Document:

forest8kexhibit101.htm

                                      

Forest Corporate Officer Severance Benefit Plan

And

Summary Plan Description

 

  

  

  

Forest Corporate Officer Severance Benefit Plan

And Summary Plan Description

	
1.  

	
INTRODUCTION

The Forest Corporate Officer Severance Benefit Plan (the “Plan”) is designed to provide severance benefits to eligible U.S. Corporate Officers (other than the CEO) of Forest Laboratories, Inc. (FLI, together with its successors, the “Company”) if their employment with the Company is terminated as set forth herein.  This Plan is an “employee welfare benefit plan” as defined in Section 3(1) of Title I of ERISA and the type of plan described in Sections 201(2), 301(a)(3) and 401(a)(1) of Title I of ERISA.

If you have any questions regarding the Plan, please contact your Human Resources representative.

The Company reserves the right to amend, modify or terminate the Plan at any time for any reason, subject to the limitations set forth herein.

The Plan is established effective November 1, 2013.  As to those persons covered by the Plan, the Plan supersedes all other Company severance guidelines, policies or plans, whether formal or informal; provided that the Plan does not supercede any individual employment agreements, offer letters, or other individual agreements with any such persons.

	
2.

	
DEFINED TERMS

 

(a) “Annualized Bonus” means the greater of (i) your annual target bonus for the most recently completed fiscal year for which annual bonuses have been determined or (ii) your average annual bonus for the three (3) most recently completed fiscal years for which annual bonuses have been determined.

 

(b) “Base Pay” means the sum of (i) your annual base salary, as of your Termination Date, including any before-tax contributions you make to any Company sponsored retirement or welfare benefit plan plus (ii) your Annualized Bonus, (in each case, without regard to any reduction constituting Good Reason).  Base Pay excludes equity compensation, and any other non-ordinary compensation and/or benefits provided by the Company.

 

(c) “Board” means the Board of Directors of the Company.

 

(d) “Cause” means (i) your possession, use, sale or distribution of illegal drugs; (ii) your misappropriation, misuse or theft of funds or property belonging to the Company; (iii) your violent or threatening behavior that adversely affects the Company; (iv) your material breach of any agreement to which you and the Company are parties; (v) your material violation of any law, code, ordinance, rule or regulation in connection with your employment; (vi) your being excluded, debarred, suspended, or otherwise ineligible to participate in the Federal health care programs or in Federal procurement or non-procurement programs; (vii) your conviction of a criminal offense that falls within the ambit of 42 U.S.C. § 1320a-7(a), which has not yet resulted in your being excluded, debarred, suspended, or otherwise declared ineligible; (viii) your inclusion on the (A) Health and Human Services/Office of Inspector General List of Excluded Individuals/Entities (available through the Internet at http://www.oig.hhs.gov) or (B) General Services Administration’s List of Parties Excluded from Federal Programs (available through the Internet at http://www.epls.gov); (ix) your continuing and willful violation of any Company policy (including but not limited to the Code of Business Conduct and Ethics); (x) your willful failure to substantially perform your duties; or (xi) your willful and continuing misconduct or otherwise engaging in any acts that, in the reasonable judgment of the Company, do not comport with the Company’s standards.

 

(e) “Code” means the Internal Revenue Code of 1986, as amended.

 

(f) “Company Property” means all paper and electronic documents of the Company or its successors created and/or received by you during your employment and other property of the Company or its successors which you had in your possession or control at any time, including, but not limited to, files, notes, lab notebooks, drawings, records, plans, forecasts, reports, studies, analyses, proposals, agreements, financial information, research and development information, sales and marketing information, operational and personnel information, specifications, code, software, databases, computer-recorded information, tangible property and equipment (including, but not limited to, leased vehicles, computers, computer equipment, software programs, facsimile machines, mobile telephones, servers), credit and calling cards, entry cards, identification badges and keys, and any materials of any kind which contain or embody any proprietary or confidential information of the Company or its successors (and all reproductions thereof in whole or in part).

 

(g) “Eligible Terminated Employee” has the meaning set forth in Section 3 hereof.

 

(h) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

(i) “Good Reason” means the occurrence of any of the following without your written consent:  (i) a material diminution in title or scope of principal responsibilities, (ii) a material reduction in your base salary or target bonus eligibility or  (iii) the relocation of your principal place of employment more than seventy-five (75) miles from its location.

 

(j) “Plan Administrator” means FLI.

 

(k) “Regular Employee” means an individual who (i) is directly employed and paid by the Company and on whose behalf the Company withholds income tax from his or her compensation; (ii) has regular full-time or part-time employment with the Company; and (iii) is considered and classified by the Company as a “regular employee.”  Notwithstanding the foregoing, a “Regular Employee” shall not include any of the following: (A) a temporary, seasonal or leased employee, intern, or floater; (B) an employee on an unpaid leave of absence who does not have a job guarantee upon completion of the leave; (C) an individual who is not directly paid by the Company through its payroll system (without regard to his or her common law employment status); and (D) a consultant, contingent worker, independent contractor or person who provides services to the Company pursuant to an independent contractor, consultant or vendor agreement, or pursuant to an agreement with any third party, irrespective of whether such individual is determined by any third party (including without limitation any court, arbitrator or governmental or regulatory agency) to constitute an employee of the Company.

 

(l) “Termination Date” means the effective date of the termination of your employment with the Company (or its successor).

 

(m) “Termination Without Cause” means a termination of your employment by the Company without Cause.

 

(n) “WARN” means the federal Worker Adjustment Retraining And Notification Act and/or any state plant or facility closing or mass layoff law, in each case, as amended.

 

	
3.  

	
SEVERANCE BENEFIT ELIGIBILITY

 

If you are subjected to a termination Without Cause, or you terminate your employment for Good Reason within 90 days of the occurrence of such Good Reason, you are eligible for severance benefits under the Plan (and will be referred to for purposes of the Plan as an “Eligible Terminated Employee”) if you also satisfy each and every one of the following criteria:

 

(a) You are a Regular Employee (full-time or part-time) with the title of Vice President of FLI or above who works in the United States and are on the U.S. payroll of the Company.

 

(b) You have provided the Company with at least one hundred eighty (180) consecutive days of service as a Regular Employee.

 

(c) You do not engage in any act or omission that the Company determines, in its reasonable discretion, justifies or would have justified the termination of your employment for Cause, regardless of whether this determination occurs before or after your Termination Date or whether the conduct took place before or after your Termination Date.

 

(d) You do not resign from employment prior to your Termination Date (with the exception of a termination of your employment by you for Good Reason).

 

(e) Your employment is not terminated as a result of your death.

 

(f) Your employment is not terminated due to a disability that renders you unable to perform the essential functions of your job with or without reasonable accommodation.

 

(g) At the time of your Termination Date (or earlier if so requested by the Company or its successor), you have made reasonable arrangements with the Company for the return to the Company (or its successor), and do not retain any copies of, any and all Company Property in your possession or control.

 

(h) You sign and return to the Company (or its successor) a separation agreement, including, among other things, a fully enforceable and irrevocable general release and waiver of all claims, in a form reasonably acceptable to the Company, and not inconsistent with the terms and conditions hereof, within the time frame set forth in the separation agreement but in no case later than sixty (60) days following your Termination Date.

 

	
4.  

	
SEVERANCE BENEFITS

 

(a) If you become an Eligible Terminated Employee the monetary severance benefit payable to you will be calculated based on level of employment in accordance with the attached appendix, subject in all cases to Section 4(b) and Section 4(d) below.  Your level of employment is based on your title immediately prior to your Termination Date.  Your monetary severance benefit will be paid in a lump sum within seventy (70) days following your Termination Date; provided, if the seventy (70) day period begins in one calendar year and ends in the subsequent calendar year, the payment will be made in such subsequent calendar year.  For the avoidance of doubt, in the event you are qualified to receive severance benefits hereunder pursuant to two or more provisions (e.g., a Termination Without Cause and/or Termination for Good Reason), you shall receive severance benefits only with respect to that provision which provides you with the greatest severance benefit.

 

(b) In the event that you are party to an employment agreement, offer letter or other individual agreement with the Company (or its successor) that provides for cash severance pay, all severance benefits paid to you under the Plan will be reduced and/or offset on a dollar for dollar basis (but not below zero) by the amount of the cash severance pay that is paid to you under your employment agreement, offer letter or other individual agreement in connection with your actual termination of employment.  For purposes of this Section 4(b), cash severance pay shall exclude any (i) accrued but unpaid base salary, (ii) payment for accrued but unused paid time-off, (iii) reimbursements for costs and expenses, (iv) bonus payments for completed performance periods, (v) cash payments relating to the settlement of equity or equity-based awards, (vi) payments pursuant to retirement, deferred compensation plans and other employee benefit plans and (vii) non-compensatory payments.

 

(c) If you become an Eligible Terminated Employee, the Company shall continue medical, prescription and dental benefits (medical benefits) to the Executive and the Executive’s family at least equal to those which would have been provided to them had employment not been terminated Without Cause or for Good Reason, for 12 months following the effective date of termination, provided, however, that if the Executive becomes employed with another employer who provides medical benefits, the medical and other welfare benefits described herein shall be secondary to those provided under such other plans.

 

(d) In the event that WARN applies to you and you would otherwise be eligible to receive severance benefits under the Plan that exceed any notice, payment or other benefit to which you may be entitled under WARN, all severance benefits under the Plan will be reduced and/or offset by any notice (including any paid days in lieu of notice), payments, or other benefits that you are given under WARN.

 

(e) The Plan Administrator in its sole and absolute discretion may arrange to provide an Eligible Terminated Employee with, and an Eligible Terminated Employee may elect to utilize, outplacement counseling services from an outplacement firm selected by the Plan Administrator, subject to such terms and conditions as the Plan Administrator may determine.

 

	
5.  

	
PLAN ADMINISTRATION

 

(a) The administration of the Plan will be under the supervision of the Plan Administrator.  It will be the responsibility of the Plan Administrator to assure that the Plan is carried out in accordance with its terms.  The Plan Administrator will have full power and sole discretionary authority to administer, interpret and construe the Plan, and to determine all claims for benefits, subject to the terms of the Plan and applicable law.  The Plan Administrator's actions, interpretations and determinations will be final and binding on all concerned and, in the event of judicial review, will be entitled to the maximum deference allowed by law.  Without limiting the foregoing, the Plan Administrator will have discretionary authority:

 

	
(1)  

	
To make and enforce such rules and regulations as it deems necessary or proper for the efficient administration of the Plan;

 

	
(2)  

	
To decide all questions concerning the Plan and the eligibility of any person to participate in the Plan;

 

	
(3)  

	
To compute the amount of benefits which will be payable to any individual in accordance with the provisions of the Plan, and to determine the person or persons to whom such benefits will be paid;

 

	
(4)  

	
To authorize the payment of benefits;

 

	
(5)  

	
To appoint such agents, counsel, accountants, consultants and actuaries as may be required to assist in administering the Plan;

 

	
(6)  

	
To determine which subsidiaries and affiliates of FLI participate in the Plan; and

 

	
(7)  

	
To allocate and delegate its responsibilities under the Plan and to designate other persons to carry out any of its responsibilities under the Plan, and such allocation, delegation or designation to be by written instrument and in accordance with Section 405 of ERISA.

 

The interpretations and determinations of the Plan Administrator will be final and binding and are not required to be uniform among similarly situated individuals.  The Plan Administrator also reserves the right to provide additional benefits, in the Plan Administrator's sole discretion.  In administering the Plan, the Plan Administrator will be entitled, to the extent permitted by law, to rely conclusively on all tables, valuations, certificates, opinions and reports which are furnished by any accountant, counsel or other expert who is employed or engaged by the Plan Administrator.

 

The Company agrees to indemnify, defend and hold harmless to the fullest extent permitted by law any employee serving as or on behalf of the Plan Administrator or as a member of a committee designated as Plan Administrator (including any employee or former employee who formerly served as Plan Administrator or as a member of such committee) against all liabilities, damages, costs and expenses (including attorneys' fees and amounts paid in settlement of any claims approved by the Company) occasioned by any act or omission to act in connection with the Plan, if such act or omission is in good faith.

 

	
6.  

	
INTERNAL REVENUE CODE SECTION 409A

 

The Plan is not intended to constitute a “nonqualified deferred compensation plan” within the meaning of Section 409A of the Code and the Plan shall be interpreted to that end.  In the event that any benefit hereunder is determined by the Plan Administrator to be subject to Code Section 409A, the Plan Administrator may modify such benefit (including by amending any of the terms of the Plan) as it deems necessary to comply with the provisions of Code Section 409A.

 

If the Plan Administrator determines that the severance payments or outplacement counseling benefits provided under the Plan constitute "deferred compensation" under Code Section 409A and you are, at your Termination Date, a "Specified Employee", as such term is defined in Code Section 409A(a)(2)(B)(i), then, solely to the extent necessary to avoid the incurrence of the adverse personal tax consequences under Code Section 409A, the timing of such payments and benefits shall be delayed to the earlier to occur of (i) the date that is six months and one day after your Termination Date, or (ii) the date of your death.

 

If under this Plan, an amount is paid in two or more installments, for purposes of Code Section 409A, each installment shall be treated as a separate payment.

 

For purposes of this Plan, you will be considered to have terminated your employment with the Company if you completely cease to provide services to the Company with no anticipated return to providing services to the Company.

 

No provision of the Plan shall be construed as a representation or guarantee of any particular tax effect for the payments and benefits under the Plan, and neither the Company, the Plan nor the Plan Administrator shall have any liability or be responsible for any claim related to the incurrence by you of any tax, interest, expense, loss of tax benefit, or any other obligation or liability, in each case, arising under or related to Code Section 409A or any other Code provision.

 

 

 

	
7.  

	
AMENDMENT AND TERMINATION OF THE PLAN

 

The Plan may be amended, suspended, or terminated at any time by the Company, acting through its Board of Directors or the Compensation Committee of the Board, in whole or in part, for any reason, and without either the consent of or prior notification to any employee.  No amendment to, or suspension or termination of, the Plan shall discontinue or otherwise affect any further payment or other obligations already matured and accrued under the Plan prior to such amendment, suspension or termination.

 

 

 

 

 

	
8.  

	
CLAIM PROCEDURE

 

If you believe you have not been provided with all benefits to which you are entitled under the Plan, you may file a written claim with the Plan Administrator with respect to your rights to receive benefits from the Plan.  You will be informed of the Plan Administrator's decision with respect to your claim within 90 days after it is filed.  Under special circumstances, the Plan Administrator may require an additional period of not more than 90 days to review your claim.  If this occurs, you will be notified in writing as to the length of the extension, the reason for the extension, and any other information needed in order to process your claim.  If the extension is required due to your failure to submit information necessary to decide the claim, the period for making the determination will be tolled from the date on which the extension notice is sent until the date on which you respond in writing to the Plan’s request for information.

 

If your claim is denied, in whole or in part, you will be notified in writing of the specific reason for the denial, the exact Plan provision on which the decision was based, what additional material or information is relevant to your claim, and what procedure you should follow to get your claim reviewed again.  The notice will also include a statement regarding the procedures for you to file a request for appeal of the claim denial and your right to bring a civil action under Section 502(a) of ERISA following a claim denial on appeal.  If you are not notified within the 90-day (or 180-day, if extended) period, you may consider your claim to be denied.  In either case, you then have 60 days to appeal the decision to the Plan Administrator.

 

Your appeal must be submitted in writing.  You may submit a written statement of issues and comments. You may request the opportunity to review relevant documents prior to submission of your written statement, submit documents, records and comments in writing, and receive, upon request and free of charge, reasonable access to and copies of all documents, records and other information relevant to your claim for severance and/or benefits under the Plan.  The review of the appeal will take into account all comments, documents, records and other information submitted by you relating to the claim, without regard to whether such information was submitted or considered in the initial review of the claim.

 

A decision as to your appeal will be made within 60 days after the appeal is received.  Under special circumstances, the Plan Administrator may require an additional period of not more than 60 days to review your appeal.  If this occurs, you will be notified in writing as to the length of the extension, not to exceed 120 days from the day on which your appeal was received, and the reason for the extension.

 

If your appeal is denied, in whole or in part, you will be notified in writing of the specific reason for the denial and the exact Plan provision on which the decision was based.  The decision on your appeal will be final and binding on all parties and persons affected thereby.  If you are not notified within the 60-day (or 120-day, if extended) period you may consider your appeal as denied.  The notice will also include a statement that you are entitled to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records and other information relevant to the claim, and a statement of your right to bring an action under Section 502(a) of ERISA.

 

No legal action for benefits under the Plan may be brought until you (i) have submitted a written claim for benefits in accordance with the procedures described above, (ii) have been notified by the Plan Administrator that the claim is denied, (iii) have filed a written request for a review of the decision in accordance with the appeal procedure described above, and (iv) have been notified that the Plan Administrator has denied the appeal.  Notwithstanding the foregoing, if the Plan Administrator does not respond to your claim or appeal within the relevant time limits specified in this Section 8, you may bring legal action for benefits under the Plan pursuant to Section 502(a) of ERISA.

 

	
9.  

	
STATEMENT OF ERISA RIGHTS

 

The Plan is an “employee welfare benefit plan” subject to ERISA.  As a participant in the Forest Corporate Officer Severance Benefit Plan you are entitled to certain rights and protections under ERISA.  ERISA provides that all Plan participants shall be entitled to:

 

Receive Information About the Plan and its Benefits

Examine, without charge, at the Company’s offices, all documents governing the Plan and a copy of the latest annual report (Form 5500 Series) required to be filed by the Plan with the U.S. Department of Labor and available at the Public Disclosure Room of the Employee Benefits Security Administration.

 

Obtain, upon written request to the Plan Administrator, copies of documents governing the operation of the Plan and copies of the latest annual report (Form 5500 Series) required to be filed by the Plan with the U.S. Department of Labor and updated summary plan description.  The Plan Administrator may make a reasonable charge for the copies.

 

Prudent Actions by Plan Fiduciaries

In addition to creating rights for plan participants, ERISA imposes duties upon the people who are responsible for the operation of the employee benefit plan.  The people who operate your Plan, called “fiduciaries” of the Plan, have a duty to do so prudently and in the interest of you and other Plan participants and beneficiaries.  No one, including your employer or its employees, may fire you or otherwise discriminate against you in any way to prevent you from obtaining a benefit or exercising your rights under ERISA.

 

Enforce Your Rights

If your claim for a benefit is denied or ignored, in whole or in part, you have a right to know why this was done, to obtain copies of documents relating to the decision without charge, and to appeal any denial, all within certain time schedules.

 

Under ERISA, there are steps you can take to enforce the above rights.  For instance, if you request from the Plan a copy of Plan documents or the latest annual report required to be filed by the Plan with the U.S. Department of Labor and do not receive them within 30 days, you may file suit in a Federal court.  In such a case, the court may require the Plan Administrator to provide the materials and pay you up to $110 a day until you receive the materials, unless the materials were not sent because of reasons beyond the control of the Administrator.  If you have a claim for benefits which is denied or ignored, in whole or in part, you may file suit in a state or Federal court.  If it should happen that Plan fiduciaries misuse the Plan's money, or if you are discriminated against for asserting your rights, you may seek assistance from the U.S. Department of Labor, or you may file suit in a Federal court.  The court will decide who should pay court costs and legal fees.  If you are successful the court may order the person you have sued to pay these costs and fees.  If you lose, the court may order you to pay these costs and fees, for example, if it finds your claim is frivolous.

 

Assistance with Your Questions

If you have any questions about your Plan, you should contact the Plan Administrator.  If you have any questions about this statement or about your rights under ERISA, or if you need assistance in obtaining documents from the Plan Administrator, you should contact the nearest office of the Employee Benefits Security Administration, U.S. Department of Labor, listed in your telephone directory or contact the: Division of Technical Assistance and Inquiries Employee Benefits Security Administration U.S. Department of Labor, 200 Constitution Avenue N.W., Washington, D.C. 20210.  You may also obtain certain publications about your rights and responsibilities under ERISA by calling the publications hotline of the Employee Benefits Security Administration.

 

	
10.  

	
IMPORTANT INFORMATION ABOUT THE PLAN

 

	
NAME OF PLAN:

	
Forest Corporate Officer Severance Benefit Plan

	
PLAN YEAR:

	
January 1 through December 31

 

	
TYPE OF PLAN:

	
Employee welfare severance benefit plan

 

	
PLAN SPONSOR:

	
Forest Laboratories, Inc.

909 Third Avenue

New York, New York 10022

Telephone:  212-421-7850

 

	
EMPLOYER IDENTIFICATION NUMBER:

 

	
__________________

	
PLAN NUMBER:

 

	
_______________

	
PLAN ADMINISTRATOR:

	
Forest Laboratories, Inc.

909 Third Avenue

New York, New York 10022

 

	
FUNDING:

	
Benefits under the Plan are paid out of the general assets of the Company.

 

	
AGENT FOR SERVICE OF LEGAL PROCESS:

	
The Plan Administrator.  Process may be served at the address specified above.

 

	
TYPE OF ADMINISTRATION:

	
Employer Administered.  The Plan is administered by Forest Laboratories, Inc.

	
11.  

	
MISCELLANEOUS

 

(a)           Records.  The records of the Company with respect to your length of employment, employment history, reason for employment termination, base pay, absences, and all other relevant matters may be conclusively relied on by the Plan Administrator.

 

(b)           Governing Law.  This Plan is an employee welfare benefit plan that is regulated by ERISA, a federal law.  To the extent, if any, that state laws apply to the Plan, New York State law shall apply (except to the extent it would require use of another state's law).  You expressly consent to personal jurisdiction in the state of New York, and any and all disputes shall be litigated in either the U.S. District Court for the Southern District of New York or New York Supreme Court, New York County.

 

(c)           Severability.  Should any provisions of the Plan be deemed or held to be unlawful or invalid for any reason, the balance of the Plan will remain in effect, unless it is amended or terminated as provided in Section 7.

 

(d)           Assignment and Alienation.  Except as required by law, the benefits payable under the Plan will not be subject to alienation, transfer, assignment, garnishment, execution or levy of any kind, and any attempt to cause any benefits to be so subjected will not be recognized.

 

(e)           Plan Not a Contract of Employment.  Nothing contained in the Plan will be held or construed to create any liability upon the Company to retain you in its service.  You are, at all times, an employee at will, and nothing in this Plan shall preclude or in any way restrict the Company from terminating you for any reason or no reason at all, except as otherwise prohibited by law.  All employees will remain subject to discharge or discipline to the same extent as if the Plan had not been put into effect. 

 

(f)           Tax Withholding.  The Company may withhold from any amounts payable under this Plan such federal, state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or regulation.

 

(g)           Funding.  This Plan shall be maintained in a manner to be considered “unfunded” for purposes of ERISA.  No person shall have any right, other than the right of an unsecured general creditor against the Company, with respect to the benefits payable hereunder.

 

(h)           Overpayments.  If any overpayment is made to you under the Plan for any reason, the Plan Administrator will have the right to recover the overpayment.  You shall cooperate fully with the Plan Administrator and return any overpayment.

 

 

  

  

  

Forest Corporate Officer Severance Benefit Plan

And Summary Plan Description

Appendix I

 

Severance Eligibility

	
Title

	
Termination Without Cause or for Good Reason

(multiple of Base Pay)

	
 

 

Corporate VP, SVP and EVP

 

	
 1x

Base pay shall have the meaning as set forth in Section 2(b) of this Plan.HBIO 9.30.13 EX10.2

EXHIBIT 10.2

	
			
	Private & Confidential

	 

	Dated   July 5, 2013

	 

	 

	 

	 

	HSBC Finance Corporation
and
Patrick J. Burke

	 

	 

	 

	 

	 

	 

	 

	 

	 
	SERVICE AGREEMENT

	 

	 

1 OF 14

Contents
Clause    Page
1    Appointment    3
2    Scope and Duties of the Employement    3
3    Salary and Variable Pay    3
4    Other Benefits    4
5    Tax Withholding and Compliance    4
6    Noncompetition and Confidentiality    5
7    Intellectual Property Rights    6
8    Termination    7
9    Obligations of the Company Upon Termination    10
10    Status Under FDIC Regulations    11
11    Binding Effect    11
12    Notices    11
13    No Assignment    12
14    Execution in Counterparts    12
15    Severability    12
16    Indemnification    12
17    Prior Understandings    12
Appendix A    14

2 OF 14

THIS AGREEMENT is dated July 5, 2013 and is made BETWEEN:
HSBC Finance Corporation (hereinafter called the “Company”); and
Patrick J. Burke of (hereinafter called the “Executive”).
WITNESSETH THAT:
WHEREAS, the Executive is currently employed by the Company; and
WHEREAS, the Company desires to continue to employ the Executive and the Executive desires to continue such employment on the following terms and conditions;
NOW THEREFORE, in consideration for continued employment of the Executive and a one-time off-cycle award as approved by the HSBC Holding plc Remuneration Committee on January 16, 2013, the terms of which are shown in Appendix A of this Agreement, the Company and the Executive, each intending to be legally bound, hereby mutually covenant and agree as follows:
		
	1
	APPOINTMENT

The Company shall continue to employ the Executive as an Executive of the Company and the Executive shall continue his employment with the Company until this Agreement is terminated in accordance with clause 8 (“the Term”).
		
	2
	SCOPE AND DUTIES OF THE EMPLOYMENT

The Executive shall serve as GGM SEVP and CEO HBIO of the Company and shall have all powers and duties consistent with such position, subject to the reasonable direction of the Board, including the requirement to perform services for Affiliates of the Company.  The Executive shall devote substantially his entire time during reasonable business hours (reasonable sick leave and vacations excepted) and use all best efforts to fulfill faithfully, responsibly, and to the best of his ability, his duties hereunder.  However, the Executive may, with the approval of the Board and subject to any approvals required by Parent Group policies in effect from time to time, serve on corporate, civic, and/or charitable boards and committees.  The Executive shall serve as a member of the Board if elected as such.  As used in this Agreement, “Affiliates” shall mean all companies, corporations, and entities that are affiliated with the Company, including without limitation HSBC Holdings plc (“Parent”) and its subsidiaries and their respective successors and assigns, and “Parent Group” shall mean Parent and its subsidiaries and their respective successors and assigns and all other Affiliates.
		
	3
	SALARY AND VARIABLE PAY

		
	3.1
	Base Salary.  For services performed by the Executive for the Company pursuant to this Agreement during the Term, the Company shall pay the Executive an annual base salary of $ 700,000.00 payable in substantially equal installments in accordance with the Company’s regular payroll practices.   

		
	3.2
	Salary Adjustments.  During the Term, the base salary of the Executive shall be reviewed by the Board no less frequently than annually to determine whether 

3 OF 14

or not the same should be adjusted in light of the duties and responsibilities of the Executive and his performance thereof.
		
	3.3
	Variable Pay.  During the Term, including, but not limited to, the year in which the Date of Termination (as defined by Section 8.6.3) occurs and notwithstanding any requirements that the Executive be employed at the end of the performance year or on the date of payment to be eligible for a variable pay award under the terms of any then existing bonus plan, the Board of Directors of the Parent (“the Parent Board”) may at its sole discretion, both as to whether to pay or award any variable incentive compensation (including any bonus or deferred bonus in the form of cash or equity) (“Variable Pay”) and if so, how much, pay the Executive Variable Pay of such amount as the Parent Board may determine in respect of each complete financial year of the Company.

		
	3.3.1
	The Executive acknowledges that he has no contractual right to receive any Variable Pay and that no Variable Pay shall be deemed earned or accrued until it is specifically declared in writing by the Parent Board (or an appointed committee thereof) in respect of the financial year to which it relates and that he will not acquire such a right on the basis that during the Executive’s employment he has received one or more Variable Pay awards.

		
	3.3.2
	The Parent Board will determine the payment date for any Variable Pay from time to time.  The granting or awarding of and all arrangements relating to any such Variable Pay (including the form thereof), will be at the absolute discretion of the Parent Board, which may, in its absolute discretion, terminate, replace, or amend any such arrangement.  Any Variable Pay which may be paid to the Executive shall be in addition to the Base Salary to which the Executive is entitled under this Agreement.

		
	3.4
	Equity Incentive Compensation.  The Executive may be eligible to participate in the HSBC Share Plan or any other employee equity plan established by the Parent from time to time.  Any such right to participate is subject to the rules of the relevant plan and at the discretion of the Parent Board.

		
	4
	OTHER BENEFITS

During the Term, in addition to the compensation described in clause 3 the Executive shall also be entitled to participate in all of the various retirement, welfare, fringe benefit, executive perquisite, and expense reimbursement plans, programs, and arrangements of the Company as in effect from time to time for similarly situated senior executives of the Company, to the extent the Executive is eligible for participation under the terms of such plans, programs, and arrangements.

		
	5
	TAX WITHHOLDING AND COMPLIANCE

		
	5.1
	The Company shall provide for the withholding of any taxes required to be withheld by federal, state, or local law with respect to any payment in cash, shares of stock and/or other property made by or on behalf of the Company to or for the benefit of the Executive under this Agreement or otherwise.  The Company may, at its option: (i) withhold such taxes from any cash payments 

4 OF 14

owing from the Company to the Executive, (ii) require the Executive to pay to the Company in cash such amount as may be required to satisfy such withholding obligations and/or (iii) make other satisfactory arrangements with the Executive to satisfy such withholding obligations.
		
	5.2
	Certain payments under this Agreement may be nonqualified deferred compensation subject to Internal Revenue Code Section 409A and the regulations promulgated thereunder (“Section 409A”).  The Company believes that all nonqualified deferred compensation payable under the terms of this Agreement will be paid in compliance with Section 409A, including, but not limited to, the requirement that payments made to a specified employee on account of a voluntary Separation from Service be delayed until at least six months after such Separation from Service.  The Agreement shall at all times be interpreted, construed, and administered so as to avoid insofar as possible the imposition of excise taxes and other penalties under Section 409A.    

		
	6
	NONCOMPETITION AND CONFIDENTIALITY

		
	6.1
	Noncompetition.  During the Term and during the six month period following the Date of Termination (as defined in clause 8.6.3) the Executive shall not become associated with the Comparator Group, whether as a principal, partner, employee, consultant or shareholder (other than as a holder of 1% or less of the outstanding voting shares of any publicly traded Company in the Comparator Group) without the written consent of the Company, such consent not to be unreasonably withheld if Executive will be working for a member of the Comparator Group in a role or business that does not directly or indirectly compete with the Company.  For purposes of this clause 6, “Comparator Group” means the following companies and entities, subject always to amendment from time to time by the HSBC Group’s Remuneration Committee and as notified to the Executive by no later than 30 days after any such amendment:  Banco Bradesco, Banco Itau, Banco Santander, Bank of America, Bank of China, Barclays, BBVA, BNP Paribas, Citigroup, Credit Suisse Group, DBS Group, Deutsche Bank, Fortis, ICBC, JP Morgan Chase, Lloyds Banking Group, National Australia Bank, Royal Bank of Canada, Royal Bank of Scotland, Societe Generale, Standard Chartered, UBS, Unicredito Italiano and Wells Fargo (and all group companies of the companies and entities set out in this clause 6) and, where any companies or entities set out in this clause 6 are the subject of a takeover or undergo any form of reconstruction, the entities to which the relevant business assets of such companies or entities are transferred from time to time.

		
	6.2
	Nonsolicitation.  During the Term and during the one year period following the Date of Termination (as defined in clause 8.6.3) the Executive:

		
	6.2.1
	will not directly or indirectly induce any employee of the Company or its Affiliates to terminate employment with any such entity, and shall not, directly or indirectly, either individually or as owner, agent, employee, consultant or otherwise, hire, employ or offer employment or assist in hiring, employing or offering employment to any person who is or was employed by the Company or an Affiliate unless such person shall have ceased to be employed by such entity for a period of at least six months; and 

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	6.2.2
	shall not solicit the business of, or otherwise attempt to establish any business relationship of a nature that is competitive with the business relationship of the Company or its Affiliates with any person or entity who was a significant commercial customer or client of the Company or its Affiliates within six months immediately prior to the Date of Termination.

		
	6.3
	Confidentiality.  During and after the period of employment with the Company, the Executive shall not, without prior consent from the CEO or the General Counsel of the Company, directly or indirectly disclose to any individual, company or other entity, other than to the Company or the Parent Group or their officers, directors or employees entitled to such information or any other person or entity to whom such information is disclosed in the normal course of the business of the Company, or use for the Executive’s own benefit or for the benefit of any other individual, company or other entity, any Confidential Information of the Company or of the Parent Group.  For purposes of this Agreement, “Confidential Information” is information relating to the Company or Parent Group (i) which is not generally known to the public or in the industry, (ii) which has been treated by the Company or the Parent Group as confidential or proprietary, (iii) which provides the Company or Parent Group with a competitive advantage, or (iv) in the confidentiality of which the Company or any Affiliate in the Parent Group has a legally protectable interest.  Confidential Information which becomes generally known to the public or in the industry, or in the confidentiality of which the Company and the Parent Group cease to have a legally protectable interest, shall cease to be subject to the restrictions of this clause 6.

		
	6.4
	Company Property.  By no later than the Termination Date (as defined in clause 8.6.3), the Executive shall return to the Company all property of the Company and the Parent Group and all copies thereof in the Executive’s possession or under his control.

		
	6.5
	Injunctive Relief with Respect to Covenants.  The Executive acknowledges and agrees that the covenants and obligations of the Executive under this clause 6 with respect to Noncompetition, Nonsolicitation, Confidentiality, and Company Property relate to special, unique, and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause the Company irreparable injury for which adequate remedies are not available at law.  Therefore, the Executive agrees that the Company shall be entitled to an injunction, restraining order or other such equitable relief (without the requirement to post bond) restraining the Executive from committing any violation of the covenants and obligations contained in this clause 6.  These injunctive remedies are cumulative and are in addition to any other rights and remedies the Company may have at law or in equity.

		
	6.6
	Survival.  The provisions of this clause 6 shall continue to apply after the Date of Termination (as defined in clause 6).

		
	7
	INTELLECTUAL PROPERTY RIGHTS

		
	7.1
	The Executive may make inventions or create other intellectual property during the Employment. In this respect the Executive has a special responsibility to further the interests of the Company and the Parent Group given the Executive’s 

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position at the Company and the remuneration paid to the Executive under this Agreement.
		
	7.2
	In recognition of the Executive’s position, remuneration and responsibility, the Executive acknowledges and agrees that any invention, improvement, design, process, information, copyright work, trade mark, trade name or get-up or any other intellectual property (together the “Intellectual Property”) made, created or discovered by him during the Term (whether capable of being patented or registered or not) in conjunction with or in any way affecting or relating to the business of the Company or the Parent Group or capable of being used or adapted for use in the Company or the Parent Group or in connection therewith shall be immediately disclosed to the Company and shall belong to and be the absolute property of the Company or such Affiliate as the Company may direct.  The Executive hereby assigns all right, title, and interest in and to all such Intellectual Property to the Company.

		
	7.3
	The Executive acknowledges that he has no rights, interests or claims, either during the Term or after its termination, in or to any such Intellectual Property and he shall not use such Intellectual Property other than during the Term and solely for the purpose of the Company or the Parent Group.

		
	7.4
	If and whenever requested by the Company, whether during the Term or after its termination, the Executive shall at the expense of the Company or such Affiliate of the Company as the Company shall direct:

		
	7.4.1
	apply or join with the Company or such Affiliate in applying for letters patent or other protection or registration in any part of the world for any such Intellectual Property; and

		
	7.4.2
	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 Company or such Affiliate or such other person as the Company may specify. 

		
	8
	TERMINATION

		
	8.1
	Until terminated in accordance with the provisions of this clause 8, the Company shall continue to employ the Executive and the Executive shall remain employed by Company.  Clause 9 hereof sets forth certain obligations of the Company in the event the Executive’s employment hereunder is terminated.  Certain capitalized terms used in this Agreement are defined in clause 8.6, below.

		
	8.2
	The Company and the Executive agree that effective by the Date of Termination for any reason, the Executive shall resign or shall have resigned from all positions, titles, duties, authorities, and responsibilities with, arising out of or relating to his employment with the Company including any directorships and agrees to execute all additional documents and take such further steps as may be required to effect such resignation.  The Executive hereby irrevocably appoints any member of the Board from time to time, jointly and severally, to be his attorney in his name and on his benefit to sign any documents and do things necessary or requisite to give effect to this clause.  In favor of any third party a certificate in writing signed by any member of the Board or by the Secretary of 

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the Company that any instrument or act that falls within the authority hereby conferred shall be conclusive evidence that such is the case.
		
	8.3
	Death or Disability.  Except to the extent otherwise provided in clause 8 with respect to certain post-Date of Termination payment obligations of the Company, this Agreement shall terminate immediately as of the Date of Termination in the event of the Executive’s death or in the event that the Executive becomes disabled.  The Executive will be deemed to be disabled if (i) he is unable to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months or (ii) he is, by reason of any medically determinable physical or mental impairment that can be expected to result in death or can be expected to last for a continuous period of not less than 12 months, receiving income replacement benefits for a period of not less than three months under an accident and health plan covering employees of the Company or Parent Group.  Notwithstanding the foregoing, the Executive will be deemed to have a Separation from Service (as defined in clause 8.6.4) as of the date six months after the date on which the Executive initially commenced a bona fide disability leave, whether or not such disability meets the definition set forth in this clause 8.3, and any compensation or benefits payable as a result of such Separation from Service shall be paid in accordance with the requirements of Section 409A, including, but not limited to, the requirement for a six-month delay of payments to a Specified Employee and any payment so delayed shall be paid as of the first day of the seventh month following the month in which the Separation from Service took place.

		
	8.4
	Discharge for Cause.  In accordance with the procedures hereinafter set forth, the Board may discharge the Executive from his employment hereunder for Cause.  Except to the extent otherwise provided in clauses 6 and 9 with respect to certain post-Date of Termination obligations of the Executive and the Company, this Agreement shall terminate immediately as of the Date of Termination in the event the Executive is discharged for Cause.  Any discharge of the Executive for Cause shall be communicated by a Notice of Termination to the Executive.  For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon; (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) specifies the Date of Termination, which may be as early as the date of the giving of such notice.  No purported termination of the Executive’s employment for cause shall be effective without a Notice of Termination.  Notwithstanding the foregoing, any nonqualified deferred compensation subject to the requirements of Section 409A, as such compensation is defined by Section 409A, that is owed as a result of a discharge for Cause, shall be payable on account of the Executive’s Separation from Service (as defined in clause 8.6.4) whether such Separation from Service occurs on the same date as the Date of Termination or not.

		
	8.5
	Termination for Other Reasons.  The Company may discharge the Executive without Cause by giving written notice to the Executive at least six months prior to the Date of Termination.  The Company can provide the six month notice by having the Executive continue to perform his duties hereunder or by placing the Executive on garden leave for all or part of that period and continuing to pay the 

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Executive his Base Salary and provide benefits due under clause 4 until the six month period has elapsed.  The Executive may resign from his employment by giving written notice to the Company at least six months prior to the Date of Termination.  The Company, in its sole discretion, may require that the Executive continue to perform his duties hereunder or may place the Executive on garden leave for all or part of that period and continue to pay the Executive his Base Salary and provide benefits due under clause 4 until the six month period has elapsed.  Notwithstanding the foregoing, if the Executive resigns and has been designated as a Specified Employee in the sole discretion of the Administrative Committee of HSBC North America Holdings Inc., as of the date he has a Separation from Service (as defined by clause 8.6.4), the Base Salary payments and other compensation and benefits subject to Section 409A required as result of such Separation from Service shall be paid in accordance with the requirements of Section 409A, including, but not limited to, the requirement for a six-month delay of payments to a Specified Employee and any payment so delayed shall be paid as of the first day of the seventh month following the month in which the Separation from Service took place.
		
	8.6
	Definitions.  For purposes of this Agreement, the following capitalized terms shall have the meanings set forth below:

		
	8.6.1
	“Accrued Obligations” shall mean, as of the Date of Termination to the extent not theretofore paid, the sum of (A) the Executive’s Base Salary under clause 3.1 through the Date of Termination, and (B) any vacation pay, expense reimbursements, and other cash entitlements accrued by the Executive as of the Separation from Service.  For the purpose of this clause 8.6.1, amounts due under (A) and (B) shall be deemed to accrue ratably over the period during which they are earned.

		
	8.6.2
	“Cause” shall mean the Executive: (A) committed an act constituting a misdemeanor involving moral turpitude or a felony under the laws of the United States, any state or political subdivision thereof or any jurisdiction in which the Executive is performing his Duties under this Agreement at the direction of the Company or any member of the Parent Group; (B) violated laws, rules or regulations applicable to banks, investment banks, broker dealers, investment advisors, or the banking and securities industry generally; (C) committed an act constituting a breach of fiduciary duty, negligence or misconduct; (D) engaged in conduct that violated internal policies or procedures; (E) committed an act of fraud, dishonesty or misrepresentation (other than negligent misrepresentation); (F) engaged in a conflict of interest or self-dealing; (G) engaged in material insubordination; or (H) breached the obligations as set forth in this Agreement or failed to perform duties as an employee of Company or Affiliate other than as a result of death or disability.  Notwithstanding the foregoing, you shall not be Discharged for Cause under clause (D) unless the Company first provides you with written notice referring to this Agreement, of the circumstances constituting Cause and giving you reasonable opportunity to cure the same.

		
	8.6.3
	“Date of Termination” shall mean (A) in the event of a discharge of the Executive by the Board for Cause, the date specified in the Notice of Termination, (B) in the event of a discharge of the Executive without Cause or resignation by the Executive, the date specified in the written 

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Notice of Termination to the Executive (in the case of discharge) or to the Company (in the case of resignation), which date shall be no less than six months from the date of such written notice, (C) in the event of the Executive’s death, the date of the Executive’s death, and (D) in the event of termination of the Executive’s employment by reason of disability pursuant to clause 8.3, the date the Executive receives written notice of such termination.
		
	8.6.4
	“Separation from Service” means that the Executive ceases to be employed by the Company or any ERISA Affiliate (defined as an entity that is related to the Company within the meaning of Internal Revenue Code Section 414(b) or 414(c), including, but not limited to, any Company or other entity that is 80 percent or more owned directly or indirectly by the Parent) for any reason, voluntary or involuntary, other than by reason of death or an approved leave of absence.  Whether a Separation from Service has occurred shall be determined in accordance with Treasury Regulation § 1.409A-1(h)(1).

		
	8.6.5
	“Qualifying Termination” shall mean termination of the Executive’s employment under this Agreement by reason of the discharge of the Executive by the Company other than for Cause, death or disability.

		
	8.7
	Continuing Obligations.  Notwithstanding the termination of this Agreement pursuant to clauses 8.3, 8.4 or 8.5 above, the respective covenants, agreements and obligations of the Company and the Executive set forth hereinafter shall continue.

		
	9
	OBLIGATIONS OF THE COMPANY UPON TERMINATION

		
	9.1
	The following provisions describe the obligations of the Company to the Executive under this Agreement upon termination of his employment, subject in all cases to compliance with all applicable laws including in particular, Section 409A.  However, except as explicitly provided in this Agreement, nothing in this Agreement shall limit or otherwise adversely affect any rights which the Executive may have under applicable law, under any other agreement with the Company or any of its subsidiaries, or under any compensation or benefit plan, program, policy or practice of the Company or any of its subsidiaries.

		
	9.2
	Death, Disability or Retirement.  In the event this Agreement terminates by reason of the death or disability of the Executive or retirement under a retirement plan of the Company, the Company shall pay to the Executive (or his heirs or estate in the event of the Executive’s death), to the extent not theretofore paid, all Accrued Obligations and the amount of Variable Pay (if any) awarded to the Executive on a pro-rated basis to the date of the Separation from Service, in a lump sum within sixty (60) days after the date of the Separation from Service, save for any deferred Variable Pay which shall vest in accordance with the vesting schedule issued to the Executive at the time of any such award;

		
	9.3
	Discharge for Cause or Resignation.  In the event this Agreement terminates by reason of the discharge of the Executive by the Company for Cause or by reason of the resignation of the Executive, the Company shall pay to the Executive all 

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Accrued Obligations to the extent not theretofore paid, in a lump sum within sixty (60) days after the date of the Separation from Service.
		
	9.4
	Qualifying Termination.  In the event of a Qualifying Termination, the Executive shall receive the following benefits provided the Executive has executed and not revolved a release of liability satisfactory to the Company.

		
	9.4.1
	To the extent not theretofore paid, payment of all Accrued Obligations together with the amount of Variable Pay (if any) awarded to the Executive on a pro-rated basis to the Date of Termination, in a lump sum within sixty (60) days after the date of the Separation from Service, save for any deferred Variable Pay which shall vest in accordance with the vesting schedule issued to the Executive at the time of any such award.

		
	9.4.2
	Severance pay under the HSBC – North America (U.S.) Severance Pay Plan as in effect at the time of the Separation from Service.

		
	9.4.3
	Vesting of all equity awards to the Executive which are not otherwise fully vested, subject to and in accordance with the relevant plan or award rules in force as at the date of the Separation from Service.

		
	10
	STATUS UNDER FDIC REGULATIONS

The payments under this Agreement, including without limitation pursuant to clause 3 hereof, shall be reduced to the extent required by the applicable Federal Deposit Insurance Company (“FDIC”) regulations.
		
	11
	BINDING EFFECT

This Agreement shall be binding upon and inure to the benefit of the heirs and representatives of the Executive and the successors and assigns of the Company.  This Agreement shall be binding upon any successor of the Company in accordance with the operation of law, and such successor shall be deemed the “Company” for purposes of this Agreement.
		
	12
	NOTICES

All notices, requests, demands and other communications hereunder shall be in writing and shall be deemed to have been duly given if delivered by hand or by recognized commercial delivery service or if mailed, within the continental United States by first class certified mail, return receipt requested, postage prepaid, addressed as follows:

If to the Board or the Company, to:

HSBC Finance Corporation
26525 N. Riverwoods Blvd.
Suite 100
Mettawa, IL  60045

Attention:  General Counsel

If to the Executive, to the most recent address for the Executive on the files of the Company.

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Such addresses may be changed by written notice sent to the other party at the last recorded address of that party.
		
	13
	NO ASSIGNMENT

Except as otherwise expressly provided herein, this Agreement is not assignable by any Party and no payment to be made hereunder shall be subject to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance or other charge.
		
	14
	EXECUTION IN COUNTERPARTS

This Agreement may be executed by the Parties hereto in two or more counterparts, each of which shall be deemed to be an original, but all such counterparts shall constitute one and the same instrument, and all signatures need not appear on any one counterpart.
		
	15
	SEVERABILITY

If any provision of this Agreement shall be adjudged by any court of competent jurisdiction to be invalid or unenforceable for any reason, such judgment shall not affect, impair or invalidate the remainder of this Agreement.  Furthermore, if the scope of any restriction or requirement contained in this Agreement is too broad to permit enforcement of such restriction or requirement to its full extent, then such restriction or requirement shall be enforced to the maximum extent permitted by law, and the Executive consents and agrees that the contract may be so modified in any proceeding brought to enforce such restriction or requirement.
		
	16
	INDEMNIFICATION

To the full extent permitted by law, the Company shall, both during and after the term of the Executive’s employment, indemnify the Executive (including the advancement of expenses) for any judgments, fines, amounts paid in settlement and reasonable expenses, including attorneys’ fees, incurred by the Executive in connection with the defense of any lawsuit or other claim to which he is made a party by reason of being (or having been) an officer, director or employee of the Company or any Affiliate in the Parent Group.
		
	17
	PRIOR UNDERSTANDINGS

This Agreement embodies the entire understanding of the parties hereto and supersedes all other oral or written agreements, including the Employment Protection Agreement entered into between the Executive and Household International, Inc. on March 1, 2002, or understandings between them regarding the subject matter hereof.  No change, alteration or modification hereof may be made except in writing, signed by each of the Parties hereto.  The headings in this Agreement are for convenience of reference only and shall not be construed as part of this Agreement or to limit or otherwise affect the meaning hereof.

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IN WITNESS WHEREOF the Parties hereto have executed and delivered this Agreement as of the day and year first above written.

	
			
	 
	HSBC Finance Corporation

	 
	

By:
	

/s/ Mary Bilbrey

	 
	

Title:
	

EVP Head of HR HSBC USA

	 
	 
	 

	 
	 
	 

	 
	Patrick J. Burke

	 
	 
	 

	 
	 
	/s/ Patrick Burke

 

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APPENDIX A
Patrick J Burke
March 2013 RSU Award Terms & Conditions
	
		
	Group Band Level:
	Band 0

	Fixed Pay:
	Unchanged at USD700,000

	Discretionary Variable Pay:
	Eligible for consideration of the annual discretionary variable pay award.  The amount to be determined in line with the pay review timeline and guidelines.

	Off Cycle Award.
	USD1,300,000 in the form of HSBC Restricted Share Units.  The award would be conditional and vest on 1 October 2014 if: 
1) conduct of the executive is aligned with HSBC Values until vesting date or cessation of  employment if earlier  
2) executive has achieved his business objectives until vesting date or cessation of employment if earlier, 
3) the CML transaction has closed to the satisfaction of CEO HSBC Bank Inc., and
4) executive has experienced an involuntary job loss as a result of no alternative new role being found which is commensurate with his current Global Career Band and is in both parties reasonable opinion appropriate in all the circumstances

Should the executive remain employed, his award will lapse on the day prior to the vesting date (1 October 2014) even though the other performance conditions may have been met. 

Vesting will not be pro-rated if the employee leaves HSBC or closure occurs prior to 1 October 2014

	Other good and bad leaver terms
	Death and cessation of employment due to injury, disability or ill health will be afforded good leaver treatment but no acceleration of vesting or pro-rating  

All other good leaver provisions in the rules will be disapplied (eg redundancy, retirement, sale of business, sale of company) 

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