None. Because no original issuance ordinary shares are to be registered hereunder, no opinion of counsel regarding the legality of the ordinary shares being
registered hereunder is required.
Item 6. Indemnification of Directors and Officers
The relevant provision of the Articles of Association of Barclays PLC in respect of indemnification of directors and officers is Article 147.
Article 147 of the articles of association of Barclays provides:
(147.1) To the extent permitted by the Act and without prejudice to any indemnity to which he may otherwise be entitled, every person who is
or was a director or other officer of the company (other than any person (whether or not an officer of the company) engaged by the company as auditor) shall be and shall be kept indemnified out of the
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assets of the company against all costs, charges, losses and liabilities incurred by him (whether in connection with any negligence, default, breach of duty or breach of trust by him or otherwise
as a director or such other officer of the company) in relation to the company or its affairs provided that such indemnity shall not apply in respect of any liability incurred by him:
(147.1.1) to the company or to any associated company; or
(147.1.2) to pay a fine imposed in criminal proceedings; or
(147.1.3) to pay a sum payable to a regulatory authority by way of a penalty in respect of
non-compliance
with any requirement of a regulatory nature (howsoever arising); or
(147.1.4) in
defending any criminal proceedings in which he or she is convicted; or
(147.1.5) in defending any civil proceedings brought by the
company, or an associated company, in which judgment is given against him; or
(147.1.6) in connection with any application under any of
the following provisions in which the court refuses to grant him relief, namely:
(a) section 661(3) or (4) of the Act (acquisition
of shares by innocent nominee); or
(b) section 1157 of the Act (general power to grant relief in case of honest and reasonable conduct).
(147.2) In article 147.1.4, 147.1.5 or 147.1.6 the reference to a conviction, judgment or refusal of relief is a reference to one that
has become final. A conviction, judgment or refusal of relief becomes final:
(147.2.1) if not appealed against, at the end of the period
for bringing an appeal; or
(147.2.2) if appealed against, at the time when the appeal (or any further appeal) is disposed of.
An appeal is disposed of:
(147.2.3) if it is determined and the period for bringing any further appeal has ended; or
(147.2.4) if it is abandoned or otherwise ceases to have effect.
(147.3) To the extent permitted by the Act and without prejudice to any indemnity to which he may otherwise be entitled, every person who is
or was a director of the company acting in its capacity as a trustee of an occupational pension scheme shall be and shall be kept indemnified out of the assets of the company against all costs, charges, losses and liabilities incurred by him in
connection with the companys activities as trustee of the scheme provided that such indemnity shall not apply in respect of any liability incurred by him:
(147.3.1) to pay a fine imposed in criminal proceedings; or
(147.3.2) to pay a sum payable to a regulatory authority by way of a penalty in respect of
non-compliance
with any requirement of a regulatory nature (howsoever arising); or
(147.3.3) in
defending criminal proceedings in which he or she is convicted.
For the purposes of this article, a reference to a conviction is to the
final decision in the proceedings. The provisions of article 147.2 shall apply in determining when a conviction becomes final.
(147.4)
Without prejudice to article 147.1 or any indemnity to which a director may otherwise be entitled, and to the extent permitted by the Act and otherwise upon such terms and subject to such conditions as the board may in its absolute discretion think
fit, the board shall have the power to make arrangements to provide a director with
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funds to meet expenditure incurred or to be incurred by him in defending any criminal or civil proceedings or in connection with an application under section 661(3) or (4) of the Act
(acquisition of shares by innocent nominee) or section 1157 of the Act (general power to grant relief in case of honest and reasonable conduct) or in defending himself in an investigation by a regulatory authority or against action proposed to be
taken by a regulatory authority or to enable a director to avoid incurring any such expenditure.
(147.5) Where at any meeting of the
board or a committee of the board any arrangement falling within article 147.4 is to be considered, a director shall be entitled to vote and be counted in the quorum at such meeting unless the terms of such arrangement confers upon such director a
benefit not generally available to any other director; in that event, the interest of such director in such arrangement shall be deemed to be a material interest for the purposes of article 106 and he shall not be so entitled to vote or be counted
in the quorum.
(147.6) To the extent permitted by the Act, the board may exercise all the powers of the company to purchase and maintain
insurance for the benefit of a person who is or was:
(147.6.1) a director, alternate director or secretary of the company or of a company
which is or was a subsidiary undertaking of the company or in which the company has or had an interest (whether direct or indirect); or
(147.6.2) trustee of a retirement benefits scheme or other trust in which a person referred to in article 147.6.1 above is or has been
interested,
indemnifying him and keeping him indemnified against liability for negligence, default, breach of duty or breach of trust or
other liability which may lawfully be insured against by the company.
Barclays is subject to the provisions of the U.K. Companies Act 2006 (the
2006 Act). The relevant provisions of the 2006 Act in respect of indemnification of directors and officers are sections 205, 206, 232 to 238 inclusive and 1157.
Section 205 (Exception for expenditure on defending proceedings etc.) of the 2006 Act provides:
(1) Approval is not required under section 197, 198, 200 or 201 (requirement of members approval for loans etc)
for anything done by a company
(a) to provide a director of the company or of its holding company with
funds to meet expenditure incurred or to be incurred by him (i) in defending any criminal or civil proceedings in connection with any alleged negligence, default, breach of duty or breach of trust by him in relation to the company or an
associated company, or (ii) in connection with an application for relief (see subsection (5)), or
(b) to
enable any such director to avoid incurring such expenditure,
if it is done on the following terms.
(2) The terms are
(a) that the loan is to be repaid, or (as the case may be) any liability of the company incurred under any transaction
connected with the thing done is to be discharged, in the event of (i) the director being convicted in the proceedings, (ii) judgment being given against him in the proceedings, or (iii) the court refusing to grant him relief on the
application; and
(b) that it is to be so repaid or discharged not later than (i) the date when the
conviction becomes final, (ii) the date when the judgment becomes final, or (iii) the date when the refusal of relief becomes final.
(3) For this purpose a conviction, judgment or refusal of relief becomes final
(a) if not appealed against, at the end of the period for bringing an appeal;
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(b) if appealed against, when the appeal (or any further appeal) is disposed
of.
(4) An appeal is disposed of
(a) if it is determined and the period for bringing any further appeal has ended, or
(b) if it is abandoned or otherwise ceases to have effect.
(5) The reference in subsection (1)(a)(ii) to an application for relief is to an application for relief under
section 661(3) or (4) (power of court to grant relief in case of acquisition of shares by innocent nominee), or section 1157 (general power of court to grant relief in case of honest and reasonable conduct).
Section 206 (Exception for expenditure in connection with regulatory action or investigation) of the 2006 Act provides:
Approval is not required under section 197, 198, 200 or 201 (requirement of members approval for loans etc) for
anything done by a company
(a) to provide a director of the company or of its holding company with funds
to meet expenditure incurred or to be incurred by him in defending himself (i) in an investigation by a regulatory authority, or (ii) against action proposed to be taken by a regulatory authority, in connection with any alleged negligence,
default, breach of duty or breach of trust by him in relation to the company or an associated company, or
(b) to
enable any such director to avoid incurring such expenditure.
Section 232 (Provisions protecting directors from liability) of the
2006 Act provides:
(1) Any provision that purports to exempt a director of a company (to any extent) from any
liability that would otherwise attach to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company is void.
(2) Any provision by which a company directly or indirectly provides an indemnity (to any extent) for a director of the
company, or of an associated company, against any liability attaching to him in connection with any negligence, default, breach of duty or breach of trust in relation to the company of which he is a director is void, except as permitted
by
(a) section 233 (provision of insurance),
(b) section 234 (qualifying third party indemnity provision), or
(c) section 235 (qualifying pension scheme indemnity provision).
(3) This section applies to any provision, whether contained in a companys articles or in any contract with the
company or otherwise.
(4) Nothing in this section prevents a companys articles from making such provision as
has previously been lawful for dealing with conflicts of interest.
Section 233 (Provision of insurance) of the 2006 Act provides:
Section 232(2) (voidness of provisions for indemnifying directors) does not prevent a company from purchasing and
maintaining for a director of the company, or of an associated company, insurance against any such liability as is mentioned in that subsection.
Section 234 (Qualifying third party indemnity provision) of the 2006 Act provides:
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(1) Section 232(2) (voidness of provisions for indemnifying directors)
does not apply to qualifying third party indemnity provision.
(2) Third party indemnity provision means provision for
indemnity against liability incurred by the director to a person other than the company or an associated company.
Such
provision is qualifying third party indemnity provision if the following requirements are met.
(3) The provision must
not provide any indemnity against
(a) any liability of the director to pay (i) a fine imposed in
criminal proceedings, or (ii) a sum payable to a regulatory authority by way of a penalty in respect of
non-compliance
with any requirement of a regulatory nature (however arising); or
(b) any liability incurred by the director (i) in defending criminal proceedings in which he is convicted, or
(ii) in defending civil proceedings brought by the company, or an associated company, in which judgment is given against him, or (iii) in connection with an application for relief (see subsection (6)) in which the court refuses to grant
him relief.
(4) The references in subsection (3)(b) to a conviction, judgment or refusal of relief are to the final
decision in the proceedings.
(5) For this purpose
(a) a conviction, judgment or refusal of relief becomes final (i) if not appealed against, at the end of the period
for bringing an appeal, or (ii) if appealed against, at the time when the appeal (or any further appeal) is disposed of; and
(b) an appeal is disposed of (i) if it is determined and the period for bringing any further appeal has ended, or
(ii) if it is abandoned or otherwise ceases to have effect.
(6) The reference in subsection (3)(b)(iii) to an
application for relief is to an application for relief under section 661(3) or (4) (power of court to grant relief in case of acquisition of shares by innocent nominee), or section 1157 (general power of court to grant relief in case of
honest and reasonable conduct).
Section 235 (Qualifying pension scheme indemnity provision) of the 2006 Act provides:
(1) Section 232(2) (voidness of provisions for indemnifying directors) does not apply to qualifying pension scheme
indemnity provision.
(2) Pension scheme indemnity provision means provision indemnifying a director of a company that
is a trustee of an occupational pension scheme against liability incurred in connection with the companys activities as trustee of the scheme.
Such provision is qualifying pension scheme indemnity provision if the following requirements are met.
(3) The provision must not provide any indemnity against
(a) any liability of the director to pay (i) a fine imposed in criminal proceedings, or (ii) a sum payable to a
regulatory authority by way of a penalty in respect of
non-compliance
with any requirement of a regulatory nature (however arising); or
(b) any liability incurred by the director in defending criminal proceedings in which he is convicted.
(4) The reference in subsection (3)(b) to a conviction is to the final decision in the proceedings.
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(5) For this purpose
(a) a conviction becomes final (i) if not appealed against, at the end of the period for bringing an appeal, or
(ii) if appealed against, at the time when the appeal (or any further appeal) is disposed of; and
(b) an
appeal is disposed of (i) if it is determined and the period for bringing any further appeal has ended, or (ii) if it is abandoned or otherwise ceases to have effect.
(6) In this section occupational pension scheme means an occupational pension scheme as defined in
section 150(5) of the Finance Act 2004 (c. 12) that is established under a trust.
Section 236 (Qualifying indemnity
provision to be disclosed in directors report) of the 2006 Act provides:
(1) This section requires disclosure in
the directors report of
(a) qualifying third party indemnity provision, and
(b) qualifying pension scheme indemnity provision.
Such provision is referred to in this section as qualifying indemnity provision.
(2) If when a directors report is approved any qualifying indemnity provision (whether made by the company or
otherwise) is in force for the benefit of one or more directors of the company, the report must state that such provision is in force.
(3) If at any time during the financial year to which a directors report relates any such provision was in force for
the benefit of one or more persons who were then directors of the company, the report must state that such provision was in force.
(4) If when a directors report is approved qualifying indemnity provision made by the company is in force for the
benefit of one or more directors of an associated company, the report must state that such provision is in force.
(5) If at any time during the financial year to which a directors report relates any such provision was in force for
the benefit of one or more persons who were then directors of an associated company, the report must state that such provision was in force.
Section 237 (Copy of qualifying indemnity provision to be available for inspection) of the 2006 Act provides:
(1) This section has effect where qualifying indemnity provision is made for a director of a company, and
applies
(a) to the company of which he is a director (whether the provision is made by that company or an
associated company), and
(b) where the provision is made by an associated company, to that company.
(2) That company or, as the case may be, each of them must keep available for inspection
(a) a copy of the qualifying indemnity provision, or
(b) if the provision is not in writing, a written memorandum setting out its terms.
(3) The copy or memorandum must be kept available for inspection at
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(a) the companys registered office, or
(b) a place specified in regulations under section 1136.
(4) The copy or memorandum must be retained by the company for at least one year from the date of termination or expiry of
the provision and must be kept available for inspection during that time.
(5) The company must give notice to the
registrar
(a) of the place at which the copy or memorandum is kept available for inspection, and
(b) of any change in that place,
unless it has at all times been kept at the companys registered office.
(6) If default is made in complying with subsection (2), (3) or (4), or default is made for 14 days in complying
with subsection (5), an offence is committed by every officer of the company who is in default.
(7) A person guilty
of an offence under this section is liable on summary conviction to a fine not exceeding level 3 on the standard scale and, for continued contravention, a daily default fine not exceeding
one-tenth
of
level 3 on the standard scale.
(8) The provisions of this section apply to a variation of a qualifying indemnity
provision as they apply to the original provision.
(9) In this section qualifying indemnity provision
means
(a) qualifying third party indemnity provision, and
(b) qualifying pension scheme indemnity provision.
Section 238 (Right of member to inspect and request copy) of the 2006 Act provides:
(1) Every copy or memorandum required to be kept by a company under section 237 must be open to inspection by any member
of the company without charge.
(2) Any member of the company is entitled, on request and on payment of such fee as
may be prescribed, to be provided with a copy of any such copy or memorandum.
The copy must be provided within seven days
after the request is received by the company.
(3) If an inspection required under subsection (1) is refused, or
default is made in complying with subsection (2), an offence is committed by every officer of the company who is in default.
(4) A person guilty of an offence under this section is liable on summary conviction to a fine not exceeding level 3
on the standard scale and, for continued contravention, a daily default fine not exceeding
one-tenth
of level 3 on the standard scale.
(5) In the case of any such refusal or default the court may by order compel an immediate inspection or, as the case may
be, direct that the copy required be sent to the person requiring it.
Section 1157 (Power of court to grant relief in
certain cases) of the 2006 Act provides:
(1) If in proceedings for negligence, default, breach of duty or breach
of trust against
(a) an officer of a company, or
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(b) a person employed by a company as auditor (whether he is or is not an
officer of the company),
it appears to the court hearing the case that the officer or person is or may be liable but that
he acted honestly and reasonably, and that having regard to all the circumstances of the case (including those connected with his appointment) he ought fairly to be excused, the court may relieve him, either wholly or in part, from his liability on
such terms as it thinks fit.
(2) If any such officer or person has reason to apprehend that a claim will or might be
made against him in respect of negligence, default, breach of duty or breach of trust
(a) he may apply to
the court for relief, and
(b) the court has the same power to relieve him as it would have had if it had been a
court before which proceedings against him for negligence, default, breach of duty or breach of trust had been brought.
(3) Where a case to which subsection (1) applies is being tried by a judge with a jury, the judge, after hearing the
evidence, may, if he is satisfied that the defendant (in Scotland, the defender) ought in pursuance of that subsection to be relieved either in whole or in part from the liability sought to be enforced against him, withdraw the case from the jury
and forthwith direct judgment to be entered for the defendant (in Scotland, grant decree of absolvitor) on such terms as to costs (in Scotland, expenses) or otherwise as the judge may think proper.
In addition, Barclays PLC has procured directors and officers liability insurance, for the benefit of its directors and officers against suit by
third parties. The terms and extent of such coverage are reviewed annually.