FORM 6-K
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Report of Foreign Private Issuer
Pursuant to Rule 13a - 16 or 15d - 16 of
the Securities Exchange Act of 1934
For the month of April, 2008
HSBC Holdings plc
42nd Floor, 8 Canada
Square, London E14 5HQ, England
(Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F).
Form 20-F X Form 40-F ......
(Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934).
Yes....... No X
(If "Yes" is marked, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82- ..............)
THIS DOCUMENT IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION.
If you are in any doubt as to any aspect of the proposals referred to in this
document or as to the action you should take, you should consult a stockbroker,
solicitor, accountant or other appropriate independent professional adviser.
If you have sold or transferred all your shares in HSBC Holdings plc (the
"Company"), you should at once forward this document and the accompanying Form
of Proxy to the stockbroker, bank or other agent through whom the sale or
transfer was effected for transmission to the purchaser or transferee.
This document should be read in conjunction with the Annual Report and Accounts
and/or Annual Review in respect of the year ended 31 December 2007.
The Stock Exchange of Hong Kong Limited takes no responsibility for the contents
of this document, makes no representation as to its accuracy or completeness and
expressly disclaims any liability whatsoever for any loss howsoever arising from
or in reliance upon the whole or any part of the contents of this document. The
ordinary shares of HSBC Holdings plc trade under stock code 5 on The Stock
Exchange of Hong Kong Limited.
Shareholders may at any time choose to receive corporate communications in
printed form or to receive a notification of its availability on HSBC's website.
To receive future notifications of a corporate communication's availability on
HSBC's website by email, or revoke or amend an instruction to receive such
notifications by email, go to www.hsbc.com/ecomms. If you received a
notification of this document's availability on HSBC's website and would like to
receive a printed copy or would like to receive future corporate communications
in printed form, please write to the appropriate Registrars at the address given
below. Printed copies will be provided without charge. Further copies of this
document and a Chinese translation of this and future documents may be obtained
from the Registrars: Computershare Hong Kong Investor Services Limited, Hopewell
Centre, Rooms 1806-1807, 18th Floor, 183 Queen's Road East, Hong Kong SAR;
Computershare Investor Services PLC, PO Box 1064, The Pavilions, Bridgwater
Road, Bristol, BS99 3FA, United Kingdom; or Corporate Shareholder Services, The
Bank of Bermuda Limited, 6 Front Street, Hamilton HM 11, Bermuda. Holders of
American Depositary Shares may obtain copies of this document by calling 001 224
544 3292 or by writing to Internal Communications, HSBC-North America, 26525 N.
Riverwoods Boulevard, Mettawa, Illinois 60045, USA.
--------------------------------------------------------------------------------
HSBC Holdings plc
Notice of
Annual General Meeting
to be held on 30 May 2008
--------------------------------------------------------------------------------
Notice of the Annual General Meeting to be held at Barbican Hall, Barbican
Centre, London EC2 at 11.00 am on Friday 30 May 2008 is set out on pages 17 to
34.
The action to be taken by Shareholders is set out on page 6. Whether or not you
propose to attend the Annual General Meeting you are requested to complete and
submit a Form of Proxy in accordance with the instructions printed on the Form.
Submission of a Form of Proxy will not preclude a shareholder from attending and
voting in person. The Form of Proxy must be received not less than 48 hours
before the time of the holding of the Annual General Meeting.
3 April 2008
Access to the Meeting The Barbican Centre is wheelchair accessible, the
auditorium is fitted with an induction loop, and parking spaces are available
for disabled drivers. To help us ensure the Annual General Meeting is fully
accessible to all Shareholders, please contact Surinder Gill (telephone +44
(0)20 7992 1385, fax +44 (0)20 7992 4631, e-mail surindergill@hsbc.com) if you
have any particular access or other needs.
This Notice of Annual General Meeting and the Annual Report and Accounts and/or
Annual Review are available on our website, www.hsbc.com.
The Annual General Meeting can be viewed live on the internet at
www.hsbc.com/agmwebcast. A recording of the Annual General Meeting will also be
available after the conclusion of the meeting until 30 June 2008.
3 April 2008
Dear Shareholder
Special Business at the Annual General Meeting
The purpose of this letter is to give you details of the proposals which will be
considered as special business at the Annual General Meeting of the Company to
be held on Friday 30 May 2008. The Notice of Annual General Meeting is set out
on pages 17 to 34 of this document.
1 Resolutions 5 and 6 (Authority to Directors to allot shares and disapplication
of pre-emption rights)
At last year's Annual General Meeting the Directors were again given general
authorities to allot shares.
The general purpose of these authorities is to enable the Directors to issue new
shares without having first to obtain the consent of Shareholders in general
meeting. The need for such an issue of shares could arise, for example, in the
context of a transaction (such as the acquisition of a company) which had to be
completed speedily. The granting of such authorities is now commonplace and your
Board takes the view that it would be in the interests of the Company if the
authorities were renewed.
In addition to the Ordinary Shares reserved for issue pursuant to the exercise
of options previously granted under the employee share plans, the Directors
would have authority to allot new Ordinary Shares up to a maximum amount (in
nominal value) of US$1,186,700,000, equivalent to 20 per cent of the Ordinary
Shares in issue on 27 March 2008, being the latest practicable date prior to the
printing of this document.
Within this amount, the Directors would have authority to allot Ordinary Shares
(and, in addition, to sell any Ordinary Shares which may be held in treasury)
wholly for cash to persons other than existing Shareholders up to a maximum
amount (in nominal value) of US$296,675,000. This is equivalent to approximately
5 per cent of the Ordinary Shares in issue on 27 March 2008. The Company does
not currently hold any of its shares in treasury.
Other than on the exercise of options granted under the employee share plans or
pursuant to the Company's scrip dividend scheme your Board has no present
intention of issuing any further Ordinary Shares, and no issue will be made
which would effectively change the control of the Company or the nature of its
business without the prior approval of Shareholders in general meeting.
The Board is again seeking authority to issue sterling, United States dollar and
euro preference shares. These preference shares were created to underpin issues
of preferred securities, which are tax efficient regulatory capital, and with
the intention that they may be used for the purpose of raising further
regulatory capital. If any of the preference shares were to be issued they
would, subject to regulatory approval, be redeemable at the Company's option and
carry no voting rights except in exceptional circumstances but would rank in
priority to the Company's Ordinary Shares with respect to participation in any
return of capital. The Board has no present intention of exercising this
authority.
It is proposed that these general authorities be extended until the Annual
General Meeting in 2009.
HSBC Holdings plc
Incorporated in England with limited liability. Registered in
England: number 617987
Registered Office and Group Head Office:
8 Canada Square, London E14 5HQ, United Kingdom
1
2 Resolution 7 (Purchase of Ordinary Shares by the Company)
The Company has power under its Articles of Association to purchase its own
shares. The Directors consider that it is appropriate to seek renewal of the
mandate giving authority for the Company to make market purchases of up to 10
per cent of its own Ordinary Shares in issue. It is emphasised that it remains
the Directors' policy to maintain a strong capital base, a policy which has been
one of the Group's strengths over the years. Having this authority will,
however, give added flexibility if the Directors consider it in the interests of
the Company and its Shareholders to purchase Ordinary Shares in the market in
appropriate circumstances.
The UK Companies Act 1985 (as amended) permits the Company to elect to hold in
treasury any Ordinary Shares it may repurchase, rather than automatically
cancelling those shares. Approval has been received from the relevant regulatory
authorities in Hong Kong to enable the Company to hold repurchased shares in
treasury. The conditional waiver granted by the Hong Kong Stock Exchange on 19
December 2005 was granted on the basis of certain agreed modifications to the
Hong Kong Stock Exchange's Listing Rules applicable to the Company, details of
which can be found on the Company's website, www.hsbc.com and the Hong Kong
Stock Exchange's website, www.hkex.com.hk. Copies of the modifications are also
available from the Group Company Secretary, HSBC Holdings plc, 8 Canada Square,
London E14 5HQ and the Corporation Secretary, The Hongkong and Shanghai Banking
Corporation Limited, 1 Queen's Road Central, Hong Kong SAR.
Further details regarding the proposed authority to be given to the Company to
purchase its own shares and the waiver granted by the Hong Kong Stock Exchange
are set out in Appendix I.
3 Resolutions 8 and 9 (Alterations to the Articles)
To reflect the provisions of the UK Companies Act 2006 brought into force on 1
October 2007, and certain additional provisions which will come into effect on 6
April 2008 and 1 October 2008 and other related matters, it is proposed that
certain alterations be made to the Articles of Association.
The UK Companies Act 2006 sets out directors' general duties which largely
codify the existing law but with some changes. Under the UK Companies Act 2006,
from 1 October 2008 a director must avoid a situation where he or she has, or
can have, a direct or indirect interest that conflicts, or possibly may
conflict, with the company's interests. The requirement is very broad and could
apply, for example, if a director becomes a director of another company or a
trustee of another organisation. The UK Companies Act 2006 allows directors of
public companies to authorise conflicts and potential conflicts, where
appropriate, where the articles of association contain a provision to this
effect. The UK Companies Act 2006 also allows the articles to contain other
provisions for dealing with directors' conflicts of interest to avoid a breach
of duty. The proposed amendments to the Articles of Association give the
directors authority to approve such situations and to include other provisions
to allow conflicts of interest to be dealt with in a similar way to the current
position.
There are safeguards that will apply when directors decide whether to authorise
a conflict or potential conflict. First, only directors who have no interest in
the matter being considered will be able to take the relevant decision, and
secondly, in taking the decision the directors must act in a way they consider,
in good faith, will be most likely to promote the company's success. The
directors will be able to impose limits or conditions when giving authorisation
if they think this is appropriate.
The proposed amendments to the Articles of Association relating to directors'
conflicts of interest also contain provisions relating to confidential
information, attendance at board meetings and availability of board papers to
deal with situations where a director may be in breach of duty if a conflict of
interest or potential conflict of interest arises. These provisions will only
apply where the position giving rise to the potential conflict has previously
been authorised by the directors. In addition, certain changes have been
proposed to permit directors to vote in relation to an indemnity or any proposal
concerning the funding of expenditure by one or more directors on defending
proceedings against him/her or them where all directors are also being offered
an indemnity or funding on substantially the same terms.
It is the board's intention to report annually on the Company's procedures for
ensuring that the board's powers to authorise conflicts are operated effectively
and that the procedures have been followed.
Further information in relation to the proposed alterations to the Articles of
Association is set out in Appendix II.
2
The remaining provisions of the UK Companies Act 2006 are now expected to come
into force on 1 October 2009. In addition, various regulations that relate to
certain of these provisions have yet to be finalised. Consequently, it will be
necessary for the Company to undertake a further review of its Articles of
Association in due course in order to reflect these other provisions. As these
further changes to the Articles of Association will be reasonably substantial in
number, it is expected that the Company will adopt new Articles of Association
at its Annual General Meeting in 2009.
4 Resolution 10 (Share plan)
Resolution 10 proposes the amendment of the rules of the HSBC Share Plan (the
"Plan"), which were adopted on 27 May 2005. The Plan expires on 27 May 2015. The
Plan as proposed to be amended is summarised in Appendix III.
In July 2007, the Remuneration Committee (the "Committee") appointed Mercer
Limited as its independent advisers and, as part of its annual review of
remuneration, requested them to carry out a comprehensive assessment of the
remuneration arrangements of the executive Directors and other senior
executives. The objective was to ensure closer alignment of remuneration
arrangements with HSBC's business strategy, taking into account competitive
market practice.
Among the changes to the remuneration strategy that are being implemented, the
Company is seeking approval from its shareholders to make changes to the
performance measures applicable to the vesting of Performance Share awards (see
Appendix III) which may be made under the Plan. This is part of an overall
change in remuneration structure, details of which are described in the
Directors' Remuneration Report issued on 3 March 2008. The intention is to
rebalance overall remuneration so that the base salary element is a smaller
proportion of the whole remuneration package. At the same time a greater
proportion of compensation will be share-based, which, whilst delivering
competitive remuneration at the market median, provides an opportunity for top
quartile total compensation for higher levels of performance. In addition, share
ownership requirements will be increased.
As part of the Company's on-going commitment to shareholder engagement, we have
shared these proposals with its largest institutional shareholders, representing
approximately 50 per cent of the share capital of HSBC, and leading
institutional shareholder bodies and have taken into account feedback received
from them.
The Committee proposes to continue making awards of Performance Shares under the
Plan and to maintain the overall maximum individual award at its current level
of 700 per cent of salary. Reflecting the nature of the performance measures,
the progressive vesting of the awards geared to outperformance, as well as
competitive market practice in our global comparator group for remuneration
purposes, from 2008 the Committee expects to make awards to executive Directors
closer to or at the permitted maximum but which would only vest in full in the
event of full achievement of all performance measures.
The Committee believes that the vesting schedules applicable to the proposed
performance measures provide an appropriate relationship between pay and
performance and are aligned with corporate governance guidelines in the UK where
the expectation is that threshold vesting should be modest, with full vesting
occurring for the achievement of significantly greater value creation than that
applicable to threshold vesting.
Awards will be granted to executive Directors and other senior executives
shortly after the Meeting. These will be made under the amended Plan subject to
the proposed amendments to the Plan receiving shareholder approval. If the
proposed amendments are not approved by shareholders, the Plan will continue to
be operated in its unamended form. The performance measures for awards of
Performance Shares made prior to 2008 will not be affected by the proposals.
The expected value of long-term incentive awards under the proposals, taking
into account the new vesting schedules applicable to the performance conditions,
is 41 per cent of face value.
The Company currently operates a formal share ownership policy, expressed as a
number of shares, for the executive Directors and the senior management team. To
demonstrate further alignment with shareholders and to reflect the proposed
increase in awards to executive Directors, it is proposed that the share
ownership requirements will be increased as follows:
3
o Group Chairman and Group Chief Executive: increase from 300,000 to
600,000 shares; and
o Group Finance Director: increase from 100,000 to 200,000 shares.
The Group Chairman, Group Chief Executive and Group Finance Director will have
three years from the date of award in 2008 to achieve their required share
ownership target.
Appropriate targets will be set for other newly appointed executive Directors.
The timeframe to achieve the required targets for newly appointed executive
Directors will be five years, effective from the date of appointment to the
Board.
Whilst the formal share ownership policy is not part of the Plan, information
has been included on this policy to provide additional information on the
alignment of the executive Directors' interests with those of shareholders.
Changes to Performance Measures
It is proposed that, for future awards of Performance Shares, the vesting of the
awards will be based on three independent performance measures and an overriding
'sustained improvement' judgement by the Committee. In addition to performance
measures based on relative total shareholder return ("TSR") and growth in
earnings per share ("EPS"), a further measure, based on Group economic profit
("EP") will be used to determine the extent of the vesting of the Performance
Shares. The three measures will apply as follows: 40 per cent of the award will
be linked to TSR, 40 per cent to EP, and the remaining 20 per cent to EPS.
Awards will not vest unless the Committee is satisfied that HSBC's financial
performance has shown a sustained improvement in the period since the award
date. In determining this, the Committee will take into account all relevant
factors, but in particular, comparisons against the TSR comparator group (see
Appendix III) in areas such as revenue growth and mix, cost efficiency, credit
performance, return on cash invested, dividend performance and TSR.
The proposed performance measures and targets, which are set out in Schedule 5
of the amended rules of the Plan, will apply for awards made in 2008 subject to
the amendments to the Plan receiving shareholder approval. The Committee will
review annually whether the performance targets remain appropriate and
challenging, or should be recalibrated, for awards made thereafter, taking into
account factors such as economic expectations, the industry's outlook and
shareholders' interests.
The Committee will consult in accordance with institutional shareholder
guidelines on any future changes proposed to the nature of the performance
measures and their percentage split referred to above.
TSR
The review undertaken by the Committee has highlighted that a revision of the
current comparator group of 28 major banks is warranted to reflect HSBC's growth
strategy, which is focussed towards emerging markets such as Asia and Latin
America, and to recognise the impact of the public listing of the major mainland
Chinese banks in recent years. Therefore, the Committee is proposing to update
the comparator group to include, in addition to large global banks, other banks
against which HSBC competes for business on a regional and/or local level. The
Committee believes that this modified comparator group, consisting of 26 banks
at the date of the awards (see Appendix III), also reflects HSBC's competitors
for shareholder capital.
In addition, a change to the TSR measurement method is being proposed to
recognise the fact that the range of market capitalisations within the modified
comparator group is very wide and that only a few global banks match HSBC in
terms of scale.
Therefore, instead of simply ranking the companies according to their individual
TSR performance, the Committee proposes to use a free float market
capitalisation ("FFMC") weighted method, (see Appendix III), to recognise the
significant size differentials within the comparator group. The Committee
considers that this method is appropriate as it takes into account the following
factors: the impact of highly volatile but smaller banks on TSR ranking; the
market capitalisation that is based on the
4
free float for each company in the comparator group; and the connection between
the Group's size and the absolute and relative level of shareholder value that
it can potentially create.
To reflect the change in the TSR measurement method, a new vesting schedule,
(see Appendix III), is also being proposed. Under the proposed method, 20 per
cent of the TSR part of the award would vest for outperforming, over the
performance period, banks comprising 50 per cent of the total FFMC of the
comparator group, and 100 per cent would vest for outperforming banks comprising
75 per cent or more of the total FFMC of the comparator group. There will be
straight line vesting between these two points and no vesting where HSBC does
not outperform banks comprising 50 per cent of the total FFMC of the TSR
comparator group.
The Committee undertakes to review the new TSR measurement method during the
first year of its operation, and, subject to the outcome of the review, will
consult in accordance with institutional shareholder guidelines on any material
proposed changes to this method.
EP As explained above, EP will be a new performance measure. It will be
expressed in percentage terms and calculated as the average annual difference
between return on invested capital and the Group's benchmark cost of capital.
For the 2008 awards, the benchmark cost of capital is 10 per cent. EP will be
measured over a three-year performance period. The Committee believes that EP is
a key measure of shareholder value creation as it rewards management
progressively to the extent that the return on the capital invested in HSBC by
its shareholders is in excess of the threshold return, which itself exceeds the
Group's benchmark cost of capital. Thus, EP is a complementary measure to both
TSR, which is an external measure of shareholder value creation, and EPS, which
is a direct measure of profits generated for shareholders.
It is proposed that the vesting of Performance Shares linked to EP will start
when the average EP over the performance period exceeds 3 per cent. The
calculation will be made on a straight line basis from 3 per cent with 100 per
cent of the award vesting for average EP over the period of 8 per cent or more.
EPS Taking into account feedback received during consultation with institutional
shareholders aimed at simplifying the use of EPS as a performance measure, it is
proposed that the EPS growth calculation will be changed from the current method
of measuring total incremental EPS over the period to the simpler point to point
approach. Under this approach, EPS growth over the three-year performance period
will be calculated by comparing the EPS in the final year of the performance
period with EPS in the year prior to grant, the base year. This approach is
explained in detail in Appendix III.
EPS growth targets will be expressed in absolute percentage terms without
adjusting for inflation. In reviewing the appropriateness of these targets,
recent and expected levels of inflation in the major markets in which we operate
have been taken into account. This recognises that HSBC is operating in a global
environment and hence using a UK or another country's inflation index is not
suitable.
Under the proposals, 20 per cent of the Performance Shares linked to the EPS
component will vest if the EPS in the final year of the three-year period is 16
per cent higher than the EPS achieved in the base year (this equates to compound
annual growth in EPS over the period of just over 5 per cent). The percentage
vesting will rise on a straight line basis to 100 per cent if the EPS in the
final year of the three-year period is at least 28 per cent higher than the EPS
achieved in the base year (equating to compound annual growth in EPS of
approximately 8.6 per cent or more).
5 Recommendation
Your Board considers that the proposals described in this document are in the
best interests of HSBC Holdings plc and its Shareholders and recommends that you
should vote in favour of the resolutions relating thereto. The Directors intend
to do so in respect of their own beneficial holdings.
5
6 Action to be taken
A Form of Proxy is enclosed or is available at www.hsbc.com/proxy for use at the
Annual General Meeting. Whether or not you propose to attend the Annual General
Meeting, you are requested to complete and submit a Form of Proxy in accordance
with the instructions on the Form of Proxy. The Form of Proxy must be received
not less than 48 hours before the time of the holding of the Annual General
Meeting (or any adjourned meeting). The completion and submission of a Form of
Proxy will not preclude a Shareholder from attending and voting in person at the
Annual General Meeting. Shareholders with internet access may submit their Form
of Proxy electronically at www.hsbc.com/proxy by entering their Shareholder
Reference Number and the Personal Identification number which is either printed
on their Form of Proxy or which has been sent to them by email if they have
registered an email address to receive electronic communications. For shares
held through CREST, proxy appointments may be submitted via the CREST proxy
voting system.
If you would like a question or questions to be addressed at the Annual General
Meeting please complete and return the form on page 35 or send your question via
email to agmquestions@hsbc.com.
We will endeavour to address any questions raised when the item of business to
which the questions relate is under consideration by the Annual General Meeting.
Any questions submitted that are not relevant to the business of the Annual
General Meeting will be forwarded for the attention of an appropriate executive.
Submitting a question in advance of the Annual General Meeting does not affect
your rights as a Shareholder to attend and speak at the Annual General Meeting.
Yours sincerely
S K Green
Group Chairman
6
APPENDIX I
PURCHASE OF ORDINARY SHARES BY THE COMPANY
Set out below is information concerning the proposed general mandate for the
purchase of shares by the Company (Resolution 7), which incorporates the
Explanatory Statement required to be sent to Shareholders in accordance with the
Listing Rules of the Hong Kong Stock Exchange as well as details of the
conditional waiver granted by the Hong Kong Stock Exchange to enable the Company
to hold in treasury any shares it may repurchase.
(a) It is proposed that the Company be given authority to purchase up to
1,186,700,000 Ordinary Shares (which represent 10 per cent of the Ordinary
Shares in issue on 27 March 2008, the latest practicable date prior to the
printing of this document). Purchases of shares will be at prices not below
the nominal value of each Ordinary Share, US$0.50 (or the equivalent in the
relevant currency in which the purchase is effected), and at not more than
105 per cent of the average of the middle market quotations for the
Ordinary Shares on the London Stock Exchange for the five dealing days
before the relevant purchase or 105 per cent of the average of the closing
prices of the Ordinary Shares on the Hong Kong Stock Exchange for the five
dealing days before the relevant purchase, whichever is the lower.
(b) The Directors believe that it is in the best interests of the Company and
its Shareholders to have a general authority from Shareholders to enable
the Company to purchase Ordinary Shares in the market and to give power to
the Directors to exercise such authority. The Directors intend that
purchases of shares should only be made if they consider that the purchase
would operate for the benefit of the Company and Shareholders taking into
account relevant factors and circumstances at that time, for example the
effect on earnings per share. The Directors have no immediate plans to make
any purchases under the proposed authority.
(c) It is expected that purchases will be funded from the Company's available
cash flow or liquid resources and will, in any event, be made out of funds
legally available for the purchase in accordance with the Memorandum and
Articles of Association of the Company and the applicable laws of England
and Wales.
(d) The Directors do not propose to execute purchases in circumstances where to
do so would have a material adverse effect on the capital requirements of
the Company or the liquidity levels which, in the opinion of the Directors,
are from time to time appropriate for the Company. If the power to make
purchases were to be carried out in full (equivalent to 10 per cent of the
Ordinary Shares in issue on 27 March 2008, being the latest practicable
date prior to the printing of this document) there might be a material
adverse impact on the capital or liquidity position of the Company (as
compared with the position disclosed in its published audited accounts for
the year ended 31 December 2007).
(e) None of the Directors, nor, to the best of the knowledge of the Directors
having made all reasonable enquiries, any associates (as defined in the
Listing Rules of the Hong Kong Stock Exchange) of the Directors, has a
present intention, in the event that Resolution 7 is approved by
Shareholders, to sell any Ordinary Shares to the Company. No connected
persons (as defined in the Listing Rules of the Hong Kong Stock Exchange)
of the Company have notified the Company that they have a present intention
to sell shares in the Company to the Company or have undertaken not to sell
any of the shares in the Company held by them to the Company, in the event
that Resolution 7 is approved.
(f) Under the provisions of the UK Companies Act 1985 (as amended) the Company
is permitted, following any repurchase of Ordinary Shares, to retain and
hold such shares in treasury, provided that the number of such shares held
in treasury does not exceed 10 per cent of its total number of issued
shares, rather than automatically cancelling them. On 19 December 2005, the
Hong Kong Stock Exchange granted a conditional waiver to the Company to
enable it to hold shares which it may repurchase in treasury (the
"Waiver"). The Waiver is subject to certain conditions, including
compliance by the Company with all applicable laws and regulations in the
United Kingdom in relation to the holding of shares in treasury. As part of
the Waiver, the Company has agreed with the Hong Kong Stock Exchange a set
of modifications to the Hong Kong Stock Exchange's Listing Rules necessary
to enable the Company to hold treasury shares. The modifications also
reflect
7
various consequential matters to deal with the fact that the Company may
hold treasury shares in the future. A full version of the modifications is
available on the Company's website, www.hsbc.com, and the Hong Kong Stock
Exchange's website, www.hkex.com.hk. Copies of the modifications are also
available from the Group Company Secretary, HSBC Holdings plc, 8 Canada
Square, London E14 5HQ and the Corporation Secretary, The Hongkong and
Shanghai Banking Corporation Limited, 1 Queen's Road Central, Hong Kong
SAR. In accordance with the terms of the Waiver, the Company confirms that
it will comply with the applicable law and regulation in the United Kingdom
in relation to the holding of any shares in treasury and with the
conditions of the Waiver in connection with any shares which it may hold in
treasury.
(g) The Directors have undertaken to the Hong Kong Stock Exchange that, if they
exercise any power of the Company to make purchases pursuant to Resolution
7, they will do so in accordance with the Listing Rules of the Hong Kong
Stock Exchange (as modified in accordance with the terms of the Waiver to
enable the Company to hold in treasury any shares it may repurchase) and
the applicable laws of England and Wales.
(h) The Directors are not aware of any consequences which would arise under any
applicable Takeover Code as a result of any purchases made by the Company
pursuant to Resolution 7, if approved.
(i) The Company has not purchased any of its own shares whether on the Hong
Kong Stock Exchange or otherwise in the six months prior to the date of
this document.
(j) The highest and lowest prices at which Ordinary Shares or, in the case of
the New York Stock Exchange, American Depositary Shares ("ADS"), have
traded on the Hong Kong, London, New York, Paris and Bermuda Stock
Exchanges during each of the twelve months prior to 27 March 2008 (the
latest practicable date prior to the printing of this document) were as
follows:
New York
Hong Kong London Stock Exchange Euronext Paris Bermuda
Stock Exchange Stock Exchange (ADS(1)) Stock Exchange Stock Exchange
Lowest Highest Lowest Highest Lowest Highest Lowest Highest Lowest Highest
(HK$) (HK$) (GBP) (GBP) (US$) (US$) (EUR) (EUR) (BD$) (BD$)
March 2007 132.80 137.70 8.72 9.15 85.16 89.04 12.80 13.62 17.20 17.80
April 2007 136.10 145.60 8.82 9.35 87.63 93.50 13.10 13.80 18.00 18.35
May 2007 143.70 147.80 9.18 9.58 92.26 95.38 13.65 14.11 17.70 18.70
June 2007 142.30 146.70 9.06 9.43 91.35 94.30 13.53 14.03 18.20 18.60
July 2007 139.80 146.80 8.70 9.23 88.58 94.10 13.00 13.69 18.20 18.80
August 2007 131.50 145.60 8.59 9.19 84.66 94.19 12.80 13.62 17.05 18.40
September 2007 137.20 143.80 8.68 9.23 88.32 93.53 12.69 13.39 17.55 18.35
October 2007 143.80 153.50 8.96 9.72 92.26 99.52 12.88 13.98 18.80 19.55
November 2007 129.40 153.00 7.84 9.46 81.71 96.81 10.95 13.59 16.45 18.80
December 2007 130.00 138.20 8.03 8.63 82.70 88.29 11.23 12.02 16.50 17.25
January 2008 104.00 131.90 7.12 8.51 70.42 83.84 9.10 11.47 14.05 15.95
February 2008 109.30 123.60 7.13 7.99 69.85 79.07 9.62 10.57 14.25 15.45
1 Each ADS represents five Ordinary Shares.
8
APPENDIX II
SUMMARY OF ALTERATIONS TO THE ARTICLES OF ASSOCIATION
As a consequence of certain provisions of the UK Companies Act 2006 (the "2006
Act") which came into force on 1 October 2007, further provisions which will
come into force on 6 April 2008 and 1 October 2008 and other related matters, it
is proposed to make certain alterations to the Articles of Association. The
principal alterations to the Articles of Association, which are proposed to be
made by Resolutions 8 and 9 in the Notice of Annual General Meeting, are
summarised below:
Part A: Amendments proposed to take immediate effect following the passing of
Resolution 8.
1 To add references to the 2006 Act where required to reflect the changes in
law brought into force by the 2006 Act and replace existing references to
the UK Companies Act 1985 where these have been repealed and, where
appropriate, replaced with new sections in the 2006 Act (Articles 2.1,
52.1, 54.1, 55.2, 55.5, 66.1, 71.1, 80.1, 87.1, 92.1, 96.1, 97.1(b), 109.1,
115.1, 117.1, 119.1, 137.1, 138.1, 141.1, 142.1, 143.1, 154.1, 155.1,
157.1, 158.1, 168.1, 169.1, 170.2(j) and 170.2(l)).
2 To reflect the change in law under the 2006 Act regarding types of
resolutions that can be passed in general meetings. The concept of
extraordinary resolutions has been abolished from 1 October 2007 (Articles
2.5, 48.1, 49.1, 55.3, 69.1 and 166.2).
3 To reflect the change in law under the 2006 Act that a company is now
required, if it refuses to register a transfer of shares, to give the
transferee notice of refusal together with reasons for the refusal
(Articles 35.1 and 36.1).
4 To reflect the change in law under the 2006 Act regarding the notice period
for general meetings other than annual general meetings. A company is now
only required to give 14 days' notice for all general meetings including
general meetings at which special resolutions are to be considered (Article
55.1).
5 To reflect the change in law under the 2006 Act that a member in a company
trading on a regulated market may now nominate the underlying beneficial
owners to enjoy information rights, such as the right to receive all
communications sent to members (Article 55.4).
6 To reflect the change in law under the 2006 Act regarding members'
entitlement to vote on a poll. Sections 321 and 329 of the 2006 Act provide
that shares that are relied on to demand a poll must carry rights to vote
on the resolution on which the poll relates, rather than just the right to
vote at the meeting (Article 66.1).
7 To reflect the change in law under the 2006 Act relating to the time limit
which a company can prescribe for the revocation of proxies in the case of
a poll taken more than 48 hours after it has been demanded (Article 79.1).
8 To reflect the change in law under the 2006 Act regarding board sanction of
payments to or for the benefit of certain persons. Section 247 of the 2006
Act provides that the board is not permitted to sanction payments to or for
the benefit of directors, former directors and shadow directors (Article
117.1).
9 To reflect the change in law under the 2006 Act regarding execution of
documents. One director may now execute a document on behalf of a company
provided the director's signature is attested by a witness (Article 139.1).
Part B: Amendments proposed under Resolution 9 to take effect on 1 October 2008
when certain provisions of the 2006 Act to which the amendments relate come into
force.
10 To reflect the change in law under the 2006 Act relating to directors'
conflicts of interest enabling the board to authorise conflicts, or
potential conflicts, of interest in accordance with the 2006 Act (Articles
130 and 137).
11 To reflect the change in law under the 2006 Act regarding the declaration
of director's interests. Sections 177 and 182-187 of the 2006 Act will
replace section 317 of the UK Companies Act 1985 on 1 October 2008 with a
few changes. These include a new timeframe for the notification of an
9
interest, a requirement for a statement in the general notice giving the nature
and extent of the director's interest, a requirement for a further declaration
if there is a change in circumstances, a provision allowing a declaration to be
made by notice in writing and a provision setting out the circumstances where no
such declaration is needed (Article 131).
12 To reflect the provisions at law which enable a company to indemnify its
directors and/or fund the expenditure of a director on defence proceedings
so that the matters in which a director is interested and is entitled to
vote on, and count in the quorum in relation to, under the Articles of
Association are extended to include the giving of indemnities or any
proposal concerning the funding of expenditure by one or more directors on
defending proceedings against such director where all directors are also
being offered indemnities or funding on substantially the same terms. This
is intended to cover the specific situation where all directors are being
offered the indemnity or funding in connection with defending proceedings,
and therefore no director would be entitled to vote or count towards the
quorum if the exception was not available. An example of this (although not
exhaustive) would be where there is an action against all directors at the
same time and there is a proposal to fund all the directors' defence of
that claim. Further restrictions are included under section 234 of the 2006
Act in relation to the grant of an indemnity to directors, including the
requirements that the indemnity does not cover any liability to pay a
criminal fine or regulatory penalty, any expenses in relation to criminal
proceedings in which the director is convicted, or liability owed by the
director to the Company (Article 132). Although the 2006 Act does not
expressly cover this point, it is difficult to envisage any circumstances
arising in which this provision would apply to voting in respect of an
indemnity or funding for the benefit of directors acting otherwise than in
their capacity as directors or in the performance of their duties on behalf
of the Company.
10
APPENDIX III
SUMMARY OF THE RULES OF THE HSBC SHARE PLAN
AS PROPOSED TO BE AMENDED
Constitution and General Structure
The Plan provides for awards of Performance Shares (the release of which is
subject to the attainment of corporate performance conditions) or Restricted
Shares (the release of which is subject to the individual remaining in service
for a period, typically three years) and Options (which are granted on similar
terms to Performance Shares or Restricted Shares but are exercisable at a price
based on the market value of an Ordinary Share at the date of grant). As an
alternative to Performance Shares or Restricted Shares, Options with no or a
nominal exercise price ("Nil-Cost Options") may be granted. References below to
Performance Shares or Restricted Shares shall apply, with the necessary changes
being made, where such shares are delivered by means of Nil-Cost Options.
References below to Options are to Options which are exercisable at a price
based on the market value of an Ordinary Share at the date of grant. The
collective term used in this summary for all these various forms of share award
is "Rights".
Schedules 1 and 2 of the Plan allow for the grant of Options, on tax-efficient
terms, to participants resident in the UK and the USA. Schedule 3 allows for the
grant of Rights, on tax-efficient terms, to participants resident in France. It
is proposed that a new Schedule 4 be inserted to allow for the grant of Rights
to participants resident in India conditional on such participants entering into
an agreement to reimburse any local fringe benefit tax paid by their employing
company on the grant or exercise or vesting of such Rights. It is proposed that
a new Schedule 5 be inserted to replace the existing Schedule 4, setting out the
proposed performance conditions for awards of Performance Shares to be granted
in 2008. Such performance measures will apply to awards made in 2008, subject to
approval of the proposed amendments to the Plan by shareholders at the 2008
Annual General Meeting.
Eligibility
Any executive Director or employee of the Company or any subsidiary is eligible
for participation in the Plan. Selection for participation is at the discretion
of the Committee.
In respect of Rights granted under Schedule 1, 2 or 3 of the Plan, further
restrictions will apply in relation to eligibility which reflect local law
requirements in the relevant countries.
Grant of Rights
No Rights may be granted at a time when dealings in the Ordinary Shares by
Directors are prohibited by the Company's Code for Securities Transactions. This
apart, Restricted Shares may be granted at any time. Other Rights may generally
only be granted within the period of 42 days commencing on the dealing day
following the date on which the Company makes an announcement of its results for
any year, half year or other period or issues any prospectus, listing
particulars or other document containing equivalent information relating to its
shares. However, Rights may be granted outside these periods on a day on which
the Committee resolves that exceptional circumstances have arisen which justify
the grant of Rights. It is proposed to amend the rules so as to allow Rights to
be granted within the period of 42 days commencing on the dealing day following
the date of a meeting of Shareholders approving amendments to the Plan.
Individual Limit
Save for awards of Restricted Shares granted on or shortly after the
commencement of employment or granted in substitution for an annual bonus
payment, the total value of Rights granted to any individual in any year shall
not exceed seven times base salary. For this purpose the value of a Right shall
be the market value of the Ordinary Shares comprised in the Right. Specific
limits set by UK and US tax legislation apply to Options granted under Schedule
1 or Schedule 2 of the Plan.
Option Price
The price per Ordinary Share payable on the exercise of an Option is set by the
Committee at the grant date and may not be less than the higher of the market
price derived from the London Stock Exchange Daily Official List of an Ordinary
Share on the grant date and the average market price derived from the
11
London Stock Exchange Daily Official List of an Ordinary Share over the five
dealing days immediately preceding the grant date.
Performance Conditions
The vesting of Performance Shares is, and the vesting of other Rights may be,
dependent on the extent to which performance conditions based on the Group's
performance set by the Committee when the Rights are granted are achieved.
Awards subject to such performance conditions will not vest unless the Committee
is satisfied that HSBC's financial performance has shown a sustained improvement
in the period since the award date.
Where events occur which cause the Committee to consider that a performance
condition has become unfair in either direction or impractical, the Committee
may amend, relax or waive such condition as it deems appropriate.
The proposed new Schedule 5 of the Plan sets out the proposed performance
conditions for Performance Share awards granted in 2008 which will be divided
into three parts, each of which will be subject to a separate performance
condition as described below, with 40 per cent subject to a total shareholder
return measure, a further 40 per cent subject to an economic profit measure and
the remaining 20 per cent subject to an earnings per share measure. The
performance conditions which were set for awards of Performance Shares made
prior to 2008 will not be affected by the new proposals.
TSR
Total shareholder return ("TSR") is defined as the total value of dividend
income (assumed to be reinvested in shares) and share price movements relating
to a share, measured over a defined period of time, expressed as a percentage of
the share price at the commencement of that time period. Under the terms of the
HSBC Share Plan, TSR is measured in sterling over a three-year performance
period.
Forty per cent of an award of Performance Shares (the "TSR Part") will be
subject to a TSR condition which will measure HSBC's performance against a
comparator group. It is proposed to update the existing comparator group so that
it initially comprises the 26 major banks set out below. These include the
largest banks in the world measured in terms of free float market
capitalisation, other banks with which HSBC competes on a regional and/or local
basis. During the performance period, the Committee may, at its discretion,
remove from the comparator group a member which has ceased to be quoted or to
exist or whose relevance to HSBC as a comparator has, in the opinion of the
Committee, significantly diminished. The Committee may also, at its discretion,
add to the comparator group (whether to replace a removed member or otherwise)
if it believes that such addition will enhance the relevance of the comparator
group to HSBC.
The updated comparator group for the 2008 awards will comprise Banco Bilbao
Vizcaya Argentaria S.A., Banco Bradesco S.A., Banco Itau Holding Financeira
S.A., Banco Santander Central Hispano S.A., Bank of America Corporation, Bank of
China Limited, Barclays PLC, BNP Paribas S.A., Citigroup Inc., Credit Suisse
Group, DBS Group Holdings Ltd, Deutsche Bank AG, Fortis, HBOS plc, Industrial
and Commercial Bank of China Ltd, JPMorgan Chase & Co., Lloyds TSB Group plc,
National Australia Bank Limited, Royal Bank of Canada, The Royal Bank of
Scotland Group plc, Societe Generale, Standard Chartered PLC, UBS AG, UniCredito
Italiano S.p.A., Wachovia Corporation and Wells Fargo & Company.
The extent to which the TSR Part will vest will be determined by reference to
HSBC's TSR measured against the comparator group over a three-year period.
It is proposed to change the way the TSR measure is benchmarked by using a
market capitalisation weighted method which will recognise the significant size
differentials within the comparator group. The proposed method will work as
follows:
(i) the free float market capitalisation at the beginning of the
performance period ("FFMC") of each company in the comparator group
will be calculated and expressed in sterling and then all the figures
will be totalled. The free float will be as calculated by Morgan
Stanley Capital International (MSCI) or such other independent
organisation as the Committee may consider appropriate
and is defined as the market value of the proportion of shares
outstanding that is deemed to be available for purchase in the public
equity markets by international investors;
(ii) the TSR for all members of the comparator group and HSBC will be
calculated for the relevant three-year performance period. The
starting share price component for HSBC's TSR will be the average
market price over the 20 dealing days commencing on the day on which
HSBC's annual results are announced, which in 2008 was 3 March. The
starting point for 2008 awards will therefore be the average over the
period from 3 March to 1 April inclusive. The end point will be the
average market price over the 20 dealing days commencing on the day on
which HSBC's annual results are announced three years later. TSR for
all members of the comparator group will be calculated on the same
basis; and
(iii)HSBC's outperformance of the comparator group will then be calculated
by dividing the total FFMC of all the companies that HSBC has
outperformed in terms of TSR by the total FFMC of all the companies in
the comparator group.
The proposed vesting schedule for the TSR Part is as follows:
(i) none will vest where HSBC outperforms companies comprising less than
50 per cent of the total FFMC of the comparator group;
(ii) 20 per cent will vest where HSBC outperforms companies comprising 50
per cent of the total FFMC of the comparator group;
(iii)vesting will be on a straight line basis between 20 per cent and 100
per cent where HSBC outperforms companies comprising between 50 per
cent and 75 per cent of the total FFMC of the comparator group; and
(iv) 100 per cent will vest where HSBC outperforms companies comprising 75
per cent or more of the total FFMC of the comparator group.
An example of how the TSR measure would be applied in different scenarios is
shown below:
Total FFMC of Percentage
companies of TSR Part
Total FFMC of HSBC has which would
Percentage
comparator outperformed out- vest
group(GBPm) (GBPm) performance (Note)
Scenario 1 1,000,000 770,000 77.0 100
Scenario 2 1,000,000 500,000 50.0 20
Scenario 3 1,000,000 450,000 45.0 0
Note
Awards will not vest unless the Committee is satisfied that HSBC's financial
performance has shown a sustained improvement in the period since the award
date.
EP
Forty per cent of an award of Performance Shares (the "EP Part") will be subject
to a new Group economic profit ("EP") measure. EP will be measured annually over
a three-year period beginning with the year in which the award is made. EP in
respect of the three-year period will be the average annual difference between
return on invested capital and the Group's benchmark cost of capital (10 per
cent for 2008). Return on invested capital is based on the profit attributable
to shareholders, both as defined in the Annual Report and Accounts for HSBC. EP
will be expressed as a percentage.
The proposed vesting schedule for the EP Part is as follows:
(i) none will vest where, on average, annual EP over the three-year period
is less than 3 per cent;
(ii) vesting will be on a straight line basis between 0 per cent and 100
per cent where, on average, annual EP over the three-year period falls
between 3 per cent and 8 per cent; and
(iii)100 per cent will vest where, on average, annual EP over the
three-year period is 8 per cent or more.
13
An example of how the EP measure would be applied is shown below:
Percentage of
EP Part
Annual which would
Year 1 Year 2 Year 3 Total Average vest
% % % (Note)
---------- ---------- ---------- ---------- --------- ----------------
---------- ---------- ---------- ---------- --------- ----------------
Return on invested capital 15 14 16
Benchmark cost of capital 10 10 10
Economic Profit 5 4 6 15 5 40
Note
Awards will not vest unless the Committee is satisfied that HSBC's financial
performance has shown a sustained improvement in the period since the award
date.
EPS
Vesting of the final 20 per cent of each award of Performance Shares (the "EPS
Part") will be subject to a growth in earnings per share ("EPS") measure. The
base EPS is the EPS for the financial year preceding that in which the award is
made and the performance period will be the following three consecutive
financial years. EPS growth will be calculated by comparing the EPS in the third
year with the base EPS.
The proposed vesting schedule for the EPS Part is as follows:
(i) none will vest where the EPS in year 3 is less than 16 per cent higher
than the base EPS;
(ii) 20 per cent will vest where the EPS in year 3 is 16 per cent higher
than the base EPS;
(iii)vesting will be on a straight line basis between 20 per cent and 100
per cent where the EPS in year 3 is between 16 per cent and 28 per
cent higher than the base EPS; and
(iv) 100 per cent will vest where the EPS in Year 3 is at least 28 per cent
higher than the base EPS.
An example of how the EPS measure would be applied in different scenarios is
shown below:
EPS Growth
in Year 3 Percentage
EPS over the base of EPS Part
EPS which would
vest
Base Year Year 1 Year 2 Year 3 (%) (Note)
---------- ---------- ---------- ---------- --------------- --------------
---------- ---------- ---------- ---------- --------------- --------------
Scenario 1 100 106 110 115 15 0
Scenario 2 100 105 122 115 15 0
Scenario 3 100 105 115 122 22 60
Scenario 4 100 118 110 125 25 80
Scenario 5 100 80 80 130 30 100
Scenario 6 100 115 130 115 15 0
Note
Awards will not vest unless the Committee is satisfied that HSBC's financial
performance has shown a sustained improvement in the period since the award
date.
Normal Vesting
A Right will only vest in the participant to whom it is awarded or his/her
personal representative(s) and is not transferable.
Subject to the achievement of any performance conditions, Rights other than
Options normally vest at the end of a specified period of approximately three
years and Options normally become exercisable from the third anniversary of
grant. Options will lapse if not exercised by the tenth anniversary of grant.
14
Notional dividends
In relation to awards of Performance Shares and Restricted Shares, when a
dividend arises during the specified period referred to above, the number of
Ordinary Shares comprised in the Awards will be increased by the number of
Ordinary Shares which could have been acquired with the dividend which would
have been received had the participant been the owner of the relevant
Performance Shares or Restricted Shares.
Cessation of Employment
Currently, if a participant leaves the Group because of injury, ill health or
disability, redundancy, retirement, as a result of the company or business by
which he/she is employed being transferred outside the Group, or in other
circumstances which, in the view of the Committee, justifies him/her being
treated as a "good leaver":
(i) vesting will normally be on a time-apportioned basis, i.e. according
to the proportion of the restricted period which has elapsed at the
date of leaving;
(ii) vesting will not normally be accelerated as a result of leaving; and
(iii)performance conditions will be applied in the normal way.
It is proposed to amend the Plan so that a participant who retires will no
longer automatically be treated as a good leaver. It is also proposed to amend
the Plan so that a good leaver who has vested but unexercised Options will have
six months from cessation in which to exercise those Options, after which they
will lapse.
If a participant leaves the Group other than in the above circumstances, all
his/her unvested Rights will lapse.
If a participant dies whilst employed within the Group, all Rights vest in full
and his/her personal representative(s) will have twelve months in which to
exercise any Options. If a participant dies within six months of leaving the
Group as a good leaver and has unexercised Options, it is proposed to amend the
Plan so that the deadline for exercise will be extended to the first anniversary
of the date of his/her death.
Change of Control or Reconstruction
If the Company is taken over, Rights will vest immediately and, unless the
Committee determines that the circumstances are sufficiently exceptional to
justify the vesting of a greater proportion, on a time-apportioned basis and,
under the proposed amendments, to the extent that the Committee in its absolute
discretion determines that performance conditions have been satisfied or should
be deemed to have been satisfied during the foreshortened performance period.
Alternatively, and to the extent offered by the acquiring company, Options and
Restricted Shares may be exchanged for equivalent Rights over shares in the
acquiring company. If the Company is the subject of a reconstruction involving
substantially the same shareholders, all Rights will be replaced by equivalent
new rights in the new company or companies.
Issue or Transfer of Ordinary Shares
Following vesting, Rights will be satisfied by the transfer of Ordinary Shares
to the participant except that new Ordinary Shares can be issued to satisfy the
exercise of Options. Newly issued Ordinary Shares will rank pari passu with the
Ordinary Shares then in issue other than in respect of entitlements arising by
reference to a date prior to the date of allotment. Applications will be made
for listing and trading of the new Ordinary Shares on the relevant stock
exchanges.
In the case of Options, the participant and the Company can agree for the gain
available at the date of exercise to be satisfied in lieu of exercise by the
transfer of existing Ordinary Shares having an equivalent value.
15
Issues and Reorganisations
Following a rights or capitalisation issue or other variation of capital, Rights
may be adjusted as the Committee considers appropriate, provided that, as
confirmed by the auditors, in the case of Options the proportion of the Ordinary
Shares represented by each Option remains unchanged.
Pension Implications
Rights under the Plan and any resulting benefits are not pensionable emoluments.
Amendments
The Plan may be amended by the Committee in any way except that certain
amendments which are to the advantage of participants (present or future)
require the prior approval of Shareholders and the Hong Kong Stock Exchange save
for minor amendments which the Committee considers necessary or desirable in
order to benefit the administration of the Plan, or to obtain or maintain
favourable tax, exchange control or regulatory treatment for any eligible
employee or participant or for the Company or any subsidiary. Amendments to key
provisions of Schedule 1 of the Plan require the approval of HM Revenue &
Customs.
Termination
The Plan will terminate on 27 May 2015 unless the Directors or the Committee
resolve to terminate it earlier. Following termination no further Rights may be
awarded but existing Rights will not be affected.
16
HSBC Holdings plc
Notice of Annual General Meeting
Notice is hereby given that the Annual General Meeting of the Company will be
held at the Barbican Hall, Barbican Centre, London EC2 on Friday 30 May 2008 at
11.00 am to transact the following ordinary business:
1 to receive and consider the Annual Accounts and Reports of the
Directors and of the Auditor for the year ended 31 December 2007;
2 to approve the Directors' Remuneration Report for the year ended 31
December 2007;
3 to re-elect Directors;
Separate resolutions will be proposed for the re-election of:
(a) S A Catz;
(b) V H C Cheng;
(c) J D Coombe;
(d) J L Dura n;
(e) D J Flint;
(f) A A Flockhart;
(g) W K L Fung;
(h) S T Gulliver;
(i) J W J Hughes-Hallett;
(j) W S H Laidlaw;
(k) N R N Murthy; and
(l) S W Newton;
4 to reappoint KPMG Audit Plc as Auditor at remuneration to be
determined by the Group Audit Committee;
and by way of special business to consider and (if thought fit) pass the
following Resolutions of which Resolutions 5, 7 and 10 will be proposed as
Ordinary Resolutions and Resolutions 6, 8 and 9 will be proposed as Special
Resolutions:
5 THAT the Directors be and they are hereby generally and
unconditionally authorised pursuant to and for the purposes of section
80 of the Companies Act 1985 (the "Act") to exercise all the powers of
the Company to allot relevant securities (within the meaning of that
section) up to an aggregate nominal amount of GBP100,000 and
EUR100,000 (in each such case in the form of 10,000,000 non-cumulative
preference shares), US$85,500 (in the form of 8,550,000 non-
cumulative preference shares) and US$1,186,700,000 (in the form of
Ordinary Shares of US$0.50 each ("Ordinary Shares")) provided that
this authority shall be limited so that, otherwise than pursuant to:
(a) a rights issue or other issue the subject of an offer or
invitation, open for acceptance for a period fixed by the
Directors, to:
(i) Ordinary Shareholders where the relevant securities
respectively attributable to the interests of all Ordinary
Shareholders are proportionate (or as nearly as may be) to
the respective number of Ordinary Shares held by them; and
17
(ii) holders of securities, bonds, debentures or warrants which,
in accordance with the rights attaching thereto, are
entitled to participate in such a rights issue or other
issue,
but subject to such exclusions or other arrangements as the
Directors may deem necessary or expedient in relation to
fractional entitlements or securities represented by depositary
receipts or having regard to any restrictions, obligations or
legal problems under the laws of or the requirements of any
regulatory body or stock exchange in any territory or otherwise
howsoever; or
(b) the terms of any share plan for employees of the Company or any
of its subsidiary undertakings; or
(c) any scrip dividend scheme or similar arrangements implemented in
accordance with the Articles of Association of the Company; or
(d) the allotment of up to 10,000,000 non-cumulative preference
shares of GBP0.01 each, 10,000,000 non-cumulative preference
shares of EUR0.01 each and 8,550,000 non-cumulative preference
shares of US$0.01 each in the capital of the Company,
the nominal amount of relevant securities to be allotted by the
Directors pursuant to this authority wholly for cash shall not in
aggregate, together with any allotment of other equity securities
authorised by sub-paragraph (b) of Resolution 6 set out in the Notice
convening this Meeting, exceed US$296,675,000 (being equal to
approximately 5 per cent of the nominal amount of Ordinary Shares of
the Company in issue at the latest practicable date prior to the
printing of the Notice of this Meeting) and such authority shall
expire at the conclusion of the Annual General Meeting of the Company
to be held in 2009 save that this authority shall allow the Company
before the expiry of this authority to make offers or agreements which
would or might require relevant securities to be allotted after such
expiry and the Directors may allot relevant securities in pursuance of
such offers or agreements as if the authority conferred hereby had not
expired.
6 THAT the Directors be and are hereby empowered pursuant to section 95
of the Companies Act 1985 ("the Act"):
(a) subject to the passing of Resolution 5 set out in the Notice
convening this Meeting, to allot equity securities (as defined by
section 94 of the Act) the subject of the authority granted by
Resolution 5; and
(b) to allot any other equity securities (as defined by section 94 of
the Act) which are held by the Company in treasury,
in each case as if section 89(1) of the Act did not apply to any such
allotment, provided that this power shall expire at the conclusion of
the Annual General Meeting of the Company to be held in 2009 save that
this power shall enable the Company before the expiry of this power to
make offers or agreements which would or might require equity
securities to be allotted after such expiry and the Directors may
allot equity securities in pursuance of such offers or agreements as
if the power conferred hereby had not expired.
7 THAT the Company be and is hereby generally and unconditionally
authorised to make market purchases (within the meaning of section 163
of the Companies Act 1985) of Ordinary Shares of US$0.50 each in the
capital of the Company ("Ordinary Shares") and the Directors are
authorised to exercise such authority provided that:
(a) the maximum number of Ordinary Shares hereby authorised to be
purchased is 1,186,700,000 Ordinary Shares;
(b) the minimum price (exclusive of expenses) which may be paid for
each Ordinary Share is US$0.50 (or the equivalent in the relevant
currency in which the purchase is effected calculated by
reference to the spot rate of exchange for the purchase of United
States dollars with such other currency as quoted by HSBC Bank
plc in the London Foreign Exchange Market at or about 11.00 am
(London time) on the business day (being a day on which banks are
ordinarily open for the transaction of normal banking business in
London) prior to the date on which the Ordinary Share is
contracted to be purchased, in each case such rate to be the rate
as conclusively certified by an officer of HSBC Bank plc);
18
(c) the maximum price (exclusive of expenses) which may be paid for
each Ordinary Share is the lower of (i) 105 per cent of the
average of the middle market quotations for the Ordinary Shares
(as derived from the Daily Official List of London Stock Exchange
plc) for the five dealing days immediately preceding the day on
which the Ordinary Share is contracted to be purchased or (ii)
105 per cent of the average of the closing prices of the Ordinary
Shares on The Stock Exchange of Hong Kong Limited for the five
dealing days immediately preceding the day on which the Ordinary
Share is contracted to be purchased, in each case converted
(where relevant) into the relevant currency in which the purchase
is effected calculated by reference to the spot rate of exchange
for the purchase of such currency with the currency in which the
quotation and/or price is given as quoted by HSBC Bank plc in the
London Foreign Exchange Market at or about 11.00 am (London time)
on the business day prior to the date on which the Ordinary Share
is contracted to be purchased, in each case such rate to be the
rate as conclusively certified by an officer of HSBC Bank plc;
(d) unless previously revoked or varied this authority shall expire
at the conclusion of the Annual General Meeting of the Company to
be held in 2009; and
(e) the Company may prior to the expiry of this authority make a
contract to purchase Ordinary Shares under this authority which
will or may be executed wholly or partly after such expiry and
may make a purchase of Ordinary Shares pursuant to any such
contract.
8 THAT the Articles of Association of the Company be and are hereby
altered as follows:
(a) by deleting from the definition of "recognised person" in Article
2.1 the words "section 185(4) of the Act" and substituting
therefor the words "section 778(2) of the 2006 Act";
(b) by inserting at the end of the definition of "Principal Register"
in Article 2.1 the words "and sections 121 and 128 of the 2006
Act" so that Article 2.1 reads as follows:
"Principal Register the register of members of the Company to be
kept pursuant to section 352 of the Act and sections 121 and 128
of the 2006 Act";
(c) by inserting into the definition of "Secretary" in Article 2.1
before the word "Act" the word "2006";
(d) by deleting from Article 2.5 the words "or an extraordinary
resolution shall also be effective, and where an extraordinary
resolution is required a special resolution" so that Article 2.5
reads as follows:
"Where for any purpose an ordinary resolution of the Company is
required, a special resolution shall also be effective.";
(e) by deleting from Article 35.1 the words "and without giving any
reason";
(f) by inserting into Article 36.1 the words ", together with the
reasons for the refusal," so that Article 36.1 reads as follows:
"36.1 If the Board refuses to register a transfer of a share
it shall, within two months after the date on which
the transfer was lodged with the Company send notice
of the refusal, together with the reasons for the refusal,
to the transferee. Any instrument of transfer which
the Board refuses to register shall (except in the case
of suspected fraud) be returned to the person
depositing it. All instruments of transfer which are
registered may be retained by the Company.";
(g) by deleting from each of Articles 48.1, 49.1 and 166.2 the words
"an extraordinary" and substituting therefor the words "a
special";
(h) by inserting into in each of Articles 52.1, 55.2, 66.1, 71.1,
80.1, 92.1, 96.1, 97.1(b), 117.1, 141.1, 142.1, 143.1, 154.1,
168.1, 169.1 and 170.2(j) the word "2006" before the word "Act";
(i) by deleting from Article 54.1 the words "section 368 of the Act2
and substituting therefor the words "sections 303-305 of the 2006
Act";
19
(j) by deleting the existing Article 55.1 and substituting therefor
the following new Article 55.1:
"55.1 An annual general meeting shall be convened by not less
than 21 clear days' notice in writing. An extraordinary
general meeting shall be convened by not less than
14 clear days' notice in writing or such longer period
as may be required by law from time to time.";
(k) by deleting from each of Articles 55.3(d) and 69.1 the words "or
extraordinary";
(l) by inserting into Article 55.4 the words 2and to any other person
who may be entitled to receive it" so that Article 55.4 reads as
follows:
"55.4 The notice shall be given to the members (other than any
who, under the provisions of these Articles or of any
restrictions imposed on any shares, are not entitled to receive
notice from the Company), to the Directors, to the Auditors and
to any other person who may be entitled to receive it.";
(m) by deleting from Article 55.5 the words "section 376(2)(b) of the
Act" and substituting therefor the words "sections 314(2)(b) and
338(3)(b) of the 2006 Act";
(n) by deleting from Article 66.1 the words "at the meeting" wherever
they appear and substituting therefor the words "on the
resolution", by inserting the words "(excluding any voting rights
attached to any shares in the Company held as treasury shares)"
into Article 66.1(c) and by inserting the words "(excluding
shares in the Company conferring a right to vote on the
resolution which are held as treasury shares)" into Article
66.1(d) so that Article 66.1 reads as follows:
"66.1 At any general meeting a resolution put to a vote of
the meeting shall be decided on a show of hands, unless
(before or on the declaration of the result of the show
of hands) a poll is duly demanded. Subject to the
provisions of the 2006 Act, a poll may be demanded by:
(a) the Chairman of the meeting; or
(b) by at least five members present in person or by proxy
and entitled to vote on the resolution; or
(c) a member or members present in person or by proxy
representing not less than one-tenth of the total
voting rights of all the members having the right to
vote on the resolution (excluding any voting rights
attached to any shares in the Company held as treasury
shares); or
(d) a member or members present in person or by proxy
holding shares conferring a right to vote on the
resolution, being shares on which an aggregate sum
has been paid up equal to not less than one-tenth of
the total sum paid up on all the shares conferring that
right (excluding shares in the Company conferring
a right to vote on the resolution which are held as
treasury shares).";
(o) by deleting from Article 79.1 the words "at least 48 hours before
the commencement of the meeting or adjourned meeting or the
taking of the poll at which the appointment of proxy is used" and
substituting therefor the words "in the case of a meeting or
adjourned meeting at which the appointment of proxy is used, at
least 48 hours before the time for holding the meeting or
adjourned meeting and, in the case of a poll taken more than 48
hours after it was demanded at which the appointment of proxy is
used, at least 24 hours before the time appointed for the taking
of the poll" so that Article 79.1 reads as follows:
"79.1 A vote given or poll demanded in accordance with the terms
of an appointment of proxy shall be valid
notwithstanding the death or mental disorder of the
principal or the revocation of the appointment of proxy,
or of the authority under which the appointment of proxy
was executed or submitted, or the transfer of the share in
respect of which the appointment of proxy is given, unless
notice in writing of such death, mental disorder,
revocation or transfer shall have been received by the
Company at the Office, or at such other place or places or
20
address as has or have been appointed for the deposit or
receipt of appointments of proxy, in the case of a meeting
or adjourned meeting at which the appointment of proxy is
used, at least 48 hours before the time for holding the
meeting or adjourned meeting and, in the case of a poll
taken more than 48 hours after it was demanded at which the
appointment of proxy is used, at least 24 hours before the
time appointed for the taking of the poll.";
(p) by inserting into each of Articles 87.1, 109.1, 115.1 and 119.1
the words "and the 2006 Act" after the words "the Act" wherever
they appear;
(q) by inserting into Article 117.1 the words "(other than directors,
former directors or shadow directors)" so that Article 117.1
reads as follows:
"117.1 The Board may exercise any power conferred on the
Company by the 2006 Act to make provision for the
benefit of persons (other than directors, former
directors or shadow directors) employed or formerly
employed by the Company or any of its subsidiaries in
connection with the cessation or the transfer to any
person of the whole or part of the undertaking of the
Company or that subsidiary.";
(r) by inserting into Article 137.1(a) before the word "Act",
wherever it appears, the word "2006" and deleting the words
"section 346" and substituting therefor the words "sections
252-256" so that the Article 137.1(a) reads as follows:
"(a) an interest of a person who is for the purposes of
the 2006 Act connected (which word shall have the
meaning given thereto by sections 252-256 of the 2006
Act) with a Director shall be treated as an interest of
the Director;";
(s) by inserting into Article 137.1(c) before the word "Act",
wherever it appears, the word "2006" and deleting the words
"section 346" and substituting therefor the words "sections
252-256" so that the Article 137.1(c) reads as follows:
"(c) an "associate" of a Director shall mean any person who
is for the purposes of the 2006 Act connected (which
word shall have the meaning given thereto by sections
252-256 of the 2006 Act) with a Director and any person
who is an associate of a Director within the meaning
of rule 1.01 of the rules governing the listing of
securities on The Hong Kong Stock Exchange.";
(t) by inserting into Article 138.1 after the words "the Act" the
words ", the 2006 Act,";
(u) by inserting into Article 139.1 the words "or by a Director in
the presence of a witness who attests the signature" so that
Article 139.1 reads as follows:
"139.1 A document signed by a Director and by the Secretary or
by two Directors or by a Director in the presence of a
witness who attests the signature and expressed (in
whatever form of words) to be executed by the Company
shall have the same effect as if it were executed under
the Seal, provided that no instrument shall be so
signed which makes it clear on its face that it is
intended by the person or persons making it to have
effect as a deed without the authority of a resolution
of the Board or of a committee of the Board authorised in
that behalf. An instrument or document which is
executed by the Company as a deed shall not be deemed
to be delivered by the Company solely as a result of it
having been executed by the Company.";
(v) by inserting into Article 155.1 the words "and the 2006 Act(as
appropriate)" so that Article 155.1 reads as follows:
"155.1 The Board shall cause accounting records to be kept
in accordance with the Act and the 2006 Act (as
appropriate).";
(w) by deleting the existing Article 157.1 and substituting therefor
the following new Article 157.1:
"157.1 Except as provided in Article 158, the Directors'
and Auditors' reports, together with copies of the
balance sheet and every document required by the Act
or the 2006 Act (as appropriate) to be annexed to the
balance sheet and copies of the
21
profit and loss account or income and expenditure
account (subject to the provisions of section 230
of the Act or section 408 of the 2006 Act, as
appropriate) shall, not less than 21 clear days before
the annual general meeting before which they are to be
laid, be delivered, sent by post or made available on the
Company's website to every member and holder of
debentures of the Company, to the Auditors and to any
other person who may be entitled to receive them.
However, this Article shall not require a copy of
those documents to be sent to any person who under the
provisions of these Articles is not entitled to receive
notices from the Company or of whose address the Company
is unaware or to any holder of debentures of whose
address the Company is unaware or to more than one of
the joint holders of any shares or debentures.
If all or any of the shares in or debentures of the
Company are listed or dealt in on any stock exchange,
there shall at the same time be forwarded to
the secretary of that stock exchange such number of
copies of each of those documents as the regulations of
that stock exchange may require.";
(x) by deleting the existing Article 158.1 and substituting therefor
the following new Article 158.1:
"158.1 The Company may, in accordance with section 251 of the
Act or sections 426- 429 and sections 434-435 of the
2006 Act (as appropriate) and any regulations made
under the Act or the 2006 Act (as appropriate) send a
summary financial statement to any member, holder of
debentures of the Company or other person who is entitled
to receive notice of general meetings instead of or in
addition to the documents referred to in Article 157.
Where it does so, the statement shall be delivered, sent
by post or made available on the Company's website to
the member, holder of debentures of the Company or
other person entitled to receive notice not less than 21
clear days before the annual general meeting before which
those documents are to be laid."; and
(y) by inserting into Article 170.2(l) the words "or the 2006 Act (as
appropriate)" so that Article 170.2(l) reads as follows:
"(l) the Board may utilise the relevant system to the fullest
extent available from time to time in the exercise of
the Company's powers or functions under the Act or the
2006 Act (as appropriate) or these Articles or otherwise
in effecting any actions".
9 THAT, with effect from 1 October 2008, the Articles of Association of
the Company be and are hereby altered as follows:
(a) by inserting into Article 130.1 the word "2006" before the word
"Act" and deleting the words "Article 131 is" and substituting
therefor the words "Articles 130A, if appropriate, and 131 are"
so that the introductory words of Article 130.1 begin as follows:
"130.1 Subject to the provisions of the 2006 Act and provided
that Articles 130A, if appropriate, and 131 are complied
with, a Director, notwithstanding his office:";
(b) by deleting the existing Article 130.1(d) and substituting
therefor the following new Article 130.1(d):
"(d) shall not be liable to account to the Company for any
profit, remuneration or other benefit realised by any
such office, employment, contract, arrangement,
transaction or proposal or from any interest in any
body corporate and no such contract, arrangement,
transaction, proposal or interest shall be avoided on
the grounds of any such interest or benefit nor shall
the receipt of any such profit, remuneration or any
other benefit constitute a breach of his duty under the
2006 Act not to accept benefits from third parties.";
(c) by inserting a new Article 130A as follows:
"130A Power of the Board to authorise conflicts of interest
130A.1 The Board may authorise any matter proposed to it in
accordance with these Articles which would, if not so
authorised, involve a breach by a Director of
22
his duty to avoid conflicts of interest under section 175
of the 2006 Act, including, without limitation, any
matter which relates to a situation in which a Director
has, or can have, an interest which conflicts, or
possibly may conflict, with the interest of the Company
(including the exploitation of any property, information
or opportunity, whether or not the Company could take
advantage of it, but excluding any situation which
cannot reasonably be regarded as likely to give rise to
a conflict of interest). The provisions of this
Article do not apply to a conflict of interest arising in
relation to a transaction or arrangement with the
Company.
130A.2 Any such authorisation will be effective only if:
(a) the matter arose on or after 1 October 2008;
(b) any requirement as to quorum at the meeting at which
the matter is considered is met without counting the
Director in question or any other interested
Director; and
(c) the matter was agreed to without their voting or
would have been agreed to if their votes had not been
counted.
130A.3 The Board may (whether at the time of the giving of the
authorisation or subsequently) make any such
authorisation subject to any limits or conditions it
expressly imposes but such authorisation is otherwise
given to the fullest extent permitted.
130A.4 The Board may vary or terminate any such authorisation
at any time.";
(d) by deleting the existing Article 131 and substituting therefor
the following new Articles 131, 131A, 131B and 131C:
"131 Declaration of interests
131.1 A Director shall declare the nature and extent of his
interest in a matter within Article 130A to the other
Directors.
131.2 A Director who is aware that he is in any way interested
in a proposed transaction or arrangement with the
Company must declare the nature and extent of his
interest to the other Directors.
131.3 A Director who is aware that he is in any way interested
in a transaction or arrangement that has been entered
into by the Company must declare the nature and extent
of his interest to the other Directors, unless the
interest has already been declared under Article 131.2.
131.4 The declaration of interest must (in the case of
Article 131.3) and may, but need not (in the case of
Article 131.1 or 131.2), be made:
(a) at a meeting of the Directors; or
(b) by general or specific notice to the Directors in
accordance with the 2006 Act.
131.5 If a declaration of interest, or deemed declaration
of interest, proves to be, or becomes, inaccurate or
incomplete, a further disclosure must be made.
131.6 Any declaration of interest required by Article 131.1
above must be made as soon as reasonably practicable.
131.7 Any declaration of interest required by Article 131.2
above must be made before the Company enters into the
transaction or arrangement or, in the case of an interest
which arose before 1 October 2008, at the first
meeting of the Directors at which the question of
entering into the proposed transaction or arrangement
is first taken into consideration.
131.8 Any declaration of interest under Article 131.3 above
must be made as soon as reasonably practicable. Failure
to comply with this requirement does not affect the
underlying duty to make the declaration of interest.
23
131.9 For the purposes of Articles 131.1, 131.2 and 131.3,
a Director need not declare an interest which arose on
or after 1 October 2008:
(a) if it cannot reasonably be regarded as likely to give
rise to a conflict of interest;
(b) if, or to the extent that, the other Directors are
already aware of it; or
(c) if, or to the extent that, it concerns terms of his
service contract that have been or are to be
considered:
(i) by a meeting of the Directors; or
(ii) by a committee of the Directors appointed for
the purpose under these Articles.
131A Entitlement to keep information confidential
131A.1 Subject to Article 131A.2, a Director shall be under
no duty to the Company with respect to any
information which he obtains or has obtained otherwise
than as a Director of the Company and in respect of
which he has a duty of confidentiality to another
person. In particular, the Director shall not be in
breach of the general duties he owes to the Company
under sections 171-177 of the 2006 Act because he
fails:
(a) to disclose any such information to the Board or to
any Director or other officer or employee of the
Company; and/or
(b) to use or apply any such information in performing
his duties as a Director of the Company.
131A.2 To the extent that the relationship between a Director
and a person to whom he owes a duty of confidentiality
gives rise to a conflict of interest or possible conflict
of interest, Article 131A.1 applies only if the
existence of that relationship has been authorised by
the Board pursuant to Article 130A.
131B Avoiding conflicts of interest
131B.1 Where the existence of a Director's relationship with
another person has been authorised by the Board pursuant
to Article 130A (and subject to any limits or
conditions imposed pursuant to Article 130A.3) and his
relationship with that person gives rise to a conflict
of interest or possible conflict of interest, the
Director shall not be in breach of the general duties he
owes to the Company under sections 171-177 of the 2006
Act because he:
(a) absents himself from meetings of the Board at which
any matter relating to the conflict of interest
or possible conflict of interest will or may be
discussed or from the discussion of any such matter at
a meeting or otherwise; and/or
(b) makes arrangements not to receive documents and
information relating to any matter which gives rise
to the conflict of interest or possible conflict of
interest sent or supplied by the Company and/or
makes arrangements for such documents and information
to be received and read by a professional adviser,
for so long as he reasonably believes such conflict of
interest or possible conflict of interest subsists.
131C Overriding principles
131C.1 The provisions of Articles 131A and 131B are without
prejudice to any equitable principle or
rule of law which may excuse the Director from:
(a) disclosing information in circumstances where disclosure
would otherwise be required under these Articles; or
(b) attending meetings or discussions or receiving documents
and information as referred to in Article 131B, in
circumstances where such
24
attendance or receiving such documents and information
would otherwise be required under these Articles.";
(e) by deleting the word "or" from the end of Article 132.1(e)
and inserting into the end of Article 132.1(f) the word ";
or" and inserting into Article 132.1 the following new
Article 132.1(g):
"(g) the giving of any other indemnity or any proposal concerning
the funding of expenditure by one or more Directors on
defending proceedings against him or them, or doing anything
to enable such Director or Directors to avoid incurring such
expenditure, where all other Directors are also being
offered indemnities or funding on substantially the same
terms."; and
(f) by deleting the existing Article 137.1 and substituting
therefor the following new Article 137.1:
"137.1 For the purposes of Articles 130 to 137:
(a) a conflict of interest includes a conflict of
interest and duty and a conflict of duties;
(b) an interest means a direct or an indirect interest,
and for these purposes an interest of a person who is
for the purposes of the 2006 Act connected (which
word shall have the meaning given thereto by sections
252-256 of the 2006 Act) with a Director shall be
treated as an interest of the Director;
(c) an interest, transaction, arrangement or proposal of
which a Director is aware includes an interest,
transaction, arrangement or proposal of which that
Director ought reasonably to be aware;
(d) in relation to an alternate Director, an interest of
his appointor shall be treated as an interest of the
alternate Director in addition to any interest which
the alternate Director otherwise has; and
(e) an "associate" of a Director shall mean any person
who is for the purposes of the 2006 Act connected
(which word shall have the meaning given thereto by
sections 252-256 of the 2006 Act) with a Director and
any person who is an associate of a Director within
the meaning of rule 1.01 of the rules governing the
listing of securities on The Hong Kong Stock
Exchange.".
10 THAT the amended rules of the HSBC Share Plan (the main features of
which are summarised in Appendix III to the Chairman's letter to
Shareholders dated 3 April 2008 and a copy of which has been signed
for the purposes of identification by the Chairman of the Meeting) are
hereby approved and that the Directors are hereby authorised to do
whatever may be necessary or expedient to carry the amended HSBC Share
Plan into effect.
By Order of the Board
R G Barber
Group Company Secretary 3 April 2008
HSBC Holdings plc
Incorporated in England with limited liability. Registered in England:
number 617987
Registered Office and Group Head Office:
8 Canada Square, London E14 5HQ, United Kingdom
25
Notes:
(1) Voting at the Meeting may be decided on a show of hands, unless a poll
is directed by the Chairman of the Meeting or a poll is demanded by:
(a) at least five members present in person or by proxy and entitled
to vote at the Meeting; or
(b) a member or members present in person or by proxy representing
not less than one-tenth of the total voting rights of all
the members having the right to vote at the Meeting (excluding any
voting rights attached to any shares in the Company held as
treasury shares); or
(c) a member or members present in person or by proxy holding shares
conferring a right to vote at the Meeting, being shares on which
an aggregate sum has been paid up equal to not less than
one-tenth of the total sum paid up on all the shares conferring
that right (excluding shares in the Company conferring a right to
vote at the Meeting which are held as treasury shares).
It is again intended that a poll will be conducted on each resolution
referred to in this Notice of Annual General Meeting.
The issued share capital of the Company with voting rights on 27 March
2008, being the latest practicable date prior to the printing of this
document, was 11,867,422,018 ordinary shares of US$0.50.
(2) A member entitled to attend, speak and vote at the Meeting is entitled
to appoint another person as his or her proxy to exercise all or any
of his or her rights to attend, speak and vote instead of the member.
A member may appoint more than one proxy in relation to the Meeting,
provided that each proxy is appointed to exercise the rights attached
to a different share or shares held by the member. A proxy need not be
a member. Completion and submission of an instrument appointing a
proxy will not preclude a member from attending and voting in person
at the Meeting. If a member wishes to appoint more than one proxy and
so requires additional proxy forms, the original proxy form may be
photocopied or additional forms can be obtained from Computershare
Investor Services PLC, PO Box 1064, The Pavilions, Bridgwater Road,
Bristol, BS99 3FA, United Kingdom; Computershare Hong Kong Investor
Services Limited, Hopewell Centre, Rooms 1806-1807, 18th Floor, 183
Queen's Road East, Hong Kong SAR; or Corporate Shareholder Services,
The Bank of Bermuda Limited, 6 Front Street, Hamilton HM 11, Bermuda.
The right to appoint a proxy does not apply to persons whose shares
are held on their behalf by another person and who have been nominated
to receive communications from HSBC in accordance with section 146 of
the UK Companies Act 2006 ("nominated persons"). Nominated persons may
have a right under an agreement with the registered shareholder who
holds the shares on their behalf to be appointed (or to have someone
else appointed) as a proxy for the Meeting. Alternatively, if
nominated persons do not have such a right, or do not wish to exercise
it, they may have a right under such an agreement to give instructions
to the person holding the shares as to the exercise of voting rights
at the Meeting.
The main point of contact for nominated persons remains the registered
shareholder (for example your stockbroker, investment manager,
custodian or other person who manages the investment on your behalf).
Any changes or queries relating to nominated persons' personal details
and holdings (including any administration thereof) must continue to
be directed to the registered shareholder and not HSBC's Registrars.
The only exception is where HSBC, in exercising one of its powers
under the UK Companies Act 2006, writes to nominated persons directly
for a response.
(3) In order to be valid, the instrument appointing a proxy and the power
of attorney or other authority (if any) under which it is signed, or a
copy of such authority certified notarially or in some other way
approved by the Board, must be deposited not less than 48 hours before
the time of the holding of the Meeting (or any adjourned meeting) at:
the offices of Computershare Investor Services PLC, PO Box 1064, The
Pavilions, Bridgwater Road, Bristol, BS99 3FA, United Kingdom; the
offices of Computershare Hong Kong Investor Services Limited, Hopewell
Centre, Rooms 1806-1807, 18th Floor, 183 Queen's Road East, Hong Kong
SAR; or the offices of Corporate Shareholder Services, The Bank of
Bermuda Limited, 6 Front Street, Hamilton HM 11, Bermuda. In the case
of an appointment of a proxy submitted in electronic form, such
appointment must be received not less than 48 hours before the time of
the holding of the Meeting (or any adjourned meeting). It should be
noted,
26
however, that any power of attorney or other authority relating to an
appointment of a proxy cannot be submitted electronically and must be
deposited as referred to above for the appointment to be valid.
(4) Pursuant to the Uncertificated Securities Regulations 2001, changes to
entries on the principal register of members of the Company maintained
in England (the "Principal Register") after 12.01 a.m. (London time)
on the day immediately before the day of the Meeting or any adjourned
meeting (as the case may be) shall be disregarded in determining the
rights of a member to attend or vote at the Meeting or any adjourned
meeting (as the case may be). Accordingly, a member entered on the
Principal Register at 12.01 a.m. on the day immediately before the day
of the Meeting or any adjourned meeting (as the case may be) shall be
entitled to attend and vote at the Meeting or any adjourned meeting
(as the case may be) in respect of the number of such shares entered
against the member's name at that time.
(5) CREST members who wish to appoint a proxy or proxies by using the
CREST electronic proxy appointment service may do so for the Meeting
or any adjourned meeting by following the procedures described in the
CREST manual. CREST personal members or other CREST sponsored members,
and those CREST members who have appointed a voting service provider,
should refer to their CREST sponsor or voting service provider, who
will be able to take the appropriate action on their behalf.
In order for a proxy appointment made by means of CREST to be valid,
the appropriate CREST message (a "CREST Proxy Instruction") must be
properly authenticated in accordance with Euroclear UK & Ireland
Limited's specifications and must contain the information required for
such instructions, as described in the CREST manual. The message must
be transmitted so as to be received by the issuer's agent (ID 3RA50)
by the latest time for receipt of proxy appointments specified in Note
(3) above. For this purpose, the time of receipt will be taken to be
the time (as determined by the timestamp applied to the message by the
CREST Applications Host) from which the issuer's agent is able to
retrieve the message by enquiry to CREST in the manner prescribed by
CREST.
CREST members and, where applicable, their CREST sponsor or voting
service providers should note that Euroclear UK & Ireland Limited does
not make available special procedures in CREST for any particular
messages. Normal system timings and limitations will therefore apply
in relation to the input of CREST Proxy Instructions. It is the
responsibility of the CREST member concerned to take (or, if the CREST
member is a CREST personal member or sponsored member or has appointed
a voting service provider, to procure that his CREST sponsor or voting
service provider takes) such action as shall be necessary to ensure
that a message is transmitted by means of the CREST system by any
particular time. In this connection, CREST members and, where
applicable, their CREST sponsors or voting service providers are
referred, in particular, to those sections of the CREST manual
concerning practical limitations of the CREST system and timings.
Pursuant to Regulation 35(5)(a) of the Uncertificated Securities
Regulations 2001 the Company may treat as invalid a CREST Proxy
Instruction if the Company has actual notice that:
- the information in the instruction is incorrect;
- the person expressed to have sent the instruction did not in fact
send it; or
- the person sending the instruction on behalf of the relevant
shareholder did not have the authority to do so.
(6) In the case of joint registered holders of any share, the vote of the
senior who tenders a vote, whether in person or by proxy, shall be
accepted to the exclusion of the votes of the other joint holders. For
this purpose seniority shall be determined by the order in which the
names of the holders stand in the Principal Register or either the
Hong Kong or Bermuda Overseas Branch Registers of the Company, as
appropriate.
(7) In order to facilitate voting by corporate representatives at the
Meeting, arrangements will be put in place at the Meeting so that (i)
if a corporate shareholder has appointed the Chairman of the Meeting
as its corporate representative with instructions to vote on a poll in
accordance with the directions of all of the other corporate
representatives for that shareholder at the Meeting, then on a poll
those corporate representatives will give voting directions to the
Chairman and the Chairman will vote (or withhold a vote) as corporate
representative in accordance with those directions; and (ii) if more
than one corporate representative for the
27
same corporate shareholder attends the Meeting but the corporate
shareholder has not appointed the Chairman of the Meeting as its
corporate representative, a designated corporate representative will
be nominated, from those corporate representatives who attend
(normally being the first to register at the Meeting unless otherwise
decided at the Meeting) who will vote on a poll and the other
corporate representatives will give voting directions to that
designated corporate representative. Corporate shareholders are
referred to the guidance issued by the Institute of Chartered
Secretaries and Administrators on proxies and corporate
representatives - www.icsa.org.uk - for further details of this
procedure. The guidance includes a sample form of representation
letter if the Chairman is being appointed as described in (i) above.
(8) The Directors are Lord Butler* (who will retire as a Director on 30
May 2008), S A Catz (who will be appointed a Director on 1 May 2008),
V H C Cheng, J D Coombe+, Baroness Dunn* (who will retire as a
Director on 30 May 2008), J L Dura n+, R A Fairhead+, D J Flint, A A
Flockhart (who will be appointed a Director on 1 May 2008), W K L
Fung*, M F Geoghegan, S K Green, S T Gulliver (who will be appointed a
Director on 1 May 2008), J W J Hughes-Hallett+, W S H Laidlaw+, Sir
Brian Moffat* (who will retire as a Director on 30 May 2008), Sir Mark
Moody-Stuart+, G Morgan+, N R N Murthy (who will be appointed a
Director on 1 May 2008), S W Newton+, S M Robertson+, and Sir Brian
Williamson+. The Group Chairman has confirmed that, following
performance evaluation, the non-executive Directors standing for
re-election continue to perform effectively and demonstrate commitment
to their roles. The particulars required to be disclosed, pursuant to
Rule 13.51(2) of the Rules Governing the Listing of Securities on the
Stock Exchange of Hong Kong Limited, of the Directors standing for
re-election are:
+ Safra Ada Catz, BS, JD
Age 46. A non-executive Director of HSBC Holdings plc with effect from
1 May 2008. President and Chief Financial Officer of Oracle
Corporation. Managing Director of Donaldson, Lufkin & Jenrette from
1997 to 1999. Joined Oracle in 1999 and was appointed to the Board of
Directors in 2001.
S A Catz brings to the board as a non-executive director a background
in international business leadership, having helped transform Oracle
into the second biggest producer of management software and the
world's leading supplier of software for information management. It is
the belief of the Board that S A Catz is fully able to discharge her
duties as an independent non-executive Director.
Vincent Cheng Hoi Chuen, MPhil, BSocSc
Age 59. An executive Director of HSBC Holdings plc since 1 February
2008. Chairman of The Hongkong and Shanghai Banking Corporation
Limited. Chairman of HSBC Bank (China) Company Limited and HSBC
Investments (Hong Kong) Limited and a Director of HSBC Bank Australia
Limited. Joined HSBC in 1978. Appointed a Group General Manager in
1995 and a Group Managing Director in 2005. A Director of Great Eagle
Holdings Limited and a Member of the Exchange Fund Advisory Committee
of the Hong Kong Monetary Authority. Vice Chairman of the China
Banking Association from 10 December 2007. Appointed a member of the
National Committee of the 11th Chinese People's Political Consultative
Conference (CPPCC), and a senior adviser to the 11th Beijing Municipal
Committee of the CPPCC. Deputy Chairman and Chief Executive Officer of
Hang Seng Bank Limited from 1998 to 2005. A Director of Swire Pacific
Limited from 2005 to January 2008.
V H C Cheng brings to the board, as an executive director, extensive
experience in Asia. He is Chairman of HSBC's Asia operations and has
30 years' business experience, particularly in mainland China and Hong
Kong. He is also an expert public policy adviser and economist.
+ John David Coombe, FCA, FCT
Age 62. A non-executive Director of HSBC Holdings plc since 2005. A
member of the Group Audit Committee and of the Remuneration Committee.
Chairman of Hogg Robinson plc. A non-executive Director of Home Retail
Group plc and a trustee of the Royal Academy Trust. Former executive
Director and Chief Financial Officer of GlaxoSmithKline plc and a
former member of the Supervisory Board of Siemens AG. A former
Chairman of The Hundred Group of Finance Directors and a former member
of the Accounting Standards Board.
28
+ Jose Luis Duran
Age 43. A non-executive Director of HSBC Holdings plc since 1 January
2008. Chief Executive of Carrefour SA and Chairman of its Management
Board of Directors. Joined Carrefour SA in 1991. Chief Financial
Officer and Managing Director, Organisation and Systems of Carrefour
SA from 2001 to 2005.
J L Duran brings to the board as a non-executive director a background
in both developed and emerging markets. He has held a number of
positions within Carrefour's businesses in Spain, southern Europe and
the Americas, and was appointed Chief Financial Officer and Managing
Director, Organisation and Systems in 2001. In 2005 he became Chief
Executive and was appointed Chairman of the Management Board. It is
the belief of the Board that J L Duran is fully able to discharge his
duties as an independent non-executive Director.
Douglas Jardine Flint, CBE, BAcc (Hons), CA, FCMA, PMD (Harvard),
Group Finance Director Age 52. Joined HSBC Holdings plc as an
executive Director in 1995. Non-executive Chairman of HSBC Finance
Corporation. A non-executive Director of BP p.l.c. and a member of the
Consultative Committee of the Large Business Advisory Board of HM
Revenue & Customs. Chaired the Financial Reporting Council's review of
the Turnbull Guidance on Internal Control. Served on the Accounting
Standards Board and the Standards Advisory Council of the
International Accounting Standards Board from 2001 to 2004. A former
partner in KPMG.
Alexander Andrew Flockhart, CBE
Age 56. An executive Director of HSBC Holdings plc with effect from 1
May 2008. Chief Executive Officer of The Hongkong and Shanghai Banking
Corporation Limited and Global Head of Commercial Banking. Joined HSBC
in 1974. A Director of Hang Seng Bank Limited, HSBC Bank Australia
Limited, HSBC Bank (China) Company Limited, and Chairman of HSBC Bank
Malaysia Berhad. Managing Director of The Saudi British Bank from 1997
to 1999 and Senior Executive Vice-President, Commercial Banking, HSBC
Bank USA, N.A. from 1999 to 2002. Chief Executive Officer, Mexico from
2002 to October 2006. President and Group Managing Director Latin
America and the Caribbean from October 2006 to 20 July 2007. Appointed
a Group General Manager in 2002 and a Group Managing Director in 2006.
A A Flockhart brings to the board as an executive Director an
international background with over 30 years' experience at HSBC. He
has oversight of HSBC's Asia operations in 19 countries and
territories and is also Global Head of Commercial Banking.
A A Flockhart is often referred to in communications by the Company as
Sandy Flockhart.
* Dr William Kwok Lun Fung, OBE, BSE, MBA
Age 59. A non-executive Director of HSBC Holdings plc since 1998. A
member of the Corporate Sustainability Committee. Deputy Chairman of
The Hongkong and Shanghai Banking Corporation Limited. Group Managing
Director of Li & Fung Limited. A non-executive Director of CLP
Holdings Limited, Integrated Distribution Services Group Limited,
Convenience Retail Asia Limited, Shui On Land Limited and VTech
Holdings Limited. A member of the Hong Kong Trade Development Council.
A former non-executive Director of Bank of Communications Co. Ltd.
Former Chairman of the Hong Kong General Chamber of Commerce, the Hong
Kong Exporters' Association and the Hong Kong Committee for the
Pacific Economic Co-operation Council.
Stuart Thomson Gulliver, M.A. Oxon
Age 49. An executive Director of HSBC Holdings plc with effect from 1
May 2008. Chief Executive of Global Banking and Markets and HSBC
Global Asset Management. Joined HSBC in 1980. A Director of HSBC Bank
plc, HSBC Private Banking Holdings (Suisse) SA, HSBC USA Inc. and The
Hongkong and Shanghai Banking Corporation Limited. A member of the
Supervisory Board of HSBC Trinkaus & Burkhardt AG. Head of Treasury
and Capital Markets in Asia-Pacific from 1996 to 2002. Head of Global
Markets from 2002 to 2003 and Co-Head of Global Banking and Markets
from 2003 to May 2006. Appointed a Group General Manager in 2000 and a
Group Managing Director in 2004.
29
S T Gulliver brings to the board as an executive director an
international background with over 28 years' experience at HSBC,
particularly in Asia. Global Banking and Markets, is the wholesale
banking division of the Group with operations in more than 60
countries and territories.
+ James Wyndham John Hughes-Hallett, FCA
Age 58. A non-executive Director of HSBC Holdings plc since 2005. A
member of the Group Audit Committee and of the Nomination Committee.
Chairman of John Swire & Sons Limited. A non-executive Director of The
Hongkong and Shanghai Banking Corporation Limited from 1999 to 2004. A
non-executive Director and formerly Chairman of Cathay Pacific Airways
Limited and Swire Pacific Limited. A Director of China Festival 2008.
A trustee of the Dulwich Picture Gallery and the Esmee Fairbairn
Foundation. A member of The Hong Kong Association and of the Governing
Body of the School of Oriental and African Studies, University of
London.
+ William Samuel Hugh Laidlaw, MA, MBA
Age 51. A non-executive Director of HSBC Holdings plc since 1 January
2008. Chief Executive Officer of Centrica plc. A Trustee of RAFT, a
medical charity for burns and reconstructive surgery. A member of the
Business Council for International Understanding. President and Chief
Operating Officer of Amerada Hess Corporation from 1995 to 2001. Chief
Executive Officer of Enterprise Oil plc from 2001 to 2002. Executive
Vice President of Chevron Corporation from 2003 to 2006, and a
non-executive Director of Hanson PLC from 2003 to August 2007.
W S H Laidlaw brings to the board as a non-executive director
significant international experience, having had responsibility for
businesses on four continents. It is the belief of the Board that W S
H Laidlaw is fully able to discharge his duties as an independent
non-executive Director.
+ Narayana Ramarao Nagavara Murthy, CBE
Age 61. A non-executive Director of HSBC Holdings plc with effect from
1 May 2008. Chairman and Chief Mentor of Infosys Technologies Limited,
and former Chief Executive Officer. An independent non-executive
Director of Unilever plc and New Delhi Television Limited and a
Director of the United Nations Foundation. An independent
non-executive Director of DBS Bank Limited until 2 April 2008.
N R N Murthy brings to the board a background in India. He founded
Infosys Technologies Limited in India in 1981 and was CEO for 21
years. Under his leadership, Infosys was listed on NASDAQ in 1999 and
today has offices in 23 countries and territories, employing over
80,000 staff covering 66 nationalities. It is the belief of the Board
that N R N Murthy is fully able to discharge his duties as an
independent non-executive Director.
+ Stewart Worth Newton, FCA
Age 66. A non-executive Director of HSBC Holdings plc since 2002. A
member of the Group Audit Committee. Chairman of The Real Return Group
Limited. A Member of the Investment Committee of The Wellcome Trust,
and the Investment Board of Cambridge University. A Council Member of
Imperial College, London and Chairman of the committee advising the
Council on the College Fund. An adviser to the Investment Committee of
the Royal Marsden NHS Foundation Trust.
* Non-executive Director
+ Independent non-executive Director
None of the Directors standing for re-election has any material
relationship with another Director, member of Senior Management or
substantial or controlling shareholder.
V H C Cheng, A A Flockhart and S T Gulliver are members of the Group
Management Board of HSBC Holdings plc. The Group Management Board is
chaired by M F Geoghegan, the Group Chief Executive of HSBC Holdings
plc and D J Flint, the Group Finance Director of HSBC Holdings plc, is
a member. Baroness Dunn, W K L Fung, M F Geoghegan, S K Green and J W
J Hughes-Hallett are Directors of HSBC Holdings plc who are, or
previously served
30
as, Directors of The Hongkong and Shanghai Banking Corporation
Limited, of which Mr Cheng, Mr Flockhart and Mr Gulliver are also
Directors. Baroness Dunn and J W J Hughes-Hallett are Directors of
Swire Pacific Limited, of which Mr Cheng was also a Director from 2005
to 31 January 2008.
Mr Flockhart serves on the boards of Hang Seng Bank Limited and HSBC
Bank (China) Company Limited with other Directors and members of the
senior management of HSBC Holdings plc.
Mr Gulliver serves on the boards of HSBC Bank plc, HSBC Bank USA,
National Association, HSBC National Bank USA, HSBC Private Banking
Holdings (Suisse) SA, HSBC USA Inc. and HSBC Trinkaus & Burkhardt AG
with other Directors and members of the senior management of HSBC
Holdings plc.
J D Coombe, an independent non-executive Director of HSBC Holdings
plc, served with D J Flint, the Group Finance Director of HSBC
Holdings plc, on the Accounting Standards Board and on the Financial
Reporting Council's review of the Turnbull guidance on internal
control. HSBC provides banking services to his former employer,
GlaxoSmithKline plc, from which he retired as a director in March
2005. Mr Coombe is a Director of Home Retail Group plc and, until
January 2008, was a Director of Siemens AG both of which have banking
relationships with HSBC. He is Chairman of Hogg Robinson plc who
provides travel services to, and has banking relationships with, HSBC.
J W J Hughes-Hallett, an independent non-executive Director of HSBC
Holdings plc, is Chairman of John Swire & Sons Limited and a Director
of Swire Pacific Ltd. Baroness Dunn, a non-executive Director of HSBC
Holdings plc, serves as a Director of both companies. They both serve
as Trustees of The Swire Educational Trust. V H C Cheng, an executive
Director of HSBC Holdings plc, was a Director of Swire Pacific Limited
until January 2008. Mr Hughes-Hallett is a Director of The Hong Kong
Association with S K Green, the Group Chairman of HSBC Holdings plc,
and Baroness Dunn. He is also a Director of China Festival 2008 with S
K Green. A non-wholly owned subsidiary of John Swire & Sons Limited,
Hong Kong Aircraft Engineering Company Limited (HAECO), owns 45 per
cent of Hong Kong Aero Engine Services Limited (HAESL). Another 45 per
cent of HAESL is owned by Rolls Royce Group plc, of which S M
Robertson, an independent non-executive Director of HSBC Holdings plc,
is non-executive Chairman. HAECO also provides management services to
HAESL.
W S H Laidlaw, an independent non-executive Director of HSBC Holdings
plc, was Chief Executive Officer of Enterprise Oil plc from 2001 to
2002. During this time, Sir Brian Moffat, a non-executive Director of
HSBC Holdings plc, also served as a non-executive Director of
Enterprise Oil plc.
According to the register of Directors' interests maintained by HSBC
Holdings plc pursuant to section 352 of the Securities and Futures
Ordinance of Hong Kong, the Directors standing for re-election had the
following interests in the shares and loan capital of HSBC at 3 March
2008 (the date of the Report of the Directors), all beneficial unless
otherwise stated. J L Duran, had no interests in the shares and loan
capital of HSBC at 3 March 2008. Changes in Directors' interests since
approval of the Report of the Directors on 3 March 2008 are shown in
note (14) below.
HSBC Holdings ordinary shares
of US$0.50 Percentage of
Beneficial Controlled Equity Total ordinary
owner Trustee corporationderivatives interests shares in issue
V H C Cheng 241,469 - - 3,070(1) 244,539 0.00
J D Coombe 12,655 33,799(2) - - 46,454 0.00
D J Flint 84,349 29,610(3) - 2,310(1) 116,269 0.00
W K L Fung 328,000 - - - 328,000 0.00
J W J Hughes-Hallett - 554,435(2) - - 554,435 0.00
W S H Laidlaw 20,000 4,500(2) - - 24,500 0.00
S W Newton 5,963 - 51,464 - 57,427 0.00
1 Savings-related share options
--------------------------------------------------------------------------------
2 Non-beneficial
3 Non-beneficial interest in 9,870 HSBC Holdings ordinary shares
of US$0.50.
31
At 3 March 2008, V H C Cheng and D J Flint had additional interests,
which are categorised as the interests of a beneficiary of a trust
under the Securities and Futures Ordinance of Hong Kong, in 408,022
and 770,018 HSBC Holdings ordinary shares of US$0.50 respectively
arising from conditional awards of Performance Shares under the HSBC
Holdings Restricted Share Plan 2000 and the HSBC Share Plan, subject
to the vesting arrangements summarised on pages 36 to 37 of the Annual
Review and set out on pages 325 to 327 and pages 331 to 332 of the
Annual Report and Accounts. The aggregate interests of V H C Cheng and
D J Flint in HSBC Holdings ordinary shares of US$0.50 including
interests arising through conditional awards of Performance Shares and
awards of Restricted Shares were 652,561 and 886,287 shares
respectively (less than 0.01 per cent of the shares in issue).
At 3 March 2008, when their appointments as Directors with effect from
1 May 2008 were announced, A A Flockhart and S T Gulliver had
beneficial interests in 131,571 and 2,022,961 HSBC Holdings ordinary
shares of US$0.50 respectively. At 3 March 2008, A A Flockhart and S T
Gulliver had additional interests, which are categorised as the
interests of a beneficiary of a trust under the Securities and Futures
Ordinance of Hong Kong, in 274,502 and 424,601 HSBC Holdings ordinary
shares of US$0.50 respectively arising from conditional awards of
Performance Shares under the HSBC Holdings Restricted Share Plan 2000
and the HSBC Share Plan, subject to the vesting arrangements
summarised on pages 36 to 37 of the Annual Review and set out on pages
325 to 327 and pages 331 to 332 of the Annual Report and Accounts, and
in 51,167 and 743,796 HSBC Holdings ordinary shares of US$0.50
respectively arising from awards of Restricted Shares under the HSBC
Share Plan. Mr Flockhart also had interests in options over 1,332 HSBC
Holdings ordinary shares of US$0.50 granted under the HSBC Holdings
Savings-Related Share Option Plan: International and options over
22,500 HSBC Holdings ordinary shares of US$0.50 granted under the HSBC
Holdings Executive Share Option Scheme. The aggregate interests of A A
Flockhart and S T Gulliver in HSBC Holdings ordinary shares of US$0.50
including interest arising through conditional awards of Performance
Shares and awards of Restricted Shares were 481,072 and 3,191,358
shares (less than 0.01 and 0.03 per cent of the shares in issue)
respectively.
S A Catz and N R N Murthy had no interests in the shares and loan
capital of HSBC at 3 March 2008, the date on which their appointments
as Directors with effect from 1 May 2008 were announced.
S A Catz, J D Coombe, J L Duran, W K L Fung, J W J Hughes-Hallett, W S
H Laidlaw, N R N Murthy and S W Newton, non-executive Directors who
are standing for re-election, each receive a Director's fee of
GBP65,000 per annum. Non-executive Directors' fees, which are
regularly reviewed and compared with other large international
companies, were authorised by Shareholders at the 2006 Annual General
Meeting, following a comprehensive review of fees paid in other major
UK companies. In addition, J D Coombe receives fees totalling
GBP40,000 per annum as a member of the Group Audit Committee and the
Remuneration Committee. W K L Fung receives fees totalling GBP20,000
per annum as a member of the Corporate Sustainability Committee. Mr
Fung also receives a fee of HK$450,000 (GBP28,816) per annum as a
director of The Hongkong and Shanghai Banking Corporation Limited. J W
J Hughes-Hallett receives fees totalling GBP40,000 per annum as a
member of the Group Audit Committee and the Nomination Committee. S W
Newton receives a fee of GBP20,000 per annum as a member of the Group
Audit Committee. Committee fees are determined by the Board. Those
Directors to whom fees are payable do not participate in that
determination.
Non-executive Directors do not have service contracts with HSBC
Holdings plc. Subject to their re-election by shareholders, the terms
of appointment for the non-executive Directors standing for
re-election will expire: in 2009 in respect of W K L Fung and S W
Newton; and in 2011 in respect of S A Catz, J D Coombe, J L Duran, J W
J Hughes-Hallett, W S H Laidlaw and N R N Murthy. The terms of
appointment for the non-executive Directors are available for
inspection at the registered office of the Company in London and at 1
Queen's Road Central, Hong Kong SAR during usual business hours and
will be available for inspection at the place and on the date of the
Meeting from at least 15 minutes before the Meeting begins until the
conclusion of the Meeting.
V H C Cheng and A A Flockhart are employed on rolling contracts dated
1 October 1978 and 6 July 1974 respectively, which require three
months' notice to be given by either party.D J Flint is employed on a
rolling contract dated 29 September 1995 which requires 12 months'
notice to be given by the Company and nine months' notice to be given
by Mr Flint.
32
S T Gulliver is employed on a rolling contract dated 8 December 2005
which requires twelve months' notice to be given by either party.
Under each of their terms of employment, V H C Cheng, D J Flint, A A
Flockhart and S T Gulliver receive a basic salary and are eligible for
a discretionary annual bonus and long term incentive award. The basic
salaries of V H C Cheng, D J Flint, A A Flockhart and S T Gulliver are
HK$7,500,000, GBP700,000, HK$4,494,384 and GBP600,000 per annum
respectively. The performance factors to determine the discretionary
annual bonuses are explained on page 35 of the Annual Review and on
pages 323 to 324 of the Annual Report and Accounts. From 2008,
remuneration policy for executive Directors is intended to provide
competitive rates of base salary targeted at the market median of the
remuneration comparator group whilst providing an opportunity for top
quartile total compensation for higher levels of performance with a
greater proportion of total compensation being share-based. Copies of
the service contracts of the executive Directors will be available for
inspection at the registered office of the Company in London and at 1
Queen's Road Central, Hong Kong during usual business hours on any
business day from the date of this Notice until the date of Meeting
and at the place and on the date of the Meeting from at least 15
minutes before the Meeting begins until the conclusion of the Meeting.
Save as disclosed above there are no further matters or particulars
required to be disclosed pursuant to Rule 13.51(2) of the Rules
Governing the Listing of Securities on The Stock Exchange of Hong Kong
Limited.
(9) The general purpose of the authorities to be conferred on
the Directors by Resolutions 5 and 6 is to enable the Directors to
allot shares (or sell shares held by the Company in treasury following
an own share purchase) up to a specified number without having first
to obtain the consent of Ordinary Shareholders in general meeting. The
Directors have undertaken that no capital will be issued which would
effectively change the control of the Company or the nature of its
business without the prior approval of Ordinary Shareholders in
general meeting.
(10) The purpose of the authority to be conferred by Resolution 7 is to
enable the Company to make market purchases of its own shares. The
total number of options to subscribe for Ordinary Shares outstanding
on 27 March 2008 (the latest practicable date prior to printing of
this document) was 281,045,726 which represented 2.37 per cent of the
issued ordinary share capital as at that date. If the Company were to
purchase the maximum number of Ordinary Shares permitted by this
Resolution, the options outstanding on 27 March 2008 would represent
2.63 per cent of the issued ordinary share capital.
(11) The purpose of Resolutions 8 and 9 are to make alterations to the
Articles of Association to reflect certain of the provisions of the UK
Companies Act 2006 which have come into force on 1 October 2007 and
which will come into force on 6 April 2008 and 1 October 2008 and
other related matters, further details of which are contained in
Appendix II.
Copies of the Articles of Association of the Company and the Articles
of Association of the Company as proposed to be amended by the
provisions of Resolutions 8 and 9 will be available for inspection at
the registered office of the Company in London and at 1 Queen's Road
Central, Hong Kong SAR during usual business hours from the date of
this Notice until the date of the Meeting and at the place and on the
date of the Meeting from at least 15 minutes before the Meeting begins
until the conclusion of the Meeting.
(12) The purpose of Resolution 10 is to amend the rules of the HSBC Share
Plan. A copy of the rules as proposed to be amended by Resolution 10
and a copy of the current rules will be available for inspection at
the registered office of the Company in London and at 1 Queen's Road
Central, Hong Kong SAR during usual business hours from the date of
this Notice until the date of the Meeting and at the place and on the
date of the Meeting from at least 15 minutes before the Meeting begins
until the conclusion of the Meeting.
(13) For safety reasons, security checks will be carried out on entry to
the Meeting. Shareholders are reminded that briefcases, cameras and
tape-recorders will not be allowed in the Meeting and that all mobile
telephones must be switched off.
(14) The following changes in the interests of Directors and of the
Directors to be appointed with effect from 1 May 2008, all beneficial
unless otherwise stated, in the shares and loan capital of HSBC
Holdings plc and its subsidiaries or associated corporations have been
notified to the Company during the period from approval of the Report
of the Directors and of the announcements of the appointments of S A
Catz, A A Flockhart, S T Gulliver and
33
N R N Murthy as Directors with effect from 1 May 2008 on 3 March 2008
to 27 March 2008 (the latest practicable date prior to the printing of
this document):
(a) A A Flockhart acquired a beneficial interest in 22,500 HSBC
Holdings ordinary shares of US$0.50 by the exercise of an option
and sold 18,515 HSBC Holdings ordinary shares of US$0.50;
(b) The undernamed Directors were awarded Restricted Shares under the
HSBC Share Plan which give rise to additional interests as
beneficiaries of a trust in the number of HSBC Holdings ordinary
shares of US$0.50 shown below:
V H C Cheng 82,295
S T Gulliver 458,708
A A Flockhart 11,929
(c) Upon the release of a Restricted Share award under the HSBC Share
Plan, S T Gulliver's interests categorised as a beneficiary of a
trust under the Securities and Futures Ordinance of Hong Kong
were reduced by 294,528 HSBC Holdings ordinary shares of US$0.50.
120,755 HSBC Holdings ordinary shares of US$0.50 were sold by the
trustees of the Plan to meet the tax liability. S T Gulliver
retained 88,804 HSBC Holdings ordinary shares of US$0.50 and
transferred 84,969 HSBC Holdings ordinary shares of US$0.50 to
his spouse.
(15) The following notifications of major shareholdings have been
received by the Company pursuant to the requirements of UK Financial
Services Authority Disclosure and Transparency Rule 5:
o Singularis Holdings Limited; AWAL Trust Company Limited; and Maan
Abdulwahed Al Sanea gave notice on 16 April 2007 of an indirect
interest on 16 April 2007 in 360,055,575 HSBC Holdings ordinary
shares, representing 3.11 per cent of the ordinary shares in
issue at that date.
o Barclays PLC gave notice on 17 April 2007 of an indirect interest
on 16 April 2007 in 518,233,657 HSBC Holdings ordinary shares,
representing 4.47 per cent of the ordinary shares in issue at
that date.
o Legal and General Group Plc gave notice on 27 March 2008 of a
direct interest on 26 March 2008 in 543,241,591 HSBC Holdings
ordinary shares, representing 4.57 per cent of the ordinary
shares in issue at that date.
(16) In the event of a conflict between any translation and the English
text hereof, the English text will prevail.
34
Annual General Meeting - 30 May 2008
If there is a question or questions you would like to have addressed at the
Annual General Meeting on 30 May 2008, please write your question(s) here and
return this form as indicated below. Alternatively, please send your question by
email to agmquestions@hsbc.com.
Questions.......................................................................
.................................................................................
.................................................................................
.................................................................................
.................................................................................
We will endeavour to address any issues raised when the item of business to
which the question relates is under consideration by the Meeting. Any questions
submitted that are not relevant to the business of the Meeting will be forwarded
for the attention of an appropriate executive. These might include matters
relating to a shareholder's bank account or affairs, which are unlikely to be
relevant to the business of the Meeting. Submitting a question in advance of the
Meeting does not affect your rights as a shareholder to attend and speak at the
Meeting.
Signed:
Name:
Shareholder Reference Number:
Please return this form to the Registrars: Computershare Investor Services PLC,
PO Box 1064, The Pavilions, Bridgwater Road, Bristol BS99 3FA, United Kingdom;
Computershare Hong Kong Investor Services Limited, Hopewell Centre, Rooms
1806-1807, 18th Floor, 183 Queen's Road East, Hong Kong SAR; or Corporate
Shareholder Services, The Bank of Bermuda Limited, 6 Front Street, Hamilton HM
11, Bermuda.
35
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
HSBC Holdings plc
By:
Name: P A Stafford
Title: Assistant Group Secretary
Date: 3 April, 2008