EXHIBIT
4(b)(i)


EXECUTIVE SERVICE AGREEMENT


THIS EXECUTIVE SERVICE AGREEMENT is made on the 3rd day of November 2010.


BETWEEN


	
  

 	
  

 	
  

 
	
  

 	
  (1)

 	
 Lloyds
 TSB Bank plc (the “Employer”);
 and

 
	
  

 	
  

 	
  

 
	
  

 	
  (2)

 	
 António
 Horta-Osório (the “Executive”).

 



Definitions used in this Agreement are set out in Clause
20.2 below.


IT IS AGREED as follows:


	
  

 	
  

 	
  

 
	
 1

 	
 Appointment Pre-Conditions and Term

 
	
  

 	
  

 
	
  

 	
 Appointment

 
	
  

 	
  

 	
  

 
	
 1.1

 	
 Provided
 the Executive has satisfied the conditions set out in Clause 1.2 below, the
 Employer shall employ the Executive initially as a Director and with effect
 from 7 March 2011 (or such later date as agreed) as Group Chief Executive
 (the “Employment”). On
 commencement of the Employment, the Executive shall be appointed to the board
 of directors of Lloyds Banking Group plc and to the boards of directors of
 the Employer, Bank of Scotland plc and HBOS plc.

 
	
  

 	
  

 
	
  

 	
 Pre-conditions

 
	
  

 	
  

 
	
 1.2

 	
 The
 Executive’s employment is conditional upon:

 
	
  

 	
  

 	
  

 
	
  

 	
 1.2.1

 	
 the
 Executive having been approved in respect of the Employment by the FSA under
 FSMA 2000 (“FSMA Approval”),

 
	
  

 	
  

 	
  

 
	
  

 	
 1.2.2

 	
 the
 Executive not being prevented from taking up employment under this Agreement
 by any obligation or duty owed to a third party, whether contractual or
 otherwise.

 
	
  

 	
  

 	
  

 
	
  

 	
 Term

 
	
  

 	
  

 	
  

 
	
 1.3

 	
 The
 Employment shall begin on such date as shall be agreed between the parties
 which unless otherwise agreed by the parties shall be a date no later than 7
 March 2011 (the “Commencement Date”)
 and shall continue until terminated:

 
	
  

 	
  

 	
  

 
	
  

 	
 1.3.1

 	
 by
 not less than 12 months’ notice given by the Employer to the Executive
 (provided that such notice may not expire before the second anniversary of
 the Commencement Date); or

 
	
  

 	
  

 	
  

 
	
  

 	
 1.3.2

 	
 by
 not less than 6 months’ notice given by the Executive to the Employer; or

 
	
  

 	
  

 	
  

 
	
  

 	
 1.3.3

 	
 under
 a provision set out in Clause 12.

 
	
  

 	
  

 	
  

 
	
 1.4

 	
 The
 Executive’s period of continuous employment with the Employer for the
 purposes of the law relating to redundancy and unfair dismissal is the
 Commencement Date.

 
	
  

 	
  

 	
  

 
	
 2

 	
 Duties of the Executive

 
	
  

 	
  

 
	
  

 	
 General Duties

 
	
  

 	
  

 
	
 2.1

 	
 The
 Executive will during the Employment:

 
	
  

 	
  

 
	
  

 	
 2.1.1

 	
 devote
 their whole time, attention and skill to the Employment during normal office
 hours and during such other times as may reasonably be required for the
 effective performance of the duties under this Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
 2.1.2

 	
 properly
 perform the duties and exercise the powers and functions that from time to
 time may reasonably be assigned to or vested in the Executive by the Board in
 relation to any Group Company;

 
	
  

 	
  

 	
  

 
	
  

 	
 2.1.3

 	
 accept
 any offices or directorships as reasonably required by the Employer;

 
	
  

 	
  

 	
  

 
	
  

 	
 2.1.4

 	
 comply
 with all rules, regulations policies and codes issued by the Employer that
 apply to the Employment;

 
	
  

 	
  

 	
  

 
	
  

 	
 2.1.5

 	
 comply
 with all rules, regulations and codes imposed or recommended by any industry
 or regulatory body that apply to the Employment; 

 
	
  

 	
  

 	
  

 
	
  

 	
 2.1.6

 	
 discuss
 regularly with the Chairman the conduct of the Executive’s duties, plans for
 the future performance of the duties and of any conflict of interest to which
 the Executive may become subject and promptly inform the Chairman if there
 are major issues relating to the foregoing of which the Chairman ought
 reasonably to be informed without delay;

 
	
  

 	
  

 	
  

 
	
  

 	
 2.1.7

 	
 comply
 with any policy directions or reasonable other directions issued by the
 Employer;

 
	
  

 	
  

 	
  

 
	
  

 	
 2.1.8

 	
 use
 best endeavours to promote the interests and reputation of every Group
 Company; and

 
	
  

 	
  

 	
  

 
	
  

 	
 2.1.9

 	
 keep
 the Employer advised of the Executive’s current UK residential address.

 
	
  

 	
  

 	
  

 
	
  

 	
 Interests of the Executive

 
	
  

 	
  

 	
  

 
	
 2.2

 	
 The
 Executive will disclose promptly in writing to the Employer any interests of
 his (for example, shareholdings or directorships) whether or not of a
 commercial or business nature (except interests in any Group Company). The
 Executive has, prior to signing this Agreement, disclosed in writing all such
 interests and without prejudice to the Executive’s obligations under any
 other provision of this Agreement, the Employer consents to the Executive
 continuing to hold such interests and such other interests or appointments as
 may be approved in advance by the Chairman.

 
	
  

 	
  

 
	
 2.3

 	
 Subject
 to Clauses 2.2 and 2.4, during the Employment (including any Garden Leave
 Period) the Executive will not be directly or indirectly engaged or concerned
 in the conduct of any activity of a commercial or business nature (except as
 a representative of the Employer or with the written consent of the
 Chairman). 

 
	
  

 	
  

 
	
 2.4

 	
 The
 Executive may hold or be interested in investments which amount to not more
 than one per cent of the issued investments of any class or any one company. 

 













	
  

 	
  

 
	
 2.5

 	
 The
 Executive will (and will use best endeavours to ensure that the Executive’s
 spouse and any dependents) comply with all rules of law, including Part V of
 the Criminal Justice Act 1993, the Model Code appended to Chapter 16 of the
 Listing Rules of the United Kingdom Listing Authority, the FSA’s Code of
 Market Conduct and all other rules, policies or codes applicable to the
 Employer or the Executive from time to time in relation to the holding or trading
 of securities (in each case as amended or replaced from time to time).

 
	
  

 	
  

 
	
 2.6

 	
 The
 Executive will not directly or indirectly receive any benefit from any person
 having or seeking to have business transactions with any Group Company (other
 than reasonable corporate hospitality and seasonal or occasional gifts of
 limited value).

 
	
  

 	
  

 
	
  

 	
 Approved Person

 
	
  

 	
  

 
	
 2.7

 	
 During
 the period of this Agreement the Executive will not do anything which could
 cause the Executive to be disqualified from continuing to act as a director
 of any Group Company or lose approval as an “Approved Person” by the FSA under the FSMA 2000 in respect
 of the Employment. If the Executive is not an “Approved Person” at the date
 of appointment under this Agreement, then the Executive will not do anything
 which would cause the Executive to be prevented from becoming an “Approved
 Person” in the future. 

 
	
  

 	
  

 
	
  

 	
 Location

 
	
  

 	
  

 
	
 2.8

 	
 The
 Executive’s normal place of work will be the Employer’s London Head Office
 from time to time (currently 25 Gresham Street, London). The Executive shall
 travel to such places within or outside the United Kingdom as the Employer
 may reasonably require.

 
	
  

 	
  

 
	
 3

 	
 Remuneration

 
	
  

 	
  

 
	
 3.1

 	
 During
 the Employment the Employer will pay the Executive a salary of £1,035,000 per annum or such higher
 annual salary as may be notified to the Executive from time to time (“Basic Salary”). Basic Salary will be
 reviewed (but without any obligation to increase) annually from (and
 including with effect from) 1 January 2011. Basic Salary will be paid in
 equal monthly instalments on or about the 20th day of each month. The
 Executive shall maintain a bank account with a subsidiary of the Lloyds
 Banking Group into which Basic Salary shall be paid. 

 
	
  

 	
  

 
	
 3.2

 	
 The
 Executive agrees to waive payment of any director’s fees or other
 remuneration payable in respect of any directorship held by the Executive
 with any Group Company.

 
	
  

 	
  

 
	
 3.3

 	
 The
 Executive will be paid such bonus at such times and subject to such
 conditions as the Employer in its sole and absolute discretion may from time
 to time determine. In accordance with clause 4.9 below payment of such a
 bonus or participation in a bonus scheme is not a contractual entitlement.

 
	
  

 	
  

 
	
 3.4

 	
 The
 Executive will be eligible to participate in any all-employee share schemes
 or other benefits provided to all employees, or to be considered for
 participation in any discretionary scheme, operated or offered by the
 Employer or any Group Company from time to time in accordance with the
 relevant rules (including without limitation any rules as to eligibility). In
 accordance with clause 4.9 below participation in any share option, share
 incentive or other employee benefit plan, scheme or arrangement is not a
 contractual entitlement except to the extent of any specific awards or entitlements
 made or notified to the Executive and, for the avoidance of doubt it is
 agreed that the provisions set out in Clauses 3.5 and 5 are contractual and
 binding on the Employer.

 
	
  

 	
  

 
	
  

 	
 2011 Share Award

 
	
  

 	
  

 
	
 3.5

 	
 As
 soon as reasonably practicable following commencement of the Employment, the
 Employer will procure the grant to the Executive of an award over shares in
 Lloyds Banking Group plc with a value of 420% of Basic Salary on the same
 terms and conditions as those applying to awards under the Lloyds TSB Long-Term
 Incentive Plan 2006 or other replacement long term incentive plan of the
 Group (the “LTIP”). 

 
	
  

 	
  

 
	
 4

 	
 Pension and Other Benefits

 
	
  

 	
  

 
	
  

 	
 Pension allowance

 
	
  

 	
  

 
	
 4.1

 	
 The
 Employer will pay directly to the Executive or to a registered pension scheme
 (including Your Tomorrow or other registered pension scheme as defined in the
 Finance Act 2004) nominated by him an amount equal to 50% of the annual
 Reference Salary from time to time as a pension allowance. 

 
	
  

 	
  

 
	
  

 	
 The
 Executive acknowledges that in signing this contract the Executive will be
 deemed to have opted out of the “personal accounts” arrangements due to be
 implemented from 2012 in the United Kingdom (except and to the extent that
 this is the arrangement which the Employer designates as the Scheme).

 
	
  

 	
  

 
	
  

 	
 Currently,
 a Contracting-Out Certificate pursuant to the provisions of the Pensions Act
 1995 is not in force in respect of the Executive’s employment. 

 
	
  

 	
  

 
	
  

 	
 The
 pension allowance paid by the Employer will not be taken into account for the
 purposes of calculating bonus or other such payments and shall include the
 Executive’s 4% flexible benefit allowance.

 
	
  

 	
  

 
	
  

 	
 The
 Executive acknowledges and agrees that any payments to or in respect of him
 (other than to a registered pension scheme as defined in the Finance Act
 2004) under this Clause will be subject to deduction of income tax and
 secondary national insurance contributions and that the net amount only after
 such deductions shall be received by or in respect of the Executive.

 
	
  

 	
  

 
	
  

 	
 To
 the extent that any part of the pension allowance under this Clause is paid
 to a registered pension scheme (as defined in the Finance Act 2004) the
 Executive acknowledges and agrees that he will be solely liable for any
 annual allowance charge, special annual allowance charge or lifetime
 allowance charge in respect thereof.

 













	
  

 	
  

 	
  

 
	
  

 	
 Pension Arrangement

 
	
  

 	
  

 	
  

 
	
 4.2

 	
 This
 Clause shall apply where the Executive loses rights to future payments
 pursuant to clauses Seventh, Eighth or Ninth of the Senior Executive Contract
 dated 29 April 2009 between Banco Santander, S.A. and the Executive.

 
	
  

 	
  

 	
  

 
	
  

 	
 In
 recognition that the Executive will by reason of accepting employment with
 the Employer, suffer significant loss in relation to future payments on
 retirement by virtue of his loss of rights as referred to in this Clause, the
 Employer has agreed to establish for the Executive as soon as reasonably
 practicable an unfunded pension arrangement for and in respect of the
 Executive (in terms to be agreed with the Executive and subject to complying
 with any requirements of the FSA, including its Remuneration Code, as amended
 from time to time) to compensate him in part for the loss of future payments
 under his existing arrangements.

 
	
  

 	
  

 	
  

 
	
  

 	
 Salary sacrifice arrangements

 
	
  

 	
  

 	
  

 
	
 4.3

 	
 The
 Employer has or may at some stage introduce a salary sacrifice arrangement.
 Under this arrangement some or all of the Executive’s pension contributions
 (if any) payable to the Your Tomorrow scheme from time to time (which may at
 the Employer’s discretion include both regular or mandatory contributions or
 voluntary contributions) will be paid on the Executive’s behalf by the
 Employer in return for a reduction in the Executive’s salary (although
 pension and life cover benefits will be calculated without regard to this
 reduction). By signing and/or entering into this contract the Executive has
 agreed to this option. The Executive is therefore automatically a member of
 the salary sacrifice scheme (if one is already in place) or alternatively
 will join the salary sacrifice arrangement if it is introduced unless the
 Executive chooses to opt out as permitted under the terms of the salary
 sacrifice arrangement.

 
	
  

 	
  

 
	
  

 	
 Car Allowance and car

 
	
  

 	
  

 	
  

 
	
 4.4

 	
 The
 Executive shall be eligible to receive a non pensionable cash allowance of
 £1,000 payable each month. In addition, a car and driver will be provided for
 the Executive for business and if he so wishes reasonable personal use
 (appropriate for the position of Group Chief Executive and provided in a
 manner consistent with other Executive Directors). The Executive shall be
 responsible for any income tax arising in respect of such personal use.

 
	
  

 	
  

 
	
  

 	
 Life Cover

 
	
  

 	
  

 	
  

 
	
 4.5

 	
 The
 Executive will be provided with Life Cover (in a manner consistent with the
 Executive Directors).

 
	
  

 	
  

 	
  

 
	
  

 	
 The
 amount of Life Cover in the event of the Executive’s death during the
 Employment will be equal to eight times the annual Reference Salary (as
 revised from time to time), irrespective of whether or not the Executive is a
 member of any pension scheme operated by the Employer. 

 
	
  

 	
  

 
	
  

 	
 Such
 Life Cover will be provided under the terms of any arrangement designated by
 the Employer and notified to the Executive (subject to the proviso that any
 Life Cover in excess of the Lifetime Allowance applicable to registered
 pension schemes will be provided by the Employer or through an arrangement
 other than a registered pension scheme).

 
	
  

 	
  

 
	
  

 	
 Private Medical Cover

 
	
  

 	
  

 	
  

 
	
 4.6

 	
 The
 Executive may participate during the Employment in the Employer’s
 international private health scheme. International private health cover will
 be provided for the Executive, his spouse and his dependent children subject
 to and in accordance with such terms from time to time on which any appointed
 supplier provides cover (including eligibility requirements). If and to the
 extent that the Employer reduces, varies or withdraws the scheme for all
 other participants, the private health cover arrangements in this clause may
 also be reduced, varied or withdrawn by the Employer to the same extent. 

 
	
  

 	
  

 
	
  

 	
 Health Screening

 
	
  

 	
  

 
	
 4.7

 	
 The
 Executive will be eligible to receive, and expected to undertake, an annual
 confidential medical screening by a supplier appointed by the Employer.

 
	
  

 	
  

 
	
  

 	
 Deductions

 
	
  

 	
  

 	
  

 
	
 4.8

 	
 For
 the avoidance of doubt, any and all remuneration or benefits provided by
 virtue of this Agreement or the Employment shall be subject to such
 deductions for tax and employees National Insurance as the Employer is
 required to make by law or the tax and/or National Insurance authorities. 

 
	
  

 	
  

 
	
  

 	
 Other Benefits

 
	
  

 	
  

 
	
 4.9

 	
 The
 Executive acknowledges that (except for any specific awards or entitlements
 notified to the Executive individually or by a general notice to staff and
 subject to the other provisions of this Agreement including the provisions
 set out in Clauses 3.5 and 5 which are contractual) participation in any
 bonus, share option, share incentive or other employee benefit plan, scheme
 or arrangement (“Plan”) is not a contractual entitlement and on termination
 of the Employment the Executive will have no right to compensation or
 otherwise against the Employer or any other Group Company by reason of no
 longer being able to participate in any such Plan. 

 
	
  

 	
  

 
	
 5

 	
 Share Buy-Out Awards

 
	
  

 	
  

 
	
  

 	
 Awards

 
	
  

 	
  

 
	
 5.1

 	
 In
 recognition that the Executive’s outstanding awards over Santander shares
 will lapse on accepting Employment with the Employer, the Employer has agreed
 that it will, as soon as reasonably practicable following commencement of the
 Employment, procure the grant to the Executive of awards over shares in
 Lloyds Banking Group plc on the following bases. The Employer may change any
 of the vesting dates specified in Clauses 5.1.1 to 5.1.3 below to a later
 date (such time being a date which is as close as possible to the original
 vesting date specified below), at the time of grant of the Stock Buy-Out
 Awards or subsequently if it becomes necessary to do so to comply with the
 Listing Rules of the UK Listing Authority or to take account of the actual
 Commencement Date.

 
	
  

 	
  

 
	
  

 	
 5.1.1

 	
 in
 respect of shares the Executive could otherwise have acquired in 2011 and
 2012 under the Santander performance share plan, an award over a number of
 Lloyds Banking Group plc shares whose value on the date of commencement of
 Employment equates to the value on 29 October 2010 of 91% of the Santander
 shares under the relevant Santander performance share plan awards. The award
 will vest in two equal tranches on 15 June 2011 and 15 June 2012 (or the
 immediately preceding business day) as long as the Executive remains in
 Employment, except as provided in clauses 5.4 and 5.5 and subject to the deduction
 of income tax and any other withholding obligations for which the Executive
 is liable;

 













	
  

 	
  

 	
  

 
	
  

 	
 5.1.2

 	
 in
 respect of shares the Executive could otherwise have acquired in 2013 under
 the Santander performance share plan, an award over a number of Lloyds
 Banking Group plc shares whose value on the date of commencement of
 Employment equates to the value on 29 October 2010 of the Santander shares
 under the relevant Santander performance share plan award. The award will
 vest on 15 June 2013 (or the immediately preceding business day) if a
 performance condition based on the TSR performance of Lloyds Banking Group
 plc against the peer group currently set in relation to the Santander shares
 amended to include Santander is satisfied, as long as the Executive remains
 in Employment, except as provided in clauses 5.4 and 5.5 and subject to the
 deduction of income tax and any other withholding obligations for which the
 Executive is liable; and

 
	
  

 	
  

 	
  

 
	
  

 	
 5.1.3

 	
 in
 respect of shares the Executive could otherwise have acquired under the
 Santander matched deferred bonus plan, an award over a number of Lloyds
 Banking Group plc shares whose value on the date of commencement of
 Employment equates to the value on 29 October 2010 of 100% of the Santander
 shares under the relevant Santander matched deferred bonus plan awards. The
 award will vest in three equal tranches on the last business day in January
 of 2011, 2012 and 2013 as long as the Executive remains in Employment, except
 as provided in clauses 5.4 and 5.5 and subject to the deduction of income tax
 and any other withholding obligations for which the Executive is liable; 

 
	
  

 	
  

 	
  

 
	
  

 	
  

 	
 (together
 referred to as the “Share Buy-Out Awards”).

 
	
  

 	
  

 	
  

 
	
 5.2

 	
 In
 recognition that the Executive’s award of delayed vesting compensation which
 would otherwise have been payable on 7 February 2011 will lapse on accepting
 Employment with the Employer, the Employer has agreed that it will, as soon
 as reasonably practicable following commencement of the Employment, procure
 the grant to the Executive of an award of £516,000 payable in three equal
 tranches on or as soon as reasonably practicable after 7 February 2011 (or
 the Commencement date, whichever is later), 7 February 2012 and 7 February
 2013 subject to the deduction of income tax and any other withholding
 obligations for which the Executive is liable. 

 
	
  

 	
  

 	
  

 
	
 5.3

 	
 For
 the purposes of calculating the value of the Share Buy-Out Awards referred to
 in clauses 5.1.1 to 5.1.3, the value of the Santander shares will be £8.085,
 being the agreed Pounds Sterling equivalent of the closing price on 29
 October 2010 and the value for the shares of Lloyds Banking Group plc will be
 the mid market quotation in Pounds Sterling on the date of commencement of
 Employment. 

 
	
  

 	
  

 	
  

 
	
  

 	
 Forfeiture and Malus

 
	
  

 	
  

 	
  

 
	
 5.4

 	
 This
 Clause 5.4 is subject to Clauses 5.5 and 5.6. Upon termination of the
 Employment for any reason, any Share Buy-Out Award that has vested will be
 retained by the Executive and not lapse. If the Executive ceases to be an
 employee of the Group:

 
	
  

 	
  

 	
  

 
	
  

 	
 5.4.1

 	
 because
 he is Dismissed for Cause or by reason of his voluntary resignation (i.e. in
 circumstances in which he is not entitled to resign without notice owing to
 the conduct of the Group), any Share Buy-Out Award which has not yet vested
 will lapse on the Termination Date; or 

 
	
  

 	
  

 	
  

 
	
  

 	
 5.4.2

 	
 for
 any other reason (including Absence Dismissal under Clause 12.3) any Share
 Buy-Out Awards which have not vested will not lapse and will vest on the
 vesting dates specified in the Share Buy-Out Awards subject to such
 performance conditions as are referred to in Clause 5.1. 

 
	
  

 	
  

 	
  

 
	
 5.5

 	
 The
 Board may in its absolute discretion determine that the number of Shares over
 which a Share Buy-Out Award may vest may be reduced (to nil if appropriate)
 as a result of:

 
	
  

 	
  

 	
  

 
	
  

 	
 5.5.1

 	
 the
 Lloyds Banking Group plc annual report and accounts having been materially
 restated at any time during the period between the grant of the Share Buy-Out
 Award and the vesting date of the Share Buy-Out Award as a result of the
 conduct of the Executive other than material restatement due to a change in
 accounting policy or to rectify a minor error;

 
	
  

 	
  

 	
  

 
	
  

 	
 5.5.2

 	
 the
 Executive having, in the reasonable opinion of the Board, deliberately misled
 the management of the Lloyds Banking Group plc, the market and/or Lloyds
 Banking Group plc shareholders regarding the financial performance of Lloyds
 Banking Group plc at any time during the period between the grant of the
 Share Buy-Out Award and the vesting date of the Share Buy-Out Award;

 
	
  

 	
  

 	
  

 
	
  

 	
 5.5.3

 	
 the
 Executive’s actions at any time during the period between the grant of the
 Share Buy-Out Award and the vesting date of the Share Buy-Out Award having,
 in the reasonable opinion of the Board, caused harm to the reputation of the
 Group; or

 
	
  

 	
  

 	
  

 
	
  

 	
 5.5.4

 	
 any
 other factors considered by the Board to be relevant which are compliant with
 and no more onerous than requirements under the Financial Services Authority
 Code on Remuneration Practices.

 
	
  

 	
  

 	
  

 
	
 5.6

 	
 Any
 Share Buy-Out Awards granted in accordance with clause 5.1 and any award
 granted in accordance with clause 5.2, must satisfy any relevant requirements
 of the FSA, including its Remuneration Code as amended from time to time.

 
	
  

 	
  

 	
  

 
	
 5.7

 	
 The
 Employer and the Executive have agreed the basis of the grant of the above
 Share Buy-Out Awards and the award referred to in clause 5.2 based on the
 Form 20-F issued by Santander on 10 June 2010 (“20-F”). After signature of
 this Agreement, the Executive will at the Employer’s request use all
 reasonable endeavours to obtain such additional documents as are reasonably
 requested by the Employer from Santander and if there are any discrepancies
 between the arrangements agreed between the Executive and the Employer and
 the arrangements the Executive had at Santander, such discrepancies will be
 resolved between the parties in good faith and with the objective that the
 Executive is not overcompensated in relation to the Share Buy-Out Awards and
 the award referred to in clause 5.2. 

 
	
  

 	
  

 	
  

 
	
 5.8

 	
 References
 in this clause to various Santander plans shall be to those plans as named
 and described in the 20-F.

 
	
  

 	
  

 	
  

 
	
 6

 	
 Expenses

 
	
  

 	
  

 	
  

 
	
 6.1

 	
 The
 Employer will refund to the Executive all reasonable expenses properly
 incurred by the Executive in performing the duties under this Agreement,
 provided that these are incurred in accordance with Employer’s policy from
 time to time. The Employer will require the Executive to produce receipts or
 other documents as proof for any expenses claimed.

 













	
  

 	
  

 	
  

 
	
 7

 	
 Holiday

 
	
  

 	
  

 	
  

 
	
 7.1

 	
 The
 Executive shall be entitled during the Employment to 30 working days holiday
 in each calendar year plus bank holidays. Holiday may only be taken at such
 time or times as the Chairman shall approve. A maximum of five days holiday
 not taken in a particular year may be carried forward to be taken by 31 March
 in the next year. The Executive’s holiday entitlement shall be pro rated for
 the year in which the Employment begins and for the year in which the
 Employment ends. 

 
	
  

 	
  

 	
  

 
	
 8

 	
 Confidentiality

 
	
  

 	
  

 	
  

 
	
 8.1

 	
 Without
 prejudice to the common law duties which the Executive owes to the Employer,
 the Executive agrees to preserve the confidentiality of any trade secrets
 and/or confidential information belonging or relating to the Employer or its
 employees or relating to the Works, in whatever form (written, oral, visual
 and electronic), whether of a technical or commercial nature, disclosed to
 the Executive by or on behalf of the Employer or its employees or otherwise
 comes under the control of the Executive in the course of the Employment (“Confidential Information”), and agrees
 not to (except in so far as may be strictly necessary for the proper
 performance of the duties under this Agreement or with the prior written
 consent of the Chairman), copy, use, discuss with or disclose to any third
 party any Confidential Information. This provision will not apply to
 Confidential Information which becomes public other than through unauthorised
 disclosure by the Executive. The Executive will use best endeavours to
 prevent the unauthorised copying, use or disclosure of such information by
 any third party.

 
	
  

 	
  

 	
  

 
	
 8.2

 	
 In
 the course of the Employment the Executive is likely to obtain Confidential
 Information belonging or relating to other Group Companies or other persons.
 The Executive will treat such information as if it falls within the terms of
 Clause 8.1 and Clause 8.1 will apply with any necessary amendments to such
 information. If requested to do so by the Employer, the Executive will enter
 into an agreement with other Group Companies or any other persons in the same
 terms as Clause 8.1 with any amendments necessary to give effect to this
 provision.

 
	
  

 	
  

 	
  

 
	
 8.3

 	
 The
 Executive agrees not to, either during or after the termination of the
 Employment (without the written consent of the Chairman) make any public
 announcement, statement or comment (whether to the media or otherwise)
 concerning:

 
	
  

 	
  

 	
  

 
	
  

 	
 8.3.1

 	
 the
 affairs of the Employer or any other Group Company; or

 
	
  

 	
  

 	
  

 
	
  

 	
 8.3.2

 	
 the
 circumstances of the termination of the Employment and any offices with any
 other Group Company (except he may disclose the reason for such termination
 to any prospective or future employer and without prejudice to Clause 8.3.3.
 he may make announcements, statements and comments consistent with
 announcements, statements and comments made by or on behalf of any Group
 Company regarding such termination); or

 
	
  

 	
  

 	
  

 
	
  

 	
 8.3.3

 	
 anything
 that may be detrimental to the Employer or any other Group Company:

 
	
  

 	
  

 	
  

 
	
  

 	
 except
 as required by law or any regulatory body or as appropriate in connection
 with the proper performance of the duties under this Agreement.

 
	
  

 	
  

 	
  

 
	
 8.4

 	
 Nothing
 in this Agreement will prevent the Executive from making a “protected
 disclosure” in accordance with the provisions of the Employment Rights Act
 1996.

 
	
  

 	
  

 	
  

 
	
 9

 	
 Intellectual Property Rights

 
	
  

 	
  

 	
  

 
	
 9.1

 	
 The
 Executive shall disclose to the Employer promptly following creation details
 of all Works made, created or developed, wholly or partially, by the
 Executive at any time during the course of the Employment (whether or not
 during working hours or using Group premises or resources). The Executive
 acknowledges that all Intellectual Property Rights subsisting (or which may
 in the future subsist) in any Work shall automatically, on creation, vest in
 the Employer absolutely. To the extent that they do not vest automatically,
 the Executive hereby assigns (or where immediate assignment is not effective,
 agrees to assign) to the Employer, with full title guarantee, all the
 Executive’s Intellectual Property Rights in any Work. Pending assignment, the
 Executive shall hold the Intellectual Property Rights on trust for the
 Employer. The Executive agrees to promptly execute all documents and do all
 acts as may, in the opinion of the Employer, be necessary to give effect to
 this Clause 9.1.

 
	
  

 	
  

 	
  

 
	
 9.2

 	
 So
 far as permitted by applicable laws, the Executive hereby irrevocably waives
 all moral rights under Chapter IV (Moral Rights) of Part 1 of the Copyright,
 Designs and Patents Act 1988 (and all similar rights in other jurisdictions),
 which he may have or will have in any Work.

 
	
  

 	
  

 	
  

 
	
 9.3

 	
 The
 Executive hereby irrevocably appoints the Employer to act as the Executive’s
 attorney to do everything necessary to give the Employer the full benefit of
 the rights under this Clause 9.

 
	
  

 	
  

 	
  

 
	
 9.4

 	
 The
 rights and obligations of the parties under this Clause 9 shall continue
 after expiry or termination of this Agreement.

 
	
  

 	
  

 	
  

 
	
 10

 	
 Garden Leave and Suspension

 
	
  

 	
  

 	
  

 
	
  

 	
 Garden Leave

 
	
  

 	
  

 	
  

 
	
 10.1

 	
 At
 any time after notice to terminate the Employment is given by either party,
 or if the Executive resigns without giving due notice in circumstances in
 which he is not entitled to do so and the Employer does not accept the
 Executive’s resignation, the Employer may require the Executive to take a
 period of absence called garden leave (the “Garden
 Leave Period”). The Garden Leave Period shall last for such period
 or periods of the notice period as the Employer shall in its absolute
 discretion determine, provided they shall not exceed 6 months in aggregate.
 The provisions of Clause 10.2 to Clause 10.8 apply to any Garden Leave
 Period. 

 
	
  

 	
  

 	
  

 
	
 10.2

 	
 During
 the Garden Leave Period the Executive will not, without prior written consent
 of the Chairman, be employed or otherwise engaged in the conduct of any
 activity, whether or not of a business nature (except as permitted by Clauses
 2.2 and 2.4). The Employer will have no obligation to provide work to the
 Executive during the Garden Leave Period. Further, the Executive will not,
 unless requested or permitted by the Employer:

 
	
  

 	
  

 	
  

 
	
  

 	
 10.2.1

 	
 enter
 or attend the premises of the Employer or any other Group Company; or

 
	
  

 	
  

 	
  

 
	
  

 	
 10.2.2

 	
 contact
 or have any communication with any customer or client of the Employer or any
 other Group Company in relation to the business of the Employer or any other
 Group Company; or

 













	
  

 	
  

 	
  

 
	
  

 	
 10.2.3

 	
 contact
 or have any communication with any employee, officer, director, agent or
 consultant of the Employer or any other Group Company in relation to the
 business of the Employer or any other Group Company; or

 
	
  

 	
  

 	
  

 
	
  

 	
 10.2.4

 	
 remain
 or become involved in any aspect of the business of the Employer or any other
 Group Company except as required by such companies.

 
	
  

 	
  

 	
  

 
	
 10.3

 	
 During
 the Garden Leave Period (and save to the extent that he is on holiday taken
 by him pursuant to Clause 7) the Executive shall be available to (on
 reasonable notice) deal with requests for information, be available for
 meetings (unless the Employer has agreed in writing that the Executive may be
 unavailable for a period) and to advise on matters relating to work.

 
	
  

 	
  

 	
  

 
	
 10.4

 	
 During
 the Garden Leave Period the Employer may require the Executive to comply with
 the provisions of Clause 13, except that there will be no requirement to
 return any company car in the possession of the Executive. The Executive may
 resign immediately from any and all directorships held in the Employer and
 any other Group Company or any company where such directorship(s) is (or are)
 held as a consequence or requirement of the Employment. The Employer may also
 require the Executive to resign immediately from any directorship held in the
 Employer, any other Group Company or any other company where such
 directorship is held as a consequence or requirement of the Employment,
 unless the Executive is required or permitted by the Employer to perform
 duties to which any such directorship relates in which case the Executive may
 retain such directorships while those duties are ongoing. The Executive
 hereby irrevocably appoints the Employer to be the Executive’s attorney to
 execute any instrument and do anything in the Executive’s name and on their
 behalf to effect the Executive’s resignation if the Executive fails to do so
 in accordance with this Clause 10.4

 
	
  

 	
  

 	
  

 
	
 10.5

 	
 During
 the Garden Leave Period, the Executive will be entitled to receive the Basic
 Salary and all contractual benefits in accordance with the terms of this
 Agreement. For the avoidance of doubt the Executive shall not be entitled to
 receive any new award under any bonus or other incentive scheme. Any unused
 holiday accrued at the commencement of the Garden Leave Period and any
 holiday accrued during any Garden Leave Period will (to the extent not
 actually taken by the Executive pursuant to Clause 7) be deemed to be taken
 by the Executive during the Garden Leave Period in relation to day(s) (not
 being a Saturday, Sunday, public or bank holiday) during which the Executive
 was not required to deal with information requests, attend meetings, give
 advice or otherwise undertake any duties in connection with the Employment.

 
	
  

 	
  

 	
  

 
	
 10.6

 	
 The
 Executive agrees and acknowledges that during any Garden Leave Period the
 Employer may appoint another person to carry out the duties of his role in
 substitution of the Executive.

 
	
  

 	
  

 	
  

 
	
 10.7

 	
 At
 the end of the Garden Leave Period, the Employer may, at its sole and
 absolute discretion, make a payment in lieu of the balance of the period of
 notice in accordance with Clause 12.5 (less any deductions the Employer is
 required by law to make). For the avoidance of doubt, this Clause shall not
 affect the Executive’s rights and entitlements (if any) on termination of the
 Employment as expressly referred to in this Agreement or in any other written
 agreement between the parties.

 
	
  

 	
  

 	
  

 
	
 10.8

 	
 All
 duties of the Employment (whether express or implied), including, but not
 limited to, the Executive’s duties of fidelity, good faith and under Clauses
 2.1, 2.2 and 2.3 shall continue throughout the Garden Leave Period (except
 insofar as they are naturally inconsistent with the terms applicable to the
 Garden Leave). 

 
	
  

 	
  

 	
  

 
	
  

 	
 Suspension

 
	
  

 	
  

 	
  

 
	
 10.9

 	
 Without
 prejudice to the Executive’s rights to remuneration and other benefits
 hereunder, the Employer shall have the right at any time to require the
 Executive not to attend at any place of work or otherwise to suspend the
 Executive from the performance of any duties under this Agreement for the
 purpose of undertaking any investigation in relation to any material
 complaint against the Executive or failure to obtain or hold any regulatory
 approvals (provided that the Employer does not do so for longer than is
 necessary to ensure a thorough but prompt investigation). During the period
 of such suspension the Employer may assign the Executive’s duties, titles or
 powers to another. For the avoidance of doubt, during any period of
 suspension the rights of the Employer and duties of the Executive set out in
 clauses 10.2 – 10.8 above shall apply (save that the Employer shall not
 require the Executive to resign from any directorships unless the complaint
 is made out against him and otherwise subject to any FSA or other regulatory
 requirements). 

 
	
  

 	
  

 	
  

 
	
 11

 	
 Restrictions after termination of Employment

 
	
  

 	
  

 	
  

 
	
 11.1

 	
 The
 Executive is likely to obtain Confidential Information and personal knowledge
 of and influence over employees of the Group during the course of the
 Employment. To protect these interests of the Employer, the Executive agrees
 with the Employer that the Executive will be bound by the following:

 
	
  

 	
  

 	
  

 
	
  

 	
 11.1.1

 	
 subject
 to clause 11.2 throughout the Employment and during the period of 6 months
 commencing with the Relevant Date the Executive will not (either on their own
 behalf or with any other person, whether directly or indirectly) be employed
 in, or carry on (or be a director of any company engaged in) any business
 which, is or is about to be in competition with any business of the Employer
 (or any other Group Company) being carried on by such company at the Relevant
 Date provided the Executive was concerned or involved with that business to a
 material extent at any time during the 12 months prior to the Relevant Date; 

 
	
  

 	
  

 	
  

 
	
  

 	
 11.1.2

 	
 throughout
 the Employment and during the period of 12 months commencing on the Relevant
 Date the Executive will not (either on their own behalf or for or with any
 other person, whether directly or indirectly) entice or try to entice away
 from the Employer or (as the case may be) any other Group Company any
 Restricted Employee;

 
	
  

 	
  

 	
  

 
	
  

 	
 11.1.3

 	
 throughout
 the Employment and during the period of 12 months commencing on the Relevant
 Date the Executive will not (either on their own behalf or for or with any
 other person, whether directly or indirectly) employ or engage or try to
 employ or engage any Restricted Employee;

 
	
  

 	
  

 	
  

 
	
  

 	
 11.1.4

 	
 throughout
 the Employment and during the period of 12 months commencing on the Relevant
 Date the Executive will not (either on their own behalf or for or with any
 other person, whether directly or indirectly) canvass, solicit or attempt to
 entice away from the Employer or (as the case may be) any other Group Company
 any business of any Relevant Customer or any Prospective Customer in respect
 of the Relevant Services; and

 
	
  

 	
  

 	
  

 
	
  

 	
 11.1.5

 	
 throughout
 the Employment and during the period of 12 months commencing on the Relevant
 Date the Executive will not intentionally or recklessly interfere or
 endeavour to interfere with the continuance of supplies to the Employer
 and/or any other Group Company or the terms relating to those supplies by any
 Relevant Supplier. 

 













	
  

 	
  

 	
  

 
	
 11.2

 	
 In
 the event that the Employer gives notice to terminate the Executive’s
 employment and the Executive works 6 months or more of the Executive’s notice
 period, the Employer will not require the Executive to comply with Clause
 11.1.1 above following the termination of the Executive’s employment.

 
	
  

 	
  

 	
  

 
	
 11.3

 	
 Following
 the Termination Date, the Executive will not hold out as being in any way
 connected with the businesses of the Employer or of any other Group Company
 (except to the extent agreed by such a company).

 
	
  

 	
  

 	
  

 
	
 11.4

 	
 Any
 benefit given or deemed to be given by the Executive to any Group Company
 under the terms of Clause 11 is received and held on trust by the Employer
 for the relevant Group Company. The Executive will enter into appropriate
 (but not wider) restrictive covenants directly with other Group Companies if
 asked to do so by the Employer. 

 
	
  

 	
  

 	
  

 
	
 11.5

 	
 The
 Executive acknowledges that the provisions of this Clause are fair,
 reasonable and necessary in order to protect the Confidential Information and
 business connections of the Employer, and any other Group Company, to which
 the Executive has access as a result of the Employment

 
	
  

 	
  

 	
  

 
	
 11.6

 	
 Each
 of the obligations in this Clause 11 is an entirely separate and independent
 restriction on the Executive. If any part is found to be invalid or
 unenforceable the remainder will remain valid and enforceable.

 
	
  

 	
  

 	
  

 
	
 11.7

 	
 The
 Executive agrees to draw the provisions of this Clause 11 to the attention of
 any third party who may at any time before or after the termination of the
 Employment offer to employ or engage the Executive in any capacity and for
 whom or with whom the Executive intends to work during the 12 months
 following the Termination Date. 

 
	
  

 	
  

 	
  

 
	
 12

 	
 Termination

 
	
  

 	
  

 	
  

 
	
  

 	
 Summary Dismissal

 
	
  

 	
  

 	
  

 
	
 12.1

 	
 The
 Employer may terminate the Employment at any time forthwith by written notice
 to the Executive (and without any requirement of prior notice) if the
 Executive shall:-

 
	
  

 	
  

 	
  

 
	
  

 	
 12.1.1

 	
 commit
 any serious breach of the obligations under this Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
 12.1.2

 	
 be
 guilty of any material and serious misconduct or material and serious neglect
 in the discharge of the duties; 

 
	
  

 	
  

 	
  

 
	
  

 	
 12.1.3

 	
 have
 a bankruptcy order made against them or make any arrangement or composition
 with the Executive’s creditors or have an interim order made against them
 pursuant to the Insolvency Act 1986 (or any re-enactment or amendment thereof
 for the time being in force);

 
	
  

 	
  

 	
  

 
	
  

 	
 12.1.4

 	
 be
 convicted of any criminal offence (except any road traffic offence for which
 a non-custodial penalty is imposed) which in the reasonable opinion of the
 Employer materially affects the Executive’s position as an employee under
 this Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
 12.1.5

 	
 bring
 the name or reputation of the Executive or Employer, or any Group Company
 into material disrepute;

 
	
  

 	
  

 	
  

 
	
  

 	
 12.1.6

 	
 be
 or become prohibited by law from becoming or remaining a director; 

 
	
  

 	
  

 	
  

 
	
  

 	
 12.1.7

 	
 be
 disqualified or disbarred from membership of, or be found to have committed
 any serious disciplinary offence by, or be found not to be a fit and proper
 person by, any professional or regulatory body governing the conduct of the
 Executive or the business of any Group Company; 

 
	
  

 	
  

 	
  

 
	
  

 	
 12.1.8

 	
 cease
 to have FSMA Approval; 

 
	
  

 	
  

 	
  

 
	
  

 	
 12.1.9

 	
 cease
 to be entitled to work in the UK.

 
	
  

 	
  

 	
  

 
	
 12.2

 	
 Where
 the Executive has been summarily dismissed in accordance with Clause 12.1 or
 where the Executive terminates the Employment in breach of the notice
 provisions in Clause 1.3.2, the calculation of any payment in lieu of
 outstanding holiday entitlement owed by the Employer to the Executive shall
 be calculated as being £1. 

 
	
  

 	
  

 	
  

 
	
  

 	
 Absence Dismissal

 
	
  

 	
  

 	
  

 
	
 12.3

 	
 If
 the Executive (owing to sickness, injury or otherwise) does not perform the
 duties under this Agreement for a period of at least 26 weeks (or at least 26
 weeks in aggregate in any period of twelve months) the Employer shall be
 entitled to terminate the Employment by giving to the Executive not less than
 6 months’ notice at any time while the Executive does not perform the duties
 and the Executive shall have no claim for compensation or otherwise against
 the Employer by reason of such termination. 

 
	
  

 	
  

 	
  

 
	
  

 	
 Reconstructions or amalgamation

 
	
  

 	
  

 	
  

 
	
 12.4

 	
 If
 employment of the Executive under this Agreement is terminated by reason of
 the liquidation of the Employer for the purpose of reconstruction or
 amalgamation and the Executive is offered employment with any concern or
 undertaking resulting from the reconstruction or amalgamation on terms and
 conditions materially no less favourable overall than the terms of this
 Agreement (and any written amendment hereto), then the Executive shall have
 no claim against the Employer in respect of the termination of the Employment
 (whether or not the notice required by Clause 1.3 shall have been given).

 
	
  

 	
  

 	
  

 
	
  

 	
 Payment in lieu of notice

 
	
  

 	
  

 	
  

 
	
 12.5

 	
 The
 Employer may at any time in its absolute discretion, elect to terminate the
 Employment and this Agreement by paying to the Executive a payment in lieu of
 the notice period referred to in Clause 1.3 or any part thereof. The amount
 of the payment in lieu shall be:

 
	
  

 	
  

 	
  

 
	
  

 	
 12.5.1

 	
 in
 the case of notice given by the Executive under Clause 1.3.2 an amount
 equivalent to the Basic Salary under Clause 3.1 for such period or part
 period;

 
	
  

 	
  

 	
  

 
	
  

 	
 12.5.2

 	
 in
 the case of notice given or to be given by the Employer under Clause 1.3.1 an
 amount equivalent to the Basic Salary under Clause 3.1 and the pension
 allowance under Clause 4.1 for such period or part period which for the
 avoidance of doubt shall take into account the fact that notice may not expire
 before the second anniversary of the Commencement Date

 
	
  

 	
  

 	
  

 
	
  

 	
 Such
 a payment shall be subject to such deductions for tax and employee national
 insurance as are required by law and to any other authorised deductions.

 













	
  

 	
  

 	
  

 
	
 12.6

 	
 For
 the avoidance of doubt:-

 
	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 If
 the Employer terminates the Executive’s employment other than in accordance
 with its rights under this Agreement any entitlement to damages for breach of
 contract will be assessed on normal common law principles (including the
 Executive’s obligation to mitigate any losses); and

 
	
  

 	
  

 	
  

 
	
  

 	
 (ii)

 	
 The
 right of the Employer to make a payment in lieu of notice does not give rise
 to any right for the Executive to receive such a payment.

 
	
  

 	
  

 	
  

 
	
 12.7

 	
 The
 Employer will pay any sums due under Clause 12.5 in monthly instalments over
 the period until the date on which notice, if it had been served in
 accordance with Clause 1.3, would have expired (the “Relevant Period”). The Executive is
 obliged to seek alternative income over the Relevant Period and to disclose
 the gross amount of any such income to the Employer as evidenced by payslips
 and/ or invoices in a timely manner. The Employer’s monthly instalment
 payments pursuant to this Clause 12.7 shall then be reduced by the gross
 amount of such alternative income earned in respect of any part of the
 Relevant Period. Payments shall be subject to such deductions for tax and
 employee national insurance contributions as are required by law and to any
 other authorised deductions. 

 
	
  

 	
  

 	
  

 
	
 13

 	
 Return of Property

 
	
  

 	
  

 	
  

 
	
 13.1

 	
 The
 Executive will immediately upon the termination of the Employment return to
 the Employer at such place as the Employer may reasonably specify

 
	
  

 	
  

 
	
  

 	
 13.1.1

 	
 all
 documents and other materials (whether originals or copies) made or compiled
 by or delivered to the Executive during the Employment and concerning any
 Group Company (but excluding documents and materials which belong solely to
 the Executive), including any Confidential Information and will not retain
 any copies of such documents or materials; and

 
	
  

 	
  

 	
  

 
	
  

 	
 13.1.2

 	
 all
 other property belonging or relating to any Group Company, in good condition
 (allowing for fair wear and tear).

 
	
  

 	
  

 	
  

 
	
 14

 	
 Directorships

 
	
  

 	
  

 	
  

 
	
 14.1

 	
 The
 Executive’s office in any Group Company is subject to the Articles of
 Association of the relevant company (as amended from time to time). If the
 provisions of this Agreement conflict with the provisions of the Articles of
 Association, the Articles of Association will prevail.

 
	
  

 	
  

 	
  

 
	
 14.2

 	
 The
 Executive must resign from any office held in any Group Company if asked at
 any time to do so by the Employer (but excluding any office necessary to
 enable him to perform his appointment). 

 
	
  

 	
  

 	
  

 
	
 14.3

 	
 By
 entering into this Agreement, the Executive irrevocably appoints the Employer
 as attorney to act in the Executive’s name and on the Executive’s behalf to
 execute any document or do anything in the Executive’s name necessary to
 effect the Executive’s resignation in accordance with Clause 14.2. If there
 is any doubt as to whether such a document (or other thing) has been carried
 out within the authority conferred by this Clause 14.3, a certificate in
 writing (signed by any director or the secretary of the Employer) will be
 sufficient to prove that the act or thing falls within that authority.

 
	
  

 	
  

 	
  

 
	
 14.4

 	
 The
 termination of any directorship or other office (other than any directorship
 or office necessary to enable the Executive to perform his appointment) held
 by the Executive will not terminate the Executive’s employment or amount to a
 breach of terms of this Agreement by the Employer.

 
	
  

 	
  

 	
  

 
	
 14.5

 	
 During
 the Employment the Executive will not do anything which could cause the
 Executive to be disqualified from continuing to act as a director of any
 Group Company. 

 
	
  

 	
  

 	
  

 
	
 14.6

 	
 The
 Executive must not resign office as a director of any Group Company without
 the agreement of the Employer, or unless he reasonably considers his position
 and liability as an officer of the relevant company to be materially
 prejudiced by the acts or omissions of its board or the Board.

 
	
  

 	
  

 	
  

 
	
 15

 	
 Disciplinary and Grievance Procedures

 
	
  

 	
  

 	
  

 
	
 15.1

 	
 Any
 disciplinary matter affecting the Executive will be dealt with by the
 Chairman.

 
	
  

 	
  

 	
  

 
	
 15.2

 	
 If
 the Executive has any grievance relating to their employment such grievance
 should be made in writing to the Chairman. If the Executive is dissatisfied
 with the Chairman’s treatment of the grievance, the matter may be referred to
 another non-executive Director.

 
	
  

 	
  

 	
  

 
	
 16

 	
 Miscellaneous Conditions of Employment

 
	
  

 	
  

 	
  

 
	
 16.1

 	
 The
 Staff Manual (People Policies and Practice)/HR policies and practice contains
 general information regarding policies and procedures currently in place,
 within the Group, which may be altered from time to time at the sole
 discretion of the Employer. These do not form part of this Agreement except
 for the following provisions:-

 
	
  

 	
  

 	
  

 
	
  

 	
 16.1.1

 	
 Group
 Security Policy;

 
	
  

 	
  

 	
  

 
	
  

 	
 16.1.2

 	
 Personal
 Account Dealing;

 
	
  

 	
  

 	
  

 
	
  

 	
 16.1.3

 	
 Sick
 Pay;

 
	
  

 	
  

 	
  

 
	
  

 	
 16.1.4

 	
 Sickness
 absence reporting;

 
	
  

 	
  

 	
  

 
	
  

 	
 16.1.5

 	
 Smoking
 policy.

 
	
  

 	
  

 	
  

 
	
  

 	
 If
 there is any conflict between this Agreement and such provisions, then this
 Agreement shall prevail.

 
	
  

 	
  

 	
  

 
	
 16.2

 	
 There
 are no collective agreements affecting the employment of the Executive.

 
	
  

 	
  

 	
  

 
	
 17

 	
 Contracts (Rights of Third Parties) Act 1999 and Data
 Protection Act 1998

 
	
  

 	
  

 	
  

 
	
 17.1

 	
 No
 person other than the parties to this Agreement or any Group Company shall
 have any right to enforce any term of this Agreement under The Contracts
 (Rights of Third Parties) Act 1999.

 













	
  

 	
  

 	
  

 
	
 17.2

 	
 For
 the purposes of the Data Protection Act 1998 (the “Act”) the Executive
 consents to the holding, processing and disclosure of personal data
 (including sensitive data within the meaning of the Act) provided by the
 Executive to the Employer (provided such holding, processing and disclosure
 is undertaken in accordance with the terms of the Act and with the Employer’s
 data protection policy issued from time to time) for all purposes relating to
 the performance of this Agreement including, but not limited to:

 
	
  

 	
  

 	
  

 
	
  

 	
 17.2.1

 	
 administering
 and maintaining personnel records;

 
	
  

 	
  

 	
  

 
	
  

 	
 17.2.2

 	
 paying
 and reviewing salary and other remuneration and benefits;

 
	
  

 	
  

 	
  

 
	
  

 	
 17.2.3

 	
 providing
 and administering benefits (including if relevant, pension, life assurance,
 permanent health insurance and medical insurance);

 
	
  

 	
  

 	
  

 
	
  

 	
 17.2.4

 	
 undertaking
 performance appraisals and reviews;

 
	
  

 	
  

 	
  

 
	
  

 	
 17.2.5

 	
 maintaining
 sickness and other absence records;

 
	
  

 	
  

 	
  

 
	
  

 	
 17.2.6

 	
 taking
 decisions as to the Executive’s fitness for work;

 
	
  

 	
  

 	
  

 
	
  

 	
 17.2.7

 	
 providing
 references and information to future employers, and if necessary,
 governmental and quasi-governmental bodies for social security and other
 purposes, Her Majesty’s Revenue and Customs and the Contributions Agency;

 
	
  

 	
  

 	
  

 
	
  

 	
 17.2.8

 	
 providing
 information to future purchasers of the Employer or of the business in which
 the Executive works; and

 
	
  

 	
  

 	
  

 
	
  

 	
 17.2.9

 	
 transferring
 information concerning the Executive to a country or territory outside the
 EEA.

 
	
  

 	
  

 	
  

 
	
  

 	
 The
 Executive acknowledges that during the employment the Executive will have
 access to and process, or authorise the processing of personal data and
 sensitive personal data relating to employees, customers and other
 individuals held and controlled by the Employer. The Executive agrees to
 comply with the terms of the Act in relation to such data and to abide by the
 Employer’s data protection policy issued from time to time.

 
	
  

 	
  

 	
  

 
	
 18

 	
 Other Agreements

 
	
  

 	
  

 	
  

 
	
 18.1

 	
 This
 Agreement shall be in substitution for all existing contracts of service or
 consultancy between the Employer or any Group Company and the Executive,
 which (without prejudice to any accrued rights) shall be treated as cancelled
 with effect from the Commencement Date.

 
	
  

 	
  

 	
  

 
	
 18.2

 	
 This
 Agreement comprises the whole agreement between the Employer and the
 Executive relating to the Employment, to the exclusion of all other
 warranties, representations made in good faith, undertakings and collateral
 contracts save that it is agreed, for the avoidance of doubt, that any
 written amendments to this Agreement after the date hereof, and any rights
 and entitlements arising pursuant to any other written agreement entered into
 by the Employer and the Executive in relation to the Employment on or after
 the date of this Agreement shall have full force and effect.

 
	
  

 	
  

 	
  

 
	
 19

 	
 Notices

 
	
  

 	
  

 	
  

 
	
  

 	
 Any
 notice under this Agreement shall be in writing and shall either be given
 personally or be sent by prepaid first class post by the Employer to the
 Executive at their home address notified to the Employer pursuant to Clause
 2.1.9 or at any other last known UK residential address, or by the Executive
 to the Employer at its address stated above or its other last known address.
 Any notice sent by the Employer by post shall be deemed to have been received
 two business days after the date of posting.

 
	
  

 	
  

 	
  

 
	
 20

 	
 Interpretation

 
	
  

 	
  

 	
  

 
	
  

 	
 General

 
	
  

 	
  

 	
  

 
	
 20.1

 	
 In
 this Agreement:

 
	
  

 	
  

 	
  

 
	
  

 	
 20.1.1

 	
 where
 the context permits, references to the singular shall include references to
 the plural and vice versa;

 
	
  

 	
  

 	
  

 
	
  

 	
 20.1.2

 	
 the
 Employer’s Staff Manual shall mean the current manual of the Employer
 entitled “People Policies and Practice”/HR Policies and Practice, as may be
 amended or replaced by the Employer from time to time at its sole and
 absolute discretion. Upon any amendment or replacement, the references to the
 sections of the now current Employer’s Staff Manual/HR Policies and Practice
 in Clause 16.1 shall be construed so as to be references to the provisions of
 the amended or replaced Employer’s Staff Manual dealing with the same subject
 matter;

 
	
  

 	
  

 	
  

 
	
  

 	
 20.1.3

 	
 references
 to a Clause mean a Clause in this Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
 20.1.4

 	
 Clause
 headings are inserted for convenience only and shall not affect the
 construction of this Agreement;

 
	
  

 	
  

 	
  

 
	
  

 	
 20.1.5

 	
 any
 reference to a statute, statutory provision or subordinate legislation (“legislation”) shall be construed as
 referring to such legislation as amended and in force from time to time and
 to any legislation which re-enacts or consolidates or modifies such
 legislation from time to time.

 
	
  

 	
  

 	
  

 
	
  

 	
 Definitions

 
	
  

 	
  

 	
  

 
	
 20.2

 	
 In
 this Agreement unless the context otherwise requires:

 
	
  

 	
  

 	
  

 
	
  

 	
 “Board” means board of directors of Lloyds
 Banking Group plc or any duly authorised committee of the same;

 
	
  

 	
  

 	
  

 
	
  

 	
 “Chairman” means the Chairman of the
 Lloyds Banking Group plc

 
	
  

 	
  

 	
  

 
	
  

 	
 “Commencement Date” has the meaning given
 in Clause 1.3;

 
	
  

 	
  

 	
  

 
	
  

 	
 “Confidential Information” has the meaning
 given in Clause 8.1;

 













	
  

 	
  

 	
  

 
	
  

 	
 “Dismissal for Cause” shall include
 termination of the Executive’s employment:-

 
	
  

 	
  

 	
  

 
	
  

 	
 (a)

 	
 on
 any grounds listed in Clause 12.1; or

 
	
  

 	
  

 	
  

 
	
  

 	
 (b)

 	
 for
 any reason relating to the Executive’s performance or conduct where the Board
 in good faith considers that the Executive has failed or is failing to
 perform and/or conduct himself to the standard expected by the Board; or in
 any other circumstances where the Board in good faith considers that it is in
 the best interests of Lloyds Banking Group plc that the Executive’s
 employment be terminated;

 
	
  

 	
  

 	
  

 
	
  

 	
 “Employment” has the meaning given in
 Clause 1.1;

 
	
  

 	
  

 	
  

 
	
  

 	
 “FSA” means the Financial Services
 Authority and/or any successor regulatory body or bodies relevant to the
 Employer’s business from time to time; 

 
	
  

 	
  

 	
  

 
	
  

 	
 “FSMA 2000” means the Financial Services
 and Markets Act 2000, as amended and in force from time to time, and/or any
 legislation which re-enacts or consolidates or modifies such legislation from
 time to time or otherwise replaces such legislation in respect of the FSA;

 
	
  

 	
  

 	
  

 
	
  

 	
 “FSMA Approval” has the meaning given in
 Clause 1.2;

 
	
  

 	
  

 	
  

 
	
  

 	
 “Garden Leave Period” has the meaning
 given in Clause 10.1;

 
	
  

 	
  

 	
  

 
	
  

 	
 “Group Company” means any of Lloyds
 Banking Group plc and its subsidiaries (as such terms are defined in the
 Companies Act 2006), and “Group”
 means all of them;

 
	
  

 	
  

 	
  

 
	
  

 	
 “Intellectual Property Rights” means all
 intellectual property rights, and interests in or to intellectual property
 rights, which may subsist in any part of the world, including where such
 rights are or may be obtained or enhanced by registration, any registrations,
 applications for registrations and rights to apply for registration of such
 intellectual property rights; 

 
	
  

 	
  

 	
  

 
	
  

 	
 “Prospective Customer” means any person,
 firm or company which has been engaged in negotiations, with which the
 Executive has been personally involved, with the Employer or any other Group
 Company with a view to purchasing products or services from the Employer or
 any other Group Company during the period of 6 months prior to the Relevant Date;

 
	
  

 	
  

 	
  

 
	
  

 	
 “Reference Salary” means an annual amount
 of £1,220,000 or such higher salary as may be notified to the Executive from
 time to time. The Reference Salary shall be reviewed (but without any
 obligation to increase), annually from 1 January 2011; 

 
	
  

 	
  

 	
  

 
	
  

 	
 “Relevant Customer” means any person, firm
 or company which at any time during the 12 months prior to the Relevant Date
 was a customer of the Employer or any other Group Company, with whom or which
 the Executive dealt other than in a de minimis way or for whom or which the
 Executive was responsible in a supervisory or managerial capacity on behalf
 of the Employer or any other Group Company at any time during the said
 period;

 
	
  

 	
  

 	
  

 
	
  

 	
 “Relevant Date” means (i) in the case of
 Clause 11.1.1 the earlier of the date the Executive gives notice to terminate
 his employment, the Termination Date or the date on which the Executive
 commences any Garden Leave Period; and (ii) in the case of Clauses 11.1.2 to
 11.1.5 the Termination Date, or if earlier, the date on which the Executive
 commences any Garden Leave Period;

 
	
  

 	
  

 	
  

 
	
  

 	
 “Relevant Services” products and services
 competitive with those supplied by the Employer or any other Group Company at
 any time during the 12 months prior to the Relevant Date in the supply of which
 the Executive was involved or concerned other than in a de minimis way at any
 time during the said period;

 
	
  

 	
  

 	
  

 
	
  

 	
 “Relevant Supplier” means any person, firm
 or company which at any time during the 12 months prior to the Relevant Date
 was a supplier of any goods or services (other than utilities and goods or
 services supplied for administrative purposes) to the Employer or any Group
 Company and with whom or which the Executive had personal dealings during the
 Employment other than in a de minimis way;

 
	
  

 	
  

 	
  

 
	
  

 	
 “Restricted Employee” means any person who
 is at the Relevant Date or was at any time during the period of 12 months
 prior to the Relevant Date employed or engaged as a consultant in the Group
 in an executive or senior managerial capacity or who reported directly to the
 Executive and with whom the Executive has had dealings other than in a de
 minimis way during the course of the Employment;

 
	
  

 	
  

 	
  

 
	
  

 	
 “Santander” means Banco Santander, S.A.;

 
	
  

 	
  

 	
  

 
	
  

 	
 “Santander shares” means shares of Capital
 Stock in Santander, par value Euro 0.50 each;

 
	
  

 	
  

 	
  

 
	
  

 	
 “Termination Date” means the date on which
 the Employment terminates; and

 
	
  

 	
  

 	
  

 
	
  

 	
 “Work(s)” means any idea, method,
 discovery, invention, technical or commercial information, know-how, computer
 program, semiconductor chip layout, database, drawing, literary work,
 product, packaging, design, marketing concept, trade or service mark, logo,
 domain name and all similar works (whether registrable or not and whether
 copyright works or not) made, created, or developed by the Executive, either
 alone or with others, during the term of the Employment (whether in or
 outside the course of the Executive’s duties), which relates to, or is
 capable of being used in, the business of the Employer or any Group Company.

 













	
  

 	
  

 
	
 21

 	
 Governing Law and Jurisdiction

 
	
  

 	
  

 
	
  

 	
 This
 Agreement is governed by and will be interpreted in accordance with the law
 of England and Wales. Each of the parties submits to the exclusive
 jurisdiction of the English courts as regards any claim or matter arising
 under this Agreement.

 



EXECUTED by the Executive and a representative of the
Employer duly and fully authorized by the Board of the Employer to enter into
this Agreement on the first date mentioned above.


	
  

 	
  

 	 
	
 EXECUTED
 as a DEED by the

 	
 

 	 
	
 Executive

 	/s/ António Horta-Osório

	
 António
 Horta-Osório 

 	 
	
 in
 the presence of:

 	3/11/2010




Witness’s signature       /s/ Elizabeth Jackson


	Name
	ELIZABETH JACKSON

	 	 
	Address
	LONDON

	 	 
	Occupation
	HR DIRECTOR

	 	 








	
  

 	
  

 	 
	
 SIGNED
 on behalf of the Employer:

 	
 

 	 
	
  

 	/s/ W F W Bischoff

	
 in
 the presence of:

 	 



/s/ Elizabeth Jackson