SERVICE AGREEMENT FOR DOUGLAS JARDINE FLINT GROUP FINANCE DIRECTOR
Exhibit 4.5
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SERVICE AGREEMENT
FOR XXXXXXX XXXXXXX XXXXX
GROUP FINANCE DIRECTOR
CONTENTS
THIS AGREEMENT is dated 29 September 1995 and is made BETWEEN:
| (1) | HSBC HOLDINGS plc (No. 617987), whose registered office is at 00 Xxxxx Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX (“the Employer”); and |
| (2) | Xxxxxxx Xxxxxxx Flint of Xxxxx Xxxxx, Xxxxxxx Xxxxx, Xxxx Xxxxxx XX00 0XX (“the Executive”) |
NOW IT IS HEREBY AGREED as follows:
| 1 | Definitions |
| 1.1 | In this Agreement unless the context otherwise requires: |
| (a) | the following expressions have the following meanings: |
“the Employment” means the Executive’s employment hereunder |
“the Group” means the Employer and the Group Companies |
“Group Company” means any subsidiary or holding company of the Employer and any subsidiary of any such holding company for the time being. For the purposes of this Agreement the terms “subsidiary” and “holding company” shall have the meanings ascribed
thereto by sections 736 and 736A Companies Xxx 0000; |
| (b) | references to clauses and sub-clauses are to clauses and sub-clauses of this Agreement. |
| (c) | the headings to the clauses are for convenience only and shall not affect the construction or interpretation of this Agreement. |
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| 2 | Appointment |
| 2.1 | The Employer shall employ the Executive and the Executive agrees to act as a senior executive of the Employer on and subject to the terms and conditions specified herein. |
| 3 | Duration of the Employment |
| 3.1 | The Employment shall commence on 30 September 1995 and, subject to clause 15 below, shall continue for a period of twenty-four months until 29 September 1997 and thereafter unless or until terminated by the Employer giving to the Executive at any time not less than twelve
calendar months’ previous notice in writing to terminate the employment or by the Executive giving to the Employer at any time not less than nine calendar months’ previous notice in writing to terminate the employment. |
| 3.2 | Notwithstanding clause 3.1, the Employment shall terminate on the last day of the month in which the Executive attains the age of 60 or on such subsequent date as may be mutually agreed between the Employer and the Executive. |
| 3.3 | The Executive’s period of continuous employment with the Employer shall be deemed to have begun on 30 September 1995. |
| 3.4 | The Executive represents and warrants that he is not bound by or subject to any court order, agreement, arrangement or undertaking which in any way restricts or prohibits him from entering into this Agreement or from performing his duties hereunder. |
| 4 | Scope of the Employment |
| 4.1 | The Executive shall initially be employed as Group Finance Director, in which capacity he may be required to perform duties for the Employer or any Group Company. He may also be required, without any further remuneration therefor than is herein mentioned, to act as a
director or officer of any Group Company. |
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| 4.2 | The Executive shall: |
| (a) | devote the whole of his time, attention and skill to his duties; |
| (b) | faithfully and diligently perform such duties consistent with his position as may from time to time be assigned to him; |
| (c) | obey any reasonable and lawful directions given to him; and |
| (d) | comply with all rules, regulations, policies and procedures which may from time to time be issued by the Employer or any Group Company. |
| 4.3 | The Employer reserves the right to require the Executive to carry out the duties of another position of equivalent status either in addition to or instead of the duties specified in clause 4.1 |
| 4.4 | The Employer may, with the agreement of the Executive, transfer this Agreement to any Group Company at any time. |
| 5 | Hours and Place of Work |
| 5.1 | The Executive shall work such hours as are necessary for the proper performance of his duties. |
| 5.2 | The Executive’s place of work will initially be the Employer’s office at 00 Xxxxx Xxxxxx Xxxxxx, Xxxxxx XX0X 0XX but the Employer may require the Executive to work at any place within the United Kingdom. The Executive will be given reasonable notice of any change in
his place of work. |
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| 5.3 | If the Executive’s principal place of work is changed to a location which is inside the United Kingdom but outside reasonable commuting distance from his home, the Employer will reimburse his reasonable relocation expenses in accordance with its relocation policy from time
to time in force. |
| 6 | Remuneration |
| 6.1 | The Employer shall pay to the Executive a salary at the rate of £260,000 per annum, payable by equal monthly instalments in arrears. The Employer will review the Executive’s salary annually, the first such review to take place in March 1996. |
| 6.2 | The Employer may, at its sole discretion, pay to the Executive a bonus of such amount as may be determined by its Board in respect of each complete financial year of the Employer during which the Employment subsists. |
| 6.3 | The remuneration specified in clauses 6.1 and 6.2 shall be exclusive of any fees to which the Executive may be entitled as a director of the Employer and inclusive of fees in respect of Directorships of any other Group Companies. |
| 6.4 | Payment of salary and any bonus payable to the Executive shall be made either by the Employer or by a Group Company and, if by more than one company, in such proportions as the Employer may from time to time think fit. |
| 6.5 | (a) |
Subject to sub-clause (b) below the Employer shall provide the Executive with a motor car of a size and type commensurate (in the opinion of the Employer) with his position and remuneration for the time being and in accordance with the appropriate Management Car
Scheme. The Employer shall tax and comprehensively insure the car and pay or reimburse, as appropriate, against receipts or other appropriate evidence, the costs of servicing and repairing the car. The Executive will be permitted to use the car for reasonable private journeys
but will be required to meet the cost of fuel consumed as a result of private use. If the Executive shall be convicted of any offence under the Road Traffic Acts or become involved in any accident involving the motor car, he shall forthwith notify the General Manager, Group
Human Resources and supply such information in connection therewith as he may request. |
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| (b) | The Executive may elect to receive a cash alternative instead of a motor car in an amount and subject to giving notice to the Employer in accordance with the appropriate Management Car Scheme. |
| 6.6 | The Executive shall be entitled during the period of his employment under this Agreement: |
| (a) | to the benefit of for so long during the period of his employment with the Employer as he has outstanding a mortgage loan in respect of his principal or main residence in the United Kingdom to payment by the Employer monthly in arrears of a sum equal to the difference
between: |
| (i) | the amount of interest which would be payable during the relevant month on a mortgage loan having a principal amount of £50,000 (or on any lesser sum representing the principal amount outstanding of the Executive’s mortgage loan during that month) calculated
at the Midland Bank’s mortgage rate; and |
| (ii) | the amount of such interest
that would be payable calculated at a rate of 5½ % per annum (or such
other interest rate as may from time to time be applied by the Employer
in relation to preferential interest rate house purchase or improvement
loans to executives of the Employer of a principal amount up to £50,000). |
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Payments under this sub-clause will be made subject to any deductions required by law to be made by the Employer in respect of Income Tax and National Insurance contributions and such payments shall not be taken into account for the purposes of calculating any
entitlement the Executive may have in respect of pension benefits; |
| (b) | to private medical insurance cover for himself and his family under the Employer’s corporate health scheme from time to time in force; |
| (c) | to participate in the relevant Executive and Savings-Related Share Option Schemes of the Employer provided always that the total amount of options granted to the Executive shall not at any time exceed four times the Executive’s Relevant Emoluments as defined in the
Rules of the Share Option Scheme; |
| (d) | to participate in the Personal Accident Benefits Scheme of the Employer; |
| (e) | to payment on the Executive’s behalf of the annual membership subscription of up to two clubs to be approved by the Employer. |
| 7 | Deductions |
| 7.1 | For the purposes of the Wages Xxx 0000, the Executive hereby authorises the Employer to deduct from his remuneration hereunder any sums due from him to the Employer or to any Group Company including, without limitation, any overpayments, loans or advances made to
him by the Employer or any Group Company. |
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| 8 | Expenses |
The Employer shall reimburse the Executive in respect of all expenses reasonably incurred by him in the proper performance of his duties, subject to his providing such receipts or other evidence as the Employer may require. |
| 9 | Holidays |
| 9.1 | The Executive shall be entitled to receive his normal remuneration for all Bank and Public holidays normally observed in England and a further 30 working days’ holiday in each calendar year. The Executive may only take his holiday at such times as are agreed with his
immediate superior. |
| 9.2 | In the respective calendar years in which the Employment commences or terminates, the Executive’s entitlement to holiday shall accrue on a pro rata basis for each month of service during the relevant year. |
| 9.3 | If, on the termination of the Employment, the Executive has exceeded his accrued holiday entitlement, the excess may be deducted from any sums due to him. If the Executive has any unused holiday entitlement, the Employer may either require the Executive to take such unused
holiday during any notice period or make payment in lieu thereof. |
| 9.4 | Holiday entitlement for one holiday year cannot be taken in subsequent holiday years unless otherwise agreed by the Executive’s immediate superior provided that such agreement will only be given for ten working days or more with the written approval of the General Manager,
Group Human Resources. Failure to take holiday entitlement in the appropriate holiday year will lead to forfeiture of any accrued holiday not taken without any right to payment in lieu thereof. |
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| 10 | Sickness Benefits |
| 10.1 | The Employer shall continue to pay the Executive’s salary during any period of absence on medical grounds up to a maximum of 260 working days in any period of 12 months, provided that the Executive shall from time to time if required: |
| (a) | supply the Employer with medical certificates covering any period of sickness or incapacity exceeding seven days (including weekends); and |
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| (b) | undergo at the Employer’s expense a medical examination by a doctor appointed by the Employer. |
| 10.2 | Payment of the Executive’s salary pursuant to clause 10.1 shall be inclusive of any Statutory Sick Pay to which the Executive may be entitled. |
| 10.3 | If the Executive’s absence shall be occasioned by the actionable negligence of a third party in respect of which damages are recoverable, then all sums paid by the Employer shall constitute loans to the Executive, who shall: |
| (a) | forthwith notify the Employer of all the relevant circumstances and of any claim, compromise, settlement or judgement made or awarded in connection therewith; |
| (b) | if the Employer so requires, refund to the Employer such sum as the Employer may determine, not exceeding the lesser of: |
| (i) | the amount of damages net of any costs recovered by him under such compromise, settlement or judgement; and |
| (ii) | the sums advanced to him in respect of the period of incapacity. |
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| 11 | Pension and Death Benefit |
| 11.1 | The Employer will provide a non-pensionable allowance payable at the rate of 17½% per annum of annual basic salary through which the Executive will continue to fund his existing Pension Policy, or any alternative personal pension arrangement as he may choose to arrange
from time to time. |
| 11.2 | The Executive will not be a member of the Company’s approved pension plans. Life insurance at four times basic salary and permanent accident cover will be provided under similar arrangements as those established for other Company executives who are not members of the
Company’s approved pension plans. The Executive will be responsible for any income tax liability on these benefits. |
| 12 | Restrictions on other activities by the Executive |
| 12.1 | The Executive shall not (except with the prior sanction of the Chief Executive Officer of the Employer) be directly or indirectly employed, engaged, concerned or interested in any other business or undertaking, provided that this shall not prohibit the holding (directly or through
nominees) of investments listed on the London Stock Exchange or in respect of which dealing takes place on the Hong Kong Stock Exchange or any recognised stock exchange or in the Unlisted Securities Market on the London Stock Exchange as long as not more than 5 per
cent of the issued shares or other securities of any class of any one company shall be so held without the prior sanction of the Chief Executive Officer of the Employer. |
| 12.2 | The Executive shall comply, and shall procure that his spouse, infant children and other connected persons (within the meaning of section 346 Companies Act 1985) shall comply, with: |
| (a) | every rule of law; and |
| (b) | every regulation of the Employer or any Group Company for the time being in force |
in relation to dealings in shares or other securities of the Employer or any Group Company. |
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| 12.3 | Subject to any regulations
issued by the Employer or any Group Company, the Executive shall not
be entitled to receive or obtain directly or indirectly any discount,
rebate or commission in respect of any sale or purchase of goods effected
or other business transacted (whether or not by him) by or on behalf
of the Employer or any Group Company and if he (or any firm or company
in which he is interested) shall obtain any such discount, rebate or
commission he shall account to the Employer or the relevant Group Company
for the amount received by him (or a due proportion of the amount received
by such company or firm having regard to the extent of his interest
therein). |
| 13 | Confidential Information and Employer Documents |
| 13.1 | The Executive shall neither during the Employment (except in the proper performance of his duties) nor at any time (without limit) after the termination of the Employment (howsoever the same is determined and whether in breach of contract or otherwise): |
| (a) | divulge or communicate to any person, company, business entity or other organisation; |
| (b) | use for his own purposes or for any purposes other than those of the Employer or any Group Company; or |
| (c) | through any failure to exercise due care and diligence, cause any unauthorised disclosure of, |
any trade secrets or Confidential Information relating to the Employer or any Group Company but so that these restrictions shall cease to apply to any information which shall become available to the public generally otherwise than through the default of the Executive. |
| 13.2 | “Confidential Information” shall mean financial information, results and forecasts (save to the extent that these are included in published audited accounts), any proposals relating to the acquisition or disposal of a company or business or any part thereof or to any proposed
reorganisation, expansion or contraction of activities (whether involving companies within the Group or companies outside it), details of employees and officers and of the remuneration and other benefits paid to them, details of customers of the Employer or any Group Company
(including their requirements, financial standing, the terms of business and any dealings with them), any information which the Executive is told is confidential and any information which has been given to the Employer or any Group Company in confidence by customers or
other persons. |
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| 13.3 | All notes, memoranda, records, lists of customers and suppliers and employees, correspondence, documents, computer and other discs and tapes, data listings, codes, designs and drawings and other documents and material whatsoever (whether made or created by the Executive
or otherwise) relating to the business of the Employer or any Group Company (and any copies of the same): |
| (a) | shall be and remain the property of the Employer or the relevant Group Company; and |
| (b) | shall be handed over by the Executive to the Employer or to the relevant Group Company on demand and in any event on the termination of the Employment. |
| 14 | Inventions and Other Intellectual Property |
| 14.1 | The parties foresee that the Executive may make inventions or create other intellectual property in the course of his duties hereunder and agree that in this respect the Executive has a special responsibility to further the interests of the Employer and the Group Companies. |
| 14.2 | Any invention, or improvement,
design, process, information, copyright work, trade xxxx or trade name
or get-up made, created or discovered by the Executive during the continuance
of the Employment (whether capable of being patented or registered
or not and whether or not made or discovered in the course of the Employment)
in conjunction with or in any way affecting or relating to the business
of any company in the Group or capable of being used or adapted for
use therein or in connection therewith shall forthwith be disclosed
to the Employer and shall (subject to sections 39 to 43 Patents Act
1977) belong to and be the absolute property of the Employer or such
Group Company as
the Employer may direct. |
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| 14.3 | The Executive if and whenever required so to do by the Employer shall at the expense of the Employer or such Group Company as the Employer may direct: |
| (a) | apply or join with the Employer or such Group Company in applying for letters patent or other protection or registration in the United Kingdom and in any other part of the world for any such invention, improvement, design, process, information, work, trade xxxx, trade
name or get-up as aforesaid; and |
| (b) | execute and do all instruments and things necessary for vesting the said letters patent or other protection or registration when obtained and all right title and interest to and in the same absolutely and as sole beneficial owner in the Employer or such Group Company or in
such other person as the Employer may specify. |
| 14.4 | The Executive hereby irrevocably and unconditionally waives all rights under Chapter IV, Copyright, Designs and Patents Xxx 0000 in connection with his authorship of any existing or future copyright work in the course of the Employment, in whatever part of the world such
rights may be enforceable, including, without limitation: |
| (a) | the right conferred by section 77 of that Act to be identified as the author of any such work; and |
| (b) | the right conferred by section 80 of that Act not to have any such work subjected to derogatory treatment. |
| 14.5 | The Executive hereby irrevocably appoints the Employer to be his Attorney in his name and on his behalf to execute and do any such instrument or thing and generally to use his name for the purpose of giving to the Employer the full benefit of this clause. In favour of any third
party a certificate in writing signed by any Director or by the Secretary of the Employer that any instrument or act falls within the authority hereby conferred shall be conclusive evidence that such is the case. |
| 14.6 | Nothing in this clause shall be construed as restricting the rights of the Executive or the Employer under sections 39 to 43 Patents Xxx 0000. |
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| 15 | Termination |
| 15.1 | The Employment shall be subject to termination by the Employer by summary notice in writing if the Executive shall have: |
| (a) | committed any serious or persistent breach of any of his obligations to the Employer or any Group Company (whether under this Agreement or otherwise) and any such breach is not rectified within a period of one month of the Executive receiving a notice from the
Employer requesting him to rectify such breach; or |
| (b) | been guilty of serious misconduct which has brought the Employer or any Group Company into disrepute; or |
| (c) | become bankrupt or had an interim order made against him under the Insolvency Xxx 0000 or compounded with his creditors generally; or |
| (d) | been disqualified from being a director by reason of any order made under the Company Directors Disqualification Act 1986 or any other enactment; or |
| (e) | been convicted of an offence under any statutory enactment or regulation relating to insider dealing. |
Any delay by the Employer in exercising such right of termination shall not constitute a waiver thereof. |
| 15.2 | If the Employer becomes
entitled to terminate the appointment of the Executive hereunder pursuant
to clause 16.1, it shall be entitled (but without prejudice to its
right subsequently to terminate such appointment on the same or any
other ground) to suspend the Executive on full pay for so long as
it may think fit. |
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| 15.3 | The employer reserves the right to give the Executive pay in lieu of any notice of termination (whether given by the Employer or by the Executive). For this purpose, the Executive agrees that pay in lieu will consist of his basic salary for the relevant period of notice and will
exclude any bonus and any other emolument referable to the Employment other than pension benefit rights. |
| 15.4 | During any period of notice of termination not exceeding twelve months given by the Employer or nine months given by the Executive, the Employer shall be under no obligation to assign any duties to the Executive and shall be entitled to exclude him from its premises,
provided that this shall not affect the Executive’s entitlement to receive his normal salary and other contractual benefits. |
| 15.5 | On the termination of the Employment howsoever arising or upon either the Employer or the Executive having served notice of such termination, the Executive shall: |
| (a) | at the request of the Employer resign from all offices held by him in the Employer or any Group Company, provided however that such resignations shall be without prejudice to any claims which the Executive may have against the Employer or any Group Company
arising out of the termination of the Employment; and |
| (b) | forthwith deliver to the Employer all materials within the scope of clause 14.3 and all credit cards, motor-cars, car keys and other property of or relating to the business of the Employer or of any Group Company which may be in his possession or under his power or
control, |
and if the Executive should fail to do so the Employer is hereby irrevocably authorised to appoint some person in his name and on his behalf to sign any documents and do any things necessary or requisite to give effect thereto. |
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| 16 | Grievance procedure |
If the Executive wishes to obtain redress of any grievance relating to the Employment or is dissatisfied with any reprimand, suspension or other disciplinary step taken by the Employer, he shall apply in writing to the Board setting out the nature and details of any such grievance
or dissatisfaction. |
| 17 | Dealings in Securities |
The Executive will comply with Staff Dealings Rules and any other related rules issued from time to time by the Employer and acknowledges that compliance with such rules is a condition of his employment any breach of which may be considered for disciplinary action by the
Employer. |
| 18 | Notices |
| 18.1 | Any notice or other document to be given under this Agreement shall be in writing and may be given personally to the Executive or to the Secretary of the Employer (as the case may be) or may be sent by first class post or other fast postal service or by facsimile transmission to,
in the case of the Employer, its registered office for the time being and in the case of the Executive either to his address shown on the face hereof or to his last known place of residence. |
| 18.2 | Any such notice shall be deemed served when in the ordinary course of the means of transmission it would first be received by the addressee in normal business hours. |
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| 19 | Choice of law and submission to jurisdiction |
| 19.1 | This Agreement shall be governed by and interpreted in accordance with English law. |
| 19.2 | The parties hereby submit to the jurisdiction of the High Court of Justice in England but this Agreement may be enforced in any court of competent jurisdiction. |
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IN WITNESS whereof this Agreement has been executed the day and year first above written. |
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