Document:

EXHIBIT 4(b)(ii)

 

	 	Lord Blackwell	 
	 	Chairman	 
	 	Lloyds Banking Group plc

25 Gresham Street

London EC2V 7HN

 

 

19 February 2019

 

Strictly Private and Confidential

António Horta-Osório

 

Dear António

 

Fixed Share Award and Pension Allowance

 

I am writing
to confirm that in respect of your additional accountabilities as Chief Executive of the Ring Fenced Bank entities, your Fixed
Share Award for your role has been reviewed. Effective from 1 January 2019, it will increase to £1,050,000 per annum. The
Fixed Share Award will continue to be payable quarterly in shares subject to dealing restrictions that lift pro-rata over five
years. For details of how this will operate, please find attached an updated Addendum to your Executive Service Agreement.

 

With regard to
your Pension Allowance, we seek your acceptance to amend the Heads of Terms dated 2 November 2010 (“HoT”) and your Executive
Service Agreement dated 3 November 2010 (“the ESA”) which outline your current Pension Allowance arrangements. Effective
from 1 January 2019, your Pension Allowance will be set at 33% of your annual Reference Salary (which is defined in the ESA as
being the higher of £1,220,000 and your actual annual salary) and the HoT and clause 4.1 of the ESA will be amended accordingly.

 

If, under the
terms of the Executive Service Agreement Addendum, the Group Remuneration Committee (“RemCo”) determines that
the Fixed Share Award must be adjusted or discontinued because it would be inconsistent with any legal, regulatory or tax reason,
the Group agrees, in a form to be approved by RemCo at that time, to increase your total fixed remuneration by £150,000
per annum. Should such a discontinuation of the Award be required, RemCo will consider alternative remuneration components to
ensure the overall package is commensurate with the role of the Group Chief Executive in respect of the remainder of the Award
value of £900,000.

 

Furthermore,
on termination of your employment the Group agrees that it will seek RemCo approval at their discretion, acting reasonably and
in good faith, for early release of shares under the Fixed Share Award at least to the value of the cumulative deferred impact
of the £150,000 increment in your Award provided by this letter.

 

Lloyds Banking Group
plc is registered in Scotland No. SC95000. Registered office. The Mound, Edinburgh, EH1 1YZ

    	 

    	

    

All other terms
and conditions of your employment remain unchanged including your Death in Service benefits which will remain at eight times your
annual salary and your unfunded benefit provided in pension form directly paid for by the Company. The accrued benefit is 6% of
your annual Reference Salary. Your flexible benefits allowance will remain at 4% of your salary as at 1 September of the prior
year.

 

Please countersign
a copy of this letter to confirm your agreement to the change to the Pension Allowance terms contained within this letter with
effect from 1 January 2019.

 

Should you have
any questions in relation to the above please do not hesitate to contact Matt Sinnott.

 

Best Regards,

Norman Blackwell

 

I confirm that
I have read and understood the terms set out in this letter and agree that my Executive Service Agreement and Heads of Terms shall
be varied to include these terms with effect from 1 January 2019.

 

	Signed	/s/ António Horta-Osório	 

 

	Print name	 António Horta-Osório

 

	Date	19 February 2019	 

 

Lloyds Banking Group
plc is registered in Scotland No. SC95000. Registered office. The Mound, Edinburgh, EH1 1YZ

    	 

    	

    

EXECUTIVE
SERVICE AGREEMENT ADDENDUM

 

The following clauses should be read in conjunction with your
Executive Service Agreement and the letter from the Chairman dated 19 February 2019

 

FIXED SHARE AWARD

 

The Award

 

The
Executive is entitled to receive an annual Fixed Share Award (the “Award”)
on the following terms. The Award is £1,050,000 per annum effective from 1 January 2019 and payable in respect of
the Executive’s role as Group Chief Executive.

 

The
Award is not subject to performance conditions or performance adjustment and accrues on a daily basis. It is paid in Lloyds Banking
Group plc (“Lloyds”) ordinary shares (“Shares”),
in equal instalments, quarterly in arrears. Where the Executive’s new role commences part-way through a quarter,
the corresponding instalment of the Award will be pro-rated downwards to reflect the part of the quarter during which the Executive
is in the new role. The number of shares the Executive receives will be determined by deducting income tax and national insurance
contributions from each quarterly instalment of the Award and using the net amount to buy Shares as soon as practicable at the
end of each quarter (and subject to any dealing restrictions). The Shares will be held in a brokerage account set up in the Executive’s
name with the share plan administrators, currently Equiniti. The date upon which each instalment of the Award is paid into the
Executive’s brokerage account is referred to in this agreement as the “Allocation Date”.

 

For
each quarterly Award instalment net of deductions, 20% will be released to the Executive each year for five years on or around
the annual anniversary of each Allocation Date. The Executive will be notified of the number of shares and of the specific release
dates applying to the shares after each Allocation Date.

 

Where
the Executive has a bonus opportunity stated in their offer letter and/or is eligible to be considered for a personal bonus pursuant
to paragraph 3.3 above, any bonus will be calculated as a percentage of base salary only (i.e. not the Executive’s base salary
plus the value of the Award). Neither bonus opportunity nor eligibility for a personal bonus is a contractual entitlement.

 

The
Employer will not be obliged to pay any Award (or any instalment of any Award) to the Executive if that would be inconsistent
with any legal or regulatory or tax requirement in the UK or other relevant jurisdiction. If such an inconsistency arises, the
Group Remuneration Committee (“RemCo”), acting reasonably and
in good faith, may adjust the terms of any Award or may discontinue payment of the Award. If the Executive’s Award is adjusted
or discontinued in this way, the Executive will have no right to any compensatory payment or damages in respect of such change,
however, RemCo will consider alternative remuneration components to ensure the overall package is commensurate with the role performed
by the Executive.

 

Unless
the Executive is informed otherwise in writing on any Allocation Date, the Award or any instalment will not be taken into account
in determining:

 

	•	pension entitlements under this Agreement or pursuant to any Group policy;
	 	 
	•	the Executive’s flexible benefit entitlement (“Flex”);
	 	 
	•	death-in-service benefits;
	 	 
	•	payments in lieu of notice;

    	 

    	

    

	•	a “week’s pay” or “month’s pay” for the purpose of calculating severance or redundancy payments under any of the Group’s Job Security Policies or Job Security Agreements or for the purposes of calculating any statutory redundancy entitlements; or
	 	 
	•	any “deputising payments” or “critical payment” to which the Executive may be entitled from time to time.

 

For
the avoidance of doubt, the Award does not form part of “basic salary” for the purposes of the Lloyds’ Long Term
Incentive Plans.

 

Review of the Award

 

If
the Executive’s salary is adjusted to reflect any Group leave policy, e.g. in relation to parental leave or sickness absence the
Award will be adjusted in the same proportions as the Executive’s salary.

 

Change of Role

 

The
Award relates to the Executive’s current role. If the Executive changes role, the Executive will be informed whether they
will receive a Fixed Share Award in respect of that new role, and if so, the amount of that Fixed Share Award. In the event that
the Executive is not entitled to a Fixed Share Award in such new role (or if the Fixed Share Award in such new role is less than
the Executive’s current Fixed Share Award) any instalment (or part of an instalment of the Award) accruing after the change
of role may be increased or decreased as appropriate (this may include a decrease to nil) and the Executive will have no right
to any compensatory payment or damages in respect of such change.

 

Leaving employment

 

If
the Executive’s employment terminates part-way through a quarter, the next instalment of the Award will be pro-rated downwards
to reflect the part of the quarter during which the Executive was in employment.

 

The
release dates for Shares held in the Executive’s brokerage account will normally continue to apply after the Executive has
left. However in exceptional circumstances the RemCo may allow early release of the Executive’s shares and other assets in
the brokerage account. This decision will be made within two months of the Executive leaving.

 

On
death, all Shares held in the brokerage account will be released to the Executive’s personal representatives as soon as administratively
possible.

 

On
termination of employment, if under the Group’s policies the Executive is entitled to pay in respect of any accrued but untaken
holiday, the Executive will receive payment in respect of their accrual of the Award in relation to such untaken holiday. This
payment will either be made in cash, or in Lloyds’ shares which will be held in the Executive’s brokerage account together
with the final instalment of the Award.

 

For
the purposes of the Award, the Executive’s employment will be treated as terminating when the Executive ceases to be employed
by any Group Company.

 

Brokerage account

 

The
share plan administrator will set up an individual brokerage account in the Executive’s name to manage the award. The share
plan administrator will contact the Executive with the terms and conditions of the nominee account and any action required to set
up the Executive’s account. If the Executive does not accept those terms, the Employer reserves the right to revoke the Award.

    	 

    	

    

Instalments
will be paid into the brokerage account at the end of each quarter.

 

Rights and dividends

 

Shares
will be held as restricted stock until each release date and the Executive will not be able to sell, pledge, charge, transfer or
in any way dispose of the Shares (or any interest in the Shares). After each release date, the Shares will show as unrestricted
stock and the Executive will be able to ask for the relevant Shares to be sold or transferred. There may be costs involved in such
a sale or transfer, which will be advised at the time by the share plan administrator.

 

Apart
from the restriction set out above, the Executive will be entitled to all rights of a shareholder in respect of the Shares held
in the brokerage account from the time they are transferred to that account.

 

Dividends
accruing in respect of your Shares will be automatically reinvested in additional Lloyds’ shares (“Dividend Shares”)
unless you wish to receive the dividends in cash and obtain all necessary approvals to do so. Dividend Shares will be held in your
brokerage account but you can ask for them to be sold or transferred at any time and you are entitled to all rights of a shareholder
in respect of them.

 

Corporate events

 

This
section applies where there is a Corporate Event and is without prejudice to the Executive’s continuing right to an Award
if employment continues following the Corporate Event (albeit that in the event of a Change of Control future Awards will be paid
in shares in the acquiring company or other relevant company).

 

Where
a Change of Control occurs part-way through a quarter, the instalment of the Award due to be payable at the end of the quarter
will become immediately payable and will be pro-rated downwards to reflect the shorter accrual period. The appropriate number of
Shares will then be transferred to the brokerage account.

 

Unless
the RemCo determines otherwise, all Shares held in the brokerage account will be released to the Executive and they may participate
in the Corporate Event in the same way as other shareholders. However, the RemCo may instead decide that the Shares held in the
brokerage account will be exchanged for shares or other securities in any acquiring company or other relevant company. If so, this
new holding will be held in the brokerage account until the release date applying to the Shares to which the new holding relates,
on such terms determined at the time. “RemCo” here means the individuals who were members of the Group Remuneration
Committee immediately before any Corporate Event. “Corporate Event” means:

 

	 	•	a Change of Control;
	 	 	 
	 	•	a resolution for the voluntary winding up of Lloyds;
	 	 	 
	 	•	a demerger, delisting, distribution (other than an ordinary dividend) or other transaction, which, in the opinion of the Remco, might affect the current or future value of any Award; or
	 	 	 
	 	•	a reverse takeover, merger by way of a dual listed company or other significant corporate event, as determined by the RemCo,
	 	 	 
	 	“Change of Control” means:
	 	 	 
	 	•	when a general offer to acquire shares made by a person (or a group of persons acting in concert) becomes wholly unconditional;

    	 

    	

    

	 	•	when, under Section 895 of the Companies Act 2006 or equivalent procedure under local legislation, a court sanctions a compromise or arrangement in connection with the acquisition of shares; or
	 	 	 
	 	•	when a person (or a group of persons acting in concert) obtains control (within the meaning of Section 995 of the Income Tax Act 2007) of Lloyds in any other way.

 

Tax matters

 

Each
Award is taxable at each Allocation Date. The number of Shares that will be purchased on the Executive’s behalf will be determined
by deducting income tax and national insurance contributions from each quarterly instalment through payroll and using the net amount
to buy the Shares. The Executive will be liable for any subsequent capital gains tax on the Shares. The Employer will provide the
Executive with an election form under section 431 of the Income Tax (Earnings & Pensions) Act 2003 which the Executive will
be required to sign and return within the 14 day period stipulated at the time of receipt of the election form. If the Employer
does not receive a signed copy of the enclosed election under section 431 of the Income Tax (Earnings & Pensions) Act 2003
within such 14 day period, they may revoke the Award.

 

Data protection

 

Unless
the Executive expressly objects to the arrangements outlined in this Agreement, they are deemed to consent to the processing of
personal data provided by them to any member of the Group, trustee or third party service provider for all purposes relating to
the operation Award including, but not limited to, administering the Awards and Shares and maintaining records.

 

The
Executive agrees that their personal data may be transferred to any member of the Group, trustee of any employee benefit trust,
registrars, brokers, third party administrators and any future purchasers of the Group or the business in which the Executive works.EXHIBIT
4(b)(iii)

17 November 2010

Ms Anita M Frew

Dear Anita

Non-executive director appointment - Lloyds
Banking Group plc (“the company”)

I am pleased on behalf of our Board to confirm my invitation
for you to join the board of Lloyds Banking Group plc as a non-executive
director.

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 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. 

	
  

 
	
 Appointment

 
	
  

 
	
 Your
 appointment will commence on 1 December 2010 and is for an initial term of
 three years, expiring at the AGM 2014. At the end of the three year term,
 your appointment will be reviewed. Subject to satisfactory performance and
 Board approval, you may be invited to serve for a further period.

 
	
  

 
	
 Continuation
 of your appointment is subject to:

 

	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 confirmation
 by the Financial Services Authority (FSA) that your application for Approved
 Person status has been approved and to this status being maintained
 throughout your tenure. Directors 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/directors;

 
	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 satisfactory
 performance and contribution to the Board and any committees of which you are
 a member;

 
	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 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).

 

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)

 	
 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, where possible, you
are requested to make the Chairman aware of your intention not to seek
re-election so that the board can plan for orderly succession.

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

Board Committees

In addition to your appointment as a non-executive director,
you may be required to serve on standing or ad hoc Board Committees. Initially,
you will be invited to serve on the following committees:

	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 Member,
 Audit Committee

 
	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 Member,
 Risk Oversight Committee

 

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;

 
	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 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 understood and met.

 

Key accountabilities

Key accountabilities for non-executive directors will
consist of:

	
  

 	
  

 	
  

 
	
  

 	
 •

 	
 Strategy.
 Non-executive directors should constructively challenge 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.

 

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 days per month which is made
up as follows:

	
  

 	
  

 	
  

 
	
 -

 	
 Base
 time commitment for LBG non-executive directors:

 	
 20 days

 
	
 -

 	
 Additional
 time for membership of Audit Committee

 	
 7 days

 
	
 -

 	
 Additional
 time for membership of Risk Oversight Committee

 	
 7 days

 
	
  

 	
  

 	

 

 
	
 -

 	
 Total
 estimated time commitment per annum:

 	
 34 days

 
	
  

 	
  

 	

 

 

The estimated time commitment includes all 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 for 2010 and 2011 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 expected to relinquish other appointments to ensure that you can meet
the time commitments and make yourself available 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.

Fees and Expenses

The following fees per annum are payable in respect of your
appointment:

	
  

 	
  

 	
  

 	
  

 	
  

 	
  

 
	
 •

 	
 Non-executive
 director base fee:

 	
  

 	
 £

 	
 65,000

 	
  

 
	
 •

 	
 Additional
 fee for membership of Audit Committee

 	
  

 	
 £

 	
 20,000

 	
  

 
	
 •

 	
 Additional
 fee for membership of Risk Oversight Committee

 	
  

 	
 £

 	
 15,000

 	
  

 
	
  

 	
  

 	
  

 	
  

 	
  

 
	
 Total
 fees payable:

 	
  

 	
 £

 	
 100,000

 	
  

 

Fees are payable monthly and will be paid to a LloydsTSB
bank account held in your name. If you do not hold a LloydsTSB 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.

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 senior
independent director and obtain a resolution of the board authorising such
acquisition. 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.

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. 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.

Induction

Following appointment, 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. 

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. 

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 copy of the company’s deed of indemnity is
included in your appointment pack for information.

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).

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 in
accordance with the company’s policy, details of which are set out in the
appointment pack.

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.

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
included in your appointment pack.

Shareholdings

All directors are encouraged to hold shares in the company.
If you would like to receive the whole or a 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

/s/ Win Bischoff

	
  

 
	

 

 
	
 I
 acknowledge receipt of the letter dated 17 November 2010 of which this is a
 copy and accept the terms of appointment.

 

Signed /s/ Anita Frew

Date 23/11/2010

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