SCHEDULEThe Bradford & Bingley plc Compensation Scheme

PART 2Determination of amount of compensation

Transfer of Bradford & Bingley shares3

1

The amount of any compensation payable by the Treasury to persons who held shares in Bradford & Bingley immediately before they were transferred by the Transfer Order shall be determined in accordance with this paragraph.

2

The amount of compensation payable to a person shall be an amount equal to the value immediately before the transfer time of all shares in Bradford & Bingley held immediately before the transfer time by that person.

3

For the purposes of this Scheme, the holders of shares in Bradford & Bingley, and the class and number of shares held by them, shall be identified by reference to—

a

the Operator register of members of Bradford & Bingley; and

b

the issuer register of members of Bradford & Bingley,

following the reconciliation required by article 4(4) of the Transfer Order.

4

In sub-paragraph (3) “issuer register of members” and “Operator register of members” have the meanings given in the Uncertificated Securities Regulations 20013.

Extinguishment of subscription rights4

1

The amount of any compensation payable by the Treasury to persons whose subscription rights were extinguished by virtue of article 5 of the Transfer Order shall be determined in accordance with this paragraph.

2

The amount of compensation payable to a person shall be an amount equal to the value immediately before the transfer time of that person’s subscription rights.

3

In this paragraph “subscription rights” means any right or other entitlement to receive shares in Bradford & Bingley (whether by subscription, conversion or otherwise) granted by—

a

a relevant undertaking; or

b

a person not within paragraph (a), where the right or entitlement is enjoyed by reason of or in connection with—

i

any individual’s office or employment with a relevant undertaking; or

ii

the services provided by any individual to a relevant undertaking.

4

In sub-paragraph (3) “relevant undertaking” means Bradford & Bingley or any of its UK subsidiary undertakings that is a body corporate incorporated, or a partnership established, under the law of any part of the United Kingdom.

Modification of interests, rights and liabilities in relevant instruments5

1

Subject to sub-paragraph (4), the amount of any compensation payable by the Treasury to persons whose rights were extinguished by virtue of the provision made in article 6 or 7 of the Transfer Order (referred to in this paragraph as “consequential rights”) shall be determined in accordance with this paragraph.

2

The amount of compensation payable to a person shall be such compensation as may be just in respect of that person’s consequential rights.

3

The determination of any compensation in respect of consequential rights shall take into account—

a

any diminution in the value of property; or

b

any increase in the burden of any liability,

which is attributable to the consequences specified in article 7(3) of the Transfer Order not arising.

4

Compensation is payable in respect of a person’s consequential rights only if such compensation is required to be paid to comply with the Convention rights (within the meaning given by section 1 of the Human Rights Act 19984).