Business Context and Reporting Period
This filing is a Form 6-K submitted by Lloyds Banking Group Plc (formerly Lloyds TSB Group plc) on November 12, 2008. The document describes the material terms of an amended and restated deposit agreement dated November 17, 2008, between the Company and The Bank of New York Mellon, acting as depositary. The agreement governs the issuance and administration of American Depositary Shares (ADSs) representing the Company's ordinary shares.
Key Financial Metrics
The filing text does not provide a clear value for revenue, profit, cash flow, margins, debt, or liquidity. This document is a legal description of the deposit agreement structure rather than a financial performance report.
Specific financial terms related to the deposit agreement include:
- ADS Ratio: Each ADS represents four ordinary shares.
- Issuance/Cancellation Fee: $5.00 (or less) per 100 ADSs.
- Cash Distribution Fee: $0.02 (or less) per ADS.
- Annual Depositary Service Fee: $0.02 (or less) per ADS per calendar year, if not collected via cash distribution fees.
Material Changes
The primary material change is the amendment and restatement of the deposit agreement originally dated February 7, 2000, and previously amended on November 7, 2001. The new agreement updates the terms governing the relationship between the Company, the depositary, and ADS holders, including provisions for the Direct Registration System (DRS) and Profile Modification System.
Guidance, Outlook, and Risks
Management Commentary: The filing outlines the operational mechanics of the ADS program, including dividend distribution, voting rights, and withdrawal procedures. It clarifies that ADS holders are not direct shareholders under Scottish law but hold rights via the deposit agreement governed by New York law.
Risks and Contingencies:
- Currency Risk: ADS holders may lose value on distributions if exchange rates fluctuate while the depositary cannot convert foreign currency to U.S. dollars.
- Voting Limitations: ADS holders may not receive voting materials in time to instruct the depositary, potentially resulting in a loss of voting rights or the depositary exercising a discretionary proxy.
- Distribution Restrictions: The Company has no obligation to register securities under the Securities Act; holders may not receive distributions if it is illegal or impractical to make them available.
- Liability Limits: The Company and depositary are not liable for special, consequential, or punitive damages, nor for failures to perform due to circumstances beyond their control.
- Termination: The deposit agreement may be terminated by the Company with 90 days' notice, or by the depositary if no successor is appointed within 90 days of resignation notice.
Important Facts for Investors to Verify
- Confirm the current exchange rate and conversion procedures for dividends, as fractional cents are rounded and foreign currency conversion is not guaranteed.
- Verify the specific voting deadlines and procedures, as failure to instruct the depositary by the specified date may result in a discretionary proxy being cast by the Company.
- Review the fee schedule ($5.00 per 100 ADSs for issuance/cancellation and $0.02 per ADS for distributions/services) to understand the cost of holding and transacting ADSs.
- Understand that ADS holders do not have direct shareholder rights under Scottish law and must rely on the depositary to exercise rights.
- Note that the depositary may sell rights or other property if distribution is not legal or practical, and holders may receive no value for lapsed rights.