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Coutts Structured Investments Plan
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Coutts Structured Investment Plan
100% Capital Protected
High Dividend Stock Basket Strategy =======
Strategy Features
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Introduction
Coutts & Co. (‘Coutts’) have designed a series of structured
investments linked to the latest Coutts research around the
‘Hunt for Yield’ theme. This four year strategy is designed to
take advantage of the potential appreciation in a basket of
stocks designed for this strategy and chosen for their
attractiveness in terms of dividend, dividend policy,
sustainability of earnings and fundamental strength (the ‘High
Dividend Stock Basket’ or ‘Basket’).
We believe our selection of stocks will continue to be
popular as other sources of yield remain thin on the ground.
This continued popularity has the potential to support and
drive share prices in the Basket.
Please note however that any return will not include
any dividends payable on the shares within the Basket.
Investment Strategy
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This Strategy Features Document describes a four year
sterling denominated Coutts Structured Investment Plan
Strategy (the ‘Strategy’). The Strategy offers a return equal to
1.25 times any appreciation in the Basket up to a maximum
return of 35% of your investment paid at maturity.
If the Basket falls in value over the term then, at maturity, the
Strategy offers 100% capital protection, subject to the Issuer
risk described elsewhere in this document.
Please see ‘Composition of the Basket’ elsewhere in this
document for details on the Basket components.
How the Strategy is delivered
Coutts will purchase on your behalf a warrant that tracks the
performance of the Basket (‘tracker warrant’) and a warrant
that aims to protect you from any fall in the Basket (‘hedge
warrant’) from the Issuer. A warrant is a type of investment
that contains special terms in relation to the timing and
amount that is repaid. Together, these two warrants
comprise the Strategy. The issuer of the warrants will be The
Royal Bank of Scotland plc (‘RBS plc’ or the ‘Issuer’). Coutts
is a member of The Royal Bank of Scotland Group. Once
invested the warrants will be held in the name of Brown
Brothers Harriman & Co, a non trading nominee company
whose assets are beneficially owned by investors.
Should the Basket rise in value over the term, the tracker
warrant will provide 100% of your initial investment plus 1.25
times the appreciation of the Basket at maturity up to a
maximum return of 35% of your investment (see next section
for details).The tracker warrant could lose value if the Basket
falls over the term but, in conjunction with the hedge
warrant, it will provide 100% capital protection as long as the
Strategy is held to maturity, subject to the Issuer risk
described elsewhere in this document.
Coutts has categorised this Strategy as ‘Wealth Enhancement’
due to its four year term. Further information on the wealth
categories and the risk associated with them are detailed in
the ‘Wealth Purpose Category Table’ on page 8.
Coutts Structured Investments Plan
Coutts has reserved a set amount of each Strategy with the
Issuer. The Strategy will be allocated on a first come first
serve basis. If the Strategy is oversubscribed your
application may not be successful and we will inform you as
soon as possible.
How Your Return Is Calculated
The Strategy is linked to the performance of an equally
weighted basket of 12 stocks selected from across the
globe. The performance of the Basket is equal to the
average return of the individual stocks comprising the
Basket. The return of each stock is calculated by comparing
the average closing level of that stock across seven
consecutive weekly dates (‘Averaging’), up to and including
the Final Determination Date, with its closing level on the
First Fixing Date.
If the performance of the Basket is positive, then at
maturity, you will receive your initial investment plus an
investment return equal to 1.25 times the performance of
the Basket up to a maximum return of 35%, subject to the
Issuer risk described later in the document.
If the performance of the Basket is zero or negative, then
at maturity, you will only receive your initial investment
amount, subject to the Issuer risk described later in the
document (see scenarios in ‘Illustration of Performance of
the Strategy’ overleaf).
Averaging may benefit the Strategy’s performance if the
Basket depreciates during the Averaging period. However,
if the opposite occurs, this will constrain the Strategy’s
performance when compared to a calculation method
which does not use Averaging.
Your return will not include the dividends you would
receive if holding the equities directly.
Our House View
Coutts forecasts that high dividend paying equities will
deliver attractive returns in the current economic and
investment environment. Historical data implies that higher
dividend paying equities perform well in periods of lower
growth and inflation. With interest rates in developed
economies at record low levels, investors look for yield
from other assets, so we would expect them to drive up
the share price of companies offering high dividends. Our
conclusion is that high dividend paying shares are
potentially an attractive investment in the current
environment. As this Strategy does not benefit directly
from dividends paid by the shares in the Basket, it is
focused on companies where there is scope for dividend
payments to be increased, so providing a support to the
share price. Therefore the companies included have strong
balance sheets and dividends which we believe are
sustainable from their profits and cash flow.
Issuer Risk
The issuer of the warrants underlying this Strategy will be
RBS plc. In the unlikely event that RBS plc were to default
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Coutts Structured Investments Plan
or go bankrupt, you may lose some or all of your investment
and return.
The financial position of the Issuer may change over the life of
the Strategy.
Credit ratings can be a useful way to compare the credit risk
associated with different product providers and related
investments. Credit ratings are assigned by independent
companies known as ratings agencies and reviewed regularly.
RBS plc’s long-term credit rating as at 22 October 2010 was
Aa3 from Moody’s with a stable outlook (its equivalent rating
by Standard & Poor’s was A+, stable outlook and by Fitch was
AA-, stable outlook). Moody’s, Standard & Poor’s and Fitch
are independent agencies.
You should note that Moody’s rate companies from Aaa
(Most Secure/Best) to C (Most Risky/ Worst), while Standard
& Poor’s and Fitch rate companies from AAA (Most
Secure/Best) to D (Most Risky/ Worst). These credit ratings
are reviewed on a regular basis and are subject to change by
these agencies. A rating outlook indicates the likely rating
trend over a one to two-year period. It reflects financial or
other trends that have not yet reached the level that would
trigger rating action, but which may do so if such trends
continue. A stable outlook means that the rating is not likely
to change in the short term.
Based on these ratings, it is expected that the Issuer will meet
its payment obligations to you at the end of the Strategy
term, but this is not guaranteed.
Please note that in the event of the Issuer defaulting or going
bankrupt, compensation will not be available under the UK
Financial Services Compensation Scheme.
Other Risks
There is a risk that your return may not be as good as if you
had invested in other types of assets, for example in a cash
deposit.
Any return you receive may fail to beat inflation, which will
reduce the purchasing power of your investment by the time
the Strategy matures.
Economic, political and social factors can cause adverse
market fluctuations that may affect the performance of the
Strategy.
A change in the market conditions (as discussed under
‘House View’) and/or an increase in interest rates could
adversely affect the Strategy.
The Basket is comprised of only 12 stocks, so the adverse
performance of just one or two of these stocks can have a
significant effect on the performance of the Strategy.
The Basket is comprised of shares of companies selected
from only a few sectors. In particular, five of the twelve
Basket components are shares of telecom companies. Any
adverse market developments in one or more of these
sectors (in particular the telecoms sector) may have a
significant adverse impact on the performance of the Basket
and consequently the Strategy.
The Issuer
You will be subject to, and bound by, the Issuer’s terms for
each warrant that makes up the Strategy, copies of which
are available from Coutts. Issuer documentation typically
contains rights for the Issuer to vary the terms of the
warrants that make up the Strategy upon the occurrence of
specified events which may operate to your disadvantage.
Examples of such events are disruption or closure of the
relevant markets, cessation of any applicable Basket
constituent, settlement disruption and increased costs to
the Issuer of providing the warrants.
In such events, the Issuer may have the right, for example,
to vary the basis of valuation of, to postpone settlement of,
or to cancel the warrants. There may be a risk to your
investment in these circumstances.
Coutts Fees
All fees are included in the cost of the Strategy to you.
Coutts will receive 1.00% of the initial investment amount.
This is equivalent to 1.0101% of the consideration as
detailed on the contract note.
Thereafter, an annual fee of 0.30% of the initial investment
amount is payable to Coutts by the Issuer for each year of
the life of the Strategy. This is equivalent to 0.3030% of the
consideration as detailed on the contract note.
This is not in addition to, and does not affect you receiving
back, that part of your initial capital investment and any
return you are entitled to if you hold the Strategy until
maturity.
The Issuer will also take fees which are built into the
construction of the Strategy. The amount of these fees is
not readily ascertainable, however further details may be
available on request.
The Strategy may incur higher costs and offer reduced
returns compared to a direct investment in the Basket.
Liquidity
The warrants that comprise the Strategy may be listed on a
recognised exchange such as the London Stock Exchange.
However, neither the Strategy nor the two constituent
warrants will be traded on an exchange. As a consequence,
the Strategy will not be as easily tradable as a security
traded on the exchange.
You will not have the right to cancel your application once
it is made.
The Strategy has a four year fixed term. Accordingly it may
not be suitable if you need early access to your investment
or regular investment returns. If you wish to redeem the
Strategy early, the Issuer may under normal market
conditions buy back your investment in the Strategy.
However, you may receive less than your initial investment
amount dependent on market conditions and the tax
treatment may be affected.
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Coutts Structured Investments Plan
No partial sales may be made. Alternatively, at your request,
Coutts may, at its absolute discretion, provide a loan using
the Strategy as collateral.
If death occurs within the term of the investment, and early
redemption is required, the redemption value will depend
upon the market value of the underlying warrants and may be
less than the original amount invested and the tax treatment
may be affected. Alternatively, Coutts may at its discretion
agree that the investment may continue until maturity.
Tax Treatment
It is expected, based on current UK tax legislation that
payments made on any investment under the Strategy will be
subject to Capital Gains Tax for UK resident and ordinarily
resident individuals. You should note that UK tax law and
regulation may change in the future which could have
retrospective effect.
Nothing in this Strategy Features or any other information
provided to you by Coutts or The Royal Bank of Scotland
Group in connection with this investment constitutes tax
advice to you. You should not rely upon any tax
information provided here for your personal tax planning
purposes as it may not apply to your specific circumstances.
Coutts recommends that you seek your own independent
tax advice.
Payments under the Strategy
You will receive amounts due to you within three business
days of the Maturity Date unless, due to circumstances or
events beyond Coutts or the Issuer’s control, the
calculation or payment of the capital or return as at the
Final Determination Date is suspended or delayed. If so
Coutts will use its reasonable endeavours to obtain
payment for investors of such amounts as soon as
reasonably practicable after the Maturity Date.
Key Dates
Trade Date 6 December 2010
First Fixing Date 7 December 2010
Settlement Date 21 December 2010
Averaging Dates 27 October 2014
3 November 2014
10 November 2014
17 November 2014
24 November 2014
1 December 2014
8 December 2014
Final Determination Date 8 December 2014
Maturity Date 22 December 2014
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Illustration of Performance of the Strategy
Performance of the Basket Return Characteristics Initial
Investment
5 year historical and simulated performance of the Basket
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Coutts Structured Investments Plan
Potential Total
Return (gross of
tax)
Basket performance is +35% Initial investment amount + return equal to 1.25 times £50,000 £67,500
the percentage rise of the Basket from its closing level on
the First Fixing Date, subject to a maximum return of
35% (giving a 35% return)
Basket performance is +20% Initial investment amount + return equal to 1.25 times £50,000 £62,500
the percentage rise of the Basket from its closing level on
the First Fixing Date, subject to a maximum return of
35% (giving a 25% return)
Basket performance is zero Initial investment returned £50,000 £50,000
Basket performance is -5% Initial investment returned £50,000 £50,000
Basket performance is -15% Initial investment returned £50,000 £50,000
170
160
150
Basket 140
performance
(re-based at 130
100)
120
110
100
90
80
17/10/2005
17/12/2005
17/02/2006
17/04/2006
17/06/2006
17/08/2006
17/10/2006
17/12/2006
17/02/2007
17/04/2007
17/06/2007
17/08/2007
17/10/2007
17/12/2007
17/02/2008
17/04/2008
17/06/2008
17/08/2008
17/10/2008
17/12/2008
17/02/2009
17/04/2009
17/06/2009
17/08/2009
17/10/2009
17/12/2009
17/02/2010
17/04/2010
17/06/2010
17/08/2010
Annual performance of the Basket over the last 5 years
17 October 2005 to
16 October 2006
17 October 2006 to
16 October 2007
17 October 2007 to
16 October 2008
17 October 2008 to
16 October 2009
17 October 2009 to
16 October 2010
Annual Basket
Performance 23.31% 23.23% -33.95% 16.70% 8.39%
Source: Bloomberg, 22 October 2010. The information in the graph and table above refers to simulated past performance and
past performance of the Basket, both of which cannot be relied on as a guide to the future performance of the Basket. Past
performance of the Basket is calculated based on the performance of each underlying component. Price data for shares of
Philip Morris International Inc. prior to March 2008 was not available as Philip Morris International Inc. was spun off from
Altria Group Inc in March 2008. The performance of Philip Morris International Inc. shares prior to this date has been
simulated. To calculate this performance the percentage performance of Altria Group Inc shares for the relevant period has
been calculated and such percentage performance has been assumed to apply to the Philip Morris International Inc. shares
during the relevant period.
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Composition of the Basket
Coutts Structured Investments Plan
Stock name Bloomberg
Stock House View
Reference
AT&T Inc. T UN AT&T Inc. is the largest telecom provider in the US by market capitalisation
(the number of outstanding shares multiplied by the current share price)
providing, through its subsidiaries and affiliates, local and long-distance
phone services, wireless and data communications, Internet access and
messaging, IP-based and satellite television, security services,
telecommunications equipment, and directory advertising and publishing.
The current market forecast (as measured by analyst data supplied to
Reuters) for the dividend yield (the ratio of the dividend to the share price)
is 5.9% for Dec ’10, and 6.0% for Dec ’11. The company’s financial position,
in our view, should be sufficient for dividend payment in both years.
British American BATS LN British American Tobacco Plc (‘BAT’) is an international tobacco group that
Tobacco Plc
produces, markets, distributes and sells cigarettes and other tobacco
products and whose brands are sold in over 180 countries. The company
has been offsetting the maturity of its western markets by expanding its
presence in emerging economies. BAT has a strong trading record, helped
by the fact that demand for tobacco products is generally unaffected by
rising prices, which has supported an attractive dividend policy. This is
highlighted by the fact the dividend has risen almost four-fold in the past
decade. The current market forecasts for dividend yield are 4.7% for Dec
’10, and 5.1% for Dec ’11. In our view the company’s financial position
should be sufficient for dividend payment in both years.
China Mobile Ltd 941 HK China Mobile Ltd is China’s incumbent and leading mobile operator and
provides, through its subsidiaries, cellular telecommunications and related
services in the People’s Republic of China and Hong Kong SAR. It has over
500m subscribers reflecting superior network coverage and a good brand
image and distribution network. Both rural expansion and mobile data
represent strong growth opportunities. China Mobile Ltd’s current market
forecasts for dividend yield are 3.7% for Dec ’10, and 3.9% for Dec ’11. In
our view the company’s financial position should be supportive of dividend
payment in both years.
GlaxoSmithKline Plc GSK LN GlaxoSmithKline Plc (‘GSK’) is a leading global pharmaceutical company,
with key market positions in respiratory, anti-virals and vaccines. Relative
to its peers, GSK has less future concerns about the impact of patent
expiries and competition from existing drugs. At present there is a good
pipeline of new products with some 30 compounds in phase III
development / registration. The current market forecasts for dividend yield
is 4.8% for Dec ’10, and 5.2% for Dec ’11. In our view the company’s
financial position should be sufficient for dividend payment in both years.
Koninklijke KPN NV KPN NA Koninklijke KPN NV is the leading provider of telecommunication services in
the Netherlands, including local and long-distance, international and mobile
telecoms services, plus voice-mail, faxing and ISDN internet lines. Cost
cutting should protect the bottom-line and cash flows, and as such the
company’s financial position should be sufficient for dividend payment in
both years. Current market forecasts for dividend yield are 6.9% for Dec
’10, and 7.4% for Dec ’11.
Pfizer Inc. PFE UN Pfizer Inc. is a research-based, global pharmaceutical company that
discovers, develops, manufactures and markets medicines for humans and
animals. Pfizer Inc. halved its dividend in 2009 in-line with expectations of
lower levels of earnings and cash flow during a period of patent expiry for a
number of its key drugs. Despite this cut, Pfizer Inc.'s current dividend
yield forecasts remain attractive at 4.1% for Dec ’10, and 4.4% for Dec ’11.
In our view the company’s financial position should be supportive of
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Philip Morris
International Inc.
PM UN
dividend payment in both years.
Philip Morris International Inc. (‘PM’), through its subsidiaries, affiliates and
their licensees, produces, sells, distributes and markets a wide range of
branded cigarettes and tobacco products. PM owns Marlboro, the no.1
brand outside of the US and 6 other top-15 (non-Chinese) cigarette brands.

Coutts Structured Investments Plan
PM sells entirely into non-US cigarette markets, successfully focussing on
pursuing higher prices rather than volumes. Owing to its strong balance
sheet, PM is able to release value to shareholders via large share buybacks
as well as solid dividend growth. The current market forecasts for dividend
yield are 4.2% for Dec ’10, and 4.7% for Dec ’11. In our view the company’s
financial position should be sufficient for dividend payment in both years.
Tate & Lyle Plc TATE LN Tate & Lyle Plc is a global provider of specialty and bulk food ingredients
and solutions. What this means in practice is that in bulk commodities it is a
global processer of corn (maize) into its elemental components of water,
starch, oil, glucose, and husk, while in specialty ingredients it produces a
range of value adding products such as sucralose and complex starches.
We believe that whilst bulk soft commodity markets may be nebulous and
volatile over shorter time frames, the company’s financial position, in our
view, should be sufficient for dividend payment in both years. Current
market forecasts for dividend yield are 4.4% for Mar ’11, and 4.6% for Mar
’12.
Total SA FP FP Total SA is the largest integrated oil & gas company in continental Europe.
The company is the 2 nd largest Liquefied Natural Gas (LNG) producer
globally and should benefit above average from growing gas demand in
emerging markets. Total SA has a well diversified upstream portfolio
(including oil and gas exploration, development and production, and LNG)
and has strong positions in major deepwater offshore growth areas in West
Africa and South East Asia. Total SA’s return on capital invested is sector
leading and coupled with the company’s financial position, in our view,
should support dividend payment in both years. Current market forecasts
for dividend yield are 5.9% for Dec ’10, and 6.1% for Dec ’11.
Verizon
VZ UN
Communications Inc.
Verizon Communications Inc. provides fixed line, wireless and data
telecommunications services. The Board reviews dividend policy annually
and has stated it is committed to returning cash while also continuing to
invest in the long-term growth of the business. Unusually, the company
establishes dividend policy during the quarter ending in September which in
2010 marked the 4 th consecutive annual dividend increase commitment
made by the company for that quarter and the next three. The current
market forecasts for dividend yield therefore includes this commitment and
stands at 5.9% for Dec ’10, and 6.0% for Dec ’11. In our view the company’s
financial position should be sufficient for dividend payment in both years.
Vivendi SA VIV FP Vivendi SA is a major player in both the French media and telecoms
markets. The company, through its subsidiaries, provides digital and pay
television services, sells music compact discs, develops and distributes
interactive entertainment and operates mobile and fixed-line
telecommunications. The group has an attractive portfolio of income
generators and growth businesses. The current market forecasts for
dividend yield are 6.8% for Dec ’10, and 6.8% for Dec ’11. In our view the
company’s financial position should be sufficient for dividend payment in
both years.
Vodafone Group Plc VOD LN Vodafone Group Plc is one of the largest global telecommunication services
companies with 347m customers. Principal geographies are Europe, Asia,
Middle East, Asia Pacific, and through a primary joint venture, the US.
Vodafone Group Plc’s subsidiaries already contribute significantly to the
shareholder’s return although this is not the case for its primary joint
ventures. However we expect the primary joint ventures to start
contributing soon and so we believe this provides the opportunity for a
decent medium term capital and income return for shareholders. The
current market forecasts for dividend yield are 5.4% for Mar ’11, and 5.7%
for Mar ’12. In our view the company’s financial position should be sufficient
for dividend payment in both years.
Please note: Market forecasts for dividends expected to be paid by the Basket components are currently only available for
the next two years. There is no assurance that dividends will be paid as forecast above or otherwise during the remainder of
the term of the Strategy in respect of the Basket components.
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Coutts Structured Investments Plan

Coutts Structured Investments Plan
Important Information
This Financial Promotion is issued by Coutts & Co which is authorised and regulated by the Financial Services
Authority for investment business in the UK, FSA registration number 122287.
Coutts & Co registered in England Company No 36695 Registered Office and main business address, 440
Strand London WC2R 0QS.
You should refer to the Terms and Conditions as set out in your Coutts Structured Investments Plan
Agreement/ Coutts Capital Secure Plan Agreement.
You should consider carefully whether an investment in this Strategy meet your specific investment objectives,
financial situation or particular needs. If in any doubt about an investment in this Strategy, you should seek
independent financial, tax, accounting or legal advice. UK tax law and regulation may change in the future
which could have retrospective effect.
Nothing in this Strategy Features document or any other information provided to you by us in connection with
this investment constitutes tax advice to you. You should not rely upon any tax information provided here for
your personal tax planning purposes as it may not apply to your specific circumstances. Coutts strongly
recommend that you seek your own independent tax advice.
Any expressions of opinion constitute our judgment at the date shown and are subject to change. Any
information is believed to be correct but cannot be guaranteed. Coutts may subsequently launch strategies
that reflect changes in its view and market conditions. The analysis contained in this document has been
procured, and may have been acted upon, by Coutts & Co and connected companies for their own purposes,
and the results are being made available to you on this understanding. To the extent permitted by law and
regulation, neither Coutts & Co nor any connected company accepts responsibility for any direct or indirect
or consequential loss suffered by you or any other person as a result of your acting, or deciding not to act, in
reliance upon such opinions information or analysis. Coutts & Co, its directors and/or employees and/or those
of its affiliates may hold positions in any warrants mentioned, and may receive brokerage fees or act as
principal or agent in dealings with respect to these warrants and currencies.
This product is not available in the US or to US Persons.
References to the warrants are included only to describe the components upon which the Strategy is based.
The Strategy is not in any way sponsored, endorsed or promoted by RBS plc.
Credit: Over 18s only. Security may be required. Coutts & Co subscribes to the Lending Code. A copy is
available upon request.
www.coutts.com
(01/11/10)
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