IMPORTANT NOTICE Please note that all written correspondence should now be mailed to The Bank of New York Mellon s new address:

Transcription

1 IMPORTANT NOTICE Please note that all written correspondence should now be mailed to The Bank of New York Mellon s new address: Shareholder Services P.O. Box Providence, RI All correspondence should contain your account number and the name of the corporation that appears on your certificate or account statement. To call The Bank of New York Mellon, you may continue to use the phone number listed in the accompanying documentation. Please retain this notice for future reference. 3/13

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3 DIVIDEND REINVESTMENT PLAN The Dividend Reinvestment Plan provides two easy ways to increase your investment in HSBC Holdings plc ( HSBC ): Dividend Reinvestment which allows you to reinvest all or part of the dividends that you receive on your HSBC shares. Additional Cash which allows you to invest any amount from $20 up to a maximum of $60,000 in any calendar year. You may elect either of the Dividend Reinvestment options or the Additional Cash option or a combination of the two. If you elect only the Additional Cash option, you will continue to receive cash dividends declared on the HSBC shares registered in your name. KEY FEATURES The plan provides a systematic way for you to use your dividends and/or cash to purchase additional HSBC shares. You can reinvest dividends on less than all of the HSBC shares registered in your name and continue to receive cash dividends on the remaining HSBC shares. You can make additional investments in cash on a monthly basis. All shares purchased through the plan are held for you by The Bank of New York, unless you request the issuance of an American Depositary Receipt ( ADR ). This convenience provides protection against ADRs being lost, misplaced or stolen. An ADR for the full number of shares credited to your account under the plan will be delivered to you upon written request. You may also send The Bank of New York your other HSBC ADRs for safekeeping, free of charge. Because you bear the risk of loss

4 in sending ADRs to The Bank of New York, you are urged to send your ADRs by registered mail, return receipt requested, and properly insured. ADRs should not be endorsed. The plan is entirely voluntary. You may terminate your participation at any time upon giving written notice, to be received by The Bank of New York before the record date for that dividend payment. Upon termination, you will receive an ADR for the number of full HSBC shares credited to your plan account and a check for any fraction of a share, valued at the then current market price of the HSBC shares, less any brokerage commission. Alternatively, The Bank of New York will sell all the HSBC shares that are held for you under the plan and send you a check for the proceeds, less any brokerage commissions and any other costs of sale. HOW THE PLAN WORKS To join the plan you need to sign the Application enclosed with this brochure and return it to The Bank of New York. Be sure to sign exactly as your name appears on the Application. (All joint owners must sign.) Option I Dividend Reinvestment If you choose this option, cash dividends on all or part of your HSBC shares will be reinvested automatically for you in additional HSBC shares. Option II Additional Cash If you choose this Option, you can invest cash as often as once a month in varying amounts from $20 up to a maximum of $60,000 each calendar year to purchase shares.

5 Features Common To Both Options Under both Option I and II, when the shares for participants in the Dividend Reinvestment plan are purchased, your account will be credited with the relevant number of full HSBC shares as well as any fractional HSBC shares. All cash payments, in U.S. dollars, can be sent to The Bank of New York by personal check or money order (make payable to The Bank of New York). Future dividends on all shares held by The Bank of New York in your plan account will be reinvested for you in more shares. For your convenience, The Bank of New York will retain shares in your plan account unless you request the issuance of an ADR. Upon termination of your participation in the plan, unless you instruct otherwise, an ADR for the number of full HSBC shares credited to your plan account will be issued in your name and you will receive all future dividends in cash on such ADR. You may, however, request that shares in your plan account be sold, in which case any brokerage commissions and any other costs of sale will be deducted from the proceeds and you will be sent a check for the net amount. Purchases Cash amounts, other than dividends, will be invested beginning on the 7th day of each month in which no dividend is payable. In the months in which dividends are ordinarily paid, dividends and additional cash payments will be invested concurrently beginning on the dividend payment date. No interest will be paid on funds held by The Bank of New York pending investment. You may obtain a refund of any voluntary cash payment if a written request for such refund is

6 received by The Bank of New York more than 48 hours before each investment date. Cost to You You pay your proportionate share of the brokerage commissions and any other relevant costs on the total shares purchased under the plan. Because purchases for all participants in the plan are consolidated, brokerage commission rates are likely to be lower than for individual purchases. You share in any such savings. Income Tax Information Even though your dividends will be reinvested, they are subject to income taxes as if they were paid to you in cash. The required income tax information on all dividends paid will be sent to you at the end of each calendar year. If you are a United States citizen or resident, your gross dividend (before deduction of the applicable United Kingdom tax) is subject to income tax just as if you received it yourself and you may use the amount of United Kingdom tax withheld as a deduction from income or, subject to the usual limitations, as a credit against your Federal income tax. All shareholders may wish to obtain professional advice in regard to their tax situation. Voting You can exercise the votes of the underlying Ordinary Shares represented by your full shares acquired under the plan. Enrollment As a registered holder you can enroll in the plan by signing the enclosed Application. If you elect either Option II or a combination of Option I and II, be sure to include your check

7 or money order for the designated amount. You may enroll at any time. Correspondence All communications regarding the Dividend Reinvestment Plan should be addressed to The Bank of New York: The Bank of New York Dividend Reinvestment Plan for HSBC Holdings PO Box Church Street Station New York, NY BNY-ADRS BE SURE TO INCLUDE A REFERENCE TO HSBC Holdings plc ADRs TERM AND CONDITIONS 1. As agent for the participant, The Bank of New York will in accordance with each participant s authorization: a) apply all or part of the cash dividends (after deduction of the applicable United Kingdom income tax) on the American Depositary Shares representing HSBC Holdings plc Ordinary Shares of US$0.50 ( shares ) held by the participant and on any full shares or fractional interest in one share (to four decimal places) held by the participant under the plan, to the purchase of full and fractional shares for such participant, and/or: b) apply all cash payments of $20 to $60,000 (not to exceed $60,000 in any calendar year) received from the participant for such purpose, as the participant may elect, together with cash dividends on shares held for such participant under the plan, to the purchase of full and fractional shares for the participant s account.

8 c) The purchases, as described in (a) and (b) above, may be made on any securities exchange where such shares are traded, in the over-the-counter market, or by negotiated transactions and may be subject to such terms with respect to price, delivery, etc., as The Bank of New York may agree to. Nether HSBC Holdings plc nor any shareholder shall have any authority or power to direct the time or price at which shares may be purchased, or the selection of the broker or dealer through or from whom purchases are to be made. Any voluntary cash payment will be refunded if the participant s written request for a refund is received by The Bank of New York more than 48 hours before the next succeeding investment date. 2. Cash payments received prior to the 7th day of any month in which no dividend is payable (or the next following business day if the 7th day is not a business day) will be invested beginning on such day. In the months in which dividends are paid, dividends and additional cash will be invested concurrently beginning on the dividend payment dates. For the purpose of making purchases, The Bank of New York will commingle the funds of all plan participants. The Bank of New York will make every effort to make such purchases promptly beginning on each investment date and in no event later than 30 days from such date except where necessary under any applicable Federal securities laws. 3. The price per HSBC share or shares purchased for each participant s account shall be the average price (including brokerage commissions and any other costs of purchase) of all such shares purchased for that month. The Bank of New York will hold

9 the total shares purchased for all participants in the name of its nominee and will have no responsibility for the value of such shares after their purchase. 4. A statement describing account activity will be mailed to each participant by The Bank of New York as soon as practicable after completion of each investment for a participant s account. Dividends paid on the accumulated shares will be included in the Form 1099 DIV information return to the Internal Revenue Service. 5. Participants may obtain, without charge, an American Depositary Receipt ( ADR ) or ADRs for all or part of the full shares credited to their accounts at any time by making a request in writing to The Bank of New York. Participants who wish to do so may deposit HSBC ADRs registered in their names for credit as accrued shares held under the plan. There is no charge for such deposits. Dividends will be reinvested on shares represented by the ADRs deposited with The Bank of New York. 6. Participation in the plan may be terminated by a participant at any time by written instructions to that effect to The Bank of New York. To be effective on any given dividend payment date, the notice to discontinue must be received by The Bank of New York before the record date for that payment. If a notice to discontinue is received by The Bank of New York on or after the record date for a dividend payment, such notice to discontinue may not become effective until such dividend has been reinvested and the shares purchased have been credited to the participant s account under the plan. The Bank of New York, in its sole discretion may either pay such dividend in cash (U.S. dollars) or reinvest it in

10 shares on behalf of the terminating participant. The Bank of New York may terminate, for whatever reason at any time as it may determine in its sole discretion, a participant s participation in the plan upon mailing a notice to terminate to the participant at the participant s address as it appears on The Bank of New York s records. Upon termination, a participant will receive an ADR for the full shares credited to the participant s account, unless the sale of all or part of such shares is requested by the participant. Such sale may, but need not, be made by purchase of the shares for the account of other participants, and any such transaction shall be deemed to have been made at the then current market price, less any brokerage commission and any other costs of sale. Fractional shares credited to terminating account will paid for in cash at the then current market price, less any brokerage commission. 7. A participant will have the sole right to vote the underlying shares represented by the full shares held by The Bank of New York in that participant s account under the plan on the record date for a vote. Proxies with respect to shares sent to a participant by The Bank of New York, as depositary, will include the number of full shares held for the participant under the plan. 8. Any stock dividends or split shares distributed on shares held by The Bank of New York for a participant will be credited to the participant s account. In the event rights to purchase additional shares, debentures or other securities are made available to participants, the full shares held for the participant under the plan will be added to other shares held by the participant in calculating the number of rights to be issued to such participant.

11 9. The Bank of New York shall not be liable under plan for any act done in good faith or for any good faith omission to act including, without limitation, any claims for liability (1) arising out of failure to terminate a participant s participation in the plan upon the participant s death prior to receipt of notice in writing of such death, and (2) with respect to the prices at which shares are purchased or sold for participants accounts and the time such purchases or sales are made. 10. The Tax Equity and Fiscal Responsibility Act of 1982 ( TEFRA ) imposes certain reporting obligations upon brokers and other middlemen. As a result, The Bank of New York will be required to report to the Internal Revenue Service and the participant any sales of stock by it on behalf of a participant. 11. The terms and conditions of the plan and its operation shall be governed by the laws of the State of New York.