Guide to the Royal Mail SIP 2015 Free Shares Offer

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Contents

What is the Free Shares Offer? 3

SIP 2015 – who is eligible? 4

SIP 2015 Free Shares Offer 5

Key features and facts 6

Managing your shares 7

Selling shares from the SIP 8

What happens if I leave Royal Mail? 9

Frequently asked questions 10

Jargon buster 14

Contacts 16

Terms and conditions 18

Terms in bold are defined in the jargon buster.

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When Royal Mail was privatised in October 2013, 10% of the shares were set aside as Free Shares for employees who were eligible at the time. This amounted to just over 100 million shares. These shares were issued as Share Incentive Plan (SIP) 2013 and SIP 2014 Free Shares.

This was the largest free stake of any major UK privatisation. More employees could take part than in any other UK privatisation for almost 30 years. The overwhelming majority of employees who were eligible at the time (more than 99%) decided to take part.

SIP 2013 and SIP 2014 Free SharesEach full-time employee who was eligible at the time was given 729 Free Shares:

Part-time employees who were eligible at the time were given a proportionate (pro-rata) number of Free Shares based on their paid hours, between 10 July 2013 and 13 October 2013.

SIP 2015 Free Shares Since these shares were awarded, some employees who received them have left Royal Mail. Under the scheme rules, some have had to give up their shares. This means there are surplus shares in the SIP. These can now be distributed to eligible employees.

As well as the surplus shares, the Government has also given an extra 1% of company shares, equal to 10 million shares, to eligible employees.

The surplus shares and the extra 1% of company shares make up the SIP 2015 Free Shares Offer.

What is the Free Shares Offer?

613Free Shares awarded on 15 October 2013

116Free Shares awarded

on 9 April 2014

The Government gift of 1%, equal to 10

million shares, and the surplus shares make up the SIP 2015 Free

Shares Offer.

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SIP 2015 – who is eligible?

Most of Royal Mail Group Limited’s employees in the UK, including employees working in Parcelforce Worldwide, are eligible to be given SIP 2015 Free Shares if they meet certain conditions (eligibility criteria). Employees of GLS and employees of other subsidiaries and joint ventures are not eligible for SIP 2015 Free Shares.

✔ Full-time and part-time employees in the UK who have been continuously employed by Royal Mail Group Limited from 1 June 2015 and are still employed by Royal Mail Group Limited when the SIP 2015 Free Shares are given to eligible employees. This includes Royal Mail employees who are on permanent, temporary or fixed-term contracts, and those who are under 18 years of age.

✔ All eligible full-time employees will be given around 90 SIP 2015 Free Shares. They will receive the same number of shares, regardless of their grade.

✔ Eligible part-time employees will be given a proportionate (pro-rata) number of SIP 2015 Free Shares (up to the maximum number of shares given to a full-time eligible employee). The number of SIP 2015 Free Shares eligible part-time employees are given will be based on their paid hours between 1 June 2015 and 30 August 2015 if they are weekly-paid; and between 1 June 2015 and 31 August 2015 if they are monthly-paid. If this number is less than 10, their SIP 2015 Free Shares award will be rounded up to 10 Free Shares.

✔ Part-time eligible employees on paid or unpaid leave (including those on maternity or paternity leave) during all or part of the period between 1 June 2015 and 30/31 August 2015 will have their SIP 2015 Free Shares award based on their standard contractual hours. Full-time eligible employees on paid or unpaid leave (including those on maternity or paternity leave) during all or part of that period will be treated as eligible full-time employees for the whole period.

Employees who leave Royal Mail for any reason after 1 June 2015 but before the Free Shares are given to eligible employees will not be given any SIP 2015 Free Shares.

The following employees are eligible for SIP 2015 Free Shares.

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If you want to be given your SIP 2015 Free Shares, you do not need to do anything.

SIP 2015 Free Shares Offer

How will I benefit from the SIP 2015 Free Shares Offer?

✔ You will be given shares in the company for free.

✔ You may benefit further if the share price rises during the time you are a shareholder. However, it is important to remember that the value of shares can go down as well as up.

✔ You will be eligible to receive any dividends (a share of a company’s profits that it pays to shareholders).

✔ You will be able to vote on certain matters, by directing the SIP Trustee on how to vote, on your behalf, on issues at annual general meetings (AGMs) and other shareholder meetings.

✔ If you stay an employee and keep your Free Shares in the SIP for five years, you will be able to sell them free from income tax and National Insurance.

How do I apply?If you are eligible and want to receive your SIP 2015 Free Shares, you do not need to do anything. You will automatically be given your Free Shares through the SIP. The share scheme administrator, Equiniti, will send you a formal allocation notice shortly after the shares are given to you. This will show you the number of Free Shares you were given and their value at the time of award.

How do I opt out? If you do not want to receive your SIP 2015 Free Shares, you can opt out by filling in the personalised opt-out form in this pack and sending it to Equiniti Limited, SIP Operations Dept, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA. Equiniti must receive your form by 5pm on Thursday 24 September 2015. You send the opt-out form at your own risk. This means that once you have filled in and returned the opt-out form, you will not be able to change your mind.

If Equiniti receives your opt-out form after this deadline, we will not accept it.

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Key features and facts

What is the Share Incentive Plan (SIP)?The Share Incentive Plan (SIP) is a way of holding shares in your company without paying income tax or National Insurance on those shares as long as you meet certain conditions. While you hold shares in the SIP there are also capital gains tax (CGT) advantages.

Share Incentive Plan All the Free Shares you receive are held in a tax-advantaged SIP. This places some restrictions on when you can access your Free Shares.

You do not hold the Free Shares in your own name. They are held by the Trustee on your behalf, until you decide to sell them from the SIP. You will still have the right to vote on certain matters at the annual general meeting (AGM) and other shareholder meetings, and the right to any dividends we pay to shareholders from the time you are awarded your Free Shares.

In line with HM Revenue & Customs rules, you cannot take your shares out of the SIP until three years after they are given to you, except in certain circumstances as set out on page 9.

After three years, you can sell your Free Shares but you may have to pay income tax and National Insurance on the value of the shares. Please see ‘Selling shares from the SIP’ on page 8 for details.

After five years, you will not have to pay income tax or National Insurance on the Free Shares if you decide to sell them. You will not have to pay CGT if you sell your Free Shares directly from the SIP. However you may need to pay CGT if you decide to transfer your Free Shares out of the SIP and then sell them at a later date.

The facts about owning shares

• A share is a single unit of ownership in a company.

• The share price is decided by the stock market. It reflects the market’s view of the business, its prospects and general market conditions.

• The value of shares can go down as well as up.

• You can see the share price every day that the stock market is open.

• As a shareholder, you have the right to vote on certain matters and are entitled to any dividends we pay.

If you have any questions about how owning shares affects your financial position, you should get independent financial advice. We (Royal Mail) and the administrator (Equiniti) cannot give you independent financial advice.

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Managing your shares

You can use your Employee Shares Account on the website at www.royalmailemployeeshares.co.uk to manage your Free Shares as well as any other Royal Mail investments you may have.

If you haven’t already registered for an Employee Shares Account (for example, because you have not previously received Free Shares), you will need to register for one.

Equiniti will write to you once the SIP 2015 Free Shares have been awarded to give you details of how you can register for this free service.

If you already have an Employee Shares Account, you can log in at any time. The SIP 2015 Free Shares will usually be shown on your account within five working days of them being awarded.

In your online Employee Shares Account, you can:

✔ see details of any Royal Mail Free Shares you have been given;

✔ see details of any Royal Mail shares that you have bought yourself;

✔ view details of any cash dividends you may have received;

✔ see details of Save As You Earn (SAYE) 2014, if you are taking part;

✔ track how long you have held your Free Shares in the SIP; and

✔ sell your shares, depending on the restrictions that apply to Free Shares.

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If you sell your Free Shares from the SIP, while you continue to be a Royal Mail employee, you may have to pay income tax and National Insurance. This is explained below.

Selling shares from the SIP (while you are a Royal Mail employee)

You cannot sell your shares from the SIP, except in certain circumstances, for example if you retire or are made redundant. Please see page 9 for more details.

Free Shares held in the SIP for less than three years after they are given to you (locked-in shares)

You will have to pay income tax and National Insurance on the lower of:

• the value of the Free Shares based on the share price at the time you are given them; or

• the value of the Free Shares based on the share price when you sell them from the SIP.

You will not have to pay capital gains tax (CGT) when the Free Shares are sold directly from the SIP. Although you may need to pay CGT if you decide to transfer the shares out of the SIP and sell them at a later date.

Free Shares held in the SIP for between three and five years after they are given to you (conditional shares)

You will not have to pay income tax or National Insurance on the Free Shares if you sell them. You will not have to pay capital gains tax (CGT) if you sell your Free Shares directly from the SIP. However you may need to pay CGT if you decide to transfer the shares out of the SIP and sell them at a later date.

Free Shares held in the SIP for five or more years after they are given to you (available shares)

This is just a summary of the current UK tax position, which may change from time to time and may be affected by your personal circumstances. It also does not cover any non-UK tax issues which may be relevant. If you have any questions you should get independent financial advice.

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What happens if I leave Royal Mail?

If you leave Royal Mail at any time after being given your Free Shares for the following reasons, you will not lose them and will not have to pay income tax or National Insurance on their value.

• You have an injury or disability which means you can no longer do your job

• You are made redundant

• You retire in line with our current policy on retirement for the purposes of the SIP (see page 14)

• The part of the company or business you work for is sold or transferred

• You die (in this situation, the people managing your estate will not have to pay income tax or National Insurance on the value of your Free Shares)

If you leave Royal Mail for any of the reasons above, the Trustee will take your Free Shares out of the SIP. You can instruct Equiniti to either sell your shares or transfer the shares to you for you to continue to hold outside the SIP. You will not have to pay any income tax or National Insurance on the value of your Free Shares, regardless of when you leave (or die).

You (or, if you have died, those managing your estate) may instruct the administrator, Equiniti, to transfer the shares to you (or those managing your estate) or to sell your shares. If you give no instructions, your shares will be sold by Equiniti who will deduct any costs (commission) relating to the sale of your shares before sending you (or your estate) the money made from selling them.

If you leave Royal Mail for the following reasons, you may lose your Free Shares or have to pay income tax and National Insurance on their value.

• You resign

• Your fixed term contract comes to an end

• You are dismissed

If you leave Royal Mail for any of the reasons above, the following will apply.

If you leave within three years after being given the Free Shares, you will lose the shares.

If you leave between three and five years after being given the Free Shares, the Trustee will take them out of the SIP and you can instruct the administrator, Equiniti, either to sell all your shares or sell enough of the shares to cover any income tax and National Insurance that are due. Equiniti will deduct any costs (commission) relating to the sale of your shares, and transfer the rest of the shares to you for you to continue to hold outside the SIP.

If you leave more than five years after being given the Free Shares, you may instruct the administrator, Equiniti, either to sell the shares or transfer them to you so you continue to hold them outside the SIP. You will not pay any income tax or National Insurance on the value of the shares. If you sell your Free Shares, Equiniti will deduct any costs (commission) relating to the sale of your shares before sending you the money made from selling them.

If you leave Royal Mail in the first three years after you are given your Free Shares, you may lose them. After three years you will be allowed to keep the shares, but they will need to come out of the SIP and you may have to pay income tax and National Insurance depending on the reason you left Royal Mail.

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Frequently asked questions

How do I pay for the shares?You do not have to pay for your Free Shares. They are being given to you free as part of the Government’s commitment to give:

• 10% of shares in the business to eligible employees following our privatisation in October 2013; and

• an extra 1% of company shares to eligible employees.

What do I need to do to be given my SIP 2015 Free Shares?You do not need to do anything. You will automatically be given your Free Shares through the SIP as long as you stay an eligible employee. Equiniti will send an allocation notice to your home address shortly after they have been given to you. The notice will confirm how many shares you have been given and their value when you were given them.

Where have the SIP 2015 Free Shares come from?When Royal Mail shares were placed on the London Stock Exchange, the Government gave 10% of its shares to employees who were eligible at the time as Free Shares. These shares were awarded as SIP 2013 and SIP 2014 Free Shares.

Since those Free Shares were awarded, some employees have left Royal Mail and, depending on the reason why they left, some have lost their Free Shares (see page 9 for examples of when an employee leaving Royal Mail would lose their Free Shares). These shares are now being given to eligible employees as SIP 2015 Free Shares.

As well as the surplus shares, the Government has also given an extra 1% of company shares, equal to 10 million shares, to eligible employees.

What is a dividend?A dividend is a portion of a company’s profits that the company pays to its shareholders. Companies do not have to pay dividends. Our directors will decide when and how often we will pay dividends to shareholders, and how much these dividends will be. Companies often pay an interim and a final dividend each financial year. While you hold shares in the SIP, you will receive any dividends that we pay to our shareholders in cash. How often we pay dividends and how much we pay will depend on many things, including our company’s performance and future investment plans.

How will I receive dividends?For your Free Shares, any dividend payments will be paid into the bank account we pay your salary into. If Equiniti does not have details of your bank account, they will send a cheque to your registered home address. If you want to receive a cheque, you will need to contact Equiniti and ask them to remove the bank details registered on your account (see page 16 for contact details).

Since we were privatised, eligible full-time employees with 729 Free Shares have received around £248 in dividends.

They received:

• around £96 on 31 July 2014

• around £48 on 14 January 2015; and

• around £104 on 31 July 2015.

Eligible part-time employees have received dividends based on their proportionate (pro-rata) allocation of Free Shares.

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Will I have to pay income tax on any dividends I receive?Under current tax rules, if you pay the basic rate of income tax, you will not normally have to pay income tax or National Insurance on the dividends. Please see the question in the shaded box below for information about a change to the tax on dividends from April 2016.

If you are a basic-rate taxpayer and don’t already fill in a self-assessment tax return, there is no need for you to take any action based on any dividend payment. If you are a basic-rate taxpayer and you fill in a self-assessment tax return (for example, if you have a second job or other income that is taxed), you will have to include the dividend payment on the form but you won’t normally be taxed on it.

This is the case for any Free Shares you hold in the SIP, and for any Royal Mail shares you may have bought.

If you pay the higher rate of income tax, you may need to pay tax on your dividend. If you don’t already fill in a self-assessment tax return, you should contact HM Revenue & Customs (HMRC). They will be able to tell you whether you need to fill in a self-assessment tax return.

If you fill in a self-assessment tax return, all the information you will need about your dividend payments will be included on the tax voucher that will be sent to your home address after the dividend has been paid.

For more information about contacting HMRC, visit www.gov.uk/tax-on-dividends

Are there charges if I want to sell my Free Shares?If you sell your Free Shares at any time, you may have to pay a fee (known as commission). If you sell your Free Shares through Equiniti the commission rate is currently 0.5% or £17.50, whichever is higher.

You may also have to pay income tax and National Insurance if you have not held your Free Shares for at least five years. There is more information about this on page 8.

If you leave Royal Mail and are entitled to keep your Free Shares, the shares will have to come out of the SIP. You may have to pay income tax and National Insurance on the value of the shares, depending on why you left and the length of time between being given the shares and selling them.

If you take your Free Shares out of the SIP and keep them (that is, you do not sell them straight away), or if you have bought your own shares, depending on your personal circumstances you may need to pay capital gains tax when you sell your shares. Please see page 14 for more information.

If you sell any shares you have bought, any charges will depend on who you use to sell them.

Is the law about paying income tax on dividends changing?In summer 2015, the Government announced that the tax on share dividends will change from April 2016 when a new Dividend Tax Allowance of £5,000 a year is introduced. This means that income tax will no longer be due on the first £5,000 of dividends you receive in any tax year. And if you only hold Free Shares, you will normally have no tax to pay.

Under the new Dividend Tax Allowance, if you are a basic-rate taxpayer, you will need to pay 7.5% income tax on dividend payments over £5,000 in total in the tax year. If you are a higher-rate taxpayer, you will need to pay 32.5% income tax. You will receive any dividend payments before tax. If you need to pay income tax, you have to fill in a self-assessment tax return. Please visit the website www.gov.uk/tax-on-dividends for more information.

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How is the value of my shares calculated?The value of your shares is based on the share price quoted on the stock market, which is available every day the stock market is open. The value of Royal Mail shares will depend on market demand. The share price is decided by the market. It reflects the market’s view of the business, its prospects and general market conditions. You can see Royal Mail’s share price every day on www.myroyalmail.com, on the business screens in your workplace and in certain newspapers.

Why do share prices go up and down?The price of a company’s shares may go up or down depending on the demand for the shares. This can be influenced by many things, including the company’s performance. If investors want to buy shares in the company, the increase in demand may increase the share price. However, the value of shares may go down as well as up and the share price does not always go up if a company does well.

When can I sell my Free Shares?Under HM Revenue & Customs rules, you cannot sell your Free Shares until three years after they are given to you, except in certain circumstances. This means you will normally be able to sell:

• Any SIP 2013 Free Shares you may have from 15 October 2016

• Any SIP 2014 Free Shares you may have from 9 April 2017

• Any SIP 2015 Free Shares you may have from 5 October 2018 (if the shares are awarded on 5 October 2015 as expected).

Remember, if you sell your Free Shares between three and five years after you are given them, you may have to pay income tax and National Insurance on them. After five years, you will not have to pay income tax or National Insurance on the Free Shares if you sell them. Please see ‘Selling shares from the SIP’ on page 8 for details.

Can I put my Free Shares towards my pension?You can use the cash proceeds from selling your Free Shares to make your own pension contributions, known as additional voluntary contributions (AVCs), into your Royal Mail pension plan if you leave Royal Mail because you have an injury or disability which means you can no longer do your job, you are made redundant, you retire, or the part of the company or business you work for is sold or transferred.

If you are retiring, making an AVC in this way may delay the date you receive your pension benefits. Otherwise, you can only put your Free Shares towards your pension if you are still in employment with Royal Mail and have held your Free Shares for at least three years. In that case, you can also sell your Free Shares and make AVCs as above, although, if you sell your Free Shares before you have held them for five years, there will be income tax and National Insurance to pay.

You should carefully consider whether you want to use your Free Shares to make AVCs and it is strongly recommended that you should get independent financial advice before doing so.

Tax and pensions law can also change from time to time. The pension scheme Trustee and the administrator, Equiniti, cannot give you independent financial advice.

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Can I keep my shares in the SIP indefinitely? As an employee you can leave your Free Shares in the SIP for as long as you like. You may have to take your Free Shares out of the SIP in certain circumstances (for example if you leave Royal Mail or there is a takeover of Royal Mail, see page 8 and the question below). The Trustee will contact you if you have to take your Free Shares out of the SIP.

How do I keep my details up to date?We will need to write to you about your shares. It is vital that we have your correct name and address details and you must keep us up to date with any changes. To tell us about any changes to your name or address details, you can do the following.

• Tell your manager, and ask them to update your details on the People System Portal (PSP).

• Update your details through PSP, if you have access to the system.

• Fill in the change of address form in the helpful documents section on www.myroyalmail.com/employee-share-offers and post it to:

Personal Data Changes Team, HR Services, Royal Mail, Pond Street, Sheffield, S98 6HR.

Do I have to give up any employment rights to be given my Free Shares? No, you do not have to give up any employment rights. Free Shares are completely different from the arrangements introduced in the Growth and Infrastructure Act 2013 which allows employees to agree with their employer to reduce their employment rights in return for shares. The Free Shares you are given under the SIP 2015 Free Shares Offer have nothing to do with this law. The Free Shares are given under a tax-advantaged, HMRC-approved share plan known as a SIP. These shares are free and, under HMRC rules governing the SIP, employees cannot be asked to give anything up (including employment rights) in order to be given Free Shares. You do not need to opt out of the SIP 2015 Free Shares Offer to keep your employment rights, and being given Free Shares will not reduce your employment rights.

What happens if a takeover of Royal Mail is proposed?If you own Free Shares which are still held in the SIP, Equiniti will let you have details of how you can sell your Royal Mail shares or direct the Trustee how to vote on the proposed takeover offer (or both). If the takeover happens, you will be able to sell your shares on the same terms as those offered to other ordinary shareholders.

If you own Royal Mail shares that have been transferred out of the SIP, or you have bought shares yourself, you will be given the same opportunity as other shareholders to sell them to the company buying Royal Mail or to vote on the proposed takeover.

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Jargon buster

AdministratorOur administrator is Equiniti Limited. Their role is to oversee and administer the Royal Mail Employee Share Offers and also the Royal Mail share register. Equiniti will be your first point of contact if you have any questions about your shares.

Additional voluntary contribution (AVC)Additional voluntary contributions are extra payments you make into a Royal Mail pension scheme. AVCs are normally tax-free and so can be very efficient in terms of tax as well as saving for your pension. Certain rules limit the amounts you can contribute as AVCs and the time when you can make contributions. You should read the relevant documents relating to your pension if you are thinking of making AVCs.

Capital gains tax (CGT)This is a tax that is normally paid on gains made when shares are bought and sold. Capital gains tax is not paid on shares held in a Share Incentive Plan (SIP). However, if you hold your shares outside the SIP, you may have to pay CGT. Every person has a yearly CGT allowance and you will not have to pay CGT on any gains you make below your allowance. The allowance for the 2015-2016 tax year is £11,100.

EquinitiThe administrator is Equiniti Limited. Their role is to oversee and administer the Royal Mail Employee Share Offers and also the Royal Mail share register.

Income taxThe tax you pay on all income you receive, including shares you hold in a SIP in certain circumstances. The rate of income tax you pay will depend on your income.

National InsuranceYou pay National Insurance to build up your entitlement to certain state benefits, including the State Pension. Like income tax, National Insurance is paid out of the income you earn at rates, and up to limits, that are set by Parliament.

RetireOur current policy on retirement for the purposes of the SIP is that any resignation, where you are aged 60 or over and stop working, will be treated as retiring. However, this only applies to the SIP and for other benefits retirement may have a different meaning. You should also note our policy on retirement may be different when you stop working, which could be many years away.

TrusteeEquiniti Share Plan Trustees Limited, who manage the Trust for the Share Incentive Plan in line with the SIP rules.

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Contacts

AdministratorOur administrator is Equiniti. If you still have questions after reading this guide, you can get more information by contacting them.

Equiniti Limited, Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, United Kingdom.

Royal Mail Employee Shares Helpline: 0800 012 12 13 (or +44 121 415 0268 if you are calling from outside the United Kingdom).

Textel or Minicom number: 0800 011 3649 (or +44 121 415 7028 if you are calling from outside the United Kingdom).

The Trustee of the Share Incentive Plan

The Trustee is Equiniti Share Plan Trustees Limited. They manage the SIP in line with the SIP rules. You can contact the Trustee at:Equiniti Share Plan Trustees Limited, Highdown House, Yeoman Way, Worthing, West Sussex, BN99 3HH, United Kingdom.

Important note: Calls to the Royal Mail Employee Shares Helpline are free from a BT landline, but other network providers may charge. The helpline is open from 8.30am to 5.30pm, Monday to Friday, not including UK bank holidays.

Nothing in this guide should be taken as financial advice. We (Royal Mail), and the employee shares administrator, Equiniti, cannot provide independent financial advice.

If there is any inconsistency between this guide and the terms and conditions of the Free Shares Offer, the rules of the SIP or tax legislation, they shall take priority over the guide.

If you would like this guide in a different format, for example in large print, in Braille or on audio tape, please contact the Royal Mail Employee Shares Helpline on 0800 012 12 13.

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Royal Mail Share Incentive Plan – Terms & Conditions for SIP 2015 Free Shares

These terms apply between you and Royal Mail plc (the “Company”) and Equiniti Share Plan Trustees Limited (the “Trustee”) and form part of your agreement, along with the rules of the Plan, to receive Free Shares under the Royal Mail Share Incentive Plan (the “Plan”). By not completing and returning the opt-out form enclosed with the invitation letter from the Company, you are deemed to have accepted the Free Shares and these Terms and Conditions. Words used here are defined in the rules of the Plan or legislation. In the event of any conflict between this agreement, the rules of the Plan and/or legislation, the rules of the Plan and legislation will apply.

PLEASE NOTE THE PRICE OF SHARES AND THE INCOME FROM THEM MAY GO DOWN AS WELL AS UP.

FREE SHARESI agree:• to receive Free Shares awarded to me under the Plan• to leave the Free Shares in the hands of the Trustee or other persons appointed

by the Trustee, and not to assign, charge or otherwise dispose of my beneficial interest in the shares for the whole of the 3 year Holding Period except as permitted in the case of a Reconstruction or Takeover or on ceasing to be in Relevant Employment.

• that I will lose my Free Shares if I cease to be in Relevant Employment within 3 years from the date of the Award, unless the employment ceases for one of the following reasons: a) injury or disability b) redundancy c) transfer of employment to which TUPE applies d) my employing company ceases to be an associated company e) retirement f) death.

• that my obligations during the Holding Period will end if I: a) cease to be in Relevant Employment or b) if the Company terminates the Plan in accordance with the rules of the Plan and I have consented to the transfer to me of my Free Shares.

• that my rights are subject to the right of the Trustee to sell Free Shares held by them on my behalf under the terms of the Plan in order to enable the Trustee to pay to my employing company an amount sufficient to enable my employing company to satisfy any PAYE obligation in respect of my Free Shares unless I pay to the Trustee a sum equal to the amount of such obligation.

• that if there is a rights issue and the Trustee has not received a direction from me, the Trustee will sell some of the rights attached to my Free Shares in order to exercise the rights attached to my other Free Shares.

For this purpose:“Associated Company” has the meaning given in paragraph 94 of Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003.

“Holding Period” means the period of 3 years from the date on which I am awarded Free Shares.

“Reconstruction or Takeover” means any transaction mentioned in paragraph 37 of Schedule 2 to the Income Tax (Earnings and Pensions) Act 2003 which affects Free Shares.

“Relevant Employment” means employment by the Company, Royal Mail Group Limited or an Associated Company.

DIVIDENDSI agree that all dividends paid on my Plan Shares will be paid direct to my salary bank account. If the Trustee does not have my salary bank account details a cheque will be sent to my registered address.I understand that:• any dividends paid by the Company to the Trustee will be held in a non-interest

bearing account until they are paid to me.

The Company may decide to offer reinvested dividend shares at some point in the future. You understand that the Company and/or the Trustee will write to you advising of any changes. This may be compulsory reinvested dividend shares or employees may be given the option to choose cash dividends in accordance with the rules of the Plan.

VOTESThe Trustee will seek a direction from you as to how it should cast its votes on your Free Shares on any shareholder vote that is taken by way of a poll and, provided it receives your direction in due time, it agrees that it will cast votes in respect of your Free Shares only in accordance with your directions. The Trustee will not be obliged to cast a vote on any vote that is taken by way of a show of hands.

STATEMENTSI understand that a paper statement showing a summary of my account will be issued to me by post on an annual basis, by the Company’s administrator, Equiniti Limited.

RIGHTS AND OBLIGATIONSI agree that:• taking part in the Plan does not affect my rights, entitlements and obligations

under my contract of employment, and does not give me any rights or additional rights to compensation or damages if my employment ceases.

• I allow the Trustee to sell some or all of my Plan Shares to pay any income tax and NICs in respect of my shares ceasing to be subject to the Plan, unless I provide them in advance with a cheque that is drawn on a UK bank account in my name and have sufficient funds to pay these amounts.

• if there is a rights issue, i) I agree to allow the Trustee to sell the rights attached to some of my Plan

Shares, in order to fund the exercise of the rights attached to my remaining Plan Shares.

ii) In the event that there is insufficient time to take the action outlined above (as deemed by both the Company and the Trustee) or the sale of rights is insufficient to fund the exercise of any of my rights, the Trustee will sell the rights and pass the funds to me through my payroll.

ELIGIBILITY CRITERIAReferences to an employee in this section are to an employee of the Company or Royal Mail Group Limited (including employees under 18 on the date of the Free Share award) who:a) is a UK tax resident or working for the Company or Royal Mail Group Limited in

the UK and has UK taxable earnings (or would have UK taxable earnings but for a period of absence) on the date of the Free Share award;

b) has been continuously employed within the meaning of the rules of the Plan between 1 June 2015 and the date of the Free Share award (inclusive); and

c) who has not returned an opt-out form by the deadline for doing so.

References to shares are to shares in the Company.

All eligible full time employees will receive an allocation of the same number of Free Shares. Eligible part-time employees will receive a pro-rata allocation in accordance with the rules of the Plan.

Where an employee was not a full-time employee, and was therefore a part-time employee, the number of shares which he or she will be given will be calculated by reference to hours worked (whether as contractual hours or overtime hours paid at part time single standard pay rate) for which payment was received in the measurement period (which ran from 1 June 2015 to 30 August 2015 for weekly paid employees and from 1 June 2015 to 31 August 2015 for monthly paid employees). This number of hours will then be divided by the number of hours which a full-time employee of the same or equivalent grade and earnings period would have been contractually required to work in the measurement period. The resulting fraction will then be applied to the number of shares which a full-time employee would be given to produce the number of shares to which that part-time employee is entitled. Shares will be rounded up to the nearest whole share. No part-time employee can be given more shares than a full-time employee.

Hours paid for working for a company other than Royal Mail Group Limited or the Company shall be ignored, but hours taken as holiday, sickness or other absence shall be treated as worked.

If an employee at any time during the measurement period acted as a substitute, and the substituted position was one which would normally be fulfilled by:• a full-time employee, he shall be treated as a full-time employee for the whole

of the measurement period; or• a part-time employee, he shall be treated as a part-time employee and for

the purposes of determining his pro-rata entitlement, his number of hours (measured as above) shall be divided by the number of hours which a full-time employee of the same or equivalent grade and earnings period would have been contractually required to work in the measurement period, which shall be determined by reference to the substituted position, rather than the employee’s normal position.

Plain English Campaign’s Crystal Mark does not apply to the rest of this document.

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For this purpose, a substitute is an employee whose normal job description is not that of a manager but who provides temporary cover for an individual who is a manager and the substituted position is the managerial position for which the employee provides temporary cover.

Where an employee changed from being weekly paid to monthly paid (or the other way round) during the measurement period, his earnings period shall be that which applied at the start of the measurement period.

Where an employee changed from being part-time or full-time (or the other way round) or changed grade during the measurement period, then, the measurement period shall be divided into a period in which he was full-time and a period in which he was part-time and pro-rating shall be applied accordingly. If he changed from being part-time or full-time in the middle of an earnings period, his status (and hours if relevant) shall be treated as changing from the end of that earnings period. For this purpose, “earnings period” shall be the period to which salary payments related and shall be either weekly or monthly.

COMPANYThe Company agrees to arrange for shares in Royal Mail plc to be bought for or awarded to me, according to the rules of the Plan.

TRUSTEEThe Trustee is part of the Equiniti group of companies whose registered offices are Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, United Kingdom registered in England and Wales number 3925002. The main business of the Trustee is to act as Trustee for UK registered share incentive plans.

The Trustee:• will not be responsible for advising me on the suitability of any transaction in

relation to the Plan• may, whether itself or through another member of the Equiniti group of

companies, provide other services in relation to the administration of the Plan and may be compensated for these services.

EQUINITI LIMITED I understand that:• the Company and/or the Trustee may delegate the performance of services and

the administration of the Plan to Equiniti Limited, part of the Equiniti Group of companies (but Equiniti Limited will not thereby become a party to this Agreement except to benefit from the rights and disclaimers conferred on the Trustee).

• I will not become a customer of Equiniti Limited nor will I have any rights or obligations against or rights to give instructions directly to Equiniti Limited. Equiniti Limited is acting for the Company and/or the Trustee and not for me.

• Equiniti Limited is a part of the Equiniti group of companies whose registered offices are Aspect House, Spencer Road, Lancing, West Sussex, BN99 6DA, United Kingdom registered in England and Wales number 6226088.

DATA PROTECTION ACTFor the purposes of this paragraph, information held about me shall be deemed to include any information held by any other member of the Equiniti group of companies.

The Company and the Trustee give the information below about data protection, which I acknowledge that I have read and understand.• In accordance with the Data Protection Act 1998 I am entitled, on payment of a

fee, to a copy of the information they hold about me. I shall let them know if I think any information they hold about me is inaccurate, so that they may correct it.

• The information they hold about me is confidential and will only be disclosed outside the Company and/or the Trustee in the following circumstances:–

• where the law permits or it is in the public interest. • to investigate or prevent fraud • to their agents in connection with running accounts and services for me • at my request or with my consent • to any party to this agreement or its’ delegates so that they may update their

own records about me

I specifically consent to the sending of data outside of the European Economic Area (EEA) where this is required to run my account. These countries may not have the same laws to protect the information but the Trustee shall ensure that the same level of protection is provided as required by UK law.

When I speak to the Trustee on the phone in connection with any aspect of the Plan, they may record the call. They may or may not remind me about this at the start of each call. They may use any such recordings and transcripts of them• to make sure they carry out my instructions correctly• to help them maintain and improve service quality• for security purposes, and• as evidence in any dispute relating to the Plan.

They may store, use and process my personal information in order to• assess my application to participate in this service• provide me with services• identify other products and services that might be suitable for me• keep their records about me up to date• recover debts• carry out research and statistical analysis about their services and how they

might improve them. Sometimes they may use an outside market research agency to do this for them, in which case they undertake to ensure that they appropriately protect any personal customer data they share with them, and

• ensure security for customers and staff and to help maintain service quality, some telephone calls may be recorded or monitored. In accordance with the Money Laundering Regulations they may require verification of my identity, or that of the third party provider. They may conduct searches of databases and other credit data in order to do this or they may need to ask you to provide proof of my identity, or that of the third party provider. This may lead to a delay in carrying out my instruction, a delay in payment of my sale proceeds to me, or in my instruction being rejected. They will not be liable for any loss which may result from this.

HOW DO I COMPLAINIf you wish to complain about the service provided under this agreement your first point of contact should be the following address: Equiniti Share Plan Trustees Limited, Highdown House, Yeoman Way, Worthing, West Sussex, BN13 3RA, United Kingdom.

TEXTEL/MINICOM SERVICE NUMBER 0800 011 3649(or +44 121 415 7028 if calling from outside the United Kingdom)

• If I would like these terms and conditions in an alternative format, for example large print, Braille or audio tape, I should contact the helpline on 0800 012 12 13 (or +44 121 415 0268 if calling from outside the United Kingdom).

CONFLICTS OF INTEREST POLICYThe Equiniti group of companies has established and implemented a Conflicts Policy (which may be revised and updated from time to time), which sets out how they seek to identify and manage all material conflicts of interest. Such conflicts of interest can occur in their day to day business activities, for example, where one of their clients could make a gain at the direct expense of another client, or they might be faced with an opportunity to make a gain but this would be to the direct disadvantage of one or more of their clients.

Depending on the exact nature of the conflict of interest involved, they may take certain actions in accordance with the Conflicts Policy to mitigate the potential impact of the conflict. Such actions may include putting in place controls between the opposing sides of the conflict, which may control or prevent the exchange of information, and/or involve the appropriate management of staff activities and segregation of duties. Where such controls would be insufficient to eliminate the potential material risk of damage to clients from specific conflicts, then they will disclose the general nature and/or source of those conflicts of interest prior to them undertaking the relevant business.

Full details of the Conflicts Policy are on their website at www.shareview.co.uk, or contact them and ask for a printed copy.

At the time of the issue of this document no material conflicts of interest were identified which could not be managed in accordance with the provisions made above.

GENERAL PROVISIONSI understand that:The Plan will be governed by the Trust Deed and Rules of the Plan under English Law. I agree that legal action relating to this agreement may only be dealt with by the courts of England and Wales. Any contact made by the parties to this agreement in relation to these terms and conditions will be in the English language. All instructions and notices to me under this agreement must be given to me under the rules of the Plan.

The Trustee will take any actions considered necessary in their reasonable opinion to comply with all applicable laws and regulations or any requirements of any regulatory body that are binding upon them.

The Trustee and the Company may vary the terms on which participation is offered. Should the terms of this agreement change in such a way as to have an effect on my entitlements or the service provided under the Plan, either the Trustee or the Company will write to me, giving me 30 days’ notice, outlining the changes and when they are due to take effect. If I no longer wish to participate on these terms, I should write to the Trustee in accordance with the rules of the Plan.

If a gain is made in the course of administering the Plan, the Trustee will be entitled to keep it.