Not to Conduct a Conversion Shares Offer]

This notice is in relation to Barclays PLC’s (the “Company”) $1,500,000,000 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities (CUSIP: 06738E BN4, ISIN: US06738EBN40) issued on August 12, 2020 (the “Securities”) pursuant to the Contingent Convertible Securities Indenture, dated August 14, 2018, between Barclays PLC and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”) and Paying Agent, as supplemented and amended by the Fourth Supplemental Indenture, dated August 12, 2020, between the Company and the Trustee (together, the “Indenture”), and pursuant to the prospectus supplement dated August 5, 2020, supplementing the prospectus dated April 6, 2018, (the “Prospectus”). Capitalized terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the Indenture.

 

 

3 

Note: Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and to changes in DTC (or successor clearing system) policies and procedures.

 

D-1


Barclays PLC hereby notifies The Depository Trust Company (“DTC”), the Holders and the Beneficial Owners of the Securities that it has elected that a Conversion Shares Offer [not] be conducted. [The Conversion Shares Offer Period will extend from the date of this notice until [Date]4. [Conversion Shares Depository] has been appointed as Conversion Shares Depository for the Conversion Shares Offer.]5

In addition, Barclays PLC hereby notifies DTC, the Holders and the Beneficial Owners of the Securities that the Suspension Date shall be [Date].6 Accordingly, Barclays PLC hereby instructs DTC to implement a “chill” on the clearance and settlement of the Securities on the Suspension Date. As described in the Prospectus, Holders and Beneficial Owners will not be able to settle the transfer of any Securities following the Suspension Date, and any sale or other transfer of the Securities that a Holder or Beneficial Owner may have initiated prior to the commencement to the Suspension Date that is scheduled to settle after the Suspension Date will be rejected by DTC and will not be settled within DTC.

Barclays PLC further requests DTC to post this notice on its Reorganization Inquiry for Participants System (or such other system as DTC uses for providing notices to holders of securities).

Should DTC, any Holder or any Beneficial Owner of the Securities have any inquiries, please contact:

[Barclays Contact Person]

[Telephone]

[Fax]

[Email]

 

4 

Note: Insert the date that the Conversion Shares Offer expires, which shall be no later than forty (40) business days after the delivery of this Conversion Shares Offer Notice.

5 

Note: If Barclays PLC has been unable to appoint a Conversion Shares Depository (or other nominee), it shall also include in this notice such other arrangements for the issuance and/or delivery of the Conversion Shares or the Conversion Shares Offer Consideration, as applicable, to the holders of the Securities as it has put in place.

6 

Note: Insert the Suspension Date, which is the date on which DTC shall suspend all clearance and settlement of the Securities, which date shall be no later than thirty-eight (38) business days after the delivery of the Conversion Shares Offer Notice to DTC and at least two (2) business days prior to the end of the Conversion Shares Offer Period, if any).

 

D-2


Exhibit E

Form of Conversion Shares Settlement Request Notice7

NOTICE TO DTC, THE TRUSTEE AND FOR PUBLICATION

AS A NOTICE TO HOLDERS AND BENEFICIAL OWNERS

[Barclays Letterhead]

 

To:       

[The Depository Trust Company

55 Water Street, 25th Floor

New York, NY 10041 0099

Attn: Mandatory Reorganization Department

Fax: +1 (212) 855 5488

Email: mandatoryreorgannouncements@dtcc.com]

Cc:   

[The Bank of New York Mellon

Merck House

Seldown

Poole, Dorset BH15 1PX

United Kingdom

Attn: International Corporate Trust Services

Email: corpsov2@bnymellon.com

Fax: 01202 689600

Tel: 01202 689978

  

The Bank of New York Mellon

101 Barclay Street

Floor 7-E

New York, New York 10286

United States of America

Attn: International Corporate Trust

Fax: +1 (212) 815-5366]

Re: Barclays PLC $1,500,000,000 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities (CUSIP: 06738E BN4, ISIN: US06738EBN40) – Notice to DTC, Holders and Beneficial Owners Requesting that Holders and Beneficial Owners Complete a Conversion Shares Settlement Notice

This notice is in relation to Barclays PLC’s (the “Company”) $1,500,000,000 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities (CUSIP: 06738E BN4, ISIN: US06738EBN40) issued on August 12, 2020 (the “Securities”) pursuant to the Contingent Convertible Securities Indenture, dated August 14, 2018, between Barclays PLC and The Bank of New York Mellon, London Branch, as Trustee (the “Trustee”) and Paying Agent, as supplemented and amended by the Fourth Supplemental Indenture, dated August 12, 2020, between the Company and the Trustee (together, the “Indenture”), and pursuant to the prospectus supplement dated August 5, 2020, supplementing the prospectus dated April 6, 2018. Capitalized terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the Indenture.

Barclays PLC hereby requests that Holders and Beneficial Owners of the Securities provide notice to [Name of Conversion Shares Depository (or other nominee)], as [Conversion Shares Depository]8, and the Trustee in the form provided in Appendix A before [Date]9 (the “Notice Cut-off Date”).

 

 

7 

Note: Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and to changes in DTC’s (or successor clearing system) policies and procedures.

8 

Note: If Barclays PLC has been unable to appoint a Conversion Shares Depository, this should refer to the entity undertaking its functions.

9

Note: The Notice-Cut-off Date must be at least forty (40) business days following the Suspension Date.

 

E-1


If a Holder or Beneficial Owner of the Securities properly completes and delivers a Conversion Shares Settlement Notice on or before the Notice Cut-off Date, the Conversion Shares Depository shall, in accordance with the terms of the Fourth Supplemental Indenture, deliver to such Holder or Beneficial Owner the relevant Conversion Shares (rounded down to the nearest whole number of Conversion Shares) or Conversion Shares Offer Consideration, as applicable, two (2) Business Days after the date on which the Conversion Shares Settlement Notice is received by the Conversion Shares Depository.

If a Holder or Beneficial Owner of the Securities fails to properly complete and deliver a Conversion Shares Settlement Notice before the Notice Cut-off Date, the Conversion Shares Depository shall continue to hold the relevant Conversion Shares (or Conversion Shares Component, if applicable). However, the relevant Securities shall be cancelled on the Final Cancellation Date, which shall be [Date],10 and any Holder or Beneficial Owner delivering a Conversion Shares Settlement Notice after the Notice Cut-off Date will have to provide evidence of its entitlement to the relevant Conversion Shares (or the relevant Conversion Shares Component, if applicable) satisfactory to the [Conversion Shares Depository] in its sole and absolute discretion in order to receive delivery of such Conversion Shares (or the relevant Conversion Shares Component, if applicable).

Barclays PLC further requests DTC to post this notice on its Reorganization Inquiry for Participants System (or such other system as DTC uses for providing notices to holders of securities).

Should DTC, any Holder or any Beneficial Owner of the Securities have any inquiries, please contact:

[Barclays Contact Person]

[Telephone]

[Fax]

[Email]

 

10 

Note: The Final Cancellation Date may be up to twelve (12) business days following the Notice Cut-Off Date.

 

E-2


Appendix A

Form of Conversion Shares Settlement Notice11

NOTICE TO THE [CONVERSION SHARES DEPOSITORY AND] DTC

 

To:       

[The Depository Trust Company

55 Water Street, 25th Floor

New York, NY 10041 0099

Attn: Mandatory Reorganization Department

Fax: +1 (212) 855 5488

Email: mandatoryreorgannouncements@dtcc.com]

   [Contact details of [Conversion Shares Depository] to be included.]
Cc:   

[The Bank of New York Mellon

Merck House

Seldown

Poole, Dorset BH15 1PX

United Kingdom

Attn: International Corporate Trust Services

Email: corpsov2@bnymellon.com

Fax: 01202 689600

Tel: 01202 689978

  

The Bank of New York Mellon

101 Barclay Street

Floor 7-E

New York, New York 10286

United States of America

Attn: International Corporate Trust

Fax: +1 (212) 815-5366]

Re: Barclays PLC $1,500,000,000 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities (CUSIP: 06738E BN4, ISIN: US06738EBN40) – Conversion Shares Settlement Notice to the [Conversion Shares Depository and] DTC

This notice is in relation to Barclays PLC’s (the “Company”) $1,500,000,000 6.125% Fixed Rate Resetting Perpetual Subordinated Contingent Convertible Securities (CUSIP: 06738E BN4, ISIN: US06738EBN40) issued on August 12, 2020 (the “Securities”) pursuant to the Contingent Convertible Securities Indenture, dated August 14, 2018, between Barclays PLC and The Bank of New York Mellon, London Branch, as Trustee (“Trustee”) and Paying Agent, as supplemented and amended by the Fourth Supplemental Indenture, dated August 12, 2020, between the Company and the Trustee (together, the “Indenture”), and pursuant to the prospectus supplement dated August 5, 2020, supplementing the prospectus dated April 6, 2018. Capitalized terms used herein and not defined herein shall have the respective meanings ascribed to such terms in the Indenture.

 

11

Note: Addresses to be reconfirmed prior to when notice is sent; subject to modification if Securities are in definitive form and to changes in DTC and CREST (or successor clearing system) policies and procedures.

 

E-3


INFORMATION OF THE HOLDER OR BENEFICIAL OWNER FOR DELIVERY OF CONVERSION SHARES OR CONVERSION SHARES OFFER CONSIDERATION
Surname/Company Name    First name
Name to be entered in Barclays PLC’s share register
Tradable Amount of the Securities held on the date hereof
CREST participant ID    CREST member account (if applicable)
Cash account details (if applicable)
[Account details of clearing system account]12
[Address to which any Conversion Shares should be delivered]13

YOU MUST DELIVER THE CONVERSION SHARES SETTLEMENT NOTICE TO THE CONVERSION SHARES DEPOSITORY AND THE TRUSTEE VIA DTC BEFORE [DATE].14

If you fail to properly complete and deliver the Conversion Shares Settlement Notice on or before the Notice Cut-off Date, the Conversion Shares Depository shall continue to hold your Conversion Shares (or Conversion Shares Component, if applicable). However, your Securities shall be cancelled on the Final Cancellation Date, which shall be [Date],15 and you will have to provide evidence of your entitlement to the relevant Conversion Shares (or the relevant Conversion Shares Component, if applicable) satisfactory to the Conversion Shares Depository in its sole and absolute discretion in order to receive delivery of such Conversion Shares (or Conversion Shares Component, if any, of any Conversion Shares Offer Consideration).

 

12 

Note: To be included if the Conversion Shares will be delivered through a clearing system account other than CREST.

13 

Note: To be included if the Conversion Shares are not a participating security in CREST or any another clearing system.

14 

Note: The Notice Cut-off Date must be at least forty (40) business days following the Suspension Date.

15 

Note: The Final Cancellation Date may be up to twelve (12) business days following the Notice Cut-off Date.

 

E-4

Exhibit 5.1

 

LOGO

August 12, 2020

Barclays PLC

1 Churchill Place

London E14 5HP

Ladies and Gentlemen:

We have acted as special U.S. counsel to Barclays PLC, a public limited company incorporated under the law of England and Wales (the “Company”), in connection with the Company’s offering pursuant to a registration statement on Form F-3 (No. 333-223156) of $1,500,000,000 6.125% fixed rate resetting perpetual subordinated contingent convertible securities (the “Securities”), to be issued under an indenture dated as of August 14, 2018 (the “Base Indenture”), among the Company, The Bank of New York Mellon, London Branch, as trustee and paying agent (the “Trustee”), and The Bank of New York Mellon SA/NV, Luxembourg Branch, as registrar (the “Registrar”), as supplemented by a fourth supplemental indenture dated as of August 12, 2020 (the “Supplemental Indenture” and, together with the Base Indenture, the “Indenture”), among the Company, the Trustee and the Registrar. Such registration statement, as amended as of its most recent effective date (August 5, 2020), insofar as it relates to the Securities (as determined for purposes of Rule 430B(f)(2) under the Securities Act of 1933, as amended (the “Securities Act”)), including the documents incorporated by reference therein but excluding Exhibits 25.1, 25.2 and 25.3, is herein called the “Registration Statement.”

In arriving at the opinion expressed below, we have reviewed the following documents:

 

  (a)

the Registration Statement;

 

  (b)

an executed copy of the Base Indenture;

 

  (c)

an executed copy of the Supplemental Indenture; and

 

  (d)

a copy of the Securities in global registered form (the “Global Security”) as executed by the Company and authenticated by the Trustee.

In addition, we have made such investigations of law as we have deemed appropriate as a basis for the opinion expressed below.

 

LOGO


Barclays PLC, p. 2

 

In rendering the opinion expressed below, we have assumed the authenticity of all documents submitted to us as originals and the conformity to the originals of all documents submitted to us as copies. In addition, we have assumed and have not verified the accuracy as to factual matters of each document we have reviewed.

Based on the foregoing, and subject to the further assumptions and qualifications set forth below, it is our opinion that the Securities are valid, binding and enforceable obligations of the Company, entitled to the benefits of the Indenture; provided that we express no opinion as to the validity, binding effect or enforceability of Sections 5.04(d) and 12.01 of the Base Indenture (and the corresponding provisions in the Global Security), which are governed by English law.

Insofar as the foregoing opinion relates to the validity, binding effect or enforceability of any agreement or obligation of the Company, (a) we have assumed that the Company and each other party to such agreement or obligation has satisfied those legal requirements that are applicable to it to the extent necessary to make such agreement or obligation enforceable against it (except that no such assumption is made as to the Company regarding matters of the federal law of the United States of America or the law of the State of New York that in our experience normally would be applicable to general business entities with respect to such agreement or obligation), (b) such opinion is subject to applicable bankruptcy, insolvency and similar laws affecting creditors’ rights generally and to general principles of equity, (c) we express no opinion with respect to the effect of any mandatory choice of law rules and (d) such opinion is subject to the effect of judicial application of foreign laws or foreign governmental actions affecting creditors’ rights.

We express no opinion as to the subject matter jurisdiction of any United States federal court to adjudicate any action relating to the Securities where jurisdiction based on diversity of citizenship under 28 U.S.C. §1332 does not exist.

The foregoing opinion is limited to the federal law of the United States of America and the law of the State of New York. With respect to matters governed by English law, we have relied on the opinion of Clifford Chance LLP dated August 12, 2020, as English counsel to the Company, which has been filed as Exhibit 5.2 to the Company’s Form 6-K dated August 12, 2020.


Barclays PLC, p. 3

 

We hereby consent to the incorporation by reference of this opinion in the Registration Statement and the use of our name in the prospectus constituting a part of the Registration Statement and the prospectus supplement dated August 5, 2020 relating to the Securities under the heading “Validity of Securities.” In giving such consent, we do not thereby admit that we are within the category of persons whose consent is required under Section 7 of the Securities Act or the rules and regulations of the Securities and Exchange Commission thereunder.

The opinion expressed herein is rendered on and as of the date hereof, and we assume no obligation to advise you or any other person, or to make any investigations, as to any legal developments or factual matters arising subsequent to the date hereof that might affect the opinion expressed herein.

 

Very truly yours,
CLEARY GOTTLIEB STEEN & HAMILTON LLP
By:  

/s/ David I. Gottlieb

  David I. Gottlieb, a Partner

Exhibit 5.2

 

LOGO

    

CLIFFORD CHANCE LLP

 

10 UPPER BANK STREET

LONDON

E14 5JJ

 

TEL +44 20 7006 1000

FAX +44 20 7006 5555

DX 149120 CANARY WHARF 3

 

www.cliffordchance.com

 

To   Barclays PLC

1 Churchill Place

London E14 5HP

    

Our ref: 70-40752928

Direct Dial: +44 207006 2977

E-Mail: simon.sinclair@cliffordchance.com

 

12 August 2020

Barclays PLC

U.S.$ 1,500,000,000 6.125 per cent. Fixed Rate Resetting Perpetual Subordinated

Contingent Convertible Securities (the “Securities”)

We have acted as English legal advisers to Barclays PLC (the “Issuer”) in connection with the issue by the Issuer of the Securities under the Contingent Convertible Securities Indenture dated as of 14 August 2018, among the Issuer, The Bank of New York Mellon, London Branch as trustee (the “Trustee”) and The Bank of New York Mellon SA/NV, Luxembourg Branch, as Contingent Convertible Security Registrar (the “Registrar”) (the “Base Indenture”), as amended and supplemented by the Fourth Supplemental Indenture dated as of 12 August 2020, among the Issuer, the Trustee and the Registrar (the “Fourth Supplemental Indenture” and, together with the Base Indenture, the “Indenture”).

 

1.

INTRODUCTION

 

1.1

Opinion Documents

This Opinion relates to the Indenture and the Securities.

 

1.2

Defined Terms

 

  1.2.1

Terms defined or given a particular construction in the Indenture shall have the same meaning in this Opinion unless a contrary indication appears.

 

  1.2.2

Headings in this Opinion are for ease of reference only and shall not affect its interpretation.

 

  1.2.3

All references in this Opinion to paragraphs mean paragraphs in this Opinion.

CLIFFORD CHANCE LLP IS A LIMITED LIABILITY PARTNERSHIP REGISTERED IN ENGLAND AND WALES UNDER NO. OC323571. THE FIRM’S REGISTERED OFFICE AND PRINCIPAL PLACE OF BUSINESS IS AT 10 UPPER BANK STREET LONDON E14 5JJ. THE FIRM USES THE WORD “PARTNER” TO REFER TO A MEMBER OF CLIFFORD CHANCE LLP OR AN EMPLOYEE OR CONSULTANT WITH EQUIVALENT STANDING AND QUALIFICATIONS. THE FIRM IS AUTHORISED AND REGULATED BY THE SOLICITORS REGULATION AUTHORITY.

 


LOGO       CLIFFORD CHANCE LLP

 

1.3

Legal Review

In connection with the creation and issue of the Securities and the giving of this Opinion:

 

  1.3.1

we have reviewed the documents referred to in paragraph 1 of Schedule 1 (Documents and Enquiries) and completed the searches and enquiries referred to in paragraph 2 of Schedule 1 (Documents and Enquiries) and any references to such documents in this Opinion are to those documents as originally executed. Certain of such documents have been executed using the cloud based electronic signing platform owned and run by DocuSign Inc.;

 

  1.3.2

we have not verified the facts or the reasonableness of any statements (including statements as to foreign law) contained in the Indenture or the Prospectus, save as expressly specified in paragraph 2.6 (Taxation statements in the Prospectus Supplement);

 

  1.3.3

we have not been responsible for ensuring that the Prospectus contains all material facts; and

 

  1.3.4

we have not been responsible for ensuring that the Prospectus or the Form 6-K comply with the requirements of any competent authority.

 

1.4

Applicable Law

This Opinion is governed by English law, relates only to English law as applied by the English courts as at today’s date and does not extend to the laws of any other jurisdiction (save as described in paragraph 1.5 (Taxation)). All non-contractual obligations and any other matters arising out of or in connection with this Opinion are governed by English law.

 

1.5

Taxation

We express no opinion on any taxation matter, and none is implied or may be inferred, save as expressly specified in paragraph 2.6 (Taxation statements in the Prospectus Supplement). In respect of those tax matters this Opinion is confined to, and given on the basis of, English law, United Kingdom tax law and Her Majesty’s Revenue and Customs (“HMRC”) published practice in force or applied in the United Kingdom as at today’s date.

 

- 2 -


LOGO       CLIFFORD CHANCE LLP

 

1.6

Assumptions and Reservations

This Opinion is given on the basis of our understanding of the terms of the Indenture and the Securities, and the assumptions set out in Schedule 2 (Assumptions) and is subject to the reservations set out in Schedule 3 (Reservations). This Opinion is strictly limited to the matters stated in paragraph 2 (Opinion) and does not extend to any other matters.

 

2.

OPINION

We are of the opinion that:

 

2.1

Corporate Existence

The Issuer is a company duly incorporated in England and has the capacity and power to create and issue the Securities, to enter into the Base Indenture and the Fourth Supplemental Indenture and to exercise its rights and perform its obligations under the Securities and the Indenture.

 

2.2

Authorisation

The execution and delivery of the Base Indenture and the Fourth Supplemental Indenture and the issue of the Securities (and the allotment of the Conversion Shares) have been duly authorised by or on behalf of the Issuer.

 

2.3

Execution

The Issuer has duly executed and delivered the Base Indenture, the Fourth Supplemental Indenture and the Global Securities, to the extent that English law is applicable.

 

2.4

Legal, valid, binding and enforceable obligations

In any proceedings taken in England for the enforcement of the Base Indenture or the Fourth Supplemental Indenture, the obligations expressed to be assumed by the Issuer in the Base Indenture and the Fourth Supplemental Indenture would be recognised by the English courts as legal, valid and binding obligations of the Issuer and would be enforceable in the English courts.

 

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2.5

Subordination

Section 12.01 (Subordination of Contingent Convertible Securities – Status of the Contingent Convertible Securities) of the Base Indenture constitutes legal, valid, binding and enforceable obligations of the Issuer.

 

2.6

Taxation statements in the Prospectus Supplement

The statements in the Prospectus Supplement under the heading “Tax Considerations—United Kingdom Taxation” are correct in all material respects.

 

3.

ADDRESSEES AND PURPOSE

 

  3.1.1

The scope and content of this Opinion solely have regard to the interests of the Issuer in accordance with its instructions. This Opinion is provided in connection with the filing of the Form 6-K and is addressed to and is solely for the Issuer and it may not, without our prior written consent, be relied upon for any other purpose or be disclosed to or relied upon by any other person save as provided below.

 

  3.1.2

We hereby consent to the filing of this opinion with the United States Securities and Exchange Commission (the “SEC”) as an exhibit to a Current Report on Form 6-K to be incorporated by reference into the Form F-3 Registration Statement filed with the SEC on 22 February 2018 with pre-effective amendments filed on 27 March 2018 and 4 April 2018 and declared effective by the SEC on 6 April 2018, and the reference to us under the headings “Service of Process and Enforcement of Liabilities” and “Validity of Securities” in the Base Prospectus and under the heading “Validity of Securities” in the Prospectus Supplement. In giving this consent, we do not admit that we are in the category of persons whose consent is required under Section 7 of the US Securities Act of 1933, as amended or the rules and regulations of the SEC thereunder.

/s/ Clifford Chance.

 

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SCHEDULE 1

DOCUMENTS AND ENQUIRIES

 

1.

DOCUMENTS

 

  (a)

The prospectus dated 6 April 2018 relating to, inter alia, the Securities (the “Base Prospectus”).

 

  (b)

The prospectus supplement dated 5 August 2020 relating to the Securities (the “Prospectus Supplement” and, together with the Base Prospectus, the “Prospectus”).

 

  (c)

The final form of the Form 6-K expected to be filed with the SEC on 12 August 2020 relating to the Securities (the “Form 6-K”).

 

  (d)

A copy of the Base Indenture.

 

  (e)

A copy of the Fourth Supplemental Indenture.

 

  (f)

A copy of the global securities representing the Securities dated 12 August 2020 (together, the “Global Securities”).

 

  (g)

A copy of the certificate of incorporation of the Issuer dated 20 July 1896.

 

  (h)

A copy of the Barclays Bank Act 1984.

 

  (i)

A copy of the certificate of incorporation on re-registration of the Issuer dated 15 February 1982.

 

  (j)

A copy of the certificate of incorporation on change of name of the Issuer dated 1 January 1985.

 

  (k)

A copy of the articles of association of the Issuer as adopted by special resolution passed on 30 April 2010 and amended by special resolution passed on 25 April 2013, certified a true copy by Sophie Lukaszewski.

 

  (l)

A copy of the extracts from the minutes of a meeting of the board of directors of the Issuer held on 15 December 2016, certified a true copy by Patrick Gonsalves (the “2016 Resolutions”).

 

  (m)

A copy of the extracts from the minutes of a meeting of the board of directors of the Issuer held on 28 March 2018, certified a true copy by Gemma Tremlett (the “2018 Resolutions”).

 

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  (n)

A copy of the approval of the Group Finance Director of the Issuer dated 20 February 2018, certified a true copy by Sophie Lukaszewski.

 

  (o)

A copy of the Confirmation of an Authorised Officer of the Issuer dated 7 August 2020.

 

  (p)

A copy of the power of attorney granted by the Issuer dated 15 June 2018, in favour of each of Miray Muminoglu, Timothy Allen, Stuart Frith and Daniel David.

 

  (q)

A copy of the power of attorney granted by the Issuer dated 30 March 2020, in favour of Miray Muminoglu and Stuart Frith.

 

  (r)

The notice of the annual general meeting of the shareholders of the Issuer dated 3 April 2020 and the results of the polls on the resolutions proposed at such annual general meeting announced by the Issuer on 7 May 2020, approving, inter alia, the allotment of shares and equity securities and the allotment of equity securities for cash other than on a pro-rata basis (the “2020 Shareholders Resolution” and, together with the special resolution referred to in paragraph (k) above, the “Shareholders Resolutions”).

 

2.

SEARCHES AND ENQUIRIES

 

  (a)

A search was conducted with the Registrar of Companies in respect of the Issuer on 12 August 2020.

 

  (b)

An enquiry by telephone was made at the Central Index of Winding Up Petitions at the Insolvency and Companies List in London at 10:08 a.m. on 12 August 2020 with respect to the Issuer. The presentation of a petition for the winding-up of the Issuer may be subject to the temporary restrictions imposed by Schedule 10 of the Corporate Insolvency and Governance Act 2020 in response to the coronavirus pandemic.

 

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SCHEDULE 2

ASSUMPTIONS

 

1.

ORIGINAL AND GENUINE DOCUMENTATION

 

  (a)

All signatures (including any electronic signatures), stamps and seals are genuine, all original documents are authentic, all deeds and counterparts were executed in single physical form and all copy documents supplied to us as photocopies or in portable document format (PDF) or other electronic form are genuine, accurate, complete and conform to the originals.

 

  (b)

The person whose name and electronic signature appears in the signature block of the Fourth Supplemental Indenture and/or any Global Security is the person who signed the Fourth Supplemental Indenture and/or such Global Security.

Where, for the purposes of paragraphs 1(a) and 1(b) of this Schedule 2:

 

  (i)

“sign” or “signed” means, in relation to the Fourth Supplemental Indenture and/or each Global Security executed with an electronic signature, the process by which the signatory has applied such electronic signature to the Fourth Supplemental Indenture and/or such Global Security; and

 

  (ii)

“electronic signature” means the signature in electronic form applied to the Fourth Supplemental Indenture and/or any Global Security that is intended by the signatory to take effect as their signature including, without limitation, an image of the signatory’s handwritten signature, the typed name of the signatory, a signature generated by the signatory with a stylus on a touch pad or screen and any signature created by the signatory in accordance with the processes of an electronic signing platform.

 

  (c)

The copies of the certificate of incorporation, certificate of incorporation on change of name, certificate of re-registration and articles of association of the Issuer provided to us are accurate and complete as of the date of this Opinion.

 

2.

CORPORATE AUTHORITY

 

  (a)

In resolving to create and issue the Securities and to enter into the Indenture the directors and the Group Finance Director of the Issuer acted in good faith to promote the success of the Issuer for the benefit of its members and in accordance with any other duty.

 

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  (b)

Each director of the Issuer has disclosed any interest which he or she may have in the issue of the Securities in accordance with the provisions of the Companies Act 2006 and the Issuer’s articles of association and none of the directors has any interest in the issue of the Securities except to the extent permitted by the Issuer’s articles of association.

 

  (c)

The 2016 Resolutions and the 2018 Resolutions were duly passed at properly constituted and quorate meetings of duly appointed directors of the Issuer and have not been amended or rescinded and are in full force and effect.

 

  (d)

The approval by the Group Finance Director of the Issuer and the Confirmation of an Authorised Officer of the Issuer, each of which is referred to in Schedule 1 (Documents and Enquiries), have not been amended or rescinded and are in full force and effect.

 

  (e)

The Shareholders Resolutions were duly passed at a properly convened and quorate meeting of the shareholders of the Issuer and in all cases have not been amended or rescinded and are in full force and effect.

 

  (f)

The extracts from the minutes referred to in Schedule 1 (Documents and Enquiries) are true records of the proceedings at the meetings of the board of directors of the Issuer.

 

  (g)

Since 7 May 2020, the Issuer has not issued any ECNs (as defined in the 2020 Shareholders Resolutions).

 

  (h)

That, as at 20 February 2018, Tushar Morzaria was duly appointed as Group Finance Director of the Issuer, as at 14 August 2018, Tim Allen was duly appointed as Director in the Capital Markets Execution team of Barclays Treasury, as at 12 August 2020, Stuart Frith was duly appointed as Director in the Capital Markets Execution team of Barclays Treasury and as at 7 August 2020 and 12 August 2020 Miray Muminoglu was duly appointed as an Authorised Officer (as defined in the 2016 Resolutions) and as Managing Director in the Capital Markets Execution team of Barclays Treasury.

 

  (i)

The person, if other than the person whose signature it purports to be, who attached any electronic signature to any of the documents listed in Schedule 1 (Documents and Enquiries) on behalf of another person, had the authority of the latter person to do so.

 

  (j)

Any relevant power of attorney granted by the Issuer referred to in Schedule 1 (Documents and Enquiries) had not been revoked and was in full force and effect at the time of execution of the Indenture and/or the Global Securities, as applicable.

 

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  (k)

The Conversion Shares will be delivered in accordance with the terms of the Indenture.

 

3.

CORPORATE CAPACITY OF THE PARTIES OTHER THAN THE ISSUER

Each party to the Indenture (other than the Issuer) has the capacity, power and authority to enter into and to exercise its rights and to perform its obligations under the Indenture.

 

4.

EXECUTION OF INDENTURE AND SECURITIES

 

  (a)

Each party to the Indenture (other than the Issuer) has duly executed and delivered the Indenture.

 

  (b)

The terms of the Indenture have been complied with and the Indenture and the Global Securities have each been duly executed and delivered in accordance with the laws of the State of New York.

 

5.

DOCUMENTS NOT GOVERNED BY ENGLISH LAW

 

  (a)

The obligations expressed to be assumed by the Issuer under the Indenture and the Securities constitute the Issuer’s legal, valid, binding and enforceable obligations under the laws of the State of New York (other than the obligations under Section 12.01 of the Base Indenture) and words and phrases used in the Indenture and the Securities have the same meaning and effect as they would if the Indenture and the Securities were governed by English law.

 

  (b)

The submission to the jurisdiction of any state or federal court in the City and State of New York or in the Borough of Manhattan, the City of New York by the Issuer contained in the Indenture and the Securities, as applicable, is legal, valid and binding under the laws of the State of New York.

 

  (c)

The choice of the laws of the State of New York to govern the Indenture and the Securities is a valid choice under the laws of the State of New York.

 

6.

OTHER DOCUMENTS

Save for those listed in Schedule 1 (Documents and Enquiries) there is no other agreement, instrument, other arrangement or relationship between any of the parties to the Indenture which modifies, supersedes or conflicts with the Indenture.

 

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7.

TAX MATTERS

 

  (a)

The Issuer is resident only in the United Kingdom for United Kingdom tax purposes.

 

  (b)

A valid election has been made in respect of the Securities pursuant to section 475C of the Corporation Tax Act 2009 which has taken effect, and the Securities will constitute “hybrid capital instruments” within the meaning of that section.

 

  (c)

The Securities are not issued by the Issuer directly or indirectly in consequence of, or otherwise in connection with, any arrangements which have the main purpose, or a main purpose, of securing a tax advantage (within the meaning given in Section 1139 of the Corporation Tax Act 2010) for the Issuer or any other person.

 

  (d)

Any provision of the Securities for (i) the alteration of the amount of debt or (ii) for the creditor to receive anything other than interest or repayment of the debt is limited to where (1) there is a material risk of the debtor being unable to pay its debts as they fall due, (2) the value of the debtor’s liabilities exceeds its assets or (3) the provision is required to comply with regulatory or other legal requirements.

 

8.

SEARCHES AND ENQUIRIES

There has been no alteration in the status or condition of the Issuer as disclosed by the searches and enquiries referred to in Schedule 1 (Documents and Enquiries). However, it is our experience that the searches and enquiries referred to in paragraphs 2(a), and, 2(b) in Schedule 1 (Documents and Enquiries) may be unreliable. In particular, they are not conclusively capable of disclosing whether or not insolvency proceedings have been commenced in England, nor do they indicate whether or not insolvency proceedings have begun elsewhere. Further, the presentation of a petition for the winding-up of the Issuer may be subject to the temporary restrictions imposed by Schedule 10 of the Corporate Insolvency and Governance Act 2020 in response to the coronavirus pandemic.

 

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SCHEDULE 3

RESERVATIONS

 

1.

ENFORCEABILITY OF CLAIMS

In this Opinion “enforceable” means that an obligation is of a type which the English courts may enforce. It does not mean that those obligations will be enforced in all circumstances in accordance with the terms of the Securities and the Indenture. In particular:

 

(a)

the opinion set out in paragraph 2.5 (Subordination) of this Opinion is subject to any limitations arising from (i) insolvency, liquidation, bankruptcy, administration, moratorium, reorganisation and similar laws, (ii) any reconstruction, arrangement or compromise and (iii) any other laws relating to or affecting the rights of creditors or any class of creditors;

 

(b)

the power of an English court to order specific performance of an obligation or any other equitable remedy is discretionary and, accordingly, an English court might make an award of damages where specific performance of an obligation or any other equitable remedy is sought;

 

(c)

where any person is vested with a discretion or may determine a matter in its opinion, that person may be required to exercise its discretion in good faith, reasonably and for a proper purpose, and to form its opinion in good faith and on reasonable grounds;

 

(d)

enforcement may be limited by the provisions of English law applicable to an agreement held to have been frustrated by events happening after its execution;

 

(e)

claims may become barred under the Limitation Act 1980 or the Foreign Limitation Periods Act 1984 or may be or become subject to a defence of set-off or counterclaim;

 

(f)

a party to a contract may be able to avoid its obligations under that contract (and may have other remedies) where it has been induced to enter into that contract by a misrepresentation or where there has been any bribe or other corrupt conduct and the English courts will generally not enforce an obligation if there has been fraud; and

 

(g)

any provision to the effect that any calculation, determination or certification is to be conclusive and binding may not be effective if such calculation, determination or certification is fraudulent, arbitrary or manifestly incorrect and an English court may regard any certification, determination or calculation as no more than prima facie evidence.

 

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2.

GOVERNING LAW

 

(a)

The English courts may refuse to apply a provision of the laws of the State of New York if application of that provision of the laws of the State of New York would be manifestly incompatible with English public policy.

 

(b)

The parties’ choice of the laws of the State of New York as the governing law of the Indenture and the Securities does not restrict the English courts from applying the overriding mandatory provisions of English law.

 

(c)

We express no opinion on the binding effect of the choice of law provisions in the Indenture and the Securities insofar as they relate to non-contractual obligations arising out of or in connection with the Indenture and the Securities.

 

3.

JURISDICTION

If any proceedings are brought in the English courts by the Issuer, in some circumstances, those courts may, and in certain circumstances they must, accept jurisdiction, notwithstanding the provisions of the Indenture and the Securities providing that any state or federal court in the City and State of New York or in the Borough of Manhattan, the City of New York, as applicable, has jurisdiction in relation thereto.

 

4.

ENFORCEMENT OF FOREIGN JUDGMENT

 

(a)

There are no reciprocal arrangements in force between the United States of America and the United Kingdom for the recognition or enforcement of judgments. Accordingly, a judgment by any state or federal court in the City and State of New York is not enforceable directly in England but may be recognised and enforced by the English courts according to common law principles. A judgment by those courts will not be enforced by the English courts if:

 

  (i)

the proceedings in which the judgment was given were opposed to natural justice;

 

  (ii)

the judgment was obtained by fraud;

 

  (iii)

the enforcement of the judgment would be contrary to English public policy;

 

  (iv)

an order has been made and remains effective under section 9 of the Foreign Judgments (Reciprocal Enforcement) Act 1933 applying that section to judgments of those courts;

 

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  (v)

before the date on which those courts gave judgment, the matter in dispute had been the subject of a final judgment of another court having jurisdiction whose judgment is enforceable in England;

 

  (vi)

the judgment is for multiple damages within the meaning of section 5(3) of the Protection of Trading Interests Act 1980;

 

  (vii)

the judgment is based on a rule of law specified by the Secretary of State under section 5(4) of the Protection of Trading Interests Act 1980 as concerned with the prohibition of restrictive trade practices;

 

  (viii)

the judgment is on a claim for contribution in respect of damages awarded by a judgment falling within (vi) or (vii) above;

 

  (ix)

the judgment is based on foreign measures which the Secretary of State specifies as regulating and controlling international trade and which, in so far as they apply to persons carrying on business in the United Kingdom, are damaging or threaten to damage the trading interests of the United Kingdom; or

 

  (x)

the bringing of proceedings in those courts was contrary to an agreement under which the dispute in question was to be settled otherwise than by proceedings in those courts.

 

(b)

If the English court gives judgment for the sum payable under a judgment of the state or federal courts in the City and State of New York, the English judgment would be enforceable by the methods generally available for the enforcement of English judgments. These give the court a discretion whether to allow enforcement by any particular method, taking into account all relevant circumstances. In addition, it may not be possible to obtain an English judgment or the court may not exercise its discretion to enforce any English judgment if the judgment debtor is subject to any insolvency or similar proceedings, if there is a delay, if an appeal is pending or anticipated against the English judgment in England or against the foreign judgment in the state or federal courts in the City and State of New York or if the judgment debtor has any set-off or counterclaim against the judgment creditor.

 

5.

CHOICE OF LAW

If any obligation arising under the Indenture or the Securities is or is to be performed in a jurisdiction outside England, it may not be enforceable in the English courts to the extent that performance would be illegal or contrary to public policy under the laws of the other jurisdiction. Further an English court may give effect to any overriding mandatory provisions of the law of the place of performance insofar as they render the performance unlawful or otherwise take into account the law of the place of performance in relation to the manner of performance and the steps to be taken in the event of defective performance.

 

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6.

DEFAULT INTEREST AND INDEMNITIES BETWEEN PARTIES

 

(a)

Any provision of the Securities or the Indenture requiring any person to pay amounts imposed in circumstances of breach or default may be held to be unenforceable on the grounds that it is a penalty. If the Indenture or the Securities do not provide a contractual remedy for late payment of any amount payable thereunder that is a substantial remedy within the meaning of the Late Payment of Commercial Debts (Interest) Act 1998 as amended the person entitled to that amount may have a right to statutory interest (and to payment of certain fixed sums) in respect of that late payment at the rate (and in the amount) from time to time prescribed pursuant to that Act. Any term of the Indenture or the Securities may be void to the extent that it excludes or varies that right to statutory interest, or purports to confer a contractual right to interest that is not a substantial remedy for late payment of that amount, within the meaning of that Act. We express no opinion as to whether any such provisions in the Indenture or the Securities do in fact constitute a “substantial remedy” in compliance with the conditions set out in Section 9 of such Act.

 

(b)

There is some possibility that an English court would hold that a judgment on the Indenture or the Securities, whether given in an English court or elsewhere, would supersede the Indenture or the Securities, so that any obligations relating to the payment of interest after the judgment or any currency indemnities would not be held to survive the judgment.

 

(c)

Any undertaking or indemnity in relation to stamp duties may be void under the provisions of Section 117 of the Stamp Act 1891.

 

(d)

An English court may in its discretion decline to give effect to any provision for the payment of legal costs incurred by a litigant.

 

7.

BANKING ACT 2009

The opinions set out in this letter are subject to any limitations arising from any measures taken pursuant to the stabilisation powers under the special resolution regime under the Banking Act 2009, as amended.

 

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8.

OTHER QUALIFICATIONS

 

(a)

The effectiveness of any provision of any agreement or instrument which allows an invalid provision to be severed in order to save the remainder of its provisions will be determined by the English courts in their discretion.

 

(b)

In some circumstances an English court may, and in certain circumstances it must, terminate or suspend proceedings commenced before it and an English court may be prevented from adjudicating upon a particular claim or issue if this would be inconsistent with the judgment of a foreign court binding upon the parties, being a judgment entitled to recognition in England and Wales.

 

(c)

Any provision in the Indenture or the Securities which confers, purports to confer or waives a right of set-off or similar right may be ineffective against a liquidator or creditor.

 

(d)

This Opinion is subject to the effects of any United Nations, European Union or United Kingdom sanctions or other similar measures implemented or effective in the United Kingdom with respect to any party to the Indenture or to any transfer of, or payment in respect of, a Security which is, or is controlled by or otherwise connected with, a person resident in, incorporated in or constituted under the laws of, or carrying on business in a country to which any such sanctions or other similar measures apply, or is otherwise the target of any such sanctions or other similar measures.

 

9.

TAXATION STATEMENTS

The confirmation provided in paragraph 2.6 (Taxation statements in the Prospectus Supplement) is subject to the following specific reservations:

 

(a)

We give no confirmation as to any section of the Prospectus other than the confirmation set out in paragraph 2.6 (Taxation statements in the Prospectus Supplement); and

 

(b)

The confirmation is given solely on the basis set out in paragraph 2.6 (Taxation statements in the Prospectus Supplement) and in particular takes into account the disclaimers and qualifications which are applied to those statements in the Prospectus Supplement and is limited to matters governed by English law, the tax law of the United Kingdom and HMRC’s published practice in force or applied in the United Kingdom as at today’s date.

 

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