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ewenstevensonservicecont

                                                           Dated                                      25 June 2018                                                                                                                                               HSBC GROUP MANAGEMENT SERVICES LIMITED                            AND                     EWEN STEVENSON                                                                 SERVICE AGREEMENT                                                                                                                                                                                            1               

 

                                   Contents   Clause                                                                                                                    Page   1           Appointment ........................................................................................ 3   2           Remuneration ..................................................................................... 3   3           Benefits and Pension .......................................................................... 5   4           Scope and duties of the Employment .................................................. 6   5           Hours and place of work ..................................................................... 7   6           Expenses ............................................................................................ 8   7           Holidays .............................................................................................. 8   8           Sickness benefits ................................................................................ 8   9           Restrictions during the Employment .................................................... 8   10          Confidential Information and Company documents ............................. 9   11          Inventions and other Intellectual Property ......................................... 10   12          Termination and Garden Leave ......................................................... 11   13          Restrictive covenants ........................................................................ 13   14          Grievance, dismissal and disciplinary procedures ............................. 18   15          Disclosure of information ................................................................... 18   16          General ............................................................................................. 18   17          Definitions ......................................................................................... 19   Schedule 1  Buyout awards...................................................................... 22                                                                                          2    

 

THIS AGREEMENT is dated 25 June 2018 and is made BETWEEN:   (1)   HSBC GROUP MANAGEMENT SERVICES LIMITED         (registered number 9231974),        whose registered office is at 8 Canada Square, London E14 5HQ (the Company); and   (2)   EWEN STEVENSON of * (the Executive).   IT IS AGREED as follows:   1     Appointment   1.1   The Employment and the Executive’s continuous employment will begin on the        Commencement Date.    1.2   Subject to clauses 1.5 and 12, the Employment will continue until terminated by either        party giving to the other twelve months’ notice in writing.   1.3   The Executive shall be employed as Group Finance Director at Global Career Band (GCB)        0. The Executive shall report to the Group Chief Executive or such other appropriate        person as the Company shall designate from time to time. The Employment also requires        the Executive to hold various directorships and offices within the Group from time to time.      1.4   The Executive consents to the Company transferring of the Executive’s employment and        assigning the provisions of this Agreement to any Group Company at any time (on the        terms and conditions of this Agreement).   1.5   The Employment is and remains at all times subject to the Executive successfully        completing all Company required and on-going screenings for a “High Risk Role”, given        that any abuse of the role poses particular potential damage to the Group and external        stakeholders. Additionally, the Executive is at all times required to hold the required        approvals by the FCA and all other relevant regulatory bodies in order to be able to carry        out his/her duties. In the event of any screening result being considered unsatisfactory in        the reasonable opinion of the Company and/or where FCA or any other relevant regulatory        approval is withdrawn, the Company has the right to terminate the Employment with        immediate effect and with no further sums payable to the Executive beyond any sums        accrued due as at the date of that termination.     2     Remuneration   2.1   The remuneration structure of the Executive as Group Finance Director will be in line with        the remuneration policy for executive Directors as published in the Annual Report and        Account of HSBC Holdings plc and approved by its shareholders.    2.2   The Company will pay the Executive a Base Salary of £700,000 per annum (Base Salary).        The Base Salary will be paid less Statutory Deductions and accrue from day to day and        be payable in equal monthly instalments in arrears on or around the 20th day of each        calendar month. Unless notice to terminate the Employment has been given by either        party, the Company will review the Executive's Base Salary in March of each calendar        year, in good faith, the first such review to take place on or about March 2020. The        Company has no obligation to increase the Executive’s Base Salary following a review.    2.3   The Executive will not be entitled to receive any other fees for holding any offices in the        Company or any Group Company by virtue of the Employment.   2.4   In its absolute discretion, the Company will pay the Executive a fixed allowance of        £950,000 per annum (the Fixed Pay Allowance). The Fixed Pay Allowance will be        granted in shares that vest immediately on a quarterly basis or at any other frequency that                                                                                3    

 

      the Group’s Remuneration Committee deems appropriate. These shares (net of those        sold to cover any income tax and social security) will be then be released annually on a        pro rata basis over five years, starting from the March immediately following the end of        the financial year for which the shares are granted.   2.5   The Company and/or the Group may decide, in its discretion, to award the Executive an        amount of Variable Pay for any complete financial year of the Company and/or the Group        during which the Employment has continued. The Executive acknowledges that he/she        has no contractual right to receive any Variable Pay in any financial year even where it        may have been paid to him/her in any previous year(s).          2.6   The Executive will not, unless otherwise approved in writing by the Group’s Remuneration        Committee in its absolute discretion, be considered for any Variable Pay award if, at the        date when it might otherwise have been payable, he/she is under notice of termination        (served by either party) or is suspended pursuant to clause 12.3 and/or is on garden leave        in accordance with clause 12.4. The Company (on behalf of itself and/or any Group        Company) also has the right to postpone the payment of any Variable Pay award if, at the        date when it might otherwise have been payable, the Executive is subject to an ongoing        investigation or disciplinary process.   2.7   Where a decision to pay to the Executive a Variable Pay award is made, the Executive        agrees that this will always be, and remain, subject to (i) any obligations or conditions        required by the regulator(s) of the Group or any other regulatory requirements, including        the application of malus and/or clawback in accordance with the Group’s Malus and        Clawback Policies in force from time to time; (ii) any remuneration policy of the Company        or any relevant Group Company from time to time; and (iii) any other applicable rules,        codes of practice and/or guidance regarding remuneration from time to time. Any        adjustment, forfeiture or repayment arising from the application of malus and/or clawback        may be deducted from any sums due to the Executive at any time. This is without prejudice        to any right the Company or any Group Company may have to recover any sums from the        Executive including any clawback. The Executive irrevocably agrees that such sums are        recoverable by the Company and/or any Group Company from any sums otherwise due        and/or payable to him/her.   2.8   The Executive may be eligible to participate in any employee share plan established by        the Company and/or the Group from time to time. Eligibility to participate is subject always        to the rules of the relevant plan in force from time to time and is at the discretion of the        Company and/or any Group Company (as applicable).    2.9   Subject to the rules of the relevant plan as referenced in clause 2.8 and in the definition        of Variable Pay, the Executive waives all rights to compensation or damages arising from        any loss sustained to him/her by a failure to receive any rights or benefits under the        relevant plan (or by their reduction in value) as a result of:         (a)   notice of termination and/or the termination of his/her office and/or the Employment              given by either party for any reason whatsoever; and/or         (b)   the Company’s exercise or failure to exercise any discretion available to it, whether              conferred by the rules of the plan or otherwise.    2.10  The Executive authorises the Company to deduct from any Salary or awards of Variable        Pay or from any other remuneration or payments due to the Executive from the Company        or any Group Company at any time, any sums due from the Executive to the Company        including any overpayments, loans or advances made to him/her by the Company or any        Group Company, the cost of repairing any damage or loss to the Group’s property caused        by the Executive (and of recovering such costs), sums in respect of clause 8.3 and/or any                                                                                 4    

 

      sums owing in connection any malus and/or clawback pursuant to the Group’s Malus and        Clawback Policies from time to time in force.   2.11  To avoid any doubt, the operation of and all arrangements relating to any Variable Pay,        can be terminated, replaced and/or amended by the Company at any time with or without        notice to the Executive and, further, the Executive’s total remuneration in respect of the        Employment is at all times subject to the Directors’ Remuneration Policy as approved by        the Group’s shareholders from time to time.   3     Benefits and Pension   3.1   In connection with his/her role as an Executive Director of the Group, the Executive is        eligible to receive the following benefits during the Employment:         3.1.1  Car                The Executive has access to the chauffeur driven services operated by the               Company  under the terms of the Global Expenses Framework for Executive               Directors, Group Managing Directors and Group General Managers that may               apply from time to time.           3.1.2  Personal Accident Insurance Cover                 The Executive is eligible to participate on a non-contributory basis in the Group’s               personal accident insurance scheme, subject to the rules of the scheme in force               from time to time.          3.1.3  Clubs                The Company will make reasonable payments on the Executive’s behalf in               respect of the membership fees for annual memberships of up to two clubs               nominated by the Executive each year, to be pre-approved by the Group Chief               Executive.          3.1.4  Health Check                The Executive is eligible for an annual voluntary health check with a medical               adviser appointed and paid for by the Company.          3.1.5  Medical Cover                The Executive and his/her spouse/partner and eligible dependants are eligible to               participate in any relevant medical scheme operated for officers of the Group,               from time to time subject always to the rules of the scheme for the time being in               force.          3.1.6  Group Income Protection                If the Executive is unable by reason of illness or injury, to perform the material or               substantial parts of his/her duties, following a period of absence from work in               excess of 26 consecutive weeks, the Executive will be eligible to be considered               for a monthly payment equivalent to 50 per cent. of monthly Base Salary for some               or all of his/her on-going absence. In the event of such payment, the Executive’s               total annual pension allowance as set out at clause 3.1.10 will continue to be               payable, subject to a proportionate reduction and, therefore, an overall reduced               cap of 15 per cent. of Base Salary.                                                                                 5    

 

      3.1.7  Life Assurance Cover                The Executive is eligible for cover under the Group Life Assurance Scheme up to               a sum (currently) equivalent to four times the Executive’s Base Salary, subject to               the rules of the scheme in force from time and any necessary approvals by the               Scheme’s trustees.         3.1.8  Tax Return Preparation                             The Executive is eligible to receive tax return support provided by the Group’s tax               provider for global mobility activities, from time to time. The provision of the tax               return support will cover only compensation delivered to the Executive in respect               of the Employment and will not cover extended wealth management or other               investment advice.           3.1.9  Directors’ and Officers’ Liability                The Executive is eligible for cover under the relevant Company or Group               Directors’ and Officers’ Liability policy (including Outside Directors’ and Officers’               Liability) subject always to the existence of that policy (determined by the               Company in its discretion and the rules of the policy in force from time in force).          3.1.10 Pension                Subject to clause 3.1.6, the Company will pay to the Executive an annual pension               allowance (Pension Allowance) of 30 per cent of the Executive’s Base Salary               payable monthly in arrears, less Statutory Deductions. By accepting this               agreement, the Executive elects to opt out of the HSBC sponsored UK pension               plan under UK pension legislation.   3.2   The Company reserves the right to amend or withdraw any employee benefit without prior        notice (although the Company will take reasonable endeavours to advise the Executive of        any such variation or withdrawal) in circumstances either where Director’s remuneration        is not approved or where it is otherwise reasonable to do so. The Company is not obliged        to provide any alternative benefit or other compensation in the event of withdrawal and/or        generally, where any scheme provider refuses to provide benefits to the Executive (or to        his/her partner/spouse and/or eligible dependants).   4     Scope and duties of the Employment   4.1   In his/her role as Group Finance Director, the Executive will devote the whole of his/her        time, attention and skill to his/her duties.  During the Employment, the Executive will        comply with any role profile and/or statement of responsibilities applicable to his/her role,        and will at all times:          4.1.1  diligently perform such duties and exercise such powers consistent with his/her               position as Group Finance Director may from time to time be assigned to or vested               in him/her by the Board (including where he/she may be assigned duties of               another position of comparable status);         4.1.2  comply with all reasonable and lawful directions given to him/her by the Board;         4.1.3  act in good faith, and in a way most likely to promote the success of the Group               for the benefit of its members as a whole (which may also include performing               duties from time to time on behalf of any Group Company);                                                                                 6    

 

      4.1.4  perform his/her services in a professional and competent manner and in               cooperation with others;         4.1.5  use his/her best endeavours to promote, protect, develop and extend the               business of the Company and any Group Company;         4.1.6  keep the Board and any relevant Group Company promptly and fully informed (in               writing if so requested) of his/her conduct and activities in relation to the business               of the Company and any Group Company and provide such explanations as the               Board may require from time to time (including for the avoidance of doubt, any               misconduct of other employees or directors or his/her own (including any plans of               any other senior employee to leave, join a competitor and/or establish a business               in competition with the Company or any Group Company as required by clause               9.5);          4.1.7  not do or fail to do anything that might reasonably be expected to harm the               reputation of the Company or any relevant Group Company;         4.1.8  do all such things as are necessary to ensure his/her compliance with the               Companies Act 2006, the UK Listing Rules (including the Model Code for               transactions in securities by directors and certain senior executives of listed               companies), the Market Abuse Regulation (596/2014/EU) and the Corporate               Governance Code, and all equivalent legal obligations elsewhere in the world to               which he/she is or may become subject (and specifically, so far as it lies within               his/her power to do so, in all cases, also by the Company and any Group               Company);         4.1.9  comply with all Company and Group Company policies, including, without               limitation, the Code for Dealing in HSBC Group Securities, the Compliance               Guidelines and those set out in the Company’s Employee Handbook and the HR               Procedure Manuals from time to time together with any relevant statement of               responsibilities as a Senior Manager and/or Group Chief Executive as required               by the Company, any Group Company, the FCA or similar regulator;          4.1.10 not, in breach of any applicable legislation, directly or indirectly seek, receive or               obtain, in respect of the performance of his/her duties or of any goods or services               sold or purchased or other business transacted (whether or not by the Executive)               by or on behalf of the Company or any Group Company, any personal benefits,               discount, rebate, commission, bribe, kickback or other inducement (whether in               cash or in kind).    5     Hours and place of work   5.1   The Company’s standard working week is 35 hours. The Executive will, however, devote        the whole of his/her time, skill and attention during normal business hours, and at such        other times as may be reasonably necessary (without additional remuneration), to his/her        duties.   5.2   The Executive acknowledges that, because of the autonomous nature of his/her role, the        duration of his/her working time is not measured or monitored or determined by the        Company, so that the limit on weekly working time set out in Regulation 4 of the Working        Time Regulations 1998 (or such other regulations as may from time to time come into        force) does not apply to the Employment.     5.3   The Executive's normal place of work is the Company's offices at 8 Canada Square,        London E14 5HQ and such other places within the UK as the Company may reasonably                                                                                 7    

 

      require for the proper performance of his/her duties. The Executive will be required        (subject always to the appropriate immigration approvals) to travel to such places within        or outside the UK as may be required in order to properly perform his/her duties.    6     Expenses   6.1   The Company will reimburse the Executive the amount of all expenses evidenced by        him/her as properly and reasonably incurred in the discharge of his/her duties, in        accordance with the Global Expenses Framework for Executive Directors, Group        Managing Directors and Group General Managers and any other relevant global policies        for directors that may apply from time to time.    7     Holidays   7.1   The Executive is entitled to 30 days' holiday in each holiday year (1 January to 31        December) calculated on Base Salary and any relevant allowance notified to the Executive        under clause 2.3, in addition to the usual (currently eight) annual public or bank holidays        in England, to be taken at times convenient to the Company. Holiday entitlement for one        holiday year may be carried over to the following holiday year with the prior agreement of        the Group Chief Executive.    7.2   If the Employment begins or ends part way through a holiday year, the Executive’s holiday        entitlement will be calculated on a prorated basis for that holiday year.   7.3   If, on the termination of the Employment, the Executive has: (i) exceeded his/her accrued        holiday entitlement, the excess may be deducted from sums due to the Executive and the        Executive hereby authorises the Company to make such deduction; or (ii) any unused        accrued holiday entitlement, the Company may either require the Executive to take such        unused holiday during any notice period (whether or not the Executive is on Garden        Leave) or make an appropriate payment in lieu of such untaken accrued holiday.     8     Sickness benefits   8.1   If the Executive cannot attend work due to sickness or injury, he/she will comply with the        notification and certification requirements of the Absence from Work Policy set out in the        Company’s Employee Handbook and will receive relevant payments in respect of his/her        absence according to the policy (which are deemed inclusive of Statutory Sick Pay and all        other statutory benefits to which the Executive may otherwise be entitled).    8.2   If so required, the Executive agrees to supply the Company with medical certificates        covering any period of sickness or incapacity exceeding seven days (including weekends)        and to undergo, at the Company's expense, a medical examination by a doctor appointed        by the Company (and the Executive agrees that copies of any medical reports prepared        by such doctor shall be sent directly to the Company).   8.3   If the Executive is incapable of performing his/her duties by reason of injury sustained        wholly or partly as a result of negligence or breach of any duty on the part of a third party,        and the Executive recovers an amount by way of compensation for loss of earnings from        that third party, he/she will pay to the Company any sum (or part sum) received by him/her        in respect of any amount paid to him/her under clause 8.1 above.   9     Restrictions during the Employment   9.1   During the Employment, the Executive will not directly or indirectly either on his/her own        account or on behalf of any other person, company, business entity or other organisation        be employed, engaged, concerned or interested in any other business or undertaking,        except:                                                                                 8    

 

      9.1.1  as holder (directly or through nominees) of investments listed on the London               Stock Exchange plc or in respect of which dealing takes place on the Alternative               Investment Market of the London Stock Exchange plc or on The Stock Exchange               of Hong Kong Limited or on any Recognised Investment 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; or          9.1.2  with the consent in writing of the Company which may be given subject to any               terms which the Company requires.     9.2   The Executive will not (and will procure so far as he/she is able that any person connected        with the Executive within the meaning of section 252 Companies Act 2006 (Connected        Person) shall not) deal or become or cease to be interested (within the meaning set out        in Schedule 1 Companies Act 2006) in any securities of the Company, except in        accordance with the Company and/or the Group Code for Dealing in HSBC Group        Securities and every regulation of the Group for the time being in force in relation to        dealings in shares or other securities of the Company or any Group Company.    9.3   Subject to any regulations issued by the Company or any relevant Group Company, the        Executive and any Connected Person 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 the Executive) by or on behalf of        the Company or any Group Company and if he/she or any Connected Person (or any firm        or company in which he/she or any Connected Person is interested) shall obtain any such        discount, rebate or commission the Executive will account to the Company or the relevant        Group Company for the amount received by the Executive or any Connected Person (or        a due proportion of the amount received by such company or firm having regard to the        extent of the Executive’s or the Connected Person’s interest therein).     9.4   The Executive agrees to disclose to the Board any matters relating to any Connected        Person which may, in the reasonable opinion of the Board, be considered to interfere,        conflict or compete with the proper performance of the Executive's obligations under this        Agreement.   9.5   During the Employment the Executive will inform the appropriate member of the Board        without delay if he/she becomes aware that any director, officer, or senior employee of the        Company or any Group Company is or may be planning to materially breach any of the        provisions of their contract of employment or implied duties of loyalty, good faith and        fidelity.   9.6   The Executive will not, other than having observed the relevant policies and procedures        in force from time to time make or issue any press, radio or television statement or publish        or submit for publication any letter or article relating directly or indirectly to the business        or affairs of the Company or any Group Company, its or their officers, directors or        employees or the Employment or its termination.   10    Confidential Information and Company documents   10.1  The Executive recognises that, whilst performing the duties for the Company the Executive        will have access to and come into contact with Confidential Information belonging to the        Company and/or any Group Company and will obtain personal knowledge of and influence        over its or their customers, suppliers and/or employees. The Executive therefore agrees        that the restrictions set out in this clause 10 are reasonable and necessary to protect the        legitimate business interests of the Company and the Group both during and after the        termination of the Employment. The Executive shall neither during the Employment                                                                                 9    

 

      (except in the proper performance of the duties) nor at any time (without limit) after the        termination of the Employment directly or indirectly:         10.1.1 divulge or communicate to any person, company, business entity or other               organisation; or         10.1.2 use for his/her own purposes or for any purposes other than those of the               Company or any Group Company; or         10.1.3 through any failure to exercise due care and diligence, cause any unauthorised               disclosure of          any Confidential Information relating to the Company or any Group Company.   10.2  This restriction does not apply to information which:         10.2.1 is used or disclosed by the Executive in the proper performance of his/her duties               or with the prior written consent of the Company or any Group Company;         10.2.2 the Executive is ordered by a court of competent jurisdiction to disclose or which               is otherwise required to be disclosed by law; or         10.2.3 is already in the public domain (other than as a result of unauthorised disclosure               by the Executive or any other person).   10.3  The Executive will not, during the Employment or at any time thereafter, make, except for        the benefit of the Company or any Group Company, any copy, record or memorandum of        any Confidential Information and any such copy, record or memorandum will be and        remain the property of the Company and will be returned by the Executive to the Company        or irrevocably deleted from any computer, mobile and/or handheld device and/or any other        media (including, but not limited to, any cloud based storage system) in the Executive’s        possession or under the Executive’s control, when required to do so by the Company and        in any event on the termination of the Employment.   10.4  Nothing in this Agreement precludes the Executive from making any legitimate        whistleblowing type disclosure to any relevant  regulator anywhere in the world (including,        so far as the UK is concerned, within the meaning of Part 4A (Protected Disclosures) of        the Employment Rights Act 1996 and so far as reportable concerns are defined by the        FCA).   11    Inventions and other Intellectual Property   11.1  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 Group given the Executive’s position at the Company        and the remuneration paid to the Executive under this Agreement.   11.2  In recognition of the Executive’s position, remuneration and responsibility, the Executive        acknowledges and agrees that any Intellectual Property made, created or discovered by        him/her during the Employment (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        any Group Company or capable of being used or adapted for use in the Company or any        such Group Company 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 Group        Company as the Company may direct.                                                                                 10    

 

11.3  However, this will only apply to the extent that any invention was made by the Executive        in the course of his/her duties or in the course of duties falling outside the Executive’s        normal duties but which have been specifically assigned to him/her (together Duties) and        (i) such invention was reasonably expected to result therefrom; and/or (ii) at the time of        making the invention, because of the nature of his/her Duties and the particular        responsibilities arising therefrom, the Executive had a special obligation to further the        interests of the Company.    11.4  The Executive acknowledges that he/she has no rights, interest or claims, either during        the Employment or after the termination of the Employment, in or to any such Intellectual        Property and he/she shall not use such Intellectual Property other than during the period        of the Employment and for the purpose of the Company or the Group.   11.5  The Executive agrees to sign all documents and to do all other acts which the Company        requests (at its expense) to enable the Company to enjoy the full benefit of this clause 11.        This includes joining in any application, which may be made in the Company's sole name        for registration of any Intellectual Property Rights (such as a patent, trademark or        registered design), and assisting the Company in defending and enforcing such rights        during and after the employment (at the Company's expense).   11.6  The Executive understands and accepts that the remuneration and benefits provided to        him/her by the Company in accordance with this Agreement constitute sufficient        consideration to the Executive for the performance of his/her obligations under this clause        11, including the waiver of or covenant not to assert any moral rights that he/she may        have.   11.7  This clause 11, and the rights and obligations of the parties contained, will survive expiry        of this Agreement, or its termination, for any reason.   12    Termination and Garden Leave   12.1  Notwithstanding the notice obligation to which the parties are generally subject in clause        1.2, the Employment may also be terminated by the Company:         12.1.1 by not less than six months' notice in writing given at any time where the Executive               has been incapacitated by reason of ill health or accident from performing the               duties hereunder for a period of (or periods aggregating) 26 weeks in total in any               period of 12 months, provided that such termination does not take effect if it would               remove any entitlement he/she would otherwise have thereafter for a maximum               period of 24 months to enjoy the receipt of any benefits arising out of or in               connection with any permanent health insurance policy or arrangement existing               from time to time for his/her benefit. The Executive generally agrees that if he/she               has been incapacitated by reason of ill health or accident from performing the               duties hereunder for the said period of (or periods aggregating) 26 weeks in any               period of 12 months, the Company may appoint another person or persons to               perform his/her role of Group Finance Director pursuant to clause 1.3 without               giving rise to any breach of any obligation owed to the Executive (under this               agreement or generally, as a matter of law, and, accordingly, he/she will have no               cause of action against the Company or the Group whatsoever in respect of such               termination of employment.          12.1.2 by summary notice in writing and with no liability to make any further payment to               the Executive (other than in respect of any sums accrued due as at the               Termination Date) if the Executive:                                                                                11    

 

             (a)  fails or neglects efficiently and diligently to discharge his/her duties, or is                    guilty of any serious or repeated breach of his/her obligations under this                    Agreement;                 (b)  is guilty of any fraud, dishonesty, serious misconduct or any other conduct                    which brings or is likely to bring the Executive or the Company or any Group                    Company into disrepute or affects or is likely to affect prejudicially the                    interests of the Company or the Group;                (c)  is convicted of an arrestable offence (other than a road traffic offence for                    which a non-custodial penalty is imposed);                 (d)  is guilty of any material breach or material non-observance of any code of                    conduct, rule or regulation referred to in clause 4.1;                (e)  becomes bankrupt or makes any arrangement or composition with his/her                    creditors;                 (f)  is prohibited from being a director by law, or has such regulatory approval                    as required pursuant to clause 1.5, withheld or withdrawn;                 (g)  voluntarily resigns as a director of the Company or any Group Company;                    or                (h)  is not or ceases to be eligible to work in the UK.     12.2  The Company's rights under clause 12.1 are without prejudice to any other rights that it        might have at law to terminate the Employment or to accept any breach of this Agreement        by the Executive as having brought the Agreement to an end. Any delay by the Company        in exercising its rights will not constitute a waiver.    12.3  If the Company may be or becomes entitled to terminate the Employment pursuant to        clauses 1.5 or 12.1.2, or whilst the Company or any external body may wish to investigate        any allegation against the Executive it will be entitled (without prejudice to its termination        rights) to suspend the Executive for so long as it considers necessary or appropriate.    12.4  Following service of notice to terminate the Employment by either party, the Company        may require the Executive to stay away from all or any of the Company's premises and/or        will not be provided with any work and/or will have no business contact with all or any of        the Group's agents, employees, customers, clients, distributors and suppliers and/or will        have no access to the Company's communications systems (Garden Leave). During any        period of Garden Leave, the Company may appoint a replacement to exercise any of the        Executive's duties and responsibilities and may require the Executive to take such actions        as it reasonably requires to effect a proper handover of any or all of his/her duties and        responsibilities. However, the Executive will continue to be bound by all his/her obligations        under this Agreement, including, without limitation, his/her duties of fidelity and of good        faith.   12.5  In addition to the circumstances referred to in clause 12.1.1 above, the Company may        terminate the Employment at any time and with immediate effect by notifying the Executive        in writing of that fact, confirming the date termination is to occur. If the Company terminates        the Executive’s employment in this way, it will make a payment in lieu of any notice of        termination and/or in lieu of the balance of the fixed term of employment corresponding to        the notice period as set out in clause 1.2 (the Payment in Lieu). The Executive agrees        that the Payment in Lieu will consist of Base Salary, Fixed Pay Allowance and Pension        Allowance but will not include any Variable Pay, payment in respect of benefits or any                                                                               12    

 

      holiday entitlement for the fixed term and/or notice period which is accrued due as at the        Termination Date (or, if notice has already been given, during the remainder of the notice        period) less Statutory Deductions.   12.6  The Company may decide to pay any Payment in Lieu only in equal monthly instalments        until the date on which the notice period referred to in clause 1.2 would have expired if        notice had been given (the Payment Period). The Executive shall comply with his/her        common law duty immediately following the termination of his/her employment and take        all reasonable steps to obtain alternative employment or engagement during the Payment        Period.     12.7  If the Executive obtains alternative employment or engagement during the Payment        Period, any further monthly instalments of the Payment in Lieu will be reduced on a pro        rata basis by the amount he/she receives. If the Executive fails to take all reasonable steps        to obtain alternative employment or engagement, the Company will have the right to        terminate all further instalments of the Payment in Lieu, and he/she will not be entitled to        any further compensation.   12.8  Without prejudice to the constitution (including for the avoidance of doubt the articles of        association) of any Group Company, on the Termination Date or on either the Company        or the Executive having served notice of such termination, the Executive will:         12.8.1 at the request of the Company resign from office as a Director of the Company               and all offices held by the Executive in any Group Company provided however               that such resignation shall be without prejudice to any claims which the Executive               may have against the Company or any Group Company arising out of the               termination of the Employment;          12.8.2 transfer without payment to the Company or as the Company may direct to any               third party, any shares or other securities held by the Executive in the Company               as a nominee or trustee for the Company or any Group Company and deliver to               the Company the related certificates;          12.8.3 deliver to the Company all Confidential Information which may be in the               Executive’s possession or under the Executive’s power or control and, if               requested, provide a signed statement that he/she has fully complied with the               obligations under this clause 12.8.3; and         12.8.4 cooperate with the Company and any Group Company by providing such               assistance as may reasonably be required in connection with any handover               arrangements or any claim made by or against the Company or any such Group               Company.     12.9  If the Employment is terminated for the purpose of the reconstruction or amalgamation of        the Company or by reason of the Company transferring all or a substantial part of its        business to another company and the Executive is offered employment by the        reconstructed or amalgamated or transferee company on similar terms to the terms of this        Agreement, the Executive will have no claim against the Company or such reconstructed        or amalgamated or transferee company in respect of the termination of the Appointment.   13    Restrictive covenants   13.1  For the purposes of this clause 13 the following words have the following meanings:         13.1.1 Capacity means as agent, consultant, director, employee, owner, partner,               shareholder beyond the shareholding limits applied in clause 9.1 or in any other               capacity;                                                                               13    

 

13.1.2 Company Products means any risk, banking or financial products researched         into, developed, supplied, distributed or sold to or by the Company with which the         duties of the Executive were materially concerned or for which he/she was directly         or ultimately responsible during the Restricted Period;   13.1.3 Company Services means any risk, banking or financial services (including but         not limited to technical and product support, technical advice and customer         services) developed or supplied to or by the Company with which the duties of         the Executive were materially concerned or for which he/she was directly or         ultimately responsible during the Restricted Period;   13.1.4 Comparator Group as at the date of this Agreement means Bank of America,         Barclays, BNP Paribas, Citigroup, Credit Suisse, DBS, Deutsche Bank, JP         Morgan Chase, Lloyds Banking Group, Royal Bank of Scotland, Standard         Chartered, Morgan Stanley and UBS, together with any transfer, merger,         amalgamation and/or reconstruction of any relevant business or part of such         business of any such company. This list of Comparator Group may have names         removed, amended and/or added at any time during the Employment by the         Company;    13.1.5 Customer  means any person or firm or company or other organisation         whatsoever to whom or which the Company supplied Company Products and/or         Company Services during the Restricted Period and with whom or which, during         the Restricted Period:          (a)  the Executive had material personal dealings pursuant to the Employment;              or          (b)  any employee who was under the direct supervision of either the Executive              or of the Executive’s direct reports, had material personal dealings              pursuant to their employment,          provided that in the case of a firm, company or other organisation “Customer”         shall not include any division, branch or office of such firm or company or other         organisation with which the Executive and/or any such employee as defined in         sub-clause (b) above had no dealings during the Restricted Period save that         where a restructuring of the firm or company or organisation has occurred         following such personal dealings “Customer” shall include the part of the business         with which the Executive or any employee as defined in sub-clause (b) above had         dealings during the Restricted Period;   13.1.6 Prospective Customer means any  person or firm or company or other         organisation whatsoever with whom or which the Company shall have had         negotiations or material discussions regarding the possible distribution, sale or         supply of Company Products and/or Company Services during the Restricted         Period and which were ongoing and not finally concluded at the Termination Date         and with whom or which during such period:          (a)  the Executive will have had material personal dealings pursuant to the              Employment; or          (b)  any employee who was under the direct supervision of either the Executive              or of the Executive’s direct reports will have had material personal dealings              pursuant to their employment; or                                                                          14               

 

             (c)  the Executive was directly responsible in a client management capacity on                    behalf of the Company,                provided that in the case of a firm, company or other organisation “Prospective               Customer” shall not include any division, branch or office of such firm, company               or other organisation with which the Executive and/or any such employee had no               dealings during the Restricted Period save that where a restructuring of the firm               or company or organisation has occurred following such personal dealings,               “Prospective Customer” shall include the part of the business with which the               Executive or any employee as defined in sub-clause (b) had dealings during the               Restricted Period;         13.1.7 Restricted Employee means any person who is on the Termination Date, or was               during the Restricted Period, employed or engaged by the Company or any Group               Company and is by reason of such employment or engagement in possession of,               or is reasonably likely to be in possession of, any trade secret or Confidential               Information relating to the business of the Company or any Group Company or               has acquired influence over its Customers or Prospective Customers (as defined               in this clause 13 but so that references to “the Executive” will be replaced by               references to the relevant employee and so that references to Employment will               mean the relevant employee’s employment with the Company or Group               Company, being in either case a person with whom the Executive had material               dealings during the Restricted Period);          13.1.8 Restricted Period means the period of 12 months ending on the Termination Date               or, in the event that no duties were assigned to the Executive for any part of the               duration of the notice period, the 12 months immediately preceding the last day on               which the Executive carried out any duties for the Company;          13.1.9 Restricted Products means Company Products or any products of the same or of               a similar kind;         13.1.10 Restricted Services means Company Services or any services of the same or of               a similar kind;         13.1.11 Restricted Supplier means any person, company, business entity or other               organisation whatsoever who has supplied goods or services to the Company or               any Group Company (other than utilities and goods or services supplied for               administrative purposes) during any part of the Restricted Period or who has               agreed prior to the Termination Date to supply goods or services to the Company               to commence at any time in the twelve months following the Termination Date.   13.2  The Executive recognises that, whilst performing his/her duties for the Company, he/she        will have access to and come into contact with Confidential Information belonging to the        Company and certain Group Companies and will obtain personal knowledge of and        influence over their customers and/or employees.     13.3  The Executive hereby undertakes with the Company that he/she will not for the period of        six months after the Termination Date without the prior written consent of the Company        (such consent not to be unreasonably withheld) whether by himself/herself, through        his/her employees or agents or otherwise and whether on his/her own behalf or on behalf        of any other person, firm, company or other organisation, directly or indirectly:         13.3.1 in competition with the Company anywhere in the world in a senior role, be               involved in any Capacity in any of the companies (or other entities) in the               Comparator Group in the business of researching into, developing, distributing,                                                                                15    

 

             selling, supplying or otherwise dealing with Restricted Products or Restricted               Services; or         13.3.2 in competition with the Company, accept orders or facilitate the acceptance of               any orders or have any business dealings for Restricted Products or Restricted               Services from any Customer or Prospective Customer; or         13.3.3 employ or otherwise engage any Restricted Employee in the business of or be               personally involved to a material extent in employing or otherwise engaging any               Restricted Employee in the business of researching into, developing,               manufacturing, distributing, selling, supplying or otherwise dealing with Restricted               Products or Restricted Services; or         13.3.4 interfere with, or endeavour to interfere with, the supply or provision of goods or               services (other than utilities, or goods or services supplied for an administrative               purpose) to the Company or to induce the cessation of the supply or provision of               such goods or services from any Restricted Supplier; or         13.3.5 in competition with the Company, solicit business from, or solicit the supply of               goods or services (other than utilities, or goods or services supplied for an               administrative purpose) from any Restricted Supplier for the purposes of the               provision of Restricted Products or Restricted Services.   13.4  The Executive hereby undertakes with the Company that he/she will not for the period of        twelve months after the Termination Date without the prior written consent of the Company        (such consent not to be unreasonably withheld) whether by himself/herself through his/her        employees or agents or otherwise and whether on his/her own behalf or on behalf of any        other person, firm, company or other organisation, directly or indirectly:         13.4.1 in competition with the Company, solicit business from or endeavour to entice               away or canvass any Customer or Prospective Customer if such solicitation or               canvassing is in respect of Restricted Products or Restricted Services;         13.4.2 solicit or induce or endeavour to solicit or induce any Restricted Employee to               cease working for or providing services to the Company, whether or not any such               person would thereby commit a breach of contract.   13.5  The Executive agrees that a copy of this clause 13, and clauses 10 and 11 will be provided        by him/her to any person firm company or other entity that makes or may make an offer        to him/her of employment, appointment as a director or officer, agency, partnership, or        joint venture either during Employment or after its termination (in such latter case, where        such restriction continues in full force and effect).     13.6  If the restrictions in clauses 13.3 and 13.4 are for any reason held to be unenforceable in        any jurisdiction in the world the Executive agrees to such amended or lesser restriction as        would enable that restriction to be enforced so far as possible in such jurisdiction.   13.7  In addition to the provisions of clause 16.6, the benefit of clauses 13.3 and 13.4 shall be        held on trust by the Company for each Group Company and the Company reserves the        right to assign the benefit of such provisions to any Group Company, in addition such        provisions also apply as though there were substituted for references to “the Company”        references to each Group Company in relation to which the Executive has in the course        of his/her duties for the Company or by reason of rendering services to or holding office        in such Group Company:         13.7.1 acquired knowledge of its trade secrets or Confidential Information; or                                                                                 16    

 

      13.7.2 had material personal dealings with its Customers or Prospective Customers; or         13.7.3 supervised directly or indirectly employees having material personal dealings with               its Customers or Prospective Customers,         but so that references in clause 13 to “the Company” shall for this purpose be deemed to        be replaced by references to the relevant Group Company. The obligations undertaken        by the Executive pursuant to this clause 13.7 shall, with respect to each such Group        Company, constitute a separate and distinct covenant and the invalidity or unenforceability        of any such covenant shall not affect the validity or enforceability of the covenants in favour        of any other Group Company or the Company.     13.8  In the event of the transfer (within the meaning of the Transfer of Undertakings (Protection        of Employment) Regulations 2006 and other equivalent legislation (the Transfer        Regulations) of the undertaking or the part of the undertaking in which the Executive shall        at the time be employed as the result of which (by virtue of the Transfer Regulations) the        Employment is automatically transferred to another company (the Transferee), the        provisions of this clause 13 shall have effect as though references in it (and in all        associated terms defined in this Agreement) to “the Group” are construed as references        to “any other company within the Transferee’s Group” (which for these purposes shall        comprise the Transferee and any holding company of the Transferee and the subsidiaries        of the Transferee and of any such holding companies for the time being).     13.9  The Executive hereby undertakes with the Company that he/she will not at any time        without the consent of the Company after the Termination Date:         13.9.1 engage other than as a private consumer in any trade or business or be               associated with any person, firm or company engaged in any trade or business               using the name(s) HSBC or Hongkong and Shanghai Banking Corporation or               incorporating the word(s) Hongkong Shanghai Banking Corporation;         13.9.2 in the course of carrying on any trade or business, claim, represent or otherwise               indicate any present association with the Company or any Group Company or for               the purpose of carrying on or retaining any business or custom, claim, represent               or otherwise indicate any past association with the Company or any Group               Company to its detriment other than simple and factual statements regarding the               Executive’s period of employment, job title, responsibilities and role.   13.10 The parties agree that the periods referred to in clauses 13.3 and 13.4 above will be        reduced by one day for every day, during which, at the Company’s direction, the Executive        is on Garden Leave.    13.11 The Executive agrees that, having taken independent legal advice, the restrictions        contained in this clause 13 are reasonable and necessary for the protection of the        Company and any Group Company and that they do not bear harshly upon him/her. The        parties agree that:         13.11.1 each restriction shall be read and construed independently of the other               restrictions so that if one or more are found to be void or unenforceable as an               unreasonable restraint of trade or for any other reason the remaining restrictions               shall not be affected; and         13.11.2 if any restriction is found to be void but would be valid and enforceable if some               part of it were deleted, that restriction shall apply with such deletion as may be               necessary to make it valid and enforceable.                                                                                17    

 

14    Grievance, dismissal and disciplinary procedures   14.1  The non-contractual grievance and disciplinary procedures applicable to the Executive are        set out in the Company’s Employee Handbook.    15    Disclosure of information   15.1  For the purposes of data protection requirements under the General Data Protection        Regulation (“GDPR”), the Company is a data controller in respect of the Executive’s        personal data. In order to comply with its obligations and responsibilities under the GDPR,        the Company will make information about the processing of the Executive’s personal data        available to the Executive in its HR Data Privacy Notice. The HR Data Privacy Notice does        not have contractual effect.   16    General   16.1  This Agreement is governed by and interpreted in accordance with English law.   16.2  The parties submit to the exclusive jurisdiction of the courts of England and Wales, but        this Agreement may be enforced by the Company in any court of competent jurisdiction.   16.3  This Agreement contains all the information required to be provided to the Executive under        section 1 of the Employment Rights Act 1996.   16.4  Any notices or other document to be served on a party under this Agreement will be        delivered by hand or sent to the party at the address or fax number given in this Agreement        or as otherwise notified in writing to the other party. A properly addressed and prepaid        notice sent by post will be deemed to have been served at 9.00am on the second working        day after posting or at the time recorded by the delivery service. If sent by fax, notice will        be deemed to have been received at the time of transmission.   16.5  The Executive will, at the time of signing this Agreement, appoint the Company as his/her        attorney so that the Company can give effect to the provisions of clauses 11 and 12.8.1.   16.6  Each Group Company will have the right under the Contracts (Rights of Third Parties) Act        1999 to enforce the rights bestowed on it by this Agreement. The consent of a Group        Company is not required to amend any terms of this Agreement. Except as set out in this        clause 16, a person who is not a party to this Agreement may not enforce any of its        provisions under the Contracts (Rights of Third Parties) Act 1999.    16.7  The Company is not party to any collective agreement which affects the Employment.   16.8  Save as otherwise advised in writing to the Executive, upon or during the Employment,        pursuant to clause 2.3 or otherwise, this Agreement comprises the whole agreement        between the parties relating to the Employment. Accordingly, as from the effective date of        this Agreement, all other agreements or arrangements between the Company and/or any        Group Company relating to the employment of the Executive, save for such matters        referred to within this Agreement or required to be entered into pursuant to this Agreement        will cease to have effect.    16.9  This Agreement may be executed in any number of counterparts, each of which, when        executed, shall constitute a duplicate original, but all the counterparts shall together        constitute the one agreement.                                                                                18    

 

17    Definitions   17.1  In this Agreement unless the context otherwise requires the following expressions have        the following meanings:         Board means the Board of Directors for the time being of HSBC Holdings plc or any        committee of the Board (including the Group Management Board) to which powers have        been properly delegated or such person or persons designated by the Board from time to        time as its representative for the purposes of this Agreement;          Commencement Date means the earlier of (i) the day immediately following the expiry of        the Executive’s 12 month notice period with The Royal Bank of Scotland Group plc or (ii)        any other date as agreed between the Company and The Royal Bank of Scotland Group        plc;         Company’s Employee Handbook and Company’s HR Procedures Manual means the        Company’s Employee Handbook and the Company’s HR Procedures Manual from time        to time in force, which can be viewed on the Company’s intranet;         Confidential Information means information relating to the business, clients, customers,        products, affairs and finances of the Company or any Group Company that is confidential        to the Company or any Group Company, or in relation to which the Company or any Group        Company is subject to a duty of confidentiality, and trade secrets including technical data        and know-how relating to the business of the Company or any Group Company or of any        persons having dealings with the Company or any Group Company, whether or not such        information is marked confidential. This includes: details of suppliers and their terms of        business, details of customers, clients and prospective customers/clients and their        requirements, the prices charged to and terms of business with customers, marketing        plans and sales forecasts, 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        expansion or contraction of activities, or any other business strategy or tender, details of        employees, atypical workers and officers and of the remuneration and other benefits paid        to them, information relating to research activities, inventions, secret processes, designs,        software, formulae and product lines, any information which the Executive either is aware        or reasonably ought to know is confidential and any information which has been given to        the Company or any Group Company in confidence by customers, suppliers or other        persons;         Corporate Governance Code means the UK Corporate Governance Code published by        the Financial Reporting Council (as amended from time to time);          Directors’ Remuneration Policy means the Group’s directors’ remuneration policy as        set out in the Directors’ Remuneration Report of the Group’s Annual Report and Accounts        from time to time;         Employment means the Executive's employment under this Agreement;         FCA means the Financial Conduct Authority;          Group means (1) HSBC Holdings plc and any entity which from time to time is a holding        company of HSBC Holdings plc or a subsidiary of HSBC Holdings plc or of any such        holding company; and (2) any entity over which from time to time any of the entities defined        in paragraph (1) of this definition either directly or indirectly exercises management        control, even though it may own less than fifty per cent. (50%) of the shares and is                                                                                19    

 

      prevented by law from owning a greater shareholding and Group Company and Group        Companies shall be construed accordingly;         Group Chief Executive means the Chief Executive of the Group (not simply of the        Company) from time to time;         Group Finance Director means the Finance Director of the Group from time to time;         Group’s Malus and Clawback Policies means any of the Group’s policies on malus and        clawback which may be in force and amended from time to time;         Intellectual Property means any invention, improvement, design, process, information,        copyright work, trade mark, trade name or get-up or any other intellectual property;         Recognised Investment Exchange means an investment exchange granted recognition        under section 285 (1) Financial Services and Markets Act 2000 including a recognised        overseas investment exchange;         Statutory Deductions means appropriate tax, national insurance contributions and any        other applicable statutory deductions;         Termination Date means the date on which the Executive’s Employment terminated;          UK Listing Authority means the FCA in its capacity as the competent authority for the        purposes of Part VI of the Financial Services and Markets Act 2000, as amended by the        Financial Services Act 2012;         Variable Pay means any non-pensionable incentive compensation (excluding any other        allowance notified to the Executive in writing from time to time) including any bonus or        deferred bonus in the form of (i) cash (ii) deferred cash or (iii) equity awarded under any        share or variable pay / Long Term Incentive plan in force from time to time (in relation to        which performance and/or other conditions may or may not be attached) and subject        always to the deferral policy and/or any other variable pay policy applicable at the time of        such award and subject to clauses 2.5, 2.6, 2.8, 2.9 and 2.10.   17.2  References to clauses, sub-clauses and schedules are unless otherwise stated to        clauses and sub-clauses of and schedules to this Agreement.   17.3  The headings to the clauses are for convenience only and shall not affect the construction        or interpretation of this Agreement.   17.4  The words subsidiary and holding company have the meanings set out in section 1159        of the UK Companies Act 2006 and “management control” shall be demonstrated by the        ability to exercise significant influence over an entity or its management.   17.5  A reference to any statute or statutory provision (whether of the United Kingdom or        elsewhere) includes any subordinate provision (as defined by section 21(1) Interpretation        Act 1978) made under it and provision which has superseded it or re-enacted it (with or        without modification) before or after the date of this Agreement except where it is after the        date of this Agreement to the extent that the liability of any party is thereby increased or        extended.                                                                                                               20    

 

This Agreement has been signed on behalf of the Company and executed as a deed by the  Executive the day and year first above written.        Executed as a Deed by                        HSBC GROUP MANAGEMENT SERVICES LIMITED in the presence of:                 /s/ Elaine Arden                          Dated: 25/6/2018  Director         /s/ Ben Mathews                           Dated: 25/6/2018  Director/Secretary         Executed as a Deed by      the EXECUTIVE           /s/ Even Stevenson                        Dated: 25th June 2018      in the presence of:           /s/ Fiona Macdonald                       Dated: 25th June 2018  Signature of Witness      Witness Name: Fiona Macdonald      Witness Address: *        Witness Occupation: Bank Office Manager                                                                               21    

 

                                    SCHEDULE I                                            1     BUYOUT AWARDS   1.1   Subject to the provisions in this clause 1:         1.1.1 provided that the Executive has forfeited deferred or unvested stock, (in full or part              form) as a result of the Executive’s resignation from The Royal Bank of Scotland              Group plc (the “Current Employer”) in order to commence employment with the              Company, on an ex gratia basis the Company will award to the Executive an              estimated amount of £7,747,000. The final value of the Buyout Award will be              calculated in accordance with this clause and to avoid any doubt, may vary from              the estimated value but in any event shall not exceed £9,000,000 and shall not, to              the extent applicable, exceed the amount of the awards (the value of which will be              calculated in accordance with clause 1.2 below) set out in the Remuneration              Statement (as defined below);         1.1.2 for performance year 2018, on an ex-gratia basis the Company will award to the              Executive an amount based on any award the Executive would have received from              the Current Employer for which the opportunity is lost in order to commence              employment with the Company. The final value of the award will be based on the              Current Employer's Executive Director policy maximum of £1,600,000, adjusted for              the Current Employer’s 2018 performance scorecard outcome, as determined by              the Current Employer and disclosed in the Current Employer's 2018 Annual Report              and Accounts.           1.1.3 the awards referred to in clauses 1.1.1 and 1.1.2 are, together, the Buyout              Awards.                1.2   The final valuation of the Executive’s forfeited deferred or unvested stock, if applicable,        will be based on the sterling value of the share price of the Current Employer at the close        of business on the Commencement Date (or the prior trading day if the Commencement        Date is not a trading day). The number of HSBC plc ordinary $0.50 shares to be granted        will be based on the sterling value of the HSBC plc ordinary $0.50 share price at the close        of business on the Commencement Date (or the prior trading day if the Commencement        Date is not a trading day).     1.3   The Buyout Awards will replicate to the extent reasonably possible the relevant award        terms from the Current Employer, including (i) the terms for reduction in the vesting level        of the awards that would have been applied by the Current Employer to the relevant        Buyout Award based on outcome of any performance conditions and/or any pre-vest        assessment (any such reduction will be based on disclosures made in the Annual Report        and Accounts of the Current Employer) and (ii) the duration of deferral and retention        (holding) periods if applicable save that the duration of deferral, retention (holding) and/or        clawback periods shall be no shorter than those set out in the Remuneration Statement.        In accordance with regulatory requirements applicable to the Company, the Company is        prohibited from applying dividend equivalents or other returns to Buyout Awards for certain        employees. At the Company’s sole discretion and in accordance with the terms applied        by the Current Employer the Buyout Awards may be split in order to provide for different        retention (holding) periods and/or clawback terms. All payments will be subject to Statutory        Deductions.    1.4   Any deferred or unvested stock of the Buyout Awards, if applicable, will:         1.4.1 be made subject to the terms of the HSBC Share Plan 2011 as amended from time              to time (the “Share Plan”) as determined by the Company;                                                                               22    

 

      1.4.2  be granted on the next available quarterly grant date set by the Company after               the Commencement Date or as soon as reasonably practicable thereafter.  After               the grant, the Executive should be sent an email notification by the Company’s               chosen plan administrator informing the Executive that the Executive’s award               statement is available to be downloaded from their website. This statement will               confirm, if applicable, the number of shares awarded to the Executive under the               Share Plan; and         1.4.3  be made subject to the Company’s legal and/or regulatory obligations to               implement a reduction and/or recovery of all or any part of the Buyout Awards               that is subject to a Reduction Notice on receipt of such Reduction Notice   1.5   The Buyout Awards are subject to the following conditions:         1.5.1 the Executive not being dismissed with or without notice for cause by the Current              Employer after the Executive’s resignation;         1.5.2 receipt by the Company of a Remuneration Statement and any other relevant              documentation which evidences to the satisfaction of the Company the value and              forfeiture of the relevant award/s from the Current Employer from the Executive as              soon as possible and in any event no later than four weeks from the              Commencement Date. If the Remuneration Statement has not been received              within four weeks from the Commencement Date, the Company reserves the right              not to award the Buyout Awards until the documentation has been provided by the              Executive;          1.5.3 in the event that the Company receives a Reduction Notice from a previous              employer, the Executive acknowledges that the Company is required by law and/or              regulation to implement the reduction and/or recovery of the Buyout Awards as              stated in the Reduction Notice and may notify a previous employer of the action              taken. The Executive agrees that in the event that the Company takes such action              following receipt of a Reduction Notice, the Executive shall not be entitled to make              any complaint to the Company or present any application or claim form against the              Company or any Group Company to an office of the Employment Tribunals or issue              any claim form in the High Court or County Court or any other court in any              jurisdiction in the world against the Company or any Group Company in connection              with such action.    1.6   The Executive acknowledges and agrees that the Company is obliged to notify the Current        Employer of the amount of the Buyout Awards in accordance with the PRA Rulebook        including the duration of deferral, retention and clawback periods being applied.          1.7   In this clause 1 (Buyout Awards) and clause 2 (Award Conditions) the following definitions        shall have the following meanings:         1.7.1 “PRA Rulebook” means the Remuneration Part of the PRA Rulebook: Capital              Requirement Regulation Firms;         1.7.2 “Reduction Notice” has the meaning set out in Rule 15A of the PRA Rulebook;              and         1.7.3 “Remuneration Statement” has the meaning set out in Rule 15A of the PRA              Rulebook.                2     Award Conditions   2.1   The Buyout Awards are subject to the following conditions:                                                                                23    

 

2.1.1 any instalment or the entirety of the awards, if applicable, will not vest or be        awarded where, prior to or on the relevant vesting and/or award and/payment  date,        the Executive has resigned from employment with the Company or any Group        Company (with or without notice), is under a period of notice issued by the        Company or has been dismissed for misconduct or other cause or has been        disciplined under the Company's disciplinary procedure (each a “Relevant        Event”), in which case any unvested instalments or the entirety of the Buyout        Awards, if applicable, will not vest and will be forfeited in full;   2.1.2 any instalment or the entire award, if applicable, will not vest or be awarded and        will be withheld by the Company where there is a pending investigation into any        alleged misconduct or impropriety by the Executive by the Company or any Group        Company and/or the Current Employer;     2.1.3 the Executive agrees to treat the award with absolute confidentiality and        acknowledges that any breach of this confidentiality (other than in relation to        members of the Executive’s immediate family, the Executive’s professional        advisers and/or any statutory authorities) may be treated as a disciplinary matter;        and   2.1.4 the award, including any amount deferred, is subject on an ongoing basis to: (i)        any obligations or conditions required by the regulator(s) of the Company or any        other regulatory requirements, including but not limited to the application of Malus        and/or Clawback in accordance with the Group’s Malus and Clawback Policies in        force from time to time; (ii) any remuneration policy of the Company or any relevant        Group Company from time to time; and (iii) any other applicable rules, codes of        practice and/or guidance regarding remuneration from time to time.   The Executive        agrees that any sums owed to the Company or any Group Company under this        clause including in connection with any adjustment, forfeiture or repayment arising        from the application of Malus and/or Clawback including where Malus and/or        Clawback is implemented as a result of receipt by the Company of a Reduction        Notice, may be deducted from any sums due to the Executive from the Company        or any Group Company. For the avoidance of doubt, this is without prejudice to        any right the Company or any Group Company may have at any time to recover        any sums from the Executive including but not limited to any Clawback and the        Executive agrees that such sums are recoverable by the Company or any Group        Company as a debt.                                                                                                      24Exhibit 10.1

 

SETTLEMENT
AGREEMENT

 

THIS
SETTLEMENT AGREEMENT (this “Agreement”), is made and entered into as of the 20th day of February, 2019
(the “Effective Date”), by and among Inpixon (“Inpixon”) and Sysorex, Inc. (“Sysorex”, together
with Inpixon, the “Inpixon Parties”) on the one hand and Atlas Technology Group, LLC (“ATG”) on the other
hand. ATG and the Inpixon Parties are each referred to as a “Party” and collectively referred to as the “Parties”.
Capitalized terms not defined herein shall have the meaning for such term set forth in the Reduction Agreement (defined below).

 

WHEREAS,
on December 4-6, 2018, the Parties participated in an arbitration hearing in regard to a dispute arising out of that certain engagement
agreement, dated September 8, 2016, by and between Inpixon and ATG, American Arbitration Association Arbitration Case No. 01-18-0001-5735
(the “Arbitration”); and

 

WHEREAS,
in connection with such Arbitration, the parties executed that certain Arbitration Award Reduction and Payment Agreement, dated
January 17, 2019 (the “Reduction Agreement”), pursuant to which, inter alia, ATG agreed to accept INPX Shares (as
defined in the Reduction Agreement) in full or partial satisfaction of any Award issued to ATG; and

 

WHEREAS,
the decision in the Arbitration resulted in an Award to ATG in an aggregate amount of $1,156,840.25 plus pre-judgment interest
equal to an aggregate of $59,955.28 and after application of the $275,000 credit described in the Reduction Agreement, a Net Award
equal to $941,795.53; and

 

WHEREAS,
in accordance with the Reduction Agreement Inpixon has exercised its option to satisfy the Award in full with the INPX Shares.

 

NOW,
THEREFORE, in full and final settlement of any obligation of the Inpixon Parties in connection with the dispute resulting
in the initiation of the Arbitration and the satisfaction of the Award issued in connection with the Arbitration and all other
disputes, based on good and valuable consideration, the receipt and sufficiency of which is hereby acknowledged, the parties to
this Agreement, enter into this legal and binding Agreement as follows:

 

1.
Settlement Shares.

 

(a) Simultaneously
with the delivery of an executed signature page to this Agreement which shall be on the Effective Date, Inpixon agrees to instruct
its transfer agent to issue an aggregate of 749,440 freely tradable INPX Shares (the “Settlement Shares”) to ATG or
its designees, at a price of $1.508 per share (the “Offering”). After giving effect to the issuance of the Settlement
Shares, any amounts due and payable to ATG in connection with the Award shall be deemed paid in full. The Settlement Shares are
being issued pursuant to a registration statement on Form S-3 (Registration File No. 333-223960) (the “Registration Statement”)
filed under the Securities Act of 1933, as amended (the “Securities Act”), which was declared effective by the U.S.
Securities and Exchange Commission on June 5, 2018, the base prospectus included therein and the related prospectus supplement,
dated February 20, 2019, containing certain information regarding the Settlement Shares and terms of the Offering.

 

    1

     

    

 

(b)
 Within five (5) business days of the sale of all of the Settlement Shares, ATG shall
deliver to the Inpixon Parties a brokerage statement or other evidence setting forth the total net proceeds received by ATG or
its designees from the sale of the Settlement Shares (exclusive of brokerage fees) (the “Sale Proceeds”). In the event
that the Sale Proceeds exceeds the amount of the Net Award, ATG agrees to deliver an amount equal to the difference between the
Sale Proceeds and the Net Award (the “Excess Amount”) to Mitchell Silberberg & Knupp LLP, counsel to the Inpixon
Parties, within ten (10) business days of ATG or its designees receiving such Excess Amount to be applied against fees payable
by the Inpixon Parties in connection with legal services provided to the Inpixon Parties in connection with the Arbitration and
this Agreement. 

 

2. Release
of Inpixon Parties. ATG, on its own behalf and on behalf of its present and former representatives, officers, directors, partners,
shareholders, employees, attorneys, departments, boards, plans, parents, subsidiaries, affiliates, predecessors, successors, agents,
assigns, insurers and any other persons or entities that it represents hereby releases, remises, acquits and forever discharges
any and all claims (including claims for costs and attorneys’ fees), demands, sums of money, actions, rights, causes of
action, suits, debts, demands, dues, damages, losses, costs, judgments, obligations and liabilities at law or in equity, of any
kind or nature whatsoever, known or unknown, that it may have had or claimed to have had, or now has or claims to have or hereafter
may have or assert to have for, upon, or by reason of any matter, cause or thing whatsoever from the beginning of the world to
the date of this Agreement as against the Inpixon Parties, including any of the Inpixon Parties’ present and former representatives,
officers, directors, partners, shareholders, employees, attorneys, departments, boards, plans, parents, subsidiaries, affiliates,
predecessors, successors, agents, assigns and insurers, and any other persons or entities that it represents, including but not
limited to, any and all claims, demands, rights, causes of action, obligations or suits relating to or arising out of the engagement
agreement, dated September 8, 2016, by and between Inpixon and ATG (the “Engagement Agreement”), but, specifically
excluding any claims and/or actions for the enforcement of the Reduction Agreement or this Agreement.

 

3.
 General Release of ATG. The Inpixon Parties each on its own behalf and on behalf
of their present and former representatives, officers, directors, partners, shareholders, employees, attorneys, departments, boards,
plans, parents, subsidiaries, affiliates, predecessors, successors, agents, assigns, insurers and any other persons or entities
that it represents hereby releases, remises, acquits and forever discharges any and all claims (including claims for costs and
attorneys’ fees), demands, sums of money, actions, rights, causes of action, suits, debts, demands, dues, damages, losses,
costs, judgments, obligations and liabilities at law or in equity, of any kind or nature whatsoever, known or unknown, that they
may have had or claimed to have had, or now has or claims to have or hereafter may have or assert to have for, upon, or by reason
of any matter, cause or thing whatsoever from the beginning of the world to the date of this Agreement as against ATG, including
any of ATG’s present and former representatives, officers, directors, partners, shareholders, employees, attorneys, departments,
boards, plans, parents, subsidiaries, affiliates, predecessors, successors, agents, assigns and insurers, including but not limited
to, any and all claims, demands, rights, causes of action, obligations or suits relating to or arising out of the Engagement Agreement,
but, specifically excluding any claims and/or actions for the enforcement of the Reduction Agreement or this Agreement.

 

    2

     

    

 

4.
 Covenant Not To Sue. Each of ATG and the Inpixon Parties covenant that they will
not assert any claim in any forum based upon, related to, arising out of, or having any connection with any of the matters released
pursuant paragraph 3 or 4 hereof, as applicable, except with respect to any claims required to enforce the terms of the Reduction
Agreement or this Agreement.

 

5. Attorneys’
Fees and Costs. Each of the parties hereto will bear their own expenses, including but not limited to any costs, forum fees
or attorneys’ fees incurred in connection with the negotiation and execution of this Agreement and/or the matters released
pursuant to paragraph 3 or 4 hereof, as applicable, provided however, that ATG shall pay the Excess Amount, if any, referenced
in paragraph 1(b) hereof.

 

6. Injunctive
Relief. The Parties each agree that money damages may not be a sufficient remedy for any breach of this Agreement by the other
and that in addition to all other remedies, each party shall be entitled to seek specific performance and injunctive or other
equitable relief as a remedy for any such breach.

 

7. Severance.
If any provision or portion of this Agreement is determined by a court of competent jurisdiction to be invalid or unenforceable
for any reason, in whole or in part, the remaining provisions of this Agreement shall be unaffected thereby and shall remain in
full force and effect to the fullest extent permitted by applicable law.

 

8. Entire
Agreement. This Agreement contains the full and complete understanding of the parties with respect to the subject matter hereof
and supersedes all prior representations and understandings regarding the subject matter hereof, whether oral or written. Failure
to exercise or delay in exercising any remedy hereunder shall not be deemed a waiver thereof. Each Party represents that this
Agreement is being signed by a duly authorized officer.

 

9. Modifications.
This Agreement may not be modified or amended in any manner except by an instrument in writing specifically stating that it
is a supplement, modification or amendment to the Agreement and signed by each of the parties hereto.

 

10. General
Representations. All parties acknowledge and represent that: (a) they have read the Agreement; (b) they clearly understand
the Agreement and each of its terms; (c) they fully and unconditionally consent to the terms of this Agreement; (d) they have
had the benefit and advice of counsel of their own selection; (e) they have executed this Agreement, freely, with knowledge, and
without influence or duress; (f) they have not relied upon any other representations, either written or oral, express or implied,
made to them by any person; (g) the consideration received by them has been actual and adequate; and (h) they have the authority
to enter into this Agreement.

 

11. No
Presumption Against Drafter. This Agreement shall be construed without regard to any presumptions against the Party causing
the same to be prepared.

 

12.
No Admission of Liability. It is expressly understood and agreed, as a condition hereof, that neither this Agreement, nor
any document referred to herein, nor the settlement set forth herein, nor any payment provided for herein, shall constitute or
be construed to be an admission by any Party of any fault, wrongdoing or liability whatsoever concerning the Arbitration, or as
evidencing or indicating in any degree an admission of the truth or correctness of the claims and allegations asserted by the
parties in the Arbitration.

 

    3

     

    

 

13. No
Waiver. The failure to strictly enforce any or all of the terms of this Agreement by either of the Parties hereto shall not
be construed as and shall not result in a waiver of their right to strictly enforce any and all of the terms and conditions of
this Agreement, despite such Party’s prior failure to strictly enforce the terms and conditions of this Agreement.

 

14. Additional
Documents. The parties agree to cooperate and execute any further documentation that may be required to implement the terms
and the intent of this Agreement.

 

15. Warranty.
Each Party warrants that (a) the person executing this Agreement on its behalf has the authority to do so; and (b) the matters
being released pursuant to this Agreement have not been assigned or otherwise transferred to any other person or entity. In addition,
ATG represents and warrants that there are no other persons or entities that have a direct or indirect interest, right or claim
in any of the matters released by ATG pursuant to paragraph 3 hereof.

 

16. Governing
Law. This Agreement shall be governed by and construed in accordance with the laws of the State of California without regard
to the conflicts of laws provisions thereof. Any right to trial by jury with respect to any claim, action, suit or proceeding
arising out of this Agreement or any of the matters contemplated hereby is waived. The Parties hereby agree to resolve any dispute
related to this Agreement by way of binding arbitration pursuant to the American Arbitration Association rules in force when the
arbitration is initiated. The Parties hereby agree to hold any arbitration in San Francisco, California.

 

17. Notices.
All notices, requests, consents, claims, demands, waivers, and other communications hereunder shall be in writing and shall be
deemed to have been given: (a) when delivered by hand (with written confirmation of receipt); (b) when received by the addressee
if sent by a nationally recognized overnight courier (receipt requested); (c) on the date sent by facsimile or email (with confirmation
of transmission) if sent during normal business hours of Inpixon, and on the next business day if sent after normal business hours
of Inpixon; or (d) on the third day after the date mailed, by certified or registered mail, return receipt requested, postage
prepaid. Such communications must be sent to the respective Parties at the addresses set forth in this paragraph 17 (or to
such other address that may be designated by a Party from time to time in accordance with this paragraph 17).

 

If
to the Inpixon Parties, to Inpixon’s address at:

 

Inpixon

2479
E. Bayshore Rd

Suite
195

Palo
Alto, CA 94303 US 

Attention:
Nadir Ali

Email:
nadir.ali@inpixon.com

 

    4

     

    

 

With
a copy (which shall not constitute notice) to:

 

Mitchell
Silberberg & Knupp LLP

437
Madison Avenue

25th
Floor

New
York, NY 10022

		Attention:	David
Gordon

Melanie Figueroa

		Email:	dbg@msk.com

mxf@msk.com

 

If
to ATG, to ATG’s address below:

 

Atlas
Technology Group, LLC

201
Filbert Street

Suite
100

San
Francisco, CA 94133

Attention:
Christopher Kemper

Email:
chris@atlastechgroup.com

 

18. Miscellaneous.
This Agreement may be executed in two or more counterparts, each of which will be deemed to be an original copy of this Agreement,
and all of which, when taken together, shall be deemed to constitute one and the same agreement. The exchange of copies of this
Agreement and of signature pages by facsimile transmission or electronic mail in .pdf or similar format shall constitute effective
execution and delivery of this Agreement as to the parties. For purposes of this Agreement any reference to “written”
or “in writing” shall be deemed to include correspondence by signed letter or facsimile or by e-mail.

 

19. Confidential.
Except as may be required by applicable law, none of the Parties hereto shall make any disclosure concerning this Agreement, including,
but not limited to, the arbitrator in the Arbitration, except to its employees and representatives as may be necessary or advisable,
including but not limited to legal counsel, accountants or other advisors without prior approval by the other Parties hereto;
provided, however, that nothing in this Agreement shall restrict the Inpixon Parties from making any disclosures that may be required
by the federal securities laws including (without limitation) appropriate disclosures if so required by Item 7.01 of Form 8-K,
the Securities Act or Regulation FD, as such disclosure is incorporated into Forms 8-K and 10-Q. Notwithstanding the foregoing,
upon any disclosure concerning this Agreement made in accordance with the federal securities laws, the restrictions contained
in this paragraph shall terminate as of the date of such disclosure and be of no further force and effect.

 

20. California
Civil Code Section 1542. Each of the Parties acknowledge the existence of and, with respect to the releases given in paragraphs
2 and 3 above, expressly waive and relinquish any and all rights and benefits that they may have under California Civil Code,
Section 1542 (or any similar statute in any other state), which provides: “A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH
THE CREDITOR OR RELEASING PARTY DOES NOT KNOW OR SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER WOULD HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH THE DEBTOR OR RELATED PARTY.” The
Parties acknowledge that they may hereafter discover facts different from or in addition to those which they now know or believe
to be true with respect to the matters released in paragraphs 2 and 3 above, and agree that the release so given in paragraph
2 and 3, above, shall be and remain in effect as a full and complete release of any claims, notwithstanding any such different
or additional facts.

 

[SIGNATURE
PAGE FOLLOWS]

 

    5

     

    

 

	INPIXON	 	 
	 	 	 
	By:	/s/
    Nadir Ali	 
	Name: 	Nadir Ali	 
	Title: 	CEO	 
	 	 	 
	SYSOREX, INC.	 
	 	 	 
	By:	/s/
    Zaman Khan	 
	Name: 	Zaman Khan	 
	Title: 	CEO	 
	 	 	 
	ATLAS TECHNOLOGY GROUP, LLC	 
	 	 	 
	By:	/s/
    Tony Trousset	 
	Name:	Tony Trousset	 
	Title: 	Managing Member	 
	 	 	 
	Dated:  February 20, 2019	 

 

[SIGNATURE
PAGE TO SETTLEMENT AGREEMENT]

 

    6

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