Definitions used in this Agreement are set out in Clause 19.2 below.
IT IS AGREED as follows:
Appointment Pre-Conditions and Term
Appointment
Provided the Executive has satisfied the conditions set out in Clause 1.2 below, the Employer shall employ the Executive as Group Executive Director of Wholesale, Lloyds Banking Group, or in such other executive capacity as the Employer may from time to time reasonably require (the “Employment”).
Pre-conditions
The Executive’s employment is conditional upon:
the Executive having been approved as an “Approved Person” in respect of the Employment by the Financial Services Authority under the Financial Services and Markets Xxx 0000 (“FSMA Approval”),
the Executive not being prevented from taking up employment under this Agreement by any obligation or duty owed to a third party, whether contractual or otherwise,
the satisfactory completion of other recruitment formalities including obtaining any work permit where required.
If the conditions are not satisfied then, unless the Employer decides to waive the conditions or the parties agree to postpone the Commencement Date until the conditions have been satisfied, this Agreement shall not take effect and the Executive shall not have any claim for compensation or otherwise against the Employer by reason of this.
The Employment shall begin on 19 January 2009 (the “Commencement Date”) and shall continue until terminated:
by not less than 12 months’ notice given by the Employer to the Executive; or
by not less than 6 months’ notice given by the Executive to the Employer; or
by retirement under Clause 1.4; or
under a provision set out in Clause 11.
Whilst the Employer’s normal retirement age is sixty five (65), the Executive may opt to retire at any time after reaching the age of sixty (60).
The date on which any continuous period of employment began with the Employer or a previous employer which counts as part of the Executive’s continuous period of
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employment with the Employer for the purposes of the law relating to redundancy and unfair dismissal and for the purposes of commencement of pensionable service, is 4 August 2003.
Duties of the Executive
General Duties
The Executive will during the Employment:
devote their whole time, attention and skill to the Employment during normal office hours and during such other times as may reasonably be required for the effective performance of the duties under this Agreement;
properly perform the duties set out in this Agreement and properly exercise any powers conferred by this Agreement;
accept any offices or directorships as reasonably required by the Employer;
comply with any reasonable directions of the Board;
comply with all rules, regulations policies and codes issued by the Employer that apply to the Employment;
comply with all rules, regulations and codes imposed or recommended by any industry or regulatory body that apply to the Employment;
keep the Chief Executive Officer promptly informed of the conduct of the Executive’s duties, plans for the future performance of the duties and of any conflict of interest to which the Executive is or may become subject;
comply with any policy directions or reasonable other directions issued by the Employer;
use best endeavours to promote the interests and reputation of every Group Company; and
keep the Employer advised of the Executive’s current UK residential address.
Interests of the Executive
The Executive will disclose promptly in writing to the Employer any interests (for example, shareholdings or directorships) whether or not of a commercial or business nature (except interests in any Group Company).
Subject to Clause 2.4, during the Employment (including any Garden Leave Period) the Executive will not be directly or indirectly engaged or concerned in the conduct of any activity of a commercial or business nature (except as a representative of the Employer or with the written consent of the Chief Executive Officer).
The Executive may hold or be interested in investments which amount to not more than one per cent of the issued investments of any class or any one company.
The Executive will (and will use best endeavours to ensure that the Executive’s spouse and any dependents) comply with all rules of law, including Part V of the Criminal Justice Xxx 0000, the Model Code appended to Chapter 16 of the Listing Rules of the United Kingdom Listing Authority, the Financial Services Authority’s Code of Market Conduct and all other rules, policies or codes applicable to the Employer or the Executive from time to
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time in relation to the holding or trading of securities (in each case as amended or replaced from time to time).
The Executive will not directly or indirectly receive any benefit from any person having or seeking to have business transactions with any Group Company (other than reasonable corporate hospitality and seasonal or occasional gifts of limited value).
Approved Person
During the period of this Agreement the Executive will not do anything which could cause the Executive to be disqualified from continuing to act as a director of any member of the Group or lose approval as an “Approved Person” by the Financial Services Authority under the Financial Services and Markets Xxx 0000 in respect of the Employment.
The Executive will work in 00 Xxxxxxx Xxxxxx, Xxxxxx or anywhere else within the United Kingdom required by the Employer. The Executive shall travel to such places within or outside the United Kingdom as the Employer may specify.
Remuneration
During the Employment the Employer will pay the Executive a salary of £640,000 per annum or such higher salary as may be notified to the Executive from time to time. Salary will be paid monthly on or about the 20th day of each month. The Executive shall maintain a bank account with a subsidiary of the Lloyds Banking Group into which the Executive’s salary shall be paid.
The Executive agrees to waive payment of any director’s fees or other remuneration payable in respect of any directorship held by the Executive with any Group Company.
The Executive will be paid such bonus at such times and subject to such conditions as the Employer in its sole and absolute discretion may from time to time determine. In accordance with clause 4.10 below payment of such a bonus or participation in a bonus scheme is not a contractual entitlement.
The Executive will be entitled to participate in any all-employee share schemes or other benefits, or to be considered for participation in any discretionary scheme, operated or offered by the Employer or any Group Company from time to time in accordance with the relevant rules (including without limitation any rules as to eligibility). In accordance with clause 4.10 below participation in any share option, share incentive or other employee benefit plan, scheme or arrangement is not a contractual entitlement.
Pension and Other Benefits
Pension arrangements until Change Date
Until the Change Date (as defined in paragraph 4.2) (or leaving Employment, if earlier), the Executive shall be entitled to continue to participate in the Lloyds TSB Group Pension Scheme No.2 Pension Investment Plan (the “Current Scheme”) subject to and in accordance with the terms of its deed and rules from time to time.
Subject to this (including in particular to the rights of any person to amend or terminate the Current Scheme) and to the remainder of this Clause 4, the Executive’s membership will
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continue on the basis applicable to the Executive immediately prior to the date of the Agreement save that the Employer’s contribution will be 25% of the Executive’s annual salary as set out in Clause 3.1 above.
If the Executive is receiving a pension allowance instead of or in addition to contributions to a Lloyds TSB Group Pension Scheme the Executive will continue to do so on the same basis as applied immediately prior to the date of the Agreement.
Currently, a Contracting-Out Certificate pursuant to the provisions of the Pensions Act 1995 is in force in respect of the Executive’s employment.
Changes to pension arrangements
The Executive acknowledges that the Employer intends to replace the Current Scheme with effect from a date to be confirmed but which will be no earlier than 1 July 2009 (the “Change Date”). The Employer will give the Executive at least 1 month’s prior written notice confirming the date which is to be the Change Date.
If the Executive is still in Employment on the Change Date, the Executive will cease to accrue benefits under the Current Scheme and will be treated as having left service for the purposes of the Current Scheme at midnight on the Change Date.
By signing this contract, the Executive agrees:
that the Executive will cease to accrue benefits under the Current Scheme at midnight on the Change Date and will be treated as having become a deferred member of the Current Scheme with effect from that date;
the Executive will do all things which the Employer directs the Executive to do to give effect to this including, without limitation, opting out of the Current Scheme, consenting to any amendments to the Current Scheme and completing any documentation which the Trustee of the Current Scheme may require.
If the Employer designates the Current Scheme for the purposes of 4.3, this Clause will apply with the necessary modifications.
Pension arrangements from the Change Date
If the Executive is still in Employment on the day immediately following the Change Date, the Employer will offer the Executive the opportunity to join a defined contribution pension arrangement selected by the Employer (the “New Scheme”) with effect from the day following the Change Date. The New Scheme may (but need not) be within the Current Scheme.
The Employer will contribute an amount equal to 25% of the Executive’s annual salary referred to in Clause 3.1 from time to time to the New Scheme. The Executive’s membership of the New Scheme will be subject to and in accordance with the terms of its governing documentation in force from time to time (including in particular to the rights of any person to amend or terminate the New Scheme). The Executive will be notified before the Change Date of the terms of the New Scheme as they apply to the Executive.
Joining the New Scheme will be subject to any requirements under the governing documentation or imposed by any provider (including without limitation any completion of application forms and provision of evidence of health).
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If the Executive does not join the New Scheme on the day immediately following the Change Date or subsequently opts out, the Employer will pay the Executive an amount equal to 25% of the annual salary referred to in Clause 3.1 from time to time as a non-pensionable cash supplement. The Employer may also at its option permit the Executive to opt for contributions to be paid to the New Scheme at a rate less than 25% of the annual salary referred to in Clause 3.1 with the balance of this amount being paid as a non-pensionable cash supplement. The Employer may impose restrictions including, without limitation, a minimum amount which must be paid as pension contributions.
The Executive acknowledges that in signing this contract the Executive will be deemed to have opted out of the “personal accounts” arrangements due to be implemented from 2012 in the United Kingdom (except and to the extent that this is the arrangement which the Employer designates as the New Scheme).
The Employer does not currently expect that a Contracting-Out Certificate pursuant to the provisions of the Pensions Xxx 0000 will be in force in respect of the Executive’s employment after the Change Date.
Rights of the Employer
The Employer shall be entitled at any time to terminate or vary the Current Scheme or the New Scheme or the Executive’s membership of it provided that if it does so before the Change Date it will provide an alternative pension scheme for the Executive to participate in.
During the Employment the Employer shall provide the Executive with a company car subject to and in accordance with the rules of the Employer’s car scheme from time to time. The Executive may opt instead for a non pensionable cash allowance payable each month. Upon termination of the Employment, the Executive shall return any car provided by the Employer in good condition (allowing for fair wear and tear).
The Executive will be provided with Life Cover. The amount of Life Cover in the event of the Executive’s death during the Employment will be equal to four times the annual salary set out in Clause 3.1 irrespective of whether or not the Executive is a member of the Lloyds TSB Group Pension Scheme (No 2). Such Life Cover will be provided under the terms of the Lloyds TSB Group Pension Scheme (No.2) (subject to the proviso that any Life Cover in excess of the Lifetime Allowance applicable to registered pension schemes will be provided by the Employer).
Private Medical Cover
Provided the Executive complies with any eligibility requirements or other conditions from time to time set by the Employer and any supplier appointed by the Employer, the Executive may participate, during the Employment, in the Employer’s private health scheme. Private health cover is provided subject to and in accordance with such terms from time to time on which any appointed supplier provides cover and on such terms as the Employer may from time to time notify to the Executive. Those private health cover arrangements may be reduced, varied or withdrawn by the Employer at any time and at its sole and absolute discretion.
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Executive Health Screening
The Executive will be eligible to receive, and expected to undertake, an annual confidential executive medical screening by a supplier appointed by the Employer.
For the avoidance of doubt, any and all remuneration or benefits provided by virtue of this Agreement shall be subject to such deductions for tax and National Insurance as the Employer is required to make by law or the tax and/or National Insurance authorities.
Other Benefits
The Executive acknowledges that (except for any specific awards or entitlements notified to the Executive individually or by a general notice to staff) participation in any bonus, share option, share incentive or other employee benefit plan, scheme or arrangement (“Plan”) is not a contractual entitlement and on termination of the Employment the Executive will have no right to compensation or otherwise against the Employer or any other member of the Group by reason of no longer being able to participate in any such Plan.
The Employer will refund to the Executive all reasonable expenses properly incurred by the Executive in performing the duties under this Agreement, provided that these are incurred in accordance with the Employer’s policy from time to time. The Employer will require the Executive to produce receipts or other documents as proof for any expenses claimed.
The Executive shall be entitled during the Employment to 30 working days holiday in each calendar year plus bank holidays. Holiday may only be taken at such time or times as the Chief Executive Officer shall approve. The Executive’s holiday entitlement shall be pro rated for the year in which the Employment begins and for the year in which the Employment ends.
Confidentiality
Without prejudice to the common law duties which the Executive owes to the Employer, the Executive agrees to preserve the confidentiality of any trade secrets and/or confidential information belonging or relating to the Employer or its employees or relating to the Works, in whatever form (written, oral, visual and electronic), whether of a technical or commercial nature, disclosed to the Executive by or on behalf of the Employer or its employees or otherwise comes under the control of the Executive in the course of the Employment (“Confidential Information”), and agrees not to (except in so far as may be strictly necessary for the proper performance of the duties under this Agreement or with the prior written consent of the Employer), copy, use, discuss with or disclose to any third party any Confidential Information. This provision will not apply to Confidential Information which becomes public other than through unauthorised disclosure by the Executive. The Executive will use best endeavours to prevent the unauthorised copying, use or disclosure of such information by any third party.
In the course of the Employment the Executive is likely to obtain Confidential Information belonging or relating to other Group Companies or other persons. The Executive will treat
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