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Employee Handbook 2009 Last updated: 07 May 2009 Dear Colleague Welcome to HSBC Bank plc (the “bank”). I would like to wish you every success during your employment with us, whether you have recently joined the bank or whether you are an existing employee. This Employee Handbook (the “Handbook”) is designed both to introduce you to the bank and to be of continuing use during your employment with the bank. Together with your offer letter, the Handbook sets out the terms and conditions of your employment, guidance on the high standards of conduct that are expected of you and some of the main employee benefits which may be available to you. The Handbook also provides you with information on where to find the main policies and procedures that will affect your employment which, for the most part, are contained in the HR Procedures Manual which can be found on the bank's intranet site. The Handbook is therefore an important document and it is essential that you read the Handbook thoroughly and carefully before accepting an offer of employment with the bank or, if you are a current employee, as soon as possible after the Handbook is issued. Unlike previously, paper copies of the Handbook will not be issued. Instead, this Handbook will only be available via the bank’s intranet or recruitment website. This will allow the bank to keep the Handbook up to date and reflects the bank’s policy of minimising paper products. General amendments to the Handbook will be issued from time to time by circular. As these amendments may revise your contract of employment it is essential that you refer to the Handbook, as set out on the bank’s intranet, and familiarise yourself with these amendments. I hope that you will find the information contained in the Handbook both informative and helpful. If you require clarification or any additional information please refer to your line manager. Julie Harding Head of Human Resources HSBC Bank plc
Transcript
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Employee Handbook 2009 Last updated: 07 May 2009 Dear Colleague Welcome to HSBC Bank plc (the “bank”). I would like to wish you every success during your employment with us, whether you have recently joined the bank or whether you are an existing employee. This Employee Handbook (the “Handbook”) is designed both to introduce you to the bank and to be of continuing use during your employment with the bank. Together with your offer letter, the Handbook sets out the terms and conditions of your employment, guidance on the high standards of conduct that are expected of you and some of the main employee benefits which may be available to you. The Handbook also provides you with information on where to find the main policies and procedures that will affect your employment which, for the most part, are contained in the HR Procedures Manual which can be found on the bank's intranet site. The Handbook is therefore an important document and it is essential that you read the Handbook thoroughly and carefully before accepting an offer of employment with the bank or, if you are a current employee, as soon as possible after the Handbook is issued. Unlike previously, paper copies of the Handbook will not be issued. Instead, this Handbook will only be available via the bank’s intranet or recruitment website. This will allow the bank to keep the Handbook up to date and reflects the bank’s policy of minimising paper products. General amendments to the Handbook will be issued from time to time by circular. As these amendments may revise your contract of employment it is essential that you refer to the Handbook, as set out on the bank’s intranet, and familiarise yourself with these amendments. I hope that you will find the information contained in the Handbook both informative and helpful. If you require clarification or any additional information please refer to your line manager. Julie Harding Head of Human Resources HSBC Bank plc

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About the Handbook The purpose of the Handbook is to:

• Set out and clarify the terms and conditions of employment. • Set out and clarify the rules and regulations which you must abide by. • Summarise the benefits you may be entitled to. • Set out some of the main issues which may be of interest to you during your

employment. So that you may know what is expected of you and what you can expect from your colleagues and the bank. The Handbook is divided into a number of sections: Introduction This section explains the importance of the Handbook and introduces the various sections of the Handbook and other HR Resources. Section 1 – Terms and Conditions This section, together with your offer letter (as amended by any subsequent communications from the bank), solely form the terms and conditions of your employment. It therefore sets out important information on the rights and obligations which apply during the course of your employment. For the avoidance of doubt, references in this Handbook to your ‘offer letter’ means any letter or document (other than the Handbook) issued to you by the bank that is expressly stated to form or constitute part of your terms and conditions of employment and/or employment contract (and as may have been amended by any subsequent communications from the bank). Section 2 – Code of Business Ethics and Responsible Behaviour The Code of Business Ethics and Responsible Behaviour deals with and provides guidance on the standards of behaviour that the bank expects of all employees. Section 3 – Rules and Regulations This section sets out important information about the standards of conduct which you must abide by as an employee, and which you should expect from your colleagues. Section 4 – Benefits Section 4 of the Handbook outlines some of the benefits which you may have access to during your employment and sets out where further information can be obtained in respect of each benefit. Section 5 – Your Career with the bank This section sets out information on training, development and employee representation and other matters which may be relevant during your career with the bank. Section 6 – Security of Employment This section outlines how the bank seeks to provide security of employment for its employees and contains information on the Security of Employment Policy (SEP) currently in place. Separate Handbooks are issued for employees in other parts of the HSBC Group within the UK, e.g. HSBC Treasury and Capital Markets, first direct and those employees working on the Channel Islands or the Isle of Man. The parent company of the Group, HSBC Holdings plc, also issues its own Handbook for its employees. This Handbook supersedes earlier versions of the Employee Handbook (or “Lets Work Together”) which may be referred to in your current offer letter from the bank. All references in

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such documents to earlier Handbooks, including “Let’s Work Together”, should now be taken to refer to this Handbook. About HR Procedures, Policies and other HR Documents The Human Resources Procedures Manual (the "HR Procedures Manual"), which can be found on the bank's intranet site, contains the bank’s principal HR policies and procedures. You can navigate through the HR Procedures Manual by using the A-Z index. At the end of most sections of the HR Procedures Manual, there are "contact point" tables, so that you know who has the expertise to guide you with any specific issues. It is important that you take an opportunity within the first few weeks of your employment with the bank to familiarise yourself with the format and contents of the HR Procedures Manual. The HR Procedures Manual does not form part of your contract of employment. Other sources of information are specific to certain situations, such as the ‘Employee Maternity Guide’ or the ‘Business Instruction Manual - Compliance’ and are referred to in the HR Procedures Manual and can be obtained from your line manager or through the bank's intranet. Where a matter is referred to in the Handbook and further information is contained in the HR Procedures Manual or other documents, directions to the appropriate document will normally be provided. Please note, however, that any documents referred to in this Handbook do not form part of your contract of employment (unless otherwise expressly stated) and are not incorporated into your contract of employment by reference. What is the difference between a policy and a procedure? Most of the sources of information are referred to as ‘policies’ and/or ‘procedures’. A policy usually describes the bank’s approach to a certain issue. A procedure usually describes the process which the bank will follow in respect of a particular issue. Some subjects will have both a policy and a procedure; in other subjects the policy may form part of the procedure. Regardless of whether information on a particular subject is called a ‘policy’, a ‘procedure’ or both, the key factor is that they set out guidance on how you should act, and how the bank will act towards you.

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1. Terms and Conditions This section of the Handbook, together with your offer letter (as amended by subsequent communications from the bank), form your terms and conditions of employment. In addition, they set out the details which the bank, as your employer, is required to give you under section 1 of the Employment Rights Act 1996. For the avoidance of doubt, references in this Handbook to your ‘offer letter’ means any letter or document (other than the Handbook) issued to you by the bank that is expressly stated to form or constitute part of your terms and conditions of employment and/or employment contract (and as may have been amended by any subsequent communications from the bank). 1.1 Job Title Your current job title is as stated in your offer letter or subsequent communication from the bank, and may be amended periodically by notice to you in writing or by circular. 1.2 Duties Your duties are as set out in your job description or as detailed to you by your line manager. However, you will need to take a flexible approach to your duties and in particular from time to time, you may be required to undertake such alternative or additional duties as may be commensurate with your grade. On occasions for training purposes or operational reasons, you may also be required to carry out duties at a higher or lower grade as necessary. Deputising in other grade duties is a developmental opportunity and a contribution to overall teamwork and customer service. When an employee deputises in a higher graded job, a payment may be made, by prior agreement and in accordance with the bank's rules as they may exist at the time. 1.3 Grade/Global Career Bands All positions within the bank are given a grade or Global Career Band (GCB) allocated to a particular job by a process of job evaluation, which assesses and ranks jobs according to content.

Grades for non-managerial employees are known as clerical grades and are prefixed by the letter S or E, followed by ‘0’ ‘B’ 'C' 'D' W' ‘K’ ‘J’ ‘L’ ‘F’ ‘S’ or ‘X’ which denotes the level of flexibility in your working hours.

Your grade is initially stated in your offer letter and any changes will be notified to you in writing or by circular. In addition, set out below is a table of changes to grade names, which have taken place over the past few years.

Clerical Employees

Previous Grade

New Grade

Business Area

Contract type/description

S03-5 No change Bankwide Individuals employed before the introduction of flexible contracts in their business area.

S04-5 SJ4-5 Branch Network Individuals who accepted flexible terms.

B03-5 SB3-5 Branch Network

New entrants after the introduction of flexible contracts.

C03-5 SK3-5 Milton Keynes Branch Individuals who accepted flexible terms.

D03-5 SD3-5 Milton Keynes New entrants after the introduction of flexible

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Branch contracts.

C91-92 SC3-5 Operations /Headquarters Individuals who accepted flexible terms.

SF3-5 SL1-6 CTS New entrants after the introduction of flexible

contracts who are accredited under Progression 4U.

SC3-5 SX1-6 CTS Individuals who accepted flexible terms who are accredited under Progression 4U.

S03-5 SS1-6 CTS Individuals employed before the introduction of flexible contracts in their business area who are

accredited under Progression 4 U

S91-92 SF3-5 Operations /Headquarters

New entrants after the introduction of flexible contracts.

SW3-5 No change Departments

in Headquarters

New entrants after the introduction of flexible contracts.

Graduate Trainees

E00 Bankwide Executive Trainees

E0C Branch (Commercial) Management Trainees (Commercial)

E0R Branch (Retail) Management Trainee (Retail)

E02 IT Graduate Trainee

Global Career Bands (GCB) for management employees and employees who work in regulated (known as ‘Salesforce’) positions are set out in the table below.

Unlike clerical grades Global Career Bands (GCB) do not distinguish contractual terms and conditions. A separate "contract type" code will be used to determine contractual terms and conditions, including the level of flexibility in working hours, as listed below.

Your pay arrangements and eligibility for certain benefits will vary according to your grade, business area and your location. Any "red-circled" arrangements that may have previously applied to your terms and conditions or benefits whilst employed in a clerical grade shall normally end on your promotion to a management grade.

Management Employees

Old Contract

type

GCB New Contract

type

Contract type/description

M93 6 TA6 Individuals employed before the introduction of flexible contracts in their business area

M94 5 TA5 Individuals employed before the introduction of flexible contracts in their business area

M95 4 TA4 Individuals employed before the introduction of

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flexible contracts in their business area

M96 3 TA3 Individuals employed before the introduction of flexible contracts in their business area

M97 2 TA2 Individuals employed before the introduction of flexible contracts in their business area

M98 1 TA1 Individuals employed before the introduction of flexible contracts in their business area

M99 0 TA0 Individuals employed before the introduction of flexible contracts in their business area

MB3 6 TB6 Branch Network - new entrants after the introduction of flexible contracts

MB4 5 TB5 Branch Network - new entrants after the introduction of flexible contracts

MB5 4 TB4 Branch Network - new entrants after the introduction of flexible contracts

MD3 6 TD6 Milton Keynes Branch - new entrants after the introduction of flexible contracts

Regulated Salesforce

Old Contract

type

GCB New Contract

type

Contract type/description

G70 6 RA6 Regulated contract

G71 6 RB6 Regulated contract

G72 6 RC6 Regulated contract

G73 5 RA5 Regulated contract

G74 5 RB5 Regulated contract

G76 3 RA3 Regulated contract

H78 4 RA4 Regulated contract

HG0 5 RE5 Regulated contract

HG1 5 RF5 Regulated contract

HG2 5 RG5 Regulated contract

HG3 5 RH5 Regulated contract

HG5 5 RJ5 Regulated contract

HG6 6 RE6 Regulated contract

HG7 5 RK5 Regulated contract

HG8 4 RB4 Regulated contract

HG9 4 RC4 Regulated contract

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UK Operations / CTS / Head Office

Old Contract

type

GCB New Contract

type

Contract type/description

MC3 6 TC6 Individuals who accepted flexible terms

MC4 5 TC5 Individuals who accepted flexible terms

MC5 4 TC4 Individuals who accepted flexible terms

MF3 6 TF6 New entrants after the introduction of flexible contracts

MF4 5 TF5 New entrants after the introduction of flexible contracts

MF5 4 TF4 New entrants after the introduction of flexible contracts

MF6 3 TF3 New entrants after the introduction of flexible contracts

HBEU departments in 8 Canada Square (8CS)

Old Contract

type

GCB New Contract

type

Contract type/description

MW3 6 TW6 New entrants after the introduction of flexible contracts

MW4 5 TW5 New entrants after the introduction of flexible contracts

MW5 4 TW4 New entrants after the introduction of flexible contracts

MW6 3 TW3 New entrants after the introduction of flexible contracts

MW7 2 TW2 New entrants after the introduction of flexible contracts

1.4 Pay 1.4.1 Payments to You Your pay comprises a basic salary and any entitlement to other allowances as stated in your offer letter or other communication from the bank. Any changes will be notified to you in writing or by circular. Your basic salary is pensionable and any allowances are non-pensionable, unless otherwise stated. Payment will be made into an account in your name with the bank, in 12 equal monthly instalments on or around the 20th of each month. This means that you will be paid in arrears for work done up to the 20th of each month and in advance for working from the 20th to the end of the month. However, depending on the date in the month you join the bank, the payment period and/or date of your first salary payment may vary. Further details on this are set out in the Salaries section of the HR Procedures Manual, which is available through the bank’s intranet.

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Salary and, where applicable, any allowances, accrue in respect of each hour or part thereof, which you work. Payment is subject in all cases to statutory deductions of income tax and employee national insurance contributions and any other deductions which the bank may be obliged to make. You will receive a monthly pay statement detailing gross pay and deductions. 1.4.2 Bank Account It is a requirement of your employment that you maintain an account with the bank, into which your salary will be paid. For new entrants working within centralised sites and the bank’s Headquarters this account will usually be domiciled within the National Sort Code (40-01-00). For new entrants working within the branch network, the account will usually be held at the branch where you are to work initially. 1.4.3 Salary for Clerical Grades The bank reviews its current levels of pay each year and where appropriate seeks to agree through negotiation any changes with Unite. Any changes to your basic salary will be notified to you by letter, circular or in your monthly pay statement. In addition current pay bands applicable to your grade and/or area of work are set out in the Rates - salaries and allowances section of the HR Procedures Manual which is available on the bank’s intranet. 1.4.4 Salary for Management and Salesforce Bands The bank reviews its current levels of pay each year. Any changes to your basic salary will be notified to you by letter, circular or in your monthly pay statement. Current minimum salary levels applicable to management band employees up to and including band GCB4 and minimum and target salaries for Salesforce grade employees are set out in the Rates - salaries and allowances section of the HR Procedures Manual which is available on the bank’s intranet. 1.4.5 Incentive Schemes The bank currently operates performance related discretionary incentive schemes designed to reward employees according to their efforts and the achievements of the bank. The existence of, and rules of the schemes are entirely discretionary and operate in accordance with non-contractual rules, which may be in place from time to time. Further information is detailed in the HR Procedures Manual (Incentive pay awards), which is available on the bank’s intranet. Separate incentive schemes apply to members of the regulated Salesforce and to Senior Managers. The existence of and rules of such schemes are also entirely discretionary and operate in accordance with non-contractual rules, which may be in place from time to time. Further details of such schemes will be communicated directly to such employees or will be set out in the HR Procedures Manual from time to time. 1.4.6 Allowances You may be eligible for certain non–contractual allowances, as are applicable at the time. Your offer letter or subsequent communications from the bank will specify the type and level of any allowance to which you may be entitled. Any subsequent withdrawal or variation will be notified to you in writing or by circular. Further information is provided in the HR Procedures Manual (Allowances), which is available on the bank’s intranet. 1.4.7 Overtime and Additional Hours Where you are required to work beyond your normal hours, payment will be made to clerical grade employees, in respect of any such hours, in accordance with the bank's rules on authorisation, eligibility and rates of pay. Overtime payments are non-pensionable and are not used in the calculation of any other benefits which are reliant on hours worked. Key time employees in clerical grades will not be eligible for overtime payments until they work more than 7 hours in one day or 35 hours in one week. Any hours worked by key time

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employees in clerical grades above their normal hours, but below the limits for overtime payments, will count as additional contractual hours (“Additional Hours”). Additional Hours are pensionable and will also be used in the calculation of any incentive payments, where any such payment is calculated on number of hours worked. No overtime payment will be made to management band employees who work in excess of 35 hours per week. In exceptional circumstances key time employees who are in a management band, may be permitted to work Additional Hours, for which they will be remunerated as set out above in respect of clerical grade employees. Further details are set out in the HR Procedures Manual (Overtime) which is available on the bank’s intranet. 1.4.8 Public and Bank Holidays Some employees receive payment in respect of Public and Bank holiday working in accordance with the bank's policies and procedures on authorisation, eligibility and rates of pay. For further information please refer to the HR Procedures Manual (Public and Bank Holiday working) which is available on the bank’s intranet. 1.4.9 Incorrect Pay and Deductions from Pay Under the Employment Rights Act 1996 (Part II) There may be an occasion when through error or omission you receive less than your contractual pay and/or allowances. Should such an unfortunate circumstance arise the bank will rectify the situation and any contractual pay and/or allowances not paid to you will be paid on the first opportune pay-day following notification or identification of the omission or error. Conversely, if any error or omission results in any overpayment of pay and/or allowances being made to you it is accepted that the bank reserves the right to deduct any such overpayment(s) from salary on the first opportune pay-day following identification or notification. The bank will take into account individual circumstances and try to achieve a jointly-agreed repayment schedule. In the event that the overpayment is made in respect of your final salary payment (or other payment due on termination of employment), or if you are under a repayment schedule and your employment terminates, the bank reserves the right to request that you repay such sums owed, on demand. If your employment ends and the number of days holiday you have taken exceeds your pro-rata entitlement for the holiday year, an appropriate deduction will be made from your final pay or if this is not possible the bank reserves the right to request that you repay such sum on demand. The bank will give you an opportunity to discuss the proposed repayment, and the bank will take into account your personal circumstances prior to determining a repayment schedule. If the holiday entitlement you have taken is less than your pro-rata entitlement and it is not operationally practical for the outstanding days to be taken during the notice period, payment in lieu of outstanding holiday entitlement will be made. Payments or deductions will not be made in respect of any Bank or Public holidays accrued or taken in excess of entitlement. If you are summarily dismissed or leave the bank without giving due notice, you will not be entitled to any payment for accrued holidays or holiday pay, including (where relevant) any accumulated lieu days due to Saturday or rest day working. 1.4.10 Tax and National Insurance on Benefits Each year the bank will issue to you a P60 Certificate, which states your total earnings and deductions for the tax year ending 5 April. If you earn at the rate of £8500 or more (set by HM Revenue & Customs) in any tax year including "benefits in kind", you will be liable to tax on the financial value of those benefits.

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Benefits in kind include items which may be provided to you periodically by the bank such as private health insurance, cars and beneficial rate loans. If you need to communicate with HM Revenue and Customs, quote your tax reference and NI number, both of which are given on your pay statement. Address any queries to: HM Revenue and Customs West Yorkshire and Craven Area Centenary Court 1 St Blaise Way Bradford West Yorkshire BD1 4YL Telephone: 0845 302 1432 1.5 Performance Review Each employee’s performance is reviewed annually, the present review period being the calendar year. Further details are set out in the HR Procedures Manual (Performance Review) which is available on the bank’s intranet. 1.6 Hours of Work 1.6.1 General Different working arrangements apply depending on your grade. Such working arrangements relate both to the number of normal hours worked in a week (based on a full time position) and to the way normal hours may be scheduled. In particular, you will note that some employees work on ‘non-flexible’ schedules and other employees work on ‘flexible’ schedules. Whether you work on a non-flexible or flexible schedule depends on your grade, work location and your job in the bank. Details of which grades are on non-flexible or flexible schedules are set out below. Grades S03 to S05, SS1 to SS6 (pre-accreditation on to flexible terms) TA6 to TA4 (which apply to employees whose continuous employment with the bank started before 1 December 1996 and are known as ‘non-flexible’ grades): The standard working week is 35 hours and this is normally for 7 hours per day (excluding a one hour unpaid lunch break) Monday to Friday inclusive. The normal working day, unless advised otherwise, will be 9.00am to 5.00pm Monday to Friday inclusive. For non-shift employees the bank can vary, by mutual agreement, the start and finish time between the hours of 8.00am and 10.00am and 4.00pm and 6.00pm respectively. For those employees on "flexible" contracts, different parameters will apply depending on the first 2 letters of your grade/contract type, as set out below. Unless otherwise stated your schedule will normally include a one hour unpaid lunch break each day. Specific schedules will be advised to you locally or set out in your offer letter, but may be changed, on reasonable notice, within the parameters set out below. Clerical SF, SL and SW and Managerial PH, PI, PJ, PK, PL, PM, PN, TF, TW: The standard working week is 35 hours. The maximum number of days you may be required to work in any week is 6, over 7 calendar days, Monday to Sunday. The days of the week on which you work need not be consecutive. Your scheduled daily working hours will be a maximum of 10 working hours per day, although you may agree to work longer hours as overtime. Clerical SC, SX and Managerial PA, PB, PC, PD, PE, PF, PG, TC: The standard working week is 35 hours. The maximum number of days you may be required to work in any week is 6, over 6 calendar days, Monday to Saturday, or Sunday to Friday. The days of the week on which you work need not be consecutive. Your scheduled daily working hours will be a maximum of 10 working hours per day, although you may agree to work longer hours as overtime.

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Clerical SJ: The standard working week is 35 hours. The maximum number of days you may be required to work in any week is 5, over 6 calendar days, Monday to Saturday, and between the hours of 8.00am to 8.00pm. The days of the week on which you work need not be consecutive. You will be required to work a maximum of one Saturday in every two consecutive Saturdays. Your scheduled daily working hours will be a maximum of 10 working hours per day. Clerical SB and Managerial TB and ET, E0C and E0R: The standard working week is 35 hours. The maximum number of days you may be required to work in any week is 5, over 6 calendar days, Monday to Saturday, and between the hours of 8.00am to 8.00pm. The days of the week on which you work need not be consecutive. At the bank's discretion, time and day "slides" may form part of the schedule within the following parameters:

• Time and day "slides" within the core schedule of 8.00am to 8.00pm, Monday to Saturday, provided 50% of the employee’s current schedule remains unchanged.

• Changes to the core schedule will only be made as a result of individual agreement or by collective agreement with Unite.

• Employees contracted to work less than an average 35 hours per week can agree either a time or a day slide according to their personal and domestic circumstances. If you elect a day slide the bank may alter the days on which you work, but not the times in those days that you work. If you choose a time slide the bank may alter the times in the day when you work, but not the days on which you work.

Clerical SD and SK and Managerial TD: The standard working week is 35 hours. The maximum number of days you may be required to work in any week is 5 out of 6 on any day of the week. The days of the week on which you work need not be consecutive. Your scheduled daily hours will be a maximum of 10 working hours per day, although you may agree to work longer hours as overtime. The parameters set out above apply to both clerical grades and managerial band employees up to Global Career Band 4 (GCB4) unless:

• you are a member of the Salesforce, in which case the standard working week is 35 hours and may include weekends, Public and Bank holidays. Your specific hours of work will be flexible depending on the operational requirements of the business and may include such further hours as are necessary for the fulfilment of your duties; or

• you work on a shift basis, in which case any working parameters will be set out in your offer letter.

Senior management employees are required to work such hours as are necessary for the proper fulfilment of their duties. 1.6.2 Overtime and Additional Hours The bank aims to ensure that persistent overtime or additional hours are unnecessary. However, occasions may arise where, due to unforeseen or unavoidable circumstances, you may be required to work beyond your normal hours. In these circumstances overtime payments will be made to clerical grade employees in respect of such hours in accordance with the bank's policies and procedures. Key-time employees in clerical grades will be not be eligible for overtime payments until they work more than 7 hours in one day or in excess of 35 hours in one week. Subject to prior agreement and in accordance with the polices and procedures on authorisation and eligibility key time employees who work hours above their normal hours but below the limits for overtime payments will be paid at their hourly rate of basic salary for such hours. These hours are known as ‘Additional Hours’. Additional Hours are pensionable and will count towards any incentive payment calculation which is based on hours of work.

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Further details are set out in the HR Procedures Manual (Overtime), which is available on the bank’s intranet. 1.6.3 Working Time Regulations 1998 The above regulations set limits on working hours and create a legal entitlement to minimum rest breaks and paid holiday entitlement. Further details on the regulations appear in the HR Procedures Manual (Working Time Regulations 1998), which is available on the bank’s intranet. 1.7 Leave

1.7.1 Holiday Entitlement The bank’s holiday year runs from 1 January to 31 December each year.

During Core Leave, employees must be physically away from their workplace and actively discouraged from participating in work-related activities from a remote location e.g. accessing Blackberry’s. Line managers must not place employees under duress to respond to work-related matters during core leave and it is acceptable for an employee not to undertake any work-related activity during this period.

Employees may attend training courses, conferences or conventions during their core leave as long as the events are not held on HSBC Group premises. Such events must not account for more than 50% of the core leave period.

Minimum core leave is detailed below:

Category Minimum Core Leave Full time employees with 20 or more days annual leave allowances

10 working days, which may include Bank and Public Holidays that fall on normal working days.

Part time employees Pro rata the above calculations. i.e. an employee working 3 days a week with an annual leave allowance of 12 days (full time equivalent allowance of 20 days) should take a minimum core leave of 6 working days, (i.e. two working weeks of 3 days a week).

Leave arrangements for employees whose working pattern exceeds 7 hours per day, or who are working a recognised shift pattern, may vary. These arrangements will be advised to you at the time of introduction of the working pattern.

(i) Clerical Grades Clerical Grades other than S03-S05, SJ4-SJ5, SS1-SS6 on non-flexible schedules and SK3-SK5 are entitled to 25 days paid leave.

Clerical Grades S03-S05, SJ4-SJ5, SS1-SS6 on non-flexible schedules and SK3-SK5:

Completed years of service Paid leave (working days)

Under 3 21

3 and over: 23

5 and over: 25

10 and over: 26

20 and over: 27

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Different arrangements may apply where holiday entitlement has been red-circled.

Additional leave entitlement based on years of service will be given in the holiday year in which the relevant length of service is achieved.

(ii) Management and Salesforce Grades/Bands GCB 6 RC5 (1) managers: 28 working days GCB5 and RC5 (2) managers and above: 30 working days

Holiday entitlement for all other management bands will be set out in their offer letter.

(iii) Promotion On promotion any holiday entitlement will be adjusted pro-rata for the remainder of the holiday year.

(iv) Key Time Employees

Employees whose normal hours are less than 35 hours per week are entitled to paid holiday which is proportional to their normal hours, when compared to the holiday entitlement for a full time employee.

Individual entitlement will be set out in your offer letter or will be provided by your line manager.

(v) Commencing or Leaving Employment During the Holiday Year

If your employment starts or finishes part way through the bank’s holiday year, your holiday entitlement will be directly proportional to the actual period worked during that holiday year.

If it is not operationally practical for you to take your accrued holiday entitlement prior to termination of employment, the bank will make an equivalent payment to you in your final salary, unless your employment is terminated by reason of gross misconduct or if you fail to give appropriate notice. The bank will also deduct an equivalent sum from your final salary payment for any holiday taken in excess of your entitlement or, if this is not possible, the bank reserves the right to withdraw an equivalent sum from your bank account within one month of the termination of your employment or to request that you repay the sum on demand. If the bank intends to withdraw any such sum from your bank account it will write to you, at your last recorded address, informing you of the amount that will be withdrawn. The bank will give you an opportunity to discuss the proposed withdrawal, and the bank will take into account your personal circumstances prior to determining a repayment schedule.

Payments or deductions will not be made in respect of any Bank or Public holidays accrued or taken in excess of entitlement.

Further information on taking your Holiday Entitlement is set out in the HR Procedures Manual, which is available on the bank’s intranet.

1.7.2 Public and Bank Holidays The recognised Public and Bank holidays are: New Year's Day, Good Friday, Easter Monday, May Bank Holiday, Spring Bank Holiday, August Bank Holiday, Christmas Day and Boxing Day.

In addition to the holiday entitlement in section 1.7.1, employees whose normal working hours are 35 hours per week will receive 8 days in recognition of the Bank and Public holidays.

Key-time employees will receive an entitlement in respect of Bank and Public holidays which is proportional to their normal hours of work.

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Individual entitlement will be set out in your offer letter or will be provided by your line manager.

Depending on your rostered pattern of work, either paid leave on the Bank or Public holiday, or subsequent time-off in recognition, will be given.

If your working arrangements include working a Public or Bank holiday, and you are subsequently not required to work on that day, reasonable notice will be given.

Further details are set out in the HR Procedures Manual (Public and Bank Holiday working), which is available on the bank’s intranet.

1.7.3 Time Off for Trade Union Duties Employees who undertake trade union duties on behalf of Unite will be granted paid or unpaid time off in accordance with any agreements that may exist between the bank and Unite.

1.7.4 Time Off for Medical Appointments You may be granted paid time off to attend medical (including dental and optician) appointments which cannot be arranged outside working hours, subject to such policies and procedures on authorisation as may apply locally. Such appointments should, where possible, be made close to the beginning or end of your working day. Where you choose to make a medical appointment in the middle of the working day, rather than re-arrange this for a more operationally convenient time, you may be asked to work additional hours to cover the time taken off for such appointments.

Pregnant women who attend ante-natal care appointments are entitled to paid time off and will not be asked to work any additional hours to cover time taken off for such appointments.

1.8 Absence from Work You must wherever possible gain prior agreement from management before being absent from work. In that case an explanation satisfactory to the bank must be given for your absence.

If you do not have your manager’s prior agreement to your absence you must:

• comply with the bank's rules and procedures if the absence is due to your sickness or injury as set out below; or

• if your absence is due to any other reason you must telephone management at your normal starting time, or as soon thereafter as is reasonably practicable, in order to advise of your absence and provide a satisfactory explanation for the absence.

When you return to work you must attend a return to work interview.

If the bank considers that the explanation you have given for your absence, verbally, in writing, or through your self certification form, to be unsatisfactory or false then action under the bank’s disciplinary procedures may be taken against you.

1.8.1 Absence Due to Sickness or Injury If you are unable to attend work because of your sickness or injury you must telephone your line management no later than your normal starting time (or as soon thereafter as reasonably practicable) in order to advise them of your absence and its reason.

If your absence lasts for 7 calendar days or less you will need to complete a self certification form.

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If your absence exceeds, or is likely to exceed, one calendar week, you must consult your doctor and obtain a medical statement expressing the doctor's opinion of the reason for your absence from work. This must be sent by post or delivered to your manager. If further certificates are required, these must also be sent to your manager by post or delivered. If your illness lasts longer than one calendar week, you should contact your manager to advise him or her of your current prognosis at least once a week, unless agreed otherwise.

You may be asked to give your consent for the bank to obtain a prognosis from your doctor. You may also be required to visit a medical adviser appointed by the bank and you will also be requested to give your consent to any report prepared by such medical adviser being disclosed to the bank.

Reporting requirements may be varied by local arrangement at your place of work, when any particular requirements will be brought to your attention during your employment. If you are unclear about the arrangements in place you should speak to your line manager.

1.8.2 Salary and Other Payments During Periods of Absence No salary or other allowances or incentive payments will be paid for periods of unauthorised absence.

Payments may be made for periods of absence due to reasons other than sickness or injury at the bank’s absolute discretion.

Subject to you following the absence rules laid down by the bank, basic pay less any Statutory Sick pay (“SSP”), Incapacity Benefit or other similar benefit, will be continued for a limited period during authorised absence due to sickness or injury. The period for which salary will be paid currently depends on the length of your service with the bank and is as shown in the following tables:

Employees:

• S03-5, SJ4-5, SS1-6 and SK3-5 employed prior to 1 April 1999 and GCB6-GCB1 employed on non flexible contracts.

• Regulated employees employed before 1st December 1999.

Service Maximum period of normal pay granted*

Less than 2 years 8 weeks (40 working days)

Between 2 and 3 years 16 weeks (80 working days)

Between 3 and 5 years 26 weeks (130 working days)

Over 5 years 52 weeks (260 working days)

* The maximum period is the maximum granted in any one year starting 6 April whether absence is owing to a single illness or succession of illnesses.

Employees:

• SB3-5, SD3-5, SC3-5**, SF3-5, SX1-6, SL1-6, SW3-5, TC3-6** and GCB6-GCB1 on flexible contracts employed prior to 1st December 2006.

• Regulated employees employed from 1st December 1999 to 30 November 2006.

Service Maximum period of normal pay granted***

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Less than 3 years 8 weeks (40 working days)

Between 3 and 5 years 16 weeks (80 working days)

Over 5 years 26 weeks (130 working days)

** Current levels of entitlement were retained on conversion to flexible contract where these were higher than the periods of normal pay granted in this table. However, any future progression is based on the above table.

*** Calculation of maximum period of normal pay granted will be based upon a rolling 12 month period whether absence is due to a single illness or succession of illnesses.

Employees:

• On flexible contracts employed from 1st December 2006 in grades/bands SB3-5, SD3-5, SF3-5, SW3-5, GCB6-GCB1 and all regulated grades.

Service Maximum period of normal pay granted****

Up to 6 months Statutory Sick Pay only

Between 6 and 12 months 2 weeks (10 working days)

Between 1 and 3 years 8 weeks (40 working days)

Between 3 and 5 years 16 weeks (80 working days)

Over 5 years 26 weeks (130 working days)

**** Calculation of maximum period of normal pay granted will be based upon a rolling 12 month period whether absence is due to a single illness or succession of illnesses. All sick pay is calculated and paid monthly in arrears following the receipt of the Absence return form completed by your line manager.

Bank sick pay includes any entitlement you may have to Statutory Sick Pay (SSP). If bank sick pay ceases, you may still be entitled to SSP (for up to 28 weeks' sickness in total). The bank reserves the right to refuse to pay sick pay (including SSP) if it has reasonable cause to think that you are not genuinely sick, or are abusing the sick pay policy. You should be aware that the bank may reduce your holiday entitlement for the holiday year on a pro-rata basis related to your attendance during that year. Any incentive scheme arrangements, as may exist, may also be affected.

Should your SSP entitlement exceed bank arrangements as set out in the HR Procedures Manual then, on exhaustion of any bank sick pay, you will be paid SSP in accordance with your statutory entitlement. Payment of SSP is dependent on you satisfying rules regarding periods of incapacity, the period of entitlement, qualifying days and rules for the notification of absence.

If you are absent from work due to an accident or a condition sustained on or off duty that is the fault of a third party, any bank sick pay paid to you in respect of such absence will be recoverable by the bank only if, and to the extent that, you recover damages in respect of your injury, condition or absence from work. You will be notified if these circumstances apply.

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Further details on absence are set out in the HR Procedures Manual (Absence management).

1.9 Location and Mobility Your initial location will be as stated in your offer letter from the bank. You may be required to travel to customer sites and premises and on occasion to attend training sessions and meetings elsewhere.

There may also be times when the bank needs you to be flexible with your work location, which may mean a permanent or temporary move. Subject to business needs, the bank will, wherever possible, take into account your personal and domestic circumstances before requiring you to move. Set out below are the bank’s mobility requirements. Although the general mobility requirement is dependent on grade, the bank’s requirements under any business recovery plan (see section 1.9.5) apply to all grades.

Employees whose work location is stated as ‘home’ in their offer letter are also covered by these requirements. Some employees may have the option of working from home from time to time by mutual agreement in line with business needs. However, this arrangement is not contractual and the employee’s base remains as stated in their offer letter.

1.9.1 Senior Management If you are a senior management grade employee you may be required to work at or from any office, branch or location of the bank or within different companies of the HSBC Group (as defined in section 1.25) in the UK. A change of your place of residence may be required from time to time at particular stages of your career.

In addition there may be some roles where there is a requirement to work outside of the UK. There may also be roles where occasional overseas travel is necessary, and in such situations, personal and domestic circumstances will be taken into account.

1.9.2 Management If you are a management grade employee (including if you are a Management Trainee) you may be required to work at or from any office, branch or location of the bank in the UK. A change of your place of residence may be required from time to time at particular stages of your career.

In addition there may be some roles where there is a requirement to work outside of the UK. There may also be roles where occasional overseas travel is necessary, and in such situations, personal and domestic circumstances will be taken into account.

1.9.3 Executive Trainees If you are on the bank’s Executive Management Programme, you are likely to be required from time to time to work at or from any office, branch, or location of the bank in the UK. National flexibility is required as an Executive Trainee. A change of your place of residence is likely from time to time at particular stages of your career.

In addition there may be some roles where there is a requirement to work outside of the UK. There may also be roles where occasional overseas travel is necessary, and in such situations, personal and domestic circumstances will be taken into account.

1.9.4 Clerical Grade If you are a clerical grade employee you may be required to work at or from any office, branch or location of the bank in the UK, within reasonable travelling distance of your existing location or your home. What is deemed a reasonable journey will depend on a number of circumstances that will include normal travelling time and public transport availability.

1.9.5 Business Recovery Plans The bank has business recovery plans in place in the event of a major disaster taking place and the working environment being compromised. Depending on the nature and longevity of

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the disaster and the nature of the role you are carrying out at the time, you may be identified as a key member of staff. If you are identified as such, you may be contacted and expected to report for work at a different site, for a temporary period, to recover critical business disruption.

1.10 Cars

1.10.1 Management Car Scheme Employees in bands GCB4 and above and Salesforce employees on Grades RB4, RC4 and RA4 are eligible to participate in the HSBC Company Car Scheme (the “Car Scheme”) subject to the existence of and rules of the Car Scheme as they may exist from time to time.

If your normal hours are less than 35 hours per week, the benefit will be pro rata to your normal hours.

If you change your normal hours, any contributions/cash back will be adjusted accordingly.

For further information please refer to the HR Procedures Manual (Car Scheme), which is available on the bank’s intranet.

1.10.2 Management Car Loan Employees who are in bands GCB5 who are not Job Car holders may apply for a management car loan subject to its existence, limits and terms as may apply from time to time.

Should you subsequently become eligible to participate in the Management Car Scheme, or be issued with a Job Car, no further car loans will be agreed, but any existing car loan can continue until normal expiry or until the car is sold when the loan must be repaid.

For further information please refer to the HR Procedures Manual (Car Loan), which is available on the bank’s intranet.

1.10.3 Job Cars On appointment to certain jobs you may be provided with a car under the bank's Job Car scheme.

A job car is provided when it is an essential requirement for the performance of the job. It is a branch/department asset (not a personal resource) and allocation is reviewed regularly to ensure continued eligibility. As a result, the provision of a Job Car may be withdrawn by the bank at any time. For further information on Job Cars, please refer to the HR Procedures Manual (Car Scheme), which can be accessed through the bank’s intranet.

1.10.4 Salesforce Job Car Scheme Special arrangements apply to employees in Grades RA5, RB5, RD6, RC5, RD5, RF5, RG5, RH5, RI5, RJ5, RE6, RK5 and band GCB6/GCB5 managers working in certain specified Salesforces. For further information please refer to the HR Procedures Manual (Car Scheme) which is available on the bank’s intranet or your offer letter.

1.10.5 Motoring Offences If, as a result of a motoring offence, you lose your driving licence and as a consequence are not able to undertake your duties satisfactorily you must make suitable alternative arrangements acceptable to the bank to enable you to perform your contract of employment.

If you are not able to do so the bank will attempt to identify an alternative position, not involving driving. However if this is not possible or you do not accept the alternative position then your employment will be terminated, by the bank, by giving due notice.

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It is accepted that should an alternative role be identified, your salary, benefits and all other terms and conditions of employment would mirror that of an employee at that grade and level and not that of your current position. Any such alternative role will normally be an established position. You will therefore not be entitled to automatically return to your current role if your driver’s licence is returned, although you will be able to apply and be considered for positions which require a driving licence.

1.11 Expenses You will be reimbursed for expenses incurred on the bank's business which are:

• incurred and claimed strictly in accordance with the bank's rules on expenses; and

• supported by the appropriate level of authorisation and documentation.

To take best advantage of the bank's buying power, arrangements exist for purchase of certain services through given suppliers or through a central point. Such arrangements must be complied with.

Further details are available in the Expenses Policy & Procedures Manual, which is available via Lotus Notes.

1.12 Retirement and Pensions The normal retirement age in the bank is currently 65 and your employment will terminate automatically at the end of the month in which your 65th birthday occurs, in accordance with the Retirement policy as stated in the HR Procedures Manual. Your ‘pensionable retirement age’ is determined by the section of the Pension scheme you are in, and by your contract, and is shown on your pension statement (age 60 for most employees). The change to the bank’s working retirement age does not change this in any way. This will mean that, when you reach your ‘pensionable retirement age’ you will still be able to decide whether to retire or whether to continue to work until 65, if you are under 65.

1.12.1 The HSBC Defined Contribution Retirement Benefit Scheme

The HSBC Defined Contribution Retirement Benefit Scheme (“DCS Scheme”) is applicable to employees who entered service on or after 1 July 1996.

The DCS Scheme is contracted in to the State Second Pension (S2P) which replaced the State Earnings Related Pension Scheme (SERPS) in April 2002.

The DCS Scheme is a savings style type of pension which provides:

o a pension on retirement; o an ill-health pension (which currently applies if you have five years membership and

are unable to continue in employment because of serious ill-health); and o security for your dependants, which is currently:-

a lump sum of four times pensionable salary if you die in service plus a refund of your own pensions contributions;

a spouse's or civil partner’s pension; a children's allowance.

Provided that you are aged 23 or over when you commence employment, you will automatically become a full member of the DCS Scheme for pension, life insurance and other benefits. This means that a contribution of 2% of monthly pensionable salary will automatically be deducted from your monthly pay and paid to the DCS Scheme as a contribution towards your future pension. Further details on the contributions the bank will make to the DCS Scheme for your future pension are set out in the DCS Scheme Explanatory Booklet.

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If you are under the age of 23 at the time of commencing employment you will be automatically admitted to the DCS Scheme for life insurance and qualification service towards an ill heath pension. When you reach the age of 23 (provided that you are still an employee of the bank), the contribution of 2% of monthly pensionable salary will automatically start to be deducted from your monthly pay and paid to the DCS Scheme as a contribution towards your future pension. You may also make contributions to the DCS Scheme for your future pension before you reach the age of 23. Details on how you may do this are set out in the DCS Scheme Explanatory Booklet.

Further details about the DCS Scheme, including the DCS Scheme Explanatory Booklet, Frequently Asked Questions and details of the DCS Scheme Administration Team, are available on the DCS Scheme Intranet Site (inuk-dcsscheme-live.hbeu.adroot.hsbc). You can also call on 01737 227570 (external company Watson Wyatt Ltd).

The pension benefits detailed in the handbook are subject to the Trust Deed and Rules of the DCS Scheme which may be changed from time to time to the extent permitted by the Trust Deed and Rules.

1.12.2 The HSBC Bank (UK) Pension Scheme - Defined Benefit Section

The Defined Benefit Section ("DBS Scheme") is applicable to most employees in service before 1 July 1996.

The DBS Scheme is based on your final salary and pensionable service accrued during your membership of the DBS Scheme. The DBS Scheme provides:

o a pension on retirement; o an ill-health pension (if you have five years membership and are unable to continue in

employment because of serious ill-health); and o security for your dependants:-

a lump sum of four times pensionable salary if you die in service; a spouse's or civil partner’s pension; a children's allowance.

The DBS Scheme is contracted-out of the state second pension (S2P) which replaced the State Earnings Related Pension Scheme (SERPS) in April 2002.

Further details about the DBS Scheme, including the DBS Scheme Explanatory Booklet and details of the DBS Scheme Administration Team are available on the DBS Scheme Intranet Site (inuk-dcsscheme-live.hbeu.adroot.hsbc).

Important points to note are:

o The scheme is non-contributory. The total cost of the scheme is met by the employer. o Completion of the Expression of Wish form and/or Specified Dependants Nomination

Form can assist the Trustee when making payments in the event of your death. o The DBS Scheme is contracted-out of the state second pension (S2P) which replaced

the State Earnings Related Pension Scheme (SERPS) in April 2002. o Employees who joined the DBS before 1 January 1975 have the option to retire from

age 55, (with provision for a reduction of part of the pension in some cases) subject to providing notice to the bank in accordance with their contract of employment.

o Ill-health pensions are based upon your actual period of pensionable service accrued to the date of actual retirement. This may be further enhanced at the discretion of the Trustee, provided it is satisfied that your illness is severe, with no likelihood that you will recover or be able to undertake any gainful employment in the future.

o You are eligible to pay additional voluntary contributions (AVCs) through one of the scheme’s AVC providers to increase your benefits payable from retirement.

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You can also call the DBS Scheme Administration Team on 01737 227570 (external company Watson Wyatt Ltd).

The pension benefits detailed in the handbook are subject to the Trust Deed and Rules of the DBS Scheme which may be changed from time to time to the extent permitted by the Trust Deed and Rules.

1.12.3 Salesforce Bonus Pension Scheme

Certain Salesforce employees may be eligible to participate in the Salesforce Bonus Pension Scheme under which the bank will make contributions in respect of bonus earnings. Further details are set out in your offer letter or are available from HSBC Actuaries and Consultants Limited who you can call on 7688 5318 (Internal) or 01727 885318 (External).

1.13 Standards of Conduct Banking is a business based on the utmost integrity and mutual trust. In order to maintain and safeguard the trust and confidence of our customers and the public, the bank places paramount importance on the maintenance of certain standards of conduct. The bank’s standards of conduct are principally made up of certain rules, regulations and ethical principles. These are set out in sections 1-3 of the Handbook and it is essential that you familiarise yourself with the content of the Handbook and observe the bank’s standards of conduct. In addition other specific rules and regulations may apply in your place of work and will be brought to your attention during your employment.

Due to the need for integrity and trust in our business and the rapidly developing nature of the business, it is not possible to set out standards of conduct in every situation. You should seek guidance from your line manager should you be in any doubt about the correct action to take in any situation.

A failure to abide by the standards of conduct may lead to disciplinary action being taken, including dismissal.

1.14 Confidentiality You must from the date of the commencement of your employment and thereafter, observe strict confidentiality in respect of any and all information held by the bank, including dealings, transactions, procedures, policies, decisions, systems and other matters of a confidential nature of and concerning the bank, the HSBC Group and allied or associated companies of the bank or Group (all such subsidiary and other companies being referred to as “the Companies”). Such confidentiality relates to any and all transactions (including, but not limited to the state of any account and matters relating to customers’ or clients’ business or personal affairs) of the bank or the Group and of each of the Companies with their respective customers, clients, suppliers or associates, except when required or authorised to disclose such information by the bank or by law.

You should be aware that any breaches of the above, including the unauthorised "browsing" of accounts, is likely to lead to disciplinary action and may result in dismissal for gross misconduct.

Disclosure of customers' or clients' business or personal affairs is not permitted without the customers’ or clients’ authority. This is a requirement of bankers' confidentiality, the Banking Code, and the Data Protection Act 1998. Any contravention may lead to action under the disciplinary procedures, as well as individual liability under data protection legislation.

If you are approached by any third party, in particular any media source, and asked to make any comments or provide any information to such persons, under no circumstances should you respond without having sought permission and guidance from your line manager who, where appropriate and necessary, will seek permission and guidance from Group Corporate Affairs. Guidelines on regulations and procedures regarding the handling of information

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relating to customers, clients and employees are set out in the HR Procedures Manual (Data Protection - use, retention and disclosure of personal data; and Data Protection - regulations for staff files), which is available on the bank's intranet.

Nothing in this clause prevents you from making a protected disclosure under the bank’s whistle-blowing procedure, in respect of any malpractice or unlawful conduct. Further details on the bank’s whistle-blowing policy are set out at paragraph 3.9 of this Handbook or are available in the HR Procedures Manual (Whistle blowing), which is available on the bank's intranet.

1.15 Inventions and Other Intellectual Property You may make inventions or create other intellectual property during your employment. In this respect you have a special responsibility to further the interests of the bank and the HSBC Group given your position at the bank and the remuneration paid to you under your contract of employment.

In recognition of your position, remuneration and responsibility, you acknowledge and agree that any invention, improvement design, process, information, copyright work, trade mark, trade name or get-up or any other intellectual property (together the “Intellectual Property”) made, created or discovered by you during your employment (whether capable of being patented or registered or not) in conjunction with or in any way affecting or relating to the business of any company in the Group or capable of being used or adapted for use in such a company or in connection therewith shall be immediately disclosed to the bank and shall belong to and be the absolute property of the bank or such member of the Group as the bank may direct.

However, the above clause shall only apply to the extent that any invention was made by you in the course of your Duties and (i) such invention was reasonably expected to result therefrom; or (ii) at the time of making the invention, because of the nature of your Duties and the particular responsibilities arising therefrom, you have a special obligation to further the interests of the bank. For the purpose of this clause ‘Duties’ means in the course of your duties or in the course of duties falling outside your normal duties but which have been specifically assigned to you.

You acknowledge that you have no rights, interest or claims, either during your employment or after the termination of your employment, in or to any such Intellectual Property and you shall not use such Intellectual Property other than during the period of your employment and for the purpose of the bank or the Group.

If and whenever required to do so by the bank, (whether during your employment or after its termination), you shall at the expense of the bank or such Group company as the bank may direct:

• apply or join with the bank or such Group company in applying for letters patent or other protection or registration in the United Kingdom and in any other part of the world for any such Intellectual Property; and

• execute and do all instruments and things necessary for vesting the said letters patent or other protection or registration when obtained and all right title and interest to and in the same absolutely and as sole beneficial owner in the bank or such Group company or in such other person as the bank may specify.

You agree that you irrevocably and unconditionally waive all rights under Chapter IV of the Copyrights, Designs and Patents Act 1988 in connection with your authorship of any existing or future copyright work, in whatever part of the world such rights may be enforceable.

Nothing in this clause shall be construed as restricting your rights or those of the bank under the Patents Act 1977 and in particular, sections 39 to 43 Patents Act 1977.

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The above clauses are specific to the laws applicable in the United Kingdom.

1.16 Employee Records In accordance with data protection legislation, it is important that the bank's confidential personal records are maintained as accurately as possible. You must record any change in your personal circumstances (such as a change of your name, address or marital status) in the way set out in the Human Resources Procedures Manual (Personal detail change), which is available on the bank’s intranet.

Employees in a position regulated by the Financial Services Authority must also ensure that any adverse change in their credit or other status is notified to their line manager, as this may affect their standing with the Financial Services Authority.

1.17.1 Termination of Employment by the Bank Employees are entitled to a minimum notice period of termination from the bank, as set out below, or to any such longer period as may be statutorily required, unless your employment is terminated summarily on the grounds of gross misconduct.

The bank's notice may be handed to you personally or sent to your last recorded address.

Notice periods applicable when the bank terminates your contract of employment are currently as follows:

(i) Clerical Grades and Management Bands up to and including GCB4 and all Regulated Salesforce grades.

Service Minimum Notice:

During the first five years of continuous employment: One calendar month

After 5 years of continuous employment and up to 12 years of continuous employment:

One week per completed year of continuous employment

12 or more years of continuous employment: 12 weeks

If, however, your employment ends on grounds of redundancy you will be entitled to any period of notice which may apply at the time of the redundancy under any security of employment agreement with any trade union or other such representative body.

(ii) Bands GCB3 and above

The bank will give you at least six calendar months' notice.

1.17.2 Termination of Employment by You (i) Clerical Grades and Management Bands up to and including GCB4 and all Regulated Salesforce grades.

Unless otherwise agreed, you are required to give the bank at least one calendar month's notice in writing, which you must ensure is received by your line manager before the notice begins to run.

Verbal resignations will not be accepted.

(ii) Bands GCB3 and above.

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Unless otherwise agreed, you are required to give the bank at least three calendar months' notice in writing, which you must ensure is received by your line manager before the notice begins to run.

Verbal resignations will not be accepted.

1.17.3 Garden Leave This paragraph applies to any notice period, regardless of whether notice was given by you, or by the bank.

The bank shall be under no obligation to provide you with any work and may at any time require you to stop carrying out your duties and to no longer attend your place of work (often known as ‘garden leave’) or contact any employees, offices, officers, customers or clients of the bank for the duration of the notice period. Alternatively, the bank may provide you with work of a different nature to that which you would normally perform under your contract of employment, and at a different location, during your notice period.

During any such period you will continue to be bound by the terms and conditions of your contract of employment and you will receive pay and most benefits in the normal way. You will not accrue any incentive payment in respect of any period when you are not required to carry out your duties and attend work and any commission will only be paid in respect of credits already earned.

If you have any accrued, but untaken leave, you will be deemed to have taken this during any such period when you are not in attendance at work, provided that you are not carrying out any work on behalf of the bank during such a period.

1.18 Return of Property On the termination of your employment for whatever reason, or at any time at the bank's request, you must immediately deliver to the bank, or to anyone specified by the bank, any and all books, documents, records, computer hardware and software and other disks or tapes kept or made by you and in your possession or control relating to the bank’s business, your computer, mobile, blackberry, any materials, credit cards, keys, passes, cars, equipment or other property (including any copies, drafts, extracts, summaries or reproductions of such property) belonging to or related to the business of the bank, or any other company within the HSBC Group, its or their clients, customers or suppliers and you must not retain any other documentation or property of the bank, or the HSBC Group, in your possession or control.

1.19 Competition Obligations

1.19.1 Confidential Information Following termination of your employment, you will continue to be bound by your obligations of confidentiality, as set out in 1.14. In particular, you shall not divulge, use, or in any other way cause to enter into the possession of a third party, any lists or details of customers, or products, or any item of confidential information, or knowledge that was gained by virtue of your employment, or in respect of which the bank or any company in the HSBC Group is bound by an obligation of confidence to a third party.

1.19.2 Restrictive Covenants If you are a senior management band employee (being GCB3 and above), the following additional obligations apply:

(i) For a period of six months commencing with the date of the termination of your employment (the “Relevant Period”) with the bank you will not, whether on your own behalf or with or on behalf of any other person, company, firm or other organisation, directly or indirectly, whether by yourself, by your employees or agents or otherwise howsoever, approach, solicit, canvass, or advise, sell to or offer to sell to, or interfere with or endeavour to entice away, or cause to be approached, solicited, canvassed, advised, sold to or offer to be

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sold to, or interfered with or enticed away from the bank for the purpose of offering or performing banking or related financial services to any customer or client or potential customer or client of the bank with whom you have had personal contact in respect of offering or performing banking or related financial services – whether by way of a meeting, telephone, letter or otherwise – during the period of six months immediately preceding the date of termination of your employment.

(ii) During your employment and for the Relevant Period commencing with the date of the termination of your employment either on your own account or with or for any other person, firm, company or organisation, you will not directly or indirectly, whether by yourself, by your employees or agents or otherwise howsoever, approach, solicit, canvass, or advise, sell to or offer to sell to, or interfere with or endeavour to entice away, or cause to be approached, solicited, canvassed, advised, sold to or offer to be sold to, or interfered with or enticed away from the bank, any employee of the bank or HSBC Group of band GCB5 or above with whom you have worked in the previous six months or, in the case of termination, in the six months prior to your termination, for the purpose of enticing the employee away from the bank or discouraging the employee from being employed by the bank or the Group company.

(iii)The restrictions set out at clauses 1.19.2 (i and ii) shall only apply to banking or other related financial services which are similar to or competing with the bank’s financial products or services which were developed by you (or whose development was known to you), or which were offered for sale, or advised upon or serviced or supervised by you during the six months prior to the termination of your employment. The restrictions shall not apply to the taking out of financial services, in the ordinary course of usage, by you or your immediate family.

(iv) The Relevant Period set out at clauses 1.19.2 (i and ii) shall be reduced by the period of time (if any) that you are required by the bank not to undertake any active employment duties, prior to the termination of your employment (commonly known as ‘Garden leave’) as set out in clause 1.17.3.

(v) You acknowledge that the duration, extent and application of each of these restrictions are no greater than is necessary for the protection of the legitimate interests of the bank and you agree having regard to the circumstances of your employment and duties that those covenants do not work unfairly or harshly upon you.

(vi) Whilst these restrictions are accepted by all parties to be reasonable in all the circumstances it is agreed that if any such restriction shall be judged to go beyond what is properly considered reasonable in all the circumstances but would be adjudged to be reasonable if part or parts of the wording thereof were deleted then you agree that the restriction shall continue to apply save for the deletion of the offending part.

(vii) Each of these sub-clauses shall be deemed to constitute a separate agreement with the bank, for the benefit of the HSBC Group.

(viii) You acknowledge that damages will not be an adequate remedy for any breach of the restrictions set out 1.19.2 (i and ii) and you shall not seek to resist an application for an injunction in respect of any breach or threatened breach of any or all of the restrictions on the grounds that there is an alternative adequate remedy in damages.

Specific obligations apply to Salesforce employees on Regulated Salesforce Grades and are set out in your offer letter.

1.20 Disciplinary

1.20.1 Rules and Procedure Contravention of any of the terms of your contract of employment or the bank’s standards of conduct, rules, regulations, compliance requirements and other rules which may apply to you

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is viewed most seriously and will normally result in disciplinary action (which could include dismissal) being taken under the bank's Disciplinary Procedures.

The bank’s Disciplinary procedures - HSBC Bank plc are set out in the HR Procedures Manual, which are available from your line manager or on the bank intranet at your place of work.

If you are dissatisfied with a disciplinary decision relating to you, then you can appeal to HR Connect (Employee Relations Team, HR Connect, Mayfields Court, Maylands Avenue, Hemel Hempstead Herts, HP2 4SE) or other person, as set out in the Disciplinary Procedures. Such appeals will normally be held by a level of management above the level responsible for the decision. Full details of how to go about this and the steps that follow such an application are set out in full in the Disciplinary Procedures.

1.20.2 Disciplinary Sanctions Where you have been the subject of disciplinary action under the Disciplinary Procedures and after the procedure has been exhausted it is decided a disciplinary sanction, short of dismissal, should be imposed, the bank may impose on you one or more of the following sanctions:-

(a) a disciplinary transfer to an alternative place of work; (b) a downgrading with reduction in pay; (c) forfeiture of pay; loss of a specified amount of pay related to an offence(s); (d) stoppage/postponement of your next pay award, either salary and/or incentive payment; (e) reduction in pay

either in addition to or in replacement of any other disciplinary sanction which appears appropriate to the particular circumstances.

1.21 Grievance Procedure If you have a grievance related to your employment, you have a right to apply in writing for redress. Full details of how you should go about this, including the person to whom you should apply, and how your grievance will be dealt with are set out in the bank’s grievance procedure. The Individual grievance procedures - HSBC Bank plc is set out in the HR Procedures Manual, which is available from your line manager or on the bank’s intranet at your place of work.

1.22 Variation and Changes Any variations and changes to your individual terms and conditions of employment will be notified to you in writing within one month of the change(s), either by circular or via your pay statement.

1.23 Collective Agreement and Employee Representation

1.23.1 Employee Representation The bank currently has a collective agreement with Unite in respect of clerical grades. Matters relating to pay and conditions of service are subject to negotiation and/or consultation.

If you are employed in a clerical grade, whether or not you are a member of Unite, from time to time your terms and conditions will be subject to variation following negotiations and/or consultations under this agreement, which will be notified to you by circular within one month of the change.

1.23.2 National Council of Managers Consideration of issues relating to management band employees up to and including GCB4 and Salesforce grades is currently through a National Council, representing business areas across the bank. The Council is composed of elected representatives drawn from managers

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in the bands set out above, representatives elected by Unite managerial members, and the National Secretary of Unite responsible for HSBC Bank plc issues.

1.24 Rights of Third Parties The Contracts (Rights of Third Parties) Act 1999 allows persons (including companies) to gain rights under a contract, even if they are not a party to the contract, unless the contract states otherwise.

No person who is not a party to this contract has or shall have any rights under the Act to enforce any term of this contract. No consent of any third party shall be required under that Act to terminate or change this contract.

1.25 Definition of Group “HSBC Group” or the “Group” means, for the purpose of these terms and conditions, HSBC Holdings plc and any company that for the time being is a holding company of HSBC Holdings plc or a subsidiary of HSBC Holdings plc or a subsidiary of a holding company of HSBC Holdings plc (and the terms subsidiary and holding company shall have the meanings ascribed thereto by sections 736 and 736A Companies Act 1985) and/or an associated employer of HSBC Holdings plc as defined in section 231 of the Employment Rights Act 1996.

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2. Code of Business Ethics and Responsible Behaviour (‘The Code’)

Banking is a business founded on mutual trust and public confidence. These attributes have to be earned and sustained over a long period by the successive generations of people who work in the business and can be lost overnight by irresponsible or unethical behaviour. The purpose of this Code is to set out in some detail the enduring principles which have traditionally been observed throughout the bank. They fall under three general principles - integrity, fidelity and self-respect - basic qualities which the bank expects of every employee. They also include certain corporate values to which the bank subscribes and which must govern our business ethics.

These qualities are also reflected in the Core Standards of Behaviour which form part of the performance measurement process. The Core Standards of Behaviour are set out at 2.5 of the Handbook.

Whilst the Code is not contractual, it does form part of the general standards of conduct which the bank expects all employees to reach. Failure to abide by the Code may result in disciplinary action being taken against you, which could include dismissal.

The Code (including the Core Standards of Behaviour) may be altered or modified from time to time by notice to you or by circular.

2.1 Integrity Integrity implies being fully worthy of the trust placed in us by our clients and employer by being honest, impartial and truthful. This means:

• Acting at all times in an honest and upright manner both in our corporate and personal dealings, recognising that our personal conduct may reflect on the bank.

• Scrupulously refraining from illegal, fraudulent, dishonest or unethical behaviour, particularly in relation to financial and/or business dealings.

• Never using confidential information for personal gain or abusing the trust placed in us by the bank and our customers.

• Avoiding conflict between self-interest and the interest of the employer or customer, and being ready and willing to disclose any potentially compromising or conflicting business relationships or shareholdings.

• Ensuring that where the employment of relatives of existing employees is being considered that the existing employee is not involved in the decision making process of recruitment, salary, promotion or retention. In addition, relatives should not be involved in the transacting, processing or auditing of the same activity. It is important to ensure that there are no conflicts of interest in the roles of relatives.

• Observing rules for personal dealings in securities. • Avoiding gifts, services or hospitality, on a scale which could be interpreted as

affecting integrity or the ability to exercise independent judgement. (See also the rules at 3.6 of this Handbook)

• Declining secondary employment or offers of consultancies or directorships, except as may be provided for by your offer letter or expressly approved in advance in writing by the bank. (See also the rules at 3.5 of this Handbook).

2.2 Fidelity Fidelity in banking embraces duties of loyalty, confidentiality and citizenship in relation to the affairs of the bank and our customers. This means:

• Promoting the good standing and name of the bank and defending it against unwarranted criticism.

• Marketing by personal example, including normally conducting our banking and financial services needs through the bank.

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• Ensuring that any undertakings given are within our personal capacity and fully honoured.

• Safeguarding all the bank’s information and restricting access to any confidential or sensitive documents.

• Keeping our customers' business, financial and personal affairs confidential by not disclosing information to third parties without their express consent, except where required by law or established banking practice.

• Taking care over our communications – oral, written or electronic – to prevent others acquiring confidential information.

• Complying fully with the laws and regulations of all countries in which we do business and with the published codes of relevant institutions.

• Not knowingly engaging in business which might in any way be associated with, or regarded as supportive of, illegal or criminal activities, construed as bribery or corruption or, which would be contrary to the national interest of the United Kingdom.

2.3 Self-Respect Self-respect is enhanced by professionalism, good citizenship and conscientiousness. This means:

• Maintaining your dignity and promoting that of fellow employees, by not bullying or victimising colleagues for any reason and by promoting equal opportunities within the bank.

• Acquiring the necessary skills, knowledge and experience to conduct business dealings or tasks in a professional manner and keeping abreast of current developments.

• Acting with the utmost courtesy at all times. • Giving due consideration not just to the immediate financial effects of decisions but

also their wider implications. • Avoiding practices which could make you vulnerable to financial difficulties or which

could lead to malpractice e.g. gambling (except for very modest stakes). • Seeking help and advice from colleagues where difficulties arise in matters of

professional judgement or conduct and adopting an approach of openness and teamwork.

2.4 Corporate Values (in relation to personal conduct) These include:

• Not knowingly allowing the bank to place itself in a position where its duty to one customer or client conflicts with its duty to another.

• Ensuring that the provision of banking services (particularly where this may involve credit facilities) to suppliers or potential suppliers of goods and services to the bank, is considered on a wholly objective basis and not tied to any form of reciprocal agreement.

• Observing the spirit and letter of regulatory requirements, recognising that the Financial Services Authority exercises supervisory responsibility for the HSBC Group as a whole and not just over its banking subsidiaries registered in the United Kingdom.

• Maintaining bank records and systems so that all transactions are recorded in an accurate and prompt fashion and not falsifying records or obscuring, omitting or misrepresenting facts in records or communications.

• Reporting to the appropriate internal level of authority any behaviour which contravenes the law, regulatory requirements, or the spirit of this Code.

2.5 Core Standards of Behaviour The HSBC Group has integrity, trust and excellent customer service at the heart of its values. Application of these in all that we do builds our reputation, unites us, sets us apart from the competition and ultimately makes us even more successful.

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Active Listening

• Listens carefully to customers and colleagues giving them undivided attention and asking thoughtful questions to confirm facts.

• Is genuinely concerned about others and is ready to act in their best interests.

Understanding

• Greeting customers, clients, and colleagues in a polite, friendly and personalised manner.

• Demonstrating a pleasant, enthusiastic, helpful manner when dealing with customers, clients, colleagues and other people whom we work with or who work in our premises.

• Communicating relevant information clearly and accurately. • Treating all customers, clients, colleagues and other people whom we work with or

who work in our premises, with dignity and respect, ensuring that each receives the very best service.

• Handling all customer, client and colleague enquiries, instructions and complaints promptly, willingly, accurately and efficiently.

Freedom to Deliver

• Taking pride in providing excellent customer service and personal responsibility for getting things right first time.

• Positively challenging existing processes in order to improve the quality of service and remove the barriers that impede us from deepening our relationship with customers and clients.

• Adopting a 'can do' approach and taking appropriate action to meet the needs of customers, clients and colleagues.

Integrity

• Acting in an open and honest way, recognising that personal conduct reflects on the bank.

• Attending work regularly and punctually and being committed to the team effort. • Actively promoting HSBC as a reputable organisation. • Maintaining appropriate standards of responsible behaviour, dress and appearance.

Straightforward

• Welcoming feedback and readily apologising when mistakes have been made. • Addressing all matters, particularly difficult issues, with frankness, facts and tact. • Ensuring that all commitments given are achievable and fully honoured.

Forward Thinking

• Developing skills and knowledge required to do your current job well and improve your own performance.

• Being adaptable and maintaining a positive approach to change. • Thinking ahead and anticipating customers' and colleagues' needs.

Teamwork

• Sharing knowledge, best practice and experience to support colleagues in the achievement of their goals.

• Leading by example, contributing to team morale. • Actively contributing to the overall team effort.

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• Treating all colleagues with dignity and respect. • Placing team goals before own individual goals, if appropriate.

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3. Rules and Regulations

Whilst the rules and regulations do not form part of your contractual terms and conditions of employment, they do form part of the general standards of conduct which the bank requires all employees to maintain. Failure to abide by any of the rules and regulations may result in disciplinary action being taken against you, which could include dismissal.

These rules and regulations may be altered or modified at any time by notice to you or by circular.

3.1 General You must not act at any time in any way which, in the opinion of the bank, might cause the bank to be brought into disrepute. You must at all times act with the utmost integrity and honesty in all your personal and business dealings.

You must report any known breaches of rules or regulations, including those by fellow employees, to your line manager or another appropriate manager as soon as you become aware of them.

3.2 Security and Fraud Prevention In the interests of security, fraud prevention, your safety and customer service, the bank reserves the right to:

• Issue security passes, which may include a photographic image of you. • Search any baggage carried by employees (including hand baggage and parcels of

any description) or vehicles entering or leaving bank premises. • Carry out checks on your educational and professional background and undertake

criminal record and/or credit reference checks. • Fraud prevention databases have been established for the purpose of allowing

employers to share data on their employment fraud cases. Should our investigations identify fraud or the commission of any criminal offence by you [on your part] when applying for, or during the course of your employment with us, we will record the details of this on the relevant fraud prevention databases. We and other organisations may also access this information to prevent fraud and money laundering.

• Where an employee has committed an act of dishonesty either in relation to Group funds or customer accounts then the act should be reported to the appropriate authorities and support provided in relation to any prosecution. As appropriate, refunds of any misappropriated monies should be made to the customer. Notification should also be made to the Group’s insurers.

• Carry out telephone and CCTV monitoring in HSBC’s workplace; and • Monitor the use of e-mail, the internet, voicemail and text messages sent to bank

telephones (mobile or otherwise), which have either originated from or been received via bank equipment.

In addition, in the interests of security and fraud prevention, the bank reserves the right to inspect bank accounts and other facilities held by any employee.

You should also be aware that any information or evidence gained from such monitoring may be admitted as evidence in disciplinary situations. The bank will issue appropriate notification should any further monitoring be necessary in addition to the above.

3.3 Communications You are expected at all times to maintain the highest standards of professionalism and integrity in all that you do, including your communications with colleagues, customers, clients and the public. These standards apply to communications that are verbal, written (e.g. memo, letter, report) and electronic (including, but not limited to fax, e-mail, mobile phone text messages, telephone, voicemail or the internet). If sensitive or confidential information needs

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to be sent by email to external parties it should only be transmitted using encryption because unencrypted data could be intercepted and used to commit fraud and/or to damage the reputation of the bank.

3.4 Personal Finance You are expected at all times to conduct your personal finances in accordance with the bank's rules and conditions under which financial facilities are granted to you.

You must not borrow money by overdrawing your bank account without prior authority. If you are in financial difficulty, you must consult Customer Credit Services or your account-holding manager for advice immediately.

The rules and conditions under which financial facilities are granted to you by the bank from any source are set out in appropriate application forms and/or will be provided to you at the time the facilities are granted to you. All employee borrowing is subject to customer lending criteria.

You must not borrow from, or lend money to, customers or other employees except in the course of authorised business.

You must not gamble, except for very modest stakes, and must never put yourself in a situation where you are financially reliant upon the outcome of a bet or financial speculation.

You must gain the prior agreement in writing of your General or Executive Manager if you wish to be a personal guarantor for any loan.

3.5 Commitments Outside the Bank/Dual Employment You must gain the prior agreement in writing of a senior manager if you wish to:

• take or continue with an additional job either inside or outside the bank; • become or remain a director of a company; • engage in any other business – this includes business activities undertaken by

whatever medium, including business interests in internet web sites; and/or • act as an executor, or administrator, attorney or trustee (except for near relatives i.e.

spouse, partner, mother, father, grandparent, brother, sister, child, grandchild).

Permission will not be granted for you to take on any other role which could adversely affect your job with the bank, for example, where it would mean you are unable to take proper rest periods as required by the Working Time Regulations 1998 or which would subject you to an actual or possible monetary liability. Further guidelines are provided in the HR Procedures Manual (Dual employment - commitments outside the group) which is available on the bank’s intranet.

3.6 Receiving Gifts and Benefits You must not accept or give any gift, hospitality, or other personal benefit from or to any third party which is likely to influence (or which other people may think likely to influence) your judgement or conflict with your duties to any customer or member of the HSBC Group. In circumstances where a refusal to accept a gift/hospitality/other personal benefit would be considered discourteous, or the gift/hospitality/other personal benefit offered or received is of nominal value, is appropriate, will not conflict with your duties to the bank or customer, and could not be construed as bribery, then certain rules apply. Full details of this policy can be found in the ‘Giving or receiving gifts, hospitality and other personal benefits’ section in the HR Procedures Manual.

3.7 Diversity

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3.7.1 The Central Role of Diversity Diversity is central to HSBC’s brand and we value the rich diversity, skills, abilities and creative potential that people from differing backgrounds and experiences bring to the workplace. Good practice in the implementation of customer and employee diversity policies sets us apart from our competitors and is crucial for business success. Every employee plays a vital role in providing quality service to all our customers and helping to create an inclusive working environment, where everyone can realise their full potential.

3.7.2 Your Obligations A key aspect of creating a diverse workplace and client base is the non-toleration of any form of discrimination in relation to sex, marital status, pregnancy, gender reassignment, race, colour, disability, sexual orientation, age, religion or other similar belief, ethnic or national origin.

The bank will also not tolerate any form of harassment, victimisation or bullying of any kind.

Discrimination, harassment, victimisation and bullying are extremely serious violations of your terms and conditions of employment. Any such behaviour is likely to lead to disciplinary action and may result in your dismissal for gross misconduct.

3.7.3 Assistance Further details are provided in the HR Procedures Manual (Diversity). In particular, if you believe you are the victim of any form of discrimination, harassment, victimisation or bullying you should follow the guidance and advice set out in the HR Procedures Manual (Diversity) which is available through the bank’s intranet, and you may also want to seek help from your line manager or from Open Line, the bank’s confidential and free advice and information service.

3.8 Compliance with Financial Services Regulations and Rules

3.8.1 Compliance Risk You must be fully aware of your responsibility to comply with applicable laws, rules and codes and to abide by all published compliance regulations including the bank's procedures for personal dealing in securities.

In addition, all branch managers and other managers at bands GCB5 and above have explicit responsibility (which is reflected in their job description) to implement the Group Compliance Policy by containing any compliance risk in conjunction with the relevant Compliance department. The term “compliance” embraces all relevant laws, rules and codes with which the business has to comply.

3.8.2 Operational Risk All employees must ensure that they keep themselves abreast of changes to operating procedures and practices, advised legal and regulatory requirements and the impact of new technology as appropriate to their specific roles.

In addition managers must continually reassess the operational risks inherent in the business, taking account of changing economic or market conditions, legal and regulatory requirements, operating procedures and practices, management restructurings, and the impact of new technology. Once identified, operational risks must be recorded in the Group Operational Risk Database Online Network (GORDON) as described in the Operations FIM, and appropriate measures should be taken to minimise the bank's exposure to them.

This requirement is contained within managerial and staff job descriptions and, if appropriate, should be converted into a suitable performance objective for relevant individuals.

All direct reports of the CEO and COO or equivalent, and, in turn, their direct reports must complete a formal takeover process when moving to a new role to ensure and orderly and

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documented transfer of management responsibility. Any breaches of internal or external rule/procedures/regulation/law identified during the takeover process must be detailed in a report submitted to the appropriate level of functional management which outlines the issues and proposes an appropriate remediation plan.

3.8.3 Consumer Protection The main piece of legislation in the UK which provides protection to consumers is the Financial Services and Markets Act 2000 (“FSMA”). The FSMA requires all firms in the UK undertaking “regulated activities” to be authorised by the Financial Services Authority (“FSA”) and some individuals to be individually registered as an “Approved Person”. The FSA sets out detailed rules with which all authorised firms and individuals must comply. These rules must be followed whenever a regulated activity is undertaken. Further information on regulated activities can be found in the Business Instruction Manual – Compliance, which is available on the bank’s intranet.

Procedures which reflect regulatory requirements are also incorporated in office procedures manuals and circulars. Observance of the Group’s policies and procedures will ensure that the interests of customers, as well as the Group’s reputation, are protected and will minimise the risk of penalties being imposed upon a Group company and/or upon an employee, which can arise from non-compliance. In particular, employees must comply with the requirements of the Business Instruction Manual - Compliance and the Business Instruction Manual - Data Protection which can be accessed through the bank’s intranet site.

As part of your job, you may be required to be registered as an Approved Person with the FSA by way of a formal agreement. If so, this will require you not only to abide by the FSA’s principles and rules but additionally to accept personal responsibility for certain actions under the FSMA.

3.8.4 Dealing Rules - UK Employee Dealing Procedures Personal dealing in securities by all employees is subject to specific procedures, which may be amended from time to time, and which must be strictly observed at all times. If you are a new employee, a copy of the guidelines to employees will be made available to you when you commence employment, and you should read them on receipt.

If you wish to buy or sell securities (e.g. stocks and shares, but see the procedures for a full list of what is deemed to be a security) you must observe the UK Employee Dealing Procedures. These set out procedures and conditions to ensure that employees' dealings comply with the Group's policy, the Financial Services Authority regulations and the Criminal Justice Act 1993. It is very important for you to understand the implications of these regulations.

In particular, you should read carefully the restrictions which apply if you are in possession of inside information. Dealing when in possession of such information, passing such information to others or procuring others to deal while in possession of such information are criminal offences under Part V of the Criminal Justice Act 1993. This is a complex piece of legislation and it is essential that the advice of your line manager is sought before dealing if you have any doubt about the transaction.

There are special rules for dealing in HSBC Group Securities which affect certain employees.

A full copy of the UK Employee Dealing Procedures is contained in the Business Instruction Manual – Compliance which is available on the bank’s intranet.

Failure to observe the UK Employee Dealing Procedures may result in disciplinary action, including dismissal, being taken against you. You may also be subject to criminal prosecution.

3.8.5 Lending - Conflicts of Interest If you are involved in recommending or approving any credit facility or counterparty limit for a

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customer in which you or any connected person have a significant investment, you must inform your line manager immediately in writing. Your line manager will need to be satisfied that the investment does not and will not influence approval of credit facilities or counterparty limits and keep a note of these details.

A "connected person" is defined in the Business Instruction Manual – Compliance (UK Employee Dealing Procedures).

A "significant investment" is defined as:

• any investment in an unlisted company or partnership; • any other investment with a market value of £15,000 or more.

Failure to comply with any of these requirements is likely to lead to disciplinary action and may result in your dismissal for gross misconduct.

3.8.6 Money Laundering Deterrence You must abide by all published money laundering rules, regulations and procedures

'Money Laundering' is the name given to the process by which the identity of illegally obtained money is changed so that it appears to have originated from a legitimate source. Banks and other financial institutions may be used unwittingly as intermediaries for the transfer or deposit of funds derived from criminal activity

Criminals and their associates use the financial system in order to hide the source and beneficial ownership of money by making payments and transfers of funds from one account to another, purchasing monetary instruments such as drafts and travellers cheques and using safe-deposit facilities to provide storage for bank notes. The process is also used in the financing of terrorism although the funds involved may not in themselves be the proceeds of a criminal act.

The HSBC Group has developed and introduced a Money Laundering Deterrence Programme – Global Policy and Principles (GPPs) that generally reflects the anti-money laundering legislation in the UK. Each relevant business operation has introduced the appropriate internal procedures to ensure compliance with the GPPs and the local legislation where applicable.

The following list is by no means comprehensive, but identifies some of the key aspects of which everyone dealing with customers and clients should be aware:

• care should be taken to verify the identity of all new clients (including in some situations those non-customers for whom business is occasionally undertaken) and the ownership of all accounts properly established

• be alert to unusual or large transactions which may give rise to suspicions • if you become suspicious that funds held on an account or transactions undertaken

are related to criminal activity, you must report the matter to the Money Laundering Reporting Officer (“MLRO”) in accordance with local reporting requirements. Failure to report suspicions or failure to report where there are reasonable grounds for suspicion may lead to action being taken against you under the bank's procedure for gross misconduct.

Within some jurisdictions (including the UK) local legislation imposes severe penalties on individuals (including possible imprisonment) on conviction of offences detailed under local law. All employees must therefore be constantly alert to their responsibilities and the risks to which they are exposed. The existing anti-money laundering legislation in the UK places personal responsibilities on all employees and provides that you are committing an offence if you:

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• know or suspect, or have reasonable grounds to know or suspect, that another person is engaged in money laundering and do not report your knowledge or suspicion; and/or

• reveal in any way to a person (customer, non-customer or employee) that they are the subject of a report or an investigation.

Further details are provided in the Business Instruction Manual – Compliance which is available on the bank’s intranet or can be obtained from the Money Laundering team on 799 17312 (Internal) or 020 79917312 (External).

You must be fully aware of your responsibility to comply with applicable laws, rules and codes and to abide by all published compliance regulations including the bank's procedures for personal dealing in securities.

3.9 Whistle-Blowing The Public Interest Disclosure Act 1998 and the US Sarbanes-Oxley Act 2002 are designed to provide employees, and other persons such as agency temps, with a procedure to disclose genuine concerns, which seem to involve unlawful conduct or financial malpractice, and to protect them from victimisation when making disclosures. This is why such disclosures are known as ‘protected disclosures’. The disclosure of wrongdoings within an organisation is commonly known as 'whistle-blowing'.

One of the bank's key business values is to be a fair and objective employer and so it has developed a procedure, in line with the above Acts, to help you raise any concerns about wrongdoings at work. Under the bank’s procedure the following are protected disclosures:

1. Breaches of legal and regulatory requirements by any Group company, including the committal of a criminal offence, a miscarriage of justice or a failure to comply with a legal obligation.

2. Failure to adopt policies consistent with the Group Standards Manual. 3. Fraud or deliberate error in the preparation, evaluation, review or audit of any

financial statement. 4. Fraud or deliberate error in the recording and maintaining of financial records of any

Group company. 5. Deficiencies in or non-compliance with any Group company’s internal accounting

controls. 6. Deviation from full and fair reporting of any Group company’s financial condition. 7. Misrepresentation or false statement to or by a Group Executive Officer or

Accountant regarding a matter contained in the financial reports or audit of any Group company.

You can make a protected disclosure by reporting the matter to your line manager or Human Resources. However, any disclosures falling within categories 2-7 must, due to our legal obligations, be reported to Group Compliance. If you feel unable to raise the matter with your line manager, or Human Resources, for whatever reason, you should call the Group Compliance telephone 'hotline' on 799 12155 (Internal) or 020 7991 2155 (External). Alternatively, you may send an email to: [email protected] or make a protected disclosure in writing, to the Head of Group Compliance, HSBC Holdings plc, Level 42, 8 Canada Square, London, E14 5HQ.

However, if your concern relates to your personal position, rather than a concern about malpractice, it will normally be more appropriate for you to use the bank’s Individual grievance procedures - HSBC Bank plc, which is set out in the HR Procedure Manual and can be accessed through the bank’s intranet.

Full details of the ‘Whistle-blowing’ procedure, along with the HSBC Group’s general policy on disclosure, are contained in the HR Procedures Manual.

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3.10 Data Protection

3.10.1 Personal Data and Sensitive Data The type of personal data that we hold will include information relating to payroll processing, references, family and other contact details and records (including, for example, job applications, and when relevant, details of any grievance and disciplinary procedures) relating to your recruitment and career with us.

We will only collect and process data in a fair and lawful manner. Sensitive data will only be processed with your agreement, unless required to meet statutory obligations. The types of sensitive data we hold about you may comprise of:

(i) Information about your health, which would be used to ensure compliance:

• with health and safety and occupational health obligations; • when considering any health issues that may affect your ability to work; • if you are disabled; • should you require time off work or special arrangements to look after a family

member or friend, we may keep a record of such absences; • for administration and management of insurance, pension, sick pay and other similar

benefits.

(ii) Recording racial or ethnic origin or religious beliefs. This data is held to fulfil our statutory obligations to ensure equality of opportunity at work.

(iii) Information for security, fraud prevention, and regulatory purposes. We may in the course of your recruitment and periodically during your career undertake appropriate security and credit reference checks.

In some instances we may be required by law to provide certain information to a third party, such as the HM Revenue & Customs, governmental or non-governmental regulatory bodies.

Information may also be exchanged with other members of the HSBC Group for purposes connected with your career, and for audit requirements. Information may also be processed on our behalf by members of the HSBC Group, and/or third parties. However, whether or not such information is processed outside the European Economic Area (where there may be less stringent data protection laws) it will be protected by a strict code of secrecy and security and will only be used in accordance with our instructions. If your personal data is transferred or held overseas, we will ensure your rights as an individual are protected.

In order to give you information about products and services we provide together with products supplied by selected third parties, we may use, analyse and assess information that is held about you. We may pass information to other members of the HSBC Group so that they may do the same, but your name and address will not be disclosed for marketing purposes unless you have given your consent.

Under Data Protection legislation, you can ask in writing for a copy of certain personal records we currently hold about you. A charge of £10 will be made.

3.10.2 Employees' Responsibilities Under the Data Protection Act 1998 all employees have a responsibility to ensure that their own personal data is accurate, up-to-date and kept secure. Unauthorised disclosure of third party personal data is a serious offence and can result in prosecution. Therefore you must ensure that you:

• do not disclose any individual’s personal data without authority; • do not treat personal data carelessly;

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• lock all data (including disks, tapes, paper printouts etc) away when not in use; • do not disclose your computer password to any unauthorised person; • only use personal data for the lawful purposes for which the bank has been

registered; • do not write personalised or derogatory comments about a customer, client,

colleague or any other third party.

Guidelines on regulations and procedures regarding the handling of information relating to customers and employees is set out in the HR Procedures Manual (Data Protection - use, retention and disclosure of personal data and Data protection regulations for staff files), which is available on the bank’s intranet.

3.11 Use of Information Technology You must strictly observe the bank's rules in relation to information technology. In particular you must:

• conform with any security measures which are in place to protect the bank's data and/or computer equipment and access control;

• exercise proper control over passwords, Personal Identification Numbers or any other security mechanisms, and ensure that any information technology resources which are in your control (such as access to a computer, laptop, mobile phone, blackberry) are kept secure and safe at all times;

• lock all devices when not in use; • erase all information when it is no longer required to ensure it cannot be recovered

maliciously. This includes physically destroying any CD and DVD media that cannot be erased;

• observe any rules, regulations, codes or internal procedures which are in place with regard to the use of the bank’s equipment including mobile phones, 2 way pagers, blackberrys and PDAs (whether for business or personal use);

• ensure that guests, visitors and contractors are aware of the bank’s policies regarding the use of the bank’s equipment.

• be vigilant and report any contravention of the bank’s Security Guidelines to senior management or to IT Security on 790 27969.

You must not:

• install or use unauthorised software on bank equipment either on or off bank premises;

• use unauthorised computer equipment to process the bank's data; • make unauthorised copies of software; • enter systems without proper authority; • access or attempt to access any data maintained on any of the Group computer

systems, which you are not specifically authorised to access; • access customer or employee records without a specific business need or operational

reason; • effect changes or make transactions on your own account or any account with which

you are associated; • take photographs or video images in any bank premises, using any kind of equipment

(including mobile phone cameras) without the prior permission of senior management or security management;

• connect (physically or by any type of wireless) any unauthorised device to the bank’s computer systems or networks. No personal data storage device is to be attached to the bank’s systems without prior management approval and without ensuring that the appropriate security controls for data storage are applied (A personal data storage device is defined as any non bank owned device that has the capability to have data transferred and stored on it);

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• take photographs that infringe personal privacy or customer or client confidentiality (for example on special occasions, at award ceremonies etc), or that compromise the security of employees, customers, clients, premises and equipment;

• use mobile phones in areas such as computer rooms, network rooms and trading floors where their use may cause distraction or a breach of security or compliance regulations. Relevant business specific or local instructions should be followed.

Digital recording devices such as floppy discs, CDs and DVDs should only be used to store bank and/or Group information if there is no other alternative. Devices of this type are vulnerable to compromise and can be easily read. You must consider carefully the risks of storing sensitive information on mobile recording devices and the potential danger to the bank if the information is lost. As a matter of course, if documents are being physically transported, they should be password protected. If in any doubt, err on the side of caution and do not use these devices until you have spoken to your line manager for advice.

Mobile recording devices should never hold the only copy of information stored. Another copy must always exist on a bank owned computer to provide contingency.

In all circumstances local management may restrict use of these devices further if it is deemed appropriate and in the interests of the security of the bank and/or Group’s information and the protection of employees, customers and clients.

Unauthorised software comprises any software that is not on the Group's IT list of approved software or which has not been procured via the Purchasing Department (or future equivalent) and includes any unsolicited software, demonstration software that has not been previously checked by Group IT Security and any software that is delivered in such a way that it may have been tampered with.

You are required to act in accordance with the bank's policies and guidelines on the security of information and the use of information technology at all times. Security Guidelines on the regulations and procedures regarding information technology are encapsulated in the document entitled Group IT Security Standards which is available on the Group IT intranet under IT Security, Group IT Security Awareness.

The policy explaining the appropriate use of Group e-mail systems and the Internet, and also what is inappropriate use, is contained in the HR Procedures Manual (Internet, email and company mobile phones), which is available on the bank’s intranet and in the Security and Fraud Functional Instruction Manual. You should note that the bank may monitor the content of emails and other electronic messages sent from its property. The bank will also monitor Internet use and content when using the internet.

Failure to comply with any of these requirements and, in particular, the use of unauthorised software on Group equipment is an extremely serious violation of your terms and conditions of employment. Any such failure is likely to lead to disciplinary action and may result in your dismissal for gross misconduct.

3.12 Health, Safety and Fire The bank attaches the greatest importance to the health, safety and welfare of its employees at work. Every effort is made to provide safe working conditions and to prevent fire or other damage.

However, no safety policy is likely to be successful unless it has the co-operation of all employees. Everyone should do everything possible to prevent injury to themselves or others.

The Health and Safety at Work Act 1974 and subsequent regulations place the duty on every employee, while at work, to:

• take reasonable care for the health and safety of themselves and others; and

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• co-operate with the employer in meeting the duties and requirements of the relevant statutory provision.

As an employee of the bank, you have a personal responsibility to take care of yourself and others and to avoid placing yourself or others in a situation that is hazardous or a risk to health.

You must also ensure that you are familiar with all bank emergency procedures, including actions to take on discovery of a fire, bomb or other hazard. If you are unsure about or unfamiliar with the bank’s emergency procedures you must speak to your line manager. As your employer, the bank has a duty to the health, safety and welfare of all employees.

In addition, an incident may require you to exit your place of work at short notice or an incident may occur, preventing access to your place of work. In these circumstances you need to be aware of the number to telephone to receive updated information and to report your safety (employees based in Headquarters: 08000 322722; employee based elsewhere: 0800 731 3575) and which web sites will provide you with information (http://www.hsbc.com/).

These responsibilities, together with procedural arrangements, are detailed in the Business Instruction Manual (BIM) – Health, Safety and Fire, which is available through the bank’s intranet under Branch Procedures Manuals.

The specific objectives of the bank's Health, Safety and Fire Policy are to:

• promote a healthy and safe working environment; • ensure each employee accepts health and safety as a major part of their individual

responsibilities; • identify health, safety and fire hazards in advance, and control the risks; and • ensure all legal requirements are satisfied.

A Central Safety Committee consisting of representatives of the bank, Unite and the National Council of Managers meets at regular intervals to discuss health, safety and fire issues, and exchange information and resolve problems.

Unite representatives in the workplace (known as Joint Accredited Office Representatives) are recognised by the bank and Unite as Health and Safety Representatives, as defined under legislation within an area of representation jointly agreed. In this capacity, they may inspect the workplace and advise management of their findings.

Further details on health and safety, including information on first aiders and specific areas of risk, such as upper limb disorders and night workers are contained in the HR Procedures Manual.

3.13 Circulars, Instructions and Authority Key communications about changes to procedures, rules, regulations and terms and conditions of employment will be detailed in a circular, which will be published on the bank’s intranet.

You are required to read and observe all instructions applicable to you and all appropriate circulars issued by the bank.

You are required to ensure that you act at all times within the authority granted to you by the bank.

3.14 Dress and Appearance Whether or not your job involves contact with the public, you are required to dress in a way that the bank considers appropriate to the business situation. Account will be taken of

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religious and cultural norms. Styles that could offend normally accepted standards will not be permitted.

Dress and appearance requirements may be varied by local arrangement at your place of work. Any particular requirements will be brought to your attention during your employment.

3.15 Alcohol and Drug Misuse An employee who suspects they have a drug or alcohol dependency is actively encouraged to seek help through the bank’s Occupational Health Services or Open Line, a free and confidential service which provides counselling and information to all bank employees. Details on Open Line can be found on the bank's intranet under HR & Learning, Health & Family.

In order to help the employee (and subject always to the employee’s permission), Occupational Health will usually need to liaise with the employee's line manager who will therefore need to be advised in general terms as to the nature of the problem. Clinical details are not disclosed and remain confidential unless the individual gives written permission to the contrary.

Dependency is distinguished from cases where an employee might occasionally arrive at work under the influence of alcohol or drugs. Such cases will be dealt with under normal disciplinary procedures. Incapability at work caused by alcohol or drugs is treated as a very serious matter and may result in your dismissal for gross misconduct.

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4. Benefits and Facilities

You may be eligible to take advantage of certain benefits and facilities provided by the bank from time to time. Further information will be available at your place of work in respect of other benefits and facilities which may be available to you locally.

The benefits set out in this section are only a summary. Full details and/or further information on specific benefits can be obtained from the HR Procedures Manual and the Best Place to Bank for Employees site, which are available on the bank’s intranet.

These benefits do not form part of your contract of employment. All benefits and facilities are subject to certain rules on eligibility and operation, which may change from time to time.

4.1 Beneficial Loans

4.1.1 Personal Loans Unsecured personal loans at concessionary rates may be available in accordance with the limit and terms which may be in force at the time.

4.1.2 Season Ticket Loans Interest free season ticket loans, repayable via payroll deduction, may be available to you. Additional information is available in the HR Procedures Manual (Season ticket loan scheme), which can be accessed through the bank’s intranet.

4.2 Charities

4.2.1 Give as You Earn Through this scheme, run in association with the Charities Aid Foundation, you can, via payroll deduction, make tax free donations to charities of your choice. Your money can go either direct to nominated charities, or you may be able to hold an account with the foundation, enabling you to donate in a flexible manner. Further details are available in the HR Procedures Manual (Charity scheme – Give as You Earn (GAYE)), which is available on the bank’s intranet.

4.2.2 Pound for Pound Scheme The bank will, subject to certain rules, match charitable funds raised through employee time given and fund raising events to a certain limit, per person per event per annum. For further information please see the Charity scheme - Pound for Pound (£ for £) section or telephone Int 7991 0638/ DDI 0207 991 0638.

4.2.3 ‘Keep the Change!’ ‘Keep the Change!’ is a simple and regular way to donate the odd pennies from your net salary to six nominated charities each month. For example, if you earn £900.17 then by signing up to ‘Keep the Change!’ you can donate the 17p to charity. If your salary varies each month then the pennies donated may also vary. The maximum you give each month is 99p.

Distribution costs are covered by the earned interest and therefore 100% of the monies donated will be received by the nominated charities. The donations will be received by the charities within 30 days of receipt by the distribution company. Further details are available in the HR Procedures Manual section Charity Scheme – Keep the Change!, which is available on the bank’s intranet.

4.3 HSBC Childcare Scheme All UK-based employees across the Group (except those based in the Offshore Islands) are eligible to join the HSBC childcare scheme. This scheme:

offers choice and flexibility to working parents.

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Enables employees to take advantage of the tax and national insurance incentives available to working parents.

Parents can purchase electronic vouchers that can be used to pay for a variety of childcare for children up to 16 years of age. The benefits of these ‘virtal’ vouchers are:

Their flexibility, as they can be used to pay for nursery care, childminders, nannies, au pairs, out of school clubs and holiday playschemes.

Tax and NI exemption on up to £55 per week per employee (or £243 per month) of fees paid via salary sacrifice.

4.3.1 The HSBC Childcare Scheme at a Glance

Membership of the Scheme is subject to certain eligibility criteria and basic pay thresholds. For full details of the childcare scheme, please refer to the HR Procedures Manual (Childcare provisions), which is available on the bank’s intranet.

4.4 Open Line To help employees manage personal or work difficulties, the bank offers all UK-based employees access to Open Line, a free and confidential counselling service. Open Line provides practical help and counselling on personal issues, such as bereavement, depression and relationship problems. Help is also available with a wide range of work related difficulties, such as bullying and harassment, lack of confidence, work stress and role problems. Open Line can also provide support when employees are experiencing stress in connection with matters which are the subject of disciplinary or grievance investigations or proceedings.

Telephone support is available 24 hours a day, 7 days a week. To make an appointment to see or speak to a counsellor please call between 9.00 am – 5.00 pm Monday to Friday, Counselling appointments are available outside these times.

The service can be contacted by telephone or in writing, and is open Monday to Friday 9 am to 5pm. Appointments for telephone or face-to-face counselling can be made during these hours, or, by prior arrangement outside these hours. The telephone number is 08457 666 999, and the textphone for deaf employees is 08455 854054.

Please note that, if you work in an area where calls are routinely monitored (such as a Customer Service Centre) you should ensure you use a non-monitored phone or a private phone, to preserve your confidentiality.

Further information on Open Line can be found on the bank's intranet under HR & Learning, Health & Family.

Independent nursery

Child minder Relative Holiday playscheme

After school care

Nanny/ au pair

You can join the scheme, provided that your childcare provider is approved or registered, and the first £243 per employee per month spent on childcare via salary sacrifice will be tax and NI free. You can save up to £692 per year (basic rate tax payers) or up to £1195 per year (higher rate tax payers).

You are not able to join the scheme if a relative provides all your childcare

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4.5 Holiday Fund

Work locations may run such a scheme. Details are contained in the HR Procedures Manual (Staff holiday fund account), which is available through the bank’s intranet.

4.6 HSBC Group Sports and Social Clubs The Group has two sports and social clubs for use by employees and their families. In London, activities are centred in New Beckenham and in Sheffield at Dore. There is a wide range of sports and leisure facilities available at these centres as well as a rowing club at Putney, London and sailing centres country-wide. There is also a fully equipped gym and class studios, known as ‘The Fifth Dimension’ at the bank’s Headquarters. For information and an application form, call 7213 4366 (Internal, London) or 0208 919 4366 (External, London); 7055 5681 (Internal, Sheffield) or 0114 260 5681 (External, Sheffield). 4.7 Private Medical Plan Management grade employees may be eligible for membership of the HSBC Group Healthcare plan. This provides cover for yourself and your immediate family (including partner and dependant children up to the end of the scheme year in which they achieve the age of 21) during your employment. Details are automatically made available shortly after you become a manager. The scheme operates on terms and conditions which are in force at the present time and the bank reserves the right at any time to vary or withdraw the scale or level of benefits in force. 4.8 Medical Examinations Managers in certain grades may have a medical examination through one of the BUPA Health Screening Centres. Details including information on eligibility and frequency of screenings are set out in the HR Procedures Manual (Medical examinations), which is available on the bank’s intranet. 4.9 Mortgage Subsidy Scheme The Mortgage Subsidy Scheme is designed to encourage employees to take their mortgage borrowing with the bank. Currently a monthly subsidy payment will be paid with salary subject to the rules of the scheme as they may exist from time to time. Details of the scheme including information on eligibility and rates are set out in the HR Procedures Manual (Mortgage subsidy scheme), which is available on the bank’s intranet. 4.10 Staff Accounts Preferential facilities, including rates of interest, may apply to staff accounts. Details are available from your branch and in the HR Procedures Manual (Staff accounts), which is available through the bank’s intranet. 4.11 HSBC Corporate Card A HSBC Corporate Card must be used by all managers, and appropriate employees, who incur business expenses on a regular basis. Such employees will pay for appropriate business travel, accommodation, and entertainment items with an HSBC Corporate Card, where issued, and subsequently reclaim such expenses. The card is provided for business expenses only and must not be used for personal expenditure or to make cash withdrawals other than for foreign currency required for incidental expenses during a business trip. Misuse of the Corporate Card may result in disciplinary action, which could result in dismissal. Details on the HSBC Corporate Card including information on eligibility and card limits are set out in the Expenses & Policy Procedures Manual, which is available via Lotus Notes.

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5. Your Career With the Bank Set out in this section are some of the main issues which may affect you during your employment, together with an outline of the bank’s policies and procedures in respect of each matter. Further information on each issue, and many other issues which may be of interest or which may affect you during your employment, are available in the bank’s HR Procedures Manual, which can be accessed via the bank’s intranet. This section does not form part of your contractual terms and conditions of employment. 5.1 Job Evaluation Jobs are formally evaluated using the HAY system. The HAY evaluation system is amongst the most widely used in the world. It is recognised as a consistent and fair method of measuring and comparing the relative size of jobs in the organisation. The evaluation process is based on an agreed job description for individual jobs, or a generic description covering jobs which are similar in content and skill requirement across departments or branches in the bank. A panel of trained evaluators meets regularly to consider these job descriptions. Points are awarded using common factors and agreed criteria, with the resulting total indicating the level and grade of the job. If you consider that your job is incorrectly graded, you may appeal. Further details of the process and its application to your job are available in the HR Procedures Manual (Job evaluation), which is available on the bank’s intranet. 5.2 Employee Learning and Development - Investing in Your Future The bank is committed to creating a learning organisation that promotes and supports individual development and is the envy of other global companies. We recognise that superior knowledge and skills of our employees are vital if we are to deliver a first class service to our customers, continue to grow as a business and be better than our competitors. At the same time, we want the bank to be a great place to work where employees have job satisfaction, grow with us and make a long-term commitment to stay with the bank. Whatever your personal learning and development goals are and regardless of your career aspirations with the bank, we have a wide range of opportunities for career development. Opportunities include the weekly 'My Next Move' and local bulletins where role vacancies within the bank are advertised. Learning is most effective when it is enjoyable, made as accessible as possible, with you in control and conducted at your own pace. Our goal is to make learning and development something that everyone in the bank is passionate about. We know that when it comes to learning, one size does not fit all and everyone is different – we all have different levels of knowledge or experience and we all like to learn at different speeds and in different ways. “My Learning” is a learning management system. It is your personal link to a wealth of learning opportunities. It is a single point of access for all learning activities and information resources and a key part of the bank’s flexible learning approach. It improves the speed, quality and effectiveness of the learning process, providing greater opportunity for all employees to take part in learning activities, regardless of current job role, future career aspirations or location. 5.2.1 Identifying Learning and Development Needs Learning is developing new knowledge and skills and building on and improving the skills you already have to enable you to gain more from your current role or to prepare for your next job with the bank. We want you to take control of your personal learning and development by identifying your development needs and preparing your own learning and development plan. There are several resources to help you prepare your personal learning and development plan including the Group Capabilities Framework and the Career Development Review. Links to these can easily be found on the HR and Learning pages on the bank’s intranet.

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The Group Capabilities Framework highlights the skills and actions that best support the Group’s Managing for Growth strategy. It describes the bank’s corporate character and translates this into the qualities expected of all our employees, by defining the required skills, attitudes and behaviours. The Group Capabilities Framework and “My Learning” include explanations on how to access 'My Next Move'. Managers of the bank in bands GCB5-GCB4 are able to utilise the Career Development Review. It provides an opportunity for such managers to reflect on strengths and development needs, identify career goals and aspirations and plan the best way forward to achieve them. 5.2.2 Learning and Development The Learning & Development team has learning and development professionals who are responsible for a wide range of learning activities, all of which are accessible through "My Learning". The team liaise with business units to provide the best learning solutions throughout the bank and the HSBC Group. Your learning may be provided face to face at our premier Group Management Training College in Hertfordshire, through personal coaching or with online, video and paper-based learning materials. If you are interested in finding out more about Learning & Development or opportunities to join the team please contact them on 7988 8528 (Internal) or 01923 688 528 (External). 5.2.3 Professional and Technical Qualifications If you would like to study for a specific professional or technical qualification, the bank may be able to provide assistance. Further information about the procedures involved can be found in the HR Procedures Manual (Professional qualifications), available on the bank’s intranet. 5.3 Employee Representation 5.3.1 National Council Consideration of issues relating to management band employees up to and including GCB4 is achieved through a National Council, representing business areas across the bank. The Council is composed of elected representatives drawn from managers in the above bands, representatives elected by managerial members, and the National Secretary of Unite responsible for HSBC issues. Further details can be obtained from your line manager or the HR Procedures Manual, which is available on the bank’s intranet. 5.3.2 Unite Unite is the only recognised union for clerical grade employees within the bank. To further good industrial relations within the bank, Unite are provided with certain services and facilities. In most parts of the bank the services of a Jointly Accredited Office Representative (JAOR) are available and, in addition, there are a number of full-time 'Seconded Representatives'. Should you wish to join Unite you should contact one of these or respond to Unite's communications, frequently circulated within the bank. Further information can be obtained from: Unite Seconded Representatives Office 4th floor 196 Oxford Street London W1D 1NT 7683 4639 (Internal) 08455 834639 (External) 5.4 Maternity & Other Family Related Policies & Procedures

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Women who take maternity leave and employees who take adoption leave are encouraged to return to work with the bank, and during your leave the bank will keep in regular touch with you. A detailed 'Maternity Guide' is available to explain your entitlement and obligations and the facilities to which you may be eligible. Full details on maternity and other family related policies and procedures can be found in the HR Procedures Manual on the bank’s intranet. In order to help you return and continue your career, the bank has a number of initiatives that may assist you. These include:

• childcare facilities to aid return to work (see section 4.3 of this Handbook); • a priority returners scheme, which gives preference for re-entry to the bank to those

who apply prior to leaving and who are eligible for the scheme, if exercised within five years. Further details can be found in the HR Procedures Manual (Priority returner scheme), which is available on the bank’s intranet;

• family leave provisions which recognise the needs of carers of a sick child or an elderly, disabled, or chronically sick relative or other close dependant and provide for up to five days' paid family leave, in an emergency, in any one year.

• a flexible working policy, which aims to increase flexible working and which exceeds statutory requirements. See HR Procedures Manual (Flexible working) which is available on the bank’s intranet.

The bank’s Childcare Scheme and Family Leave provisions are available to all employees with parental responsibility for children. Further details on these and other family related policies and the procedures you should follow are set out in the HR Procedures Manual (Leave, Flexible working, and Childcare provisions). 5.5 Special Leave You may, at the bank's discretion, be granted special paid leave for reasons such as public duties, Duke of Edinburgh's Award Scheme Adventure Training, bank sports activities, certain H.M. Forces or Auxiliary Forces activities, or on compassionate grounds. Such leave will not normally exceed ten days in any one calendar year. Special unpaid leave may also be granted in exceptional circumstances, at the bank's discretion. Application for such leave should be addressed, in the first instance, to your immediate line manager. Further details are set out in the HR Procedures Manual (Special leave arrangements) which is available on the bank’s intranet. 5.6 Support for Disabled Employees The bank values the individual contribution of all employees, irrespective of any disability. The recruitment, training, career development and promotion of all employees is based on the aptitudes and skills of the individuals. Consideration of disability issues is also integrated into the business and there are a number of initiatives in place to support the bank’s commitment to disability. 5.6.1 Reasonable Adjustments Most disabled people do not need special equipment or adaptations, but sometimes provision of these can help an employee to operate more effectively at work. The bank is committed to finding the right solutions to meet the diverse needs of all employees and will make reasonable adjustments to ensure that everyone can compete on a level playing field. The bank will cover the costs of reasonable adjustments required, although practical advice/financial support from "Access to work", run by the Employment Service, may be sought on an as needed basis. "Access to work" provides a range of services, such as equipment and communicators, as well as operating a fares to work scheme. 5.6.2 Rehabilitation Policy

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When an employee becomes disabled, or an existing disability worsens, every effort is made to retain the individual in employment. The Rehabilitation Policy is designed to assist managers and employees, through employment assessment and consultation. Further information on the support available and the process to follow is set out in the HR Procedures Manual (Employees with a disability, illness or condition), which is available on the bank’s intranet.

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6. Security of Employment The bank seeks to provide security of employment for its employees by carefully planning the adoption or development of revised business practices and procedures. It aims to avoid redundancies through seeking alternative employment for surplus employees but recognises that circumstances may arise where employment cannot be maintained in this way. The manner in which job reductions and, if necessary, redundancies are handled is set out in the 'Security of Employment Policy (SEP)'. This is contained in the HR Procedures Manual, together with a document entitled 'Redeployment and redundancy - your questions answered' which contains a series of frequently asked questions in redundancy situations. Any such payment made under these arrangements includes and extinguishes any statutory redundancy entitlement. For senior management employees, where their employment terminates on the grounds of redundancy as defined in the Employment Rights Act 1996 section 139 (1), the bank will apply Appendix 1-4 of the Security of Employment Policy as appropriate. Any such payment made includes and extinguishes any statutory redundancy entitlement. An appeal against any decision regarding redundancy must be lodged with the Employee Relations Team, HR Connect, Mayfields Court, Maylands Avenue, Hemel Hempstead, Herts HP2 4SE within three weeks of receipt of the letter formally advising of the decision against which the appeal is being made.


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