Document:

Exhibit

Exhibit 10.42

CERTAIN IDENTIFIED INFORMATION HAS BEEN EXCLUDED FROM THE EXHIBIT BECAUSE IT IS BOTH (I) NOT MATERIAL AND (II) WOULD BE COMPETITIVELY HARMFUL IF PUBLICLY DISCLOSED. OMITTED INFORMATION HAS BEEN 
REPLACED WITH ASTERISKS.

AMENDMENT NO. 2

TO THE AMENDED AND RESTATED A350-900 PURCHASE AGREEMENT

dated as of September 1, 2017

between

AIRBUS S.A.S.

and

UNITED AIRLINES, INC.

This Amendment No. 2 to the Amended and Restated A350-900 Purchase Agreement between Airbus S.A.S. and United Airlines, Inc. (hereinafter referred to as the “Amendment No. 2”) is entered into as of December 3, 2019 by and between AIRBUS S.A.S., a société par actions simplifiée, organized and existing under the laws of the Republic of France, having its registered office located at 2, Rond-Point Emile Dewoitine, 31700 Blagnac, France (hereinafter referred to as the “Seller”), and UNITED AIRLINES, INC., a corporation organized and existing under the laws of the State of Delaware, United States of America, having its principal corporate offices located at 233 South Wacker Drive, Chicago, Illinois 60606, U.S.A. (hereinafter referred to as the “Buyer”).

WITNESSETH:

WHEREAS, the Buyer and the Seller entered into the Amended and Restated A350-900 Purchase Agreement, dated as of September 1, 2017 which, together with all Exhibits, Appendices and Letter Agreements attached thereto and as amended, modified or supplemented from time to time is hereinafter called the “Agreement”, and  

WHEREAS, the Buyer and the Seller have agreed to amend certain terms of the Agreement as set forth herein.

NOW, THEREFORE, IT IS AGREED AS FOLLOWS:

***

		
	1.
	DEFINITIONS

		
	1.1
	Capitalized terms used herein and not otherwise expressly defined in this Amendment No. 2 shall have the meanings assigned thereto in the Agreement. The terms “herein”, “hereof”, and “hereunder” and words of similar import refer to this Amendment No. 2.

		
	1.2
	The definitions of “A350-900 Standard Specification” and “A350-1000 Standard Specification” set out in Clause 0 of the Agreement are deleted in their entirety and replaced with the following quoted text:

QUOTE

A350-900 Standard Specification - the A350-900 standard specification document ***, a copy of which is annexed hereto as Exhibit A-1.

A350-1000 Standard Specification - the A350-1000 standard specification document ***, a copy of which is annexed hereto as Exhibit A-2.

UNQUOTE
 
		
	1.3
	The definition of “Family ADD” set out in Clause 0 of the Agreement is deleted in its entirety.

		
	1.4
	The following definition for “A350XWB ACG” is added to Clause 0 of the Agreement:

QUOTE

A350XWB ACG - as the context requires, either the A350XWB Airbus Customization Guide ***, or any ***.

UNQUOTE

		
	1.5
	Clauses 18.6.1 and 18.6.2.1 of the Agreement are amended by replacing “Family ADD” with "A350XWB ACG".

		
	2.
	PRICE

		
	2.1
	Clause 3.1 of the Agreement is deleted in its entirety and replaced with the following quoted text:

QUOTE

CT1706024 - Amended and Restated A350-900 Purchase Agreement - Amendment No. 2 final        AM2-2
AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

3.1    Base Price of the Aircraft

3.1.1    Base Price of the A350-900 Aircraft 

The Base Price of the A350-900 Aircraft is the sum of: 

		
	(i)
	the base price of the A350-900 Aircraft as defined in the A350-900 Standard Specification (excluding Buyer Furnished Equipment and Airbus Contracted Supplier equipment), which is:

***

and

		
	(ii)
	the sum of the base prices of all SCNs set forth in Part 1 of Exhibit B-2 (the “A350-900 SCN Budget”), which is:

***

and

		
	(iii)
	the base price of the ***, which is:

***

The Base Price of the A350-900 Aircraft has been established in accordance with ***.

		
	3.1.2
	Base Price of the A350-1000 Aircraft

The Base Price of the A350-1000 Aircraft, if purchased by the Buyer, is the sum of: 

		
	(i)
	the base price of the A350-1000 Aircraft as defined in the A350-1000 Standard Specification (excluding Buyer Furnished Equipment and Airbus Contracted Supplier equipment), which is:

***

and

		
	(ii)
	the sum of the base prices of all SCNs set forth in Part 2 of Exhibit B-2 (the “A350-1000 SCN Budget”), which is:

***

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AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

and

		
	(iii)
	the base price of the *** which is:

***

The Base Price of the A350-1000 Aircraft has been established in accordance with ***.

		
	3.1.3
	Base Price of the A350-900 ULR Aircraft

The Base Price of the A350-900 ULR Aircraft, if purchased by the Buyer, is the sum of: 

		
	(i)
	the base price of the A350-900 Aircraft as defined in the A350-900 Standard Specification (excluding Buyer Furnished Equipment and Airbus Contracted Supplier equipment), as modified by the ULR Option Changes, which is:

***

and

		
	(ii)
	the sum of the base prices of all SCNs set forth in Part 3 of Exhibit B-2 (the “A350-900 ULR SCN Budget”), which is:

***

The Base Price of the A350-900 ULR Aircraft has been established in accordance with ***.

UNQUOTE

		
	3.
	DELIVERY SCHEDULE

		
	3.1
	Upon the Buyer’s request, the Seller agrees to *** the Scheduled Delivery *** of the Aircraft as set forth in Clause 3.2 below (the “***”).

		
	3.2
	The delivery schedule of the Aircraft set out in Clause 9.1 of the Agreement is amended to read the following:

QUOTE

CT1706024 - Amended and Restated A350-900 Purchase Agreement - Amendment No. 2 final        AM2-4
AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

Aircraft number    Aircraft type        Scheduled Delivery 
***

Aircraft N°1     A350-900 Aircraft        ***
Aircraft N°2    A350-900 Aircraft        ***
Aircraft N°3    A350-900 Aircraft         ***
Aircraft N°4    A350-900 Aircraft         ***
Aircraft N°5    A350-900 Aircraft         ***
Aircraft N°6    A350-900 Aircraft         ***
Aircraft N°7     A350-900 Aircraft         ***
Aircraft N°8    A350-900 Aircraft         ***
Aircraft N°9    A350-900 Aircraft         ***
Aircraft N°10    A350-900 Aircraft         ***
Aircraft N°11    A350-900 Aircraft         ***

Aircraft N°12    A350-900 Aircraft         ***
Aircraft N°13     A350-900 Aircraft         ***
Aircraft N°14    A350-900 Aircraft         ***
Aircraft N°15    A350-900 Aircraft         ***
Aircraft N°16    A350-900 Aircraft         ***
Aircraft N°17    A350-900 Aircraft         ***
Aircraft N°18    A350-900 Aircraft         ***
Aircraft N°19    A350-900 Aircraft         ***
Aircraft N°20    A350-900 Aircraft         ***
Aircraft N°21    A350-900 Aircraft         ***
Aircraft N°22    A350-900 Aircraft         ***

Aircraft N°23    A350-900 Aircraft         ***
Aircraft N°24    A350-900 Aircraft         ***
Aircraft N°25    A350-900 Aircraft         ***
Aircraft N°26    A350-900 Aircraft         ***
Aircraft N°27    A350-900 Aircraft         ***
Aircraft N°28    A350-900 Aircraft         ***
Aircraft N°29    A350-900 Aircraft         ***
Aircraft N°30    A350-900 Aircraft         ***
Aircraft N°31     A350-900 Aircraft         ***
Aircraft N°32    A350-900 Aircraft         ***
Aircraft N°33    A350-900 Aircraft         ***

Aircraft N°34    A350-900 Aircraft         ***
Aircraft N°35    A350-900 Aircraft         ***
Aircraft N°36    A350-900 Aircraft        ***
Aircraft N°37    A350-900 Aircraft        ***
Aircraft N°38    A350-900 Aircraft        ***
Aircraft N°39    A350-900 Aircraft        ***

CT1706024 - Amended and Restated A350-900 Purchase Agreement - Amendment No. 2 final        AM2-5
AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

Aircraft N°40    A350-900 Aircraft        ***
Aircraft N°41    A350-900 Aircraft        ***
Aircraft N°42    A350-900 Aircraft        ***
Aircraft N°43    A350-900 Aircraft        ***
Aircraft N°44    A350-900 Aircraft        ***
Aircraft N°45    A350-900 Aircraft        ***

UNQUOTE

		
	4.
	PREDELIVERY PAYMENTS

		
	4.1
	***.

		
	5.
	LETTER AGREEMENT No. 2 (predelivery payments)

		
	5.1
	Clause 5.2.2 of the Agreement, as amended by Letter Agreement No. 2, is amended by deleting in its entirety the text located between ***, and replacing the same with the following quoted text:

QUOTE

***

UNQUOTE

		
	6.
	LETTER AGREEMENT No. 3 (credit matters)

		
	6.1
	The following quoted text is added at the end of Paragraph 1.2 of Letter Agreement No.3:

QUOTE

***

UNQUOTE

		
	6.2
	Paragraph 1.3 of Letter Agreement No.3 is deleted in its entirety and replaced with the following quoted text:

QUOTE

***

UNQUOTE

***

CT1706024 - Amended and Restated A350-900 Purchase Agreement - Amendment No. 2 final        AM2-6
AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

7.        LETTER AGREEMENT No. 4 (***)

7.1        *** Aircraft

		
	7.1.1
	The table in Paragraph 2.2 of Letter Agreement No. 4 is deleted in its entirety and replaced with the following table:

QUOTE
    
***

UNQUOTE

***    

		
	7.2
	***

		
	7.2.1
	Sub-paragraph (ii) of Paragraph 3.1.3 of Letter Agreement No. 4 is deleted in its entirety and replaced with the following quoted text:

QUOTE

***

UNQUOTE

		
	7.2.2
	Sub-paragraph (iv) of Paragraph 3.1.3 of Letter Agreement No. 4 is deleted in its entirety and replaced with the following quoted text:

QUOTE

*** 

UNQUOTE

		
	7.2.3
	Sub-paragraph (ii) of the part of Paragraph 3.2.1 of Letter Agreement No. 4 which deals with *** is deleted in its entirety and replaced with the following quoted text:

QUOTE

*** 

UNQUOTE

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AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

		
	7.3
	*** 

		
	7.3.1
	Paragraph 4 of Letter Agreement No. 4 is deleted in its entirety and voided.

		
	8.
	LETTER AGREEMENT No. 6 (specification matters)

		
	8.1
	The last paragraph of Clause 2.1.1.1 (as amended by Letter Agreement No. 6) is deleted in its entirety.

		
	8.2
	The following quoted text is added at the end of Clause 2.1.1.2 (as amended by Letter Agreement No. 6): 

QUOTE

***

UNQUOTE

		
	8.3
	Clause 2.1.1.3 (as amended by Letter Agreement No. 6) is deleted in its entirety and replaced with the following quoted text:

QUOTE

***

UNQUOTE

		
	8.4
	Clause 2.1.2 (as amended by Letter Agreement No. 6) is deleted in its entirety and replaced with the following quoted text:

QUOTE

***

UNQUOTE

		
	8.5
	The first paragraph of Clause 2.1.3 (as amended by Letter Agreement No. 6) is deleted in its entirety and replaced with the following quoted text:

QUOTE

***

UNQUOTE

CT1706024 - Amended and Restated A350-900 Purchase Agreement - Amendment No. 2 final        AM2-8
AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

		
	8.6
	The third paragraph of Clause 2.1.3 (as amended by Letter Agreement No. 6) is amended by ***.

		
	8.7
	Clauses 2.5.1 and 2.5.2 (as amended by Letter Agreement No. 6) are amended by ***.

		
	9.
	LETTER AGREEMENT No. 14 (aircraft order matters)

		
	9.1
	Paragraph 1.1 (i) of Letter Agreement No. 14 is deleted in its entirety and replaced with the following quoted text:

QUOTE

		
	(i)
	The *** is only granted to the Buyer for *** of the Aircraft which are included   in the Buyer’s *** order of forty-five (45) Aircraft, as follows (each a “***”):

a.    Aircraft ***, 

b.    *** Aircraft with a Scheduled Delivery ***, 

c.    *** Aircraft with a Scheduled Delivery ***, 

d.    *** Aircraft with a Scheduled Delivery ***, 

e.    *** Aircraft with a Scheduled Delivery ***, 

f.    *** Aircraft with a Scheduled Delivery ***. 

UNQUOTE

		
	9.2
	The Decision Window, as such term is defined in Paragraph 1.1 (ii) of Letter Agreement No. 14, is amended to be the period between *** and ***.

		
	9.3
	The date by which the *** Agreement shall enter in full force and effect, as set out in Paragraph 2.2 (i) of Letter Agreement No. 14, is amended to be ***.

		
	9.4
	***, as set out in Paragraph 2.2 (iii) of Letter Agreement No. 14, is amended to read    ***.

		
	9.5
	***, as set out in Paragraph 2.3 (iii) of Letter Agreement No. 14, is amended to read    ***.

		
	9.6
	The date up to ***, as set out in Paragraph 2.3 of Letter Agreement No. 14, is amended to read ***.

		
	10.
	EXIBIT B-2

CT1706024 - Amended and Restated A350-900 Purchase Agreement - Amendment No. 2 final        AM2-9
AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

		
	10.1
	The reference reading *** of the Agreement is amended to read ***.

		
	10.2
	The reference reading *** of the Agreement is amended to read ***.

		
	10.3
	The reference reading *** of the Agreement is amended to read ***.

		
	11.
	EFFECT OF THE AMENDMENT

The Agreement will be deemed amended to the extent herein provided, and, except as specifically amended hereby, will continue in full force and effect in accordance with its original terms. This Amendment No. 2 supersedes any previous understandings, commitments, or representations whatsoever, whether oral or written, related to the subject matter of this Amendment No. 2.

Both parties agree that this Amendment No. 2 will constitute an integral, non-severable part of the Agreement, that the provisions of the Agreement are hereby incorporated herein by reference, and that this Amendment No. 2 will be governed by the provisions of the Agreement, except that if the Agreement and this Amendment No. 2 have specific provisions that are inconsistent, the specific provisions contained in this Amendment No. 2 will govern.

		
	12. 
	ASSIGNMENT 

This Amendment No. 2 and the rights and obligations of the parties will be subject to the provisions of Clause 21 of the Agreement.

		
	13.
	CONFIDENTIALITY

This Amendment No. 2 is subject to the terms and conditions of Clause 22.10 of the Agreement. 

		
	14.
	GOVERNING LAW

The governing law shall be as set forth in Clause 22.6 of the Agreement.

		
	15.
	COUNTERPARTS

This Amendment No. 2 may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered will be an original, but all such counterparts will together constitute one and the same instrument.  

CT1706024 - Amended and Restated A350-900 Purchase Agreement - Amendment No. 2 final        AM2-10
AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

IN WITNESS WHEREOF, this Amendment No. 2 was entered into as of the day and year first above written.

    
UNITED AIRLINES, INC.    

		
	By:
	 /s/ Gerald Laderman    

		
	Its: 
	Gerald Laderman

Executive Vice President &
Chief Financial Officer

AIRBUS S.A.S.

		
	By:
	 /s/ Benoit de Saint Exupéry

		
	Its: 
	Benoit de Saint Exupéry

Senior Vice President,
Contracts

CT1706024 - Amended and Restated A350-900 Purchase Agreement - Amendment No. 2 final        AM2-11
AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

AMENDED AND RESTATED
LETTER AGREEMENT NO. 7

TO THE AMENDED AND RESTATED 
A350-900 PURCHASE AGREEMENT

As of December 3, 2019

UNITED AIRLINES, INC.
233 South Wacker Drive
Chicago, Illinois 60606
USA

Re: ***

Dear Ladies and Gentlemen,

UNITED AIRLINES, INC. (the “Buyer”), and AIRBUS S.A.S. (the “Seller”), have entered into an Amended and Restated A350-900 Purchase Agreement dated as of September 1, 2017 (the “Agreement”), which covers, among other things, the sale by the Seller and the purchase by the Buyer of certain Aircraft, under the terms and conditions set forth in said Agreement. The Buyer and the Seller have agreed to set forth in this Amended and Restated Letter Agreement No. 7 (the “Letter Agreement”) certain additional terms and conditions regarding the sale of the Aircraft. Letter Agreement No. 7 dated as of September 1, 2017 to the Agreement is hereby amended and restated in its entirety to read as set forth herein. Capitalized terms used herein and not otherwise defined in this Letter Agreement will have the meanings assigned thereto in the Agreement. The terms “herein”, “hereof” and “hereunder” and words of similar import refer to this Letter Agreement.

Both parties agree that this Letter Agreement will constitute an integral, nonseverable part of said Agreement, that the provisions of said Agreement are hereby incorporated herein by reference, and that this Letter Agreement will be governed by the provisions of said Agreement, except that if the Agreement and this Letter Agreement have specific provisions which are inconsistent, the specific provisions contained in this Letter Agreement will govern.

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AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

***

***

11.    ASSIGNMENT

12.    CONFIDENTIALITY

13.    COUNTERPARTS 

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AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

***

		
	11.
	ASSIGNMENT

This Letter Agreement and the rights and obligations of the parties will be subject to the provisions of Clause 21 of the Agreement.

		
	12.
	CONFIDENTIALITY

This Letter Agreement and the rights and obligations of the parties will be subject to the provisions of Clause 22.10 of the Agreement.

		
	13.
	COUNTERPARTS

This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered will be an original, but all such counterparts will together constitute but one and the same instrument.

CT1706024 - Amended and Restated A350-900 Purchase Agreement - final             ARLA 7-3
AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

***

***

11.    ASSIGNMENT

12.    CONFIDENTIALITY

13.    COUNTERPARTS 

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AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

***

		
	11.
	ASSIGNMENT

This Letter Agreement and the rights and obligations of the parties will be subject to the provisions of Clause 21 of the Agreement.

		
	12.
	CONFIDENTIALITY

This Letter Agreement and the rights and obligations of the parties will be subject to the provisions of Clause 22.10 of the Agreement.

		
	13.
	COUNTERPARTS

This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered will be an original, but all such counterparts will together constitute but one and the same instrument.

CT1706024 - Amended and Restated A350-900 Purchase Agreement - final             ARLA 7-5
AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

***

***

11.    ASSIGNMENT

12.    CONFIDENTIALITY

13.    COUNTERPARTS 

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AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

***

		
	11.
	ASSIGNMENT

This Letter Agreement and the rights and obligations of the parties will be subject to the provisions of Clause 21 of the Agreement.

		
	12.
	CONFIDENTIALITY

This Letter Agreement and the rights and obligations of the parties will be subject to the provisions of Clause 22.10 of the Agreement.

		
	13.
	COUNTERPARTS

This Letter Agreement may be executed by the parties hereto in separate counterparts, each of which when so executed and delivered will be an original, but all such counterparts will together constitute but one and the same instrument.

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AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

If the foregoing correctly sets forth your understanding, please execute the original and one (1) copy hereof in the space provided below and return a copy to the Seller.

Very truly yours,

AIRBUS S.A.S.

By: /s/ Benoit de Saint Exupéry

Its: /s/ Benoit de Saint Exupéry
Senior Vice President,
Contracts

Accepted and Agreed

UNITED AIRLINES, INC.

By: /s/ Gerald Laderman

Its: Gerald Laderman
Executive Vice President &
Chief Financial Officer

    

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AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIAL

APPENDIX A TO PART 1 OF AMENDED AND RESTATED LETTER AGREEMENT NO. 7

***

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AIRBUS S.A.S. & UNITED AIRLINES, INC. - PROPRIETARY AND CONFIDENTIALExhibit 4(b)(ii)

 

	 	Lord Blackwell	 
	 	Chairman	
	 	 	 
	19 February 2019	 	Lloyds Banking Group plc

        25 Gresham Street

        London EC2V 7H

 

Strictly Private and Confidential

António Horta-Osório

 

Dear Antonio

 

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

/s/ N.B, AHO

    	 

    	

    

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,

 

/s/ 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	19/2/19

 

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;
	 	 	 
	 	 	/s/ AHO

    	 

    	

    

		•	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.

 

/s/ AHO

    	 

    	

    

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;
	 	 	 
		•	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;
	 	 	 
	 	 	/s/ AHO

    	 

    	

    

		•	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.

 

/s/ AHO

19/2/19

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