Q. What type of shareholder loan is available to me through Barclays Bank PLC?

A. A Stock purchase loan (also known as an Annual Repayment loan); this is a loan taken out at the time of purchase of shares in FIL for all or part of the purchase price of those shares. Annual repayments are made in line with vesting of the shares in your name (i.e. 20% of the loan amount must be repaid per annum).

Q. How much can I borrow?

A. For Regulated loans the minimum loan available is £10,000 subject to approval.
For Unregulated loans the minimum loan available is the USD equivalent of £65,000 subject to approval.

Q. What is the difference between a Regulated and Unregulated loan?

A. Regulated loans

The Consumer Credit Act 1974 (“the Act”) applies to all credit arrangements where, the borrower is an individual, the credit is not secured by a first legal charge over land, and the lender and/or the borrower is resident in England or Wales. The Act provides protections for the borrower in terms of marketing, sales process and documentation.

Unregulated loans

The borrower can apply for an exemption, which, if applicable, would take the credit arrangement out of scope of “the Act”. Please take your own advice as to whether this action would be suitable for you.

Q. What are the eligibility criteria for an Unregulated loan?

A. One of these exemptions is the High Net Worth Debtor exemption. A borrower qualifies for this exemption if, the borrower has earned at least £150,000 on a net basis in the past financial year or has owned at least £500,000 of net assets (excluding primary residence) during the entire past financial year. If the borrower qualifies for this exemption and declares this in writing, then the loan facility will not be regulated by the Act.

Q. How can the borrower apply for this High Net Worth exemption?

A. If you decide that applying for High Net Worth exemption would be suitable for you, you should obtain a “Statement of High Net Worth” certified by your accountant (your accountant will be able to provide a copy of this document). Once certified please send this through to Barclays with your completed loan application paperwork.

Please note that the bank is legally unable to advise you whether or not you should apply for High Net Worth exemption. You must therefore take your own advice as to whether applying would be suitable for you.

Q. In what currency is the loan available?

A. Regulated loans will be provided in GBP only.
Unregulated loans will be provided in USD only.

Q. Do I need to open a bank account with Barclays?

A. Yes. You will need to open a current account with Barclays as part of the loan application process. This current account will act as the servicing account for your loan and will be the account that principal and interest payments are debited from.

For Regulated GBP loans you will need to open a GBP current account. As your loan will be secured against a USD denominated asset (i.e. FIL shares) you should bear in mind the exchange rate risk of a loan taken in GBP.

For Unregulated USD loans you will need to open a USD current account.

You may wish to also open an additional bank account in a different currency if that is more convenient for your personal banking requirements. Additional bank accounts can be opened at the time of the loan application or at a later date by contacting the Bank.

Q. What interest rate would I have to pay?

A. For Regulated loans the interest rate charged will be Barclays GBP Base rate plus 2.5%.
For Unregulated loans the interest rate will be 1 month Barclays USD Libor plus 2.5%.

The 1 month LIBOR USD loans will be fixed on a monthly basis at which time the chargeable rates may vary depending on fluctuations in the respective 1 month Barclays USD LIBOR rate. The rates charged on loans linked to LIBOR will be advised to you in writing on a monthly basis.

The Sterling Loan interest rates are not fixed on a monthly basis and the interest rate will typically change to mirror any fluctuations in the Bank of England Base Rate. Any changes in the Bank of England Base Rate will be advised in the British National Press. Any changes to the Barclays GBP Base Rate will be displayed in our branches and on our website.

Q How will interest payments be calculated?

A. Regulated loans: the interest will accrue daily and be charged to the servicing account on the 15th February each year or next working day if the 15th falls on a weekend.

Unregulated loans: the interest will accrue daily and be applied to the loan each month and can either be paid monthly from the servicing account or charged annually to the servicing account on the 15th February each year or next working day if the 15th falls on a weekend. Please note that if you decide to pay the interest annually then you will incur debit interest.

Q. How will interest payments be collected?

A. Interest payments will be collected from the employees servicing account that will be opened in conjunction with the loan.

Regulated loans - interest payments must be repaid to the servicing account on an annual basis along with your 20% annual repayment in February each year.

Unregulated loans – interest payments can either be repaid to the servicing account on an annual basis along with your 20% annual repayment in February each year or if you prefer settled monthly

Q. Are there any tax implications of taking a loan?

A. You are strongly advised to check your funding and remittance arrangements with your own tax adviser as failure to do so could undermine any tax planning arrangements you have put in place.

Q. What is the term of the loan?

A. Up to 5 years and 5 months, with annual bullet repayments of capital, in line with the normal share vesting profile.

Q. How would the loan be repaid?

A. Annual instalments of 20% of the amount you have borrowed per annum, repayable each year, over the approx 5 year term.

You will be asked to repay the loan by five instalments each equivalent to 20% of the initial amount of the loan and to repay the interest accrued for the respective instalment period (unless interest is settled on a monthly basis) for the year to the relevant mid February.

Annual repayments are currently due each February during the term of the loan. February has been set as the annual repayment month so that payments are due after the FIL December bonus payments, and the holiday period.

For loans taken out between 1st October and 31st December in any year the first annual repayment will not be due in the immediately following February, but in the February after that. For example if you draw down the loan in December 2012 then your first repayment would be due in February 2014.

You can repay the entire loan or part of the entire loan early at any time:

• For Regulated loans – Interest is calculated on a daily basis. Please contact the Bank and they will be able to provide a settlement quotation.

• For Unregulated loans – Interest is calculated on the balance outstanding on or around the 15th of each month. Therefore if you do wish to repay the loan early, you should give at least 5 working days notice (prior to the date of the loan being rolled) to prevent the full outstanding amount rolling into the next month. You will need to take into account exchange rate fluctuations also when making payments. Repayments between loan rolling dates may incur a breakage fee, which will be advised at the time of your repayment request to the Bank.

Additionally, please note that a charge may apply to any inward payment made into your servicing account. If you want to repay your loan early please email xrafilenquiries@barclayscapital.com

Barclays will then advise the current charge details and what is required to make such repayments.

Q. Can a loan be secured by my FIL shares if shares are held in my spouse’s name?

A. Yes. Your spouse will need to complete and sign the Charge over Shares and the shareholder acknowledgment document as part of the loan application process. Additionally your spouse will be required to obtain independent legal advice. Please email xrafilenquiries@barclayscapital.com for details and for the relevant documents.

Q. Can a loan be secured by FIL shares if shares are held in my child's name?

A. This depends on the age of the child and local legal requirements.

If this is possible, and this will be for you to evidence to Barclays, your child will need to complete and sign the Charge over Shares and the shareholder acknowledgment document, subject to the local laws governing the legal ability for your child to execute this document, as part of the loan application process. Additionally your child will be required to obtain independent legal advice – the bank will provide the required documentation to evidence this. Please email xrafilenquiries@barclayscapital.com for details and for the relevant documents.

Q Can a loan be secured by FIL shares if shares are held in a UK Trust?

A. This depends on the law of the local jurisdiction and whether this is legally possible.

If this is possible, and this will be for you to evidence to Barclays, then the Trustees will need to complete and sign the Charge over Shares and the shareholder acknowledgment document as part of the loan application process. Additionally the trustee will be required to obtain independent legal advice – the bank will provide the required documentation to evidence this. Please email xrafilenquiries@barclayscapital.com for details and for the relevant documents.

Q Can a loan be secured by FIL shares if shares are held in an offshore (i.e. non UK) Trust?

A. This depends on the law of the local jurisdiction and whether this is legally possible.

If this is possible, and this will be for you to evidence to Barclays, the Trustees will need to complete and sign the Charge over Shares and the shareholder acknowledgment document as part of the loan application process. Additionally the trustee will be required to obtain independent legal advice – the bank will provide the required documentation to evidence this. Please email xrafilenquiries@barclayscapital.com for details and for the relevant documents.

Q. If I have an existing loan with Barclays Bank PLC can I transfer stock?

A. Yes – to a permitted assignee (please refer to the FIL Bye-Laws for details). The party to which shares are being transferred will need to complete and sign a Shareholder Acknowledgment document and a Charge over Shares document. Prior to actioning the transfer with FIL you will also need to seek and receive consent from the Bank to transfer the shares under the Charge of Shares document you entered in to originally. Please email xrafilenquiries@barclayscapital.com for details and for the relevant consent letter and documents.

Q. What happens to a loan when I leave employment?

A. Upon leaving, the Company will automatically repurchase your shares in accordance with the FIL bye-laws. By signing the loan agreement included in the application pack you will be consenting to full repayment of the loan (direct from FIL to Barclays Bank PLC) before any residual proceeds of sale are forwarded to you. (FIL will do this, whatever your personal tax status and so for non-UK domiciled shareholders share proceeds will be remitted to the UK – again shareholders are advised to speak to their own tax advisor to check their tax planning ahead of any payments being made to them or liabilities settled on their behalf).

Q. What happens if I should die?

A. FIL has the right to repurchase your shares and will repay the Bank from the repurchase proceeds prior to any residual proceeds of sale are settled with your Estate.

Q. What if the proceeds of the FIL shares are not sufficient to cover the loan?

A. In the event that there is a shortfall in funds, you will be responsible for the liability. FIL does not guarantee any shortfall. Please note that your share proceeds will be denominated in USD and therefore if you have a GBP loan you will also be exposed to any fluctuations in the currency exchange rate. FIL does not guarantee any shortfall arising from fluctuations in the exchange rate resulting in the USD share proceeds being insufficient to settle the GBP loan amount.

Q. Can I use my unvested shares as security for a loan?

A. Yes, unvested shares are automatically pledged to the Bank when you take an annual repayment loan.

Q. What happens if I default on the loan?

A. The Bank has the right to sell all or some of your shares back to FIL in order to pay off the loan. The remaining balance of the proceeds of realised shares would be paid to you. For tax purposes it would be as if you had redeemed the shares yourself, received the entire proceeds and therefore will be liable for any taxes due on the full redemption as a result of this transaction.

Q. What about dividends?

A. If you default on a loan, FIL will continue to pay dividends to you albeit the Bank legally reserves the right to receive dividends, which would then be offset against monthly interest payments. Pledging shares as security for a loan does not have an impact on your rights to a dividend.

Q. How will any recapitalisation of Common Shares affect my loan?

A. Any additional shares (common and/or participating) created by a recap will be automatically added to the shares pledged to the bank in respect of a Share Purchase loan.

Q. What documentation do I need to complete to take out a loan?

A. Your loan application details will be taken via the dedicated telephone number contained on the Barclays website (details of which will be provided by Jo Hynes, Fidelity), as each loan will be assessed on each individual’s circumstances we may need to contact you for further information.

Please email xrafilenquiries@barclayscapital.com for details and for the relevant documents.

Q. What do I do if I wish to change my address with the Bank?

A. Please email xrafilenquiries@barclayscapital.com for details and for the relevant documents.