HSBC 2010 Annual Report Download - page 217

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Overview Operating & Financial Review Governance Financial Statements Shareholder Information
declare dividends to be paid to the holders of
ordinary shares, though no dividend shall exceed the
amount recommended by the Board. The Board may
pay interim dividends as appears to the Board to be
justified by the profits available for distribution.
All dividends shall be apportioned and paid
proportionately to the percentage of the nominal
amount paid up on the shares during any portion
or portions of the period in respect of which the
dividend is paid, but if any share is issued on terms
providing that it shall rank for dividend as from a
particular date, it shall rank for dividend
accordingly. Subject to the Articles of Association,
the Board may, with the prior authority of an
ordinary resolution passed by the shareholders and
subject to such terms and conditions as the Board
may determine, offer to any holders of ordinary
shares the right to elect to receive ordinary shares of
the same or a different currency, credited as fully
paid, instead of cash in any currency in respect of
the whole (or some part, to be determined by the
Board) of any dividend specified by the ordinary
resolution. At the 2007 Annual General Meeting
shareholders gave authority to the Directors to
determine to offer a scrip dividend alternative until
the conclusion of the Annual General Meeting in
2012.
Preference shares
There are three classes of preference shares in the
share capital of HSBC Holdings, non-cumulative
preference shares of US$0.01 each (the ‘Dollar
Preference Shares’), non-cumulative preference
shares of £0.01 each (the ‘Sterling Preference
Shares’) and non-cumulative preference shares of
€0.01 (the ‘Euro Preference Shares’). The Dollar
Preference Shares in issue are Series A Dollar
Preference Shares and the Sterling Preference Share
in issue is a Series A Sterling Preference Share.
There are no Euro Preference Shares in issue.
Dollar Preference Shares
Holders of the Dollar Preference Shares are only
entitled to attend and vote at general meetings if any
dividend payable on the relevant preference shares in
respect of such period as the Board shall determine
prior to allotment thereof 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. In the case of the
Dollar Preference Shares in issue at 28 February
2011 the relevant period determined by the Board is
four consecutive dividend payment dates. Whenever
holders of the Dollar 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 Dollar Preference Shares 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). A dividend of US$62.00 per
annum is payable on each Dollar Preference Share
in issue at 28 February 2011. The dividend is paid at
the rate of US$15.50 per quarter at the sole and
absolute discretion of the Board.
A dividend will not be declared or paid 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.
Dividends will not be declared or paid on any class
of shares of HSBC Holdings ranking lower in the
right to dividends than the Dollar Preference Shares
nor redeem nor purchase in any manner any of its
other shares ranking equal with or lower than the
Dollar Preference Shares unless it has paid in full, or
set aside an amount to provide for payment in full,
the dividends on the Dollar Preference Shares for
the then-current dividend period.
The Dollar 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 of bonus shares or
shares issued by way of capitalisation of reserves.