EXHIBIT 4(b)(xiii) 

 
	
  

 	
  

 	
  

 
	
  

 	
 Sir Winfried Bischoff

 	
 LLOYDS

 
	
  

 	
 Chairman

 	
 BANKING

 
	
  

 	
  

 	
 GROUP

 
	
 28 May 2012

 	
  

 	
 

 







	
  

 	
  

 
	
 Private & Confidential

 	
 Lloyds Banking Group plc

 
	
 Carolyn Fairbairn

 	
 25 Gresham
 Street

 London EC2V 7HN

 
	
  

 	
  

 
	
  

 	
 020 7356
 1390 telephone 

 
	
  

 	
 020 7356
 2323 facsimile

 



Dear Carolyn


Non executive director appointment - Lloyds Banking Group plc


Following our recent discussions, I am pleased to confirm
that the board of Lloyds Banking Group plc (“the company”) has approved in
principle your appointment as a non-executive director, subject to FSA approval. Your appointment
will be confirmed by the Board once approval has been obtained.


All directors of the company also serve on the principal
subsidiary boards of Lloyds TSB Bank plc, HBOS Plc and BOS plc. This letter also
covers your appointment as a non executive
director of those companies. The boards generally meet simultaneously.


Your appointment is subject to the
terms and conditions set out in this letter.


	
  

 	
  

 
	
 1.

 	
 Appointment

 


Your appointment will commence on 1 June 2012 and is for
an initial term of three years, expiring at the AGM 2015. Appointments are
reviewable annually. Subject to satisfactory performance and Board approval,
you will be invited to stand for annual re-election by shareholders at the AGM in each year of your
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.


Continuation
of your appointment is subject to:


	
  

 	
  

 	
  

 
	
  

 	
 §

 	
 confirmation by the Financial Services Authority (FSA)
 (or successor organisation) that your application to carry out the
 non executive director controlled function as an approved person has been
 approved and to this (or equivalent) status being maintained throughout your
 tenure. 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

 






	
  

 	
  

 
	
 Lloyds Banking Group plc is registered in Scotland no. 95000.
 Registered office: Henry Duncan House, 120 George Street, Edinburgh EH2 4LH

 	
  

 
	
  

 
	
 Lloyds
 Banking Group plc is registered
 in Scotland no. 95000. Registered Office: The
 Mound, Edinburgh EH1 1YZ

 













	
  

 	
  

 	
  

 
	
  

 	
  

 	
 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 company of any significant changes in their personal
 circumstances which may have an impact on their status as approved
 persons/director;

 
	
  

 	
 §

 	
 satisfactory performance and contribution to the Board
 and any Board committees on which you serve;

 
	
  

 	
 §

 	
 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).

 






	
  

 	
  

 	
  

 	
  

 
	
  

 	
 2.

 	
 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 of 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.

 
	
  

 	
  

 
	
  

 	
 3.

 	
 Board Committees

 
	
  

 	
  

 	
  

 
	
  

 	
 In
 addition to your appointment as a non executive director you will be required
 to serve on at least two Board Committees which may be subject to rotation.
 Initially, you will serve on the following:

 






	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 Member,
 Audit Committee

 
	
  

 	
 •

 	
 Member,
 Remuneration Committee

 






	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 4.

 	
 Role

 
	
  

 	
  

 	
  

 
	
  

 	
 Your
 duties will be those required of 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;

 


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 •

 	
 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.

 
	
  

 	
  

 	
  

 
	
  

 	
 5.

 	
 Key account abilities

 
	
  

 	
  

 	
  

 
	
  

 	
 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.

 
	
  

 	
  

 	
  

 
	
  

 	
 6.

 	
 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 time commitment for your role is approximately 3-4 days per month which is made
 up as follows:

 





	
  

 	
  

 	
  

 	
  

 
	
  

 	
 -

 	
 Base
 time commitment for LBG non executive directors:

 	
 c. 25
 days per annum

 
	
  

 	
 -

 	
 Additional
 time for membership of Audit Committee*

 	
 c.   9
 days per annum

 
	
  

 	
 -

 	
 Additional
 time for membership of Remuneration Committee

 	
 c.   6
 days per annum

 






	
  

 	
  

 
	
  

 	
 (* including deep dive meetings)

 
	
  

 	
  

 
	
  

 	
 Estimated time commitment: approx 40 days per annum.

 
	
  

 	
  

 
	
  

 	
 The estimated time commitment includes scheduled
 Board and Committee meetings relevant to your role, plus strategy sessions,
 attendance at the AGM and preparation for meetings. A schedule of Board and committee
 meetings is attached.

 
	
  

 	
  

 
	
  

 	
 The above time commitment is based on planned events.
 From time to time, however, you may be required to attend meetings at short
 notice. You will be required to make yourself available as appropriate. Where
 appropriate, you may be expected to relinquish other appointments to ensure that you can meet
 the time commitments of the company.

 


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 In your capacity as a director of Lloyds Banking Group
 plc, 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.

 
	
  

 	
  

 	
  

 
	
  

 	
 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.

 
	
  

 	
  

 	
  

 
	
  

 	
 7.

 	
 Fees and Expenses

 
	
  

 	
  

 	
  

 
	
  

 	
 The
 following fees are payable in respect of your appointment:

 






	
  

 	
  

 	
  

 	
  

 	
  

 
	
  

 	
§

 	
 Non
 executive base fee:

 	
 £ 65,000

 	
  

 
	
  

 	
§

 	
 Additional
 fee for membership of Audit Committee

 	
 £ 20,000

 	
  

 
	
  

 	
§

 	
 Additional
 fee for membership of Remuneration Committee

 	
 £ 15,000

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
           Total fees payable:

 	
 £ 100,000

 	
  

 





	
  

 	
  

 	
  

 
	
  

 	
 Fees are payable monthly and will be paid to a Lloyds
 TSB bank account (or an account with any of the Lloyds Banking Group brands), held in your name. 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.

 
	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 8.

 	
 Outside Interests

 
	
  

 	
  

 	
  

 
	
  

 	
 It is accepted and acknowledged that you have 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 take on any additional business interests or become aware of
 any potential conflicts of interest, these must be disclosed to the board as soon as they
 arise or become known to you. If at any time you are considering acquiring any new
 interest which might give rise to a conflict of interest with the
 company 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 you can meet the time commitment required by the role.

 
	
  

 	
  

 
	
  

 	
 9.

 	
 Confidentiality

 
	
  

 	
  

 
	
  

 	
 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.

 
				


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 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.

 
	
  

 	
  

 	
  

 
	
  

 	
 Your attention is also drawn to the requirements under
 both legislation and regulation relating to the disclosure of price sensitive
 information. You should avoid making any statements or
 engaging in any dealings that might contravene these requirements. The Company Secretary can
 provide further information and advice on these matters if required. Company policy is that all
 external communication on company affairs is restricted to the Chairman, Chief Executive and Corporate Affairs
 Director only.

 
	
  

 	
  

 	
  

 
	
  

 	
 10.

 	
 Induction

 
	
  

 	
  

 	
  

 
	
  

 	
 Following appointment, the company will provide further
 tailored induction to the extent required. You are entitled to request any
 additional information or briefings to assist you in the execution of
 your duties.

 
	
  

 






	
  

 	
  

 	
  

 
	
  

 	
 11.

 	
 Evaluation and review of performance

 
	
  

 	
  

 	
  

 
	
  

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

 
	
  

 	
  

 	
  

 
	
  

 	
 12.

 	
 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).

 
	
  

 	
  

 	
  

 
	
  

 	
 13.

 	
 Independent Professional Advice

 
	
  

 	
  

 	
  

 
	
  

 	
 Occasions may arise when you consider that you need
 professional advice in the furtherance of your duties as a director and it
 will be appropriate for you to consult independent advisers at the company’s expense.
 The company will reimburse the full cost of expenditure incurred.

 
	
  

 	
  

 	
  

 
	
  

 	
 14.

 	
 Disclosure and Dealings in Shares

 
	
  

 	
  

 	
  

 
	
  

 	
 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 so
 that the Board can note your interest and, if appropriate, approve any
 conflicts. A general notice that you are interested in any contracts with a
 particular person, firm or company is acceptable.

 


5









	
  

 	
  

 	
  

 
	
  

 	
 During the continuation of your appointment you will
 be expected to comply (and to procure that your spouse and any connected persons comply) where
 relevant with any rule of law or
 regulation of any competent authority or of the company from time to time in force in relation to dealings in shares,
 debentures and other securities of the company and the 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 in your appointment pack.

 
	
  

 	
  

 	
  

 
	
  

 	
 15.

 	
 Shareholdings

 
	
  

 	
  

 	
  

 
	
  

 	
 All directors are encouraged to hold shares in the
 company. If you would like to receive whole or part of your monthly fee in
 shares, we would be happy to make the necessary arrangements for you.

 


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 welcoming you to
the Board.


Yours Sincerely





Sir
Winfried Bischoff

Chairman

Lloyds
Banking Group plc



I acknowledge receipt of the letter dated 28 May 2012 of
which this is a copy and accept the terms of appointment.


Signed  


Date 12/6/2012


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