EXHIBIT 2.(a)
CONFORMED COPY
DEPOSIT AGREEMENT
-------------------------------------------------------------------------------
by and among
AU OPTRONICS CORP.
AND
CITIBANK, N.A.,
as Depositary,
AND
THE HOLDERS AND BENEFICIAL OWNERS
OF AMERICAN DEPOSITARY SHARES EVIDENCED BY
AMERICAN DEPOSITARY RECEIPTS ISSUED HEREUNDER
-------------------------------------------------------------------------------
Dated as of May 29, 2002
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of May 29, 2002 (this Deposit Agreement and
all Exhibits hereto, as amended and supplemented from time to time in
accordance with its terms, the "Deposit Agreement"), by and among (i) AU
OPTRONICS CORP., a company incorporated under the laws of the Republic of
China, and its successors (the "Company"), (ii) CITIBANK, N.A., a national
banking association organized under the laws of the United States of America
acting in its capacity as depositary, and any successor depositary hereunder
(the "Depositary"), and (iii) all Holders and Beneficial Owners of American
Depositary Shares evidenced by American Depositary Receipts issued hereunder
(all such capitalized terms as hereinafter defined).
W I T N E S E T H T H A T:
WHEREAS, the Company has duly authorized the issuance of, and has
outstanding, shares of common stock, having a par value of NT$10.00 per share
(the "Shares"), which are listed for trading on the Taiwan Stock Exchange; and
WHEREAS, the Company and the Depositary desire to provide for the deposit
of the Shares and the creation of (i) American Depositary Shares (the "ADSs")
represented by American Depositary Receipts, the ADSs representing the Shares
so deposited upon the terms set forth herein listed for trading on the New York
Stock Exchange, Inc. (the depositary receipts facility for such ADSs, the "ADS
Facility"); and
WHEREAS, the Company wishes to provide for the deposit of Certificates of
Payment (as hereinafter defined) and the creation of "Temporary COP American
Depositary Shares" representing the Certificates of Payment so deposited upon
the terms set forth herein (the "Temporary COP ADSs") listed for trading on the
New York Stock Exchange, Inc. (the depositary receipts facility for such
Temporary COP ADSs, the "COP ADS Facility"); and
WHEREAS, the Company wishes to provide for the deposit of Entitlement
Certificates (as hereinafter defined), and for the creation of Temporary EC
ADSs representing the Entitlement Certificates so deposited upon the terms set
forth herein (the "Temporary EC ADSs", together with the Temporary COP ADSs,
the "Temporary ADSs"). (the EC ADS Facility, together with the ADS Facility and
the COP ADS Facility, the "ADS Facilities"); and
WHEREAS, the Depositary is willing to act as the Depositary for the ADS
Facilities upon the terms set forth in this Deposit Agreement; and
WHEREAS, the American Depositary Receipts evidencing each series of the
American Depositary Shares issued pursuant to the terms of this Deposit
Agreement are to be substantially in the form of Exhibit A attached hereto,
with appropriate insertions, modifications and omissions, as hereinafter
provided in this Deposit Agreement; and
WHEREAS, the Board of Directors of the Company (or an authorized committee
thereof) has duly approved the establishment of the ADS Facilities upon the
terms set forth in
this Deposit Agreement, the execution and delivery of this Deposit Agreement on
behalf of the Company, and the actions of the Company and the transactions
contemplated herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto agree as
follows:
ARTICLE I
DEFINITIONS
All capitalized terms used, but not otherwise defined, herein shall have
the meanings set forth below, unless otherwise clearly indicated:
Section 1.1 "ADS Record Date" shall have the meaning given to such term in
Section 4.9.
Section 1.2 "Affiliate" shall have the meaning assigned to such term by
the Commission (as hereinafter defined) under Regulation C promulgated under
the Securities Act (as hereinafter defined), or under any successor regulation
thereto.
Section 1.3 "American Depositary Share(s)" and "ADS(s)" shall mean,
individually or collectively, as the context may require, the rights and
interests in the Deposited Securities (as hereinafter defined) granted to the
Holders (as hereinafter defined) and Beneficial Owners (as hereinafter defined)
pursuant to the terms and conditions of this Deposit Agreement and the American
Depositary Receipts issued hereunder to evidence such ADSs. Each American
Depositary Share shall represent (i) in the case of Share ADSs (as hereinafter
defined) ten (10) Shares, (ii) in the case of Temporary COP ADSs, an undivided
interest in a Certificate of Payment deposited by the Company with the
Custodian and representing the irrevocable right to receive the aggregate
number of Shares from the Company, each Temporary COP ADS representing an
undivided interest in the irrevocable right to receive ten (10) Shares from the
Company, and (iii) in the case of Temporary EC ADSs, Entitlement Certificates,
each representing the irrevocable right to receive ten (10) Shares in each case
until there shall occur a distribution upon Deposited Securities referred to in
Section 4.2, or a change in Deposited Securities referred to in Section 4.11,
with respect to which additional American Depositary Shares are not issued, and
thereafter each American Depositary Share shall represent the Deposited
Securities determined in accordance with the terms of such Sections. Unless
otherwise specifically set forth in this Deposit Agreement or the applicable
ADR (as hereinafter defined), the terms "American Depositary Shares" and "ADSs"
shall include Temporary COP ADSs and Temporary EC ADSs, individually or
collectively, as the context may require.
Section 1.4 "Applicant" shall have the meaning given to such term in
Section 5.10.
Section 1.5 "Beneficial Owner" shall mean, as to any ADS, any person or
entity having a beneficial interest deriving from the ownership of such ADS. A
2
Beneficial Owner of ADSs may or may not be the Holder of the ADR(s) evidencing
such ADSs. A Beneficial Owner shall be able to exercise any right or receive
any benefit hereunder solely through the person who is the Holder of the ADR(s)
evidencing the ADS(s) owned by such Beneficial Owner.
Section 1.6 "Bonds" shall mean any convertible or exchangeable promissory
note or bond issued pursuant to the terms of any Trust Deed (as hereinafter
defined) that may be converted according to its terms into, or exchanged
according to its terms for, (i) Shares or Entitlement Certificates or (ii)
ADSs.
Section 1.7 "Business Day" shall mean any day on which both the banks in
Taipei and the banks in New York are open for business.
Section 1.8 "Certificate(s) of Payment" and "COP(s)" shall mean the
Certificate(s) of Payment issued by the Company evidencing the irrevocable
right to receive Shares from the Company in connection with the Offering or any
subsequent offerings of the same nature as the Offering.
Section 1.9 "Commission" shall mean the Securities and Exchange Commission
of the United States or any successor governmental agency thereto in the United
States.
Section 1.10 "Company" shall mean AU Optronics Corp., a company
incorporated and existing under the laws of the Republic of China, and its
successors.
Section 1.11 "Custodian" shall mean, as of the date hereof, Citibank,
N.A., (Taipei), having its principal office at ▇▇, ▇▇. ▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇. ▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ of China, as the custodian for the purposes of
this Deposit Agreement, and any other entity that may be appointed by the
Depositary pursuant to the terms of Section 5.5 as successor, substitute or
additional custodian hereunder. The term "Custodian" shall mean any Custodian
individually or all Custodians collectively, as the context requires.
Section 1.12 "Deliver" and "Delivery" shall mean, when used in respect of
ADSs, Deposited Securities and Eligible Securities (as such terms are
hereinafter defined) and to the extent permissible under the laws of the
Republic of China, either (i) the physical delivery of the certificate(s)
representing such securities, or (ii) the electronic delivery of such
securities by means of book-entry transfer through the Taiwan Securities
Central Depository Co., Ltd., if available.
Section 1.13 "Deposit Agreement" shall mean this Deposit Agreement and all
exhibits hereto, as the same may from time to time be amended and supplemented
from time to time in accordance with the terms hereof.
Section 1.14 "Depositary" shall mean Citibank, N.A., a national banking
association organized under the laws of the United States, in its capacity as
depositary under the terms of this Deposit Agreement, and any successor
depositary hereunder.
Section 1.15 "Deposited Securities" shall mean, collectively or
individually, as the context may require and unless otherwise specifically set
forth herein, (a) with respect to
3
Share ADSs (as such term is hereinafter defined), Shares, (b) with respect to
Temporary COP ADSs (as such term is hereinafter defined), Certificates of
Payment, and (c) with respect to Temporary EC ADSs (as such term is hereinafter
defined), Entitlement Certificates, in each case, at any time deposited under
this Deposit Agreement and any and all other securities, property and cash held
by the Depositary or the Custodian in respect thereof, subject, in the case of
cash, to the provisions of Section 4.8. Notwithstanding anything else contained
herein, the securities, property and cash delivered to the Custodian in respect
of Shares and Entitlement Certificates, and any other deposited securities,
from and after the date hereof, shall be considered to be and treated as,
Deposited Securities hereunder in all respects. The collateral delivered in
connection with Pre-Release Transactions and/or Pre-Cancellation Sales in each
case as described in Section 5.10 hereof, shall not constitute Deposited
Securities.
Section 1.16 "Dollars" and "$" shall refer to the lawful currency of the
United States.
Section 1.17 "DTC" shall mean The Depository Trust Company, a national
clearinghouse and the central book-entry settlement system for securities
traded in the United States and, as such, the custodian for the securities of
DTC Participants (as hereinafter defined) maintained in DTC, and any successor
thereto.
Section 1.18 "DTC Participant" shall mean any financial institution (or
any nominee of such institution) having one or more participant accounts with
DTC for receiving, holding and delivering the securities and cash held in DTC.
Section 1.19 "Eligible Securities" shall mean, collectively or
individually as the context may require and unless otherwise specifically set
forth herein, (a) with respect to Share ADSs (as such term is hereinafter
defined), Shares, (b) with respect to Temporary COP ADSs (as such term is
hereinafter defined), Certificates of Payment and (c) with respect to Temporary
EC ADSs (as such term is hereinafter defined), Entitlement Certificates, in
each case to the extent eligible for deposit hereunder at any time and from
time to time from and after the date hereof.
Section 1.20 "Eligible Securities Registrar" shall mean National
Securities Corp., or any other institution organized under the laws of the
Republic of China appointed by the Company to carry out the duties of registrar
for holders of (a) Shares, (b) Certificates of Payment and (c) Entitlement
Certificates, and any successor thereto.
Section 1.21 "Entitlement Certificate(s)" and "ECs" shall mean the scrip
known as "Certificates Exchangeable for Shares" to be issued to holders of
Bonds in connection with the exercise of conversion or exchange rights of the
Bonds. Entitlement Certificates evidence the irrevocable right to receive
Shares from the Company after completion of the necessary corporate amendment
registration by the Company.
Section 1.22 "Exchange Act" shall mean the United States Securities
Exchange Act of 1934, as from time to time amended.
Section 1.23 "Foreign Currency" shall mean any lawful currency other than
Dollars.
4
Section 1.24 "Holder" shall mean the person in whose name a Receipt is
registered on the books of the Depositary (or the Registrar, if any) maintained
for such purpose. A Holder may or may not be a Beneficial Owner. If a Holder is
not the Beneficial Owner of the ADSs evidenced by the Receipt registered in its
name, such person shall be deemed to have all requisite authority to act on
behalf of the Beneficial Owners of the ADSs evidenced by such Receipt.
Section 1.25 "Initial Deposit" shall mean the initial deposit of Shares or
Certificates of Payment, as the case may be, in connection with the Offering
(as hereinafter defined).
Section 1.26 "NT dollars" and "NT$" shall refer to the lawful currency of
Taiwan, Republic of China.
Section 1.27 "Offering" shall mean the offering of ADSs in the United
States and in countries other than the Republic of China as contemplated by the
Underwriting Agreements, dated as of May 23, 2002, by and among ▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, Inc., as representatives of the several underwriters listed in Schedule
I thereto, the Company and certain of the Company's shareholders.
Section 1.28 "Pre-Cancellation Sale" shall have the meaning set forth in
Section 5.10(b).
Section 1.29 "Pre-Release Transaction" shall have the meaning set forth in
Section 5.10(a).
Section 1.30 "Principal Office", when used with respect to the Depositary,
shall mean the principal office of the Depositary at which at any particular
time its depositary receipts business shall be administered, which, at the date
of this Deposit Agreement, is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇.▇.▇.
Section 1.31 "Prospectuses" shall mean the Company's Prospectuses, dated
May 23, 2002, delivered in connection with the Offering pursuant to the
Company's Registration Statement on Form F-1 (Reg. No. 333-87418), filed with
the Commission on May 15, 2002 and declared effective on May 22, 2002.
Section 1.32 "Receipt(s)"; "American Depositary Receipt(s)" and "ADR(s)"
shall mean any series of the certificate(s) issued by the Depositary to
evidence the American Depositary Shares issued under the terms of this Deposit
Agreement, as such Receipts may be amended from time to time in accordance with
the provisions of this Deposit Agreement. A Receipt may evidence any number of
American Depositary Shares and may, in the case of American Depositary Shares
held through a central depository such as DTC, be in the form of a "Balance
Certificate." Unless otherwise specifically set forth herein, the term
"Receipts" shall include the Temporary ADRs evidencing the Temporary EC ADSs or
the Temporary COP ADSs issued hereunder, individually or collectively, as the
context may require.
Section 1.33 "Registrar" shall mean the Depositary or any bank or trust
company having an office in the Borough of Manhattan, The City of New York,
which shall be
5
appointed by the Depositary to register issuances, transfers and cancellations
of Receipts as herein provided, and shall include any co-registrar appointed by
the Depositary for such purposes. Registrars (other than the Depositary) may be
removed and substitutes appointed by the Depositary. Each Registrar (other than
the Depositary) appointed pursuant to this Deposit Agreement shall be required
to give notice in writing to the Depositary accepting such appointment and
agreeing to be bound by the applicable terms of this Deposit Agreement.
Section 1.34 "Republic of China", "ROC" and "Taiwan" shall mean the
Republic of China.
Section 1.35 "Restricted Securities" shall mean collectively or
individually, as the context may require, Eligible Securities, Deposited
Securities or ADSs, which (i) have been acquired directly or indirectly from
the Company or any of its Affiliates in a transaction or a chain of
transactions not involving any public offering and are subject to resale
limitations under the Securities Act (as hereinafter defined) or the rules
issued thereunder, or (ii) are held by an officer or director (or persons
performing similar functions) or other Affiliate of the Company, or (iii) are
subject to other restrictions on sale or deposit under (a) the laws of the
United States, (b) the laws of the Republic of China, (c) a shareholders'
agreement, (d) the Articles of Incorporation of the Company, or (e) the
regulations of an applicable securities exchange unless, in each case, (x) such
Eligible Securities, Deposited Securities or ADSs are being transferred or sold
to persons other than an Affiliate of the Company in a transaction (i) covered
by an effective resale registration statement, or (ii) exempt from the
registration requirements of the Securities Act (as hereinafter defined), and
(y) the Eligible Securities, Deposited Securities or ADSs are not, when held by
such person(s), Restricted Securities.
Section 1.36 "Restricted ADRs" , "Restricted ADS(s)" and "Restricted
Shares" shall have the respective meanings set forth in Section 2.14.
Section 1.37 "Securities Act" shall mean the United States Securities Act
of 1933, as from time to time amended.
Section 1.38 "SFC" shall mean the ROC Securities and Futures Commission,
as further described in Section 2.3 hereof.
Section 1.39 "Shares" shall mean the Company's shares of common stock,
each having a par value of NT$10.00 per share, validly issued and outstanding
and fully paid and may, if the Depositary so agrees after obtaining written
consent from the Company, include evidence of the right to receive Shares
(other than Entitlement Certificates or Certificates of Payment); provided that
in no event shall Shares include evidence of the right to receive Shares with
respect to which the full purchase price has not been paid or Shares as to
which preemptive rights have theretofore not been validly waived or exercised;
provided further, however, that, if there shall occur any change in par value,
split-up, consolidation, reclassification, exchange, conversion or any other
event described in Section 4.11 in respect of the Shares of the Company, the
term "Shares" shall thereafter, to the maximum extent permitted by law,
represent the successor securities resulting from such change in par value,
split-up, consolidation, reclassification, exchange, conversion, or other
event.
6
Section 1.40 "Share American Depositary Receipt(s)" and "Share ADR(s)"
shall mean the Receipts issued by the Depositary to evidence Share ADSs issued
under the terms of this Deposit Agreement, as such Share ADRs may be amended
from time to time in accordance with the provisions hereof. A Share ADR may
evidence any number of Share ADSs and may, in the case of Share ADSs held
through a central depository such as DTC, be in the form of a "Balance
Certificate". Share ADRs shall, unless otherwise specifically set forth herein,
be deemed to be Receipts for all purposes under this Deposit Agreement.
Section 1.41 "Share American Depositary Share(s)" and "Share ADS(s)" shall
mean the rights and interests in deposited Shares granted to Holders and
Beneficial Owners pursuant to the terms and conditions of this Deposit
Agreement and the Share ADRs issued hereunder to evidence such Share ADSs.
Share ADSs shall, unless otherwise specifically set forth herein, be deemed to
be American Depositary Shares or ADSs, as the context may require, for all
purposes under this Deposit Agreement.
Section 1.42 "Shareholder Notice" shall have the meaning given to such
term in Section 4.10(b).
Section 1.43 "Taiwan Securities Central Depository Co., Ltd." shall mean
the central depository for Shares and Entitlement Certificates in the Republic
of China, and any successor thereto.
Section 1.44 "Taiwan Stock Exchange" and "TSE" shall mean the stock
exchange in Taiwan, Republic of China, upon which the Company's Shares are
listed for trading and any successor stock exchange thereto.
Section 1.45 "Temporary ADS(s)" shall mean, collectively or individually
as the context requires, the Temporary EC ADSs and/or the Temporary COP ADSs,
each as issued under the terms of this Deposit Agreement. Unless otherwise
specifically set forth herein, Temporary ADSs shall be deemed for all purposes
to be American Depositary Shares or ADSs issued under the terms of this Deposit
Agreement.
Section 1.46 "Temporary ADR(s)" shall mean, collectively or individually
as the context requires, the Temporary EC ADRs and/or the Temporary COP ADRs,
each as issued under the terms of this Deposit Agreement. Unless otherwise
specifically set forth herein, Temporary ADRs shall be deemed for all purposes
to be Receipts issued under the terms of this Deposit Agreement.
Section 1.47 "Temporary EC ADS(s)" shall mean the rights and interests in
deposited Entitlement Certificates issued to Holders and Beneficial Owners
pursuant to the terms and conditions of this Deposit Agreement (including,
without limitation, Section 2.13 hereof) and the applicable Temporary EC ADR(s)
(as defined below) issued hereunder to evidence such Temporary EC ADSs.
Temporary EC ADSs shall, unless otherwise specifically set forth herein, be
deemed to be American Depositary Shares or ADSs, as the context may require,
for all purposes under this Deposit Agreement.
Section 1.48 "Temporary EC ADR(s)" shall mean the Receipts issued by the
Depositary to evidence Temporary EC ADSs issued under the terms of this Deposit
Agreement
7
(including, without limitation, Section 2.13 hereof), as such Temporary EC ADRs
may be amended from time to time in accordance with the terms hereof. A
Temporary EC ADR may evidence any number of Temporary EC ADSs and may, in the
case of Temporary EC ADSs held through a central depository such as DTC, be in
the form of a "Balance Certificate." Temporary EC ADRs shall, unless otherwise
specifically set forth herein, be deemed to be Receipts for all purposes under
this Deposit Agreement.
Section 1.49 "Temporary COP ADS(s)" shall mean the rights and interests in
deposited Certificate of Payment issued to Holders and Beneficial Owners
pursuant to the terms and conditions of this Deposit Agreement (including,
without limitation, Section 2.12 hereof) and the applicable Temporary COP
ADR(s) issued hereunder to evidence such Temporary COP ADSs. Temporary COP ADSs
shall, unless otherwise specifically set forth herein, be deemed to be American
Depositary Shares or ADSs, as the context may require, for all purposes under
this Deposit Agreement.
Section 1.50 "Temporary COP ADR(s)" shall mean the Receipts issued by the
Depositary to evidence Temporary COP ADSs issued under the terms of this
Deposit Agreement (including, without limitation, Section 2.12 hereof), as such
Temporary COP ADRs may be amended from time to time in accordance with the
terms hereof. A Temporary COP ADR may evidence any number of Temporary COP ADSs
and may, in the case of Temporary COP ADSs held through a central depository
such as DTC, be in the form of a "Balance Certificate." Temporary COP ADRs
shall, unless otherwise specifically set forth herein, be deemed to be Receipts
for all purposes under the Deposit Agreement.
Section 1.51 "Trust Deed" shall mean any trust deed, trust indenture or
similar agreement in respect of Bonds, as the same may be amended from time to
time.
Section 1.52 "United States" shall have the meaning assigned to it in
Regulation S as promulgated by the Commission under the Securities Act.
Section 1.53 "Voting Representative" shall have the meaning given to such
term in Section 4.10(b).
ARTICLE II
APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS;
DEPOSIT OF ELIGIBLE SECURITIES; EXECUTION
AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS
Section 2.1 Appointment of Depositary. The Company hereby appoints the
Depositary as depositary for the Deposited Securities and hereby authorizes and
directs the Depositary to act in accordance with the terms set forth in this
Deposit Agreement. Each Holder and each Beneficial Owner, upon acceptance of
any ADSs (or any interest therein) issued in accordance with the terms of this
Deposit Agreement shall be deemed for all purposes to (a) be a party to and
bound by the terms of this Deposit Agreement and (b) appoint the Depositary as
its attorney-in-fact, with full power to delegate, to act on its behalf and to
take any and all actions contemplated in this Deposit Agreement (including,
without limitation, Sections 2.12 and 2.13
8
hereof), to adopt any and all procedures necessary to comply with applicable
law and to take such action as the Depositary in its sole discretion may deem
necessary or appropriate to carry out the purposes of this Deposit Agreement
including, without limitation, the designation of one of the Holders and
Beneficial Owners as the representative of all Holders and Beneficial Owners
(the taking of such actions to be the conclusive determinant of the necessity
and appropriateness thereof). The Depositary shall cause its nominee, as
representative of the Holders and Beneficial Owners, not to be elected as a
director or supervisor of the Company.
Section 2.2 Form and Transferability of Receipts.
(a) Form. ADSs shall be evidenced by definitive Receipts which shall be
engraved, printed, lithographed or produced in such other manner as may be
agreed upon by the Company and the Depositary. Receipts may be issued under the
Deposit Agreement in denominations of any whole number of ADSs. The Receipts
shall be substantially in the form set forth in Exhibit A to the Deposit
Agreement, with any appropriate insertions, modifications and omissions, in
each case as otherwise contemplated in the Deposit Agreement or required by
law. Receipts shall be (i) dated, (ii) signed by the manual or facsimile
signature of a duly authorized signatory of the Depositary, (iii) countersigned
by the manual or facsimile signature of a duly authorized signatory of the
Registrar, and (iv) registered in the books maintained by the Registrar for the
registration of issuances and transfers of Receipts. No Receipt and no ADS
evidenced thereby shall be entitled to any benefits under the Deposit Agreement
or be valid or enforceable for any purpose against the Depositary or the
Company, unless such Receipt shall have been so dated, signed, countersigned
and registered. Receipts bearing the facsimile signature of a duly authorized
signatory of the Depositary or the Registrar, who at the time of signature was
a duly authorized signatory of the Depositary or the Registrar, as the case may
be, shall bind the Depositary, notwithstanding the fact that such signatory has
ceased to be so authorized prior to the delivery of such Receipt by the
Depositary. The Share ADRs, the Temporary EC ADRs and the Temporary COP ADRs
shall each bear a separate and distinct CUSIP number that is different from one
another and from any CUSIP number that was, is or may be assigned to any
depositary receipts previously or subsequently issued pursuant to any other
arrangement between the Depositary (or any other depositary) and the Company
and which are not Receipts issued hereunder.
(b) Legends. The Receipts may be endorsed with, or have incorporated in
the text thereof, such legends or recitals not inconsistent with the provisions
of the Deposit Agreement (i) as may be necessary to enable the Depositary to
perform its obligations hereunder, (ii) as may be required to comply with any
applicable laws or regulations, or with the rules and regulations of any
securities exchange or market upon which ADSs may be traded, listed or quoted,
or to conform with any usage with respect thereto, (iii) as may be necessary to
indicate any special limitations or restrictions to which any particular
Receipts or ADSs are subject by reason of the date of issuance or type of the
Deposited Securities or otherwise, or (iv) as may be required by any book-entry
system in which the ADSs are held.
(c) Title. Subject to the limitations contained herein and in the Receipt,
title to a Receipt (and to each ADS evidenced thereby) shall be transferable
upon the same terms as a certificated security under the laws of the State of
New York, provided that such Receipt has been properly endorsed or is
accompanied by proper instruments of transfer. Notwithstanding
9
any notice to the contrary, the Depositary and the Company may deem and treat
the Holder of a Receipt (that is, the person in whose name a Receipt is
registered on the books of the Depositary) as the absolute owner thereof for
all purposes. Neither the Depositary nor the Company shall have any obligation
nor be subject to any liability under this Deposit Agreement or any Receipt to
any holder of a Receipt or any Beneficial Owner unless such holder is the
Holder of such Receipt registered on the books of the Depositary or, in the
case of a Beneficial Owner, such Beneficial Owner, or the Beneficial Owner's
representative, is the Holder registered on the books of the Depositary.
(d) Book-Entry Systems. The Depositary shall make arrangements for the
acceptance of the ADSs into DTC. A single ADR in the form of a "Balance
Certificate" will evidence the ADSs held through DTC and will be registered in
the name of the nominee for DTC (currently "Cede & Co.") and will provide that
it represents the aggregate amount of ADSs from time to time indicated in the
records of the Depositary as being issued hereunder and that the aggregate
amount of ADSs represented thereby may from time to time be increased or
decreased by making adjustments on such records of the Depositary and of DTC or
its nominee as hereinafter provided. As such, the nominee for DTC will be the
only "Holder" of the ADR evidencing the ADSs held through DTC. Citibank, N.A.
(or such other entity as is appointed by DTC or its nominee) may hold the
"Balance Certificate" as custodian for DTC. Each Beneficial Owner of ADSs held
through DTC must rely upon the procedures of DTC and the DTC Participants to
exercise or be entitled to any rights attributable to such ADSs. The DTC
Participants shall for all purposes be deemed to have all requisite power and
authority to act on behalf of the Beneficial Owners of the ADSs held in the DTC
Participants' respective accounts in DTC and the Depositary shall for all
purposes be authorized to rely upon any instructions and information given to
it by DTC Participants on behalf of Beneficial Owners of ADSs. So long as ADSs
are held through DTC or unless otherwise required by law, ownership of
beneficial interests in the ADR registered in the name of the nominee for DTC
will be shown on, and transfers of such ownership will be effected only
through, records maintained by (i) DTC or its nominee (with respect to the
interests of DTC Participants), or (ii) DTC Participants or their nominees
(with respect to the interests of clients of DTC Participants).
Section 2.3 Deposit with Custodian. The Depositary and the Company have
been advised that under current ROC law, no deposits of Eligible Securities may
be made in the ADS Facility, and no ADSs may be issued against such deposits,
without receipt of specific approval of the ROC Securities and Futures
Commission (the "SFC"), except in connection with the offering and the issuance
of additional Eligible Securities in connection with (i) dividends on or free
distributions of Eligible Securities, (ii) the exercise by Holders of their
preemptive rights applicable to Eligible Securities evidenced by ADSs in the
event of capital increases for cash or (iii) Entitlement Certificates or Shares
delivered to holders of Bonds in connection with the exercise of conversion or
exchange rights of Bonds for ADSs to the extent covered by SFC approval or (iv)
as permitted hereunder, the purchase by any person directly or through the
Depositary of Shares on the TSE or delivery of Shares to the Custodian for
deposit in the ADS Facility, provided that the total number of ADSs outstanding
after an issuance described in clause (iv) does not exceed the number of issued
ADSs previously approved by the SFC (plus any ADSs created pursuant to clauses
(i) and (ii) above). The Depositary and the Company have been advised that
under current ROC law, in calculating the number of ADSs outstanding after the
ADSs have been canceled upon the withdrawal of the corresponding Shares from
the ADS
10
facility, ADSs will continue to be deemed outstanding solely for such purpose
if such Shares have not been sold in the ROC market following their withdrawal
and continue to be held in the form of Shares by a non-ROC person.
Subject to applicable laws and regulations of the Republic of China and to
the terms and conditions of this Deposit Agreement and applicable law, Eligible
Securities or evidence of rights to receive Eligible Securities (other than
Restricted Securities) may be deposited by any person (including the Depositary
in its individual capacity, but subject, however, in the case of the Company or
any Affiliate of the Company, to Section 5.7 hereof) at any time, whether or
not the transfer books of the Company maintained by the Eligible Securities
Registrar, if any, are closed, by Delivery of the Eligible Securities to the
Custodian. Every deposit of Eligible Securities shall be accompanied by the
following: (A) (i) in the case of Eligible Securities represented by
certificates issued in registered form, appropriate instruments of transfer or
endorsement, in a form satisfactory to the Custodian, and (ii) in the case of
Eligible Securities delivered by book-entry transfer, confirmation of such
book-entry transfer to the Custodian or that irrevocable instructions have been
given to cause such Eligible Securities to be so transferred, (B) such
certifications and payments (including, without limitation, the Depositary's
fees and related charges) and evidence of such payments (including, without
limitation, stamping or otherwise marking such Eligible Securities by way of
receipt) as may be required by the Depositary or the Custodian in accordance
with the provisions of this Deposit Agreement and applicable law, (C) if the
Depositary so requires, a written order directing the Depositary to execute and
deliver to, or upon the written order of, the person(s) stated in such order a
Receipt or Receipts for the number of ADSs representing the Eligible Securities
so deposited, (D) evidence satisfactory to the Depositary (which may be an
opinion of counsel) that all necessary approvals have been granted by, or there
has been compliance with the rules and regulations of, any applicable
governmental agency in the Republic of China, provided, however, that no
opinion of counsel shall be necessary in connection with the deposit by the
Company of a free distribution of Eligible Securities by way of dividend or
stock split (other than elective distributions), and (E) if the Depositary so
requires, (i) an agreement, assignment or instrument satisfactory to the
Depositary or the Custodian which provides for the prompt transfer by any
person in whose name the Eligible Securities are or have been recorded to the
Depositary, the Custodian or any nominee of any distribution, or right to
subscribe for additional Eligible Securities or to receive other property in
respect of any such deposited Eligible Securities or, in lieu thereof, such
indemnity or other agreement as shall be satisfactory to the Depositary or the
Custodian and (ii) subject to ROC law and regulations if the Eligible
Securities are registered in the name of the person on whose behalf they are
presented for deposit, an authorization entitling the Depositary, the Custodian
or any nominee to exercise voting rights in respect of the Eligible Securities
for any and all purposes until the Eligible Securities so deposited are
registered in the name of the Depositary, the Custodian or any nominee, as
representative of the Holders and Beneficial Owners.
The Initial Deposit(s) of Eligible Securities into the ADR Facility will
be made, by or on behalf of the Company and certain shareholders approved to
sell ADSs in the Offering, by (i) the Delivery to the Custodian by the Company
of Shares and/or a Certificate of Payment evidencing the irrevocable right to
receive the physical share certificates representing the Shares registered in
the name of the nominee of the Depositary as representative of the Holders and
Beneficial Owners, as instructed by the Depositary and (ii) the Delivery to the
Custodian of
11
Shares by or on behalf of certain selling shareholders. Subject to the terms
and conditions of this Deposit Agreement, upon such Initial Deposit(s), the
Depositary shall execute and deliver ADRs evidencing the ADSs representing the
Deposited Securities constituting the Initial Deposit(s) in the manner provided
in Section 2.5.
Without limiting any other provision of this Deposit Agreement, the
Depositary shall instruct the Custodian not to, and neither the Depositary nor
the Custodian, nor any nominee, agent or person acting on their behalf, shall
knowingly, accept for deposit (a) any Restricted Securities nor (b) any
fractional Eligible Securities nor (c) a number of Eligible Securities which
upon application of the ADS-to-Eligible Securities ratio would give rise to
fractional ADSs. In addition, the Depositary and the Custodian shall refuse to
accept Shares for deposit (i) whenever notified, as hereafter provided, that
the Company has restricted transfer of such Shares to comply with delivery or
transfer requirements and/or ownership restrictions referred to in this Deposit
Agreement or under applicable law or (ii) in the case of a deposit of Shares
requested under Section 2.3 (iv), if such deposit is not permitted under any
legal restriction notified by the Company to the Depositary from time to time,
which restrictions may specify black-out periods during which deposits may not
be made, minimum or maximum numbers of Shares and frequencies of deposit. Other
than the Eligible Securities deposited by the Company that constitute a free
distribution of Eligible Securities by way of dividend or stock split (other
than elective distributions), no Eligible Securities shall be accepted for
deposit unless accompanied by evidence, if any is required by the Depositary,
that is reasonably satisfactory to the Depositary or the Custodian that all
conditions to such deposit have been satisfied by the person depositing such
Eligible Securities under the laws and regulations of the Republic of China and
any necessary governmental approval has been granted in the Republic of China,
if any. The Depositary may issue ADSs against evidence of rights to receive
Eligible Securities from the Company, any agent of the Company or any
custodian, registrar, transfer agent, clearing agency or other entity involved
in ownership or transaction records in respect of the Eligible Securities. Such
evidence of rights shall consist of written blanket or specific guarantees of
ownership of Eligible Securities furnished by the Company or any such
custodian, registrar, transfer agent, clearing agency or other entity involved
in ownership or transaction records in respect of the Eligible Securities.
Section 2.4 Registration and Safekeeping of Deposited Securities. The
Depositary shall instruct the Custodian upon each Delivery of certificates
representing registered Eligible Securities being deposited hereunder with the
Custodian (or other Deposited Securities pursuant to Article IV hereof),
together with the other documents above specified, to present such
certificate(s), together with the appropriate instrument(s) of transfer or
endorsement, duly stamped, to the Eligible Securities Registrar for transfer
and registration of the Eligible Securities (as soon as transfer and
registration can be accomplished and at the expense of the person for whom the
deposit is made) in the name of the Depositary, the Custodian or a nominee of
either, as representative of the Holders and Beneficial Owners. Deposited
Securities shall be held by the Depositary or by a Custodian for the account
and to the order of the Depositary or a nominee, in each case on behalf of the
Holders and Beneficial Owners, at such place or places as the Depositary or the
Custodian shall determine. Neither the Depositary nor the Custodian may dispose
of or pledge any of the Deposited Securities unless specifically permitted
under this Deposit Agreement.
12
Without limitation of the foregoing, neither the Depositary nor the
Custodian, or any nominee, agent or person acting on their behalf shall
knowingly accept for deposit under this Deposit Agreement any Eligible
Securities required to be registered under the provisions of the Securities
Act, unless a registration statement is in effect as to such Eligible
Securities, or any Eligible Securities the deposit of which would violate any
provisions of the Articles of Incorporation of the Company.
Section 2.5 Execution and Delivery of Receipts. The Depositary has made
arrangements with the Custodian to confirm to the Depositary (i) that a deposit
of Eligible Securities has been made pursuant to Section 2.3 hereof, (ii) that
such Deposited Securities have been recorded, or will be recorded as soon as
transfer and registration can be accomplished, in the name of the Depositary,
the Custodian or a nominee of either, as representative of the Holders and
Beneficial Owners, on the shareholders' register maintained by or on behalf of
the Company by the Eligible Securities Registrar if registered Eligible
Securities have been deposited or if deposit is made by book-entry transfer,
confirmation of such transfer in the books of the Taiwan Securities Central
Depository, (iii) that all required documents have been received, and (iv) the
person(s) to whom or upon whose order ADSs are deliverable in respect thereof
and the number of ADSs to be so delivered thereby. Such notification may be
made by letter, cable, telex, SWIFT message or, at the risk and expense of the
person making the deposit, by facsimile or other means of electronic
transmission. Upon receiving such notice from the Custodian, the Depositary,
subject to the terms and conditions of this Deposit Agreement and applicable
law, shall issue the ADSs representing the Eligible Securities so deposited to
or upon the order of the person(s) named in the notice delivered to the
Depositary and shall execute and deliver at its Principal Office Receipt(s)
registered in the name(s) requested by such person(s) and evidencing the
aggregate number of ADSs to which such person(s) are entitled, but only upon
payment to the Depositary of the charges of the Depositary for accepting a
deposit, issuing ADSs and executing and delivering such Receipt(s) (as set
forth in Section 5.9 and Exhibit B hereto) and all taxes and governmental
charges and fees payable in connection with such deposit and the transfer of
the Eligible Securities and the issuance of the Receipt(s). The Depositary
shall only issue ADSs in whole numbers and deliver ADRs evidencing whole
numbers of ADSs. Nothing herein shall prohibit any Pre-Release Transaction upon
the terms set forth in this Deposit Agreement.
Section 2.6 Transfer, Combination and Split-up of Receipts.
(a) Transfer. The Registrar shall register the transfer of Receipts (and
of the ADSs represented thereby) on the books maintained for such purpose and
the Depositary shall cancel such Receipts and execute new Receipts evidencing
the same aggregate number and type of ADSs as those evidenced by the Receipts
canceled by the Depositary, shall cause the Registrar to countersign such new
Receipts and shall Deliver such new Receipts to or upon the order of the person
entitled thereto, if each of the following conditions has been satisfied: (i)
the Receipts have been duly Delivered by the Holder (or by a duly authorized
attorney of the Holder) to the Depositary at its Principal Office for the
purpose of effecting a transfer thereof, (ii) the surrendered Receipts have
been properly endorsed or are accompanied by proper instruments of transfer
(including signature guarantees in accordance with standard securities industry
practice), (iii) the surrendered Receipts have been duly stamped (if required
by the laws of the State of New York or of the United States), and (iv) all
applicable fees and charges of, and expenses
13
incurred by, the Depositary and all applicable taxes and governmental charges
(as are set forth in Section 5.9 and Exhibit B hereto) have been paid, subject,
however, in each case, to the terms and conditions of the applicable Receipts,
of the Deposit Agreement and of applicable law, in each case as in effect at
the time thereof.
(b) Combination & Split Up. The Registrar shall register the split-up or
combination of Receipts (and of the ADSs represented thereby) on the books
maintained for such purpose and the Depositary shall cancel such Receipts and
execute new Receipts for the number of ADSs requested, but in the aggregate not
exceeding the number of the same type of ADSs evidenced by the Receipts
canceled by the Depositary, shall cause the Registrar to countersign such new
Receipts and shall Deliver such new Receipts to or upon the order of the Holder
thereof, if each of the following conditions has been satisfied: (i) the
Receipts have been duly Delivered by the Holder (or by a duly authorized
attorney of the Holder) to the Depositary at its Principal Office for the
purpose of effecting a split-up or combination thereof, and (ii) all applicable
fees and charges of, and expenses incurred by, the Depositary and all
applicable taxes and governmental charges (as are set forth in Section 5.9 and
Exhibit B hereto) have been paid, subject, however, in each case, to the terms
and conditions of the applicable Receipts, of the Deposit Agreement and of
applicable law, in each case as in effect at the time thereof.
(c) Co-Transfer Agents. The Depositary may appoint one or more co-transfer
agents for the purpose of effecting transfers, combinations and split-ups of
Receipts at designated transfer offices on behalf of the Depositary. In
carrying out its functions, a co-transfer agent may require evidence of
authority and compliance with applicable laws and the other requirements of
this Section 2.6 by Holders or persons entitled to such Receipts and will be
entitled to protection and indemnity to the same extent as the Depositary. Such
co-transfer agents may be removed and substitutes appointed by the Depositary.
Each co-transfer agent appointed under this Section 2.6 (other than the
Depositary) shall give notice in writing to the Depositary accepting such
appointment and agreeing to be bound by the applicable terms of the Deposit
Agreement.
Section 2.7 Surrender of ADSs and Withdrawal and Sale of Deposited
Securities.
(a) ROC Requirements. The Depositary and the Company have been advised
that under ROC law, until three (3) months after the closing of the Offering, a
Holder is not entitled to withdraw or sell Shares from the ADS Facility;
consequently, the Company and the Depositary agree to prohibit the surrender of
ADSs and the sale or Delivery of any Shares deposited in connection with the
Offering until the expiration of such three-month period. A Holder wishing to
withdraw Shares from the ADS Facility shall be required under ROC law to
appoint an eligible agent in the Republic of China to open a securities trading
account with a local brokerage firm after receiving an approval from the TSE
and a bank account (the securities trading account and the bank account,
collectively, the "Accounts"), to pay ROC taxes, remit funds, exercise
stockholders' rights and perform such other functions as may be designated by
such withdrawing Holder. In addition, such withdrawing Holder is also required
to appoint a custodian bank to hold the securities in safekeeping, make
confirmations and settle trades and report all relevant information. Without
making such appointment and until approval from the TSE is obtained, the
withdrawing Holder would be unable to receive, hold , or subsequently sell the
Deposited Securities withdrawn from the ADS Facilities on the TSE or otherwise.
14
(b) Sale of Deposited Securities. Upon surrender of Receipts at the
Principal Office and upon payment of any fees, reasonable expenses, taxes or
other governmental charges as provided hereunder, subject to the terms of this
Deposit Agreement, and the transfer restrictions applicable to the Deposited
Securities, if any, Holders may request that the Deposited Securities
represented by such Holders' Receipts be sold on such Holders' behalf. Any
Holder requesting a sale of Deposited Securities may be required by the
Depositary to deliver, or cause to be delivered, to the Depositary a written
order requesting the Depositary to sell, or cause to be sold, such Deposited
Securities. Any such sale of Deposited Securities will be conducted in
accordance with applicable ROC law through a securities company in the ROC on
the TSE or in such other manner as is or may be permitted under applicable ROC
law. Any such sale of Deposited Securities will be at the expense and risk of
the Holder requesting such sale.
Upon receipt of any proceeds from any such sale, the Depositary shall,
subject to any restrictions imposed by ROC law and regulations, and as provided
hereunder, convert or cause to be converted any such proceeds into U.S. dollars
and distribute any such proceeds to the Holders entitled thereto after
deduction or payment of any fees, reasonable expenses, taxes or governmental
charges incurred in connection with such sale, as provided under this Deposit
Agreement. Any such sale may be subject to ROC taxation on capital gains, if
any, and will be subject to a securities transaction tax in the ROC.
(c) Withdrawal of Deposited Securities. The Holder of ADSs shall be
entitled to Delivery (at the Custodian's designated office) of the Deposited
Securities at the time represented by the ADS(s) upon satisfaction of each of
the following conditions: (i) the Holder (or a duly authorized attorney of the
Holder) has duly Delivered ADSs to the Depositary at its Principal Office (and
if applicable, the Receipts evidencing such ADSs) for the purpose of withdrawal
of the Deposited Securities represented thereby, (ii) if so required by the
Depositary, the Receipts Delivered to the Depositary for such purpose have been
properly endorsed in blank or are accompanied by proper instruments of transfer
in blank (including signature guarantees in accordance with standard securities
industry practice), (iii) if so required by the Depositary, the Holder of the
ADSs has executed and delivered to the Depositary a written order directing the
Depositary to cause the Deposited Securities being withdrawn to be Delivered to
or upon the written order of the person(s) designated in such order, (iv) the
Holder has delivered to the Depositary the certification contemplated in
Exhibit C hereof, duly completed by or on behalf of the Beneficial Owner(s) of
the ADSs surrendered for withdrawal (unless the Depositary is otherwise
instructed by the Company), and (v) all applicable fees and charges of, and
reasonable expenses incurred by, the Depositary and all applicable taxes and
governmental charges (as are set forth in Section 5.9 and Exhibit B hereof)
have been paid, subject, however, in each case, to the terms and conditions of
the Receipts evidencing the surrendered ADSs, of the Deposit Agreement, of the
Company's Articles of Incorporation and of any applicable laws, and the
regulations and rules of the Republic of China and the rules of the TSE and the
Taiwan Securities Central Depository, and to any provisions of or governing the
Deposited Securities, in each case as in effect at the time thereof.
Upon satisfaction of each of the conditions specified above, the
Depositary (i) shall cancel the ADSs Delivered to it (and, if applicable, the
Receipts evidencing the ADSs so Delivered), (ii) shall direct the Registrar to
record the cancellation of the ADSs so Delivered on the books maintained for
such purpose, and (iii) shall direct the Custodian to Deliver (without
15
unreasonable delay) at the Custodian's designated office the Deposited
Securities represented by the ADSs so canceled together with any certificate or
other document of title for the Deposited Securities, or evidence of the
electronic transfer thereof (if available), as the case may be, to or upon the
written order of the person(s) designated in the order delivered to the
Depositary for such purpose, subject however, in each case, to the terms and
conditions of the Deposit Agreement, of the Receipts evidencing the ADSs so
canceled, of the Articles of Incorporation of the Company, of applicable laws
and the rules and regulations of the Republic of China and the rules of the TSE
and the Taiwan Securities Central Depository, and to the terms and conditions
of or governing the Deposited Securities, in each case as in effect at the time
thereof.
The Depositary shall not accept for surrender ADSs representing less than
one Eligible Security. In the case of the Delivery to it of ADSs representing a
number other than a whole number of Eligible Securities, the Depositary shall
cause ownership of the appropriate whole number of Eligible Securities to be
Delivered in accordance with the terms hereof, and shall, at the discretion of
the Depositary, either (i) return to the person surrendering such ADSs the
number of ADSs representing any remaining fractional Eligible Security, or (ii)
sell or cause to be sold the fractional Eligible Security represented by the
ADS(s) so surrendered and remit the proceeds of such sale (net of (a)
applicable fees and charges of, and expenses incurred by, the Depositary and
(b) taxes withheld) to the person surrendering the ADSs. In addition, trading
restrictions on the TSE may result in the price per Eligible Security or on any
lot of any type of Eligible Security other than an integral multiple of 1,000
Eligible Securities being lower than the price of Eligible Securities in lots
of integral multiples of 1,000 Eligible Securities.
Notwithstanding anything else contained in any Receipt or the Deposit
Agreement, the Depositary may make delivery at the Principal Office of the
Depositary of (i) any cash dividends or cash distributions, or (ii) any
proceeds from the sale of any distributions of securities or rights, which are
at the time held by the Depositary in respect of the Deposited Securities
represented by the ADSs surrendered for cancellation and withdrawal. At the
request, risk and expense of any Holder so surrendering ADSs, and for the
account of such Holder, the Depositary shall direct the Custodian to forward
(to the extent permitted by law) any cash or other property (other than
securities) held by the Custodian in respect of the Deposited Securities
represented by such ADSs to the Depositary for delivery at the Principal Office
of the Depositary. Such direction shall be given by letter or, at the request,
risk and expense of such Holder, by cable, telex or facsimile transmission.
Section 2.8 Additional Limitations on Execution and Delivery, Transfer,
etc. of Receipts; Suspension of Delivery, Transfer, etc.
(a) Additional Requirements. As a condition precedent to the execution and
delivery, registration, registration of transfer, split-up, combination or
surrender of any Receipt, the delivery of any distribution thereon, or the
withdrawal of any Deposited Securities, the Depositary or the Custodian may
require (i) payment from the depositor of Eligible Securities or presenter of
ADSs or of a Receipt of a sum sufficient to reimburse it for any tax or other
governmental charge and any stock transfer or registration fee with respect
thereto (including any such tax or charge and fee with respect to Eligible
Securities being deposited or withdrawn) and payment of any applicable fees and
charges of the Depositary as provided in Section 5.9 and Exhibit B hereof, (ii)
the production of proof satisfactory to it as to the identity and genuineness
16
of any signature or any other matter contemplated by Section 3.1 hereof, and
(iii) compliance with (A) any laws or governmental regulations relating to the
execution and delivery of Receipts or ADSs or to the deposit of Eligible
Securities or the withdrawal of Deposited Securities and (B) such reasonable
regulations as the Depositary and the Company may establish consistent with the
provisions of the applicable Receipt, this Deposit Agreement and applicable
law.
(b) Additional Limitations. The issuance of ADSs against deposits of
Eligible Securities generally or against deposits of particular Eligible
Securities may be suspended, or the deposit of particular Eligible Securities
may be refused, or the registration of transfer of Receipts in particular
instances may be refused, or the registration of transfers of Receipts
generally may be suspended, during any period when the transfer books of the
Company, the Depositary, a Registrar or the Eligible Securities Registrar are
closed or if any such action is deemed necessary or advisable by the Depositary
or the Company, in good faith, at any time or from time to time because of any
requirement of law, any government or governmental body or commission or any
securities exchange on which the ADSs or Eligible Securities are listed, or
under any provision of this Deposit Agreement or the applicable Receipt(s) or,
under any provision of, or governing, the Deposited Securities, or because of a
meeting of shareholders of the Company or for any other reason, subject, in all
cases, to Section 7.8 hereof. In addition, the Depositary and the Custodian
shall refuse to accept Shares for deposit (i) whenever notified, as hereafter
provided, that the Company has restricted transfer of such Shares to comply
with delivery or transfer requirements and/or ownership restrictions referred
to in this Deposit Agreement or under applicable law, (ii) in the case of a
deposit of Shares requested under Section 2.3 (iv), if such deposit is not
permitted under any restriction notified by the Company to the Depositary from
time to time, which restrictions may specify black-out periods during which
deposits may not be made, minimum or maximum numbers of Shares and frequencies
of deposit.
(c) Regulatory Restrictions. Notwithstanding any provision of this Deposit
Agreement or any Receipt(s) to the contrary, Holders are entitled to surrender
outstanding ADSs to withdraw the Deposited Securities at any time subject only
to (i) temporary delays caused by closing the transfer books of the Depositary
or the Company, or the deposit of Eligible Securities in connection with voting
at a shareholders' meeting or the payment of dividends, (ii) the payment of
fees, taxes and similar charges, (iii) compliance with any U.S. or foreign laws
or governmental regulations relating to the Receipts or to the withdrawal of
the Deposited Securities, and (iv) other circumstances specifically
contemplated by Section I.A.(l) of the General Instructions to Form F-6 (as
such General Instructions may be amended from time to time).
Section 2.9 Lost Receipts, etc. In case any Receipt shall be mutilated,
destroyed, lost, or stolen, the Depositary shall execute and deliver a new
Receipt of like tenor at the expense of the Holder (a) in the case of a
mutilated Receipt, in exchange of and substitution for such mutilated Receipt
upon cancellation thereof, or (b) in the case of a destroyed, lost or stolen
Receipt, in lieu of and in substitution for such destroyed, lost, or stolen
Receipt, after the Holder thereof (i) has submitted to the Depositary a written
request for such exchange and substitution before the Depositary has notice
that the Receipt has been acquired by a bona fide purchaser, (ii) has provided
such security or indemnity (including an indemnity bond) as may be required by
the Depositary to save it and any of its agents harmless, and (iii) has
satisfied any other reasonable requirements imposed by the Depositary,
including, without limitation, the
17
provision of evidence satisfactory to the Depositary of such destruction, loss
or theft of such Receipt, the authenticity thereof and the Holder's ownership
thereof.
Section 2.10 Cancellation and Destruction of Surrendered Receipts;
Maintenance of Records. All Receipts surrendered to the Depositary shall be
canceled by the Depositary. Canceled Receipts shall not be entitled to any
benefits under this Deposit Agreement or be valid or enforceable against the
Depositary for any purpose. The Depositary is authorized to destroy Receipts so
canceled, provided the Depositary maintains a record of all destroyed Receipts.
ADSs held in book-entry form (i.e., through accounts at DTC) which are
surrendered for cancellation shall be deemed canceled when the Depositary
causes the number of ADSs evidenced by the Balance Certificate to be reduced by
the number of ADSs surrendered (without the need to physically destroy the
Balance Certificate).
Section 2.11 Partial Entitlement ADSs. In the event that any Eligible
Securities are deposited which entitle the holders thereof to receive a
per-Deposited Security distribution or other entitlement in an amount different
from the Deposited Securities then on deposit (the Deposited Securities then on
deposit collectively, "Full Entitlement Deposited Securities" and the Deposited
Securities with different entitlement collectively, "Partial Entitlement
Deposited Securities"), the Depositary shall (i) cause the Custodian to hold
Partial Entitlement Deposited Securities separate and distinct from Full
Entitlement Deposited Securities, and (ii) subject to the terms of this Deposit
Agreement, issue ADSs and deliver ADRs representing Partial Entitlement
Deposited Securities which are separate and distinct from the ADSs and ADRs
representing Full Entitlement Deposited Securities, by means of separate CUSIP
numbering and legending (if necessary) ("Partial Entitlement ADSs/ADRs" and
"Full Entitlement ADSs/ADRs", respectively). If and when the Company informs
the Depositary in writing that the Partial Entitlement Eligible Securities
become Full Entitlement Eligible Securities, the Depositary shall (a) give
notice thereof to Holders of Partial Entitlement ADSs and give Holders of
Partial Entitlement ADRs the opportunity to exchange such Partial Entitlement
ADRs for Full Entitlement ADRs, (b) cause the Custodian to transfer the Partial
Entitlement Deposited Securities into the account of the Full Entitlement
Deposited Securities, and (c) take such actions as are necessary to remove the
distinctions between (i) the Partial Entitlement ADRs and ADSs, on the one
hand, and (ii) the Full Entitlement ADRs and ADSs on the other. Holders and
Beneficial Owners of Partial Entitlement ADSs shall be entitled only to the
entitlements of Partial Entitlement Deposited Securities. Holders and
Beneficial Owners of Full Entitlement ADSs shall be entitled only to the
entitlements of Full Entitlement Deposited Securities. All provisions and
conditions of this Deposit Agreement shall apply to Partial Entitlement ADRs
and ADSs to the same extent as Full Entitlement ADRs and ADSs, except as
contemplated by this Section 2.11. The Depositary is authorized to take any and
all other actions as may be necessary (including, without limitation, making
the necessary notations on Receipts) to give effect to the terms of this
Section 2.11. The Company agrees to give timely written notice to the
Depositary if any Eligible Securities issued or to be issued are Partial
Entitlement Eligible Securities and shall assist the Depositary with the
establishment of procedures enabling the identification of Partial Entitlement
Eligible Securities upon Delivery to the Custodian.
Section 2.12 Temporary COP ADSs. In the event that, in determining the
rights and obligations of parties hereto with respect to any Temporary COP
ADSs, any conflict arises between (a) the terms of this Deposit Agreement
(other than this Section 2.12) and (b) the terms
18
of (i) the Temporary COP ADSs issued hereunder as set forth in this Section
2.12 or (ii) the applicable Temporary COP ADR, the terms and conditions set
forth in this Section 2.12 and the applicable Temporary COP ADR shall be
controlling and shall govern the rights and obligations of the parties to this
Deposit Agreement pertaining to the Certificates of Payment, the Temporary COP
ADSs and the Temporary COP ADRs.
Whenever the Company proposes to issue Certificates of Payment eligible
for deposit hereunder (in connection with the Offering or otherwise), the
Company shall timely notify the Depositary thereof and provide the Depositary
with written instructions to the effect that, inter alia, (i) the Certificates
of Payment have been or are to be issued pursuant to a bona fide purchase of
Shares from the Company, (ii) the Certificates of Payment are not, and shall
not be deemed to be upon their deposit, Restricted Securities (except as
contemplated in this Section 2.12 and in Section 2.14), (iii) the rights (if
any) to any distribution upon Deposited Securities to be made to Holders of
Temporary COP ADSs representing such Certificates of Payment upon the terms set
forth in Article IV hereof have been set forth in such instructions, and (iv)
the estimated date established by the Company upon which the Company shall
convert or cause to be converted the Certificates of Payment into Shares on its
records and on the records of the Eligible Securities Registrar has been set
forth in such instructions.
Subject always to the laws and regulations of the Republic of China, upon
deposit of Certificates of Payment hereunder and, except in the case of the
Offering, payment to the Depositary of the charges of the Depositary for
accepting a deposit, issuing ADSs and issuing and delivering Receipts (as set
forth in Section 5.9 and Exhibit B hereto), the Depositary shall (i) cause the
Custodian to hold such Certificates of Payment in an account separate and
distinct from the Shares, any series of Entitlement Certificates, any other
series of Certificates of Payment and any other Deposited Securities and (ii)
issue and deliver Temporary COP ADSs representing interests in the Certificates
of Payment so deposited. The Temporary COP ADSs so issued shall be identified
and treated separately and distinctly from any other ADSs representing
Deposited Securities hereunder by means, inter alia, of separate CUSIP
numbering and legending (if necessary). The Depositary may issue Temporary COP
ADSs in one or multiple series as the Depositary in its sole discretion deems
necessary and appropriate. No Temporary COP ADS shall be fungible with any
other ADSs issued hereunder.
The Depositary shall deliver Temporary COP ADSs in book-entry form only.
No certificated Temporary COP ADRs will be issued except for a "Balance
Certificate" evidencing all Temporary COP ADSs held in DTC, which shall be
substantially in the form of the Temporary COP ADR set forth in Exhibit A
hereto, except as may be necessary to identify and treat the Temporary COP ADSs
separate and distinct from any other ADSs issued under the terms of this
Deposit Agreement. The Depositary shall make arrangements for the acceptance of
such Temporary COP ADSs into DTC upon the terms set forth in Section 2.2(d)
hereof. The Temporary COP ADSs and the Temporary COP ADRs evidenced thereby are
identical to and confer all of the rights and obligations set forth herein
relating to Receipts and ADSs represented thereby except that (i) subject
always to the applicable laws and regulations of the Republic of China, Holders
of Temporary COP ADRs will not be permitted to withdraw interests in
Certificate of Payment upon surrender of the Temporary COP ADSs of any series,
(ii) Temporary COP ADRs shall bear separate CUSIP numbers that shall be
different from any CUSIP number that is or may be assigned to the other ADSs
issued hereunder, (iii) neither
19
Temporary COP ADSs nor interests in any Certificates of Payment shall be
eligible for any Pre-Cancellation Sale or Pre-Release Transactions described in
Section 5.10 hereof and (iv) in the event that the Company makes any
distributions upon Deposited Securities upon the terms of Article IV of this
Deposit Agreement, the Depositary shall make distributions to Holders of
Temporary COP ADSs on the basis of the distribution(s) received from the
Company in respect of the Certificates of Payment corresponding to the series
of Temporary COP ADSs held by such Holder.
The Company undertakes to make Shares available for exchange for
Certificates of Payment in the manner provided under the terms of the Offering,
as described in the Prospectus, as soon as possible (which at the date hereof
is expected to be approximately forty-five (45) days from the date of issuance
of the Certificates of Payment as reflected on the books of the Company and/or
the Eligible Securities Registrar). The Depositary shall thereupon surrender
any Certificates of Payment then eligible for exchange with the Company and the
Company shall deliver Shares to the Depositary in exchange therefor. Upon
receipt by the Depositary of Shares in exchange for Certificates of Payment,
Temporary COP ADSs representing such Certificates of Payment shall be eligible
for exchange into Share ADSs representing such Shares. Beneficial interests in
Temporary COP ADSs will be automatically exchanged for beneficial interests in
Share ADSs as follows: with no further action by Holders, the Depositary shall
instruct DTC to automatically transfer any position held by a DTC participant
under the CUSIP number assigned to the Temporary COP ADSs to the CUSIP number
assigned to the Share ADSs. Holders and Beneficial Owners of such Temporary COP
ADSs shall thereafter be Holders and Beneficial Owners of Share ADSs issued
hereunder and shall have all the rights and obligations set forth under this
Deposit Agreement and in the Receipts. The Depositary will charge no fee for
the cancellation of the Temporary COP ADSs and issuance of Share ADSs in
exchange therefor.
Notwithstanding anything in the Deposit Agreement to the contrary, the
Depositary shall have no obligation to any party to exchange Temporary COP ADSs
for Share ADSs as provided herein unless and until, upon delivery by the
Depositary of the related Certificates of Payment, the Company shall have
delivered Shares in respect thereof to the Depositary.
Section 2.13 Temporary EC ADSs. In the event that, in determining the
rights and obligations of parties hereto with respect to any Temporary EC ADSs,
any conflict arises between (a) the terms of this Deposit Agreement (other than
this Section 2.13) and (b) the terms of (i) this Section 2.13 or (ii) the
applicable Temporary EC ADR, the terms and conditions set forth in this Section
2.13 shall be controlling and shall govern the rights and obligations of the
parties to this Deposit Agreement pertaining to the Entitlement Certificates,
the Temporary EC ADSs and Temporary EC ADRs.
The Company shall timely notify the Depositary and provide the Depositary
with written instructions to the effect that, inter alia, (i) Entitlement
Certificates are to be issued upon a conversion or exchange of Bonds, (ii) the
Entitlement Certificates are not and shall not be deemed to be, upon their
deposit, Restricted Securities (except as contemplated in Section 2.14), (iii)
the description of the rights (if any) to any distribution upon Deposited
Securities to be made to Holders of Temporary EC ADSs representing such
Entitlement Certificates upon the terms set
20
forth in Article IV hereof have been set forth in such instructions, and (iv)
the estimated date established by the Company upon which the Company shall
convert or cause to be converted the Entitlement Certificates into Shares on
its records and on the records of the Eligible Securities Registrar has been
set forth in such instructions.
Subject always to the laws and regulations of the Republic of China, upon
deposit of Entitlement Certificates and payment to the Depositary of the
charges of the Depositary for accepting a deposit, issuing ADSs and issuing and
delivering Receipts (as set forth in Section 5.9 and Exhibit B hereto)
hereunder, the Depositary shall (i) cause the Custodian to hold such
Entitlement Certificates in an account separate and distinct from the Shares,
any series of Certificates of Payment, any other series of Entitlement
Certificates and any other Deposited Securities and (ii) issue and deliver
Temporary EC ADSs representing the Entitlement Certificates so deposited. EC
ADSs so issued shall be identified and treated separately and distinctly from
any other ADSs representing Deposited Securities hereunder by means, inter
alia, of separate CUSIP numbering and legending (if necessary). The Depositary
may issue Temporary EC ADSs in one or more series as the Depositary in its sole
discretion deems necessary and appropriate. No Temporary EC ADS shall be
fungible with any other ADSs issued hereunder.
The Depositary shall deliver Temporary EC ADSs in book-entry form only. No
certificated Temporary EC ADRs will be issued except for a "Balance
Certificate" evidencing all Temporary EC ADSs of the same series held in DTC,
which shall be substantially in the form of the Temporary EC ADR set forth in
Exhibit A hereto, except as may be necessary to identify and treat the
Temporary EC ADSs as separate and distinct from any other ADSs issued under the
terms of this Deposit Agreement. The Depositary shall make arrangements for the
acceptance of such Temporary EC ADSs into DTC upon the terms set forth in
Section 2.2(d) hereof. The Temporary EC ADSs and the Temporary EC ADRs shall be
identical to and confer all of the rights and obligations set forth herein
relating to Receipts and ADSs represented thereby except that (i) subject
always to the applicable laws and regulations of the Republic of China, Holders
of Temporary EC ADRs will only be entitled to receive Entitlement Certificates
of the applicable series held on deposit with the Custodian upon surrender of
the Temporary EC ADSs corresponding to such series for the purpose of
withdrawing the underlying Deposited Securities (whether for sale upon the
terms set forth in Section 2.7 hereof or otherwise), (ii) Temporary EC ADRs
shall bear separate CUSIP numbers that shall be different from any CUSIP number
that is or may be assigned to the other ADRs issued hereunder, (iii)Temporary
EC ADSs and Entitlement Certificates shall not be eligible for any
Pre-Cancellation Sale or Pre-Release Transactions described in Section 5.10
hereof and (iv) in the event that the Company makes any distributions upon
Deposited Securities upon the terms of Article IV of this Deposit Agreement,
the Depositary shall make distributions to the Holders of Temporary EC ADSs on
the basis of the distribution(s) received from the Company in respect of the
Entitlement Certificates corresponding to the series of Temporary EC ADSs held
by such Holder. In the event that the Company makes any distributions upon
Deposited Securities described in Article IV of this Deposit Agreement, the
Depositary shall (i) make the determinations contemplated in Article IV with
respect to Temporary EC ADSs independently from the determinations for ADSs
that are not Temporary EC ADSs and (ii) shall make distributions under Article
IV to Holders of Temporary EC ADSs only on the basis of the distributions
received from the Company in respect of the Entitlement Certificates
corresponding to the Temporary EC ADSs held by such Holders.
21
The Company undertakes to make Shares available for exchange for
Entitlement Certificates in the manner provided under the terms of the relevant
Bonds, as described in the relevant Trust Deed, as soon as possible after the
issuance of the Entitlement Certificates and to provide timely notice thereof
to the Depositary. The Depositary shall thereupon surrender any Entitlement
Certificates then eligible for exchange with the Company and the Company shall
deliver Shares to the Depositary in exchange therefor. Upon receipt by the
Depositary of Shares in exchange for Entitlement Certificates, Temporary EC
ADSs representing such Entitlement Certificates shall be automatically
exchanged for Share ADSs representing such Shares. Beneficial interests in
Temporary EC ADSs will be automatically exchanged for beneficial interests in
Share ADSs as follows: with no further action by Holders, the Depositary shall
instruct DTC to automatically transfer any position held by a DTC Participant
under the CUSIP number assigned to the Temporary EC ADSs to the CUSIP number
assigned to the Share ADSs. Holders and Beneficial Owners of such Temporary EC
ADSs shall thereafter be Holders and Beneficial Owners of Share ADSs issued
hereunder and shall have all the rights and obligations set forth under this
Deposit Agreement and in the Receipts. The Depositary will charge no fee for
the cancellation of the Temporary EC ADSs and issuance of Share ADSs in
exchange therefor.
Notwithstanding anything in this Deposit Agreement to the contrary, the
Depositary shall have no obligation to any party to exchange Temporary EC ADSs
for Share ADSs as provided herein unless and until, upon delivery by the
Depositary of the related Entitlement Certificates, the Company shall have
delivered Shares in respect thereof to the Depositary.
Section 2.14 Restricted ADSs. The Depositary shall, at the request and
expense of the Company (provided that the amount of any expenses to be borne by
the Company shall be subject to prior agreement by the Company and the
Depositary), establish procedures enabling the deposit hereunder of Shares that
are Restricted Securities in order to enable the holder of such Shares to hold
its ownership interests in such Restricted Shares in the form of ADSs issued
under the terms hereof (such Shares, "Restricted Shares"). Upon receipt of a
written request from the Company to accept Restricted Shares for deposit
hereunder, the Depositary agrees to establish procedures permitting the deposit
of such Restricted Shares and the issuance of ADSs representing such deposited
Restricted Shares (such ADSs, the "Restricted ADSs," and the ADRs evidencing
such Restricted ADSs, the "Restricted ADRs"). The Company shall assist the
Depositary in the establishment of such procedures and agrees that it shall
take all steps necessary and satisfactory to the Depositary to insure that the
establishment of such procedures does not violate the provisions of the
Securities Act or any other applicable laws. The depositors of such Restricted
Shares and the holders of the Restricted ADSs may be required prior to the
deposit of such Restricted Shares, the transfer of the Restricted ADRs and the
Restricted ADSs evidenced thereby or the withdrawal of the Restricted Shares
represented by Restricted ADSs to provide such written certifications or
agreements as the Depositary or the Company may require. The Company shall
provide to the Depositary in writing the legend(s) to be affixed to the
Restricted ADRs, which legends shall (i) be in a form reasonably satisfactory
to the Depositary and (ii) contain the specific circumstances under which the
Restricted ADRs and the Restricted ADSs represented thereby may be transferred
or the Restricted Shares withdrawn. The Restricted ADSs issued upon the deposit
of Restricted Shares shall be separately identified on the books of the
Depositary and the Restricted Shares so deposited shall be held separate and
22
distinct from the other Deposited Securities held hereunder. The Restricted
Shares and the Restricted ADSs shall not be eligible for Pre-Release
Transactions. The Restricted ADSs shall not be eligible for inclusion in any
book-entry settlement system, including, without limitation, DTC, and shall not
in any way be fungible with the ADSs issued under the terms hereof that are not
Restricted ADSs. The Restricted ADRs and the Restricted ADSs evidenced thereby
shall be transferable only by the Holder thereof upon delivery to the
Depositary of (i) all documentation otherwise contemplated by this Deposit
Agreement and (ii) an opinion of counsel, satisfactory to the Depositary,
setting forth, inter alia, the conditions upon which the Restricted ADR
presented is, and the Restricted ADSs evidenced thereby are, transferable by
the Holder thereof under applicable securities laws and the transfer
restrictions contained in the legend set forth on the Restricted ADR presented
for transfer. Except as set forth in this Section 2.14 and except as required
by applicable law, the Restricted ADRs and the Restricted ADSs evidenced
thereby shall be treated as ADRs and ADSs issued and outstanding under the
terms of the Deposit Agreement. In the event that, in determining the rights
and obligations of parties hereto with respect to any Restricted ADSs, any
conflict arises between (a) the terms of this Deposit Agreement (other than
this Section 2.14) and (b) the terms of (i) this Section 2.14 or (ii) the
applicable Restricted ADR, the terms and conditions set forth in this Section
2.14 and of the Restricted ADR shall be controlling and shall govern the rights
and obligations of the parties to this Deposit Agreement pertaining to the
deposited Restricted Shares, the Restricted ADSs and Restricted ADRs.
If the Restricted ADRs, the Restricted ADSs and the Restricted Shares are
no longer Restricted Securities, the Depositary, upon receipt of (x) an opinion
of counsel satisfactory to the Depositary, setting forth, inter alia, that the
Restricted ADRs, the Restricted ADSs and the Restricted Shares are not as of
such time Restricted Securities, and (y) instructions from the Company to
remove the restrictions applicable to the Restricted ADRs, the Restricted ADSs
and the Restricted Shares, shall (i) eliminate the distinctions and separations
between the applicable Restricted Shares held on deposit under this Section
2.14 and the other Shares held on deposit under the terms of the Deposit
Agreement that are not Restricted Shares, (ii) treat the newly unrestricted
ADRs and ADSs on the same terms as, and fully fungible with, the other ADRs and
ADSs issued and outstanding under the terms of the Deposit Agreement that are
not Restricted ADRs or Restricted ADSs, (iii) take all actions necessary to
remove any distinctions, limitations and restrictions previously existing under
this Section 2.14 between the applicable Restricted ADRs and Restricted ADSs,
respectively, on the one hand, and the other ADRs and ADSs that are not
Restricted ADRs or Restricted ADSs, respectively, on the other hand, including,
without limitation, by making the newly-unrestricted ADSs eligible for
Pre-Release Transactions and for inclusion in the applicable book-entry
settlement systems.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
AND BENEFICIAL OWNERS OF ADSs
Section 3.1 Proofs, Certificates and Other Information. Any person
presenting Eligible Securities for deposit, any Holder and any Beneficial Owner
may be required, and every Holder and Beneficial Owner agrees, from time to
time to provide to the Depositary and the Custodian such proof of citizenship
or residence, taxpayer status, payment of all applicable taxes
23
or other governmental charges, exchange control approvals and any other
applicable regulatory approval, legal or beneficial ownership of ADSs and
Deposited Securities, compliance with applicable laws, the terms of this
Deposit Agreement or the Receipt(s) evidencing the ADS(s) and the provisions
of, or governing, the Deposited Securities, to execute such certifications and
to make such representations and warranties, and to provide such other
information and documentation (or, in the case of Eligible Securities in
registered form presented for deposit, such information relating to the
registration on the books of the Company or of the Eligible Securities
Registrar) as the Depositary or the Custodian may reasonably deem necessary or
proper or as the Company may reasonably require by written request to the
Depositary consistent with its obligations under this Deposit Agreement, the
applicable Receipt(s) and applicable laws and regulations. The Depositary and
the Registrar, as applicable, may withhold the execution or delivery or
registration of transfer of any Receipt or the distribution or sale of any
dividend or distribution of rights or of the proceeds thereof or, to the extent
not limited by the terms of Section 7.8 hereof, the delivery of any Deposited
Securities until such proof or other information is filed or such
certifications are executed, or such representations are made, or such other
documentation or information provided, in each case to the Depositary's, the
Registrar's and the Company's satisfaction. The Depositary shall provide the
Company, in a timely manner, with copies or originals, if necessary and
appropriate, of (i) any such proofs of citizenship or residence, taxpayer
status, or exchange control approval which it receives from Holders and
Beneficial Owners, (ii) any other information or documents which the Company
may reasonably request and which the Depositary shall reasonably request and
receive from any Holder or Beneficial Owner or any person presenting Eligible
Securities for deposit or ADSs for cancellation, transfer or withdrawal, and
(iii) in the case of withdrawal of Eligible Securities, any information and
documents provided by Holders to the Depositary in accordance with Exhibit C to
this Deposit Agreement. Nothing herein shall obligate the Depositary to (i)
obtain any information for the Company if not provided by the Holders or
Beneficial Owners, or (ii) verify or vouch for the accuracy of the information
so provided by the Holders or Beneficial Owners.
Section 3.2 Liability for Taxes and Other Charges. If any tax or other
governmental charge shall become payable with respect to any ADR or any
Deposited Securities or ADSs, such tax or other governmental charge shall be
payable by the Holders and Beneficial Owners to the Depositary. The Company,
the Custodian and/or the Depositary may withhold or deduct from any
distributions made in respect of Deposited Securities and may sell for the
account of a Holder and/or Beneficial Owner any or all of the Deposited
Securities and apply such distributions and sale proceeds in payment of such
taxes or governmental charges (including applicable interest and penalties),
the Holder and the Beneficial Owner remaining liable for any deficiency. The
Custodian may refuse the deposit of Eligible Securities and the Depositary may
refuse to issue ADSs, to deliver ADRs, register the transfer, split-up or
combination of ADRs and (subject to Section 7.8) the withdrawal of Deposited
Securities until payment in full of such tax, charge, penalty or interest is
received. Every Holder and Beneficial Owner may be asked to indemnify the
Depositary, the Company, the Custodian, and any of their respective agents,
officers, employees and Affiliates for, and to hold each of them harmless from,
any claims with respect to taxes (including applicable interest and penalties
thereon) arising from any inaccuracy in the information provided by such Holder
and/or Beneficial Owner in connection with obtaining any tax benefit for such
Holder and/or Beneficial Owner.
Section 3.3 Representations and Warranties on Deposit of Eligible
Securities.
24
(a) Deposit of Shares. Each person depositing Shares under this Deposit
Agreement shall be deemed thereby to represent and warrant that (i) such Shares
and the certificates therefor are duly authorized, validly issued, fully paid,
non-assessable and legally obtained by such person, (ii) all preemptive (and
similar) rights, if any, with respect to such Shares have been validly waived
or exercised, (iii) the person making such deposit is duly authorized to make
such deposit, (iv) the Shares presented for deposit are free and clear of any
lien, encumbrance, security interest, charge, mortgage or adverse claim, and
are not, and the ADSs issuable upon such deposit will not be, Restricted
Securities (except as contemplated in Section 2.14) and (v) the Shares
presented for deposit have not been stripped of any rights or entitlements.
Such representations and warranties shall survive the deposit and withdrawal of
Shares, the issuance and cancellation of ADSs in respect thereof and the
transfer of such ADSs.
(b) Deposit of Certificates of Payment. Each person depositing
Certificates of Payment under this Deposit Agreement shall be deemed thereby to
represent and warrant that (i) such Certificates of Payment are duly
authorized, validly issued, fully paid, non-assessable and legally obtained by
such person, (ii) all preemptive (and similar) rights, if any, with respect to
such Certificates of Payment have been validly waived or exercised, (iii) the
person making such deposit is duly authorized to make such deposit, (iv) the
Certificates of Payment presented for deposit are free and clear of any lien,
encumbrance, security interest, charge, mortgage or adverse claim, and are not,
and the Temporary COP ADSs issuable upon such deposit will not be, Restricted
Securities (except as contemplated in Section 2.14) and (v) the Certificates of
Payment presented for deposit have not been stripped of any rights or
entitlements. Such representations and warranties shall survive the deposit of
Certificates of Payment, the issuance and cancellation of Temporary COP ADSs in
respect thereof and the transfer of such Temporary COP ADSs.
(c) Deposit of Entitlement Certificates. Each person depositing
Entitlement Certificates under this Deposit Agreement shall be deemed thereby
to represent and warrant that (i) such Entitlement Certificates are duly
authorized, validly issued, fully paid and legally obtained by such person,
(ii) all preemptive (and similar) rights, if any, with respect to such
Entitlement Certificates have been validly waived or exercised, (iii) the
person making such deposit is duly authorized to do so, (iv) the Entitlement
Certificates presented for deposit are free and clear of any lien, encumbrance,
security interest, charge, mortgage or adverse claim, and are not, and the
Temporary EC ADSs issuable upon such deposit will not be, Restricted Securities
and (v) the Entitlement Certificates presented for deposit have not been
stripped of any rights or entitlements. Such representations and warranties
shall survive the deposit of Entitlement Certificates, the issuance and
cancellation of Temporary EC ADSs in respect thereof and the transfer of such
Temporary EC ADSs.
If any such representations or warranties are false in any way, the
Company and the Depositary shall be authorized, at the cost and expense of the
person depositing Shares, Certificates of Payment or Entitlement Certificates,
to take any and all actions necessary to correct the consequences thereof.
Section 3.4 Compliance with Information Requests. Notwithstanding any
other provision of this Deposit Agreement or any Receipt(s), each Holder and
Beneficial Owner agrees to comply with requests from the Company pursuant to
applicable law, the rules and
25
requirements of the TSE, and any other stock exchange on which the Eligible
Securities or ADSs are, or will be, registered, traded or listed or the
Articles of Incorporation of the Company, which are made to provide
information, inter alia, as to the capacity in which such Holder or Beneficial
Owner owns ADSs (and Eligible Securities and Deposited Securities, as the case
may be) and regarding the identity of any other person(s) interested in such
ADSs and the nature of such interest and various other matters, whether or not
they are Holders and/or Beneficial Owners at the time of such request. The
Depositary agrees to use its reasonable efforts to forward, upon the request of
the Company and at the Company's expense, any such request from the Company to
the Holders and to forward to the Company any such responses to such requests
received by the Depositary.
Section 3.5 Ownership Restrictions. Notwithstanding any other provision in
this Deposit Agreement or any Receipt, the Company may restrict transfers of
the Shares, Eligible Securities or securities convertible into Shares where the
Company informs the Depositary that such transfer might result in ownership of
Shares exceeding limits imposed by applicable law, the SFC, the TSE or the
Articles of Incorporation of the Company. The Company may also restrict, in
such manner as it deems appropriate, transfers of the ADSs where such transfer
may result in the total number of Shares, Deposited Securities, or securities
convertible into Shares represented by the ADSs owned by a single Holder or
Beneficial Owner to exceed any such limits. The Company may, in its sole
discretion, but subject to applicable law, instruct the Depositary to take
action with respect to the ownership interest of any Holder or Beneficial Owner
in excess of the limits set forth in the preceding sentence, including, but not
limited to, the imposition of restrictions on the transfer of ADSs, the removal
or limitation of voting rights or the mandatory sale or disposition on behalf
of a Holder or Beneficial Owner of the Deposited Securities represented by the
ADSs held by such Holder or Beneficial Owner in excess of such limitations, if
and to the extent such disposition is permitted by applicable law and the
Articles of Incorporation of the Company.
ARTICLE IV
THE DEPOSITED SECURITIES
Section 4.1 Cash Distributions. Subject always to the laws and regulations
of the Republic of China (including, without limitation, the need to obtain
regulatory approvals (if any)), whenever the Depositary receives directly, or
receives confirmation from the Custodian of the receipt of, any cash dividend
or other cash distribution on any Deposited Securities, or receives proceeds
from the sale of any Deposited Securities or any entitlements held in respect
of Deposited Securities under the terms hereof, the Depositary will (i) subject
to compliance with the terms of Section 4.8, promptly convert or cause to be
converted such cash dividend, distribution or proceeds into Dollars, (ii) if
applicable, establish the ADS Record Date upon the terms described in Section
4.9, and (iii) distribute promptly the amount thus received (net of (a) the
applicable fees and charges of, and reasonable expenses incurred by, the
Depositary and (b) taxes withheld) to the Holders entitled thereto as of the
ADS Record Date in proportion to the number of ADSs held as of the ADS Record
Date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any Holder a fraction of one cent, and any
balance not so distributed shall be held by the Depositary (without liability
for interest thereon) and shall be added to and become part of the next sum
received by the Depositary for
26
distribution to Holders of ADSs outstanding at the time of the next
distribution. If the Company, the Custodian or the Depositary is required to
withhold and does withhold from any cash dividend or other cash distribution in
respect of any Deposited Securities an amount on account of taxes, duties or
other governmental charges, the amount distributed to Holders on the ADSs
representing such Deposited Securities shall be reduced accordingly. Such
withheld amounts shall be forwarded by the Company, the Custodian or the
Depositary to the relevant governmental authority. Evidence of payment thereof
by the Company shall be forwarded by the Company to the Depositary upon
request.
Section 4.2 Distribution in Eligible Securities. Subject always to the
laws and regulations of the Republic of China, if any distribution upon any
Deposited Securities consists of a dividend in, or free distribution of,
Eligible Securities, the Company shall cause such Eligible Securities to be
deposited with the Custodian and registered, as the case may be, in the name of
the Depositary, the Custodian or their respective nominees. Upon receipt of
confirmation of such deposit from the Custodian, the Depositary shall establish
the ADS Record Date upon the terms described in Section 4.9 and either (i) the
Depositary shall, subject to Section 5.9 hereof, distribute to the Holders as
of the ADS Record Date in proportion to the number of ADSs held as of the ADS
Record Date, additional ADSs (of the applicable series), which represent in the
aggregate the number of Eligible Securities received as such dividend, or free
distribution, subject, however, in each case, to the other terms of this
Deposit Agreement (including, without limitation, the limitations set forth in
Article II hereof and net of (a) the applicable fees and charges of, and
reasonable expenses incurred by, the Depositary and (b) taxes), or (ii) if
additional ADSs are not so distributed, each ADS issued and outstanding after
the ADS Record Date shall, to the extent permissible by law, thenceforth also
represent rights and interests in the additional integral number of Shares
distributed upon the Deposited Securities represented thereby (subject,
however, in each case, to the laws and regulations of the Republic of China and
net of (a) the applicable fees and charges of, and expenses incurred by, the
Depositary and (b) taxes). In lieu of delivering fractional ADSs, the
Depositary shall sell the number of Eligible Securities or ADSs, as the case
may be, represented by the aggregate of such fractions and distribute the net
proceeds upon the terms described in Section 4.1. In the event that the
Depositary determines that any distribution in property (including Eligible
Securities) is subject to any tax or other governmental charges which the
Depositary is obligated to withhold, or, if the Company in the fulfillment of
its obligation under Section 5.7 hereof, has furnished an opinion of U.S.
counsel determining that Eligible Securities must be registered under the
Securities Act or other laws in order to be distributed to Holders (and no such
registration statement has been declared effective), the Depositary may dispose
of all or a portion of such property (including Eligible Securities and rights
to subscribe therefor) in such amounts and in such manner, including by public
or private sale, as the Depositary deems necessary and practicable, and the
Depositary shall distribute the net proceeds of any such sale (after deduction
of such (a) taxes and (b) fees and charges of, and reasonable expenses incurred
by, the Depositary) to Holders entitled thereto upon the terms described in
Section 4.1. The Depositary shall hold and/or distribute any unsold balance of
such property in accordance with the provisions of this Deposit Agreement.
Section 4.3 Elective Distributions in Cash or Eligible Securities. Subject
always to the laws and regulations of the Republic of China, whenever the
Company intends to distribute a dividend payable at the election of the holders
of Eligible Securities in cash or in
27
additional Eligible Securities, the Company shall give timely notice thereof to
the Depositary prior to such proposed distribution stating whether or not it
wishes such elective distribution to be made available to Holders of ADSs. Upon
receipt of notice indicating that the Company wishes such elective distribution
to be made available to Holders of ADSs, the Depositary shall consult with the
Company to determine, and the Company shall assist the Depositary in its
determination, whether it is lawful and reasonably practicable to make such
elective distribution available to the Holders of ADSs. The Depositary shall
make such elective distribution available to Holders only if (i) the Depositary
shall have determined that such distribution is reasonably practicable and (ii)
the Depositary shall have received satisfactory documentation within the terms
of Section 5.7. If the above conditions are not satisfied, the Depositary
shall, to the extent permitted by law, distribute to the Holders, on the basis
of the same determination as is made in the Republic of China in respect of the
Deposited Securities for which no election is made, either (X) cash upon the
terms described in Section 4.1 or (Y) additional ADSs representing such
additional Eligible Securities upon the terms described in Section 4.2. If the
above conditions are satisfied, the Depositary shall establish an ADS Record
Date (on the terms described in Section 4.9) and establish procedures to enable
Holders to elect the receipt of the proposed dividend in cash or in additional
ADSs. The Company shall assist the Depositary in establishing such procedures
to the extent necessary. If a Holder elects to receive the proposed dividend
(X) in cash, the dividend shall be distributed upon the terms described in
Section 4.1, or (Y) in ADSs, the dividend shall be distributed upon the terms
described in Section 4.2. Nothing herein shall obligate the Depositary to make
available to Holders a method to receive the elective dividend in Eligible
Securities (rather than ADSs). There can be no assurance that Holders
generally, or any Holder in particular, will be given the opportunity to
receive elective distributions on the same terms and conditions as the holders
of Deposited Securities.
Section 4.4 Distribution of Rights to Purchase Additional ADSs.
(a) Distribution to ADS Holders. Subject always to the laws and
regulations of the Republic of China (including, without limitation the need to
obtain regulatory approvals (if any)), whenever the Company intends to
distribute to the holders of the Deposited Securities rights to subscribe for
Eligible Securities, the Company shall give timely notice thereof to the
Depositary prior to such proposed distribution stating whether or not it wishes
such rights to be made available to Holders of ADSs. If and whenever the
Company shall announce its intention to make any offer or invitation to the
holders of Eligible Securities to subscribe for or to acquire Eligible
Securities or other assets by way of rights, the Depositary shall as soon as
practicable thereafter give notice of the same to the Holders, including if
applicable, the last date for acceptance thereof and the manner by which and
the time during which Holders may instruct the Depositary to exercise such
rights. The Depositary shall make such rights available to Holders only if (i)
the Company shall have timely requested the Depositary to make such rights
available to Holders, (ii) the Depositary shall have received satisfactory
documentation within the terms of Section 5.7, and (iii) the Depositary shall
have determined that such distribution of rights is reasonably practicable. In
the event any of the conditions set forth above are not satisfied or if the
Company requests that the Depositary not make the rights available to Holders
of ADSs, the Depositary shall proceed with the sale of the rights as
contemplated in Section 4.4(b) below. In the event all conditions set forth
above are satisfied, the Depositary shall establish an ADS Record Date (upon
the terms described in Section 4.9) and establish procedures (x) to distribute
rights to purchase additional ADSs (by means of warrants or otherwise), (y) to
enable the
28
Holders to exercise such rights (upon payment of the subscription price and of
the applicable (a) fees and charges of, and reasonable expenses incurred by,
the Depositary and (b) taxes), and (z) to deliver ADSs upon the valid exercise
of such rights. The Company shall assist the Depositary to the extent necessary
in establishing such procedures. Nothing herein shall obligate the Depositary
to make available to the Holders a method to exercise rights to subscribe for
Eligible Securities (rather than ADSs).
(b) Sale of Rights. If (i) the Company does not timely request the
Depositary to make the rights available to Holders or requests that the rights
not be made available to Holders, (ii) the Depositary fails to receive
satisfactory documentation within the terms of Section 5.7 or determines that
it is not lawful or not reasonably practicable to make the rights available to
Holders, or (iii) any rights made available are not exercised and appear to be
about to lapse, the Depositary shall determine whether it is lawful and
reasonably practicable to sell such rights, in a riskless principal capacity,
at such place and upon such terms (including public or private sale) as it may
deem reasonably practicable. The Company shall assist the Depositary to the
extent necessary to determine such legality and practicability. The Depositary
shall, upon such sale, convert and distribute the proceeds of such sale (net of
applicable (a) fees and charges of, and reasonable expenses incurred by, the
Depositary and (b) taxes) upon the terms set forth in Section 4.1.
(c) Lapse of Rights. If the Depositary is unable to make any rights
available to Holders upon the terms described in Section 4.4(a) or to arrange
for the sale of the rights upon the terms described in Section 4.4(b), the
Depositary shall allow such rights to lapse.
The Depositary shall not be responsible for (i) any failure to determine
that it may be lawful or practicable to make such rights available to Holders
in general or any Holders in particular, (ii) any foreign exchange exposure or
loss incurred in connection with such sale, or exercise, or (iii) the content
of any materials forwarded to the Holders on behalf of the Company in
connection with the rights distribution.
Notwithstanding anything to the contrary in this Section 4.4, if
registration (under the Securities Act or any other applicable law) of the
rights or the securities to which any rights relate may be required in order
for the Company to offer such rights or such securities to Holders and to sell
the securities represented by such rights, the Depositary will not distribute
such rights to the Holders (i) unless and until a registration statement under
the Securities Act (or other applicable law) covering such offering is in
effect or (ii) unless the Company furnishes the Depositary opinion(s) of
counsel for the Company in the United States and counsel to the Company in any
other applicable country in which rights would be distributed, in each case
reasonably satisfactory to the Depositary, to the effect that the offering and
sale of such securities to Holders and Beneficial Owners are exempt from, or do
not require registration under, the provisions of the Securities Act or other
applicable securities laws.
In the event that the Company, the Depositary or the Custodian shall be
required to withhold and does withhold from any distribution of property
(including rights) an amount on account of taxes or other governmental charges,
the amount distributed to the Holders of ADSs representing such Deposited
Securities shall be reduced accordingly. In the event that the Depositary
determines that any distribution in property (including Eligible Securities and
rights
29
to subscribe therefor) is subject to any tax or other governmental charges
which the Depositary is obligated to withhold, the Depositary may dispose of
all or a portion of such property (including Eligible Securities and rights to
subscribe therefor) in such amounts and in such manner, including by public or
private sale, as the Depositary deems necessary and practicable to pay any such
taxes or charges.
There can be no assurance that Holders generally, or any Holder in
particular, will be given the opportunity to receive or exercise rights on the
same terms and conditions as the holders of Deposited Securities or be able to
exercise such rights. Nothing herein shall obligate the Company to file any
registration statement in respect of any rights or Eligible Securities or other
securities to be acquired upon the exercise of such rights.
Section 4.5 Distributions Other Than Cash, Eligible Securities or Rights
to Purchase Eligible Securities. (a) Subject always to the laws and regulations
of the Republic of China, whenever the Company intends to distribute to the
holders of Deposited Securities property other than cash, Eligible Securities
or rights to purchase additional Eligible Securities, the Company shall give
timely notice thereof to the Depositary and shall indicate whether or not it
wishes such distribution to be made to Holders of ADSs. Upon receipt of a
notice indicating that the Company wishes such distribution to be made to
Holders of ADSs, the Depositary shall consult with the Company, and the Company
shall assist the Depositary, to determine whether such distribution to Holders
is lawful and reasonably practicable. The Depositary shall not make such
distribution unless (i) the Company shall have requested the Depositary to make
such distribution to Holders, (ii) the Depositary shall have received
satisfactory documentation within the terms of Section 5.7, and (iii) the
Depositary shall have determined that such distribution is reasonably
practicable.
(b) Upon receipt of satisfactory documentation and the request of the
Company to distribute property to Holders of ADSs and after making the
requisite determinations set forth in (a) above, the Depositary shall
distribute the property so received to the Holders of record, as of the ADS
Record Date, in proportion to the respective number of ADSs held by them and in
such manner as the Depositary may deem practicable for accomplishing such
distribution (i) upon receipt of payment or net of the applicable fees and
charges of, and expenses incurred by, the Depositary, and (ii) net of any taxes
withheld. The Depositary may dispose of all or a portion of the property so
distributed and deposited, in such amounts and in such manner (including public
or private sale) as the Depositary may deem practicable or necessary to satisfy
any taxes (including applicable interest and penalties) or other governmental
charges applicable to the distribution.
(c) If (i) the Company does not request the Depositary to make such
distribution to Holders or requests the Depositary not to make such
distribution to Holders, (ii) the Depositary does not receive satisfactory
documentation within the terms of Section 5.7, or (iii) the Depositary
determines that all or a portion of such distribution is not reasonably
practicable, the Depositary shall sell or cause such property to be sold in a
public or private sale, at such place or places and upon such terms as it may
deem practicable and shall (i) cause the proceeds of such sale, if any, to be
converted into Dollars and (ii) distribute the proceeds of such conversion
received by the Depositary (net of applicable (a) fees and charges of, and
expenses incurred by, the Depositary and (b) taxes) to the Holders as of the
ADS Record Date upon the
30
terms of Section 4.1. If the Depositary is unable to sell such property, the
Depositary may dispose of such property in any way it deems reasonably
practicable under the circumstances.
Section 4.6 Intentionally Omitted
Section 4.7 Intentionally Omitted.
Section 4.8 Conversion of Foreign Currency. Subject to any restrictions
imposed by ROC law and regulations, whenever the Depositary or the Custodian
shall receive Foreign Currency, by way of dividends or other distributions or
the net proceeds from the sale of securities, property or rights, which in the
judgment of the Depositary can at such time be converted on a practicable
basis, by sale or in any other manner that it may determine in accordance with
applicable law, into Dollars transferable to the United States and
distributable to the Holders entitled thereto, the Depositary shall, subject to
the laws and regulations of the Republic of China, convert or cause to be
converted, by sale or in any other manner that it may determine, such Foreign
Currency into Dollars, and shall distribute such Dollars (net of any applicable
fees, any reasonable and customary expenses incurred in such conversion and any
expenses incurred on behalf of the Holders in complying with currency exchange
control or other governmental or regulatory requirements) in accordance with
the terms of the applicable sections of this Deposit Agreement. If the
Depositary shall have distributed warrants or other instruments that entitle
the holders thereof to such Dollars, the Depositary shall distribute such
Dollars to the holders of such warrants and/or instruments upon surrender
thereof for cancellation, in either case without liability for interest
thereon. Such distribution may be made upon an averaged or other practicable
basis without regard to any distinctions among Holders on account of any
application of exchange restrictions or otherwise.
If such conversion or distribution generally or with regard to a
particular Holder can be effected only with the approval or license of any
government or agency thereof, the Depositary shall have authority to file such
application for approval or license, if any, as it may deem desirable. In no
event, however, shall the Depositary be obligated to make such a filing.
If at any time the Depositary shall determine that in its judgment the
conversion of any Foreign Currency and the transfer and distribution of
proceeds of such conversion received by the Depositary is not practicable or
lawful, or if any approval or license of any governmental authority or agency
thereof that is required for such conversion, transfer and distribution is
denied or, in the opinion of the Depositary, not obtainable at a reasonable
cost or within a reasonable period, the Depositary may, in its discretion, (i)
make such conversion and distribution in Dollars to the Holders for whom such
conversion, transfer and distribution is lawful and practicable, (ii)
distribute the Foreign Currency (or an appropriate document evidencing the
right to receive such Foreign Currency) to Holders for whom this is lawful and
practicable or (iii) hold (or cause the Custodian to hold) such Foreign
Currency (without liability for interest thereon) for the respective accounts
of the Holders entitled to receive the same.
Section 4.9 Fixing of ADS Record Date. Whenever the Depositary shall
receive notice of the fixing of a record date by the Company for the
determination of holders of Deposited Securities entitled to receive any
distribution (whether in cash, Eligible Securities, rights, or other
entitlement distribution), or whenever for any reason the Depositary causes a
31
change in the number of Deposited Securities that are represented by each ADS,
or whenever the Depositary shall receive notice of any meeting of, or
solicitation of consents or of proxies, of holders of Deposited Securities, or
whenever the Depositary shall find it necessary or convenient in connection
with the giving of any notice, solicitation of any consent or any other matter,
the Depositary shall fix a record date (the "ADS Record Date") for the
determination of the Holders of Receipts who shall be entitled to receive such
distribution, to give instructions for the exercise of voting rights at any
such meeting, to give or withhold such consent, to receive such notice or
solicitation or to otherwise take action, or to exercise the rights of Holders
with respect to such changed number of Deposited Securities represented by each
ADS. The Depositary shall make reasonable efforts to establish the ADS Record
Date as closely as possible to the applicable record date for the Deposited
Securities (if any) set by the Company in the Republic of China. Subject to
applicable law and the provisions of Section 4.1 through 4.8 and to the other
terms and conditions of this Deposit Agreement, only the Holders of Receipts at
the close of business in New York on such ADS Record Date shall be entitled to
receive such distribution, to give such voting instructions, to receive such
notice or solicitation, or otherwise take action.
Section 4.10 Voting of Deposited Securities.
(a) Voting by Shareholders. The following is a summary of certain rights
of holders of Shares, interests in Certificate(s) of Payment and Entitlement
Certificate(s), if any, to vote at shareholders' meetings under ROC Company Law
and the Articles of Incorporation of the Company, in each case, as in effect on
the date hereof: (i) a holder of Shares (including holders of interests in any
Certificate of Payment evidencing the irrevocable right to receive Shares) is
entitled to one vote for each Share held, (ii) the election of directors and
supervisors takes place by means of cumulative voting, and (iii) a shareholder
must, as to all matters subject to a vote of shareholders (other than the
election of directors and supervisors), exercise the voting rights for all
Shares held by such shareholder in the same manner (e.g., a holder of 1,000
Shares cannot split his/her votes but must vote all 1,000 Shares in the same
manner except in the event of cumulative voting for an election of directors
and supervisors). Pursuant to ROC law, the voting rights attaching to the
Deposited Securities must be exercised by, or on behalf of, the Depositary's
nominee, as representative of the Holders and Beneficial Owners, collectively
in the same manner, except in the case of an election of directors and
supervisors, which currently should be on a cumulative basis. Deposited
Securities which have been withdrawn from the applicable ADS Facility and
timely transferred on the Company's register of shareholders to a person other
than the Depositary may be voted by the Registered Holder(s) (as hereinafter
defined) thereof directly, subject, in each case, to the limitations of ROC law
and the Articles of Incorporation of the Company. Holders may not receive
sufficient advance notice of shareholders' meetings to enable them to timely
withdraw the Deposited Securities and vote at such meetings and may not be able
to re-deposit the withdrawn securities under the terms of the Deposit
Agreement.
(b) Voting by ADS Holders. Holders of ADSs have no individual voting
rights with respect to the Deposited Securities represented by their ADSs. Each
Holder shall, by acceptance of ADSs or acquisition of any beneficial interest
therein, have authorized and directed the Depositary's nominee, without
liability, to appoint the Chairman of the Board of Directors of the Company (or
the Chairman's designate) (the "Voting Representative"), as representative of
the Depositary's nominee, who is registered in the ROC as representative of the
32
Holders and Beneficial Owners in respect of the Deposited Securities (the
"Registered Holder"), to vote the Shares or other Deposited Securities in
accordance with the terms hereof.
The Company agrees to use its best efforts to timely notify the Depositary
of any proposed shareholders' meeting and to provide to the Depositary in New
York, at least twenty-four (24) calendar days before any ordinary shareholders'
meeting or at least fourteen (14) calendar days prior to the date of any
extraordinary shareholders' meeting, a sufficient number of copies reasonably
requested by the Depositary of an English language translation of the Company's
notice of shareholders' meeting and the agenda of the materials to be voted on
(in the form the Company generally makes available to holders of Shares in the
ROC, including without limitation, a list of candidates proposed by the Company
for an election of directors or supervisors) (such materials collectively, the
"Shareholder Notice"). As soon as practicable after receipt by the Depositary
of the requisite number of Shareholder Notices, the Depositary shall establish
the ADS Record Date (upon the terms of Section 4.9 hereof) and shall, at the
Company's expense and provided that no U.S. legal prohibitions exist, deliver
to Holders as of the applicable ADS Record Date, (i) the Shareholder Notice,
(ii) a depositary notice setting forth the manner in which Holders of ADSs may
instruct the Depositary to cause the Deposited Securities represented by their
ADSs to be voted under the terms of this Deposit Agreement, including a
description of the Management Instruction (as defined below), together with a
form of voting instructions and/or other means to provide voting instructions
(the depositary notice and the related materials prepared by the Depositary
collectively, the "Depositary Notice"). The Depositary is under no obligation
to mail the Shareholder Notice and the Depositary Notice to Holders if the
Company has failed to provide to the Depositary in New York the requisite
number of Shareholder Notices at least twenty-four (24) calendar days prior to
the date of any ordinary shareholders' meeting or at least fourteen (14)
calendar days prior to the date of any extraordinary shareholders' meeting. If
the Depositary has not delivered the Shareholder Notice or Depositary Notice to
Holders, it will endeavor to cause all Deposited Securities represented by ADRs
to be present at the relevant shareholders' meeting insofar as practicable and
permitted under applicable law but will not cause the Shares or other Deposited
Securities to be voted; provided, however, that the Depositary may determine,
in its sole discretion, to send such Shareholder Notice and Depositary Notice
to Holders and/or cause the Shares or other Deposited Securities to be voted as
it deems appropriate. There can be no assurance that Holders generally or any
Holder in particular will receive Shareholder Notices and Depositary Notices
with sufficient time to enable the return of voting instructions to the
Depositary in a timely manner.
Notwithstanding anything else contained in this Deposit Agreement, the
Depositary shall not have any obligation to take any action with respect to any
meeting, or solicitation of consents or proxies or instructions, of holders of
Shares or other Deposited Securities if the taking of such action would violate
U.S. laws.
(c) Voting of Deposited Securities Upon ADS Holders' Instructions. If
Holders of ADSs together holding at least 51% of all the ADSs (including
Temporary ADSs) outstanding as of the relevant ADS Record Date shall instruct
the Depositary, prior to the date established for such purpose by the
Depositary, to vote in the same manner in respect of one or more resolutions to
be proposed at a shareholders' meeting (including resolutions for the election
of directors and/or supervisors), the Depositary shall notify the Voting
Representative as the representative of the Registered Holder to attend such
shareholders' meeting and vote all
33
Deposited Securities evidenced by ADSs then outstanding as of the ADS Record
Date (including Temporary ADSs) in the manner so instructed by such Holders. If
voting instructions are received by the Depositary on or before the date
established by the Depositary for the receipt of such instructions from any
Holder as of the ADS Record Date, which are signed but without further
indication as to voting instructions, the Depositary shall deem such Holder to
have instructed a vote in favor of the items set forth in such instructions.
The Depositary and Custodian shall not have any obligation to monitor, and
shall not incur any liability for, the actions, or the failure to act, of the
Voting Representative (or his/her designate) as representative of the
Registered Holder.
(d) Depositary Authorization. If, for any reason (other than a failure by
the Company to supply the requisite number of Shareholder Notices to the
Depositary within the requisite time period provided in this Section 4.10), the
Depositary has not, prior to the date established for such purpose by the
Depositary, received instructions from Holders together holding at least 51% of
all ADSs (including Temporary ADSs) outstanding at the relevant ADS Record
Date, to vote in the same manner in respect of any resolution (including
resolutions for the election of directors and/or supervisors), then, subject to
the following paragraph, the Holders shall be deemed to have authorized and
directed the Depositary's nominee to authorize (the "Depositary Authorization")
the Voting Representative, as the representative of the Registered Holder, to
attend and vote at such meeting all the Deposited Securities represented by
ADSs then outstanding (including Temporary ADSs) in his or her discretion. In
such circumstances, the Voting Representative shall be free to exercise the
votes attaching to the Deposited Securities in any manner she/he wishes, which
may not be in the interests of the Holders.
The Depositary's Authorization, provided in the manner and under the
circumstances described in the preceding paragraph, shall be subject to the
receipt by the Depositary prior to each shareholders' meeting of an opinion of
ROC counsel of the Company addressed to, and in form and substance satisfactory
to, the Depositary to the effect that under ROC law (i) the arrangements
relating to the Depositary Authorization are permissible, and (ii) the
Depositary will not be deemed to be authorized to exercise any discretion when
causing the voting in accordance with this Section 4.10 and will not (in the
absence of negligence, bad faith or breach of contract, and subject to general
principles of agency) be subject to any liability under ROC law for losses
arising from the exercise of the voting arrangements set out in Section 4.10 on
the grounds that voting in accordance with Section 4.10 is in violation of ROC
law. In the event the Depositary does not receive such opinion, the Depositary
will not grant the Depositary Authorization, but will cause the Deposited
Securities to be present at the shareholders' meeting to the extent practicable
and permitted by applicable law and will not cause the Deposited Securities to
be voted.
The Depositary shall not, and the Depositary shall ensure that the
Custodian and its nominees do not, vote or attempt to exercise the right to
vote that attaches to the Shares or other Deposited Securities, other than in
accordance with instructions given in accordance with this Section 4.10. The
terms of this Section 4.10 may be amended from time to time in accordance with
the terms of this Deposit Agreement. By continuing to hold ADSs after the
effective time of such amendment, all Holders and Beneficial Owners shall be
deemed to have agreed to the terms of this Section 4.10 as so amended.
34
Section 4.11 Changes Affecting Deposited Securities. Upon any change in
nominal or par value, split-up, cancellation, consolidation or any other
reclassification of Deposited Securities, or upon any recapitalization,
reorganization, merger or consolidation or sale of assets affecting the Company
or to which it is a party, any securities which shall be received by the
Depositary or the Custodian in exchange for, or in conversion of or replacement
of or otherwise in respect of, such Deposited Securities shall, to the extent
permitted by law, be substituted for and treated as Deposited Securities under
this Deposit Agreement, and the Receipts shall, subject to the provisions of
this Deposit Agreement and applicable law, evidence ADSs representing the right
to receive such additional or replacement securities, as applicable. The
Depositary may, with the Company's approval, and shall, if the Company shall so
request, subject to the terms of the Deposit Agreement and receipt by the
Depositary of (a) a written opinion of U.S. counsel (reasonably satisfactory to
the Depositary) stating whether or not: (1) such exchange, conversion or
replacement requires registration of such securities under the Securities Act
and/or Exchange Act or (2) such exchange, conversion or replacement of such
securities as then contemplated is exempt from the registration requirements of
the Securities Act and/or Exchange Act and (b) a written opinion of ROC counsel
(reasonably satisfactory to the Depositary) stating that (1) such exchange,
conversion or replacement does not violate the laws or regulations of the
Republic of China and (2) all requisite regulatory consents and approvals
relating to such exchange, conversion or replacement have been obtained in the
Republic of China, execute and deliver additional Receipts as in the case of a
dividend of Eligible Securities, or call for the surrender of outstanding
Receipts to be exchanged for new Receipts, in either case, as well as in the
event of newly deposited Shares, with necessary modifications to the form of
Receipt contained in Exhibit A hereto, specifically describing such new
Deposited Securities or corporate change. The Company agrees to, jointly with
the Depositary, amend the Registration Statement on Form F-6 as filed with the
Commission to permit the issuance of such new form of Receipts if necessary and
permissible. Notwithstanding the foregoing, in the event that any security so
received may not be lawfully distributed to some or all Holders, the Depositary
may, with the Company's approval, and shall, if the Company requests, subject
to receipt of an opinion of the Company's counsel, satisfactory to the
Depositary, that such action is not in violation of any applicable laws or
regulations, sell such securities at public or private sale, at such place or
places and upon such terms as it may deem proper and may allocate the net
proceeds of such sales (net of (a) fees and charges of, and reasonable expenses
incurred by, the Depositary and (b) taxes) for the account of the Holders
otherwise entitled to such securities upon an averaged or other practicable
basis without regard to any distinctions among such Holders and distribute the
net proceeds so allocated to the extent practicable as in the case of a
distribution received in cash pursuant to Section 4.1. The Depositary shall not
be responsible for (i) any failure to determine that it may be lawful or
feasible to make such securities available to Holders in general or to any
Holder in particular, (ii) any foreign exchange exposure or loss incurred in
connection with such sale, or (iii) any liability to the purchaser of such
securities.
Section 4.12 Available Information. The Company is subject to the periodic
reporting requirements of the Exchange Act and accordingly files certain
information with the Commission. These reports and documents can be inspected
and copied at the public reference facilities maintained by the Commission
located at Judiciary Plaza, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇.
35
Section 4.13 Reports. The Depositary shall make available for inspection
by Holders at its Principal Office any reports and communications, including
any proxy soliciting materials, received from the Company which are both (a)
received by the Depositary, the Custodian, or the nominee of either of them, as
the holder of the Deposited Securities and (b) made generally available to the
holders of such Deposited Securities by the Company. The Depositary shall also
mail to Holders copies of such reports when furnished by the Company pursuant
to Section 5.6.
Section 4.14 List of Holders. The Depositary shall, on the fifth day of
each month, provide the Company with the information regarding the aggregate
number of outstanding ADSs as of the end of each preceding month and such other
information as may be required under the applicable laws and regulations of the
Republic of China and is available to the Depositary or obtained from Holders.
In addition, promptly upon written request by the Company, the Depositary shall
furnish to the Company a list, as of a recent date, of the names, addresses and
holdings of ADSs of all Holders.
Section 4.15 Taxation. The Depositary will, and will instruct the
Custodian to, forward to the Company or the Company's agents such information
from the Depositary's records as the Company may reasonably request to enable
the Company or the Company's agents to file the necessary tax reports with
governmental authorities or agencies. The Depositary, the Custodian or the
Company and its agents may, but shall not be obligated to, file such reports as
are necessary to reduce or eliminate applicable taxes on dividends and on other
distributions in respect of Deposited Securities under applicable tax treaties
or laws for the Holders and Beneficial Owners. In accordance with instructions
from the Company and to the extent practicable, the Depositary or the Custodian
will take reasonable administrative actions to obtain tax refunds, reduced
withholding of tax at source on dividends and other benefits under applicable
tax treaties or laws with respect to dividends and other distributions on the
Deposited Securities. As a condition to receiving such benefits, Holders and
Beneficial Owners of ADSs may be required from time to time, and in a timely
manner, to file such proof of taxpayer status, residence and beneficial
ownership (as applicable), to execute such certificates and to make such
representations and warranties, or to provide any other information or
documents, as the Depositary or the Custodian may deem necessary or proper to
fulfill the Depositary's or the Custodian's obligations under applicable law.
The Holders and Beneficial Owners may be asked to indemnify the Depositary, the
Company, the Custodian and any of their respective directors, employees, agents
and Affiliates against, and hold each of them harmless from, any claims by any
governmental authority with respect to taxes, additions to tax, penalties or
interest arising out of the inaccuracy of any information provided by such
Holder and/or Beneficial Owner in order to obtain any refund of taxes, reduced
rate of withholding at source or other tax benefit on behalf of such Holder
and/or Beneficial Owner.
If the Company (or any of its agents) withholds from any distribution any
amount on account of taxes or governmental charges, or pays any other tax in
respect of such distribution (i.e., stamp duty tax, capital gains or other
similar tax), the Company shall (and shall cause such agent to) remit as soon
as practicable to the Depositary information about such taxes or governmental
charges withheld or paid, and, if so requested, the tax receipt (or other proof
of payment to the applicable governmental authority) therefor, in each case, in
a form reasonably satisfactory to the Depositary. The Depositary shall, to the
extent required by U.S. law, report to
36
Holders any taxes withheld by it or the Custodian, and, if such information is
provided to it by the Company, any taxes withheld by the Company. The
Depositary and the Custodian shall not be required to provide the Holders with
any evidence of the remittance by the Company (or its agents) of any taxes
withheld, or of the payment of taxes by the Company, except to the extent the
evidence is provided by the Company to the Depositary.
The Depositary is under no obligation to provide the Holders and
Beneficial Owners with any information about the tax status of the Company. The
Depositary shall not incur any liability for any tax consequences that may be
incurred by Holders and Beneficial Owners on account of their ownership of the
ADSs, including without limitation, tax consequences resulting from the Company
(or any of its subsidiaries) being treated as a "Foreign Personal Holding
Company," or as a "Passive Foreign Investment Company" (in each case as defined
in the U.S. Internal Revenue Code and the regulations issued thereunder) or
otherwise.
ARTICLE V
THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY
Section 5.1 Maintenance of Office and Transfer Books by the Registrar.
Until termination of this Deposit Agreement in accordance with its terms, the
Registrar shall maintain in the Borough of Manhattan, the City of New York, an
office and facilities for the execution and delivery, registration of
issuances, registration of transfers, combination and split-up of Receipts, and
the surrender of Receipts for the purpose of withdrawal of Deposited Securities
in accordance with the provisions of this Deposit Agreement.
The Registrar shall keep books for the registration of issuances and
transfers of Receipts which at all reasonable times shall be open for
inspection by the Company and by the Holders of such Receipts, provided that
such inspection shall not be, to the Registrar's knowledge, for the purpose of
communicating with Holders of such Receipts in the interest of a business or
object other than the business of the Company or other than a matter related to
this Deposit Agreement or the Receipts.
The Registrar may close the transfer books with respect to the Receipts,
at any time or from time to time, when deemed necessary or advisable by it in
good faith in connection with the performance of its duties hereunder, or at
the reasonable written request of the Company, subject, in all cases, to
Section 7.8 hereof.
If any Receipts or the ADSs evidenced thereby are listed on one or more
stock exchanges or automated quotation systems in the United States, the
Depositary shall act as Registrar or appoint a Registrar or one or more
co-registrars for registration of Receipts and transfers, combinations and
split-ups, and to countersign such Receipts in accordance with any requirements
of such exchanges or systems. Such Registrar or co-registrars may be removed
and a substitute or substitutes appointed by the Depositary.
Section 5.2 Exoneration. Neither the Depositary nor the Company shall be
obligated to do or perform any act which is inconsistent with the provisions of
this Deposit Agreement or incur any liability (i) if the Depositary or the
Company shall be prevented or
37
forbidden from, or delayed in, doing or performing any act or thing required by
the terms of this Deposit Agreement, by reason of any provision of any present
or future law or regulation of the United States, the Republic of China or any
other country, or of any other governmental authority or regulatory authority
or stock exchange, or on account of the possible criminal or civil penalties or
restraint, or by reason of any provision, present or future of the Articles of
Incorporation of the Company or any provision of or governing any Deposited
Securities, or by reason of any act of God, terrorism or war or other
circumstances beyond its control (including, without limitation,
nationalization, expropriation, currency restrictions, work stoppage, strikes,
civil unrest, revolutions, rebellions, explosions and computer failure), (ii)
by reason of any exercise of, or failure to exercise, any discretion provided
for in this Deposit Agreement or in the Articles of Incorporation of the
Company or provisions of or governing Deposited Securities, (iii) for any
action or inaction in reliance upon the advice or information from legal
counsel, accountants, any person presenting Shares for deposit, any Holder, any
Beneficial Owner or authorized representative thereof, or any other person
believed by it in good faith to be competent to give such advice or
information, (iv) for the inability by a Holder or Beneficial Owner to benefit
from any distribution, offering, right or other benefit which is made available
to holders of Deposited Securities but is not, under the terms of this Deposit
Agreement, made available to Holders of ADSs or (v) for any consequential or
punitive damages for any breach of the terms of this Deposit Agreement.
The Depositary, its controlling persons, its agents, any Custodian and the
Company, its controlling persons and its agents may rely and shall be protected
in acting upon any written notice, request or other document believed by it to
be genuine and to have been signed or presented by the proper party or parties.
No disclaimer of liability under the Securities Act is intended by any
provision of this Deposit Agreement.
Section 5.3 Standard of Care. The Company and its agents assume no
obligation and shall not be subject to any liability under this Deposit
Agreement or the Receipts to Holders or Beneficial Owners or other persons,
except that the Company and its agents agree to perform their obligations
specifically set forth in this Deposit Agreement without negligence or bad
faith.
The Depositary and its agents assume no obligation and shall not be
subject to any liability under this Deposit Agreement or the Receipts to
Holders or Beneficial Owners or other persons, except that the Depositary and
its agents agree to perform their obligations specifically set forth in this
Deposit Agreement without negligence or bad faith.
Without limitation of the foregoing, neither the Depositary, nor the
Company, nor any of their respective controlling persons, or agents, shall be
under any obligation to appear in, prosecute or defend any action, suit or
other proceeding in respect of any Deposited Securities or in respect of the
Receipts, which in its opinion may involve it in expense or liability, unless
indemnity satisfactory to it against all expense (including reasonable fees and
disbursements of counsel) and liability be furnished as often as may be
required (and no Custodian shall be under any obligation whatsoever with
respect to such proceedings, the responsibility of the Custodian being solely
to the Depositary).
38
The Depositary and its agents shall not be liable for any failure to carry
out any instructions to vote any of the Deposited Securities, or for the manner
in which any vote is cast or the effect of any vote, provided that any such
action or omission is in good faith and without negligence and in accordance
with the terms of this Deposit Agreement. Provided that the Depositary acts or
omits to act in good faith and without negligence, the Depositary shall not
incur any liability for any failure to determine that any distribution or
action may be lawful or reasonably practicable, for the content of any
information submitted to it by the Company for distribution to the Holders or
for any inaccuracy of any translation thereof, for any investment risk
associated with acquiring an interest in the Deposited Securities, for the
validity or worth of the Deposited Securities or for any tax consequences that
may result from the ownership of ADSs, Shares or Deposited Securities, for the
credit-worthiness of any third party, for allowing any rights to lapse upon the
terms of this Deposit Agreement or for the failure or timeliness of any notice
from the Company. Nothing in this Deposit Agreement shall cause the Depositary
or any of its agents to incur any liability as a result of any action or
failure to act by any trustee under a Trust Deed governing Bonds.
Section 5.4 Resignation and Removal of the Depositary; Appointment of
Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by written notice of resignation delivered to the Company, such
resignation to be effective on the earlier of (i) the 60th day after delivery
thereof to the Company (whereupon the Depositary shall be entitled to take the
actions contemplated in Section 6.2 hereof), or (ii) the appointment by the
Company of a successor depositary and its acceptance of such appointment as
hereinafter provided.
The Depositary may at any time be removed by the Company by written notice
of such removal, which removal shall be effective on the earlier of (i) the
60th day after delivery thereof to the Depositary (whereupon the Depositary
shall be entitled to take the actions contemplated in Section 6.2 hereof), or
(ii) upon the appointment by the Company of a successor depositary and its
acceptance of such appointment as hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall use its best efforts to appoint a successor
depositary, which shall be a bank or trust company having an office in the
Borough of Manhattan, the City of New York. Every successor depositary shall be
required by the Company to execute and deliver to its predecessor and to the
Company an instrument in writing accepting its appointment hereunder, and
thereupon such successor depositary, without any further act or deed (except as
required by applicable law), shall become fully vested with all the rights,
powers, duties and obligations of its immediate predecessor (other than as
contemplated in Sections 5.8 and 5.9). The immediate predecessor depositary,
upon payment of all sums due to it and on the written request of the Company,
shall (i) execute and deliver an instrument transferring to such successor all
rights and powers of such predecessor hereunder (other than as contemplated in
Sections 5.8 and 5.9), (ii) duly assign, transfer and deliver all right, title
and interest to the Deposited Securities to such successor, and (iii) deliver
to such successor a list of the Holders of all outstanding Receipts and such
other information relating to Receipts and Holders thereof as the successor may
reasonably request. Any such successor depositary shall promptly provide notice
of its appointment to such Holders.
39
Any corporation into or with which the Depositary may be merged or
consolidated shall be the successor of the Depositary without the execution or
filing of any document or any further act.
Section 5.5 The Custodian. The Depositary has initially appointed
Citibank, N.A., (Taipei) as Custodian for the purpose of this Deposit
Agreement. The Custodian or its successors in acting hereunder shall be subject
at all times and in all respects to the direction of the Depositary for the
Deposited Securities for which the Custodian acts as custodian and shall be
responsible solely to it. If any Custodian resigns or is discharged from its
duties hereunder with respect to any Deposited Securities and no other
Custodian has previously been appointed hereunder, the Depositary shall
promptly appoint a substitute qualified custodian that is organized under the
laws of the Republic of China. The Depositary shall require such resigning or
discharged Custodian to deliver the Deposited Securities held by it, together
with all such records maintained by it as Custodian with respect to such
Deposited Securities as the Depositary may request, to the substitute custodian
designated by the Depositary. Whenever the Depositary determines, in its
discretion, that it is appropriate to do so, it may appoint an additional
custodian with respect to any Deposited Securities, or discharge the Custodian
with respect to any Deposited Securities and appoint a substitute custodian,
which shall thereafter be Custodian hereunder with respect to the Deposited
Securities. Immediately upon any such change, the Depositary shall give notice
thereof in writing to all Holders of Receipts, each other Custodian and the
Company.
Upon the appointment of any successor depositary, any Custodian then
acting hereunder shall, unless otherwise instructed by the Depositary, continue
to be the Custodian of the Deposited Securities without any further act or
writing, and shall be subject to the direction of the successor depositary. The
successor depositary so appointed shall, nevertheless, on the written request
of any Custodian, execute and deliver to such Custodian all such instruments as
may be proper to give to such Custodian full and complete power and authority
to act on the direction of such successor depositary.
Section 5.6 Notices and Reports. On or before the first date on which the
Company gives notice, by publication or otherwise, of any meeting of holders of
Deposited Securities, or of any adjourned meeting of such holders, or of the
taking of any action by such holders other than at a meeting, or of the taking
of any action in respect of any cash or other distributions or the offering of
any rights in respect of Deposited Securities, the Company shall transmit to
the Depositary and the Custodian a copy of the notice thereof in the English
language but otherwise in the form given or to be given to holders of Deposited
Securities. The Company shall also furnish to the Custodian and the Depositary
a summary, in English, of any applicable provisions or proposed provisions of
the Articles of Incorporation of the Company that may be relevant or pertain to
such notice of meeting or be the subject of a vote thereat. The Depositary
shall arrange, at the request of the Company and at the Company's expense, for
the mailing of copies thereof to all Holders or make such notices, reports and
other communications available to all Holders on a basis similar to that for
holders of Deposited Securities or on such other basis as the Company may
advise the Depositary or as may be required by any applicable law, regulation
or stock exchange requirement. The Company has delivered to the Depositary and
the Custodian a copy of the Company's Articles of Incorporation along with the
provisions of or governing the Deposited Securities, and promptly upon any
amendment thereto or change
40
therein, the Company shall deliver to the Depositary and the Custodian a copy
of such amendment thereto or change therein. The Depositary may rely upon such
copy for all purposes of this Deposit Agreement.
The Depositary will, at the expense of the Company, make available a copy
of any such notices, reports or communications issued by the Company and
delivered to the Depositary for inspection by the Holders of the Receipts
evidencing the ADSs governed by such provisions at the Depositary's Principal
Office, at the office of the Custodian and at any other designated transfer
office.
Section 5.7 Issuance of Additional Shares, ADSs, etc. The Company agrees
that in the event it or any of its Affiliates (to the extent applicable)
proposes (i) an issuance, sale or distribution of additional Shares, (ii) an
offering of rights to subscribe for Eligible Securities, (iii) an issuance of
securities convertible into or exchangeable for Eligible Securities, (iv) an
issuance of rights to subscribe for securities convertible into or exchangeable
for Eligible Securities, (v) an elective dividend of cash or Eligible
Securities, (vi) a redemption of Deposited Securities, (vii) a meeting of
holders of Deposited Securities, or solicitation of consents or proxies,
relating to any reclassification of securities, merger or consolidation or
transfer of assets, or (viii) any reclassification, recapitalization,
reorganization, merger, consolidation or sale of assets which affects the
Deposited Securities, it will obtain U.S. legal advice and take all steps
necessary to ensure that the application of the proposed transaction to Holders
and Beneficial Owners does not violate the registration provisions of the
Securities Act, or any other applicable U.S. securities laws (including,
without limitation, the Investment Company Act of 1940, as amended, or the
Exchange Act). In support of the foregoing, the Company will furnish to the
Depositary (a) a written opinion of U.S. counsel (reasonably satisfactory to
the Depositary) stating whether or not application of such transaction to
Holders and Beneficial Owners (1) requires a registration statement under the
Securities Act to be in effect or (2) is exempt from the registration
requirements of the Securities Act and (b) an opinion of ROC counsel stating
that (1) making the transaction available to Holders and Beneficial Owners does
not violate the laws or regulations of the Republic of China and (2) all
requisite regulatory consents and approvals have been obtained in the Republic
of China. If the filing of a registration statement is required, the Depositary
shall not have any obligation to proceed with the transaction unless it shall
have received evidence reasonably satisfactory to it that such registration
statement has been declared effective. If, being advised by counsel, the
Company determines that a transaction is required to be registered under the
Securities Act, the Company will either (i) register such transaction to the
extent necessary, (ii) alter the terms of the transaction to avoid the
registration requirements of the Securities Act or (iii) direct the Depositary
to take specific measures, in each case as contemplated in this Deposit
Agreement, to prevent such transaction from violating the registration
requirements of the Securities Act. The Company agrees with the Depositary that
neither the Company nor any of its Affiliates will at any time (i) deposit any
Eligible Securities, either upon original issuance or upon a sale of Eligible
Securities previously issued and reacquired by the Company or by any such
Affiliate, or (ii) issue additional Eligible Securities, rights to subscribe
for such Eligible Securities, securities convertible into or exchangeable for
Eligible Securities or rights to subscribe for such securities, unless such
transaction and the securities issuable in such transaction are exempt from
registration under the Securities Act and, if applicable, the Exchange Act or
have been registered under the Securities Act and, if applicable, the Exchange
Act (and such registration statement has been declared effective).
41
Notwithstanding anything else contained in this Deposit Agreement, nothing
in this Deposit Agreement shall be deemed to obligate the Company to file any
registration statement in respect of any proposed transaction.
Section 5.8 Indemnification. The Company agrees to indemnify the
Depositary, the Custodian and any of their respective directors, employees,
agents and Affiliates against, and hold each of them harmless from, any direct
loss, liability, tax, charge or expense of any kind whatsoever (including, but
not limited to, the reasonable fees and expenses of counsel) incurred by them
that may arise (a) out of or in connection with any offer, issuance, sale,
resale, transfer, deposit or withdrawal of Receipts, ADSs, Eligible Securities
or other Deposited Securities, as the case may be, or as a result of any
offering documents in respect thereof or (b) out of acts performed or omitted,
including but not limited to any delivery by the Depositary on behalf of the
Company of information regarding the Company, in connection with this Deposit
Agreement, the Receipts, the ADSs, the Eligible Securities or any Deposited
Securities, as the same may be amended, modified or supplemented from time to
time, in any such case (i) by the Depositary, the Custodian or any of their
respective directors, employees, agents and Affiliates, except to the extent
such loss, liability, tax, charge or expense is due to negligence or bad faith
of any of them, or (ii) by the Company or any of its directors, employees,
agents and Affiliates.
The Depositary agrees to indemnify the Company and its directors,
employees, agents and Affiliates against, and hold them harmless from, any
direct loss, liability, tax, charge or expense of any kind whatsoever
(including, without limitation, reasonable fees and expenses of counsel)
incurred by them which may arise out of acts performed or omitted by the
Depositary under the terms hereof due to the negligence or bad faith of the
Depositary.
The obligations set forth in this Section 5.8 shall survive the
termination of this Deposit Agreement and the succession or substitution of any
party hereto.
Any person seeking indemnification hereunder (an "indemnified person")
shall notify the person from whom it is seeking indemnification (the
"indemnifying person") of the commencement of any indemnifiable action or claim
promptly after such indemnified person becomes aware of such commencement
(provided that the failure to make such notification shall not affect such
indemnified person's rights to seek indemnification, except to the extent the
indemnifying person is materially prejudiced by such failure) and shall consult
in good faith with the indemnifying person as to the conduct of the defense of
such action or claim that may give rise to an indemnification claim hereunder,
which defense shall be reasonable in the circumstances. No indemnified person
shall compromise or settle any action or claim that may give rise to an
indemnity hereunder without the consent of the indemnifying person, which
consent shall not be unreasonably withheld.
Section 5.9 Fees and Charges of Depositary. The Company, the Holders, the
Beneficial Owners, and persons depositing Eligible Securities or surrendering
ADSs for cancellation and withdrawal of Deposited Securities shall be required
to pay to the Depositary the Depositary's fees and related charges identified
as payable by them respectively in the Fee Schedule attached hereto as Exhibit
B. All fees and charges so payable may, at any time and from time to time, be
changed by agreement between the Depositary and the Company, but, in the case
of fees and charges payable by Holders and Beneficial Owners, only in the
manner
42
contemplated in Section 6.1. The Depositary shall provide, without charge, a
copy of its latest fee schedule to anyone upon request.
The Company agrees to promptly pay to the Depositary such other fees and
charges and to reimburse the Depositary for such reasonable out-of-pocket
expenses as the Depositary and the Company may agree to in writing from time to
time. Responsibility for payment of such charges may at any time and from time
to time be changed by agreement between the Company and the Depositary. Unless
otherwise agreed, the Depositary shall present its statement for such expenses
and fees or charges to the Company once every three (3) months. The charges and
expenses of the Custodian are for the sole account of the Depositary.
The right of the Depositary to receive payment of fees, charges and
expenses as provided above shall survive the termination of this Deposit
Agreement. As to any Depositary, upon the resignation or removal of such
Depositary as described in Section 5.4 hereof, such right shall extend for
those fees, charges and expenses incurred prior to the effectiveness of such
resignation or removal.
Section 5.10 Pre-Release Transactions and Pre-Cancellation Sales.
(a) Pre-Release Transactions. Subject to the further terms and provisions
of this Section 5.10, the Depositary, its Affiliates and their agents, on their
own behalf, may own and deal in any class of securities of the Company and its
Affiliates and in ADSs. In its capacity as Depositary, the Depositary shall not
lend Deposited Securities or ADSs; provided, however, that the Depositary may,
to the extent permitted by applicable law, (i) issue ADSs prior to the receipt
of Eligible Securities pursuant to Section 2.3 and (ii) deliver Deposited
Securities only upon the prior receipt of ADSs for cancellation upon withdrawal
of Deposited Securities pursuant to Section 2.7, including ADSs which were
issued under (i) above but for which Eligible Securities may not have been
received (each such transaction in (i) above a "Pre-Release Transaction"). The
Depositary may receive ADSs in lieu of Eligible Securities under (i) above.
Each such Pre-Release Transaction will be (a) subject to a written agreement
whereby the person or entity (the "Applicant") to whom ADSs or Deposited
Securities are to be delivered (w) represents that at the time of the
Pre-Release Transaction the Applicant or its customer owns the Eligible
Securities that are to be delivered by the Applicant under such Pre-Release
Transaction, (x) agrees to indicate the Depositary as owner of such Eligible
Securities in its records and to hold such Eligible Securities in trust for the
Depositary until such Eligible Securities are delivered to the Depositary or
the Custodian, (y) unconditionally guarantees to deliver to the Depositary or
the Custodian, as applicable, such Eligible Securities, and (z) agrees to any
additional restrictions or requirements that the Depositary deems appropriate,
(b) at all times fully collateralized with cash, United States government
securities or such other collateral as the Depositary deems appropriate, (c)
terminable by the Depositary on not more than five (5) business days' notice
and (d) subject to such further indemnities and credit regulations as the
Depositary deems appropriate. The Depositary will normally limit the number of
ADSs and Eligible Securities involved in such Pre-Release Transactions at any
one time to thirty percent (30%) of the ADSs outstanding (without giving effect
to ADSs outstanding under (i) above), provided, however, that the Depositary
reserves the right to disregard such limit from time to time as it deems
appropriate and may, with the prior written consent of the Company, change such
limit for purposes of general application.
43
The Depositary may also set limits with respect to the number of ADSs and
Eligible Securities involved in Pre-Release Transactions with any one person on
a case by case basis as it deems appropriate. The Depositary may retain for its
own account any compensation received by it in conjunction with the foregoing.
Collateral provided pursuant to (b) above, but not the earnings thereon, shall
be held for the benefit of the Holders (other than the Applicant). Temporary
COP ADSs, Temporary EC ADSs, Certificate of Payment and Entitlement
Certificates shall not be eligible for Pre-Release Transactions hereunder.
(b) Pre-Cancellation Sales. To the extent permitted under applicable law,
in its capacity as Depositary, the Depositary may, when a Holder of ADSs so
requests, cause the Deposited Shares to be sold and deliver the proceeds of the
sale prior to the receipt and cancellation of ADSs (each such transaction a
"Pre-Cancellation Sale") prior to the receipt of ADSs for cancellation. Each
such Pre-Cancellation Sale will be (a) accompanied by or subject to a written
agreement whereby the person or entity (the "Applicant") to whom the proceeds
of the sale of Deposited Securities are to be delivered which, (i) represents
that at the time of the Pre-Cancellation Sale, the Applicant or its customer
owns the ADSs that are to be delivered by the Applicant under such
Pre-Cancellation Sale, (ii) agrees to indicate the Depositary as owner of such
ADSs in its records and to hold such ADSs in trust for the Depositary until
such ADSs are delivered to the Depositary, (iii) unconditionally guarantees to
deliver to the Depositary such ADSs, and (iv) agrees to any additional
restrictions or requirements that the Depositary deems appropriate; (b) at all
times fully collateralized with cash, United States government securities or
such other collateral as the Depositary deems appropriate; (c) terminable by
the Depositary on not more than five (5) business days notice; and (d) subject
to such further indemnities and credit regulations as the Depositary deems
appropriate.
The Depositary will normally limit the number of Deposited Securities
involved in such Pre-Cancellation Sales at any one time to thirty percent (30%)
of the Deposited Securities outstanding, provided, however, that the Depositary
reserves the right to disregard such limit from time to time as it deems
appropriate and may, with the prior written consent of the Company, change such
limit for purposes of general application.
Section 5.11 Restricted Securities Owners. Except as provided for in
Section 2.14 of this Deposit Agreement, the Company agrees to advise in writing
each of the persons or entities who, to the best knowledge of the Company,
holds Restricted Securities that such Restricted Securities are ineligible for
deposit hereunder and, to the extent practicable, shall require each of such
persons to represent in writing that such person will not deposit Restricted
Securities hereunder.
ARTICLE VI
AMENDMENT AND TERMINATION
Section 6.1 Amendment/Supplement. The Receipts outstanding at any time,
the provisions of this Deposit Agreement and the form of Receipt attached
hereto and to be issued under the terms hereof may at any time and from time to
time be amended or supplemented by written agreement between the Company and
the Depositary in any respect which they may deem necessary or desirable
without the prior written consent of the Holders or
44
Beneficial Owners. Any amendment or supplement which shall impose or increase
any fees or charges (other than charges in connection with foreign exchange
control regulations, and taxes and other governmental charges, delivery and
other such expenses), or which shall otherwise materially prejudice any
substantial existing right of Holders or Beneficial Owners, shall not, however,
become effective as to outstanding Receipts until the expiration of thirty (30)
days after notice of such amendment or supplement shall have been given to the
Holders of outstanding Receipts. The parties hereto agree that any amendments
or supplements which (i) are reasonably necessary (as agreed by the Company and
the Depositary) in order for (a) the ADSs to be registered on Form F-6 under
the Securities Act or (b) the ADSs to be traded solely in electronic book-entry
form and (ii) do not in either such case impose or increase any fees or charges
to be borne by Holders, shall be deemed not to materially prejudice any
substantial rights of Holders or Beneficial Owners. Every Holder and Beneficial
Owner at the time any amendment or supplement becomes effective shall be
deemed, by continuing to hold such ADSs, to consent and agree to such amendment
or supplement and to be bound by the Deposit Agreement and the Receipt as
amended and supplemented thereby. In no event shall any amendment or supplement
impair the right of the Holder to surrender such Receipt and receive therefor
the Deposited Securities represented thereby, except in order to comply with
mandatory provisions of applicable law. Notwithstanding the foregoing, if any
governmental body should adopt new laws, rules or regulations which would
require an amendment or supplement of the Deposit Agreement to ensure
compliance therewith, the Company and the Depositary may amend or supplement
the Deposit Agreement and the Receipts at any time in accordance with such
changed laws, rules or regulations. Such amendment or supplement to the Deposit
Agreement and the Receipts in such circumstances may become effective before a
notice of such amendment or supplement is given to Holders or within any other
period of time as required for compliance with such laws, rules or regulations.
Section 6.2 Termination. The Depositary shall, at any time at the written
direction of the Company, terminate this Deposit Agreement by providing notice
of such termination to the Holders of all Receipts then outstanding at least
thirty (30) days prior to the date fixed in such notice for such termination.
If sixty (60) days shall have expired after (i) the Depositary shall have
delivered to the Company a written notice of its election to resign, or (ii)
the Company shall have delivered to the Depositary a written notice of the
removal of the Depositary, and in either case a successor depositary shall not
have been appointed and accepted its appointment as provided in Section 5.4,
the Depositary may terminate this Deposit Agreement by providing notice of such
termination to the Holders of all Receipts then outstanding at least thirty
(30) days prior to the date fixed for such termination. On and after the date
of termination of this Deposit Agreement, the Holder of a Receipt will, upon
surrender of such Receipt at the Principal Office of the Depositary, upon the
payment of the charges of the Depositary for the surrender of Receipts referred
to in Section 2.7 and subject to the conditions and restrictions set forth
therein and subject always to the restrictions on withdrawal as may be in
effect under the laws and regulations of the Republic of China, and upon
payment of any applicable taxes or governmental charges, be entitled to
Delivery, to him or upon his order, of the amount of Deposited Securities
represented by such Receipt. If any Receipts shall remain outstanding after the
date of termination of this Deposit Agreement, the Registrar thereafter shall
discontinue the registration of transfers of Receipts, and the Depositary shall
suspend the distribution of dividends to the Holders thereof, and shall not
give any further notices or perform any further acts under this Deposit
Agreement, except that the Depositary shall continue to collect dividends
45
and other distributions pertaining to Deposited Securities, shall sell rights
as provided in this Deposit Agreement, and shall continue to deliver Deposited
Securities, subject to the conditions and restrictions set forth in Section
2.7, together with any dividends or other distributions received with respect
thereto and the net proceeds of the sale of any rights or other property, in
exchange for Receipts surrendered to the Depositary (after deducting, or
charging, as the case may be, in each case, the charges of the Depositary for
the surrender of a Receipt, any expenses for the account of the Holder in
accordance with the terms and conditions of this Deposit Agreement and any
applicable taxes or governmental charges or assessments). At any time after the
expiration of six months from the date of termination of this Deposit
Agreement, the Depositary may sell the Deposited Securities then held hereunder
and may thereafter hold uninvested the net proceeds of any such sale, together
with any other cash then held by it hereunder, in an unsegregated account,
without liability for interest for the pro rata benefit of the Holders whose
Receipts have not theretofore been surrendered, such Holders thereupon becoming
general creditors of the Depositary with respect to such net proceeds. After
making such sale, the Depositary shall be discharged from all obligations under
this Deposit Agreement with respect to the Receipts, the Deposited Securities
and the ADSs, except to account for such net proceeds and other cash (after
deducting, or charging, as the case may be, in each case, the charges of the
Depositary for the surrender of a Receipt, any expenses for the account of the
Holder in accordance with the terms and conditions of this Deposit Agreement
and any applicable taxes or governmental charges or assessments). Upon the
termination of this Deposit Agreement, the Company shall be discharged from all
obligations under this Deposit Agreement except for its obligations to the
Depositary under Sections 5.8, 5.9 and 7.6 hereof.
ARTICLE VII
MISCELLANEOUS
Section 7.1 Counterparts. This Deposit Agreement may be executed in any
number of counterparts, each of which shall be deemed an original and all of
such counterparts together shall constitute one and the same agreement. Copies
of this Deposit Agreement shall be maintained with the Depositary and shall be
open to inspection by any Holder during business hours.
Section 7.2 No Third-Party Beneficiaries. This Deposit Agreement is for
the exclusive benefit of the parties hereto (and their successors) and shall
not be deemed to give any legal or equitable right, remedy or claim whatsoever
to any other person, except to the extent specifically set forth in this
Deposit Agreement. Nothing in this Deposit Agreement shall be deemed to give
rise to a partnership or joint venture among the parties nor establish a
fiduciary or similar relationship among the parties. The parties hereto
acknowledge and agree that (i) the Depositary and its Affiliates may at any
time have multiple banking relationships with the Company and its Affiliates,
(ii) the Depositary and its Affiliates may be engaged at any time in
transactions in which parties adverse to the Company or the Holders or
Beneficial Owners may have interests and (iii) nothing contained in this
Agreement shall (a) preclude the Depositary or any of its Affiliates from
engaging in such transactions or establishing or maintaining such
relationships, (b) obligate the Depositary or any of its Affiliates to disclose
such transactions or relationships or to account for any profit made or payment
received in such transactions or relationships.
46
Section 7.3 Severability. In case any one or more of the provisions
contained in this Deposit Agreement or in the Receipts should be or become
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall in
no way be affected, prejudiced or disturbed thereby.
Section 7.4 Holders and Beneficial Owners as Parties; Binding Effect. The
Holders and Beneficial Owners from time to time of ADSs shall be parties to the
Deposit Agreement and shall be bound by all of the terms and conditions thereof
and of any Receipt by acceptance thereof of any beneficial interest therein.
Section 7.5 Notices. Any and all notices to be given to the Company shall
be deemed to have been duly given if personally delivered or sent by mail, air
courier or cable, telex or facsimile transmission, confirmed by letter,
addressed to AU Optronics Corp., ▇ ▇▇-▇▇▇▇ ▇▇. ▇, ▇▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇, ▇▇▇▇-▇▇▇ ▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ of China, Attention: Max ▇▇▇▇▇▇▇ ▇▇▇▇▇,
Chief Financial Officer, Finance Division, or to any other address which the
Company may specify in writing to the Depositary.
Any and all notices to be given to the Depositary shall be deemed to have
been duly given if personally delivered or sent by mail, air courier or cable,
telex or facsimile transmission, confirmed by letter, addressed to Citibank,
N.A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇. Attention: ADR
Department, or to any other address which the Depositary may specify in writing
to the Company.
Any and all notices to be given to the Custodian shall be deemed to have
been duly given if personally delivered or sent by mail, air courier or cable,
telex or facsimile transmission, confirmed by letter, addressed to Citibank,
N.A., (Taipei), having its principal office at ▇▇, ▇▇. ▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇,
▇▇▇. ▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ of China or to any other address which the
Custodian may specify in writing to the Company.
Any and all notices to be given to any Holder shall be deemed to have been
duly given if (a) personally delivered or sent by mail or cable, telex or
facsimile transmission, confirmed by letter, addressed to such Holder at the
address of such Holder as it appears on the books of the Depositary, or, if
such Holder shall have filed with the Depositary a written request that notices
intended for such Holder be mailed to some other address, at the address
specified in such request, or (b) if a Holder shall have designated such means
of notification as an acceptable means of notification under the terms of this
Deposit Agreement, by means of electronic messaging addressed for delivery to
the e-mail address designated by the Holder for such purpose. Notice to Holders
shall be deemed to be notice to Beneficial Owners for all purposes of this
Deposit Agreement. Failure to notify a Holder or any defect in the notification
to a Holder shall not affect the sufficiency of notification to other Holders
or to Beneficial Owners of ADSs held by such other Holders.
Delivery of a notice sent by mail, air courier or cable, telex or
facsimile transmission shall be deemed to be effective at the time when a duly
addressed letter containing the same (or a confirmation thereof in the case of
a cable, telex or facsimile transmission) is deposited, postage prepaid, in a
post-office letter box or delivered to an air courier service, without regard
to the actual receipt or time of actual receipt thereof by a Holder. The
Depositary
47
or the Company may, however, act upon any cable, telex or facsimile
transmission received by it from the other or from any Holder, notwithstanding
that such cable, telex or facsimile transmission shall not subsequently be
confirmed by letter as aforesaid.
Delivery of a notice by means of electronic messaging shall be deemed to
be effective at the time of the initiation of the transmission by the sender
(as shown on the sender's records), notwithstanding that the intended recipient
retrieves the message at a later date, fails to retrieve such message, or fails
to receive such notice on account of its failure to maintain the designated
e-mail address, its failure to designate a substitute e-mail address or for any
other reason.
Section 7.6 Governing Law and Jurisdiction. This Deposit Agreement and the
Receipts shall be interpreted in accordance with, and all rights hereunder and
thereunder and provisions hereof and thereof shall be governed by, the laws of
the State of New York without reference to the principles of choice of law
thereof. Notwithstanding anything contained in this Deposit Agreement, any
Receipt or any present or future provisions of the laws of the State of New
York, the rights of holders of Deposited Securities and the obligations and
duties of the Company in respect of the holders of Deposited Securities, as
such, shall be governed by the laws of Taiwan (or, if applicable, such other
laws as may govern the Deposited Securities).
Except as set forth in the following paragraph of this Section 7.6, the
Company and the Depositary agree that the federal or state courts in the City
of New York shall have jurisdiction to hear and determine any suit, action or
proceeding and to settle any dispute between them that may arise out of or in
connection with this Deposit Agreement and, for such purposes, each irrevocably
submits to the non-exclusive jurisdiction of such courts. The Company hereby
irrevocably designates, appoints and empowers CT Corporation System Inc. (the
"Agent") now at ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇ as its authorized
agent to receive for and on its behalf, and on behalf of its properties, assets
and revenues, service by mail of any and all legal process, summons, notices
and documents that may be served in any suit, action or proceeding brought
against the Company in any federal or state court as described in the preceding
sentence or in the next paragraph of this Section 7.6. If for any reason the
Agent shall cease to be available to act as such, the Company agrees to
designate a new agent in New York on the terms and for the purposes of this
Section 7.6 reasonably satisfactory to the Depositary. The Company further
hereby irrevocably consents and agrees to the service of any and all legal
process, summons, notices and documents in any suit, action or proceeding
against the Company, by service by mail of a copy thereof upon the Agent
(whether or not the appointment of such Agent shall for any reason prove to be
ineffective or such Agent shall fail to accept or acknowledge such service),
with a copy mailed to the Company by registered or certified air mail, postage
prepaid, to its address provided in Section 7.5 hereof. The Company agrees that
the failure of the Agent to give any notice of such service to it shall not
impair or affect in any way the validity of such service or any judgment
rendered in any action or proceeding based thereon.
Notwithstanding the foregoing, the Depositary and the Company
unconditionally agree that in the event that a Holder or Beneficial Owner
brings a suit, action or proceeding against (a) the Company, (b) the
Depositary, in its capacity as Depositary under this Deposit Agreement, or (c)
against both the Company and the Depositary, in any such case, in any state or
▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, and the Depositary or the Company have any
claim, for indemnification or otherwise, against each other arising out of the
subject matter of such suit, action or proceeding, then the Company and the
Depositary may pursue such claim against each other in the state or federal
court in the United States in which such suit, action, or proceeding is pending
and, for such purposes, the Company and the Depositary irrevocably submit to
the non-exclusive jurisdiction of such courts. The Company agrees that service
of process upon the Agent in the manner set forth in the preceding paragraph
shall be effective service upon it for any suit, action or proceeding brought
against it as described in this paragraph.
The Company irrevocably and unconditionally waives, to the fullest extent
permitted by law, any objection that it may now or hereafter have to the laying
of venue of any actions, suits or proceedings brought in any court as provided
in this Section 7.6, and hereby further irrevocably and unconditionally waives
and agrees not to plead or claim in any such court that any such action, suit
or proceeding brought in any such court has been brought in an inconvenient
forum.
The Company irrevocably and unconditionally waives, to the fullest extent
permitted by law, and agrees not to plead or claim, any right of immunity from
legal action, suit or proceeding, from setoff or counterclaim, from the
jurisdiction of any court, from service of process, from attachment upon or
prior to judgment, from attachment in aid of execution or judgment, from
execution of judgment, or from any other legal process or proceeding for the
giving of any relief or for the enforcement of any judgment, and consents to
such relief and enforcement against it, its assets and its revenues in any
jurisdiction, in each case with respect to any matter arising out of, or in
connection with, the Deposit Agreement, any Receipt or the Deposited
Securities.
No disclaimer of liability under the Securities Act is intended by any
provision of the Deposit Agreement. The provisions of this Section 7.6 shall
survive any termination of this Deposit Agreement, in whole or in part.
Section 7.7 Assignment. Subject to the provisions of Section 5.4 hereof,
this Deposit Agreement may not be assigned by either the Company or the
Depositary.
Section 7.8 Compliance with U.S. Securities Laws. Notwithstanding anything
in this Deposit Agreement to the contrary, the withdrawal or delivery of
Deposited Securities will not be suspended by the Company or the Depositary
except as would be permitted by Instruction I.A. (1) of the General
Instructions to Form F-6 Registration Statement, as amended from time to time,
under the Securities Act.
Section 7.9 Titles and References. All references in this Deposit
Agreement to exhibits, articles, sections, subsections, and other subdivisions
refer to the exhibits, articles, sections, subsections and other subdivisions
of this Deposit Agreement unless expressly provided otherwise. The words "this
Deposit Agreement", "herein", "hereof", "hereby", "hereunder", and words of
similar import refer to this Deposit Agreement as a whole as in effect between
the Company, the Depositary and the Holders and Beneficial Owners of ADSs and
not to any particular subdivision unless expressly so limited. Pronouns in
masculine, feminine and neuter gender shall be construed to include any other
gender, and words in the singular form shall be
49
construed to include the plural and vice versa unless the context otherwise
requires. Titles to sections of this Deposit Agreement are included for
convenience only and shall be disregarded in construing the language contained
in this Deposit Agreement. References to applicable laws and regulations shall
refer to the applicable laws and regulations in effect at the relevant time of
determination, unless otherwise required by such laws or regulations.
50
IN WITNESS WHEREOF, AU OPTRONICS CORP., and CITIBANK, N.A. have duly
executed this Deposit Agreement as of the day and year first above set forth
and all Holders and Beneficial Owners shall become parties hereto upon
acceptance by them of ADSs evidenced by Receipts issued in accordance with the
terms hereof, or upon acquisition of any beneficial interest therein.
AU OPTRONICS CORP.
By: /s/ Max ▇▇▇▇▇▇▇ ▇▇▇▇▇
-----------------------------------
Chief Financial Officer
CITIBANK, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-----------------------------------
Vice President
51
EXHIBIT A
[FORM OF RECEIPT]
Number CUSIP NUMBER: 002255 10 7
AUO___________
[American Depositary Shares (each
American Depositary Share representing
ten (10) Fully Paid shares of common
stock, par NT$10.00 per share)]
[COP American Depositary Shares (each
COP American Depositary Share
representing an undivided interest in a
global Certificates of Payment, each
interest representing the irrevocable
right to receive ten (10) Fully Paid
shares of common stock par value
NT$10.00 per share)]
[EC American Depositary Shares (each EC
American Depositary Share representing
an undivided interest in an Entitlement
Certificate, each interest representing
the irrevocable right to receive ten
(10) shares of common stock par
NT$10.00 per share)]
A-1
AMERICAN DEPOSITARY RECEIPT
FOR
AMERICAN DEPOSITARY SHARES
representing
[DEPOSITED SHARES OF COMMON STOCK]
[INTERESTS IN THE DEPOSITED CERTIFICATE(S) OF PAYMENT]
[DEPOSITED ENTITLEMENT CERTIFICATE(S)]
of
AU Optronics Corp.
(Incorporated under the laws of the Republic of China)
CITIBANK, N.A., a national banking association organized and existing
under the laws of the United States of America, as depositary (the
"Depositary"), hereby certifies that _____________is the owner of
______________ American Depositary Shares (hereinafter "ADS"), representing
deposited [shares of common stock] [interests in the global Certificate(s) of
Payment representing the irrevocable right to receive shares of common stock]
[Entitlement Certificate(s) representing the irrevocable right to receive
shares of common stock], par value NT$10.00 per share, or evidence of rights to
receive such [shares of common stock (the "Shares")] [interests in the global
Certificate(s) of Payment (the "Certificate(s) of Payment"][Entitlement
Certificate(s) (the "Entitlement Certificate(s)")] (such
[Shares][Certificate(s) of Payment][Entitlement Certificate(s)] are hereafter
called "Eligible Securities") of AU Optronics Corp., a company incorporated
under the laws of the Republic of China (the "Company"). As of the date of the
Deposit Agreement (as hereinafter defined), each ADS represents [ten (10)
Shares][an undivided interest in an Entitlement Certificate, each interest
representing the irrevocable right to receive [ten (10)] Shares][an undivided
interest in a global Certificate(s) of Payment, each interest representing the
irrevocable right to receive ten (10) Shares] deposited under the Deposit
Agreement with the Custodian, which at the date of execution of the Deposit
Agreement is Citibank, N.A., (Taipei) (the "Custodian"). The ratio of American
Depositary Shares to Eligible Securities is subject to amendment as provided in
Article IV of the Deposit Agreement. The Depositary's Principal Office is
located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇.
(1) The Deposit Agreement. This American Depositary Receipt is one of an
issue of American Depositary Receipts ("Receipts"), all issued and to be issued
upon the terms and conditions set forth in the Deposit Agreement, dated as of
May 29, 2002 (as amended from time to time, the "Deposit Agreement"), by and
among the Company, the Depositary, and all Holders and Beneficial Owners from
time to time of American Depositary Shares ("ADSs") evidenced by Receipts
issued thereunder, each of whom by accepting an ADS (or an interest
A-2
therein) agrees to become a party thereto and becomes bound by all the terms
and conditions thereof. The Deposit Agreement sets forth the rights and
obligations of Holders and Beneficial Owners of Receipts and the rights and
duties of the Depositary in respect of the Eligible Securities deposited
thereunder and any and all other securities, property and cash from time to
time received in respect of such Eligible Securities and held thereunder (such
Eligible Securities, securities, property and cash are herein called "Deposited
Securities"). Copies of the Deposit Agreement are on file at the Principal
Office of the Depositary and with the Custodian.
The statements made on the face and reverse of this Receipt are summaries
of certain provisions of the Deposit Agreement and the Articles of
Incorporation of the Company (as in effect on the date of the signing of the
Deposit Agreement) and are qualified by and subject to the detailed provisions
of the Deposit Agreement and the Articles of Incorporation, to which reference
is hereby made. All capitalized terms used herein which are not otherwise
defined herein shall have the meanings ascribed thereto in the Deposit
Agreement. The Depositary makes no representation or warranty as to the
validity or worth of the Deposited Securities. The Depositary has made
arrangements for the acceptance of the ADSs into DTC. Each Beneficial Owner of
ADSs held through DTC must rely on the procedures of DTC and the DTC
Participants to exercise and be entitled to any rights attributable to such
ADSs.
(2) Surrender of ADSs and Withdrawal and Sale of Deposited Securities. The
Depositary and the Company have been advised that under ROC law, until three
(3) months after the closing of the Offering, a Holder is not entitled to
withdraw or sell Shares from the ADS Facility, consequently, the Company and
the Depositary agree to prohibit the surrender of ADSs and the sale or Delivery
of any Shares deposited in connection with the Offering until the expiration of
such three-month period. A Holder wishing to withdraw Shares from the ADS
Facility shall be required under ROC law to appoint an eligible agent in the
Republic of China to open a securities trading account with a local brokerage
firm after receiving an approval from the TSE and a bank account (the
securities trading account and the bank account, collectively, the "Accounts"),
to pay ROC taxes, remit funds, exercise stockholders' rights and perform such
other functions as may be designated by such withdrawing Holder. In addition,
such withdrawing Holder is also required to appoint a custodian bank to hold
the securities in safekeeping, make confirmations and settle trades and report
all relevant information. Without making such appointment and until approval
from the TSE is obtained, the withdrawing Holder would be unable to receive,
hold, or subsequently sell the Deposited Securities withdrawn from the ADS
Facilities on the TSE or otherwise.
(a) Sale of Deposited Securities. Upon surrender of Receipts at the
Principal Office and upon payment of any fees, reasonable expenses, taxes or
other governmental charges as provided hereunder, subject to the terms of this
Deposit Agreement, and the transfer restrictions applicable to the Deposited
Securities, if any, Holders may request that the Deposited Securities
represented by such Holders' Receipts be sold on such Holders' behalf. Any
Holder requesting a sale of Deposited Securities may be required by the
Depositary to deliver, or cause to be delivered, to the Depositary a written
order requesting the Depositary to sell, or cause to be sold, such Deposited
Securities. Any such sale of Deposited Securities will be conducted in
accordance with applicable ROC law through a securities company in the ROC on
the TSE or in such other manner as is or may be permitted under applicable ROC
law. Any such sale of Deposited Securities will be at the expense and risk of
the Holder requesting such sale.
A-3
Upon receipt of any proceeds from any such sale, the Depositary shall,
subject to any restrictions imposed by ROC law and regulations, and as provided
hereunder and under the Deposit Agreement, convert or cause to be converted any
such proceeds into U.S. dollars and distribute any such proceeds to the Holders
entitled thereto after deduction or payment of any fees, reasonable expenses,
taxes or governmental charges incurred in connection with such sale, as
provided under the Deposit Agreement. Any such sale may be subject to ROC
taxation on capital gains, if any, and will be subject to a securities
transaction tax in the ROC.
(b) Withdrawal of Deposited Securities. The Holder of ADSs shall be
entitled to Delivery (at the Custodian's designated office) of the Deposited
Securities at the time represented by the ADS(s) upon satisfaction of each of
the following conditions: (i) the Holder (or a duly authorized attorney of the
Holder) has duly Delivered ADSs to the Depositary at its Principal Office (and
if applicable, the Receipts evidencing such ADSs) for the purpose of withdrawal
of the Deposited Securities represented thereby, (ii) if so required by the
Depositary, the Receipts Delivered to the Depositary for such purpose have been
properly endorsed in blank or are accompanied by proper instruments of transfer
in blank (including signature guarantees in accordance with standard securities
industry practice), (iii) if so required by the Depositary, the Holder of the
ADSs has executed and delivered to the Depositary a written order directing the
Depositary to cause the Deposited Securities being withdrawn to be Delivered to
or upon the written order of the person(s) designated in such order, (iv) the
Holder has delivered to the Depositary the certification contemplated in
Exhibit C to the Deposit Agreement, duly completed by or on behalf of the
Beneficial Owner(s) of the ADSs surrendered for withdrawal (unless the
Depositary is otherwise instructed by the Company), and (v) all applicable fees
and charges of, and reasonable expenses incurred by, the Depositary and all
applicable taxes and governmental charges (as are set forth in Section 5.9 of,
and Exhibit B to, the Deposit Agreement) have been paid, subject, however, in
each case, to the terms and conditions of the Receipts evidencing the
surrendered ADSs, of the Deposit Agreement, of the Company's Articles of
Incorporation and of any applicable laws and the regulations and rules of the
Republic of China and the rules of the TSE and the Taiwan Securities Central
Depository, and to any provisions of or governing the Deposited Securities, in
each case as in effect at the time thereof.
Upon satisfaction of each of the conditions specified above, the
Depositary (i) shall cancel the ADSs Delivered to it (and, if applicable, the
Receipts evidencing the ADSs so Delivered), (ii) shall direct the Registrar to
record the cancellation of the ADSs so Delivered on the books maintained for
such purpose, and (iii) shall direct the Custodian to Deliver (without
unreasonable delay) at the Custodian's designated office the Deposited
Securities represented by the ADSs so canceled together with any certificate or
other document of title for the Deposited Securities, or evidence of the
electronic transfer thereof (if available), as the case may be, to or upon the
written order of the person(s) designated in the order delivered to the
Depositary for such purpose, subject however, in each case, to the terms and
conditions of the Deposit Agreement, of the Receipts evidencing the ADSs so
canceled, of the Articles of Incorporation of the Company, of applicable laws
and the rules and regulations of the Republic of China and the rules of the TSE
and the Taiwan Securities Central Depository, and to the terms and conditions
of or governing the Deposited Securities, in each case as in effect at the time
thereof.
The Depositary shall not accept for surrender ADSs representing less than
one Eligible Security. In the case of the Delivery to it of ADSs representing a
number other than a
A-4
whole number of Eligible Securities, the Depositary shall cause ownership of
the appropriate whole number of Eligible Securities to be Delivered in
accordance with the terms hereof, and shall, at the discretion of the
Depositary, either (i) return to the person surrendering such ADSs the number
of ADSs representing any remaining fractional Eligible Security, or (ii) sell
or cause to be sold the fractional Eligible Security represented by the ADS(s)
so surrendered and remit the proceeds of such sale (net of (a) applicable fees
and charges of, and expenses incurred by, the Depositary and (b) taxes
withheld) to the person surrendering the ADSs. In addition, trading
restrictions on the TSE may result in the price per Eligible Security or on any
lot of any type of Eligible Security other than an integral multiple of 1,000
Eligible Securities being lower than the price of Eligible Securities in lots
of integral multiples of 1,000 Eligible Securities.
Notwithstanding anything else contained in any Receipt or the Deposit
Agreement, the Depositary may make delivery at the Principal Office of the
Depositary of (i) any cash dividends or cash distributions, or (ii) any
proceeds from the sale of any distributions of securities or rights, which are
at the time held by the Depositary in respect of the Deposited Securities
represented by the ADSs surrendered for cancellation and withdrawal. At the
request, risk and expense of any Holder so surrendering ADSs, and for the
account of such Holder, the Depositary shall direct the Custodian to forward
(to the extent permitted by law) any cash or other property (other than
securities) held by the Custodian in respect of the Deposited Securities
represented by such ADSs to the Depositary for delivery at the Principal Office
of the Depositary. Such direction shall be given by letter or, at the request,
risk and expense of such Holder, by cable, telex or facsimile transmission.
(3) Transfer, Combination and Split-Up of Receipts. The Registrar shall
register the transfer of this Receipt (and of the ADSs represented thereby) on
the books maintained for such purpose and the Depositary shall cancel this
Receipt and execute new Receipts evidencing the same aggregate number and type
of ADSs as those evidenced by this Receipt when canceled, shall cause the
Registrar to countersign such new Receipts and shall Deliver such new Receipts
to or upon the order of the person entitled thereto, if each of the following
conditions has been satisfied: (i) this Receipt has been duly Delivered by the
Holder (or by a duly authorized attorney of the Holder) to the Depositary at
its Principal Office for the purpose of effecting a transfer thereof, (ii) this
Receipt has been properly endorsed or is accompanied by proper instruments of
transfer (including signature guarantees in accordance with standard securities
industry practice), (iii) this Receipt has been duly stamped (if required by
the laws of the State of New York or of the United States), and (iv) all
applicable fees and charges of, and expenses incurred by, the Depositary and
all applicable taxes and governmental charges (as are set forth in Section 5.9
of, and Exhibit B to, the Deposit Agreement) have been paid, subject, however,
in each case, to the terms and conditions of this Receipt, of the Deposit
Agreement and of applicable law, in each case as in effect at the time thereof.
The Registrar shall register the split-up or combination of this Receipt
(and of the ADSs represented hereby) on the books maintained for such purpose
and the Depositary shall cancel this Receipt and execute new Receipts for the
number of ADSs requested, but in the aggregate not exceeding the number of the
same type of ADSs evidenced by this Receipt (when canceled), shall cause the
Registrar to countersign such new Receipts and shall Deliver such new Receipts
to or upon the order of the Holder thereof, if each of the following conditions
has been satisfied: (i) this Receipt has been duly Delivered by the Holder (or
by a duly authorized
A-5
attorney of the Holder) to the Depositary at its Principal Office for the
purpose of effecting a split-up or combination hereof, and (ii) all applicable
fees and charges of, and expenses incurred by, the Depositary and all
applicable taxes and government charges (as are set forth in Section 5.9 of,
and Exhibit B to, the Deposit Agreement) have been paid, subject, however, in
each case, to the terms and conditions of this Receipt, of the Deposit
Agreement and of applicable law, in each case as in effect at the time thereof.
(4) Pre-Conditions to Registration, Transfer, Etc. As a condition
precedent to the execution and delivery, registration of transfer, split-up,
combination or surrender of any Receipt, the delivery of any distribution
thereon, or the withdrawal of any Deposited Securities, the Depositary or the
Custodian may require (i) payment from the depositor of Eligible Securities or
presenter of ADSs or of a Receipt of a sum sufficient to reimburse it for any
tax or other governmental charge and any stock transfer or registration fee
with respect thereto (including any such tax or charge and fee with respect to
Eligible Securities being deposited or withdrawn) and payment of any applicable
fees and charges of the Depositary as provided in the Deposit Agreement and in
this Receipt, (ii) the production of proof satisfactory to it as to the
identity and genuineness of any signature or any other matters contemplated in
the Deposit Agreement, and (iii) compliance with (A) any laws or governmental
regulations relating to the execution and delivery of Receipts or ADSs or to
the deposit of Eligible Securities or to the withdrawal of Deposited Securities
and (B) such reasonable regulations as the Depositary and the Company may
establish consistent with the provisions of this Receipt, the Deposit Agreement
and applicable law.
The issuance of ADSs against deposits of Eligible Securities generally or
against deposits of particular Eligible Securities may be suspended, or the
deposit of particular Eligible Securities may be refused, or the registration
of transfer of Receipts in particular instances may be refused, or the
registration of transfer of Receipts generally may be suspended, during any
period when the transfer books of the Company, the Depositary, a Registrar or
the Eligible Securities Registrar are closed or if any such action is deemed
necessary or advisable by the Depositary or the Company, in good faith, at any
time or from time to time because of any requirement of law, any government or
governmental body or commission or any securities exchange upon which the ADSs
or Eligible Securities are listed, or under any provision of the Deposit
Agreement or this Receipt, or under any provision of, or governing, the
Deposited Securities, or because of a meeting of shareholders of the Company or
for any other reason, subject in all cases to Paragraph (23) hereof. In
addition, the Depositary and the Custodian shall refuse to accept Shares for
deposit (i) whenever notified, as provided in the Deposit Agreement that the
Company has restricted transfer of such Shares to comply with delivery or
transfer requirements and/or ownership restrictions referred to in the Deposit
Agreement or under applicable law, or (ii) in the case of a deposit of Shares
requested under the terms of Section 2.3(iv) of the Deposit Agreement, if such
deposit is not permitted under any restriction notified by the Company to the
Depositary from time to time, which restrictions may specify black-out periods
during which deposits may not be made, minimum or maximum numbers of Shares and
frequencies of deposit.
Notwithstanding any provision of the Deposit Agreement or this Receipt to
the contrary, Holders are entitled to surrender outstanding ADSs to withdraw
the Deposited Securities at any time subject only to (i) temporary delays
caused by closing the transfer books of
A-6
the Depositary or the Company, or the deposit of Eligible Securities in
connection with voting at a shareholders' meeting or the payment of dividends,
(ii) the payment of fees, taxes and similar charges, (iii) compliance with any
U.S. or foreign laws or governmental regulations relating to the Receipts or to
the withdrawal of the Deposited Securities, and (iv) other circumstances
specifically contemplated by Section I.A.(l) of the General Instructions to
Form F-6 (as such General Instructions may be amended from time to time).
(5) Compliance With Information Requests. Notwithstanding any other
provision of the Deposit Agreement or this Receipt, each Holder and Beneficial
Owner of the ADSs represented hereby agrees to comply with requests from the
Company pursuant to applicable law, the rules and requirements of the TSE, and
any other stock exchange on which the Eligible Securities or ADSs are, or will
be, registered, traded or listed, or the Articles of Incorporation of the
Company, which are made to provide information, inter alia, as to the capacity
in which such Holder or Beneficial Owner owns ADSs (and Eligible Securities and
Deposited Securities, as the case may be) and regarding the identity of any
other person(s) interested in such ADSs and the nature of such interest and
various other matters, whether or not they are Holders and/or Beneficial Owners
at the time of such request.
(6) Ownership Restrictions. Notwithstanding any provision of this Receipt
or of the Deposit Agreement, the Company may restrict transfers of the Shares,
Eligible Securities or securities convertible into Shares where the Company
informs the Depositary that such transfer might result in ownership of Shares
exceeding limits imposed by applicable law, the SFC, the TSE or Articles of
Incorporation of the Company. The Company may also restrict, in such manner as
it deems appropriate, transfers of ADSs where such transfer may result in the
total number of Shares, Deposited Securities or securities convertible into
Shares represented by the ADSs owned by a single Holder or Beneficial Owner to
exceed any such limits. The Company may, in its sole discretion, but subject to
applicable law, instruct the Depositary to take action with respect to the
ownership interest of any Holder or Beneficial Owner in excess of the limits
set forth in the preceding sentence, including but not limited to, the
imposition of restrictions on the transfer of ADSs, the removal or limitation
of voting rights or the mandatory sale or disposition on behalf of a Holder or
Beneficial Owner of the Deposited Securities represented by the ADSs held by
such Holder or Beneficial Owner in excess of such limitations, if and to the
extent such disposition is permitted by applicable law and the Articles of
Incorporation of the Company.
(7) Liability of Holder for Taxes and Other Charges. If any tax or other
governmental charge shall become payable with respect to any Receipt or any
Deposited Securities or ADSs, such tax or other governmental charge shall be
payable by the Holders and Beneficial Owners to the Depositary. The Company,
the Custodian and/or Depositary may withhold or deduct from any distributions
made in respect of Deposited Securities and may sell for the account of a
Holder and/or Beneficial Owner any or all of the Deposited Securities and apply
such distributions and sale proceeds in payment of such taxes or governmental
charges, (including applicable interest and penalties), the Holder and the
Beneficial Owner hereof remaining liable for any deficiency. The Custodian may
refuse the deposit of Eligible Securities and the Depositary may refuse to
issue ADSs, to deliver ADRs, register the transfer, split-up or combination of
ADRs and (subject to Paragraph (23) hereof) the withdrawal of Deposited
Securities until payment in full of such tax, charge, penalty or interest is
received. Every Holder
A-7
and Beneficial Owner may be asked to indemnify the Depositary, the Company, the
Custodian, and any of their respective agents, officers, employees and
Affiliates for, and hold each of them harmless from, any claims with respect to
taxes (including applicable interest and penalties thereon) arising from any
inaccuracy in the information provided by such Holder and/or Beneficial Owner
in connection with obtaining any tax benefit for such Holder and/or Beneficial
Owner.
(8) Representations and Warranties of Depositors. Each person depositing
Shares under the Deposit Agreement shall be deemed thereby to represent and
warrant that (i) such Shares and the certificates therefor are duly authorized,
validly issued, fully paid, non-assessable and legally obtained by such person,
(ii) all preemptive (and similar) rights, if any, with respect to such Shares
have been validly waived or exercised, (iii) the person making such deposit is
duly authorized to make such deposit, (iv) the Shares presented for deposit are
free and clear of any lien, encumbrance, security interest, charge, mortgage or
adverse claim and are not, and the ADSs issuable upon such deposit will not be,
Restricted Securities except (as contemplated in Section 2.14 of the Deposit
Agreement), and (v) the Shares presented for deposit have not been stripped of
any rights or entitlements. Such representations and warranties shall survive
the deposit and withdrawal of Shares, the issuance and cancellation of ADSs in
respect thereof and the transfer of such ADSs. Each person depositing
Certificates of Payment under the Deposit Agreement shall be deemed thereby to
represent and warrant that (i) such Certificates of Payment are duly
authorized, validly issued, fully paid, non-assessable and legally obtained by
such person, (ii) all preemptive (and similar) rights, if any, with respect to
such Certificates of Payment have been validly waived or exercised, (iii) the
person making such deposit is duly authorized to make such deposit, (iv) the
Certificates of Payment presented for deposit are free and clear of any lien,
encumbrance, security interest, charge, mortgage or adverse claim, and are not,
and the Temporary COP ADSs issuable upon such deposit will not be, Restricted
Securities (except as contemplated in Section 2.14 of the Deposit Agreement)
and (v) the Certificates of Payment presented for deposit have not been
stripped of any rights or entitlements. Such representations and warranties
shall survive the deposit of Certificates of Payment, the issuance and
cancellation of Temporary COP ADSs in respect thereof and the transfer of such
Temporary COP ADSs. Each person depositing Entitlement Certificates under the
Deposit Agreement shall be deemed thereby to represent and warrant that (i)
such Entitlement Certificates are duly authorized, validly issued, fully paid
and legally obtained by such person, (ii) all preemptive (and similar) rights,
if any, with respect to such Entitlement Certificates have been validly waived
or exercised, (iii) the person making such deposit is duly authorized to do so,
(iv) the Entitlement Certificates presented for deposit are free and clear of
any lien, encumbrance, security interest, charge, mortgage or adverse claim,
and are not, and the Temporary EC ADSs issuable upon such deposit will not be,
Restricted Securities and (v) the Entitlement Certificates presented for
deposit have not been stripped of any rights or entitlements. Such
representations and warranties shall survive the deposit of Entitlement
Certificates, the issuance and cancellation of Temporary EC ADSs in respect
thereof and the transfer of such Temporary EC ADSs.
If any such representations or warranties are false in any way, the
Company and Depositary shall be authorized, at the cost and expense of the
person depositing, Shares, Certificates of Payment or Entitlement Certificates,
to take any and all actions necessary to correct the consequences thereof.
A-8
(9) Filing Proofs, Certificates and Other Information. Any person
presenting Eligible Securities for deposit, any Holder and any Beneficial Owner
may be required, and every Holder and Beneficial Owner agrees, from time to
time to provide to the Depositary and the Custodian such proof of citizenship
or residence, taxpayer status, payment of all applicable taxes or other
governmental charges, exchange control approvals and any other applicable
regulatory approval, legal or beneficial ownership of ADSs and Deposited
Securities, compliance with applicable laws and the terms of the Deposit
Agreement or this receipt evidencing the ADS(s) and the provisions of, or
governing, the Deposited Securities, to execute such certifications and to make
such representations and warranties, and to provide such other information and
documentation (or, in the case of Eligible Securities in registered form
presented for deposit, such information relating to the registration on the
books of the Company or of the Eligible Securities Registrar) as the Depositary
or the Custodian may deem reasonably necessary or proper or as the Company may
reasonably require by written request to the Depositary consistent with its
obligations under the Deposit Agreement, this Receipt and applicable laws and
regulations. The Depositary and the Registrar, as applicable, may withhold the
execution or delivery or registration of transfer of any Receipt or the
distribution or sale of any dividend or distribution of rights or of the
proceeds thereof or, to the extent not limited by Paragraph (23) hereof, the
delivery of any Deposited Securities until such proof or other information is
filed or such certificates are executed, or such representations are made, or
such information and documentation are provided, in each case to the
Depositary's, the Registrar's and the Company's satisfaction.
(10) Charges of Depositary. The Depositary shall charge the following fees
for the services performed under the terms of the Deposit Agreement:
(i) to any person to whom ADSs are issued upon the deposit of Eligible
Securities, a fee not in excess of U.S. $ 5.00 per 100 ADSs (or fraction
thereof) so issued under the terms of the Deposit Agreement (excluding
issuances pursuant to paragraphs (iii)(b) and (v) below);
(ii) to any person surrendering ADSs for cancellation and withdrawal of
Deposited Securities, a fee not in excess of U.S. $ 5.00 per 100 ADSs (or
fraction thereof) so surrendered;
(iii) No fee shall be payable upon distribution of (a) cash dividends or
(b) ADSs pursuant to stock dividends (or other free distributions of stock) so
long as the charging of such fee is prohibited by the exchange upon which the
ADSs are listed. If charging of such fees is not prohibited, the fees specified
in (i) above shall be payable in respect of ADS distributions pursuant to stock
dividends (or other free distributions of stock) and the fees specified in (iv)
below shall be payable in respect of distributions of cash;
(iv) to any Holder of ADSs, a fee not in excess of U.S. $ 2.00 per 100
ADSs (or fraction thereof) held for the distribution of cash proceeds (i.e.,
upon the sale of rights and other entitlements); and
(v) to any Holder of ADSs, a fee not in the excess of U.S. $ 5.00 per 100
ADSs (or fraction thereof) issued upon the exercise of rights to purchase
additional ADSs.
A-9
In addition, Holders, Beneficial Owners, persons depositing Eligible
Securities for deposit and persons surrendering ADSs for cancellation and
withdrawal of Deposited Securities will be required to pay the following
charges:
(a) taxes (including applicable interest and penalties) and other
governmental charges;
(b) such registration fees as may from time to time be in effect for the
registration of Deposited Securities on the share register and applicable to
transfers of Deposited Securities to or from the name of the Custodian, the
Depositary or any nominees upon the making of deposits and withdrawals,
respectively;
(c) such cable, telex and facsimile transmission and delivery expenses as
are expressly provided in the Deposit Agreement to be at the expense of the
person depositing or withdrawing Deposited Securities or Holders and Beneficial
Owners of ADSs;
(d) the expenses and charges incurred by the Depositary in the conversion
of foreign currency;
(e) such fees and expenses as are incurred by the Depositary in connection
with compliance with exchange control regulations and other regulatory
requirements applicable to Eligible Securities, Deposited Securities, ADSs and
ADRs; and
(f) the fees and expenses incurred by the Depositary in connection with
the delivery of Deposited Securities.
Any other charges and expenses of the Depositary under the Deposit
Agreement will be paid by the Company upon agreement between the Depositary and
the Company. All fees and charges may, at any time and from time to time, be
changed by agreement between the Depositary and Company but, in the case of
fees and charges payable by Holders or Beneficial Owners, only in the manner
contemplated by Paragraph (21) of this Receipt. The Depositary will provide,
without charge, a copy of its latest fee schedule to anyone upon request. The
charges and expenses of the Custodian are for the sole account of the
Depositary.
(11) Title to Receipts. It is a condition of this Receipt, and every
successive Holder of this Receipt by accepting or holding the same consents and
agrees, that title to this Receipt (and to each ADS evidenced hereby) shall be
transferable upon the same terms as a certificated security under the laws of
the State of New York, provided that the Receipt has been properly endorsed or
is accompanied by proper instruments of transfer. Notwithstanding any notice to
the contrary, the Depositary and the Company may deem and treat the Holder of
this Receipt (that is, the person in whose name this Receipt is registered on
the books of the Depositary) as the absolute owner thereof for all purposes.
Neither the Depositary nor the Company shall have any obligation nor be subject
to any liability under the Deposit Agreement or this Receipt to any holder of
this Receipt or any Beneficial Owner unless such holder is the Holder of this
Receipt registered on the books of the Depositary or, in the case of a
Beneficial Owner, such Beneficial Owner or the Beneficial Owner's
representative is the Holder registered on the books of the Depositary.
A-10
(12) Validity of Receipt. This Receipt (and the ADSs represented hereby)
shall not be entitled to any benefits under the Deposit Agreement or be valid
or enforceable for any purpose against the Depositary or the Company unless
this Receipt has been (i) dated, (ii) signed by the manual or facsimile
signature of a duly authorized signatory of the Depositary, (iii) countersigned
by the manual or facsimile signature of a duly authorized signatory of the
Registrar, and (iv) registered in the books maintained by the Registrar for the
registration of issuances and transfers of Receipts. Receipts bearing the
facsimile signature of a duly authorized signatory of the Depositary or the
Registrar, who at the time of signature was a duly authorized signatory of the
Depositary or the Registrar, as the case may be, shall bind the Depositary,
notwithstanding the fact that such signatory has ceased to be so authorized
prior to the delivery of such Receipt by the Depositary.
(13) Available Information; Reports; Inspection of Transfer Books. The
Company is subject to the periodic reporting requirements of the Exchange Act
and accordingly files certain information with the Commission. These reports
and documents can be inspected and copied at the public reference facilities
maintained by the Commission located at Judiciary Plaza, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇., ▇▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇. The Depositary shall make available for inspection
by Holders at its Principal Office any reports and communications, including
any proxy soliciting materials, received from the Company which are both (a)
received by the Depositary, the Custodian, or the nominee of either of them, as
the holder of the Deposited Securities and (b) made generally available to the
holders of such Deposited Securities by the Company.
The Registrar shall keep books for the registration of issuances and
transfers of Receipts which at all reasonable times shall be open for
inspection by the Company and by the Holders of such Receipts, provided that
such inspection shall not be, to the Registrar's knowledge, for the purpose of
communicating with Holders of such Receipts in the interest of a business or
object other than the business of the Company or other than a matter related to
the Deposit Agreement or the Receipts.
The Registrar may close the transfer books with respect to the Receipts,
at any time or from time to time, when deemed necessary or advisable by it in
good faith in connection with the performance of its duties hereunder, or at
the reasonable written request of the Company subject, in all cases, to
Paragraph (23) hereof.
Dated: CITIBANK, N.A.,
as Depositary
By:
-----------------------------------
Authorized Signatory
▇-▇▇
▇▇▇▇▇▇▇▇, N.A.
Transfer Agent and Registrar
By:
------------------------------
Authorized Signatory
The address of the Principal Office of the Depositary is ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇.
A-12
[FORM OF REVERSE OF RECEIPT]
SUMMARY OF CERTAIN ADDITIONAL PROVISIONS
OF THE DEPOSIT AGREEMENT
(14) Dividends and Distributions in Cash, Eligible Securities, etc.
Subject always to the laws and regulations of the Republic of China, whenever
the Depositary receives directly confirmation from the Custodian of receipt of
any cash dividend or other cash distribution on any Deposited Securities, or
receives proceeds from the sale of any Deposited Securities or any entitlements
held in respect of Deposited Securities under the terms of the Deposit
Agreement, the Depositary will (i) promptly convert or cause to be converted
such cash dividend, distribution or proceeds into Dollars (upon the terms of
the Deposit Agreement), (ii) if applicable, establish the ADS Record Date upon
the terms described in Paragraph (15) hereof and in Section 4.9 of the Deposit
Agreement, and (iii) distribute promptly the amount thus received (net of (a)
applicable fees and charges of, and reasonable expenses incurred by, the
Depositary and (b) taxes withheld) to the Holders entitled thereto as of the
ADS Record Date in proportion to the number of ADS held as of the ADS Record
Date. The Depositary shall distribute only such amount, however, as can be
distributed without attributing to any Holder a fraction of one cent, and any
balance not so distributed shall be held by the Depositary (without liability
for interest thereon) and shall be added to and become part of the next sum
received by the Depositary for distribution to Holders of ADSs then outstanding
at the time of the next distribution. If the Company, the Custodian or the
Depositary is required to withhold and does withhold from any cash dividend or
other cash distribution in respect of any Deposited Securities an amount on
account of taxes, duties or other governmental charges, the amount distributed
to Holders on the ADSs representing such Deposited Securities shall be reduced
accordingly. Such withheld amounts shall be forwarded by the Company, the
Custodian or the Depositary to the relevant governmental authority.
If any distribution upon any Deposited Securities consists of a dividend
in, or free distribution of, Eligible Securities, the Company shall cause such
Eligible Securities to be deposited with the Custodian and registered, as the
case may be, in the name of the Depositary, the Custodian or their respective
nominees. Upon receipt of confirmation of such deposit from the Custodian, the
Depositary shall, subject to and in accordance with the Deposit Agreement and
the laws and regulations of the Republic of China, establish the ADS Record
Date and either (i) the Depositary shall distribute to the Holders as of the
ADS Record Date in proportion to the number of ADSs held as of the ADS Record
Date, additional ADSs (of the applicable series), which represent in aggregate
the number of Eligible Securities received as such dividend, or free
distribution, subject, however, in each case, to the terms of the Deposit
Agreement (including, without limitation, the limitations set forth on the face
of this Receipt and in Article II of the Deposit Agreement and net of (a) the
applicable fees and charges of, and reasonable expenses incurred by, the
Depositary and (b) taxes), or (ii) if additional ADSs are not so distributed,
each ADS issued and outstanding after the ADS Record Date shall, to the extent
permissible by law, thenceforth also represent rights and interest in the
additional integral number of Shares distributed upon the Deposited Securities
represented thereby (subject, however, in each case, to the laws and
regulations of the Republic of China and net of (a) the applicable fees and
charges of, and the reasonable expenses incurred by, the Depositary and (b)
taxes). In lieu of delivering
A-13
fractional ADSs, the Depositary shall sell the number of Eligible Securities or
ADSs, as the case may be, represented by the aggregate of such fractions and
distribute the net proceeds upon the terms set forth in the Deposit Agreement.
In the event that the Depositary determines that any distribution in
property (including Eligible Securities) is subject to any tax or other
governmental charges which the Depositary is obligated to withhold, or, if the
Company in the fulfillment of its obligations under the Deposit Agreement, has
furnished an opinion of U.S. counsel determining that Eligible Securities must
be registered under the Securities Act or other laws in order to be distributed
to Holders (and no such registration statement has been declared effective),
the Depositary may dispose of all or a portion of such property (including
Eligible Securities and rights to subscribe therefor) in such amounts and in
such manner, including by public or private sale, as the Depositary deems
necessary and practicable and the Depositary shall distribute the net proceeds
of any such sale (after deduction of (a) taxes and (b) fees and charges of, and
reasonable expenses incurred by, the Depositary) to Holders entitled thereto
upon the terms of the Deposit Agreement. The Depositary shall hold and/or
distribute any unsold balance of such property in accordance with the
provisions of the Deposit Agreement.
Upon timely receipt of a notice indicating that the Company wishes an
elective distribution to be made available to Holders upon the terms described
in the Deposit Agreement, the Company and the Depositary shall determine
whether such distribution is lawful and reasonably practicable. If so, the
Depositary shall, subject to the terms and conditions of the Deposit Agreement,
establish an ADS record date according to Paragraph (15) and establish
procedures to enable the Holder hereof to elect to receive the proposed
distribution in cash or in additional ADSs. If a Holder elects to receive the
distribution in cash, the dividend shall be distributed as in the case of a
distribution in cash. If the Holder hereof elects to receive the distribution
in additional ADSs, the distribution shall be distributed as in the case of a
distribution in Eligible Securities. If such elective distribution is not
lawful or not reasonably practicable, the Depositary shall, to the extent
permitted by law, distribute to Holders, on the basis of the same determination
as is made in the Republic of China in respect of the Deposited Securities for
which no election is made, either (x) cash or (y) additional ADSs representing
such additional Eligible Securities, in each case, upon the terms described in
the Deposit Agreement. Nothing herein or in the Deposit Agreement shall
obligate the Depositary to make available to the Holder hereof a method to
receive the elective distribution in Eligible Securities (rather than ADSs).
There can be no assurance that the Holder hereof will be given the opportunity
to receive elective distributions on the same terms and conditions as the
holders of Deposited Securities.
Upon timely receipt by the Depositary of a notice indicating that the
Company wishes rights to subscribe for additional Eligible Securities to be
made available to Holders of ADSs, the Depositary upon consultation with the
Company, shall determine, whether it is lawful and reasonably practicable to
make such rights available to the Holders. If and whenever the Company shall
announce its intention to make any offer or invitation to the holders of
Eligible Securities to subscribe for or to acquire Eligible Securities or other
assets by way of rights, the Depositary shall as soon as practicable thereafter
give notice of the same to the Holders, including if applicable, the last date
for acceptance thereof and the manner by which and the time during which
Holders may instruct the Depositary to exercise such rights. The Depositary
shall
A-14
make such rights available to any Holders only if (i) the Company shall have
timely requested the Depositary to make such rights available to Holders, (ii)
the Depositary shall have received satisfactory documentation contemplated in
the Deposit Agreement, and (iii) the Depositary shall have determined that such
distribution of rights is reasonably practicable. In the event any of the
conditions set forth above are not satisfied or if the Company requests the
Depositary that the rights not be made available to Holders of ADSs, the
Depositary shall proceed with the sale of rights as contemplated below. In the
event that the conditions set forth above are satisfied, the Depositary shall
establish an ADS Record Date (upon the terms described in the Deposit
Agreement) and establish procedures (x) to distribute rights to purchase
additional ADSs (by means of warrants or otherwise), (y) to enable the Holders
to exercise the rights (upon payment of the subscription price and of the
applicable (a) fees and charges of, and expenses incurred by, the Depositary
and (b) taxes), and (z) to deliver ADSs upon the valid exercise of such rights.
Nothing herein or in the Deposit Agreement shall obligate the Depositary to
make available to the Holders a method to exercise rights to subscribe for
Eligible Securities (rather than ADSs). If (i) the Company does not timely
request the Depositary to make the rights available to Holders or if the
Company requests that the rights not be made available to Holders, (ii) the
Depositary fails to receive satisfactory documentation required by the Deposit
Agreement or determines it is not lawful or not reasonably practicable to make
the rights available to Holders, or (iii) any rights made available are not
exercised and appear to be about to lapse, the Depositary shall determine
whether it is lawful and reasonably practicable to sell such rights, in a
riskless principal capacity, at such place and upon such terms (including
public and private sale) as it may deem reasonably practicable. The Depositary
shall, upon such sale, convert and distribute proceeds of such sale (net of
applicable fees and charges of, and reasonable expenses incurred by, the
Depositary and taxes) upon the terms hereof and of the Deposit Agreement. If
the Depositary is unable to make any rights available to Holders or to arrange
for the sale of the rights upon the terms described above, the Depositary shall
allow such rights to lapse. The Depositary shall not be responsible for (i) any
failure to determine that it may be lawful or practicable to make such rights
available to Holders in general or any Holders in particular, (ii) any foreign
exchange exposure or loss incurred in connection with such sale, or exercise,
or (iii) the content of any materials forwarded to the ADR Holders on behalf of
the Company in connection with the rights distribution.
Notwithstanding anything herein or in the Deposit Agreement to the
contrary, if registration (under the Securities Act or any other applicable
law) of the rights or the securities to which any rights relate may be required
in order for the Company to offer such rights or such securities to Holders and
to sell the securities represented by such rights, the Depositary will not
distribute such rights to the Holders (i) unless and until a registration
statement under the Securities Act (or other applicable law) covering such
offering is in effect or (ii) unless the Company furnishes the Depositary
opinion(s) of counsel for the Company in the United States and counsel to the
Company in any other applicable country in which rights would be distributed in
each case satisfactory to the Depositary, to the effect that the offering and
sale of such securities to Holders and Beneficial Owners are exempt from, or do
not require registration under, the provisions of the Securities Act or other
applicable securities laws. In the event that the Company, the Depositary or
the Custodian shall be required to withhold and does withhold from any
distribution of property (including rights) an amount on account of taxes or
other governmental charges, the amount distributed to the Holders of ADSs
representing such Deposited Securities shall be reduced accordingly. In the
event that the Depositary determines that any distribution in property
(including Eligible Securities and rights to subscribe therefor) is
A-15
subject to any tax or other governmental charges which the Depositary is
obligated to withhold, the Depositary may dispose of all or a portion of such
property (including Eligible Securities and rights to subscribe therefor) in
such amounts and in such manner, including by public or private sale, as the
Depositary deems necessary and practicable to pay any such taxes or charges.
There can be no assurance that Holders generally, or any Holder in
particular, will be given the opportunity to exercise rights on the same terms
and conditions as the holders of Deposited Securities or be able to exercise
such rights. Nothing herein or in the Deposit Agreement shall obligate the
Company to file any registration statement in respect of any rights or Eligible
Securities or other securities to be acquired upon the exercise of such rights.
Upon receipt of a notice indicating that the Company wishes property other
than cash, Eligible Securities or rights to purchase additional Eligible
Securities, to be made to Holders of ADSs, the Depositary shall determine
whether such distribution to Holders is lawful and reasonably practicable. The
Depositary shall not make such distribution unless (i) the Company shall have
requested the Depositary to make such distribution to Holders, (ii) the
Depositary shall have received the documentation contemplated in the Deposit
Agreement, and (iii) the Depositary shall have determined that such
distribution is reasonably practicable. Upon satisfaction of such conditions,
the Depositary shall distribute the property so received to the Holders of
record, as of the ADS Record Date, in proportion to the respective number of
ADSs held by them and in such manner as the Depositary may deem practicable for
accomplishing such distribution (i) upon receipt of payment or net of the
applicable fees and charges of, and expenses incurred by, the Depositary, and
(ii) net of any taxes withheld. The Depositary may dispose of all or a portion
of the property so distributed and deposited, in such amounts and in such
manner (including public or private sale) as the Depositary may deem
practicable or necessary to satisfy any taxes (including applicable interest
and penalties) or other governmental charges applicable to the distribution.
If the conditions above are not satisfied, the Depositary shall sell or
cause such property to be sold in a public or private sale, at such place or
places and upon such terms as it may deem practicable and shall (i) cause the
proceeds of such sale, if any, to be converted into Dollars and (ii) distribute
the proceeds of such conversion received by the Depositary (net of applicable
(a) fees and charges of, and expenses incurred by, the Depositary and (b)
taxes) to the Holders as of the ADS Record Date upon the terms hereof and of
the Deposit Agreement. If the Depositary is unable to sell such property, the
Depositary may dispose of such property in any way it deems reasonably
practicable under the circumstances.
(15) Fixing of ADS Record Date. Whenever the Depositary shall receive
notice of the fixing of a record date by the Company for the determination of
holders of Deposited Securities entitled to receive any distribution (whether
in cash, Eligible Securities, rights or other distribution), or whenever for
any reason the Depositary causes a change in the number of Deposited Securities
that are represented by each ADS, or whenever the Depositary shall receive
notice of any meeting of, or solicitation of consents or proxies of, holders of
Deposited Securities, or whenever the Depositary shall find it necessary or
convenient in connection with the giving of any notice, solicitation of any
consent or any other matter, the Depositary shall fix a record date (the "ADS
Record Date") for the determination of the Holders of Receipts who shall be
entitled to receive such distribution, to give instructions for the exercise
A-16
of voting rights at any such meeting, to give or withhold such consent, to
receive such notice or solicitation or to otherwise take action, or to exercise
the rights of Holders with respect to such changed number of Deposited
Securities represented by each ADS. The Depositary shall make reasonable
efforts to establish the ADS Record Date as closely as possible to the
applicable record date for the Deposited Securities (if any) set by the Company
in the Republic of China. Subject to applicable law and the terms and
conditions of this Receipt and the Deposit Agreement, only the Holders of
Receipts at the close of business in New York on such ADS Record Date shall be
entitled to receive such distributions, to give such instructions, to receive
such notice or solicitation, or otherwise take action.
(16) Voting of Deposited Securities. (a) Voting by Shareholders. The
following is a summary of certain rights of holders of Shares, interests in
Certificate(s) of Payment and Entitlement Certificate(s), if any, to vote at
shareholders' meetings under ROC Company Law and the Articles of Incorporation
of the Company, in each case, as in effect on the date hereof: (i) a holder of
Shares (including holders of interests in any Certificate of Payment evidencing
the irrevocable right to receive Shares) is entitled to one vote for each Share
held, (ii) the election of directors and supervisors takes place by means of
cumulative voting, and (iii) a shareholder must, as to all matters subject to a
vote of shareholders (other than the election of directors and supervisors),
exercise the voting rights for all Shares held by such shareholder in the same
manner (e.g., a holder of 1,000 Shares cannot split his/her votes but must vote
all 1,000 Shares in the same manner except in the event of cumulative voting
for an election of directors and supervisors). Pursuant to ROC law, the voting
rights attaching to the Deposited Securities must be exercised by, or on behalf
of, the Depositary's nominee, as representative of the Holders and Beneficial
Owners, collectively in the same manner, except in the case of an election of
directors and supervisors, which currently should be on a cumulative basis.
Deposited Securities which have been withdrawn from the applicable ADS Facility
and timely transferred on the Company's register of shareholders to a person
other than the Depositary may be voted by the Registered Holder(s) thereof
directly, subject, in each case, to the limitations of ROC law and the Articles
of Incorporation of the Company. Holders may not receive sufficient advance
notice of shareholders' meetings to enable them to timely withdraw the
Deposited Securities and vote at such meetings and may not be able to
re-deposit the withdrawn securities under the terms of the Deposit Agreement.
(b) Voting by ADS Holders. Holders of ADSs have no individual voting
rights with respect to the Deposited Securities represented by their ADSs. Each
Holder shall, by acceptance of ADSs or acquisition of any beneficial interest
therein, have authorized and directed the Depositary's nominee, without
liability, to appoint the Chairman of the Board of Directors of the Company (or
the Chairman's designate) (the "Voting Representative"), as representative of
the Depositary's nominee, who is registered in the ROC as representative of the
Holders and Beneficial Owners in respect of the Deposited Securities (the
"Registered Holder"), to vote the Shares or Deposited Securities in accordance
with the terms hereof.
The Company agrees to use its best efforts to timely notify the Depositary
of any proposed shareholders' meeting and to timely provide to the Depositary
in New York, at least twenty-four (24) calendar days before any ordinary
shareholders' meeting or at least fourteen (14) calendar days before any
extraordinary shareholders' meeting, a sufficient number of copies reasonably
requested by the Depositary of an English language translation of the Company's
A-17
notice of shareholders' meeting and the agenda of the materials to be voted on
(in the form the Company generally makes available to holders of Shares in the
ROC, including, without limitation, a list of candidates proposed by the
Company for an election of directors or supervisors) (such materials
collectively, the "Shareholder Notice"). As soon as practicable after receipt
by the Depositary of the requisite number of Shareholder Notices, the
Depositary shall establish the ADS Record Date (upon the terms of Paragraph
(15) hereof and Section 4.9 of the Deposit Agreement) and shall, at the
Company's expense and provided that no U.S. legal prohibitions exist, deliver
to Holders as of the applicable ADS Record Date, (i) the Shareholder Notice,
(ii) a depositary notice setting forth the manner in which Holders of ADSs may
instruct the Depositary to cause the Deposited Securities represented by their
ADSs to be voted under the terms of the Deposit Agreement, including a
description of the Management Instruction (as defined below), together with a
form of voting instructions and/or other means to provide voting instructions
(the depositary notice and the related materials prepared by the Depositary
collectively, the "Depositary Notice"). The Depositary is under no obligation
to mail the Shareholder Notice and the Depositary Notice to Holders if the
Company has failed to provide to the Depositary in New York the requisite
number of Shareholder Notices at least twenty-four (24) calendar days prior to
the date of any ordinary shareholders' meeting or at least fourteen (14)
calendar days before the date of any extraordinary shareholders' meeting. If
the Depositary has not delivered the Shareholder Notice or Depositary Notice to
Holders, it will endeavor to cause all Deposited Securities represented by ADRs
to be present at the relevant shareholders' meeting insofar as practicable and
permitted under applicable law but will not cause the Shares or other Deposited
Securities to be voted; provided, however, that the Depositary may determine,
in its sole discretion, to send such Shareholder Notice and Depositary Notice
to Holders and/or cause the Shares or other Deposited Securities to be voted as
it deems appropriate. There can be no assurance that Holders generally or any
Holder in particular will receive Shareholder Notices and Depositary Notices
with sufficient time to enable the return of voting instructions to the
Depositary in a timely manner.
Notwithstanding anything else contained in the Deposit Agreement, the
Depositary shall not have any obligation to take any action with respect to any
meeting, or solicitation of consents or proxies or instructions, of holders of
Shares or other Deposited Securities if the taking of such action would violate
U.S. laws.
(c) Voting of Deposited Securities Upon ADS Holders' Instructions. If
Holders of ADSs together holding at least 51% of all the ADSs (including
Temporary ADSs) outstanding as of the relevant ADS Record Date shall instruct
the Depositary, prior to the date established for such purpose by the
Depositary, to vote in the same manner in respect of one or more resolutions to
be proposed at a shareholders' meeting (including resolutions for the election
of directors and/or supervisors), the Depositary shall notify the Voting
Representative as the representative of the Registered Holder to attend such
shareholders' meeting and vote all Deposited Securities evidenced by ADSs then
outstanding as of the ADS Record Date (including Temporary ADSs) in the manner
so instructed by such Holders. If voting instructions are received by the
Depositary on or before the date established by the Depositary for the receipt
of such instructions from any Holder as of the ADS Record Date, which are
signed but without further indication as to voting instructions, the Depositary
shall deem such Holder to have instructed a vote in favor of the items set
forth in such instructions. The Depositary and Custodian shall not have any
obligation to monitor, and shall not incur any liability for, the
A-18
actions, or the failure to act, of the Voting Representative (or his/her
designate) as representative of the Registered Holder.
(d) Depositary Authorization. If, for any reason (other than a failure by
the Company to supply the requisite number of Shareholder Notices to the
Depositary within the requisite time period provided in the Deposit Agreement),
the Depositary has not, prior to the date established for such purpose by the
Depositary, received instructions from Holders together holding at least 51% of
all ADSs (including Temporary ADSs) outstanding at the relevant ADS Record
Date, to vote in the same manner in respect of any resolution (including
resolutions for the election of directors and/or supervisors), then, subject to
the following paragraph, the Holders shall be deemed to have authorized and
directed the Depositary's nominee to authorize (the "Depositary Authorization")
the Voting Representative as the representative of the Registered Holder to
attend and vote at such meeting all the Deposited Securities represented by
ADSs then outstanding (including Temporary ADSs) in his or her discretion. In
such circumstances, the Voting Representative shall be free to exercise the
votes attaching to the Deposited Securities in any manner she/he wishes, which
may not be in the interests of the Holders.
The Depositary's Authorization, provided in the manner and under the
circumstances described in the preceding paragraph, shall be subject to the
receipt by the Depositary prior to each shareholders' meeting of an opinion of
ROC counsel of the Company addressed to, and in form and substance satisfactory
to, the Depositary to the effect that under ROC law (i) the arrangements
relating to the Depositary Authorization are permissible, and (ii) the
Depositary will not be deemed to be authorized to exercise any discretion when
causing the voting in accordance with Section 4.10 of the Deposit Agreement and
will not (in the absence of negligence, bad faith or breach of contract, and
subject to general principles of agency) be subject to any liability under ROC
law for losses arising from the exercise of the voting arrangements set out in
Section 4.10 of the Deposit Agreement on the grounds that voting in accordance
with Section 4.10 of the Deposit Agreement is in violation of ROC law. In the
event the Depositary does not receive such opinion, the Depositary will not
grant the Depositary Authorization, but will cause the Deposited Securities to
be present at the shareholders' meeting to the extent practicable and permitted
by applicable law and will not cause the Deposited Securities to be voted.
The Depositary shall not, and the Depositary shall ensure that the
Custodian and its nominees do not, vote or attempt to exercise the right to
vote that attaches to the Shares or other Deposited Securities, other than in
accordance with instructions given in accordance with Section 4.10 of the
Deposit Agreement. The terms of Section 4.10 of the Deposit Agreement may be
amended from time to time in accordance with the terms of the Deposit
Agreement. By continuing to hold ADSs after the effective time of such
amendment, all Holders and Beneficial Owners shall be deemed to have agreed to
the terms of the Deposit Agreement as so amended.
(17) Changes Affecting Deposited Securities. Upon any change in nominal or
par value, split-up, cancellation, consolidation or any other reclassification
of Deposited Securities, or upon any recapitalization, reorganization, merger
or consolidation or sale of assets affecting the Company or to which it is a
party, any securities which shall be received by the Depositary or the
Custodian in exchange for, or in conversion of or replacement of or otherwise
in respect of, such Deposited Securities shall, to the extent permitted by law,
be substituted for
A-19
and treated as Deposited Securities under the Deposit Agreement, and the
Receipts shall, subject to the provisions of the Deposit Agreement and
applicable law, evidence ADSs representing the right to receive such additional
or replacement securities, as applicable. The Depositary may, with the
Company's approval, and shall, if the Company shall so request, subject to the
terms of the Deposit Agreement and receipt by the Depositary of (a) a written
opinion of U.S. counsel (reasonably satisfactory to the Depositary) stating
whether or not: (1) such exchange, conversion or replacement requires
registration of such securities under the Securities Act and/or Exchange Act or
(2) such exchange, conversion or replacement of such securities as then
contemplated is exempt from the registration requirements of the Securities Act
and/or Exchange Act and (b) a written opinion of ROC counsel (reasonably
satisfactory to the Depositary) stating that (1) such exchange, conversion or
replacement does not violate the laws or regulations of the Republic of China
and (2) all requisite regulatory consents and approvals relating to such
exchange, conversion or replacement have been obtained in the Republic of
China, execute and deliver additional Receipts as in the case of a dividend of
Eligible Securities, or call for the surrender of outstanding Receipts to be
exchanged for new Receipts, in either case, as well as in the event of newly
deposited Shares, with necessary modifications to the form of Receipt contained
herein, specifically describing such new Deposited Securities or corporate
change. Notwithstanding the foregoing, in the event that any security so
received may not be lawfully distributed to some or all Holders, the Depositary
may, with the Company's approval, and shall, if the Company requests, subject
to receipt of an opinion of the Company 's counsel, satisfactory to the
Depositary, that such action is not in violation of any applicable laws or
regulations, sell such securities at public or private sale, at such place or
places and upon such terms as it may deem proper and may allocate the net
proceeds of such sales (net of (a) fees and charges of, and reasonable expenses
incurred by, the Depositary and (b) taxes) for the account of the Holders
otherwise entitled to such securities upon an averaged or other practicable
basis without regard to any distinctions among such Holders and distribute the
net proceeds so allocated to the extent practicable as in the case of a
distribution received in cash pursuant to the Deposit Agreement. The Depositary
shall not be responsible for (i) any failure to determine that it may be lawful
or feasible to make such securities available to Holders in general or any
Holder in particular, (ii) any foreign exchange exposure or loss incurred in
connection with such sale, or (iii) any liability to the purchaser of such
securities.
(18) Exoneration. Neither the Depositary nor the Company shall be
obligated to do or perform any act which is inconsistent with the provisions of
the Deposit Agreement or incur any liability (i) if the Depositary or the
Company shall be prevented or forbidden from, or delayed in, doing or
performing any act or thing required by the terms of the Deposit Agreement and
this Receipt, by reason of any provision of any present or future law or
regulation of the United States, the Republic of China or any other country, or
of any other governmental authority or regulatory authority or stock exchange,
or on account of the possible criminal or civil penalties or restraint, or by
reason of any provision, present or future of the Articles of Incorporation of
the Company or any provision of or governing any Deposited Securities, or by
reason of any act of God, terrorism or war or other circumstances beyond its
control (including, without limitation, nationalization, expropriation,
currency restrictions, work stoppage, strikes, civil unrest, revolutions,
rebellions, explosions and computer failure), (ii) by reason of any exercise
of, or failure to exercise, any discretion provided for in the Deposit
Agreement or in the Articles of Incorporation of the Company or provisions of
or governing Deposited Securities, (iii) for any action or inaction in reliance
upon the advice or information from legal counsel,
A-20
accountants, any person presenting Shares for deposit, any Holder, any
Beneficial Owner or authorized representative thereof, or any other person
believed by it in good faith to be competent to give such advice or
information, (iv) for the inability by a Holder or Beneficial Owner to benefit
from any distribution, offering, right or other benefit which is made available
to holders of Deposited Securities but is not, under the terms of this Deposit
Agreement, made available to Holders of ADS or (v) for any consequential or
punitive damages for any breach of the terms of the Deposit Agreement. The
Depositary, its controlling persons, its agents, any Custodian and the Company,
its controlling persons and its agents may rely and shall be protected in
acting upon any written notice, request or other document believed by it to be
genuine and to have been signed or presented by the proper party or parties. No
disclaimer of liability under the Securities Act is intended by any provision
of the Deposit Agreement or this Receipt.
(19) Standard of Care. The Company and its agents assume no obligation and
shall not be subject to any liability under the Deposit Agreement or the
Receipts to Holders or Beneficial Owners or other persons, except that the
Company and its agents agree to perform their obligations specifically set
forth in the Deposit Agreement without negligence or bad faith. The Depositary
and its agents assume no obligation and shall not be subject to any liability
under the Deposit Agreement or the Receipts to Holders or Beneficial Owners or
other persons, except that the Depositary and its agents agree to perform their
obligations specifically set forth in the Deposit Agreement without negligence
or bad faith. Without limitation of the foregoing, neither the Depositary, nor
the Company, nor any of their respective controlling persons, or agents, shall
be under any obligation to appear in, prosecute or defend any action, suit or
other proceeding in respect of any Deposited Securities or in respect of the
Receipts, which in its opinion may involve it in expense or liability, unless
indemnity satisfactory to it against all expense (including reasonable fees and
disbursements of counsel) and liability be furnished as often as may be
required (and no Custodian shall be under any obligation whatsoever with
respect to such proceedings, the responsibility of the Custodian being solely
to the Depositary). The Depositary and its agents shall not be liable for any
failure to carry out any instructions to vote any of the Deposited Securities,
or for the manner in which any vote is cast or the effect of any vote, provided
that any such action or omission is in good faith and without negligence and in
accordance with the terms of the Deposit Agreement. Provided that the
Depositary acts or omits to act in good faith and without negligence, the
Depositary shall not incur any liability for any failure to determine that any
distribution or action may be lawful or reasonably practicable, for the content
of any information submitted to it by the Company for distribution to the
Holders or for any inaccuracy of any translation thereof, for any investment
risk associated with acquiring an interest in the Deposited Securities, for the
validity or worth of the Deposited Securities or for any tax consequences that
may result from the ownership of ADSs, Shares or Deposited Securities, for the
credit-worthiness of any third party, for allowing any rights to lapse upon the
terms of the Deposit Agreement, for the failure or timeliness of any notice
from the Company. Nothing in this Receipt or in the Deposit Agreement shall
cause the Depositary or any of its agents to incur any liability as a result of
any action or failure to act by any trustee under a Trust Deed governing the
Bonds.
(20) Resignation and Removal of the Depositary; Appointment of Successor
Depositary. The Depositary may at any time resign as Depositary under the
Deposit Agreement by written notice of resignation delivered to the Company,
such resignation to be effective on the
A-21
earlier of (i) the 60th day after delivery thereof to the Company, or (ii) upon
the appointment of a successor depositary and its acceptance of such
appointment as provided in the Deposit Agreement. The Depositary may at any
time be removed by the Company by written notice of such removal which notice
shall be effective on the earlier of (i) the 60th day after delivery thereof to
the Depositary, or (ii) upon the appointment of a successor depositary and its
acceptance of such appointment as provided in the Deposit Agreement. In case at
any time the Depositary acting hereunder shall resign or be removed, the
Company shall use its best efforts to appoint a successor depositary, which
shall be a bank or trust company having an office in the Borough of Manhattan,
the City of New York. Every successor depositary shall be required by the
Company to execute and deliver to its predecessor and to the Company an
instrument in writing accepting its appointment hereunder, and thereupon such
successor depositary, without any further act or deed (except as required by
applicable law), shall become fully vested with all the rights, powers, duties
and obligations of its immediate predecessor other than as contemplated in the
Deposit Agreement. The immediate predecessor depositary, upon payment of all
sums due to it and on the written request of the Company, shall (i) execute and
deliver an instrument transferring to such successor all rights and powers of
such predecessor hereunder (other than as contemplated in the Deposit
Agreement), (ii) duly assign, transfer and deliver all rights, titles and
interests to the Deposited Securities to such successor, and (iii) deliver to
such successor a list of the Holders of all outstanding Receipts and such other
information relating to Receipts and Holders thereof as the successor may
reasonably request. Any such successor depositary shall promptly provide notice
of its appointment to such Holders. Any corporation into or with which the
Depositary may be merged or consolidated shall be the successor of the
Depositary without the execution or filing of any document or any further act.
(21) Amendment/Supplement. This Receipt and any provisions of the Deposit
Agreement may at any time and from time to time be amended or supplemented by
written agreement between the Company and the Depositary in any respect which
they may deem necessary or desirable without the prior written consent of the
Holders or Beneficial Owners. Any amendment or supplement which shall impose or
increase any fees or charges (other than the charges in connection with foreign
exchange control regulations, and taxes and other governmental charges,
delivery and other such expenses), or which shall otherwise materially
prejudice any substantial existing right of Holders or Beneficial Owners, shall
not, however, become effective as to outstanding Receipts until the expiration
of thirty (30) days after notice of such amendment or supplement shall have
been given to the Holders of outstanding Receipts. The parties hereto agree
that any amendments or supplements which (i) are reasonably necessary (as
agreed by the Company and the Depositary) in order for (a) the ADSs to be
registered on Form F-6 under the Securities Act or (b) the ADSs to be traded
solely in electronic book-entry form and (ii) do not in either such case impose
or increase any fees or charges to be borne by Holders, shall be deemed not to
materially prejudice any substantial rights of Holders or Beneficial Owners.
Every Holder and Beneficial Owner at the time any amendment or supplement
becomes effective shall be deemed, by continuing to hold such ADS(s), to
consent and agree to such amendment or supplement and to be bound by the
Deposit Agreement as amended or supplemented thereby. In no event shall any
amendment or supplement impair the right of the Holder to surrender such
Receipt and receive therefor the Deposited Securities represented thereby,
except in order to comply with mandatory provisions of applicable law.
Notwithstanding the foregoing, if any governmental body should adopt new laws,
rules or regulations which would require amendment or supplement of the Deposit
Agreement to ensure
A-22
compliance therewith, the Company and the Depositary may amend or supplement
the Deposit Agreement and this Receipt at any time in accordance with such
changed laws, rules or regulations. Such amendment or supplement to the Deposit
Agreement in such circumstances may become effective before a notice of such
amendment or supplement is given to Holders or within any other period of time
as required for compliance with such laws, rules or regulations.
(22) Termination. The Depositary shall, at any time at the written
direction of the Company, terminate the Deposit Agreement by providing notice
of such termination to the Holders of all Receipts then outstanding at least
thirty (30) days prior to the date fixed in such notice for such termination.
If sixty (60) days shall have expired after (i) the Depositary shall have
delivered to the Company a written notice of its election to resign, or (ii)
the Company shall have delivered to the Depositary a written notice of the
removal of the Depositary, and in either case a successor depositary shall not
have been appointed and accepted its appointment as provided herein and in the
Deposit Agreement, the Depositary may terminate the Deposit Agreement by
providing notice of such termination to the Holders of all Receipts then
outstanding at least thirty (30) days prior to the date fixed for such
termination. On and after the date of termination of the Deposit Agreement, the
Holder of a Receipt will, upon surrender of such Receipt at the Principal
Office of the Depositary, upon the payment of the charges of the Depositary for
the surrender of Receipts referred to in Paragraph (2) hereof and in the
Deposit Agreement and subject to the conditions and restrictions therein set
forth and subject always to the restrictions on withdrawal as may be in effect
under the laws and regulations of the Republic of China, and upon payment of
any applicable taxes or governmental charges, be entitled to Delivery, to him
or upon his order, of the amount of Deposited Securities represented by such
Receipt. If any Receipts shall remain outstanding after the date of termination
of the Deposit Agreement, the Registrar thereafter shall discontinue the
registration of transfers of Receipts, and the Depositary shall suspend the
distribution of dividends to the Holders thereof, and shall not give any
further notices or perform any further acts under the Deposit Agreement, except
that the Depositary shall continue to collect dividends and other distributions
pertaining to Deposited Securities, shall sell rights as provided in the
Deposit Agreement, and shall continue to deliver Deposited Securities, subject
to the conditions and restrictions set forth in the Deposit Agreement, together
with any dividends or other distributions received with respect thereto and the
net proceeds of the sale of any rights or other property, in exchange for
Receipts surrendered to the Depositary (after deducting, or charging, as the
case may be, in each case the charges of the Depositary for the surrender of a
Receipt, any expenses for the account of the Holder in accordance with the
terms and conditions of the Deposit Agreement and any applicable taxes or
governmental charges or assessments). At any time after the expiration of six
(6) months from the date of termination of the Deposit Agreement, the
Depositary may sell the Deposited Securities then held hereunder and may
thereafter hold uninvested the net proceeds of any such sale, together with any
other cash then held by it hereunder, in an unsegregated account, without
liability for interest for the pro rata benefit of the Holders whose Receipts
have not theretofore been surrendered, such Holders thereupon becoming general
creditors of the Depositary with respect to such net proceeds. After making
such sale, the Depositary shall be discharged from all obligations under the
Deposit Agreement with respect to the Receipts, the Deposited Securities and
the ADSs, except to account for such net proceeds and other cash (after
deducting, or charging, as the case may be, in each case, the charges of the
Depositary for the surrender of a Receipt, any expenses for the account of the
Holder in accordance with the terms and conditions of the Deposit Agreement and
any applicable taxes or governmental charges or assessments).
A-23
Upon the termination of the Deposit Agreement, the Company shall be discharged
from all obligations under the Deposit Agreement except as set forth in the
Deposit Agreement.
(23) Compliance with U.S. Securities Laws. Notwithstanding any provisions
in this Receipt or the Deposit Agreement to the contrary, the withdrawal or
delivery of Deposited Securities will not be suspended by the Company or the
Depositary except as would be permitted by Instruction I.A.(1) of the General
Instructions to Form F-6 Registration Statement, as amended from time to time,
under the Securities Act of 1933.
(24) Certain Rights of the Depositary; Limitations. Subject always to the
laws and regulations of the Republic of China and to the further terms and
provisions of this Paragraph (24) and Section 5.10 of the Deposit Agreement,
the Depositary, its Affiliates and their agents, on their own behalf, may own
and deal in any class of securities of the Company and its Affiliates and in
ADSs. In its capacity as Depositary, the Depositary shall not lend Deposited
Securities or ADSs; provided, however, that the Depositary may, to the extent
permitted by applicable law, (i) issue ADSs prior to the receipt of Eligible
Securities pursuant to Section 2.3 of the Deposit Agreement and (ii) deliver
Deposited Securities only upon the prior receipt of ADSs for cancellation upon
withdrawal of Deposited Securities pursuant to Section 2.7 of the Deposit
Agreement, including ADSs which were issued under (i) above but for which
Eligible Securities may not have been received (each such transaction in (i)
above a "Pre-Release Transaction"). The Depositary may receive ADSs in lieu of
Eligible Securities under (i) above. Each such Pre-Release Transaction will be
(a) subject to a written agreement whereby the person or entity (the
"Applicant") to whom ADSs or Deposited Securities are to be delivered (w)
represents that at the time of the Pre-Release Transaction the Applicant or its
customer owns the Eligible Securities that are to be delivered by the Applicant
under such Pre-Release Transaction, (x) agrees to indicate the Depositary as
owner of such Eligible Securities in its records and to hold such Eligible
Securities in trust for the Depositary until such Eligible Securities are
delivered to the Depositary or the Custodian, (y) unconditionally guarantees to
deliver to the Depositary or the Custodian, as applicable, such Eligible
Securities, and (z) agrees to any additional restrictions or requirements that
the Depositary deems appropriate, (b) at all times fully collateralized with
cash, United States government securities or such other collateral as the
Depositary deems appropriate, (c) terminable by the Depositary on not more than
five (5) business days' notice and (d) subject to such further indemnities and
credit regulations as the Depositary deems appropriate. The Depositary will
normally limit the number of ADSs and Eligible Securities involved in such
Pre-Release Transactions at any one time to thirty percent (30%) of the ADSs
outstanding (without giving effect to ADSs outstanding under (i) above),
provided, however, that the Depositary reserves the right to disregard such
limit from time to time as it deems appropriate and may, with the prior written
consent of the Company, change such limit for purposes of general application.
The Depositary may also set limits with respect to the number of ADSs and
Eligible Securities involved in Pre-Release Transactions with any one person on
a case by case basis as it deems appropriate. The Depositary may retain for its
own account any compensation received by it in conjunction with the foregoing.
Collateral provided pursuant to (b) above, but not the earnings thereon, shall
be held for the benefit of the Holders (other than the Applicant). Temporary
COP ADSs, Temporary EC ADSs, Certificate of Payment and Entitlement
Certificates shall not be eligible for Pre-Release Transactions hereunder.
A-24
In addition, to the extent permitted under applicable law, in its capacity
as Depositary, the Depositary may, when a Holder of ADSs so requests, cause the
Deposited Shares to be sold and deliver the proceeds of the sale prior to the
receipt and cancellation of ADSs (each such transaction a "Pre-Cancellation
Sale") prior to the receipt of ADSs for cancellation. Each such
Pre-Cancellation Sale will be (a) accompanied by or subject to a written
agreement whereby the person or entity (the "Applicant") to whom the proceeds
of the sale of Deposited Securities are to be delivered which, (i) represents
that at the time of the Pre-Cancellation Sale, the Applicant or its customer
owns the ADSs that are to be delivered by the Applicant under such
Pre-Cancellation Sale, (ii) agrees to indicate the Depositary as owner of such
ADSs in its records and to hold such ADSs in trust for the Depositary until
such ADSs are delivered to the Depositary, (iii) unconditionally guarantees to
deliver to the Depositary such ADSs, and (iv) agrees to any additional
restrictions or requirements that the Depositary deems appropriate; (b) at all
times fully collateralized with cash, United States government securities or
such other collateral as the Depositary deems appropriate; (c) terminable by
the Depositary on not more than five (5) business days notice; and (d) subject
to such further indemnities and credit regulations as the Depositary deems
appropriate and may, with the prior written consent of the Company, change such
limit for purposes of general application.
The Depositary will normally limit the number of Deposited Securities
involved in such Pre-Cancellation Sales at any one time to thirty percent (30%)
of the Deposited Securities outstanding, provided, however, that the Depositary
reserves the right to disregard such limit from time to time as it deems
appropriate.
A-25
(ASSIGNMENT AND TRANSFER SIGNATURE LINES)
FOR VALUE RECEIVED, the undersigned Holder hereby sell(s), assign(s) and
transfer(s) unto ______________________________ whose taxpayer identification
number is _______________________ and whose address including postal zip code
is ________________, the within Receipt and all rights thereunder, hereby
irrevocably constituting and appointing ________________________
attorney-in-fact to transfer said Receipt on the books of the Depositary with
full power of substitution in the premises.
Dated: Name:
----------------------------------
By:
Title:
NOTICE: The signature of the Holder to
this assignment must correspond with the
name as written upon the face of the
within instrument in every particular,
without alteration or enlargement or any
change whatsoever.
If the endorsement be executed by an
attorney, executor, administrator,
trustee or guardian, the person executing
the endorsement must give his/her full
title in such capacity and proper
evidence of authority to act in such
capacity, if not on file with the
Depositary, must be forwarded with this
Receipt.
All endorsements or assignments of
Receipts must be guaranteed by a member
of a Medallion Signature Program approved
by the Securities Transfer Association,
Inc.
SIGNATURE GUARANTEED
A-26
Legends
[The Receipts issued in respect of Partial Entitlement American Depositary
Shares shall bear the following legend on the face of the Receipt: "This
Receipt evidences American Depositary Shares representing partial
entitlement' [common shares][interests in the global Certificates of
Payment][Entitlement Certificates] of AU Optronics Corp., and as such do
not entitle the holders thereof to the same per-security entitlement as
other [common shares][interests in the global Certificates of
Payment][Entitlement Certificates] (which are 'full entitlement' [common
shares][interests in the global Certificates of Payment][Entitlement
Certificates]) issued and outstanding at such time. The American
Depositary Shares represented by this Receipt shall entitle holders to
distributions and entitlements identical to other American Depositary
Shares when the [common shares][interests in the global Certificates of
Payment][Entitlement Certificates] represented by such American Depositary
Shares become 'full entitlement' [common shares][interests in the global
Certificates of Payment][Entitlement Certificates]".]
A-27
EXHIBIT B
FEE SCHEDULE
DEPOSITARY FEES AND RELATED CHARGES
All capitalized terms used but not otherwise defined herein shall have the
meaning given to such terms in the Deposit Agreement.
I. Depositary Fees
The Company, the Holders, the Beneficial Owners and the persons depositing
Shares or surrendering ADSs for cancellation agree to pay the following fees of
the Depositary:
--------------------------------------------------------------------------------------------------------------------
Service Rate By Whom Paid
--------------------------------------------------------------------------------------------------------------------
(1) Issuance of ADSs upon deposit Up to $5.00 per 100 ADSs (or Person for whom deposits are made
of Eligible Securities fraction thereof) issued. or person receiving ADSs.
(including issuance of (i) EC
ADSs upon deposit of
Entitlement Certificates and
(ii) COP ADSs upon deposit
of Certificate(s) of
Payment, but, excluding
issuances contemplated by
paragraphs (3)(b) and (5)
below).
--------------------------------------------------------------------------------------------------------------------
(2) Delivery of Deposited Up to $5.00 per 100 ADSs (or Person surrendering ADSs or making
Securities, property and fraction thereof) surrendered. withdrawal.
cash against surrender of
ADSs.
--------------------------------------------------------------------------------------------------------------------
(3) Distribution of (a) cash No fee, so long as prohibited by Person to whom distribution is made.
dividend or (b) ADSs the exchange upon which the ADSs
pursuant to stock dividends are listed. If the charging of
(or other free distribution such fee is not prohibited, the
of stock). fees specified in (1) above shall
be payable in respect of a
distribution of ADSs pursuant to stock
dividends (or other free distribution
of stock) and the fees specified in
(4) below shall be payable in respect
of distributions of cash.
--------------------------------------------------------------------------------------------------------------------
(4) Distribution of cash proceeds Up to $2.00 per 100 ADSs (or Person to whom distribution is made.
(i.e., upon sale of rights fraction thereof) held.
and other entitlements).
--------------------------------------------------------------------------------------------------------------------
B-1
--------------------------------------------------------------------------------------------------------------------
(5) Distribution of ADSs pursuant Up to $5.00 per 100 ADSs (or Person to whom distribution is made.
to exercise of rights to fraction thereof) issued.
purchase additional ADSs.
--------------------------------------------------------------------------------------------------------------------
II. Charges
Holders, Beneficial Owners, persons depositing Eligible Securities for
deposit and persons surrendering ADSs for cancellation and for the purpose of
withdrawing Deposited Securities shall be responsible for the following
charges:
(i) taxes (including applicable interest and penalties) and other governmental
charges;
(ii) such registration fees as may from time to time be in effect for the
registration of Deposited Securities on the share register and applicable
to transfers of Deposited Securities to or from the name of the Custodian,
the Depositary or any nominees upon the making of deposits and
withdrawals, respectively;
(iii) such cable, telex and facsimile transmission and delivery expenses as are
expressly provided in the Deposit Agreement to be at the expense of the
person depositing Eligible Securities or Holders and Beneficial Owners of
ADSs;
(iv) the expenses and charges incurred by the Depositary in the conversion of
foreign currency;
(v) such fees and expenses as are incurred by the Depositary in connection
with compliance with exchange control regulations and other regulatory
requirements applicable to Eligible Securities, Deposited Securities, ADSs
and ADRs; and
(vi) the fees and expenses incurred by the Depositary in connection with the
delivery of Deposited Securities.
B-2
Form of Certification Upon Withdrawal.
--------------------------------------
EXHIBIT C
Certification and Agreement of Persons Surrendering
ADSs for the Purpose of Withdrawal of
Deposited Securities Pursuant to Section 2.7 of the
Deposit Agreement
Citibank, N.A.
ADR Department
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Re: AU Optronics Corp.
------------------
We refer to the Deposit Agreement, dated as of May 29, 2002 (the "Deposit
Agreement"), among AU Optronics Corp. (the "Company"), CITIBANK, N.A., as
Depositary, and Holders and Beneficial Owners from time to time of American
Depositary Shares (the "ADSs") evidenced by American Depositary Receipts (the
"Receipts") issued thereunder. Capitalized terms used but not defined herein
shall have the meanings given them in the Deposit Agreement. We are providing
the information herein to enable the Company to comply with its reporting
obligations under the laws and regulations of the Republic of China and
understand that the Company will rely upon the information provided herein for
such purpose.
1. We are surrendering ADSs or giving withdrawal instructions through DTC
in accordance with the terms of the Deposit Agreement for the purpose of
withdrawal of the Deposited Securities represented by the ADSs (the "Shares")
pursuant to Section 2.7 of the Deposit Agreement.
2. We certify (or if we are acting for the account of another person, such
person has confirmed to us that it certifies) that:
(please check the applicable box in (a) below and fill in the missing
information in (b) below, as appropriate)
--> (a) [ ] We are (it is) a "Related Person" of the Company (as defined
below).
or
[ ] We are (it is) not a "Related Person" of the Company (as
defined below).
AND
C-1
--> (b)(i) We will own ____________________ Shares of the Company, after
(fill in) cancellation of the ADSs
surrendered hereby (do not
include Shares represented by
ADSs included in (b)(ii) below);
and
(ii) We will own ____________________ ADSs representing Shares of
(fill in) the Company, after cancellation
of the ADSs surrendered hereby.
3. We certify (or if we are acting for the account of another person, such
person has confirmed to us that it certifies) that:
(i) We are (or the person for the account of which we are acting is) the
Beneficial Owner of the ADSs hereby surrendered to the Depositary for
withdrawal of the Shares represented thereby;
AND
(ii) We hereby certify that the following information is true and correct:
Name of Beneficial Owner of ADSs:____________________________________
Address of Beneficial Owner of ADSs:_________________________________
_____________________________________________________________________
Nationality of Beneficial Owner of ADSs:_____________________________
Name of recipient of Shares withdrawn hereby ("Recipient"):__________
Nationality of Recipient:____________________________________________
Identity Number of Recipient (only required, if Recipient in
a ROC person):_______________________________________________________
Number of ADSs surrendered hereby:___________________________________
Number of Shares withdrawn hereby and registered in the name
of the Recipient:
The aggregate number of Shares and other certificates evidencing Shares,
Recipient has received upon all withdrawals
since execution of this Deposit Agreement:___________________________
Date:________________________________________________________________
C-2
4. If we are a broker-dealer, we further certify that we are acting for
the account of our customer and that our customer has confirmed the accuracy of
the representations contained in paragraphs 1 through 3 hereof that are
applicable to it.
_______________________________________________________________________________
A person or entity is deemed to be a "Related Person" of the Company if the
person or entity is:
(a) (i) a company of which the chairman of the board of directors or the
general manager serves as the chairman of the board of directors
or the chairman of the Company, or the spouse or member of the
immediate second family of the chairman of the board of
directors or general manager of the Company;
(ii) a non-profit organization of which the funds donated from the
Company exceeds one-third of the non-profit organization's total
funds;
(iii) a director, supervisor or general manager, vice-general
manager, assistant vice-general manager, or departmental head
reporting to the general manager;
(iv) the spouse of a director, supervisor or general manager of the
Company; or
(v) a member of the immediate or second immediate families of the
Company's chairman of the board of directors or general manager.
OR
(b) a person or entity that has control or influence over the Company.
Very truly yours,
[NAME OF CERTIFYING ENTITY]
By:
---------------------------------
Name
Title:
C-3
TABLE OF CONTENTS
Page
----
ARTICLE I
DEFINITIONS..................................................................2
Section 1.1 "ADS Record Date"..........................................2
Section 1.2 "Affiliate"................................................2
Section 1.3 "American Depositary Share(s)".............................2
Section 1.4 "Applicant"................................................2
Section 1.5 "Beneficial Owner".........................................2
Section 1.6 "Bonds"....................................................3
Section 1.7 "Business Day".............................................3
Section 1.8 "Certificate(s) of Payment" and "COP(s)"...................3
Section 1.9 "Commission"...............................................3
Section 1.10 "Company"..................................................3
Section 1.11 "Custodian"................................................3
Section 1.12 "Deliver" and "Delivery"...................................3
Section 1.13 "Deposit Agreement"........................................3
Section 1.14 "Depositary"...............................................3
Section 1.15 "Deposited Securities".....................................3
Section 1.16 "Dollars" and "$"..........................................4
Section 1.17 "DTC"......................................................4
Section 1.18 "DTC Participant"..........................................4
Section 1.19 "Eligible Securities"......................................4
Section 1.20 "Eligible Securities Registrar"............................4
Section 1.21 "Entitlement Certificate(s)" and "ECs".....................4
Section 1.22 "Exchange Act".............................................4
Section 1.23 "Foreign Currency".........................................4
Section 1.24 "Holder"...................................................5
Section 1.25 "Initial Deposit"..........................................5
Section 1.26 "NT dollars" and "NT$".....................................5
Section 1.27 "Offering".................................................5
Section 1.28 "Pre-Cancellation Sale"....................................5
Section 1.29 "Pre-Release Transaction"..................................5
Section 1.30 "Principal Office".........................................5
Section 1.31 "Prospectus"...............................................5
Section 1.32 "Receipt(s)"; "American Depositary Receipt(s)" and
"ADR(s)"...................................................5
Section 1.33 "Registrar"................................................5
Section 1.34 "Republic of China", "ROC" and "Taiwan"....................6
Section 1.35 "Restricted Securities"....................................6
Section 1.36 "Restricted ADRs" , "Restricted ADS(s)" and
"Restricted Shares"........................................6
Section 1.37 "Securities Act"...........................................6
Section 1.38 "SFC"......................................................6
Section 1.39 "Shares"...................................................6
Section 1.40 "Share American Depositary Share(s)" and "Share ADS(s)"....7
i
Section 1.41 "Share American Depositary Receipt(s)" and "Share ADR(s)"...7
Section 1.42 "Shareholder Notice"........................................7
Section 1.43 "Taiwan Securities Central Depository"......................7
Section 1.44 "Taiwan Stock Exchange" and "TSE"...........................7
Section 1.45 "Temporary ADS(s)"..........................................7
Section 1.46 "Temporary ADR(s)"..........................................7
Section 1.47 "Temporary EC ADS(s)".......................................7
Section 1.48 "Temporary EC ADR(s)".......................................7
Section 1.49 "Temporary COP ADS(s)"......................................8
Section 1.50 "Temporary COP ADR(s)"......................................8
Section 1.51 "Trust Deed"................................................8
Section 1.52 "United States".............................................8
Section 1.53 "Voting Representative".....................................8
ARTICLE II
APPOINTMENT OF DEPOSITARY; FORM OF RECEIPTS; DEPOSIT OF ELIGIBLE SECURITIES;
EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS....................8
Section 2.1 Appointment of Depositary...................................8
Section 2.2 Form and Transferability of Receipts........................9
Section 2.3 Deposit with Custodian.....................................10
Section 2.4 Registration and Safekeeping of Deposited Securities.......12
Section 2.5 Execution and Delivery of Receipts.........................13
Section 2.6 Transfer, Combination and Split-up of Receipts.............13
Section 2.7 Surrender of ADSs and Withdrawal and Sale of
Deposited Securities.......................................14
Section 2.8 Additional Limitations on Execution and Delivery,
Transfer, etc. of Receipts; Suspension of Delivery,
Transfer, etc..............................................16
Section 2.9 Lost Receipts, etc.........................................17
Section 2.10 Cancellation and Destruction of Surrendered Receipts;
Maintenance of Records.....................................18
Section 2.11 Partial Entitlement ADSs...................................18
Section 2.12 Temporary COP ADSs.........................................18
Section 2.13 Temporary EC ADSs..........................................20
Section 2.14 Restricted ADSs............................................22
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS AND BENEFICIAL
OWNERS OF ADSs...............................................................23
Section 3.1 Proofs, Certificates and Other Information.................23
Section 3.2 Liability for Taxes and Other Charges......................24
Section 3.3 Representations and Warranties on Deposit of
Eligible Securities........................................24
Section 3.4 Compliance with Information Requests.......................25
Section 3.5 Ownership Restrictions.....................................26
ii
ARTICLE IV
THE DEPOSITED SECURITIES.....................................................26
Section 4.1 Cash Distributions.........................................26
Section 4.2 Distribution in Eligible Securities........................27
Section 4.3 Elective Distributions in Cash or Eligible Securities......27
Section 4.4 Distribution of Rights to Purchase Additional ADSs.........28
Section 4.5 Distributions Other Than Cash, Eligible Securities or
Rights to Purchase Eligible Securities.....................30
Section 4.6 Intentionally Omitted......................................31
Section 4.7 Intentionally Omitted......................................31
Section 4.8 Conversion of Foreign Currency.............................31
Section 4.9 Fixing of ADS Record Date..................................31
Section 4.10 Voting of Deposited Securities.............................32
Section 4.11 Changes Affecting Deposited Securities.....................35
Section 4.12 Available Information......................................35
Section 4.13 Reports....................................................36
Section 4.14 List of Holders............................................36
Section 4.15 Taxation...................................................36
ARTICLE V
THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY................................37
Section 5.1 Maintenance of Office and Transfer Books by the Registrar..37
Section 5.2 Exoneration................................................37
Section 5.3 Standard of Care...........................................38
Section 5.4 Resignation and Removal of the Depositary;
Appointment of Successor Depositary........................39
Section 5.5 The Custodian..............................................40
Section 5.6 Notices and Reports........................................40
Section 5.7 Issuance of Additional Shares, ADSs, etc...................41
Section 5.8 Indemnification............................................42
Section 5.9 Fees and Charges of Depositary.............................42
Section 5.10 Pre-Release Transactions and Pre-Cancellation Sales........43
Section 5.11 Restricted Securities Owners...............................44
ARTICLE VI
AMENDMENT AND TERMINATION....................................................44
Section 6.1 Amendment/Supplement.......................................44
Section 6.2 Termination................................................45
ARTICLE VII
MISCELLANEOUS................................................................46
Section 7.1 Counterparts...............................................46
Section 7.2 No Third-Party Beneficiaries...............................46
Section 7.3 Severability...............................................47
Section 7.4 Holders and Beneficial Owners as Parties; Binding Effect...47
Section 7.5 Notices....................................................47
iii
Section 7.6 Governing Law and Jurisdiction.............................48
Section 7.7 Assignment.................................................49
Section 7.8 Compliance with U.S. Securities Laws.......................49
Section 7.9 Titles and References......................................49
Exhibits
Exhibit A Form of Receipt....................................................A-1
Exhibit B Fee Schedule.......................................................B-1
Exhibit C Certification Upon Withdrawal......................................C-1
iv