Dividend Reinvestment Plan

Transcription

1 Dividend Reinvestment Plan TERMS AND OPERATING CONDITIONS in question-and-answer format THIS DOCUMENT IS VERY IMPORTANT AND REQUIRES YOUR IMMEDIATE ATTENTION If you are in any doubt about how to act with respect to the Plan you should consult your broker/ banker/ accountant/ lawyer or an independent financial advisor.

2 DIVIDEND REINVESTMENT PLAN Terms and Operating Conditions in question-and-answer format The questions and answers set out below explain the Dividend Reinvestment Plan (the "Plan") for Bank of Cyprus Public Company Ltd (the "Company") ordinary Shares of nominal value of EUR 1,00 each (the "Shares"). 1. What is the purpose of the Plan? The purpose of the Plan is to allow the Company s shareholders to reinvest all or part of the net dividends they periodically receive from the Company in additional Shares. The net dividend is the remaining amount of the dividend after the deduction of Special Contribution for the Defence (where applicable). This will allow shareholders to increase their shareholding over time in a simple and convenient manner, and will provide the Company with the opportunity to continuously strengthen its capital base in order to proceed with the development and expansion of its operations. The Shares allotted to shareholders under the Plan will be derived out of new capital issues, carried out by the Company specifically for the purposes of the Plan. 2. How does the Plan operate? (a) After enrolling in the Plan and provided that you have not since withdrawn from the Plan or the Plan has not been suspended or terminated by the Company, the net amount of the dividend that corresponds to the number of Shares you have earmarked for participation in the Plan will be automatically reinvested in new Shares. (b) After each reinvestment, the Company will send you a Letter of Allotment stating the number of Shares that you have been alloted at the last reinvestment. If your Shares have been deposited in the Dematerialised Securities System (DSS) of the Hellenic Exchanges, you will not receive such a Letter; instead you will be informed of the number of Shares credited to your Securities Account by your Account Operator. (c) You will also receive a dividend certificate showing all the details regarding the calculation of the dividend and any deducted/ withheld taxes, as well as the amount of the reinvested dividend. For tax purposes your dividend will be deemed as having been paid in cash and reinvested through the purchase of new Shares. (d) You can withdraw from the Plan or amend the number of Shares on which the dividend will be reinvested whenever you wish, by notifying the Company in writing. Following receipt of your written notification, all future dividends will be sent to you in the usual manner and according to your standing instructions. 3. What are the advantages of the Plan? (a) You will be acquiring your new Shares at a discount from the average current market price of the Share, as explained in detail in the answer to question 17, by automatically reinvesting your dividend. (b) You will not be charged with any commissions and/ or fees and/ or charges for the Shares acquired under the Plan. (c) You have the right to reinvest all or part of your dividend. (d) Your investment will continuously increase in an easy and convenient manner since any new Shares received at each reinvestment will be entitled to participate in the next dividend distribution, which, in turn, can be reinvested in more Shares and so on. (e) Participation in the Plan is voluntary. You can join the Plan at any time and terminate or amend your participation whenever you wish by simply notifying the Company in writing. (f) You will be able to reinvest the dividend that corresponds to pledged Shares in the case where the pledge also extends to the dividend, provided that for every new dividend payment you will obtain the new consent of the pledgee. In this case the new Shares will be considered automatically pledged in favour of the pledgee unless otherwise requested by the Hellenic Exchanges or the Cyprus Stock Exchange. If you do not obtain the new consent of the pledgee, your participation in the Plan will only apply to those shares which participate in the Plan and are not subject to any charge or encumbrance.. 4. Who is/are eligible to participate in the Plan? Every shareholder without exception may participate in the Plan. Participation in the Plan is entirely voluntary. Joint shareholders: In the case where the Shares are registered in a joint account or in a co-owners Investor Share, the Application Form must be signed by all account holders. Minors: May participate provided that the Application Form is signed by both parents (provided that both parents are alive). 1

3 Companies and/or other legal entities: The Application Form must be signed by persons duly authorised by the company's Board of Directors and must bear the company's seal. The relevant authorisation must be attached to the Application Form. 5. Can I participate in the Plan if my Shares are pledged? Yes. You can participate in the Plan if your Shares are pledged and the pledge also extends to the dividend, provided that for every new dividend payment you will obtain a new written consent of the pledgee for the number of Shares concerned by completing and signing the reverse side of the Application Form. In such cases, the new Shares that arise from the dividend reinvestment will be considered automatically pledged in favour of the pledgee unless otherwise requested by the Hellenic Exchanges or the Cyprus Stock Exchange. If you do not obtain a new written consent of the pledgee for every new dividend payment, your participation in the Plan will only apply to those shares which participate in the Plan and are not subject to any charge or encumbrance. The pledgee has the right to withdraw his consent at any time by notifying the Company in writing. In such a case, the Company will inform the affected shareholder. The pledged Shares in relation to which the consent of the pledgee has been withdrawn will not participate in the Plan. In case that Shares are pledged but the pledge does not extend to the dividend, the consent of the pledgee is not required and the resulting new Shares will not be subject to any charge or encumbrance. 6. What will happen if in the future I wish to pledge additional Shares that already participate in the Plan? If at some time in the future you wish to pledge additional Shares that already participate in the Plan, you must provide the Company with the written consent of the pledgee for the additional number of Shares concerned. The Company must receive such consent at least on the working day prior to the next ex-dividend date. Otherwise, your participation in the Plan will only apply to those Shares which participate in the Plan and are not subject to any charge or encumbrance. 7. Is a minimum or maximum number of Shares required to participate in the Plan? No. If however, your dividend entitlement is not adequate for the allotment of at least one whole Share, the dividend will not be reinvested but will be sent to you in the usual manner and according to your standing instructions. 8. What options are available to the participants of the Plan? Shareholders participating in the Plan may elect to reinvest the dividend that corresponds to all (full reinvestment) or part (partial reinvestment) of their shareholding at the time of the dividend distribution. Full dividend reinvestment: By choosing this option you instruct the Company to reinvest the total net amount of the dividend for all the Shares that are currently registered in your name or will be registered in your name in the future. It should be noted that, under this option, any Shares that arise from the dividend reinvestment, as well as any bonus Shares which might be allotted to you in the future, will be included in the total number of Shares on which the next net dividend will be reinvested. In case of full participation, any existing instructions you may have given for the direct credit of your dividend into a bank account will be automatically deactivated. Such instructions will automatically be reactivated if you withdraw from the Plan or to the extent that participation in the Plan is amended (e.g. from full to partial reinvestment). Partial dividend reinvestment: By choosing this option you instruct the Company to reinvest the net amount of the dividend arising from the number of Shares you have specified for participation in the Plan. In this case, any instructions you may have given for the direct credit of your dividend into a bank account will only apply with regards to the amount of the dividend that corresponds to the rest of your Shares which are not subject to any charge or encumbrance. 9. How can I change my options under the Plan? You may change your reinvestment options under the Plan at any time by completing a new Application Form and returning it to any one of the following: Cyprus Shares and Loan Stock Department EuroLife House, 4 Evrou Street, Strovolos P.O. Box 24884, 1398 Nicosia Greece Custody, Shareholders & Derivatives Clearing Department Fidippidou 26 & Halkidonos, Athens 2 Any Bank of Cyprus branch in Cyprus or abroad

4 The Application Form must be received by the Company at least on the working day prior to the next ex-dividend date in order for it to apply to the forthcoming and all future dividends. If the application is not received in time, your instructions will only apply to future dividend payments. 10.Can I participate in the Plan for only part of my shareholding? Yes. If you wish to only reinvest the dividend which corresponds to a part of your shareholding, you need to specify the number of Shares that will participate in the Plan, in the space provided on the Application Form. The remaining dividend that corresponds to the Shares that do not participate in the Plan, will be sent to you in the usual manner and according to your standing instructions. 11. What can I use the Plan's Application Form for? The Application form can be used for: - participation in the Plan (part A) - withdrawal from the Plan (part B) - switching from full to partial reinvestment or vice versa (part A) - changing the number of Shares that participate in the Plan in the case of partial reinvestment (part A) - obtaining the pledgee's consent (part C) From time to time the Company will send Application Forms to all shareholders that do not participate in the Plan. 12. What should I do if I wish to participate in the Plan? To participate in the Plan you must complete part A of the Application Form and return it to any one of the following: Cyprus Shares and Loan Stock Department EuroLife House, 4 Evrou Street, Strovolos P.O. Box 24884, 1398 Nicosia Any Bank of Cyprus branch in Cyprus or abroad Greece Custody, Shareholders & Derivatives Clearing Department Fidippidou 26 & Halkidonos Athens The Company will not issue receipts in respect of Application Forms. 13. What should I do if I wish to withdraw from the Plan? You can terminate your participation in the Plan at any time by notifying the Company in writing. The Company must receive the relevant notification at least on the working day prior to the next ex-dividend date if you do not wish to be included in the Plan for that dividend. Otherwise, the relevant dividend will be reinvested on your behalf and your instructions will be effective for any subsequent dividends which will be sent to you in the usual manner and according to your standing instructions, unless you choose to rejoin the Plan, which you can do at any time. 14. When will participation in the Plan be automatically terminated? Participation in the Plan will be automatically terminated if the Company receives proper notice that a court order has been issued in respect of the bankruptcy or liquidation or receivership or death or insanity of a shareholder, irrespective of whether the Shares are held in a personal account of the said shareholder or in a joint account with other shareholders or in a co-owners Investor Share. 15. When can I enroll in the Plan? You can join the Plan at any time. You should, however, bear in mind that the Company must receive your Application Form at least on the working day prior to the ex-dividend date of a particular dividend. Your instructions will then be valid for that dividend and for all future dividends, unless subsequently revoked. If your Application Form is received late, your participation will only be effective for future dividend payments. 16. Will I need to submit a new Application Form for every dividend payment? No. Once you enroll in the Plan, your participation remains in force for all future dividends which will be automatically reinvested on your behalf, unless you request in writing to withdraw from the Plan or unless the Company suspends or terminates the Plan. 3

5 17. At what price will my dividend be reinvested and how many Shares will I get? Within the Plan, dividends will be reinvested at 100% of the weighted average closing price of the Share at the Cyprus Stock Exchange (CSE) and the Athens Exchange (ATHEX) the first five working days during which the Share is quoted ex-dividend, minus any percentage of discount decided by the Company, which today is 10%. The actual reinvestment price will be determined on the next working day after the 5 working-day period mentioned above. Any day during which trading sessions are held on both the Cyprus Stock Exchange and the Athens Exchange will be considered a working day. The Company reserves the right to change the percentage of discount offered under the Plan, or even abolish it altogether. In such a case written notice will be given to all participants in good time. The number of Shares which will be allotted to each shareholder under the Plan may vary for each dividend payment and will depend on: (a) the amount of dividend available for reinvestment, and (b) the reinvestment price that will apply for each dividend payment, as explained above. The actual number of Shares will result from the division of the net amount of dividend that will be reinvested by the reinvestment Share price that has been determined for that dividend payment. If the available amount of dividend is not adequate for the allotment of at least one whole Share, then the dividend will not be reinvested but will be sent to you in the usual manner and according to your standing instructions. 18. What happens to fractional entitlements? No participant will be entitled to receive fractions of Shares. Any fractional entitlements will be rounded to the nearest whole number of Shares. That is, any fractions less than 1/2 of a Share will be ignored and any fractions which are equal or more than 1/2 of a Share will be rounded up to one additional Share. If, however, the amount of the dividend is not adequate for the allotment of at least one whole Share, the rounding procedure will not be followed and the whole dividend will be paid to you in the usual manner and according to your standing instructions. Example 1 Net dividend available for reinvestment EUR 41,75 and reinvestment price EUR 4,50: Number of new Shares = 41,75 = 9,28 = 9 new Shares 4,50 (the 0,28 fraction is ignored) Example 2 Net dividend available for reinvestment EUR 40,25 and reinvestment price EUR 4,50: Number of new Shares = 40,25 = 8,94 = 9 new Shares 4,50 (the 0,94 fraction gives one additional Share) Example 3 Net dividend available for reinvestment EUR 4,00 and reinvestment price EUR 4,50: Number of new Shares = 4,00 = 0,89 = No new Shares 4,50 The whole dividend of EUR 4,00 will be paid to you in the usual manner and according to your standing instructions. 19. How can I enroll in the Plan if I have more than one Investor Share Code? If, for any reason, you are the registered owner of Shares under more than one Investor Share Code, then unless you make all necessary arrangements for all your Shares to be consolidated under one account, you will have to complete a separate Application Form for each account. In case that part of your shareholding is registered in the Central Registry/Depository of the Cyprus Stock Exchange (CSE) and part in the Dematerialised Securities System (DSS) of the Hellenic Exchanges, you will have to complete a separate Application Form for each Investor Share Code. 20. What statements will I receive if I participate in the Plan? A Letter of Allotment will be mailed to you by the Company after every reinvestment. This will state the date on which the Shares were allotted, the number of Shares allotted and the reinvestment price. If your Shares are deposited in the DSS then you will not receive such a Letter but the Operator of your account will inform you of the number of Shares that have been credited to your securities account. The Company will also send you a dividend certificate showing all the details regarding the calculation of the dividend and any deducted/ withheld taxes, as well as the amount of the reinvested dividend. Additionally, if you participate in the Plan with Shares that have been pledged, the Company will send you a statement with the number of new Shares that have been considered automatically pledged in favour of the pledgee and any dividend that has been paid to the pledgee. 4

6 21. What happens if I sell or transfer all my Shares? If you sell or transfer all your Shares but do not notify the Company in writing that you wish to withdraw from the Plan, your participation will be deactivated automatically. If, however, Shares are registered in your name again in the future and provided that you still comply with the Plan s terms and conditions, your participation will be automatically reactivated and your future dividends will be reinvested. 22. What happens if I sell or transfer part of my Shares? If you sell or transfer part of your Shares then: (a) if you have elected for full reinvestment you will continue to participate in the Plan for your remaining Shares, and (b) if you have elected for partial reinvestment you will continue to participate in the Plan for your remaining Shares, up to the maximum number you had originally authorised the Company to include in the Plan. For example, if you had applied for the reinvestment of the dividend of 500 out of the 1000 Shares that you own and you subsequently sell 250 Shares, the Company will continue to reinvest the dividend corresponding to 500 out of the remaining 750 Shares. Conversely, if you sell 750 Shares, the Company will continue to reinvest the dividend corresponding to all 250 remaining Shares. If, however, the amount of dividend that corresponds to the remaining Shares is not adequate for the allotment of at least one whole Share, the whole dividend will be paid to you in the usual manner and according to your standing instructions. 23.What happens if the Company decides not to declare a dividend for a certain financial year? In case the Company does not distribute a dividend for a financial year, then no reinvestment will take place and the Plan will remain inactive until the next dividend distribution by the Company. 24. How will my participation in the Plan be affected by a Split or Reverse Split of the Company s Shares? (a) In the case of full reinvestment, your participation in the Plan will continue to apply for all new Shares which will arise from the split or reverse split of the Company s Shares. (b) In the case of partial reinvestment your participation in the Plan will continue to apply for the new number of Shares, which will result from the split or reverse split of the Company s Shares and this number will be deemed to correspond to the number of Shares originally participating in the Plan. 25.Will I incur any charges for participating in the Plan? You will not incur any commissions and/ or fees and/ or charges by participating in the Plan. 26.What rights will the new Shares have? The new Shares will carry exactly the same rights as the existing Shares and will participate fully in any future dividend distributions. 27. When will the new Shares be listed on the Cyprus Stock Exchange (CSE), the Athens Exchange (ATHEX) and when will they begin trading? The new Shares will be allotted to the investors and the Company will take all necessary actions for their listing and simultaneous trading on both exchanges (CSE and ATHEX). Trading is expected to begin within three weeks from the dividend payment date. Investors in Cyprus and Greece will be notified of the date of commencement of trading in the new Shares through announcements in the Cypriot and Greek press. The Company will issue and mail to holders of new Shares that have arisen from the reinvestment the relevant Letters of Allotment prior to the commencement of trading. The Company will also ensure that the new Shares are credited to the securities accounts of those investors whose shares are deposited at the Central Registry/ Central Depository of the CSE, as well as to the securities accounts of those investors who have deposited their shares in the DSS. 28.How will participation in the Plan affect my tax position? The tax treatment of your dividend is the same irrespective of whether this is paid in cash or fully or partially reinvested in Shares. The current tax legislation applies to both cases in the same manner. Reinvesting your dividend does not exempt you from any tax liability on this dividend. Therefore, you should declare the full amount of the dividend on your tax return as usual, irrespective of whether it has been reinvested in Shares or received in cash. The relevant certificate for income tax purposes with all the dividend and tax deduction/ withholding details will continue to be sent to shareholders so that they can submit it to the tax authorities. 5

7 29.Can the Company amend, suspend or terminate the Plan? The Plan may be amended, suspended or terminated by the Board of Directors of the Company at any time. In such cases, timely written notification will be sent to all participants. If the Plan is amended, the current participations will remain in force and the amendments will be deemed to have been accepted by participants unless the Company receives written notification from a participant to withdraw from the Plan. Amendments will apply as from the following dividend payment. If the Plan is suspended or terminated, all existing participations will be cancelled and the dividend will be paid in the usual manner and according to your standing instructions. 30. What is the expected duration of the Plan? Unless suspended or terminated by the Board of Directors of the Company, in which case all participants will be notified, the Plan has no expiry date. 31. Where can I obtain further information about the Plan? For any further information or clarifications regarding the Plan or for additional copies of this document and of the Application Form please apply to any of the following: Cyprus Shares and Loan Stock Department EuroLife House 4 Evrou Street, Strovolos P.O. Box 24884, 1398 Nicosia tel: , fax: shares@cy.bankofcyprus.com Greece Custody, Shareholders & Derivatives Clearing Department Fidippidou 26 & Halkidonos Athens tel: , fax: / metoxologio@bankofcyprus.gr 32. Is there anything else I should be aware of? (a) You should know that the value and the yield of Shares fluctuate, as is the case with all listed securities. The information contained in this document should not be considered as advice to participate in the Plan. The Company cannot provide any assurance for the realisation of profits or the avoidance of losses that may arise by acquiring Shares through the Plan. (b) The Plan does not represent a change in the Company's dividend policy, or a guarantee for future dividend payments, which will continue to depend on the Company's profitability, its financial strength and other relevant factors. (c) Future ex-dividend dates and consequently the last date for submitting Application Forms for participation in the Plan for each dividend will be announced in the Company s published Annual and Interim Reports. (d) According to the Plan, the Company does not accept any responsibility for any error or omission that has been made in good faith, including but not limited to, any consequences that may arise out of failure to terminate the participation of any shareholder in case of issue of a court order in respect of bankruptcy or liquidation, or receivership or death or insanity of a shareholder, whether the Shares are held in a personal account or in a joint account with other shareholders or in a co-owners Investor Share, before receiving proper written notice regarding these events. (e) Please note that all references to Ex-dividend date refer to the first day on which the Shares are traded on the CSE and the ATHEX ex-dividend. (f) Please read carefully the Terms and Operating Conditions of the Plan, as presented in the answers to the questions contained in this document. If you are in any doubt about how to act with respect to the Plan you should consult your broker/banker/accountant/lawyer or an independent financial advisor. Nicosia, 11 March