Final Notice
FINAL NOTICE
To:
Tesco plc
1.
ACTION
1.1. For the reasons given in this Final Notice, the Authority hereby requires
Tesco plc and Tesco Stores Limited to pay restitution to the appropriate
persons in accordance with the arrangements described in Annex 2 to this
2.
SUMMARY OF REASONS
2.1. On 29 August 2014, Tesco plc published a trading update in which it stated
that it expected trading profit for the six months ending 23 August 2014 to
be in the region of £1.1bn (the “August Statement”). In issuing the August
Statement, the Tesco plc Board relied on information provided to it by Tesco
Stores Limited which was not correct. That information did not disclose the
fact or risk of the inaccuracy and those who were aware of the true position
did not alert the Tesco plc Board to the inaccuracy.
2.2. On 22 September 2014, before trading opened, Tesco plc published a
further trading update (the “September Statement”) in which it announced
that it had “identified an overstatement of its expected profit for the half
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year, principally due to the accelerated recognition of commercial income
and delayed accrual of costs.”
2.3. The August Statement contained information that gave a false or misleading
impression as to certain qualifying investments (in particular, Tesco plc
shares and certain Tesco group bonds – “the Relevant Securities” defined in
this Final Notice). Tesco plc and Tesco Stores Limited knew, or could
reasonably have been expected to know, that the information was false or
misleading. Accordingly, Tesco plc and Tesco Stores Limited engaged in
market abuse contrary to s.118(7) of the Act (as it was then in force). In
making this finding, the Authority does not suggest that any member of the
Board of Tesco Plc knew, or could reasonably be expected to have known,
that the information in the August Statement was false or misleading.
However, the Authority has found that there was knowledge at a sufficiently
high level but below the level of the Tesco plc Board as to the false and
misleading nature of the August Statement for that knowledge to constitute
the knowledge of Tesco plc, within the specific context of, and for the
purposes of, market abuse.
2.4. As a result of the market abuse, a false market was created in the Relevant
Securities. Purchasers of the Relevant Securities paid a higher price than
they would have paid had there not been a false market and those who
purchased more than they sold in the period of the false market suffered
loss as a result. The Authority considers that the false market substantially
came to an end when Tesco plc published the September Statement, which
it did on an urgent basis when the Tesco plc Board discovered that the
August Statement contained information that gave a false or misleading
impression.
2.5. The Authority therefore exercises its power under s.384(5) of the Act to
require Tesco plc and Tesco Stores Limited to pay restitution to those
investors who have suffered loss in accordance with the arrangements
described in Annex 2 to this Final Notice.
2.6. The Authority has had regard to the fact that Tesco Stores Limited has
entered into a deferred prosecution agreement with the Serious Fraud Office
(the “SFO”) in relation to conduct which is related to the conduct described
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in this Final Notice, and that Tesco Stores Limited will pay a substantial
penalty pursuant to that agreement. That agreement concerns only the
potential criminal liability of Tesco Stores Limited and does not address
whether liability of any sort attaches to Tesco plc or any employee or agent
of Tesco plc or Tesco Stores Limited. Both Tesco plc and Tesco Stores
Limited have co-operated in an exemplary manner with the Authority and
have taken steps to ensure that similar misconduct will not occur in future.
In the circumstances, the Authority does not impose a further financial
penalty on either Tesco Stores Limited or Tesco plc.
3.
DEFINITIONS
3.1. The definitions below are used in this Final Notice.
“the Act” means the Financial Services and Markets Act 2000
“August Statement” means the trading update published by Tesco plc on 29
August 2014
“the Authority” means the body corporate previously known as the Financial
Services Authority and renamed on 1 April 2013 as the Financial Conduct
Authority
“DPA” means the deferred prosecution agreement between the SFO and
Tesco Stores Limited referred to in paragraph 2.6 above.
“Eligible Claimant” has the meaning set out in Annex 2 to this Final Notice.
“H1” means the first half of a financial year.
“the Regulations” means the Financial Services and Markets Act 2000
(Market Abuse) Regulations 2005
“Relevant Period” means the period from 29 August 2014 (the date of
publication of the August Statement) to 19 September 2014 (the last day of
trading before the publication of the September Statement).
“Relevant Securities” means the following securities in issue and listed on
the London Stock Exchange (or in the case of certain bonds, the Irish Stock
Exchange) in the Relevant Period:
(i)
shares in Tesco plc; and
(ii)
the bonds listed in Appendix 2 to Annex 2 to this Final Notice.
“Restitution Amount” means, in respect of any Eligible Claimant, the amount
of that Eligible Claimant’s loss, calculated in accordance with paragraph 37
of Annex 2 to this Final Notice.
“September Statement” means the trading update published by Tesco plc on
22 September 2014
“SFO” means the Serious Fraud Office
“the Tribunal” means the Upper Tribunal (Tax and Chancery Chamber)
4.
FACTS AND MATTERS
4.1. Tesco plc’s accounting period ends on the last Saturday in February each
year. Its financial year 2013/2014 ended on 22 February 2014. It published
its accounts in respect of that year on 16 April 2014.
4.2. In order to prepare its accounts and other financial statements, Tesco plc
relies on accounting information provided by its subsidiaries, including Tesco
Stores Limited.
The August Statement
4.3. On 29 August 2014, Tesco plc published the August Statement, which
updated the market on Tesco plc’s expected trading profit for H1 2014/2015
and expected trading profits for the full year 2014/2015. In preparing the
August Statement, the Tesco plc Board relied on accounting information
provided to it by Tesco Stores Limited which did not disclose the fact or risk
of the inaccuracy.
4.4. Since publishing the August Statement, Tesco plc has made the following
announcements in respect of it:
(1)
On 22 September 2014, Tesco plc published the September
Statement in which it announced (in summary) that it had identified
an overstatement of its expected profit for H1 2014/2015,
principally due to the accelerated recognition of commercial income
and delayed accrual of costs. Tesco plc stated that, on the basis of
preliminary investigations, the Tesco plc board believed that the
guidance in the August Statement for expected profits for H1
2014/2015 had been overstated by an estimated £250 million, and
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that work was ongoing to establish the extent of these issues and
their impact on the full year 2014/2015.
(2)
On 23 October 2014, Tesco plc published its Interim Results for
2014/2015 in which it stated (in summary) that there had been an
overstatement in profit expectations of £263 million, comprising an
impact on trading profit for H1 2014/2015 of £118 million, with a
further approximately £70 million relating to 2013/2014 and
approximately £75 million relating to prior years.
(3)
On 22 April 2015, Tesco plc published its Preliminary Results for
2014/2015 and stated (in summary) that, following further
investigation, the commercial income recognised in previous
periods had been overstated by £53 million in 2013/2014 and by a
total of £155 million in years prior to 2013/2014. These figures
were confirmed in Tesco plc’s Annual Report for 2014/2015,
published on 5 May 2015.
(4)
On 3 September 2015, Tesco plc published a Performance Pro-
Forma for H1 and the full year 2014/2015 which identified an
adjustment to the H1 2014/2015 results associated with the
updated commercial income adjustment recognised in the full year
2014/2015 results. The adjustment had the effect of increasing
trading profit for H1 2014/2015 by £42 million.
(5)
In summary, therefore, Tesco plc has admitted that the expected
profit figure for H1 2014/2015 in the August Statement was
overstated by £76 million (£118 million less £42 million). The total
overstatement of actual and expected profit was £284 million (£155
million plus £53 million plus £76 million).
4.5. Tesco Stores Limited and Tesco plc knew, or could reasonably have been
expected to have known, that the information in the August Statement was
false or misleading. In making this finding, the Authority does not suggest
that the Tesco Plc Board knew, or could reasonably be expected to have
known, that the information in the August Statement was false or
misleading. However, the Authority has found that there was knowledge at
a sufficiently high level but below the level of the Tesco plc Board as to the
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false and misleading nature of the August Statement for that knowledge to
constitute the knowledge of Tesco plc, within the specific context of, and for
the purposes of, market abuse.
False market
4.6. The information in the August Statement gave a false or misleading
impression as to the Relevant Securities. The Relevant Securities traded at a
higher price than they would have done if the August Statement had not
given a false or misleading impression.
4.7. Following the September Statement, the price of the Relevant Securities
fell, such that they traded at a price which had not been substantially
affected as a result of the false or misleading information in the August
Statement. During the period from the August Statement to the September
Statement, purchasers of Relevant Securities paid more than they should
have done, as a result of the August Statement.
Deferred prosecution agreement
4.8. Tesco Stores Limited and the SFO have agreed the terms of a DPA. The
DPA concerns only the potential criminal liability of Tesco Stores Limited and
does not address whether liability of any sort attaches to Tesco plc or any
employee or agent of Tesco plc or Tesco Stores Limited. The Crown Court
has, on the date of this Final Notice, declared pursuant to Schedule 17 of
the Crime and Courts Act 2013, paragraph 7(1), that entering into the
proposed DPA is likely to be in the interests of justice and the proposed
terms of the DPA are fair, reasonable and proportionate. The DPA relates to
substantially similar conduct by Tesco Stores Limited to that described in
this Final Notice. Pursuant to the DPA, Tesco Stores Limited is to pay a
financial penalty of £128,992,500.
4.9. The DPA includes a representation by Tesco Stores Limited that, from the
first quarter of the 2015/16 financial year, it and the rest of the Tesco
business embarked on a five-year project called the Global Finance
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Transformation Programme which included, amongst other things, the
creation of a Commercial Income Governance Body whose purpose is to
ensure that there is a consistent approach to managing commercial income
across Tesco’s businesses.
4.10. Pursuant to the terms of the DPA, Tesco Stores Limited will commission
Deloitte to: report on, and make recommendations for improvements to, the
segregation of duties between relevant teams/functions and controls,
governance and policies/training in respect of the recognition of commercial
income; and review and comment on Tesco Stores Limited’s implementation
of those improvements.
Co-operation
4.11. The approach of the Tesco plc Board since the discovery of the
overstatement, in particular in agreeing the findings in this Final Notice and
thereby addressing the impact on the market of the August Statement, has
been exemplary. In all their dealings with the FCA in respect of this matter,
Tesco plc and Tesco Stores Limited have been extremely cooperative with
the FCA. The two companies have been proactive in the offering of
information and have responded promptly and constructively to requests
made of them. Furthermore, both refrained, at the FCA’s request, from
interviewing witnesses or taking statements; they disclosed voluntarily
material which appeared to them to be significant to the FCA’s enquiries;
and they generally helped to facilitate a swift conclusion to the FCA’s
enquiries.
5.
FAILINGS
5.1. The statutory and regulatory provisions relevant to this Final Notice are
referred to in Annex 1.
The Relevant Securities were qualifying investments traded on a
prescribed market
5.2. The Relevant Securities were all admitted to trading on the London Stock
Exchange or Irish Stock Exchange. They are therefore “qualifying
investments” admitted to trading on a “prescribed market” for the purposes
of article 10 of the Regulations. Accordingly, Tesco plc’s and Tesco Stores
Limited’s behaviour fell within section 118(1)(a)(i) of the Act. In addition,
the provision of information by Tesco Stores Limited to Tesco plc, and the
publication of the August Statement, both occurred in the UK, fulfilling the
jurisdictional criteria set out at section 118A(1)(a) and section 118A(1)(b)(i)
of the Act.
The information gave a false or misleading impression as to a
qualifying investment
5.3. The information provided by Tesco Stores Limited to Tesco plc, and the
information published in the August Statement, incorrectly overstated
expected profits principally as a result of the accelerated recognition of
commercial income and delayed accrual of costs. As a result, the
information gave a false or misleading impression as to the Relevant
Securities.
The information was disseminated by persons who knew or could
reasonably be expected to have known that it was false or
misleading
5.4. Tesco Stores Limited knew, or could reasonably be expected to have known,
that the information it gave to Tesco plc for the purpose of the August
Statement was false or misleading. In the circumstances, the provision of
the information to Tesco plc amounted to dissemination of it.
5.5. Tesco Plc knew or could reasonably be expected to have known that the
information it published in the August Statement was false or misleading. In
making this finding, the Authority does not suggest that the Tesco Plc Board
knew, or could reasonably be expected to have known, that the information
in the August Statement was false or misleading. However, the Authority
has found that there was knowledge at a sufficiently high level but below
the level of the Tesco plc Board as to the false and misleading nature of the
August Statement for that knowledge to constitute the knowledge of Tesco
plc, within the specific context of, and for the purposes of, market abuse.
The publication of the August Statement disseminated that false or
misleading information.
Conclusion on market abuse
5.6. The Authority considers that the behaviour of Tesco Stores Limited and
Tesco plc constituted market abuse contrary to section 118(7) of the Act.
5.7. Pursuant to section 123(1) of the Act, the Authority may therefore impose a
penalty of such amount on Tesco Stores Limited and Tesco plc as it
considers appropriate.
5.8. Section 123(2) of the Act states that the Authority may not impose a
penalty for market abuse in certain circumstances. The Authority is satisfied
that these circumstances do not apply to the conduct described in this
notice.
5.9. Section 123(3) of the Act states that if the Authority is entitled to impose a
penalty on a person it may, instead of imposing a penalty on him, publish a
statement to the effect that he has engaged in market abuse.
5.10. Pursuant to section 384(2) and section 384(5) of the Act, the Authority may
exercise the power to require restitution if it is satisfied that a person has
engaged in market abuse and that one or more persons has suffered loss as
a result of the market abuse.
5.11. Section 384(4) of the Act provides that the Authority may not require
restitution in certain circumstances. The Authority is satisfied that these
circumstances do not apply to the conduct described in this notice.
6.
SANCTION
Breach of section 118(7) – restitution
6.1. Under section 384 of the Act the Authority has the power, if it is satisfied
that a person has engaged in market abuse and that one or more persons
have suffered loss as a result of the market abuse, to require restitution to
be paid to the appropriate persons of such amount as appears to the
Authority to be just having regard to the extent of loss. The Authority has
published guidance on the exercise of its power under section 384 of the Act
in Chapter 11 of its Enforcement Guide.
6.2. In this case, purchasers of the Relevant Securities in the Relevant Period
paid a higher purchase price than they should have paid. The loss suffered
by each such purchaser is the overpayment for the Relevant Securities, less
any amount by which the loss was mitigated, for example by sales during
the Relevant Period or hedging.
6.3. The Authority therefore requires Tesco plc and Tesco Stores Limited jointly
to pay to Eligible Claimants the Restitution Amount in accordance with the
arrangements set out in Annex 2 to this Final Notice.
Breach of section 118(7) of the Act – Public Statement
6.4. The Authority publishes this notice as a statement of Tesco plc’s and Tesco
Stores Limited’s misconduct pursuant to section 123(3) of the Act.
6.5. As the misconduct took place after 6 March 2010, the Authority’s new
penalty regime applies. The Authority has also had regard to the provisions
of Chapter 7 of the Enforcement Guide.
6.6. The Authority’s policy for imposing a financial penalty or publishing a
statement of misconduct is set out in Chapter 6 of DEPP. DEPP 6.4.1G
states that the Authority will consider all the relevant circumstances of the
case when deciding whether to impose a penalty or issue a public censure.
6.7. In the circumstances of this case, the Authority does not consider it would
be appropriate to impose a penalty. The Authority believes that its
objectives may appropriately be achieved by means of a public censure and
the requirement to pay restitution, given that Tesco Stores Limited will pay
a substantial penalty pursuant to the DPA, and given the exemplary co-
operative approach taken by Tesco plc and Tesco Stores Limited both with
the FCA and the SFO. The Authority has also had regard to the steps that
both companies have taken since the misconduct to ensure that similar
misconduct will not occur in future and to the exemplary conduct of the
Tesco plc Board in the approach it has taken since the discovery of the
overstatement in September 2014.
7.
PROCEDURAL MATTERS
Decision maker
7.1. The decision which gave rise to the obligation to give this Notice was made
by the Settlement Decision Makers.
7.2. This Final Notice is given under, and in accordance, with section 390 of the
Act.
7.3. Sections 391(4), 391(6) and 391(7) of the Act apply to the publication of
information about the matter to which this notice relates. Under those
provisions, the Authority must publish such information about the matter to
which this notice relates as the Authority considers appropriate. The
information may be published in such manner as the Authority considers
appropriate. However, the Authority may not publish information if such
publication would, in the opinion of the Authority, be unfair to the person
with respect to whom the action was taken or prejudicial to the interests of
consumers or detrimental to the stability of the UK financial system.
7.4. The Authority intends to publish such information about the matter to which
this Final Notice relates as it considers appropriate.
Authority contacts
7.5. For more information concerning this matter generally, contact Joanna
Simon (direct line: 020 7066 7418) or Tim Edgar (direct line: 020 7066
9522) of the Enforcement and Market Oversight Division of the Authority.
Mario Theodosiou
Project Sponsor
Financial Conduct Authority, Enforcement and Market Oversight Division
ANNEX 1: Relevant Statutory and Regulatory Provisions
STATUTORY PROVISIONS
1.
The Authority’s statutory objectives are set out in section 1B(3) of the
Financial Services and Markets Act 2000 as amended by the Financial
Services Act 2012 and include the integrity objective.
2.
The Authority has the power under section 123(1) of the Act to impose a
financial penalty where it is satisfied that a person has engaged in market
abuse.
3.
Section 118(1)(a) of the Act defines ‘market abuse’ as “behaviour
(whether by one person alone or by two or more persons jointly or in
concert) which –
(a) occurs in
relation to:
(i) qualifying investments admitted to trading on a prescribed
market;
…an
d
(b)
falls within any one or more of the types of behaviour set
out in subsections (2) to (8).”
4.
Section 118(7) sets out the behaviour that will amount to the
dissemination of false or misleading information:
"… where the behaviour consists of the dissemination of information by
any means which gives, or is likely to give, a false or misleading
impression as to a qualifying investment by a person who knew or could
reasonably be expected to have known that the information was false or
misleading.”
5.
Section 118A(1) states that behaviour is taken into account if it occurs:
“(a) in the United Kingdom, or
(b) in relation to—
(i) qualifying investments which are admitted to trading on a
prescribed market situated in, or operating in, the United Kingdom
…”.
6.
Section 123(2) of the Act provides a defence to the Authority imposing a
penalty for market abuse:
"But the Authority may not impose a penalty on a person if … there
are reasonable grounds for it to be satisfied that –
(a) he believed, on reasonable grounds, that his behaviour did not fall
within paragraph (a) or (b) of subsection (1), or
(b) he took all reasonable precautions and exercised all due diligence
to avoid behaving in a way which fell within paragraph (a) or (b) of
that subsection."
7.
Section 123(3) of the Act provides the Authority with a power to issue a
public statement:
“if the [Authority] is entitled to impose a penalty on a person under this
section it may, instead of imposing a penalty on him, publish a statement
to the effect that he has engaged in market abuse.”
8.
Section 384(2)-(3) of the Act provides the Authority with the power to
require restitution:
“(2) The [Authority] may exercise the power in subsection (5) if it is
satisfied that a person (“the person concerned”)
(a) has engaged in market abuse…
And the condition in subsection (3) is fulfilled,
(3) The condition is – …
(b) that one or more persons have suffered loss or been otherwise
adversely affected as a result of the market abuse.”
9.
Section 384(5) of the Act provides the Authority with the power to require
restitution:
“The power referred to in [subsection (2)] is a power to require the person
concerned, in accordance with such arrangements as the regulator
exercising the power (the “regulator concerned”) considers appropriate, to
pay to the appropriate person or to distribute among the appropriate
persons such amount as appears to the regulator concerned to be just
having regard -
(b) in a case within paragraph (b) of subsection (1) or (3), to the extent of
the loss or other adverse effect”
HANDBOOK PROVISIONS
Decision Procedures and Penalties manual (“DEPP”)
10.
Section 124 of the Act requires the Authority to issue a statement of policy
with respect to the imposition of penalties for market abuse and the
amount of such penalties. The Authority’s policy in this regard is
contained in Chapter 6 of DEPP as applicable from 6 March 2010. In
deciding whether to exercise its power to impose a financial penalty under
section 123 of the Act, the Authority must have regard to this statement.
11.
DEPP 6.2 sets out a number of factors to be taken into account when the
Authority decides to take action for a financial penalty. The factors are not
exhaustive, but include the nature and seriousness of the suspected
breach and the conduct of the person after the breach.
12.
In deciding whether to exercise its power under section 123 of the Act in
the case of any particular behaviour, the Authority must have regard to
the statement of policy published under section 124 of the Act. In
determining the penalty to be imposed on Tesco plc and Tesco Stores
Limited, the Authority has had regard to DEPP 6.
13.
DEPP 6.3 sets out factors which the Authority may take into account in
determining whether the conditions in section 123(2) of the Act are met.
Relevant factors include:
(a)
whether, and if so to what extent, the behaviour in question was or
was not analogous to behaviour described in the Code of Market
Conduct as amounting or not amounting to market abuse (DEPP
6.3.2(1)G);
(b)
whether the Authority has published any guidance or other
materials on the behaviour in question and if so, the extent to
which the person sought to follow that guidance or take account of
those materials. The Authority will consider the nature and
accessibility of any guidance or other published materials when
deciding whether it is relevant in this context and, if so, what
weight should be given (DEPP 6.3.2(2)G);
(c)
the level of knowledge, skill and experience to be expected of the
person concerned (DEPP 6.3.2(4)G);
(d)
whether, and if so to what extent, the person can demonstrate that
the behaviour was engaged in for a legitimate purpose and in a
proper way.
14.
DEPP 6.4 sets out factors which the Authority may take into account in
determining whether to impose a financial penalty or public censure.
These factors include:
(a)
whether or not deterrence may be effectively achieved by issuing a
public censure (DEPP 6.4.2(1)G);
(b)
if the breach is more serious in nature or degree, this may be a
factor in favour of a financial penalty, on the basis that the sanction
should reflect the seriousness of the breach; other things being
equal, the more serious the breach, the more likely the Authority is
to impose a financial penalty (DEPP 6.4.2(3)G);
(c)
if the person has admitted the breach and provides full and
immediate cooperation to the Authority, and takes steps to ensure
that those who have suffered loss due to the breach are fully
compensated for those loses, this may be a factor in favour of a
public censure, rather than a financial penalty, depending on the
nature and seriousness of the breach (DEPP 6.4.2(5)G).
ANNEX 2
ARRANGEMENTS PURSUANT TO WHICH TESCO PLC AND TESCO STORES
LIMITED ARE TO PAY RESTITUTION
Definitions ............................................................................................... 18
Administration of the Scheme .................................................................... 22
A.
Fund Administrator ......................................................................... 22
B.
Identification of and Notification to Potential Claimants ....................... 23
D.
Plan of Compensation ..................................................................... 29
E.
Payment Process ............................................................................ 30
F.
Termination of the Scheme .............................................................. 31
G.
Reporting ...................................................................................... 31
Appendix 1 Release .................................................................................. 32
Appendix 2 Listed bonds .......................................................................... 39
Definitions
1.
The definitions used in the Final Notice continue to apply in this Annex. In
addition, in this Annex, the following definitions will apply:
“Administrator” means such Person as is appointed from time to time to
administer the Scheme on behalf of Tesco and Tesco Stores Limited.
“Beneficial Owner” means the Person or Persons with the ultimate right to
receive the income and the proceeds of sale from the Relevant Securities. For the
avoidance of doubt, where a fund has purchased or sold Relevant Securities, it is
the fund not the investors in the fund that is the Beneficial Owner.
“Claim Form” means the form for the filing of claims in accordance with the
terms of this Scheme. The Claim Form will require, at a minimum, sufficient
documentation evidencing Potential Claimants’ sales or purchases of Relevant
Securities pursuant to Eligible Transactions during the Relevant Period, as well as
details of a valid bank account for the purposes of enabling the Administrator to
make any Compensation Payment offered. The Claim Form will also provide
sufficient instructions to enable Potential Claimants to calculate the value of their
claim (excluding interest) in the Scheme and state it on the Claim Form.
References to the “Claim Form” throughout this scheme includes a Claim Form in
both paper and online form (as appropriate).
“Claims Packet” means the materials relevant to submitting a claim that may be
provided to Potential Claimants who request such materials. These materials will
comprise of a copy of this Annex, the Release and a Claim Form providing
sufficient instructions for completing the Claim Form.
“Compensation Payment” means a payment to an Eligible Claimant of its
Restitution Amount (less any tax that the Administrator considers must be
withheld) in accordance with the terms of this Scheme.
“Days” means calendar days, unless otherwise specified herein.
“Determination Notice” means the notice to be sent by the Administrator to
Potential Claimants in accordance with paragraph 18 below.
“Eligible Claimant” means a Potential Claimant who is determined by the
Administrator to have a valid claim in this scheme. Eligible Claimants do not
i.
any Person who, as of the claims filing deadline, is the subject of criminal
charges or a criminal conviction related to the August Statement;
ii.
any assignee, heir, or controlled entity of any of the Persons described in i
above;
iii.
any assignee of another Person’s right to obtain compensation under this
scheme (for the avoidance of doubt, this shall not prevent a claim being
made on behalf of an Eligible Claimant by a person holding a Power of
Attorney or otherwise acting as agent of the Eligible Claimant); and/or
iv.
any Person who has already settled claims against Tesco in respect of the
August Statement.
“Eligible Transaction” means any purchase or sale of Relevant Securities under
which Relevant Securities are delivered in exchange for cash within the standard
settlement cycle at the time of the transaction (plus one day) for such securities,
but excluding any such purchase or sale or acquisition or disposal of Relevant
Securities that is pursuant to a repo or a stock lending transaction or any
financing transaction. For the avoidance of doubt, swaps, options or other
derivative products (including, without limitation, forwards and futures) or
synthetic products do not constitute Eligible Transactions.
“Further Determination Notice” means the further determination notice to be
sent by the Administrator to Potential Claimants in accordance with paragraph 24
below.
“Institutional Investor” means an entity which is, or is part of, a sovereign
wealth fund, government, government agency, central bank, bank, insurer,
investment company or investment partnership, asset manager or investment
fund (including hedge funds, mutual funds and pension funds) that is in the
business of investing in securities on its own account for profit and which invested
on its own account in respect of the Relevant Securities that are the subject of its
claim under the Scheme. For the avoidance of doubt, a Person invests on its own
account in respect of Relevant Securities where that Person, and not another
Person, becomes the Beneficial Owner as a result of the purchase.
“Interest” means:
i.
In respect of Eligible Claimants who are Institutional Investors, simple
interest calculated at the rate of 1.25% per annum from 19 September
2014 to a date 120 days after the Scheme Commencement Date; and
ii.
In respect of Eligible Claimants who are not Institutional Investors, simple
interest calculated at the rate of 4% per annum from 19 September 2014
to a date 120 days after the Scheme Commencement Date.
“Net Relevant Bond Purchases” means in respect of each issue of Relevant
Bonds, the aggregate nominal value of bonds purchased by the Potential Claimant
in the Relevant Period pursuant to Eligible Transactions, less the sum of:
i.
the aggregate nominal value of Relevant Bonds sold by the Potential
Claimant in the Relevant Period pursuant to Eligible Transactions in
respect of that same issue; and
ii.
the aggregate nominal value of Relevant Bonds in respect of that same
issue referenced in Related Transactions entered into by that Potential
Claimant.
“Net Relevant Share Purchases” means the number of Relevant Shares that
were purchased by a Potential Claimant in the Relevant Period pursuant to
Eligible Transactions, less the sum of:
i.
the number of Relevant Shares that were sold by a Potential Claimant in
the Relevant Period pursuant to Eligible Transactions; and
ii.
the number of Relevant Shares referenced in Related Transactions entered
into by that Potential Claimant.
“Notice of Acceptance” means a notice which an Eligible Claimant must sign
and deliver to the Administrator if it wishes to accept the Restitution Amount
offered to it under the Scheme in a Determination Notice or a Further
Determination Notice.
“Person” means natural individuals as well as legal entities.
“Plan of Compensation” means the methodology by which a Potential
Claimant’s Restitution Amount is to be calculated. The Plan of Compensation is
located in paragraphs 36 to 38 below.
“Potential Claimants” means a Person or Persons who were in the Relevant
Period a Beneficial Owner of Relevant Securities and who have, or assert that
they have, possible claims to recover under the Scheme.
“Related Transaction” means any of the following:
i.
a swap, an option or other derivative product (including, without
limitation, forwards and futures) or synthetic product which, at the
relevant time, referenced Relevant Securities (and not other securities)
and which had the economic effect of mitigating risks arising from
purchases made during the Relevant Period of Relevant Securities
pursuant to Eligible Transactions; or
ii.
any other transaction which, at the relevant time, referenced Relevant
Securities (and not other securities), which was connected with purchases
of Relevant Securities pursuant to Eligible Transactions during the
Relevant Period. In this context “connected with” means that the
transaction entered into had the economic effect of mitigating risks arising
from purchases during the Relevant Period of Relevant Securities pursuant
to Eligible Transactions.
No transaction pursuant to a repo or a stock lending transaction or any financing
transaction shall be a Related Transaction.
“Release” is a release in the form of the draft attached as Appendix 1 which an
Eligible Claimant who wishes to accept an offer made in a Determination Notice or
a Further Determination Notice must sign and return to the Administrator as a
condition of receiving a Compensation Payment.
“Relevant Bonds” means the bonds from the issues identified in Appendix 2.
“Relevant Shares” means Tesco PLC ordinary shares listed on the London Stock
Exchange.
“Scheme” means these arrangements pursuant to which Tesco and Tesco Stores
Limited are to pay Restitution Amounts as required by the Final Notice of which
this Annex forms part.
“Scheme Commencement Date” means 31 August 2017 or such other date as
may be agreed between the Administrator, Tesco and Tesco Stores Limited, and
the Authority.
“Scheme Notice” means the written notice from the Administrator announcing
the Scheme Commencement Date described in paragraph 6 below.
“Scheme Termination Date” means 30 November 2018.
“Tesco” means Tesco PLC.
Administration of the Scheme
2.
Tesco and Tesco Stores Limited shall, as soon as reasonably practicable, appoint
an Administrator satisfactory to the Authority. The Administrator will act as the
agent of Tesco and Tesco Stores Limited. Tesco and Tesco Stores Limited shall
ensure that the position of Administrator shall not be vacant at any time from the
Scheme Commencement Date to the Scheme Termination Date.
3.
The Administrator will be responsible for, and authorised to take such action as
may be necessary for the purposes of, administering the Scheme in accordance
with its terms. This will include, among other things, using reasonable
endeavours to identify and contact Potential Claimants; establishing a website
and a call centre to address inquiries during the claims process; developing a
claims database; keeping appropriate records; taking such antifraud measures as
are, in the reasonable opinion of the Administrator, appropriate, such as
measures designed to identify false, ineligible and overstated claims; undertaking
appropriate anti-money laundering and sanctions checks; making determinations
under the criteria established herein as to Potential Claimant eligibility; notifying
Potential Claimants of claim determinations; and disbursing compensation in
accordance with this Scheme. Certain of these functions may be outsourced to
third parties with the agreement of Tesco, Tesco Stores Limited and the
Administrator.
4.
The Administrator will share with the Authority, Tesco and Tesco Stores Limited
reasonable details of the processes and policies that it proposes to have in place
in order to carry out its functions in relation to the Scheme before such processes
and policies come into force. The Administrator will also share with the Authority,
Tesco and Tesco Stores Limited such other information in relation to the Scheme
as any of them may reasonably request.
5.
The Authority may require such amendments to be made to the Administrator’s
processes and policies as it considers are reasonable in order to ensure the
Scheme is carried out appropriately. The Authority shall allow Tesco, Tesco Stores
Limited and the Administrator a reasonable opportunity to comment on those
amendments and shall consider any comments made, prior to requiring an
amendment.
B.
Identification of and Notification to Potential Claimants
6.
The Administrator will on the Scheme Commencement Date publish a notice
announcing that it is ready to accept claims under the Scheme on the internet
and/or in print media in a manner deemed appropriate by the Administrator and
acceptable to the Authority, Tesco and to Tesco Stores Limited. The notice will
include, at a minimum, a statement that the Scheme relates to investments in
Relevant Securities, a brief description of eligibility requirements and the Release,
details of the deadline by which Claim Forms must be submitted, instructions for
obtaining and submitting a Claim Form and obtaining a copy of the Scheme.
7.
The Administrator will establish and maintain a website devoted to the Scheme.
The Scheme website will make available a copy of the Scheme, provide
information regarding the claims process and eligibility requirements for
participation in the Scheme, including in the form of frequently asked questions,
provide an online claims portal for Potential Claimants wishing to submit their
claims online, include a copy of a Claim Form, Release and related materials in
downloadable form, and such other information covering process or substance
that the Administrator, acting reasonably, believes will be beneficial to Potential
Claimants to make the process as easy as reasonably possible for Claimants while
preserving the integrity of the Scheme. The Authority retains the right to review
and require reasonable amendments to any material posted on the Scheme
website. The Authority shall allow Tesco, Tesco Stores Limited and the
Administrator a reasonable opportunity to comment on those amendments and
shall consider any comments made, prior to requiring an amendment.
8.
Persons also may obtain a copy of the Scheme on the Authority’s website.
9.
The Administrator will establish and maintain telephone numbers (including
freephone numbers for callers from the USA and the UK) for Potential Claimants
to call to speak to a representative of the Administrator during its regular
business hours or, outside of such hours, to hear pre-recorded information about
the Scheme. The Administrator will also establish and maintain a postal address
which will be listed on the Scheme website.
10.
The Administrator will promptly provide a Claims Packet to any Potential
Claimant, or person who considers that they may be a Potential Claimant, who
asks for a Claim Form and provides contact details to which it can be sent.
11.
The Administrator will take reasonable steps to identify and contact all Beneficial
Owners of Relevant Shares and Relevant Bonds during the Relevant Period.
Throughout the period of its appointment, the Administrator will take reasonable
steps to promote the Scheme and to ensure that Potential Claimants are given
sufficient information to enable them to participate in the Scheme and are made
aware of the steps they need to take and deadlines for taking those steps.
12.
Claim Forms may only be submitted by Potential Claimants to the Administrator
(a)
on the Administrator’s online claims portal; or
(b)
by post, to the postal address set up by the Administrator in accordance
with paragraph 9 above.
13.
Claim Forms submitted using other methods will not be accepted by the
Administrator.
14.
In all materials that refer to the claim filing deadline, the claim filing deadline will
be clearly identified as the calendar date which is six months after the Scheme
Commencement Date. To avoid being barred from asserting a claim in the
Scheme, each Potential Claimant must ensure that the Administrator receives a
completed Claim Form (via the Administrator’s online claims portal or by post)
before the deadline. It will be for Potential Claimants to prove receipt by the
Administrator of a Claim Form.
15.
Claim Forms must be properly filled out per the instructions set out on the Claim
Form and signed (electronically or by hand, as appropriate) by each Potential
Claimant. They must also be accompanied by such documentary evidence as is
specified in the Claim Form (or as the Administrator may otherwise reasonably
request) to substantiate the claim. Without limitation, this may include third party
documentary evidence of Eligible Transactions in Relevant Securities during the
Relevant Period, and Related Transactions, as well as signed authorisations to
third parties to release information to the Administrator.
16.
The Administrator will review claim submissions and determine the eligibility of
each Potential Claimant to participate in the Scheme by reviewing claim data and
supporting documentation (or the lack thereof), verifying the claim, and
calculating each Potential Claimant’s loss pursuant to the Plan of Compensation.
It will be for each Potential Claimant to prove the validity and amount of his or
her claim, and that they qualify as an Eligible Claimant. The Administrator will
have the right to request, and the Potential Claimant will have the burden of
providing to the Administrator, any additional information and/or documentation
deemed relevant by the Administrator. Any additional information supplied to the
Administrator must be received no later than the deadline set for receipt by the
Administrator, which must be a deadline that is reasonable in the circumstances.
It will be for the Potential Claimant to prove receipt by the Administrator of such
additional information/documentation within this timeframe.
17.
The Administrator shall take reasonable steps to facilitate contact with it by
Potential Claimants by establishing and maintaining the telephone numbers and
postal address described in paragraph 9 above. In this regard, Potential
Claimants may request copies of the Claim Form, ask questions about the
Release, about how to complete and file the Claim Form, how to provide any
further information required or requested by the Administrator, and to inquire
about their claim. The Administrator will not, however, give legal or tax advice
and will not, in responding to any questions, be assuming any duty of any kind,
including a duty of care, to Potential Claimants.
18.
As soon as reasonably practicable following the review of a Potential Claimant’s
Claim Form and supporting information and documentation, the Administrator
will send a Determination Notice to all Potential Claimants who have filed a Claim
Form.
19.
All Determination Notices will state the Administrator’s determination in respect of
the validity of a Potential Claimant’s claim and state whether the Administrator
considers that a Potential Claimant’s claim is:
(a)
wholly valid;
(b)
partly valid; or
(c)
wholly invalid.
20.
Except where the Administrator accepts that a Potential Claimant’s claim is wholly
valid, the Determination Notice will give reasons for the Administrator’s
determination.
21.
Determination Notices in respect of wholly valid or partly valid claims will state
the Restitution Amount being offered. Determination Notices in respect of wholly
invalid claims will confirm that no Restitution Amount is being offered.
22.
Determination Notices offering Restitution Amounts to Eligible Claimants (in
respect of wholly valid or partly valid claims) will enclose a Notice of
Acceptance and a Release. Eligible Claimants must, if they wish to accept the
Restitution Amount offered in their Determination Notice, deliver to the
Administrator a copy of the signed and completed Notice of Acceptance and a
copy of the signed and completed Release. An Eligible Claimant will not receive its
Compensation Payment unless a signed and completed Notice of Acceptance and
a signed and completed Release has been received by the Administrator within
the time limit required by the Administrator, which must be a reasonable time
limit in the circumstances. It will be for the Eligible Claimant to prove receipt of
the signed and completed Notice of Acceptance and signed and completed
Release by the Administrator. Eligible Claimants will therefore be instructed to
submit these documents to the Administrator in a manner that will enable them
to prove receipt by the Administrator.
23.
Following the receipt of a Determination Notice in respect of a partly valid or
wholly invalid claim, a Potential Claimant will have one opportunity to request
reconsideration of their claim by the Administrator and provide further
information and documentation to substantiate the basis upon which the Potential
Claimant is requesting such reconsideration. Any further information and
documentation must be received by the Administrator within the time limit
required by the Administrator, which must be a reasonable time limit in the
circumstances.
24.
As soon as reasonably practicable following the review of any further information
and documentation received from a Potential Claimant in connection with a
request to reconsider its claim, the Administrator will send a Further
Determination Notice to such Potential Claimants.
25.
A Further Determination Notice will state the Restitution Amount being offered or
confirm that no Restitution Amount is being offered. Further Determination
Notices offering Restitution Amounts to Eligible Claimants will enclose a Notice of
Acceptance and a copy of the Release. Eligible Claimants must, if they wish to
accept the Restitution Amount offered in their Further Determination Notice,
deliver to the Administrator a copy of the signed and completed Notice of
Acceptance and a copy of the signed and completed Release. Eligible Claimants
will not receive their Compensation Payments unless a signed and completed
Notice of Acceptance and a signed and completed Release has been received by
the Administrator within the time limit required by the Administrator, which must
be a reasonable time limit in the circumstances. It will be for Eligible Claimants
to prove receipt of the signed and completed Notice of Acceptance and signed and
completed Release by the Administrator. Eligible Claimants will therefore be
instructed to submit these documents to the Administrator in a manner that will
enable them to prove receipt by the Administrator.
26.
A Potential Claimant will not have the opportunity to request a further
reconsideration of their claim following the receipt of a Further Determination
Notice.
27.
The Administrator will determine any question of fact arising in relation to any
claim made under the Scheme on the basis of the balance of probabilities.
28.
Following the issuance of a Determination Notice, if within the required time limit,
the Administrator has not received from a Potential Claimant: (i) a signed and
completed Notice of Acceptance and a signed and completed Release; or (ii) a
request for a reconsideration of their claim supported by further information and
documentation, the Potential Claimant’s participation in the Scheme will be
terminated, the Potential Claimant will not receive any Compensation Payment
and the Potential Claimant will not be entitled to submit a further claim into the
Scheme.
29.
Following the issuance of a Further Determination Notice, if within the required
time limit, the Administrator has not received from a Potential Claimant a signed
and completed Notice of Acceptance and a signed and completed Release, the
Potential Claimant’s participation in the Scheme will be terminated, the Potential
Claimant will not receive any Compensation Payment and the Potential Claimant
will not be entitled to submit a further claim into the Scheme.
30.
Determination Notices and Further Determination Notices offering Restitution
Amounts will inform Eligible Claimants whether, on the basis of the information
they have submitted in writing, any tax is expected to be withheld from their
Compensation Payment and will include a statement that the tax treatment of the
Compensation Payment (when paid out by the Administrator) is otherwise the
responsibility of each Eligible Claimant.
31.
Save in respect of the Scheme Commencement Date and the Scheme
Termination Date, the Administrator may extend any deadline in respect of the
Scheme at the request of a Potential Claimant, if the Administrator in its sole
discretion is satisfied (a) that there is a compelling reason to do so; (b) that the
extension is fair in all the circumstances; and (c) granting the extension would
not prejudice the Administrator’s ability to administer the Scheme in accordance
with its terms.
32.
The Administrator may, in its sole discretion, consider and determine disputes of
any nature presented by Potential Claimants. In so doing, the Administrator will
seek to reach a fair and impartial decision with the aim of giving proper effect to
the requirements of this Scheme, but is not acting as an arbitrator. The
Administrator shall be entitled to take advice from any person it considers to have
expert knowledge. The Administrator will owe no duty of any kind, including a
duty of care, to Potential Claimants.
33.
All determinations made by the Administrator in accordance with the Scheme in
any dispute, request for reconsideration, or request to cure a deficient claim will
be final and not subject to appeal.
34.
All determinations made by the Administrator in the Scheme will be made in good
faith and it will act with integrity in all its dealings with Potential Claimants and
treat them fairly in accordance with the rules and purposes of the Scheme.
However, only the Authority may enforce any of the obligations arising in relation
to the conduct of this Scheme. Nothing in this Scheme is intended to give any
person other than the Authority any right of action in respect of the conduct of
this Scheme. Neither Tesco, Tesco Stores Limited nor the Administrator will owe
any duty of any kind, including a duty of care, to any Potential Claimant. For the
avoidance of doubt, where Eligible Claimants submit a signed and completed
Notice of Acceptance and a signed and completed Release within the time
required, Tesco will owe those Eligible Claimants a contractual duty to make the
Compensation Payment (subject to those Eligible Claimants passing appropriate
anti-money laundering and sanctions checks and providing valid bank account
details), and Tesco and those Eligible Claimants will be entering into a contract on
the terms of the signed and completed Release.
35.
The Potential Claimant has the burden of notifying the Administrator through the
online claims portal or by post of a change in his or her current address and other
contact information and his or her bank account details, and of ensuring that such
information is received by the Administrator. The Administrator will otherwise be
entitled to rely on the information provided previously by the Potential Claimant.
The Administrator will ensure that Potential Claimants are clearly informed of this.
D.
Plan of Compensation
36.
The approach to compensation has been derived by looking at the fall in the price
of Relevant Securities between close of trading on the London Stock Exchange on
19 September 2014 (the last trading date before the September Statement) and
close of trading on the London Stock Exchange on 22 September 2014 (the day
that the September Statement was made) and adjusting for economy-wide and
industry-wide effects on price movements.
37.
A Potential Claimant’s Restitution Amount will be determined as follows:
(a)
The total, if positive, of:
(i)
the number of Net Relevant Share Purchases made by a Potential
Claimant, multiplied by 24.5p per share; and
(ii)
the product of the following calculation in respect of each relevant
bond issue:
(A divided by B) multiplied by C
Where A is the nominal value of Net Relevant Bond Purchases by a
Potential Claimant;
B is the nominal value in respect of the relevant bond as set out in
column 6 of Appendix 2; and
C is the amount in respect of the relevant bond as set out in
Column 7 of Appendix 2;
(b)
Interest on the amount calculated in accordance with paragraph 37(a)
above.
38.
The date of any transaction for purposes of calculating Restitution Amounts is the
“trade” date as distinguished from the “settlement” date.
30
E.
Payment Process
39.
The Administrator will notify Tesco promptly following the end of each week of all
signed and completed Notices of Acceptance and signed and completed Releases
received that week and provide Tesco with copies of the signed and completed
Releases. Upon Tesco receiving notification from the Administrator of the Eligible
Claimants that have provided signed and completed Notices of Acceptance and
signed and completed Releases to the Administrator that week, Tesco shall:
(a)
within 14 days of such notification and subject to paragraphs 40 to 42
below, put the Administrator in funds to make the relevant Compensation
Payments to the relevant batch of Eligible Claimants; and
(b)
procure that, subject to paragraphs 40 to 42 below, the Administrator
makes the relevant Compensation Payments to the Eligible Claimants
within 14 days of receipt of funds from Tesco.
40.
An Eligible Claimant’s entitlement to receive any Compensation Payment is
conditional upon the Administrator having completed to its satisfaction
appropriate anti-money laundering and sanctions checks. The Administrator will
conduct those checks as expeditiously as possible and the Administrator may ask
Eligible Claimants for further information in order to complete those checks, if
necessary. Nothing in this Scheme shall require Tesco, Tesco Stores Limited, the
Administrator or any other Person to make a payment or procure the making of a
payment to an Eligible Claimant when it would be unlawful to do so under any
applicable law, including violating any applicable anti-money laundering and
sanctions requirements.
41.
In making a Compensation Payment to an Eligible Claimant, the Administrator
shall pay the relevant amount to the bank account indicated on that Eligible
Claimant’s Claim Form or notified to the Administrator under paragraph 35. If no
or invalid bank account details have been provided by an Eligible Claimant, the
Administrator will make reasonable attempts to obtain valid bank account details.
An Eligible Claimant’s entitlement to receive any Compensation Payment is
conditional upon it providing valid bank account details to the Administrator.
Neither Tesco, Tesco Stores Limited nor the Administrator will be required to
make a Compensation Payment unless valid bank account details have been
provided by the Eligible Claimant.
42.
In order to receive Compensation Payments under the Scheme, Eligible Claimants
must have both submitted valid bank account details to the Administrator and
also passed any applicable anti-money laundering and sanctions checks by 19
November 2018. Eligible Claimants that do not meet this deadline will not be
entitled to receive a Compensation Payment.
F.
Termination of the Scheme
43.
Tesco shall make Compensation Payments within the time required under this
Scheme, and notwithstanding any requirement under this Scheme (other than the
requirements of paragraph 42), all Compensation Payments determined by the
Administrator to be payable pursuant to the Scheme must be made by the
Scheme Termination Date.
44.
As soon as reasonably practicable after the Scheme Termination Date, the
Administrator will shut down the website and telephone lines established
specifically for the administration of the Scheme and will take steps to terminate
any ongoing contracts with third party suppliers.
G.
Reporting
45.
The Administrator shall give a written report on the progress of the Scheme to
Tesco and Tesco Stores Limited on or around the last working day of each month
(or as otherwise agreed), up to and including the Scheme Termination Date.
Tesco and Tesco Stores shall provide the monthly report to the Authority within 7
days of receiving it from the Administrator. Prior to providing the monthly report
to the Authority, Tesco and Tesco Stores may provide their comments on the
monthly report to the Administrator and seek to agree amendments to the
monthly report with the Administrator. The Administrator will only be required to
accept amendments to the monthly report that it considers to be reasonable and
appropriate.
46.
The monthly report will include such information as the Authority reasonably
requires and the Administrator is reasonably able to provide, including as a
minimum details on: the number of claims received, Determination Notices and
Further Determination Notices sent out, offers accepted and the amount of
Compensation Payments offered and made. The Authority shall allow Tesco and
Tesco Stores Limited a reasonable opportunity to comment on the information to
be included in the monthly report and shall consider any comments made, prior
to requiring that the information be included.
i.
THIS AGREEMENT is made on ………………………………………..
ii.
BETWEEN:
(1)
………………………………………………………..
(2)
………………………………………………………..
(3)
………………………………………………………..
(the Claimant(s)); and
(4)
TESCO PLC, a company incorporated in England and Wales having its registered
office at Tesco House, Shire Park, Kestrel Way, Welwyn Garden City, AL7 1GA
(Tesco).
1.
BACKGROUND
A.
Following a settlement agreement between the Financial Conduct Authority
(FCA), Tesco and Tesco Stores Limited (Tesco Stores), the FCA has issued a
Final Notice (Final Notice) dated 28 March 2017 requiring Tesco and Tesco
Stores to provide restitution to qualifying persons pursuant to arrangements set
out in Annex 2 of the Final Notice;
B.
Tesco and Tesco Stores have offered to make a Compensation Payment (as
defined below) to the Claimant(s) pursuant to the Scheme.
2.
DEFINITIONS AND INTERPRETATION
2.1
In this Agreement, in addition to terms defined in the Final Notice, including
Annex 2 to the Final Notice, and unless the context otherwise requires, the
following terms shall have the following meaning:
Claim means any actual or potential claim or cause of action of any kind or
nature whatsoever, whether based on allegations of fraud or dishonesty or not,
whether direct or indirect, whether known or unknown, suspected or
unsuspected, foreseen or unforeseen, contingent or actual, present or future,
whether or not asserted or identified or yet accrued, including claims for costs
and interest, however and whenever arising and in whatever capacity and
jurisdiction.
Party means a party to this Agreement.
Proceedings means any legal, judicial, arbitral, administrative, regulatory or
other action or proceedings in any jurisdiction whatsoever.
Related Parties means:
i.
Tesco’s subsidiaries, affiliates, directors, officers or employees or former
directors, officers or employees; and
ii.
KPMG LLP in its capacity as Administrator of the Scheme, together with its
partners, directors, agents and employees.
Released Claims means:
i.
any claims arising out of or in any way connected with the publication of
the August Statement; and
ii.
any claims arising out of or in any way connected with the administration
of the Scheme.
For the avoidance of doubt, Released Claims do not include claims arising out of
or in any way connected with the publication of statements by Tesco prior to the
August Statement.
Released Parties means Tesco and any of the Related Parties.
Scheme Determination Notice means either a Determination Notice or, if the
Claimant(s)
was/were
sent
a
Further
Determination
Notice,
a
Further
Determination Notice.
2.2
Clause headings are for convenience only and are not to be taken into account in
the interpretation of this Agreement.
3.
SETTLEMENT AND RELEASE
3.1
This Agreement is executed in full and final settlement of, and the Claimant(s)
hereby release(s) and forever discharge(s), all Claims against the Released
Parties in respect of the Released Claims.
3.2
In exchange, subject to paragraphs 40, 41 and 42 of the Scheme, Tesco will:
(a)
within 14 days of receiving notification from the Administrator that it has
received a signed and completed copy of this Release and a signed and
completed Notice of Acceptance, put the Administrator in funds to pay the
Restitution Amount offered in the Scheme Determination Notice sent to
the Claimant(s); and
(b)
within 14 days of the Administrator receiving those funds, procure that the
Administrator pays to the Claimant(s) the Restitution Amount offered in
the Scheme Determination Notice sent to them. The payment shall be
made in accordance with the Claimant(s) instructions in the Claim Form.
3.3
If, by 19 November 2018, the Claimant(s) have failed to provide the
Administrator with valid bank account details and/or have failed to pass any
applicable anti-money laundering and sanctions checks applied by the
Administrator, this Agreement will immediately terminate on that date and will
cease to have any effect.
4.
WARRANTY
4.1
The Claimant(s) warrants/warrant that:
(a)
it has / they have the right to assert the Released Claims;
(b)
it has / they have not assigned, transferred or otherwise disposed of any
interest in the Released Claims; and
(c)
it has / they have not already settled the Released Claims.
5.
NO ADMISSION OF LIABILITY
5.1
None of the Released Parties make any admission of liability.
6.
CLAIM FORM CONFIRMATIONS
6.1
The Claimant(s) agree(s) that if any of the confirmations given by it/them in the
Claim Form are false or misleading, the Claimant(s) will return to Tesco any
Compensation Payment that has been made to it/them under the Scheme and will
indemnify the Administrator and Tesco against losses, costs and expenses
incurred by them as a result of those false confirmations.
7.
AUTHORITY TO SETTLE
7.1
Each of the Parties represents and warrants that its execution of this Agreement
is authorised and that the person(s) executing the Agreement on its behalf have
the authority to do so.
8.
CONTRACTS (RIGHTS OF THIRD PARTIES) ACT 1999
8.1
The Related Parties shall have the right to enforce clauses 3, 4 and 6 of this
Agreement by reason of the Contracts (Rights of Third Parties) Act 1999. This
right is subject to: (i) the right of the Parties to amend, terminate, vary or rescind
this Agreement (including clauses 3, 3.34 and 6) without the consent of the
Related Parties; and (ii) the other terms and conditions of this Agreement.
8.2
Except as provided in clause 8.1, nothing contained in this Agreement confers or
purports to confer on any third party any benefit or any right to enforce any term
of this Agreement pursuant to the Contracts (Rights of Third Parties) Act 1999.
9.
EXISTING PROCEEDINGS
9.1
The Claimant(s) will immediately take all necessary steps to discontinue any
Proceedings already brought by the Claimant(s) against the Released Parties in
respect of the Released Claims.
10.
ENTIRE AGREEMENT
10.1
This Agreement constitutes the entire agreement between the Parties relating to
the subject matter of this Agreement. Each of the Parties acknowledges and
confirms that in executing this Agreement, it is not relying upon any statement or
representation made by or on behalf of any other Party, whether or not in writing,
at any time prior to execution of this Agreement which is not expressly set out in
this Agreement or in the Claim Form or other information or documentation
submitted by the Claimant(s) to the Administrator. Each of the Parties expressly
36
agrees that it will not have any right of action in relation to any statement or
representation, whether oral or written, made by or on behalf of the other Party
which preceded the execution of this Agreement, unless such statements or
representations were made fraudulently, or made in the Claim Form or other
information or documentation submitted by the Claimant(s) to the Administrator.
11.
VARIATION
11.1
This Agreement may be varied or modified only by the written agreement of the
Parties.
12.
COUNTERPARTS
12.1
This Agreement may be executed in any number of counterparts, and all of such
counterparts taken together, shall be deemed to constitute one and the same
instrument.
13.
GOVERNING LAW
13.1
This Agreement and any non-contractual obligations arising out of or in
connection with it shall be governed by, and interpreted in accordance with,
English law.
14.
JURISDICTION
14.1
The English courts shall have exclusive jurisdiction in relation to all disputes
arising out of or in connection with this Agreement including, without limitation,
disputes arising out of or in connection with any non-contractual obligations. For
such purposes each Party irrevocably submits to the jurisdiction of the English
courts and waives any objection to the exercise of such jurisdiction.
Signed by [insert name]
)
)
[insert scanned signature]
for and on behalf of
)
………………………………
iii.
iv.
[Signature Block A: Individual Claimants signing on their own behalf should use
the below signature blocks – one per Claimant]
38
[Signature Block B: Authorised persons signing on behalf of Claimants that are legal
entities should use the signature blocks below – one signature is required per Claimant]
for and on behalf of
)
…………………………………
……………………………………...
)
for and on behalf of
)
…………………………………
……………………………………...
)
for and on behalf of
)
…………………………………
……………………………………...
)
Appendix 2
Listed bonds
1
2
3
4
5
6
7
ncy
ID_ISIN
Issue Date
Maturity
Nominal
Amount per
nominal
value set out
in column 6
TESCO PLC
GBP
XS0105244585
14/12/1999
14/12/202
TESCO PLC
GBP
XS0117308840
08/09/2000
08/09/201
6
1,000
GBP 3.41
TESCO PLC
GBP
XS0137945373
05/11/2001
05/11/202
9
1,000
GBP 7.11
TESCO PLC
GBP
XS0289810318
05/03/2007
05/03/205
7
50,000
GBP 1,228
TESCO PLC
GBP
XS0414345974
24/02/2009
24/02/202
TESCO PLC
USD
US881575AA22
05/11/2007
15/11/201
7
1,000
USD 3.47
TESCO PLC
USD
USG87621AK79
05/11/2007
15/11/201
7
1,000
USD 2.73
TESCO PLC
USD
US881575AC87
05/11/2007
15/11/203
1,000
USD 32.37
7
TESCO PLC
USD
USG87621AL52
05/11/2007
15/11/203
7
1,000
USD 27.15
TESCO PLC
USD
US881575AE44
05/12/2011
05/12/201
TESCO PLC
USD
USG87623JG33
05/12/2011
05/12/201
TESCO PLC
USD
US881575AF19
05/12/2011
05/01/201
7
1,000
USD 3.05
TESCO PLC
USD
USG87623JH16
05/12/2011
05/01/201
7
1,000
USD 2.69
TESCO PLC
EUR
XS0295018070
10/04/2007
10/04/204
7
1,000
EUR 49.37
TESCO PLC
EUR
XS0386772684
12/09/2008
12/09/201
TESCO PLC
EUR
XS0697395472
02/11/2011
02/11/201
TESCO CORP
TREASURY SERV
EUR
XS0992632702
12/11/2013
13/11/201
7
1,000
EUR 6.93
TESCO CORP
TREASURY SERV
EUR
XS0992638220
12/11/2013
12/11/202
TESCO CORP
TREASURY SERV
EUR
XS1082970853
01/07/2014
01/07/201
TESCO CORP
TREASURY SERV
EUR
XS1082971588
01/07/2014
01/07/202
TESCO PROPERTY
FIN 1 PLC
GBP
XS0425412227
25/06/2009
13/07/203
TESCO PROPERTY
FIN 2 PLC
GBP
XS0347919028
23/09/2009
13/10/203
TESCO PROPERTY
FIN 3 PLC
GBP
XS0512401976
07/07/2010
13/04/204
TESCO PROPERTY
FIN 4 PLC
GBP
XS0588909878
09/02/2011
13/10/204
TESCO PROPERTY
FIN 5 PLC
GBP
XS0735866583
31/01/2012
13/10/204
TESCO PROPERTY
FIN 6 PLC
GBP
XS0883200262
13/02/2013
13/07/204
TESCO PERSONAL
FINANCE
GBP
XS0591029409
24/02/2011
24/08/201
TESCO PERSONAL
FINANCE
GBP
XS0710391532
16/12/2011
16/12/201
TESCO PERSONAL
FINANCE
GBP
XS0780063235
21/05/2012
21/11/202