THIS CIRCULAR IS IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION
If you are in any doubt as to any aspect of this circular or as to the action you should take, you should consult your stockbroker or other registered dealer in securities, bank manager, solicitor, professional accountant or other professional adviser.
If you have sold or transferred all your shares in Hang Seng Bank Limited, you should at once hand this circular to the purchaser or to the bank, stockbroker or other agent through whom the sale was effected for transmission to the purchaser or transferee.
Hong Kong Exchanges and Clearing Limited and The Stock Exchange of Hong Kong Limited take no responsibility for the contents of this circular, make no representation as to its accuracy or completeness and expressly disclaim any liability whatsoever for any loss howsoever arising from or in reliance upon the whole or any part of the contents of this circular.
PROPOSALS RELATING TO GENERAL MANDATES TO ISSUE SHARES AND TO REPURCHASE SHARES, RE-ELECTION AND ELECTION OF DIRECTORS, AND NOTICE OF 2010 AGM
Hang Seng Bank Limited (Incorporated in Hong Kong with limited liability) (Stock Code: 11)
The notice convening the 2010 AGM of the Bank to be held at Hang Seng Bank Headquarters, 83 Des Voeux Road Central, Hong Kong on Friday, 14 May 2010 at 3:30 pm, at which, among others, the proposals relating to general mandates to issue Shares and repurchase Shares of the Bank will be considered, is set out on pages 12 to 14 of this circular.
The action to be taken by Shareholders is set out on page 4 of this circular. Whether or not you propose to attend the 2010 AGM, you are requested to complete and return the Form of Proxy to the Bank’s Registrars, Computershare Hong Kong Investor Services Limited, 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as instructed as soon as possible and in any event not later than 3:30 pm on 12 May 2010 or not less than 48 hours before the time appointed for holding any adjourned meeting (as the case may be). Submission of a Form of Proxy will not preclude a Shareholder from attending and voting in person at the 2010 AGM.
29 March 2010 DEFINITIONS
In this circular, unless the context otherwise requires, the following expressions have the following meanings:
“2010 AGM” or “the Meeting” the annual general meeting of the Bank convened to be held on Friday, 14 May 2010 at 3:30 pm at Hang Seng Bank Headquarters, 83 Des Voeux Road Central, Hong Kong or any adjournment thereof
The “Company” or “Bank” Hang Seng Bank Limited, a company incorporated in Hong Kong with limited liability, the shares of which are listed on the Stock Exchange (Stock Code: 11)
“Board” or “Directors” the Board of Directors of the Bank
“Committees” the Board committees established by the Board from time to time
“Companies Ordinance” the Companies Ordinance, Chapter 32 of the Laws of Hong Kong
“Hong Kong” the Hong Kong Special Administrative Region of the People’s Republic of China
“HSBC” The Hongkong and Shanghai Banking Corporation Limited, a wholly owned subsidiary of HSBC Holdings plc (which is incorporated in England with limited liability and the holding company of HSBC Group and the shares of which are listed on the Stock Exchange (Stock Code: 5))
“INED” Independent Non-executive Director of the Bank
“Latest Practicable Date” 22 March 2010, being the latest practicable date prior to the printing of this circular for ascertaining certain information contained herein
“Listing Rules” the Rules Governing the Listing of Securities on the Stock Exchange
“NED” Non-executive Director of the Bank
“Repurchase Mandate” a general mandate to repurchase Shares on the Stock Exchange representing up to 10% of the aggregate nominal amount of the issued share capital of the Bank as at the date of passing the resolution
“SFO” the Securities and Futures Ordinance, Chapter 571 of the Laws of Hong Kong
“Share(s)” fully paid Ordinary Share(s) at a nominal value of HK$5.00 each in the share capital of the Bank
“Shareholder(s)” holder(s) of the Shares
“Stock Exchange” The Stock Exchange of Hong Kong Limited
“Takeovers Code” The Hong Kong Codes on Takeovers and Mergers
— 1 — HANG SENG BANK LIMITED (Incorporated in Hong Kong with limited liability)
Directors: Registered Office: Dr Raymond K F Ch’ien GBS, CBE, JP, Chairman* 83 Des Voeux Road Central Mrs Margaret Leung JP, Vice-Chairman and Chief Executive Hong Kong Dr John C C Chan GBS, JP* Dr Marvin K T Cheung DBA(Hon), GBS, SBS, OBE, JP* Mr Alexander A Flockhart CBE# Mr Jenkin Hui* Mr William W Leung BBS, JP Dr Eric K C Li FCPA(Practising), GBS, OBE, JP* Dr Vincent H S Lo GBS, JP# Mr Iain J Mackay# Mrs Dorothy K Y P Sit# Mr Richard Y S Tang MBA, BBS, JP* Mr Peter T S Wong JP#
* Independent Non-executive Directors # Non-executive Directors
29 March 2010
To the Shareholders
Dear Sir or Madam
PROPOSALS RELATING TO GENERAL MANDATES TO ISSUE SHARES AND TO REPURCHASE SHARES, RE-ELECTION AND ELECTION OF DIRECTORS, AND NOTICE OF 2010 AGM
INTRODUCTION
The purpose of this circular is to seek your approval of the proposals to (i) grant general mandates to issue Shares and to repurchase Shares to the Board; and (ii) re-elect or elect (as the case may be) the retiring Directors, and to provide you with information in connection with such proposals. Shareholders’ approval on such proposals will be sought at the 2010 AGM.
GENERAL MANDATES TO ISSUE SHARES AND TO REPURCHASE SHARES
Similar to the AGM of the Bank held on 6 May 2009, ordinary resolutions will be proposed at the 2010 AGM to grant general mandates to the Board (i) to repurchase Shares on the Stock Exchange of up to 10% of the aggregate nominal amount of the issued share capital of the Bank as at the date of passing the resolution, and (ii) to allot, issue and otherwise deal with additional Shares up to a limit equal to, where the additional Shares are to be allotted wholly for cash, 5% and, in any other case, 20% of the aggregate nominal amount of the issued share capital of the Bank as at the date of passing the resolution. The purpose of the general mandate to issue Shares is to enable the Board to issue additional Shares should the need arise (for example, in
— 2 — the context of a transaction which has to be completed speedily). The Board considers it a good corporate governance practice for the Bank to impose a limit of 5% where additional Shares are allotted wholly for cash. The 20% limit to the general mandate to issue additional Shares is imposed pursuant to the Listing Rules. No Shares have been repurchased and no Shares have been allotted, issued or otherwise dealt with pursuant to the general mandates granted by the Shareholders at the last AGM. The Board has no present intention to exercise the general mandates to issue additional Shares or to repurchase Shares.
As at the Latest Practicable Date, the issued share capital of the Bank comprised 1,911,842,736 Shares. On the basis that no further Shares are issued and/or repurchased by the Bank between 22 March 2010 and the date of the 2010 AGM, the Bank would be allowed under the general mandate to issue Shares to allot and issue up to 382,368,547 Shares representing 20% of the aggregate nominal amount of the issued share capital of the Bank as at the date of the 2010 AGM.
Under the terms of the Companies Ordinance and the Listing Rules, the general mandates granted to the Board at 2009 AGM will lapse upon the conclusion of the forthcoming 2010 AGM, unless renewed at the Meeting. The Board takes the view that it would be in the interests of the Bank and the Shareholders if the general mandates were renewed. In this connection, resolutions will be proposed to renew these mandates and the explanatory statement giving certain information regarding the repurchase resolution as required under the Listing Rules is set out in Appendix I to this circular.
RE-ELECTION AND ELECTION OF DIRECTORS
At the 2010 AGM, Dr John C C Chan, Dr Eric K C Li and Dr Vincent H S Lo will retire as Directors by rotation and, being eligible, offer themselves for re-election by the Shareholders in accordance with Articles 100 to 102 of the Bank’s Articles of Association.
Further, pursuant to Article 106 of the Bank’s Articles of Association, the following Directors (who were appointed on the following dates and whose terms of office will expire at the conclusion of the 2010 AGM) will retire and, being eligible, offer themselves for election by the Shareholders at the 2010 AGM:
Name Date of appointment Mrs Dorothy K Y P Sit 7 August 2009 Mr William W Leung 7 August 2009 Mr Iain J Mackay 1 September 2009
Particulars of the above mentioned Directors offering for re-election or election (as the case may be) at the 2010 AGM are set out in Appendix II to this circular.
POLL VOTING AT THE 2010 AGM
Pursuant to Rule 13.39(4) of the Listing Rules, all resolutions set out in the notice of the 2010 AGM will be decided by poll at the 2010 AGM. The Chairman of the Meeting will demand a poll on each of the resolutions in accordance with Article 63 of the Bank’s Articles of Association.
Article 69 of the Bank’s Articles of Association provides that on a poll, every Shareholder present in person or by proxy shall have one vote for every Share held by that Shareholder. An explanation of the detailed procedures of conducting a poll will be provided to the Shareholders at the 2010 AGM.
— 3 — ACTION TO BE TAKEN
A notice of the 2010 AGM is set out on pages 12 to 14 of this circular. At the 2010 AGM, the following ordinary resolutions, among others, will be proposed for consideration and approval by Shareholders to:
(a) grant to the Board a general mandate to allot, issue and deal with additional Shares up to 20% of the aggregate nominal amount of the issued share capital of the Bank as at the date of passing the resolution provided that the additional Shares to be allotted by the Board pursuant to this mandate wholly for cash shall not in aggregate exceed 5% of the aggregate nominal amount of the issued share capital; and
(b) grant to the Board the Repurchase Mandate.
Enclosed with the Annual Report and audited financial statements for the year ended 31 December 2009 of the Bank is a Form of Proxy for use at the 2010 AGM. Whether or not you intend to attend the 2010 AGM, you are requested to complete the Form of Proxy and return it to the Bank’s Registrars, Computershare Hong Kong Investor Services Limited, 17M Floor, Hopewell Centre, 183 Queen’s Road East, Wanchai, Hong Kong as instructed as soon as possible and in any event not later than 3:30 pm on 12 May 2010 or not less than 48 hours before the time appointed for holding any adjourned meeting (as the case may be). The return of a Form of Proxy will not preclude a Shareholder from attending and voting in person at the 2010 AGM.
RECOMMENDATION
The Board believes that the proposed general mandate to issue Shares and the Repurchase Mandate, and re-election and election of Directors are in the best interests of the Bank as well as its Shareholders. Accordingly, the Board recommends that all Shareholders of the Bank vote in favour of the resolutions to be proposed at the 2010 AGM.
Yours faithfully
Raymond K F Ch’ien Chairman
— 4 — APPENDIX I EXPLANATORY STATEMENT ON REPURCHASE MANDATE
This Appendix serves as an explanatory statement, as required by the Listing Rules, and also a memorandum of the terms of a proposed repurchase, as required by section 49BA(3)(b) of the Companies Ordinance, to provide information to Shareholders with regard to the Repurchase Mandate.
1. SHARE CAPITAL
As at the Latest Practicable Date, the issued share capital of the Bank comprised 1,911,842,736 Shares. Subject to the passing of the necessary ordinary resolution and on the basis that no further Shares are issued or repurchased prior to the 2010 AGM, exercise in full of the Repurchase Mandate could accordingly result in up to 191,184,273 Shares being repurchased by the Bank from the date of the 2010 AGM until the next AGM of the Bank to be held in 2011.
2. REASONS FOR REPURCHASES
The Board believes that it is in the best interests of the Bank and its Shareholders to have a general authority from Shareholders to enable the Board to repurchase Shares in the market. Such repurchases may, depending on market conditions and funding arrangements at the time, lead to an enhancement of the net asset value of the Bank and/or net assets per Share and/or earnings per Share and will only be made when the Board believes that such repurchases will benefit the Bank and its Shareholders.
3. FUNDING OF REPURCHASES
Repurchases of Shares will be funded entirely from the Bank’s available cash flow or working capital facilities, and will, in any event, be made out of funds legally available for the repurchase in accordance with the Memorandum and Articles of Association of the Bank and the applicable laws of Hong Kong.
The Board does not propose to exercise the Repurchase Mandate to such an extent as would, in the circumstances, have a material adverse effect on the working capital requirements of the Bank or the gearing levels which, in the opinion of the Board, are from time to time appropriate for the Bank. However, there might be a material adverse effect on the working capital requirements or gearing levels of the Bank (as compared with the position disclosed in the audited financial statements contained in the Annual Report for the year ended 31 December 2009) in the event that the Repurchase Mandate is exercised in full at any time.
4. GENERAL
None of the Directors, nor, to the best of their knowledge having made all reasonable enquiries, any of their associates, has any present intention to sell any Shares to the Bank if the Repurchase Mandate is approved by Shareholders.
The Board has undertaken to the Stock Exchange that (so far as the same may be applicable) it will only exercise the Repurchase Mandate in accordance with the Listing Rules and the applicable laws of Hong Kong.
— 5 — APPENDIX I EXPLANATORY STATEMENT ON REPURCHASE MANDATE
The Board is not aware of any consequences which could arise under the Takeovers Code as a consequence of any repurchases pursuant to the Repurchase Mandate. As at the Latest Practicable Date, HSBC beneficially owned Shares representing approximately 62.14% of the issued share capital of the Bank. If the Board was to exercise the Repurchase Mandate in full, the percentage shareholding of HSBC would be increased to approximately 69.05% of the issued share capital of the Bank. Such an increase would not give rise to an obligation to make a mandatory offer under Rule 26 of the Takeovers Code.
No purchase has been made by the Bank of its Shares in the six months prior to the Latest Practicable Date (whether on the Stock Exchange or otherwise).
HSBC, the immediate holding company of the Bank, has undertaken not to sell any Shares to the Bank under the Repurchase Mandate if the Repurchase Mandate is approved by Shareholders and exercised by the Board. Save as aforesaid, no connected person (as defined in the Listing Rules) has notified the Bank that he or she has a present intention to sell Shares to the Bank, or has undertaken not to sell any Shares to the Bank, if the Repurchase Mandate is approved by Shareholders.
5. SHARE PRICES
The highest and lowest prices at which the Shares have traded on the Stock Exchange during each of the previous 12 months were as follows:
Highest Lowest HK$ HK$
March 2009 84.70 67.00 April 2009 90.90 77.25 May 2009 111.80 86.75 June 2009 119.00 104.00 July 2009 127.00 104.00 August 2009 125.70 109.50 September 2009 116.30 108.10 October 2009 113.90 109.30 November 2009 118.00 109.70 December 2009 117.00 111.00 January 2010 116.00 108.50 February 2010 114.70 107.10 1 to 22 March 2010 115.20 107.60
— 6 — APPENDIX II PARTICULARS OF DIRECTORS
Particulars of the retiring Directors subject to re-election or election (as the case may be) at the 2010 AGM are set out below:
Dr John CHAN Cho Chak GBS JP Independent Non-executive Director Aged 66 Joined the Board since August 1995 Other position held within Hang Seng Group Hang Seng Bank Limited – Chairman of Remuneration Committee Other major appointments Guangdong Investment Ltd (Note 1) – INED Long Win Bus Company Limited – NED RoadShow Holdings Ltd (Note 1) – Chairman and NED Sir Edward Youde Memorial Fund – Chairman of the Council The Community Chest of Hong Kong – Vice Patron The Hong Kong Jockey Club – Chairman The Hong Kong Monetary Authority – Member of The Exchange Fund Advisory Committee The Hong Kong University of Science and Technology – Chairman of the Court The Kowloon Motor Bus Company (1933) Ltd – NED Transport International Holdings Limited (Note 1) – NED Past major appointments HKSAR Commission on Strategic Development – Non-Official Member (2005 – 2009) Hong Kong Exchanges and Clearing Limited (Note 1) – INED (2000 – 2003) Hong Kong Civil Service – Private Secretary to the Governor; Deputy Secretary (General Duties); Director of Information Services; Deputy Chief Secretary; Secretary for Trade and Industry; Secretary for Education and Manpower (1964 – 1978; 1980 – 1993) Qualifications Degree of Doctor of Social Sciences (honoris causa) – The Hong Kong University of Science and Technology Degree of Doctor of Business Administration (honoris causa) – International Management Centres Diploma in Management Studies – The University of Hong Kong Honours Degree in English Literature – The University of Hong Kong Major awards Gold Bauhinia Star (1999) Justice of the Peace (1994) Other information Dr Chan was appointed as an INED of Guangdong Investment Ltd (“GDI”) in June 1998. GDI was incorporated in Hong Kong on 5 January 1973. At present, the principal activities of GDI and its subsidiaries (the “GDI Group”) include investment holding, property holding and investment, investment in infrastructure and energy projects, water supply to Hong Kong and to Shenzhen and Dongguan on the mainland of the People’s Republic of China, hotel ownership and operations, hotel management and department stores operation. As disclosed in GDI’s announcement dated 23 December 2000, the debt restructuring of the GDI Group (including the Bank Debt Restructuring, the Bond Restructuring, the 2001 Floating Rate Note (“FRN”) Restructuring, the 2000 FRN Restructuring and the US$27 million Bond Restructuring as defined in the said announcement) became effective on 22 December 2000. Debts subject to restructuring at GDI level amounted to approximately HK$4.5 billion and debts subject to restructuring at selected stand alone subsidiaries amounted to an additional HK$2.3 billion approximately. As announced by GDI on 6 May 2003, all outstanding financial
— 7 — APPENDIX II PARTICULARS OF DIRECTORS indebtedness of GDI (including those under guarantees issued by GDI) under the debt restructuring scheme pursuant to the master override agreement dated 15 December 2000 between GDI and its financial creditors (“MOA”) was repaid or settled in full on 2 May 2003. All the stand alone override agreements relating to the debt restructuring schemes for the stand alone subsidiaries of GDI had likewise been completed. All professional fees relating to the debt restructuring scheme as aforesaid had since further been ascertained and settled in full. Accordingly the MOA had been completed and terminated automatically in November 2003, and GDI had been fully released from any further obligation under, and had successfully exited from, its debt restructuring completely.
Mr William LEUNG Wing Cheung BBS, JP Executive Director and Head of Personal Banking Aged 55 Joined the Board since August 2009 Other positions held within Hang Seng Group Hang Seng Bank Limited – Head of Personal Banking (responsible for the Bank’s branch network and all businesses and services for personal accounts); member of Executive Committee Hang Seng General Insurance (Hong Kong) Company Limited – Chairman Hang Seng Insurance Company Limited – Director Chairman or Director of other subsidiaries in Hang Seng Group Other major appointments EPS Company (Hong Kong) Limited – Director Hang Seng School of Commerce – Director Hong Kong Academy for Performing Arts – Chairman of the Council Hong Kong Baptist University – Treasurer of the Council and the Court; Chairman of Finance Committee and Honorary Associate of School of Business Hong Kong Creative Arts Centre Limited – Chairman HSBC Global Asset Management (Hong Kong) Limited – Director Industrial Bank Co Ltd (Note 1) – Member of Management Committee of Credit Card Centre MasterCard Asia/Pacific, Middle East & Africa Regional Advisory Board – Director Securities and Futures Commission – Member of Investor Education Advisory Committee TransUnion Limited – Director West Kowloon Cultural District Authority – Member of Consultation Panel Yantai Bank Co Ltd – Director Past major appointments Hang Seng Bank Limited General Manager, Personal Financial Services and Wealth Management (2005 – 2009) General Manager and Head of Wealth Management (2005) Deputy General Manager and Deputy Head of Commercial Banking (2003 – 2005) Deputy General Manager and Deputy Head of Retail Banking (2000 – 2003) Assistant General Manager and Head of Credit Card Centre (1994 – 2000) Qualification Diploma of Arts in English Language and Literature – Hong Kong Baptist College Major awards Bronze Bauhinia Star (2009) Justice of the Peace (2005)
— 8 — APPENDIX II PARTICULARS OF DIRECTORS
Dr Eric LI Ka Cheung FCPA (Practising), GBS, OBE, JP Independent Non-executive Director Aged 56 Joined the Board since February 2000 Other position held within Hang Seng Group Hang Seng Bank Limited – Chairman of Audit Committee Other major appointments Bank of Communications Co Ltd (Note 1) – INED; Chairman of Audit Committee China Resources Enterprise Ltd (Note 1) – INED; Chairman of Audit Committee HKSAR Commission on Strategic Development – Member Hong Kong Monetary Authority – Chairman of Process Review Committee Li, Tang, Chen & Co, Certified Public Accountants – Senior Partner Long Win Bus Company Limited – INED Meadville Holdings Limited (Note 1) – INED; Chairman of Remuneration Committee RoadShow Holdings Ltd (Note 1) – INED; Chairman of Audit Committee SmarTone Telecommunications Holdings Ltd (Note 1) – INED; Chairman of Audit Committee Sun Hung Kai Properties Limited (Note 1) – INED; Chairman of Audit Committee The Financial Reporting Council – Convenor of Financial Reporting Review Committee The Hong Kong Institute of Education – Treasurer of the Council The Kowloon Motor Bus Co (1933) Ltd – INED; Chairman of Audit Committee The Eleventh National Committee of Chinese People’s Political Consultative Conference – Member Transport International Holdings Limited (Note 1) – INED; Chairman of Audit Committee Wong’s International (Holdings) Ltd (Note 1) – INED; Chairman of Audit Committee Past major appointments Sinofert Holdings Limited (Note 1) – INED (resigned in 2007) CATIC International Holdings Limited (Note 1) – INED (resigned in 2007) The International Federation of Accountants – Board Member (2004 – 2006) The Legislative Council of Hong Kong – Member (1991 – 2004); Chairman of Public Accounts Committee (1995 – 2004) Hong Kong Society of Accountants – President (1994) Qualifications BA (Economics) Honours Degree – University of Manchester, UK Fellow – Hong Kong Institute of Certified Public Accountants (Practising) Hon Doctor of Laws – University of Manchester, UK Hon Doctor of Social Sciences – Hong Kong Baptist University Hon Fellow – The Chinese University of Hong Kong Hon Fellow – The Hong Kong Polytechnic University Major awards Gold Bauhinia Star (2003) Most Excellent Order of the British Empire (1996) Justice of the Peace (1991)
Dr Vincent LO Hong Sui GBS, JP Non-executive Director Aged 61 Joined the Board since February 1999 Other major appointments APEC Business Advisory Council – Hong Kong’s Representative Business and Professionals Federation of Hong Kong – Honorary Life President
— 9 — APPENDIX II PARTICULARS OF DIRECTORS
Chongqing Municipal Government – Economic Adviser Great Eagle Holdings Ltd (Note 1) – NED Shanghai﹣Hong Kong Council for the Promotion and Development of Yangtze – President Shanghai Tongji University; Shanghai University – Advisory Professorship Shui On Construction and Materials Limited (Note 1) – Chairman Shui On Group – Chairman Shui On Land Ltd (Note 1) – Chairman and Chief Executive Officer The Eleventh National Committee of the Chinese People’s Political Consultative Conference – Member The Hong Kong University of Science and Technology – Honorary Court Chairman Past major appointments China Telecom Corporation Limited (Note 1) – INED (retired in 2008) New World China Land Limited (Note 1) – NED (retired in 2004) Qualification Doctorate in Business Administration (honoris causa) – The Hong Kong University of Science and Technology Major awards “Ernst & Young Entrepreneur Of The Year 2009” in the China Real Estate Category (2009) “Ernst & Young Entrepreneur Of The Year 2009 China” country award winner (2009) Chevalier des Arts et des Lettres by the French Government (2005) Director of the Year in the category of Listed Company Executive Directors by The Hong Kong Institute of Directors in 2002 (2002) Businessman of the Year award in the Hong Kong Business Awards 2001 (2001) Justice of the Peace (1999) Gold Bauhinia Star (1998)
Mr Iain James MACKAY Non-executive Director Aged 48 Joined the Board since September 2009 Other major appointments Pathways Foundation Limited – Executive Councillor; Honorary Treasurer; Chairman of Finance Committee The Hongkong and Shanghai Banking Corporation Limited – Chief Financial Officer; Director of various HSBC Group subsidiaries WWF Hong Kong – Trustee member; member of Executive Council; Honorary Treasurer
Past major appointments HSBC North America Holdings Inc – Senior Executive Vice President and Chief Financial Officer (2007 – 2009) Aberdeen University Development Trust – Director (2007 – 2009) GE Healthcare Technologies – Corporate Vice President and Chief Financial Officer for the Global Diagnostic Imaging Business (2004 – 2007) (before then held various senior positions in the GE Group including GE Consumer Finance, GE Equity and GE Capital) Qualifications Master’s Degree in Business Studies (Accounting primary) – Aberdeen University of Scotland Member – Institute of Chartered Accountants of Scotland
— 10 — APPENDIX II PARTICULARS OF DIRECTORS
Mrs Dorothy SIT KWAN Yin Ping Non-executive Director Aged 58 Joined the Board since August 2009 Other positions held within Hang Seng Group Hang Seng Bank (China) Limited – Vice-Chairman; Chief Executive; Chairman of Executive Committee Past major appointments The Banking Industry Training Advisory Committee – Member (2006 – 2009); Ex-officio Member of its Sub-committee on Specification of Competency Standards Development (2007 – 2009) Hang Seng Bank Limited – General Manager (2005 – 2009); Chief Operating Officer (2006 – 2009) The Hongkong and Shanghai Banking Corporation Limited – Joined as management trainee and held various managerial positions in retail banking, operations and systems, mainland China project finance, internal audit, marketing, channel development and management, wealth management and retail investments (1976 – 2003) and was Head of Personal Financial Services, Hong Kong (2004 – 2005) Bank of Shanghai – Director (2004 – 2005) EPS Company (Hong Kong) Limited – Chairman (2004 – 2005) Qualification Master’s Degree in Business Administration – The Chinese University of Hong Kong
Notes: 1 The securities of these companies are listed on a securities market in Hong Kong or overseas. 2 The interests of the retiring Directors in the Shares, if any, within the meaning of Part XV of the SFO as at 31 December 2009 are disclosed in the section “Directors’ and Alternate Chief Executives’ Interests” of the Report of the Directors attached to the Bank’s 2009 Annual Report. Their interests remain unchanged as at the Latest Practicable Date. 3 Some retiring Directors (as disclosed above) are also Directors of subsidiaries of HSBC Holdings plc which through its wholly owned subsidiaries, have an interest in the Shares under the provisions of Divisions 2 and 3 of Part XV of the SFO, the details of which are disclosed in the section “Substantial Interests in Share Capital” of the Report of the Directors attached to the Bank’s 2009 Annual Report. 4 Save as disclosed above, the retiring Directors (a) have not held any directorships in other publicly listed companies, whether in Hong Kong or overseas, during the last three years; (b) do not hold any other positions in the Bank and its subsidiaries; and (c) do not have any other relationships with any Directors, senior management or substantial or controlling shareholders of the Bank. 5 Each of the retiring Directors (except those Directors who are full time employees of the Bank or its subsidiaries) will receive Directors’ fees in the amounts approved from time to time by Shareholders at the AGMs of the Bank. The current amounts of Directors’ fees have been determined with reference to market rates, directors’ workload and required commitment. A Director will also receive a fee for duties assigned to and services provided by him as Chairman or member of various Committees of the Bank. The current amounts of the above fees have been determined with reference to the remuneration policy of the Bank. 6 Commencing from 1 January 2008, no Directors’ fees will be paid to those Directors who are full time employees of the Bank or its subsidiaries. The salary packages of such Directors have been determined with reference to the remuneration policy of the Bank. Such Directors are also entitled to discretionary bonus. 7 The details of the emoluments of the retiring Directors on a named basis are disclosed in Note 19 of the Bank’s Financial Statements as contained in the Bank’s 2009 Annual Report. 8 None of the retiring Directors, except Mr William W Leung, has signed service contracts with the Bank. However, the Bank’s Articles of Association provide that each Director is required to retire by rotation once every three years and that one-third (or the number nearest to one-third) of the Directors shall retire from office every year at the Bank’s AGM. A Director’s specific term of appointment, therefore, cannot exceed three years. Every retiring Director shall be eligible for re-election at the 2010 AGM of the Bank. 9 Save as disclosed above, none of the retiring Directors has any information which is required to be disclosed under Rules 13.51(2)(h)-(v) of the Listing Rules, and there are no other matters relating to the re-election and election of the retiring Directors that need to be brought to the attention of the Bank’s Shareholders.
— 11 — NOTICE OF ANNUAL GENERAL MEETING
Notice is hereby given that the Annual General Meeting (“AGM”) of the shareholders of Hang Seng Bank Limited (the “Bank” or the “Company”) will be held at Hang Seng Bank Headquarters, 83 Des Voeux Road Central, Hong Kong on Friday, 14 May 2010 at 3:30 pm to transact the following ordinary business: (1) to receive and consider the audited financial statements and the Reports of the Directors and of the Auditors for the year ended 31 December 2009; (2) to re-elect or elect (as the case may be) the following retiring Directors: (a) Dr John C C Chan; (b) Mr William W Leung; (c) Dr Eric K C Li; (d) Dr Vincent H S Lo; (e) Mr Iain J Mackay; and (f) Mrs Dorothy K Y P Sit; (3) to re-appoint KPMG as Auditors and to authorise the Directors of the Company to fix their remuneration; and, by way of special business, to consider and, if thought fit, pass the following Resolutions as Ordinary Resolutions: (4) “THAT (a) subject to paragraph (b) of this Resolution, the exercise by the Directors of the Company during the Relevant Period of all the powers of the Company to purchase shares of the Company be and is hereby generally and unconditionally approved; (b) the aggregate nominal amount of shares which may be purchased on The Stock Exchange of Hong Kong Limited or any other stock exchange recognised for this purpose by the Securities and Futures Commission of Hong Kong and The Stock Exchange of Hong Kong Limited under the Hong Kong Code on Share Repurchases pursuant to the approval in paragraph (a) of this Resolution shall not exceed 10% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing this Resolution, and the said approval shall be limited accordingly; (c) for the purpose of this Resolution, “Relevant Period” means the period from the date of passing this Resolution until whichever is the earliest of: (i) the conclusion of the next Annual General Meeting of the Company; (ii) the expiration of the period within which the next Annual General Meeting of the Company is required by the Companies Ordinance to be held; and (iii) the revocation or variation of the authority given under this Resolution by ordinary resolution of the shareholders in general meeting.”; and (5) “THAT (a) subject to paragraph (c) of this Resolution, pursuant to Section 57B of the Companies Ordinance, the exercise by the Directors of the Company during the Relevant Period of all the powers of the Company to allot, issue and deal with additional shares in the share capital of the Company and to make or
— 12 — NOTICE OF ANNUAL GENERAL MEETING
grant offers, agreements and options which might require the exercise of such powers be and is hereby generally and unconditionally approved; (b) the approval in paragraph (a) of this Resolution shall authorise the Directors of the Company during the Relevant Period to make or grant offers, agreements and options which might require the exercise of such powers after the end of the Relevant Period; (c) the aggregate nominal amount of share capital allotted or agreed conditionally or unconditionally to be allotted (whether pursuant to an option or otherwise) by the Directors of the Company pursuant to the approval in paragraph (a) of this Resolution, otherwise than pursuant to (i) a Rights Issue, (ii) the exercise of rights of subscription or conversion under the terms of any warrants issued by the Company or any securities which are convertible into shares of the Company, (iii) any option scheme or similar arrangement for the time being adopted for the grant or issue to officers and/or employees of the Company and/or any of its subsidiaries of shares or rights to acquire shares of the Company, or (iv) any scrip dividend or similar arrangement providing for the allotment of shares in lieu of the whole or part of a dividend on shares of the Company in accordance with the Articles of Association of the Company, shall not exceed, where the shares are to be allotted wholly for cash, 5% and in any event 20% of the aggregate nominal amount of the issued share capital of the Company as at the date of passing this Resolution, and the said approval shall be limited accordingly; and (d) for the purpose of this Resolution: “Relevant Period” means the period from the date of passing this Resolution until whichever is the earliest of: (i) the conclusion of the next Annual General Meeting of the Company; (ii) the expiration of the period within which the next Annual General Meeting of the Company is required by the Companies Ordinance to be held; and (iii) the revocation or variation of the approval given by this Resolution by ordinary resolution of the shareholders in general meeting; and “Rights Issue” means an offer of shares open for a period fixed by the Directors of the Company to holders of shares of the Company or any class thereof on the register on a fixed record date in proportion to their then holdings of such shares or class thereof (subject to such exclusion or other arrangements as the Directors of the Company may deem necessary or expedient in relation to fractional entitlements or having regard to any restrictions or obligations under the laws of, or the requirements of any recognised regulatory body or any stock exchange in, any territory outside Hong Kong).”
By Order of the Board
C C Li Secretary
Hong Kong, 29 March 2010
— 13 — NOTICE OF ANNUAL GENERAL MEETING
Notes: 1 A shareholder entitled to attend and vote at the AGM (or at any adjournment thereof) is entitled to appoint one or more proxies to attend and vote instead of the shareholder. A proxy needs not also be a shareholder of the Bank.
2 The Directors of the Bank had declared a fourth interim dividend of HK$1.90 per share for 2009. The Register of Shareholders of the Bank was closed on Tuesday, 16 March 2010 for the purpose of ascertaining shareholders’ entitlement to the fourth interim dividend. The fourth interim dividend will be payable on Wednesday, 31 March 2010 to shareholders on the Register of Shareholders of the Bank on Tuesday, 16 March 2010.
3 The biographical details of all the Directors to be re-elected or elected (as the case may be) at the AGM are provided in Appendix II to the circular of which this notice forms part. 4 Pursuant to Rule 13.39(4) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited, all resolutions set out in this notice will be decided by poll at the AGM. Article 69 of the Bank’s Articles of Association provides that on a poll, every shareholder present in person or by proxy shall have one vote for every share held by that shareholder. An explanation of the detailed procedures of conducting a poll will be provided to the shareholders at the AGM.
5 As at the date hereof, the Board of Directors of the Bank comprises Dr Raymond K F Ch’ien* (Chairman), Mrs Margaret Leung (Vice-Chairman and Chief Executive), Dr John C C Chan*, Dr Marvin K T Cheung*, Mr Alexander A Flockhart#, Mr Jenkin Hui*, Mr William W Leung, Dr Eric K C Li*, Dr Vincent H S Lo#, Mr Iain J Mackay#, Mrs Dorothy K Y P Sit#, Mr Richard Y S Tang* and Mr Peter T S Wong#.
* Independent Non-executive Directors # Non-executive Directors
— 14 — THIS CIRCULAR in both English and Chinese is now available in printed form and on the Bank’s website: www.hangseng.com.
Shareholders who: A) receive this circular by electronic means and wish to receive a printed copy; or B) receive this circular in either English or Chinese and wish to receive a printed copy of the other language version, may send a notice in writing to the Bank’s Registrars:
Computershare Hong Kong Investor Services Limited 17M Floor, Hopewell Centre 183 Queen’s Road East Wanchai, Hong Kong Facsimile: (852) 2529 6087 Email: [email protected]
Shareholders who have chosen to receive this circular by electronic means through the Bank’s website and who, for any reason, have difficulty in receiving or gaining access to this circular, may submit a written request to the Bank’s Registrars, Computershare Hong Kong Investor Services Limited, and will be sent this circular in printed form free of charge.
Shareholders may change their choice of language or means of receipt of the Bank’s future corporate communications at any time, free of charge, by completing and sending to the Bank’s Registrars, Computershare Hong Kong Investor Services Limited, by post or by email ([email protected]), a change request form which can be obtained from the Bank’s Registrars.
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