HSBC 2009 Annual Report Download - page 332

HSBC HOLDINGS PLC
Report of the Directors: Governance (continued)
Share capital > Rights and obligations / 2009 // Dividends, shareholders and meetings > 2009
330
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 1 March
2010 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
and subject to the Companies Act 2006, 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 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
1 March 2010, HSBC Holdings may redeem such
shares in whole at any time on or after 16 December
2010, subject to prior notification to 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 after distribution to ordinary shareholders
of £10 million in respect of each ordinary share held
by them. The holders of the non-voting deferred
shares are not entitled to receive notice of or to
attend (either personally or by proxy) any general
meeting of HSBC Holdings or to vote (either
personally or by proxy) on any resolution to be
proposed thereat.
Share capital during 2009
The following events occurred during the year in
relation to the ordinary share capital of HSBC
Holdings:
Scrip dividends
1. 38,963,783 ordinary shares were issued at par in
January 2009 to shareholders who elected to
receive new shares in lieu of the third interim
dividend for 2008. The market value per share
used to calculate shareholders’ entitlements to
new shares was US$9.7631, being the US dollar
equivalent of £6.4785.
2. 109,826,747 ordinary shares were issued at par
in May 2009 to shareholders who elected to
receive new shares in lieu of the fourth interim
dividend for 2008. The market value per share
used to calculate shareholders’ entitlements to