EXHIBIT 4(b)(xii) 



	
  

 	
  

 
	
  

 	
 LLOYDS

BANKING

GROUP


 





	
  

 	
  

 
	
25 May 2012

 	


 




Lord
Norman Blackwell 


Dear Norman,


Non executive director appointment -
Lloyds Banking Group plc


Following our recent discussions, I am pleased to
confirm my invitation for you to join the board of Lloyds Banking Group plc
(“the company”) and certain subsidiary boards, as a non-executive director.


	
  

 	
  

 
	
 1.

 	
 Appointment

 


Subject to your acceptance of the terms set out in this
letter, you are invited to serve as:


	
  

 	
  

 
	
 (i)

 	
 a non
 executive director of the board of Lloyds Banking Group plc; (‘main board
 appointment’)

 
	
 (ii)

 	
 a non
 executive director of the board of each of the principal subsidiaries ie:

 





	
  

 	
  

 	
  

 
	
  

 	
 -

 	
 Lloyds
 TSB Bank plc;

 
	
  

 	
 -

 	
 HBOS
 Plc; and

 
	
  

 	
 -

 	
 BOS
 plc; and

 





	
  

 	
  

 
	
 (iii)

 	
 the
 Chairman of Scottish Widows Group Ltd and each of its principal subsidiaries
 (collectively referred
 to as ‘the Insurance Boards’)

 
	
  

 	
  

 
	
 2.

 	
 Term

 


The appointments referred to in (i) and (ii) above will
commence on 1 June 2012 and the appointment referred to a (iii), will commence on 1 September
2012. The appointments are for an initial term of three years, running concurrently and expiring at Lloyds Banking
Group’s AGM in 2015. Directors’ appointments are reviewable annually. Subject
to satisfactory performance and Board approval, you will be invited to stand
for annual re-election by the shareholders of Lloyds Banking Group Plc in relation to your main board appointment.


Subject
to a review of performance and the requirements of the board at the time, non
executive directors may be invited to serve
for a further term of three years.


Continuation of your appointment is subject to:


	
  

 	
  

 
	
 •

 	
 confirmation by the Financial Services Authority (FSA)
 (or successor organisation) that you have been approved to carry out the relevant
 controlled function(s) and to this (or equivalent) status being maintained throughout your
 period of office. All directors are required to adhere to the standards set by the regulator in
 relation to approved persons. Current requirements are set out in the
 Statements of Principle and Code of Practice for Approved Persons (APER), a copy of which is included in your appointment
 pack. Directors are reminded that they must inform the FSA and the relevant
 company boards of any significant changes in their personal circumstances which may have an impact on their
 status as an approved person/director;

 













	
  

 	
  

 	
  

 
	
 •

 	
 satisfactory performance and contribution to the Board
 and any Board committees on which you serve as assessed by the Chairman;

 
	
 •

 	
 election and re-election as a director by the company’s
 shareholders in general meeting as required by the company’s articles of association
 and codes to which the company subscribes, in particular, the Financial
 Reporting Council’s UK Corporate Governance Code (formerly the Combined Code).

 






	
  

 	
  

 
	
 3.

 	
 Termination

 



You
will cease to hold the office of director if:


	
  

 	
  

 	
  

 
	
  

 	
 (i)

 	
 you resign from your appointment or choose not to stand
 for re-election;

 
	
  

 	
 (ii)

 	
 the company terminates your appointment or chooses not
 to propose you for re-election;

 
	
  

 	
 (iii)

 	
 shareholders fail to elect or re-elect you;

 
	
  

 	
 (iv)

 	
 you fail to meet on an ongoing basis the standards
 expected of an approved person; or

 
	
  

 	
 (v)

 	
 the articles of association or any law or regulation
 prevents you from continuing in office.

 


In
the case of (i) and (ii) above, there is no entitlement to notice or to
compensation for loss office. However, the company will endeavour to give you
reasonable notice where appropriate. You are requested
to make the Chairman aware of any intention not to seek re-election so that the
board can plan for orderly
succession.


In the case of termination under (iii), (iv) or (v)
above, your appointment will terminate automatically with immediate effect
and without compensation.


	
  

 	
  

 
	
 4.

 	
 Board Committees

 


In addition to your appointment as a non executive
director you will be required to serve on a minimum of two Board
Committees, membership of which is subject to rotation. You will initially serve as a member of the
Audit and Risk Committees.


You may
also be required to serve on ad hoc Board
Committees established from time to time for a specific purpose.


	
  

 	
  

 
	
 5.

 	
 Role

 


Your
duties will be those required of a non-executive director. In the case of the
Insurance Boards, your duties will also
include those of Chairman.


 (a) Non executive director


Non-executive
directors have the same legal responsibilities as any other director. The Board
as a whole is collectively responsible for
promoting the success of the company by directing the company’s affairs. As members of the unitary board,
all directors are required to:


	
  

 	
  

 
	
 •

 	
 provide
 sound leadership of the company within a framework of prudent and effective
 controls which enable risk to be assessed and managed;

 
	
  

 	
  

 
	
 •

 	
 set the
 company’s strategy having regard to its risk appetite, ensuring that the
 necessary financial and human resources are in place for the company to meet its
 objectives, and review management performance; and

 
	
  

 	
  

 
	
 •

 	
 set the company’s values
 and standards and ensure that its obligations to its shareholders and others are met and understood.

 









 (b) Chairman, Insurance Boards


As Chairman
of the Insurance Boards, you will be responsible for leadership of the Board
including:


	
  

 	
  

 
	
 •

 	
 running the
 Board and setting its agenda;

 
	
  

 	
  

 
	
 •

 	
 ensuring
 that directors receive accurate, timely and clear information and that the
 Board as a whole is devoting its time to the right matters;

 
	
  

 	
  

 
	
 •

 	
 managing the
 Board and facilitating a culture of open debate, ensuring that sufficient
 time is allowed for discussion of complex or contentious issues;

 
	
  

 	
  

 
	
 •

 	
 ensuring
 that the composition of the board is appropriate for the efficient running of
 the business;
 and

 
	
  

 	
  

 
	
 •

 	
 evaluating
 the overall effectiveness of the Board including the collective and
 individual performance
 of directors.

 






	
  

 	
  

 
	
 6.

 	
 Key
 accountabilities

 



Non executive
directors are expected to focus on the following key areas:


	
  

 	
  

 
	
 •

 	
 Strategy. Non-executive directors
 should constructively challenge management and help to develop proposals on strategy
 by bringing a different and external perspective to Board discussions.

 
	
 •

 	
 Performance. Non-executive directors should
 support and scrutinise the performance of management in meeting agreed goals and objectives
 and monitor the reporting of performance.

 
	
 •

 	
 Risk. Non-executive directors
 should satisfy themselves that Board discussion and decision making on risk matters is
 based on accurate and appropriately comprehensive information and draws, as far as they believe
 it to be relevant or necessary, on external analysis and input. In particular, non-executive
 directors should satisfy themselves on the integrity of financial information and that
 financial controls and systems of risk management are robust, adequate and effective.

 
	
 •

 	
 People. Through membership of Board
 Committees, non-executive directors are responsible for determining appropriate
 policies, structure and levels of remuneration for executive directors and senior
 executive management and ensuring appropriate arrangements are in place for Board appointments and
 executive and non-executive succession planning.

 
	
  

 	
  

 
	
 7.

 	
 Time commitment

 


As a non-executive director, you are required to devote
such time as is necessary for the effective discharge of your duties. The
estimated minimum time commitment for your role is approx 75 -80 days per year which is made up as follows:


	
  

 	
  

 	
  

 
	
  

 	
 Base time
 commitment for LBG non executive directors

 	
 25 days p.a

 
	
  

 	
 Additional
 time for membership of Committees

 	
 15
 days p.a

 
	
  

 	
 Additional
 time for Chairmanship of Insurance Boards

 	
 35- 40 days p.a

 


The boards of the principal banking subsidiaries generally
meet simultaneously with the board of Lloyds Banking Group plc.


The estimated time commitment includes scheduled
Board and Committee meetings relevant to your role, plus dinners, strategy sessions, attendance at
the AGM and preparation for meetings. You should already have received a schedule of Board dates for 2012 but please
let me know if you need any further
information.






The above time commitment is based on planned events.
From time to time, however, you may be required to attend ad hoc meetings
at short notice. In such circumstances, you will be expected to make yourself available as required. Where
appropriate, you may be expected to adjust or relinquish other appointments to ensure that you can meet
the time commitments of the role(s). The agreement of the Chairman should be
sought before accepting additional commitments that might affect your ability to meet the time commitments necessary to
discharge your duties.


In your capacity as a director of Lloyds Banking Group
plc and its subsidiaries, you may be required to attend or represent the Group
at meetings with the regulator, the Government, investors or other third parties as
appropriate.


By accepting this appointment, you confirm that you are
able to allocate sufficient time to meet the expectations of your
role to the satisfaction of the board.


	
  

 	
  

 
	
 8.

 	
 Fees and expenses

 



The
following fees are payable in respect of your appointment:



	
  

 	
  

 
	
 (i)
 Non executive base fee

 	
 £ 65,000

 
	
 (ii)
 Fee for membership of the Audit Committee

 	
 £ 20,000

 
	
 (iii)
 Fee for membership of the Risk Committee

 	
 £ 15,000

 
	
 (iv)
 Fee for Chairmanship of Insurance Board

 	
 £130,000

 
	
  

 	
  

 
	
 Total fees payable:

 	
 £230,000 

 


Fees referred to in (i), (ii) and (iii) above, are
payable from 1 June 2012. As the boards of the principal banking subsidiaries meet simultaneously with
the Board of Lloyds Banking Group plc, there is no separate fee.


Fees referred to in (iv) above are payable from 1
September 2012.


Fees
are payable monthly in arrears and will be paid to an account held with any
Lloyds Banking Group bank (ie Lloyds TSB, Bank of Scotland or Halifax). If you
do not hold such an account, you will be
required to open one for this purpose. Please contact the Company Secretary who
will be happy to make the necessary
arrangements.


All directors are encouraged to hold shares in the
company. If you would like to receive all or part of your monthly fee in
shares, please contact the Company Secretary who would be happy to make the necessary arrangements
for you.


The
company will reimburse you for all reasonable and properly documented expenses
incurred by you in the performance of your
duties.


	
  

 	
  

 
	
 9.

 	
 Outside interests and conflicts

 


It is accepted and acknowledged that you have personal
and business interests other than those of the company. As a condition of your appointment
you are required to declare any such directorships, appointments and interests to the board in writing. If you acquire any
additional interests or become aware of any potential conflicts of interest,
these must be disclosed to and authorised by the board as soon as they arise. Should you at any time
consider taking on a new interest which might conflict with your
interests as a director of the company or its subsidiaries, you must first
discuss the matter with the Chairman and
obtain a resolution of the board authorising such interest.






Regardless
of any approval given in relation to outside interests, it is your
responsibility to ensure that conflicts are duly authorised and that you can
meet the time commitment required by the role.


	
  

 	
  

 
	
 10.

 	
 Disclosure

 


The company may be required to include in its annual
accounts a note of any material interest that a director may have in any
transaction or arrangement that the company has entered into. You must disclose any such
interest as soon as possible but no later than the board meeting at which the transaction or
arrangement is first discussed. A general notice that you are interested in any
contracts with
a particular person, firm or company is acceptable where applicable.


Various
disclosure obligations are imposed on the company in relation to its directors
eg directors fees, share dealings,
connected persons etc. On appointment as a director, you are deemed to consent to such information being released where there is
a legal or regulatory obligation to do so.


	
  

 	
  

 
	
 11.

 	
 Confidentiality, price sensitivity and personal dealings

 


You will not use or disclose to any person, firm or
organisation (except as required by law or to carry out your duties under this
letter) any trade secrets, know-how, business information or other private or confidential information
relating to the business, finances or affairs of the company, or any customer of the company or any other information
provided on the basis that it is confidential. You will use your best endeavours to prevent the unauthorised
use or disclosure of any such information. This restriction will continue to
apply after your appointment ends without limit in time but will not apply to
information which becomes public, unless through unauthorised disclosure by
you. After your appointment ends you
will return all documents and information (whether written, visual or electronic) under your control which belong to
the company or any member of the Lloyds Banking Group.


Unless expressly authorised by the Group to do so, you
should avoid making any formal or informal statements that might
contravene these requirements.


In respect of your main board appointment, your
attention is drawn to the requirements under both legislation and regulation in
respect of price sensitive information. Directors (and their connected persons) are prohibited from dealing at any
time when the director is in possession of unpublished price sensitive
information and/or during any mandatory close or prohibited dealing period.
During the continuation of your appointment
you will be expected to comply (and to procure that your connected
persons comply) where relevant with any rule of law or regulation from time to
time in force in relation to dealings in
shares, debentures and other securities of the company and unpublished price sensitive information affecting the shares,
debentures and other securities of the company.


Details of the procedure for dealing in shares, together
with explanatory notes on the code of market conduct/model code, will
be included in your appointment pack.


The Company Secretary can provide further information and
advice on these matters as required.


	
  

 	
  

 
	
 12.

 	
 Induction

 


In the course of your appointment process, the company
will provide a tailored induction programme. You are entitled to request any additional
information or briefings to assist you in the execution of your duties. A copy of the induction programme
will be forwarded to you nearer the time of your appointment. Please contact the Company Secretary if you require any
further information.









	
  

 	
  

 
	
 13.

 	
 Evaluation and review of performance

 


The performance of individual directors as well as that
of the board and its committees is evaluated annually. In the interim,
if there are any matters which you wish to discuss in relation to the performance of your
role, please feel free to contact me.


	
  

 	
  

 
	
 14.

 	
 Directors’ liability indemnity and insurance

 


To the extent permitted by law, directors are entitled
to be indemnified by the company against all costs and liabilities
incurred by them in execution of their duties. A deed of indemnity is included
in your
appointment pack for signature and return.


You will also have the benefit of any directors’ and
officers’ insurance cover maintained from time to time by the company (but this
shall not oblige the company to maintain any such cover either at all, or on current terms).


	
  

 	
  

 
	
 15.

 	
 Independent professional advice

 


Occasions
may arise when you require professional advice in the furtherance of your
duties as a director. The Company Secretary
is available to all directors to advise as required. Should you wish to consult
independent advisers, you are free to do so at the company’s expense. The
company will reimburse the full cost of expenditure incurred in accordance with
the company’s policy, details of which are
set out in the appointment pack.


Please acknowledge receipt and acceptance of the above
terms by signing and returning the enclosed copy of this letter.


Please do not hesitate to contact me for any assistance
in any matters during the term of your appointment.


I look forward to working with you on our Boards.


Yours Sincerely





Sir
Winfried Bischoff

Chairman

Lloyds
Banking Group plc


I acknowledge receipt of the letter dated 25 May, 2012 of which this is a copy
and accept the terms of appointment.


Signed  


Date 10 June 2012



Enclosures:


Schedule
of 2012/13 dates

Appointment
pack