HSBC 2007 Annual Report Download - page 177

175
payment of proceeds from the redemption of each
class of share, to the extent issued, and certain rights
and obligations that attach to each class of
preference share as determined by the Board prior to
allotment of the relevant preference shares. The
Dollar Preference Shares are the only class of the
preference shares which have been issued and
allotted to date.
Holders of the preference shares will only be
entitled to attend and vote at general meetings of
HSBC Holdings if any dividend payable on the
relevant preference shares in respect of such period
as the Board shall determine prior to allotment
thereof (which, in the case of the Dollar Preference
Shares in issue at 3 March 2008, is four consecutive
dividend payment dates) is not paid in full or in such
other circumstances, and upon and subject to such
terms, as the Board may determine prior to allotment
of the relevant preference shares. Whenever holders
of the relevant preference shares are entitled to vote
on a resolution at a general meeting, on a show of
hands every such holder who is present in person or
by proxy shall have one vote and on a poll every
such holder who is present in person or by proxy
shall have one vote per preference share held by him
or her or such number of votes per share as the
Board shall determine prior to allotment of such
share.
Subject to the Articles of Association, holders of
the relevant preference shares shall have the right to
a non-cumulative preferential dividend at such rate,
on such dates and on such other terms and conditions
as may be determined by the Board prior to
allotment thereof in priority to the payment of any
dividend to the holders of ordinary shares and any
other class of shares of HSBC Holdings in issue
(other than (i) the other preference shares in issue
and any other shares expressed to rank pari passu
therewith as regards income; and (ii) any shares
which by their terms rank in priority to the relevant
preference shares as regards income). Dividends on
the Dollar Preference Shares in issue at 3 March
2008 are paid quarterly at the sole and absolute
discretion of the Board of Directors. The Board of
Directors will not declare a dividend on the Dollar
Preference Shares if payment of the dividend would
cause HSBC Holdings not to meet the applicable
capital adequacy requirements of the FSA or the
profit of HSBC Holdings available for distribution as
dividends is not sufficient to enable HSBC Holdings
to pay in full both dividends on the relevant
preference shares and dividends on any other shares
that are scheduled to be paid on the same date and
that have an equal right to dividends. HSBC
Holdings may not declare or pay dividends on any
class of its shares ranking lower in the right to
dividends than the preference shares nor redeem nor
purchase in any manner any of its other shares
ranking equal with or lower than the preference
shares unless it has paid in full, or set aside an
amount to provide for payment in full, the dividends
on the preference shares for the then-current
dividend period.
The preference shares carry no rights to
participate in the profits or assets of HSBC Holdings
other than as set out in the Articles of Association,
subject to the Companies Act 1985, do not confer
any right to participate in any offer or invitation by
way of rights or otherwise to subscribe for additional
shares in HSBC Holdings, do no not confer any right
of conversion and do not confer any right to
participate in any issue or bonus shares or shares
issued by way of capitalisation of reserves.
Subject to the relevant insolvency laws and the
Articles of Association of HSBC Holdings, holders
of the relevant preference shares have the right in a
winding up of HSBC Holdings to receive out of the
assets of HSBC Holdings available for distribution
to its shareholders, in priority to any payment to the
holders of the ordinary shares and any other class of
shares of HSBC Holdings in issue (other than (i) the
other relevant preference shares and any other shares
expressed to rank pari passu therewith as regards
repayment of capital; and (ii) any shares which by
their terms rank in priority to the relevant preference
shares as regards repayment of capital), a sum equal
to any unpaid dividend on the relevant preference
shares which is payable as a dividend in accordance
with or pursuant to the Articles of Association and
the amount paid up or credited as paid up on the
relevant preference shares together with such
premium (if any) as may be determined by the
Board prior to allotment thereof.
HSBC Holdings may redeem the relevant
preference shares in accordance with the Articles of
Association and the terms on which the relevant
preference shares were issued and allotted. In the
case of the Dollar Preference Shares in issue at
3 March 2008, HSBC Holdings may redeem such
shares in whole at any time on or after 16 December
2010, with the consent of the FSA.
Non-voting deferred shares
The non-voting deferred shares are held by a
subsidiary undertaking of HSBC Holdings. Holders
of the non-voting deferred shares are not entitled to
receive dividends on these shares. In addition, on
winding up or other return of capital, holders are
entitled to receive the amount paid up on their shares