ADS Voting Instructions Clause Samples
The ADS Voting Instructions clause outlines the procedures by which holders of American Depositary Shares (ADS) can exercise their voting rights in relation to the underlying shares of a foreign company. Typically, this clause specifies how ADS holders submit their voting instructions to the depositary bank, which then votes the underlying shares according to those instructions at shareholder meetings. For example, ADS holders may be required to provide their instructions by a certain deadline or through a designated platform. The core function of this clause is to ensure that ADS holders have a mechanism to participate in corporate governance, despite not holding the shares directly, thereby bridging the gap between foreign shareholders and the issuing company.
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ADS Voting Instructions. As soon as practicable after receipt of notice of (i) any meeting at which the holders of Deposited Securities are entitled to vote, or (ii) solicitation of consents or proxies from holders of Deposited Securities, the Depositary shall fix the ADS Record Date in respect of such meeting or solicitation of consent or proxy in accordance with Section 4.9 of the Deposit Agreement. The Depositary shall, if requested by the Company in writing in a timely manner (the Depositary having no obligation to take any further action if the request shall not have been received by the Depositary at least thirty (30) days prior to the date of such vote or meeting), at the Company’s expense and provided no U.S. legal prohibitions exist, distribute to Holders of record as of the ADS Record Date a notice which shall contain: (a) such information as is contained in such notice of meeting, (b) a statement that the Holders at the close of business on the ADS Record Date will be entitled, subject to any applicable law, the provisions of the Deposit Agreement, the Articles of Association of the Company and the provisions of, or governing, the Deposited Securities (which provisions, if any, shall have been summarized in pertinent part by the Company), to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by such Holder’s ADSs, and (c) a brief statement addressing the manner in which such instructions may be given (including an indication that instructions may be deemed to have been given in accordance with the last sentence of (b) below if no instructions are received by the Depositary prior to the deadline set for such purposes to the Depositary to give a discretionary proxy to a person designated by the Company). Voting instructions may be given only in respect of a number of ADSs representing an integral number of Deposited Securities. Notwithstanding anything contained in the Deposit Agreement or any ADR, the Depositary may, to the extent not prohibited by law or regulations or by the requirements of the stock exchange on which the ADSs are listed, in lieu of distribution of the materials provided to the Depositary in connection with any meeting of, or solicitation of consents or proxies from, holders of Deposited Securities, distribute to the Holders a notice that provides Holders with, or otherwise publicizes to Holders, instructions on how to retrieve such materials or receive such materials upon request...