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COMMON STOCK DEPOSIT AGREEMENT
BETWEEN
CITIBANK, N.A.,
as Depositary
AND
HOLDERS OF
AMERICAN DEPOSITARY RECEIPTS
EVIDENCING
AMERICAN DEPOSITARY SHARES
REPRESENTING
COMMON STOCK
OF
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
Dated as of October 19, 1994
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COMMON STOCK DEPOSIT AGREEMENT
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DEPOSIT AGREEMENT dated as of October 19, 1994 between CITIBANK, N.A.,
a national banking association organized under the laws of the United States, as
depositary (such entity and any successor as depositary hereunder, the
"Depositary"), and all holders from time to time of the ADRs issued hereunder
and the ADSs evidenced by such ADRs. The ADSs shall represent Common Stock (as
hereinafter defined) of PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, a
corporation organized under the laws of the Republic of the Philippines (the
"Company").
W I T N E S S E T H:
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WHEREAS, the parties hereto desire through the Depositary to provide
for the deposit of Common Stock of the Company from time to time with the
Depositary or a Custodian, as agent of the Depositary, for the creation of
American Depositary Shares representing such Common Stock so deposited and for
the execution and delivery of American Depositary Receipts evidencing such
American Depositary Shares; and
WHEREAS, the American Depositary Receipts are to be substantially in
the form of Exhibit A annexed hereto, with appropriate insertions, modifications
and omissions, as hereinafter provided in this Deposit Agreement.
NOW, THEREFORE, in consideration of the premises the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
The following definitions shall for all purposes, unless otherwise
clearly indicated, apply to the respective terms used in this Deposit Agreement:
Section 1.01. ADRs. The term "ADRs" shall mean the American Depositary
Receipts issued hereunder evidencing ADSs, as such American Depositary Receipts
may be amended from time to time in accordance with the provisions of this
Deposit Agreement. An ADR may evidence any number of ADSs.
Section 1.02. ADSs. The term "ADSs" shall mean the rights evidenced by
the ADRs issued hereunder and the interests in the Deposited Securities
represented thereby. Each ADS shall represent one share of Common Stock until
there shall occur a distribution upon Deposited Securities referred to in
Section 4.03 or a change in Deposited Securities referred to in Section 4.09
with respect to which additional ADRs are not issued, and thereafter each ADS
shall represent the right to receive the Deposited Securities specified in such
Sections.
Section 1.03. Commission. The term "Commission" shall mean the
Securities and Exchange Commission of the United States or any successor
governmental agency in the United States.
Section 1.04. Common Stock. The term "Common Stock" shall mean the
common capital stock of the Company, par value P5 per share, and shall include
evidence of rights to receive Common Stock (including, but not limited to,
purchase invoices as may effectuate the legal transfer of title to Common Stock
under Philippine law); provided, however, that if there shall occur any change
in par value, a split-up or consolidation or any other reclassification or, upon
the occurrence of an event described in Section 4.09, an exchange or conversion
in respect of the Common Stock of the Company, the term "Common Stock" shall
thereafter represent the successor securities resulting from such change in par
value, split-up or consolidation or such other reclassification or such exchange
or conversion.
Section 1.05. Company. The term "Company" shall have the meaning set
forth in the introductory paragraph of this Deposit Agreement.
Section 1.06. Company Agreement. The term "Company Agreement" shall
have the meaning given such term in Section 4.10.
Section 1.07. Custodian. The term "Custodian" shall mean, as of the
date hereof, Citibank, N.A., Manila, ▇▇▇▇ ▇▇▇▇▇ ▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇, as agent of the Depositary for the purposes of this Deposit
Agreement, and any other firm or corporation that may be appointed by the
Depositary pursuant to the terms of Section 5.06 as additional or substitute
Custodian hereunder, as the context shall require, and the term "Custodian"
shall mean all of them, collectively.
Section 1.08. Deposit Agreement. The term "Deposit Agreement" shall
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mean this Deposit Agreement, as the same may be amended from time to time in
accordance with the provisions hereof and all instruments supplemental hereto.
Section 1.09. Depositary. The term "Depositary" shall have the meaning
set forth in the introductory paragraph of this Deposit Agreement.
Section 1.10. Deposited Securities. The term "Deposited Securities" as
of any time shall mean the Common Stock at such time deposited under this
Deposit Agreement and any and all other securities, property and cash received
by the Depositary or the Custodian in respect thereof and at such time held
hereunder, subject in the case of cash to the provisions of Section 4.06.
Section 1.11. Dollars; Pesos. The term "dollars" shall mean United
States dollars. The term "Pesos" or "P" shall mean Philippine pesos.
Section 1.12. Holder. The term "Holder" shall mean the person or
persons in whose name an ADR is registered on the register of the Depositary
maintained for such purpose.
Section 1.13. Nominee. The term "Nominee" when used with respect to the
Depositary shall mean Citicorp Trade Services Limited, a corporation organized
under the laws of Hong Kong. The Nominee shall perform in whatever capacity and
to whatever extent under this Deposit Agreement as the Depositary designates in
its appointment of the Nominee. Such appointment may be evidenced by written
agreement, letter, telegram, telex or facsimile transmission or orally with
subsequent confirming agreement, letter, telegram, telex or facsimile
transmission.
Section 1.14. Philippines. The term "Philippines" shall mean the
Republic of the Philippines.
Section 1.15. Preferred Shares. The term "Preferred Shares" shall mean
Convertible Preferred Stock of the Company, par value P10 per share, issued
prior to or subsequent to the date hereof, convertible into Common Stock, and
shall include evidence of rights to receive Preferred Shares (including, but not
limited to, purchase invoices and assignment as may effectuate the legal
transfer of title to Preferred Shares under Philippine law).
Section 1.16. Preferred Stock Deposit Agreements. The term "Preferred
Stock Deposit Agreements" shall mean the various Deposit Agreements related to
the Preferred Shares of the Company.
Section 1.17. Principal New York Office. The term "Principal New York
Office," when used with respect to the Depositary, shall be the principal office
of the Depositary in The City of New York at which at any particular time its
corporate trust business shall be administered, which at the date of this
Deposit Agreement is located at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇.
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Section 1.18. Registrar. The term "Registrar" shall mean any bank or
trust company having an office in the Borough of Manhattan, The City of New
York, appointed by the Depositary to register ADRs and transfers of ADRs as
herein provided, and shall include any co-registrar appointed by the Depositary
for such purposes.
Section 1.19. Securities Act. The term "Securities Act" shall mean the
United States Securities Act of 1933, as from time to time amended.
Section 1.20. Securities Exchange Act. The term "Securities Exchange
Act" shall mean the United States Securities Exchange Act of 1934, as from time
to time amended.
ARTICLE II
FORM OF ADRs, DEPOSIT OF COMMON STOCK, EXECUTION
AND DELIVERY, TRANSFER AND SURRENDER OF ADRs
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Section 2.01. Form and Transferability of ADRs. The ADRs shall be
engraved, lithographed or printed on steel engraved borders, or in such other
form as may be determined by the Depositary after consultation with the Company,
and shall be substantially in the form set forth in Exhibit A annexed to this
Deposit Agreement, with appropriate insertions, modifications and omissions, as
hereinafter provided.
ADRs shall be executed and dated by the Depositary by the manual or
facsimile signature of a duly authorized officer of the Depositary; provided,
however, that such signature may be a facsimile only if a Registrar for the ADRs
shall have been appointed and such ADRs are countersigned by the manual
signature of a duly authorized officer of the Registrar and dated by such
officer. No ADR shall be entitled to any benefits under this Deposit Agreement
or be valid or obligatory for any purpose unless such ADR shall, have been
executed by the Depositary by the manual signature of a duly authorized officer
or, if a Registrar shall have been appointed, by the manual signature of a duly
authorized officer of the Registrar, and such execution of any ADR by manual
signature shall be conclusive evidence, and the only evidence, that such ADR has
been duly executed and delivered hereunder. The Depositary shall maintain a
register in which each ADR so executed and delivered as hereinafter provided and
any transfer of each such ADR shall be registered. ADRs bearing the facsimile
signature of a duly authorized signatory of the Depositary who was at any time a
proper signatory of the Depositary shall bind the Depositary, notwithstanding
that such signatory has ceased to hold such position prior to the execution of
such ADRs by the Registrar and their delivery or such signatory did not hold
such position at the date of such ADRs.
The ADRs may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required to comply with the requirements of any
applicable law or regulation, or with the rules and regulations of any
securities exchange or market upon which ADRs may be listed or traded or to
conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular ADRs are
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subject by reason of the date of issuance of the underlying Deposited
Securities, or as the Depositary may from time to time determine after
consultation with the Company.
Subject to any limitations set forth in an ADR or in this Deposit
Agreement, when such ADR is properly endorsed or accompanied by proper
instruments of transfer (including signature guarantees in accordance with
standard industry practice), and upon compliance with the restrictions on
transfer set forth in any legends appearing on such ADR, title to such ADR (and
to each ADS evidenced thereby) shall be transferable by delivery with the same
effect as in the case of a negotiable instrument in accordance with the laws of
the State of New York; provided, however, that the Company and the Depositary,
notwithstanding any notice to the contrary, may deem and treat the Holder of an
ADR as the absolute owner thereof for any purpose, including but not limited to
the purpose of determining the person entitled to distribution of dividends or
other distributions or to any notice provided for in this Deposit Agreement and
neither the Depositary nor the Company shall have any obligation or be subject
to any liability under this Deposit Agreement to any holder of an ADR unless
such holder is the Holder thereof.
Section 2.02. Deposit of Common Stock. Subject to the terms and
conditions of this Deposit Agreement, Shares of Common Stock may be deposited
under this Deposit Agreement by delivery of (i) certificates evidencing such
Common Stock to the Custodian, accompanied by any appropriate instrument or
instruments of transfer or endorsement in form satisfactory to the Custodian,
together with such other documentation as the Depositary and the Company may
from time to time require and the fees and expenses of the Depositary as herein
provided and (ii) a written order to the Custodian instructing the Custodian to
direct the Depositary to execute and deliver to, or upon the written order of,
the person or persons stated in such order, an ADR or ADRs for the number of
ADSs representing such deposited Shares.
The Depositary and the Custodian shall refuse to accept Common Stock
for deposit and issue ADRs whenever they have been notified, as hereafter
provided, that the Company has restricted transfer of such Common Stock to
comply with the ownership restrictions referred to in Section 3.05 or that such
deposit would result in a violation of any applicable laws or regulations. The
Company has agreed with the Depositary to notify the Depositary and the
Custodian in writing with respect to any such restrictions on transfer of its
Common Stock for deposit hereunder.
As a condition of accepting Common Stock for deposit and issuing ADRs,
the Depositary may require that the person making such deposit furnish (a)
evidence satisfactory to the Depositary (which may be an opinion of counsel)
that any necessary approval has been granted by the governmental body in the
Philippines, if any, which is then performing the function of the regulation of
currency exchange, (b) an agreement, assignment or other instrument satisfactory
to the Depositary that provides for the prompt transfer to the Nominee of any
dividend or right to subscribe for additional Common Stock or to receive other
property which any person in whose name the Common Stock is or has been recorded
may thereafter receive upon or in respect of such deposited Common Stock or, in
lieu thereof, such agreement of indemnity or other agreement as
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shall be satisfactory to the Depositary and (c) if the Common Stock is
registered in the name of the person on whose behalf it is presented for
deposit, a proxy or proxies entitling the Custodian to vote such deposited
Common Stock for any and all purposes until the Common Stock is registered in
the name of the Nominee.
At the request and risk and expense of any holder of Common Stock, and
for the account of such holder, the Depositary may receive Common Stock to be
deposited, together with other orders, instruments and evidence herein
specified, for the purpose of forwarding such orders, instruments and evidence
to the Custodian hereunder.
Upon each delivery to the Custodian of Common Stock or other securities
to be deposited hereunder, together with any other documents and payments
required under this Deposit Agreement, the Custodian shall, as soon as is
practicable, record the transfer of such Common Stock or other securities in the
name of the Nominee. Deposited Securities shall be held by the Depositary or by
the Custodian for the account and to the order of the Depositary, the Custodian
or the Nominee or at such other place or places as the Depositary shall
determine, subject to any applicable laws and regulations of the Philippines.
Section 2.03. Execution and Delivery of ADRs. Upon the receipt by the
Custodian of a deposit pursuant to Section 2.02, together with the other
documents and certifications specified herein and a proper acknowledgment or
other evidence from the Company (or the appointed agent of the Company for the
transfer and registration of Common Stock) satisfactory to the Depositary that
any Deposited Securities are properly recorded in the name of the Nominee on the
transfer books of the Company (or such agent) maintained for that purpose, the
Custodian shall notify the Depositary of such deposit and the person or persons
to whom or upon whose written order an ADR or ADRs are deliverable in respect
thereof and the number of ADSs to be evidenced thereby. Such notification shall
be made by letter, first class airmail postage prepaid, or, at the request, risk
and expense of the person making the deposit, by cable, telex or facsimile
transmission.
Upon receipt from the Custodian of such notice described in the
preceding paragraph, the Depositary or its agent, subject to the terms and
conditions of this Deposit Agreement, shall with respect to deposits of Common
Stock hereunder, execute and deliver at its Principal New York Office, to or
upon the order of the person or persons named in the notice delivered to the
Depositary, an ADR or ADRs registered in the name or names requested by such
person or persons, and evidencing in the aggregate the number of ADSs to which
such person or persons are entitled but, in any case, only upon payment to the
Depositary of all taxes, governmental charges and fees payable in connection
with such deposit and the transfer of the deposited Common Stock.
Section 2.04. Transfer of ADRs; Combination and Split-up of ADRs. The
Depositary, subject to the terms and conditions of this Deposit Agreement and
any ADR, shall without unreasonable delay register transfers of any such ADR on
its transfer books, upon any surrender of such ADR at the Depositary's Principal
New York Office by the Holder thereof in person or by duly authorized attorney,
properly endorsed or accompanied by proper instruments of transfer (including
signature guarantees in
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accordance with standard industry practice) and duly stamped as may be required
by any applicable law. Thereupon, the Depositary shall execute a new ADR or ADRs
and deliver the same to or upon the order of the person entitled thereto.
The Depositary, subject to the terms and conditions of this Deposit
Agreement, shall upon surrender of an ADR or ADRs for the purpose of effecting a
split-up or combination of such ADR or ADRs, execute and deliver a new ADR or
ADRs in the name of the same Holder for any authorized number of ADSs requested,
evidencing the same aggregate number of ADSs as the ADR or ADRs surrendered. In
connection with any split-up or combination pursuant to this paragraph, the
Depositary shall not be obligated to obtain any certification or endorsement
otherwise required by the terms of this Deposit Agreement.
Section 2.05. Surrender of ADRs and Withdrawal of Deposited Securities.
Subject to the terms and conditions of this Deposit Agreement, upon (i)
surrender of ADSs by delivery of ADRs at the Principal New York Office of the
Depositary for the purpose of withdrawal or sale of the Deposited Securities
represented thereby and (ii) payment of all fees (including the fees of the
Depositary as set forth on Exhibit B hereto), taxes (including stamp, transfer
and capital gains taxes) and governmental or other charges payable in connection
with surrender and cancellation of ADRs, a Holder shall be entitled to (A)
delivery, to him or upon his order, of the Common Stock and any other documents
of title at the time represented by the ADR together with such other delivery of
Deposited Securities (other than Common Stock) then represented by ADSs as the
Depositary may effect or (B) request that the Depositary use reasonable efforts
to sell or cause to be sold the Common Stock represented by the ADSs evidenced
by such ADRs on such Holder's behalf over the Philippine Stock Exchange and to
remit the proceeds thereof (less the fees and expenses provided herein and any
brokerage fee or selling expenses incurred in connection with such sale) to such
Holder or in accordance with such Holder's instructions; provided that no such
request may be made by any such Holder to the Depositary to sell or to cause to
be sold Common Stock in amounts less than the minimum trading (board) lot
prescribed by the Philippine Stock Exchange.
Delivery of Deposited Securities shall be made, as provided herein,
without unreasonable delay. The Depositary shall confirm receipt of any written
instructions regarding withdrawal of Deposited Securities. An ADR surrendered
and written instructions received for such purposes may be required by the
Depositary to be properly endorsed or accompanied by properly executed
instruments of transfer. The person requesting withdrawal of Deposited
Securities or the sale of Common Stock as provided herein shall deliver to the
Depositary written instructions requesting the Depositary to cause (i) the
Deposited Securities being withdrawn to be delivered (subject to applicable
clearing procedures and provisions of the Amended Articles of Incorporation of
the Company) to or upon the written order of a person or persons designated in
such order or (ii) the Common Stock being withdrawn to be so sold.
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Upon the receipt of written instructions to use reasonable efforts to
sell or cause to be sold the Common Stock represented by ADSs being withdrawn
from deposit hereunder and compliance with the other provisions of this Section
2.05, the Depositary will, subject to the terms and conditions of this Deposit
Agreement and applicable laws and regulations, direct the custodian to make
reasonable efforts, in its sole discretion, to sell or cause to be sold the
Common Stock represented by the ADSs so surrendered, through a securities
company in the Philippines selected by the Depositary, over the Philippine Stock
Exchange. Any such sale of Common Stock will be at the risk and expense
(including any brokerage commissions) of the Holder requesting such sale. Upon
receipt of any proceeds from such sale (less any fees and expenses incurred in
connection with such sale, including brokerage commissions), the Depositary
shall, subject to Section 4.06, convert or cause to be converted any such
proceeds into dollars and distribute any such proceeds to or to the order of the
person or persons designated in such written instructions. The Depositary may
make delivery to such person or persons at the Principal New York Office of the
Depositary of any such proceeds of sale. The parties acknowledge that no
assurance can be given that the Depositary will be able to effect any sale of
any Common Stock in a timely manner or at a specified price, particularly during
periods of trading illiquidity or volatility with respect to Common Stock.
Upon receipt of written instructions requesting the withdrawal and
delivery of Deposited Securities from deposit hereunder and compliance with the
other provisions of this Section 2.05, the Depositary shall direct the Custodian
to deliver at the principal office of such Custodian, subject to the terms and
conditions of this Deposit Agreement and applicable laws and regulations, to or
upon the written order of the person or persons designated in such written
instructions, the Deposited Securities represented by the ADSs evidenced by such
surrendered ADR; except that the Depositary may, subject to applicable law, make
delivery to such person or persons at the Principal New York Office of the
Depositary of any dividends or distributions (other than dividends or
distributions consisting of Common Stock) with respect to the Deposited
Securities to be withdrawn, or of any proceeds of sale of any dividends,
distributions (other than dividends or distributions consisting of Common Stock)
or rights with respect to the Deposited Securities which may at the time be held
by the Depositary.
At the request, risk and expense of any Holder so surrendering an ADR,
and for the account of such Holder, and provided that payment of any applicable
tax or other governmental charge shall have been made in accordance with Section
3.02, the Depositary shall direct the Custodian to forward any cash or other
property (other than rights) comprising, and forward a certificate or
certificates and other proper documents of title, if any, for, the Deposited
Securities represented by the ADSs evidenced by such ADR to the Depositary for
delivery at the Principal New York 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.
The Depositary shall not accept surrender of ADRs or written
instructions for the purpose of withdrawal of less than one share of Common
Stock. In addition, the Depositary shall only honor requests for withdrawal of
whole numbers of shares of Common Stock. In the case of surrender of an ADR
evidencing a number of ADSs
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representing other than a whole number of shares of Common Stock, the Depositary
shall cause delivery of the appropriate whole number of shares of Common Stock
as provided herein, and shall execute and deliver to the person surrendering
such ADR a new ADR evidencing ADSs representing any remaining fractional share
of Common Stock.
Notwithstanding anything in this Deposit Agreement to the contrary, the
Company and the Depositary each agrees that it will not exercise any rights it
has under this Deposit Agreement to prevent the withdrawal or delivery of
Deposited Securities in a manner which would violate the United States
securities laws, including, but not limited to, Section I.A. (1) of the General
Instructions to the Form F-6 Registration Statement, as amended from time to
time, under the Securities Act of 1933.
Section 2.06. Limitations on Execution and Delivery, Transfer, Etc. of
ADRs; Suspension of Delivery, Transfer, Etc.. As a condition precedent to the
execution and delivery, registration of transfer, split-up, combination or
surrender of any ADR for the purpose of withdrawal of any Deposited Securities,
the Depositary or the Custodian may require (i) payment from the Holder, the
presenter of an ADR or the depositor of Common Stock of a sum sufficient to
reimburse it for any tax (including any transfer, capital gains or stamp tax) or
other governmental charge and any stock transfer, custody or registration fee
with respect thereto and payment of any applicable fees as herein provided; (ii)
production of proof satisfactory to it as to the identity and genuineness of any
signature, including but not limited to a signature guarantee in accordance with
industry practice; and (iii) compliance with such other restrictions, if any, as
the Depositary may, after consultation with the Company, establish consistent
with the provisions of this Deposit Agreement.
The delivery of ADRs against deposits of Common Stock generally or of
particular Common Stock may be suspended or withheld, or the registration of
transfer of ADRs in particular instances may be refused, or the registration of
transfer generally may be suspended, or the surrender of outstanding ADRs for
the purpose of withdrawal of Deposited Securities may be suspended, during any
period when the transfer books of the Depositary or the Company (or the
appointed agent of the Company for the transfer and registration of Common
Stock) are closed, or if any such action is deemed necessary or advisable by the
Company or the Depositary at any time or from time to time.
Subject to the further terms and provisions of this Section 2.06,
Citibank, N.A. and its agents, on their own behalf, may own and deal in any
class of securities of the Company and its affiliates and in ADRs. The
Depositary may issue ADRs for evidence of rights to receive Common Stock from
the Company, or any custodian, registrar, transfer agent, clearing agency or
other entity involved in ownership or transaction records in respect of the
Common Stock. Such evidence of rights shall consist of written blanket or
specific guarantees of ownership of Common Stock furnished on behalf of the
Holder thereof. Neither the Depositary nor the Custodian shall lend Deposited
Securities or ADRs; provided, however, that the Depositary may issue ADRs prior
to the receipt of Common Stock pursuant to Section 2.02 (a "Pre-Release
Transaction") and deliver shares of Common Stock upon the receipt and
cancellation of
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ADRs which have been Pre-Released, whether or not such cancellation is prior to
the termination of such Pre-Release Transaction or the Depositary knows that
such ADR has been Pre-Released. The Depositary may receive ADRs in lieu of
Shares in satisfaction of a Pre-Release Transaction. Each such Pre-Release
Transaction will be (a) subject to (x) a written representation from the person
to whom ADRs are to be delivered (the "Applicant") that such person, or its
customer, owns the Common Stock to be remitted, (y) an unconditional guarantee
by such person to deliver to the Custodian the number of shares of Common Stock
that are the subject of the Pre-Release Transaction and (z) any additional
restrictions or requirements that the Depositary deems appropriate, (b) subject
to a written representation to the Applicant that it will hold such shares of
Common Stock in trust for the Depositary until their delivery to the Depositary
or Custodian, reflect on its records the Depositary as owner of such shares of
Common Stock and deliver such Common Stock upon the Depositary's request, (c) at
all times fully collateralized (marked to market daily) with cash, United States
government securities or such other collateral of comparable safety and
liquidity, (d) terminable by the Depositary on not more than five (5) business
days notice, and (e) subject to such further indemnities and credit regulations
as the Depositary deems appropriate. The Depositary intends that the number of
ADRs issued by it pursuant to a Pre-Release Transaction and outstanding at any
time generally will not exceed thirty percent (30%) of the ADRs issued by the
Depositary and with respect to which shares of Common Stock are on deposit with
the Depositary or Custodian; provided, however, that the Depositary reserves the
right to change or disregard such limit from time to time as it deems
appropriate. The Depositary will also set limits with respect to the number of
ADRs and Common Stock involved in transactions to be effected hereunder 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 connection with the foregoing. Collateral provided pursuant to (b)
above, but not the earnings thereon, shall be held for the benefit of the
Holders only.
Without limitation of the foregoing, the Depositary shall not knowingly
accept for deposit under this Deposit Agreement any Common Stock required to be
registered pursuant to the provisions of the Securities Act (including, but not
limited to, any "restricted securities" within the meaning of Rule 144 under the
Securities Act), unless a registration statement under the Securities Act is in
effect as to such Common Stock. The Depositary has agreed to use reasonable
efforts to comply with written instructions of the Company not to accept for
deposit hereunder any Common Stock identified in such instructions at such times
and under such circumstances as may reasonably be specified in such instructions
in order to facilitate the Company's compliance with the securities laws of the
United States.
Section 2.07. Lost ADRs, Etc. In case any ADR shall be mutilated,
destroyed, lost or stolen, the Depositary shall execute and deliver a new ADR of
like tenor, in exchange and substitution for such mutilated ADR upon
cancellation thereof, or in lieu of and in substitution for such destroyed, lost
or stolen ADR, upon the filing by the Holder thereof with the Depositary of (i)
a request for such exchange, execution and delivery before the Depositary has
notice that the ADR has been acquired by a bona fide purchaser and (ii) a
sufficient indemnity bond in favor of the Depositary and the
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Company, and upon satisfying any other reasonable requirements imposed by the
Depositary.
Section 2.08. Cancellation and Destruction of Surrendered ADRs. All
ADRs surrendered to the Depositary shall be cancelled by the Depositary.
Cancelled ADRs shall not be entitled to any benefits under this Deposit
Agreement or be valid or obligatory for any purpose. The Depositary is
authorized to destroy ADRs so cancelled. ADSs shall be deemed cancelled when the
Deposited Securities they represent are withdrawn from deposit hereunder and no
other ADR evidencing such ADSs is issued hereunder.
Section 2.09. Maintenance of Records. The Depositary shall maintain
records of (i) all ADRs surrendered and Deposited Securities withdrawn under
Sections 2.05, (ii) substitute ADRs delivered under Section 2.07 and (iii) ADRs
cancelled or destroyed under Section 2.08, in each case in accordance with
procedures followed by stock transfer agents located in The City of New York.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS OF ADRs
--------------------------------------
Section 3.01. Filing Proofs, Certificates and Other Information. Any
person depositing Common Stock or any Holder may be required from time to time
to file with the Depositary or the Custodian such proof of citizenship,
residence, exchange control approval, payment of all applicable taxes or other
governmental charges, compliance with all applicable laws and regulations and
the terms of this Deposit Agreement, or legal or beneficial ownership and the
nature of such interest, to provide information relating to the registration on
the books of the Company (or the appointed agent of the Company for the transfer
and registration of Common Stock) of the Common Stock presented for deposit or
other information, to execute such certificates and to make such representations
and warranties as the Depositary or the Company may deem necessary or proper to
enable the Depositary to perform its obligations hereunder or to enable the
Company or the Depositary to perform their respective obligations under the
Company Agreement. The Depositary may withhold the execution or delivery or
registration of transfer of all or part of any ADR or the distribution or sale
of any dividend or other distribution of rights or of the proceeds thereof or
the withdrawal of any Deposited Securities until such proof or other information
is filed or such certificates are executed or such representations and
warranties are made. The Depositary shall take such additional actions and
provide such additional information as the Depositary shall from time to time
agree with the Company.
Section 3.02. Liability of Holders for Taxes and other Charges. If any
tax, or governmental or other charge shall become payable with respect to any
ADR or any Deposited Securities represented by the ADSs evidenced by any ADR,
such tax, or governmental or other charge (other than any capital or stamp
duties or transfer taxes payable by the Company in accordance with the terms and
conditions of the Common
11
Stock) shall be payable by the Holder of such ADR to the Depositary. The
Depositary may refuse, and the Company shall be under no obligation, to effect
any registration of transfer of all or part of such ADR or any deposit or
withdrawal of Deposited Securities represented by the ADSs evidenced thereby
until such payment is made, and may withhold any dividends or other
distributions, or may sell for the account of the Holder thereof any part or all
of the Deposited Securities represented by the ADSs evidenced by such ADR, and
may apply such dividends or other distributions or the proceeds of any such sale
in payment of such tax or governmental or other charge, the Holder of such ADR
remaining liable for any deficiency.
Section 3.03. Representations and Warranties on Deposit, Transfer,
Surrender and Withdrawal of Common Stock or ADRs. Each person depositing Common
Stock under this Deposit Agreement shall be deemed thereby to represent and
warrant that such Common Stock and each certificate therefor are validly issued
and outstanding, fully paid and nonassessable, that the person making such
deposit is duly authorized to do so and that such shares of Common Stock are not
"restricted securities" as such term is defined in Rule 144 of the Securities
Act. Such representations and warranties shall survive the deposit of Common
Stock and the issuance of ADRs in respect thereof.
Section 3.04. Disclosure of Interests. The Company or the Depositary
may from time to time request Holders or former Holders to provide information
as to the capacity in which they hold or held ADRs or own or owned such
beneficial interest and the nature of such interest and various other matters.
Each such Holder agrees to provide any such information reasonably requested by
the Company or the Depositary pursuant to this Section whether or not still a
Holder at the time of such request.
Section 3.05. Ownership Restrictions. The Company may restrict
transfers of the Common Stock if such transfer might result in ownership of
Common Stock exceeding limits under any applicable law or the Company's Amended
Articles of Incorporation. The Philippine Constitution requires that at least
60% of the capital of a corporation operating a public utility in the
Philippines be owned by Philippine citizens. The Depositary shall, if and as
directed by the Company, take action with respect to the ownership interest of
any Holder in excess of any legal or contractual limitations on the legal or
beneficial ownership of Common Stock or ADSs, including but not limited to a
mandatory sale or disposition on behalf of a Holder of the Common Stock
represented by the ADSs held by such Holder in excess of such limitation, if and
to the extent such disposition is permitted by applicable law.
ARTICLE IV
RIGHTS RELATING TO THE DEPOSITED SECURITIES;
CERTAIN OBLIGATIONS OF THE DEPOSITARY
-------------------------------------
Section 4.01. Power of Attorney. Each Holder, upon acceptance of an ADR
issued in accordance with the terms hereof, thereby appoints the Depositary its
attorney-in-fact, with full power to delegate, to act on its behalf and to take
any and all steps or action provided for or contemplated herein with respect to
the Deposited
12
Securities, including but not limited to those set forth in this Article IV, and
to take such further steps or action as the Depositary in its sole discretion
may deem necessary or appropriate to carry out the purposes of this Deposit
Agreement.
Section 4.02. Cash Distributions; Withholding. Whenever the Custodian
or the Depositary receives any cash dividend or other cash distribution by the
Company in respect of any Deposited Securities, the Depositary shall, subject to
the provisions of Section 4.06, convert or cause any portion of such dividend or
distribution which is not in dollars to be converted into dollars and shall
promptly distribute such amount to the Holders entitled hereto in proportion to
the number of ADSs representing such Deposited Securities held by them
respectively, after deduction or upon payment of the fees and expenses of the
Depositary or the Custodian (and without liability for interest); provided,
however, that in the event that the Company, the Custodian or the Depositary
shall be 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 or other governmental charges, the amount distributed to Holders in
respect of ADSs representing such Deposited Securities shall be reduced
accordingly. 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 distributable 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 then outstanding. The
Company has agreed with the Depositary that the Company or its agent, or the
Depositary or its agent, as appropriate, will remit to the appropriate
governmental authority or agency all amounts withheld and owing to such
authority or agency. The Depositary will forward to the Company or its agent
such information from its records as the Company may reasonably request to
enable the Company or its agent to file necessary reports with governmental
authorities or agencies or, at the request and expense of the Company, the
Depositary or its agent may file such reports if deemed lawful and reasonably
feasible by the Depositary.
Section 4.03. Distributions in Common Stock. If any distribution in
respect of any Deposited Securities consists of a dividend in, or free
distribution of, Common Stock, the Depositary may, after consultation with the
Company, distribute to the Holders entitled thereto, in proportion to the number
of ADSs representing such Deposited Securities held by them respectively,
additional ADRs for an aggregate number of ADSs representing the number of
shares of Common Stock received as such dividend or free distribution, in either
case, after deduction or upon payment of the fees and expenses of the
Depositary; provided, however, that if for any reason (including any requirement
that the Company or the Depositary withhold, or make an advance payment of, an
amount on account of taxes or other governmental charges or that such Common
Stock must be registered under the Securities Act in order to be distributed to
Holders) the Depositary reasonably deems such distribution not to be practical
or feasible, the Depositary may, after consultation with the Company, (i) to the
extent permitted by applicable law, adopt such method as it may reasonably deem
equitable and practicable for the purpose of obtaining such dividend or
effecting such distribution, including the sale (at public or private sale) of
the Common Stock thus received, or any part thereof,
13
and the net proceeds of any such sale after payment of and reimbursement of
advances to pay any taxes or governmental charges shall be distributed by the
Depositary to the Holders entitled thereto as in the case of a distribution
received in cash or (ii) if the Depositary reasonably determines that no such
method of distribution can be effected in a practicable or equitable manner, the
Depositary may refrain from effecting such distribution altogether until such
time as it reasonably determines that a practicable or equitable distribution
can be effected. In lieu of issuing ADRs or adjusting the Depositary's records
for fractional ADSs in any such case, the Depositary shall sell the number of
shares of Common Stock represented by the aggregate of such fractions and
distribute the net proceeds in dollars, all in the manner and subject to the
conditions described in Section 4.02. If additional ADRs are not so distributed
(except pursuant to the preceding sentence), or such change in the records of
the Depositary is not made, each ADS shall thenceforth also represent its
proportionate interest in the additional shares of Common Stock distributed upon
the Deposited Securities represented thereby.
Section 4.04. Distribution of Rights. In the event that the Company
shall offer or cause to be offered to the holders of any Deposited Securities
any rights to subscribe for additional Common Stock or any rights of any other
nature, the Depositary, after consultation with the Company, shall have
discretion as to the procedure to be followed in making such rights available to
the Holders entitled thereto, subject to Section 5.09, or in disposing of such
rights on behalf of such Holders and making the net proceeds available in cash
to such Holders or, if by the terms of such rights offering or by reason of
applicable law, the Depositary may neither make such rights available to such
Holders nor dispose of such rights and make the net proceeds available to such
Holders, then the Depositary shall allow the rights to lapse; provided, however,
that the Depositary will, if requested by the Company, take action as follows:
(i) if at the time of the offering of any rights the Depositary
determines that it is lawful and feasible to make such rights available
to all or certain Holders by means of warrants or otherwise, the
Depositary shall, after deduction or upon payment of the fees and
expenses of the Depositary, distribute warrants or other instruments in
proportion to the number of ADSs representing such Deposited Securities
held by them respectively, or by means of such other method as it may
deem feasible in order to facilitate the exercise, sale or transfer of
rights by such Holders or the sale or resale of securities obtainable
upon exercise of such rights by such Holders; or
(ii) if at the time of the offering of any rights the Depositary
determines that it is not lawful or not feasible to make such rights
available to certain Holders by means of warrants or otherwise, or if
the rights represented by such warrants or such other instruments are
not exercised and appear to be about to lapse, the Depositary shall use
its reasonable efforts to sell such rights or such warrants or other
instruments, if a market therefor is available, at public or private
sales, at such place or places and upon such terms as it may deem
proper and, after deduction or upon payment of the fees and expenses of
the Depositary and any applicable taxes, allocate the net proceeds of
such sales for the account of the Holders otherwise entitled to such
rights, warrants or other instruments upon an averaged or other
practicable basis without regard to any distinctions among such
14
Holders because of exchange restrictions or the date of delivery of any
ADR or ADRs, or otherwise.
If registration (under the Securities Act or any other applicable law) of the
rights or the securities to which any rights relate is required in order for the
Company to offer such rights to Holders and to sell to them the securities to
which such rights relate, the Depositary will not offer such rights to Holders
unless and until a registration statement is in effect, or unless the offering
and sale of such rights or securities to such Holders are exempt from
registration under the provisions of such law and, if requested by the
Depositary, the Company furnishes to the Depositary an opinion of counsel in the
United States for the Company reasonably satisfactory to the Depositary to such
effect. The Company shall have no obligation to register such rights or such
securities under the Securities Act.
Section 4.05. Distributions Other Than Cash, Common Stock or Rights.
Whenever the Custodian or the Depositary shall receive any distribution other
than cash, Common Stock or rights upon any Deposited Securities, the Depositary
shall cause the securities or property so received to be distributed to the
Holders entitled thereto, after deduction or upon payment of the fees and
expenses of the Depositary, in proportion to the number of ADSs representing
such Deposited Securities held by them respectively, in any manner that the
Depositary may deem equitable and practicable for accomplishing such
distribution; provided, however, that if in the opinion of the Depositary it
cannot cause such securities or property to be distributed or such distribution
cannot be made proportionately among the Holders entitled thereto, or if for any
other reason (including any requirement that the Company, the Custodian or the
Depositary withhold an amount on account of taxes or other governmental charges
or that such securities must be registered under the Securities Act in order to
be distributed to Holders) the Depositary deems such distribution not to be
feasible, the Depositary may, after consultation with the Company, adopt such
method as it may deem equitable and practicable for the purpose of effecting
such distribution, including the sale (at public or private sale) of the
securities or property thus received, or any part thereof, and the net proceeds
of any such sale shall be distributed by the Depositary to the Holders entitled
thereto as in the case of a distribution received in cash; provided that any
unsold balance of such securities or property shall be distributed by the
Depositary to the Holders entitled thereto, if such distribution is feasible
without withholding for or on account of any taxes or other governmental charges
and without registration under the Securities Act, in accordance with such
equitable and practicable method as the Depositary adopts.
Section 4.06. Conversion of Foreign Currency. Whenever the Custodian
receives currency other than dollars (in this Section referred to as "foreign
currency"), by way of dividends or other distributions or the net proceeds from
the sale of securities, property or rights, and if at the time of the receipt
thereof the foreign currency so received can in the judgment of the Depositary
be converted on a reasonable basis into dollars which can, at the time of
receipt thereof, be transferred to the United States and distributed to the
Holders entitled thereto, the Depositary shall promptly convert or cause to be
converted, by sale or in any other manner that it may determine, such foreign
15
currency into dollars, and such dollars (less any reasonable and customary
expenses incurred by the Depositary in the conversion of the foreign currency)
shall be distributed to the Holders entitled thereto or, if the Depositary shall
have distributed any warrants or other instruments which entitle the holders
thereof to such dollars, then to the holders of such warrants and/or instruments
upon surrender thereof for cancellation. Such distribution shall 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 may file such application for
approval or license, if any, as it may deem desirable.
If at any time the Depositary determines that in its judgment any
foreign currency received by the Depositary is not convertible on a reasonable
basis into dollars distributable to Holders entitled thereto, or if any approval
or license of any government or authority or agency thereof which is required
for such conversion is denied or in the opinion of the Depositary is not
obtainable, or if any such approval or license is not obtained within a
reasonable period as determined by the Depositary, the Depositary may distribute
the foreign currency (or an appropriate document evidencing the right to receive
such foreign currency) received by the Depositary to, or in its discretion may
hold such foreign currency (without liability for interest) for the respective
accounts of, the Holders entitled to receive the same.
If any such conversion of foreign currency, in whole or in part, cannot
be effected for distribution to some Holders entitled thereto, the Depositary
may in its discretion make such conversion and distribution in dollars to the
extent permissible to the Holders for whom such conversion and distribution is
practicable and may, subject to any applicable currency and exchange
regulations, distribute the balance of the foreign currency received by the
Depositary to, or hold such balance for the account of, the Holders for whom
such conversion and distribution is not Practicable.
Section 4.07. Fixing of Record Date. Whenever any cash dividend or
other cash distribution shall become payable or any distribution other than cash
shall be made, or whenever rights shall be issued, with respect to the Deposited
Securities, or whenever the Depositary shall receive notice of any meeting of
holders of Common Stock or other Deposited Securities or any other meeting of
holders of the Company's securities at which holders of Common Stock or other
Deposited Securities are entitled to vote, or whenever, for any reason, the
Depositary causes a change in the number of shares of Common Stock that are
represented by each ADS, or whenever the Depositary finds it necessary or
convenient in respect of any matter, the Depositary shall fix a record date
after consultation with the Company (which shall be as near as practicable to
the corresponding record date for such distribution or meeting set by the
Company) for the determination of the Holders who shall be entitled to receive
such dividend, distribution or rights or the net proceeds of the sale thereof,
or to give instructions for the exercise of voting rights, if any, at any such
meeting or in respect of such changed number of shares of Common Stock
represented by an ADS or in respect of such other matter. Subject to
16
the provisions of Section 4.02 through 4.06 and to the other terms and
conditions of this Deposit Agreement, the Holders on such record date shall be
entitled to receive the amount distributable by the Depositary with respect to
such dividend or other distribution or such rights or the net proceeds of sale
thereof and to exercise the rights of Holders hereunder with respect to such
changed number of shares of Common Stock represented by each ADS, in proportion
to the number of ADSs held by them respectively, to give such voting
instructions, to receive such notice or solicitation or to act in respect of any
matter.
Section 4.08. Voting of Deposited Securities. As soon as practicable
after receipt of notice of any meeting of holders of Common Stock or other
Deposited Securities or any other meeting of holders of the Company's securities
at which holders of Common Stock or other Deposited Securities are entitled to
vote, the Depositary shall fix a record date for determining the Holders
entitled to give instructions for the exercise of voting rights as provided in
Section 4.07 and shall mail or cause to be mailed to the Holders of record a
notice which shall contain: (a) such information as is contained in such notice
of meeting and (b) a statement that the Holders of record at the close of
business on a specified record date will be entitled, subject to any applicable
provisions of the law of the Philippines and of the Amended Articles of
Incorporation and the By-Laws of the Company, to instruct the Depositary as to
the exercise of the voting rights, if any, pertaining to the number of shares of
Common Stock or other Deposited Securities represented by their respective ADSs
evidenced by their respective ADRs. Upon the written request of a Holder on such
record date, received on or before the date established by the Depositary for
such purpose, the Depositary shall endeavor insofar as is practicable to vote or
cause to be voted the amount of Deposited Securities represented by such ADSs
evidenced by such ADR in accordance with the instructions set forth in such
request.
The Depositary may not itself exercise any voting discretion over any
Common Stock. If the Depositary does not receive instructions from a Holder on
or before the date established by the Depositary for such purpose, such Holder
shall be deemed, and the Depositary shall deem such Holder, to have instructed
the Depositary to give a discretionary proxy to a person designated by the
Company for the purpose of exercising the voting rights, if any, pertaining to
the Common Stock represented by ADSs evidenced by such Holder's ADRs; provided
that no such discretionary proxy shall be given with respect to any matter as to
which the Company informs the Depositary that (i) the Company does not wish such
proxy given, (ii) substantial opposition exists or (iii) the rights of holders
of Common Stock will be materially and adversely affected.
Holders shall not have, and shall not have the right to instruct the
Depositary as to the exercise of, any dissenter's rights provided to holders of
Common Stock under Philippine law.
Section 4.09. Changes Affecting Deposited Securities. Upon any change
in par value, split-up, consolidation or any other reclassification of Deposited
Securities, or upon any recapitalization, reorganization, merger or
consolidation of the Company or
17
sale of assets affecting the Company or to which it is a party, any securities
that shall be received by the Depositary or the Custodian in exchange for or in
conversion of or in respect of Deposited Securities shall be treated as new
Deposited Securities, and the ADRs shall, subject to the terms of this Deposit
Agreement and applicable laws (including any registration requirements of the
Securities Act), thenceforth represent the right to receive the new Deposited
Securities so received in exchange or conversion, unless new or additional ADRs
are delivered pursuant to the following sentence. In any such case the
Depositary may, and shall at the Company's request, subject to the terms of this
Deposit Agreement, execute and deliver additional ADRs, as in the case of a
stock dividend on the Common Stock, or call for the surrender of outstanding
ADRs to be exchanged for new ADRs specifically describing such new Deposited
Securities.
Notwithstanding the foregoing, in the event that the Depositary
determines that any security or property so received may not be lawfully or
practicably distributed to all or certain Holders, the Depositary may and shall,
if the Company requests, sell such securities or property 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 (after payment of the expenses thereof
and any taxes or governmental charges) for the account of the Holders otherwise
entitled to such securities or property 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 4.02.
Promptly upon receipt of notice from the Company of the occurrence of
any such change, conversion or exchange covered by this Section in respect of
the Deposited Securities, the Depositary shall give notice thereof in writing,
at the Company's expense, to all Holders.
Section 4.10. Transmittal By the Depositary of Company Notices, Reports
and Communications. The Depositary shall make available for inspection during
business hours by Holders at its Principal New York Office and at the principal
office of the Custodian copies of (i) this Deposit Agreement and any related
documents, (ii) the Common Stock Agreement dated as of the date hereof between
the Company and the Depositary relating to this Agreement (the "Company
Agreement"), (iii) the Company's Amended Articles of Incorporation and By-Laws
and the Resolutions of the Board of Directors relating to the Common Stock and
(iv) any notices, reports or communications, including any proxy soliciting
materials, received from the Company which are both (a) received by the
Depositary or the Custodian or the nominee of either, 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 send to Holders,
at the Company's expense, copies of such notices, reports and communications
when furnished by the Company to the Depositary pursuant to Section 5.08.
Section 4.11. Withholding. Notwithstanding any other provision of this
Deposit Agreement, in the event that the Depositary determines that any
distribution of property (including Common Stock, rights to subscribe therefor
and other securities) is subject to any tax or governmental charges which the
Depositary is obligated to withhold, the Depositary may dispose of all or a
portion of such property (including Common
18
Stock, rights to subscribe therefor and other securities) in such amounts and in
such manner as the Depositary deems necessary and practicable to pay such taxes
or governmental charges, including by public or private sale, and the Depositary
shall distribute the net proceeds of any such sale or the balance of any such
property after deduction of such taxes or governmental charges to the Holders
entitled thereto in proportion to the number of ADSs held by them respectively
and the Depositary shall, if feasible without withholding for or on account of
taxes or other governmental charges and in compliance with applicable law,
distribute any unsold balance of such property in accordance with the provisions
of this Deposit Agreement. To the extent that the Depositary is obligated to
withhold in accordance with the previous sentence, the Depositary shall remit to
the appropriate governmental authority or agency all amounts withheld and owing
to such authority or agency and shall file such corresponding reports as may be
required.
The Company has agreed with the Depositary that, before making any
distribution or other payment on any Deposited Securities, the Company shall
make such deductions (if any) which, by the laws or regulations of the
Philippines, the Company is required to make in respect of any income, capital
gains or other taxes and that the Company may also deduct the amount of any tax
or governmental charges payable by the Company or for which the Company might be
made liable in respect of such distribution or other payment or any document
signed in connection therewith.
Section 4.12. Available Information. The Company is subject to the
periodic reporting requirements of the Securities Exchange Act of 1934 and,
accordingly, files certain reports with the Commission. These public reports can
be inspected by Holders and copied at the public reference facilities maintained
by the Commission located at the date of this Deposit Agreement at Judiciary
Plaza, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇.
Section 4.13. Lists of Receipt Holders. Promptly upon request by the
Company, the Depositary shall furnish to it a list, as of a recent date, of the
names, addresses and holdings of ADSs by all persons in whose names ADRs are
registered on the books of the Depositary.
ARTICLE V
THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY
Section 5.01. Maintenance of Depositary's Office and Register. Until
termination of this Deposit Agreement in accordance with its terms, the
Depositary shall maintain in the Borough of Manhattan, The City of New York,
facilities for the execution and delivery, registration, registration of
transfers and surrender of ADRs in accordance with the provisions of this
Deposit Agreement.
The Depositary shall keep books at its Principal New York Office for
the registration and transfer of ADRs which shall be open at all reasonable
times for inspection by Holders and the Company, provided that such inspection
shall not to the
19
Depositary's knowledge be for the purpose of communicating with Holders in the
interest of a business or object other than the business of the Company or a
matter related to this Deposit Agreement, the ADSs or the ADRs.
The Depositary may close the transfer books, at any time or from to
time, when deemed expedient by it in connection with the performance of its
duties hereunder or when requested by the Company.
If any ADSs are listed on one or more stock exchanges or automated
quotation systems in the United States, the Depositary or its agent shall act as
Registrar or, with the written approval of the Company, may appoint a Registrar
or one or more co-registrars for registration of such ADSs in accordance with
any requirements of such exchange or exchanges or system or systems. Such
Registrar or co-registrars may be removed and a substitute or substitutes
appointed by the Depositary upon the request or with the approval of the
Company. The Depositary, with the written approval of the Company, may appoint
one or more co-transfer agents for the purpose of effecting transfers,
combinations and split-ups of ADRs at designated transfer offices on behalf of
the Depositary. Such co-transfer agents with the written approval of the Company
and upon the request of the Company shall be removed and substitutes appointed
by the Depositary. Each ADR registrar, co-registrar or co-transfer agent
appointed under this Section 5.01 shall give notice in writing to the Company
and the Depositary accepting such appointment and agreeing to be bound by the
applicable terms of this Deposit Agreement.
The Depositary may perform its obligations under this Section 5.01
through any agent appointed by it (subject to the provisions of the immediately
preceding paragraph), provided that the Depositary shall notify the Company of
such appointment and shall remain responsible for the performance of such
obligations as if no agent were appointed.
Section 5.02. Obligations of the Depositary, the Custodian and the
Company. The Company assumes no obligation nor shall it be subject to any
liability under this Deposit Agreement to Holders or other persons, except that
it has agreed with the Depositary to act in good faith and use reasonable
judgment in the performance of its obligations set forth in the Company
Agreement. The Depositary assumes no obligation nor shall it be subject to any
liability under this Deposit Agreement to Holders or other persons (including,
without limitation, liability with respect to the validity or worth of the
Deposited Securities), except that it agrees to act in good faith and use
reasonable judgment in the performance of its obligations set forth in this
Deposit Agreement. The Depositary undertakes to perform such duties and only
such duties as are specifically set forth in this Deposit Agreement, and no
implied covenants or obligations shall be read into this Deposit Agreement
against the Depositary or the Company.
Neither the Depositary nor the Company 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 ADRs, which in its opinion may
involve it in expense or liability, unless indemnity satisfactory to it in its
sole discretion against all expense and liability be furnished as often as may
be required, and no Custodian shall be
20
under any obligation whatsoever with respect to such proceedings, the Custodian
being responsible solely to the Depositary.
Neither the Depositary nor the Company shall be liable for any action
or inaction by it in reliance upon the advice of or information from legal
counsel, accountants, any person presenting Common Stock for deposit, any Holder
or any other person believed by it in good faith to be competent to give such
advice or information. Each of the Depositary, its agents and the Company and
its agents may rely and shall be protected in acting upon any written notice,
request, direction or other document believed by it to be genuine and to have
been signed or presented by the proper party or parties. Subject to the
provisions of this Section 5.02, the Depositary shall not be responsible for any
failure to carry out any instructions to vote any of the Deposited Securities,
for the manner in which any such vote is cast or for the effect of any such
vote.
It is intended that neither the Depositary nor any agent of the
Depositary shall be deemed to be an "issuer" of the securities under the federal
securities laws or applicable state securities laws of the United States or any
other jurisdiction, it being expressly understood and agreed that the Depositary
and its agents are acting only in a ministerial capacity as Depositary for the
Common Stock.
Section 5.03. Prevention or Delay in Performance by the Depositary or
the Company. Neither the Depositary nor the Company shall incur any liability to
any Holder or other person if by reason of any present or future law,
regulation, decree, order or other action of the United States, the Philippines
or any other country or jurisdiction, or of any other governmental authority, or
by reason of any act of God, war or other circumstances beyond its control or,
in the case of the Depositary, by reason of any provision, present or future, of
the Amended Articles of Incorporation and By-laws of the Company or any
Deposited Securities, the Depositary or the Company is prevented, delayed or
forbidden from doing or performing any act or thing which by the terms of this
Deposit Agreement (in the case of the Depositary) or the Company Agreement it is
provided shall be done or performed; nor shall the Depositary or the Company
incur any liability to any Holder or other person by reason of any
nonperformance or delay, caused as aforesaid, in performance of any act or thing
that by the terms of this Deposit Agreement it is provided shall or may be done
or performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for in this Deposit Agreement. Where, by the terms of a
distribution pursuant to Section 4.02, 4.03 or 4.05 of this Deposit Agreement or
an offering or distribution pursuant to Section 4.04 of this Deposit Agreement,
or because of applicable law, such distribution or offering may not be made
available to Holders, and the Depositary may not dispose of such distribution or
offering on behalf of such Holders and make the net proceeds available to such
Holders, then the Depositary may make no such distribution or offering, and may
allow any rights, if applicable, to lapse.
Section 5.04. Resignation of the Depositary; Appointment of Successor
Depositary. The Depositary may at any time resign as Depositary hereunder by 30
days' written notice of its election so to do to the Company, such resignation
to take effect upon
21
the appointment of a successor depositary and its acceptance of such appointment
as hereinafter provided.
In case at any time the Depositary acting hereunder shall resign, the
Company has agreed to 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. Such successor depositary shall execute and
deliver to its immediate predecessor and to the Company an instrument in writing
accepting its appointment hereunder, and thereupon such successor depositary,
without any further act or deed, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor; but such immediate
predecessor, nevertheless, upon payment of all sums due it and on the written
request of the Company, shall execute and deliver an instrument transferring to
such successor depositary all rights and powers of such immediate predecessor
hereunder, shall duly assign, transfer and deliver all right, title and interest
in the Deposited Securities to such successor depositary, and shall deliver to
such successor a list of the Holders of all outstanding ADRs and such other
books and records maintained by such immediate predecessor and its agents with
respect to its function as Depositary hereunder. Any such successor depositary
shall promptly mail notice of its appointment to the 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.
Section 5.05. Charges of Depositary. The Company has agreed with the
Depositary that the fees of the Depositary and the Registrar, if any, shall be
paid by the Company as provided in Exhibit B hereto. Holders agree to pay
through deduction or otherwise, (i) the fees of the Depositary for the issuance
of ADSs pursuant to Section 2.03, the withdrawal of Deposited Securities upon
surrender of ADSs pursuant to Section 2.05 and the sale or exercise of rights or
other corporate action involving distributions to holders of Common Stock, each
as provided in Exhibit B hereto, (ii) taxes and other governmental charges
(including, but not limited to any transfer, capital gains and stamp tax) other
than any capital or stamp duties or transfer taxes payable by the Company in
accordance with the terms and conditions of the Common Stock, (iii) such
registration, transfer, custody or other fees as may from time to time be in
effect for the registration of transfers of Common Stock generally on the share
register of the Company or its appointed agent for the registration of transfer
and accordingly applicable to transfers of Common Stock to or from the name of
the Nominee on the making of deposits pursuant to Section 2.02 or withdrawals
pursuant to Section 2.05, (iv) such cable, telex, facsimile transmission and
delivery expenses as are expressly provided in this Deposit Agreement to be at
the expense of persons depositing Common Stock or Holders and (v) such
reasonable expenses and charges as are incurred by the Depositary in the
conversion of foreign currency pursuant to Section 4.06 or in connection with
other distributions to holders of Common Stock pursuant to Section 4.02, 4.03,
4.04 or 4.05.
Any other charges and expenses of the Depositary hereunder and the
Registrar, if any, will be paid by the Company after consultation and agreement
and in accordance with agreements in writing entered into between the Depositary
and the
22
Company as to the nature and amount of such charges and expenses. The charges
and expenses of the Custodian, the Nominee or any other agent of the Depositary
are for the sole account of the Depositary.
The right of the Depositary to receive payment of fees, charges and
expenses as provided in this Section 5.05 shall survive the termination of this
Deposit Agreement and, as to any Depositary, the resignation of such Depositary
pursuant to Section 5.04.
Section 5.06. The Custodian. The Depositary, after consultation with
the Company, shall from time to time appoint one or more agents to act for it as
Custodian hereunder. The Depositary has initially appointed Citibank, N.A.,
Manila, as custodian and agent of the Depositary for the purpose of this Deposit
Agreement. The Custodian in acting hereunder shall be subject at all times and
in all respects to the direction of the Depositary and shall be responsible
solely to it. The Custodian may resign and be discharged from its duties
hereunder by 30 days' prior notice of its election to do so delivered to the
Depositary; such resignation to become effective upon appointment of a successor
Custodian and its acceptance of such appointment as hereinafter provided. If
upon such notice of resignation there shall be no Custodian acting hereunder,
the Depositary shall, promptly after receiving such notice, appoint a substitute
custodian that is organized under the laws of the Philippines which shall
thereafter be the Custodian hereunder. The Depositary may discharge any
Custodian at any time upon notice to the Custodian being discharged and appoint
a substitute or an additional custodian, who shall thereafter be a Custodian
hereunder. Forthwith upon its appointment, each such substitute or additional
custodian shall deliver to the Depositary an acceptance of such appointment
satisfactory in form and substance to the Depositary. Upon demand of the
Depositary, any Custodian shall deliver such of the Deposited Securities as are
requested of it to any other Custodian together with all records maintained by
it as Custodian with respect to such Deposited Securities. The Depositary shall
give notice in writing to all Holders of the name, location and the appointment
of any Custodian not named in the ADRs.
Upon the appointment of any successor depositary hereunder, any
Custodian then acting hereunder shall forthwith become, without any further act
or writing, the agent hereunder of such successor depositary and the appointment
of such successor depositary shall in no way impair the authority of any
Custodian hereunder; but 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 the Custodian
full and complete power and authority as agent hereunder of such successor
depositary.
Section 5.07. Notices, Reports and Communications. The Company has
agreed with the Depositary that, on or before the first date on which the
Company gives notice, by publication or otherwise, of any meeting of holders of
Common Stock or other Deposited Securities or any other meeting of holders of
the Company's securities at which holders of Common Stock or other Deposited
Securities are entitled to vote, or of any
23
adjourned meeting of such holders, or of the taking of any action by such
holders of Common Stock or other Deposited Securities 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
Common Stock or other Deposited Securities. The Company has also agreed to
furnish to the Custodian and the Depositary a summary, in English, of any
applicable provisions or proposed provisions of the Amended 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 Company has agreed with the Depositary to provide to the Custodian
and to arrange for the prompt transmittal by the Custodian to the Depositary, at
the Company's expense, of sufficient copies of (i) such notices and any other
reports and communications that are generally made available by the Company to
holders of Common Stock and (ii) copies, with the cooperation of the Depositary
as agreed, of official receipts or other evidence of the payment of withholding
taxes paid by the Company to the Philippine Bureau of Internal Revenue in
respect of the Common Stock constituting Deposited Securities, such evidence to
include the amount of such taxes withheld, both in the aggregate and on a per
share basis. The Depositary has agreed with the Company to arrange at the
Company's expense for prompt mailing of copies thereof to all Holders and, at
the reasonable request and at the expense of the Company, shall also make such
notices, reports and communications (including information in respect of
dividends received by the Depositary with regard to the Common Stock) available
to all Holders in the same manner as the Company makes them generally available
to holders of Common Stock or on such other basis as the Company may advise the
Depositary is required by any law or regulation or any requirement of any stock
exchange to which the Company may be subject, subject to any limitations imposed
by U.S. law. The Company has also agreed to provide to the Custodian or the
Depositary an English language translation of such reports or communications
concurrently with the receipt by the Custodian of such reports or
communications. The Depositary may, but shall not be required to, at the
Company's expense, obtain English translations or adequate English summaries of
any notices, reports or communications which are generally provided by the
Company to its holders of Common Stock which are not initially furnished to the
Depositary in English text.
Section 5.08. Issuance of Additional Common Stock, Etc.. In the event
of any issuance of additional Common Stock or of other securities (including
rights and convertible or exchangeable securities) as a dividend or distribution
with respect to the Common Stock or other Deposited Securities, or future
issuances to Holders for cash of additional Common Stock or such other
securities, the Depositary shall not distribute any such additional Common Stock
or other securities to the Holders unless the Company shall have furnished to
the Depositary a written opinion from counsel for the Company in the United
States, which counsel shall be reasonably satisfactory to the Depositary,
stating whether or not the circumstances of such issue are such as to make it
necessary for a registration statement under the Securities Act to be in effect
at or prior to making such dividend or distribution available to the Holders
entitled thereto and, if in the opinion of
24
such counsel a registration statement is required, stating that there is a
registration statement in effect which will cover the issuance of such
securities.
The Company has agreed with the Depositary that any future issuances of
(1) additional Common Stock, (2) rights, preferences or privileges to subscribe
for Common Stock, (3) securities convertible into or exchangeable for Common
Stock, or (4) rights, preferences or privileges to subscribe for securities
convertible into or exchangeable for Common Stock (in each case other than as a
dividend or distribution or issuance for cash to Holders as described in the
immediately preceding paragraph), shall be effected by the Company in a manner
so as to not violate the Securities Act. If the Company determines that an
issuance of such securities is required to be registered under the Securities
Act, the Company has agreed with the Depositary to (x) register such issuance to
the extent necessary, (y) alter the terms of the issuance to avoid the
registration requirements of the Securities Act or (z) direct the Depositary to
take such measures as are provided in Section 4.03 through 4.05 or other
specific measures with respect to the acceptance for deposit of Common Stock to
prevent such issuance from being made in violation of the registration
requirements of the Securities Act.
The Company has agreed with the Depositary that, neither the Company
nor any company controlling, controlled by or under common control with the
Company will at any time deposit any Common Stock, either upon original issuance
or upon a sale of Common Stock previously issued and reacquired by the Company
or by any such controlled or controlling company unless such transaction is
registered under the Securities Act or is exempt from registration under the
Securities Act as confirmed by a written opinion from counsel for the Company in
the United States, which counsel shall be reasonably satisfactory to the
Depositary.
Section 5.09. Indemnification. The Company has agreed with the
Depositary to indemnify the Depositary, the Custodian and any of their
respective agents against, and hold each of them harmless from, any loss,
liability or expense of any kind whatsoever that may arise (a) out of or in
connection with any offer, issuance, sale, resale, transfer, conversion, deposit
or withdrawal of ADRs, ADSs, Common Stock, other Deposited Securities, or 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 Company Agreement, the ADRs and ADSs, 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 agents, except to the
extent such loss, liability or expense is due to negligence or bad faith of any
of them, or (ii) by the Company or any of its agents, except to the extent such
loss, liability or expense arises out of information relating to the Depositary,
the Custodian or any of their respective agents, as the case may be, furnished
in a signed writing to the Company by the Depositary expressly for use in an
offering document pursuant to which ADRs, ADSs, Common Stock or other Deposited
Securities are offered or sold.
25
The Depositary has agreed with the Company to indemnify the Company and
hold it harmless from any loss, liability or expense of any kind whatsoever
which may arise out of acts performed or omitted by the Depositary or the
Custodian or any of their respective agents due to the negligence or bad faith
of either the Depositary or the Custodian or any of their agents.
ARTICLE VI
AMENDMENT AND TERMINATION
Section 6.01. Amendment. The form of the ADRs and any provisions of
this Deposit Agreement may, with the consent of the Company, at any time and
from time to time be amended by the Depositary in any respect which it may deem
necessary or desirable. Any amendment which shall impose or increase any fees or
charges (other than taxes and other governmental charges), or which otherwise
prejudice any substantial existing right of Holders, shall not, however, become
effective as to outstanding ADRs until the expiration of 90 days (or 30 days in
the case of any amendment which shall impose or increase any fees of the
Depositary for the issuance, execution and delivery of ADRs or any fees or
expenses in respect of transfer or sales of Common Stock or any delivery
expenses and charges incurred by the Depositary in the conversion of foreign
currency and in connection with foreign exchange control regulations) after
notice of such amendment shall have been given to the Holders of outstanding
ADRs. Every Holder at the time any amendment becomes effective shall be deemed
by continuing to hold such ADR to consent and agree to such amendment and to be
bound by this Deposit Agreement as amended thereby. In no event shall any
amendment impair the right of any Holder to surrender such Holder's ADRs and
receive therefor the Deposited Securities represented thereby or to request the
Depositary to use reasonable efforts to sell or cause to be sold Common Stock
constituting Deposited Securities over a stock exchange in the Philippines and
to distribute the proceeds therefrom to the persons entitled thereto, in any
case except in order to comply with provisions of applicable law.
Section 6.02. Termination. The Depositary shall at any time at the
direction of the Company terminate this Deposit Agreement by mailing notice of
such termination to the Holders of all ADRs then outstanding at least 90 days
prior to the date fixed in such notice for such termination. The Depositary may
likewise terminate this Deposit Agreement if the Depositary shall have delivered
to the Company a written notice of its election to resign, and a qualified
successor depositary shall not have been appointed and accepted its appointment
as provided in Section 5.04 within 90 days after such delivery. If any ADRs
shall remain outstanding after the date of termination, the Depositary
thereafter shall discontinue the registration of transfers of ADRs, shall
suspend the distribution of dividends to the Holders thereof, shall not accept
deposits of Common Stock (and shall instruct each Custodian to act accordingly),
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 and other distributions pertaining to Deposited Securities, shall sell
property and rights and convert Deposited Securities into
cash as provided in this Deposit Agreement, and shall continue to deliver
Deposited Securities, together with any dividends or other distributions
received with respect thereto and the net proceeds of the sale of any Common
Stock, rights or other property (in all
26
such cases, without liability for interest), in exchange for ADRs surrendered to
the Depositary. At any time after the expiration of six months from the date of
termination, the Depositary may sell the Deposited Securities then held
hereunder and may thereafter hold the net proceeds of any such sale, together
with any other cash then held by it hereunder, without liability for interest,
for the pro rata benefit of the Holders of ADRs which have not theretofore been
surrendered. After making such sale, the Depositary shall be discharged from all
obligations under this Deposit Agreement and the Company Agreement, except to
account for such net proceeds and other cash and for its obligations under
Section 5.09.
ARTICLE VII
MISCELLANEOUS
Section 7.01. 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 shall constitute one and the same instrument.
Section 7.02. Third Party Beneficiaries. This Deposit Agreement is for
the exclusive benefit of the parties hereto and the Company and shall not be
deemed to give any legal or equitable right, remedy or claim whatsoever to any
other person.
Section 7.03. Severability. In case any one or more of the provisions
contained in this Deposit Agreement or in the ADRs 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 7.04. Holders as Parties; Binding Effect. The Holders from time
to time shall be parties to this Deposit Agreement and shall be bound by all of
the terms and conditions hereof and of the ADRs by acceptance thereof.
Section 7.05. 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
(if domestic, first class, if overseas, first class airmail, postage prepaid) or
air courier, or by cable, telex or facsimile transmission confirmed by letter
sent by mail or air courier, addressed to Philippine Long Distance Telephone
Company, ▇▇▇▇▇ Cojuangco Building, Makati Avenue, P.O. Box 952, Makati, Metro
Manila, Philippines, Attention: Treasurer (facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇) or
to any other address which the Company may specify by notice.
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 (if domestic,
first class, if overseas, first class airmail, postage prepaid) or air courier,
or by cable, telex or facsimile transmission confirmed by letter sent by mail or
air courier, addressed to Citibank, N.A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇, Attention: ADR Department
27
(telex number: ITT: 420392; RCA: 235530; facsimile number: (▇▇▇) ▇▇▇-▇▇▇▇), or
to any other address which the Depositary may specify by notice.
Any and all notices to be given to any Holder shall be deemed to have
been duly given if personally delivered, or sent by mail (if domestic, first
class, if overseas, first class airmail, postage prepaid) or air courier, or by
cable, telex or facsimile transmission confirmed by letter sent by mail or air
courier, addressed to such Holder at the address of such Holder as it appears on
the transfer 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.
Delivery of a notice sent by mail or air courier shall be deemed to be
effective three days (in the case of domestic mail or air courier) or seven days
(in the case of overseas mail) after dispatch and any notice sent by cable,
telex or facsimile transmission as provided in this Section shall be deemed to
be effective 24 hours after dispatch. The Depositary 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 as aforesaid.
Section 7.06. Governing Law. This Deposit Agreement and the ADRs shall
be interpreted and all rights hereunder and thereunder and provisions hereof and
thereof shall be governed by the law of the State of New York.
Section 7.07. Compliance with U.S. Securities Laws. Notwithstanding
anything in this Deposit Agreement to the contrary, the Company and the
Depositary each agrees that it will not exercise any rights it has under this
Deposit Agreement to prevent the withdrawal or delivery of Deposited Securities
in a manner which would violate the United States securities laws, including,
but not limited to, Section I.A(1) of the General Instructions to the Form F-6
Registration Statement, as amended from time to time, under the Securities Act
of 1933.
28
IN WITNESS WHEREOF, CITIBANK, N.A. has duly executed this Deposit Agreement as
of the day and year first above set forth and all Holders shall become parties
hereto upon acceptance by them of ADRs issued in accordance with the terms
hereof.
CITIBANK, N.A.
/s/
---------------------------------
Name:
Title:
29
EXHIBIT A
Number _________
American Depositary Shares
(One American Depositary
Share Represents One Fully
Paid Share of Common Stock)
[FORM OF FACE OF AMERICAN DEPOSITARY RECEIPT]
AMERICAN DEPOSITARY RECEIPT
evidencing
American Depositary Shares
representing
DEPOSITED FULLY PAID SHARES OF COMMON STOCK
of
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
(Incorporated under the laws of
the Republic of the Philippines)
THE HOLDER OF THIS AMERICAN DEPOSITARY RECEIPT SHALL NOT HAVE, AND SHALL NOT
HAVE THE RIGHT TO INSTRUCT THE DEPOSITARY AS TO THE EXERCISE OF, ANY DISSENTER'S
RIGHTS PROVIDED TO HOLDERS OF COMMON STOCK UNDER PHILIPPINE LAW.
CITIBANK, N.A., a national banking association organized and existing
under the laws of the United States of America, as depositary (the
"Depositary"), such Depositary's principal office being located at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, hereby certifies that [ ]
is the owner of that number of American Depositary Shares, indicated on the
records of the Depositary, representing deposited fully paid Common Stock, par
value P5 per share ("Common Stock"), including evidence of rights to receive
such Common Stock (including, but not limited to, purchase invoices as may
effectuate the legal transfer of title to shares under Philippine law), of
Philippine Long Distance Telephone Company, a corporation organized under the
laws of the Republic of the Philippines (the "Company"). At the date of the
Deposit Agreement (as hereafter defined), each American Depositary Share ("ADS")
represents one (1) share of
A-1
Common Stock* deposited under the Deposit Agreement with the Custodian, which at
the date of execution of the Deposit Agreement is Citibank, N.A., Manila branch
(the "Custodian").
(1) The Deposit Agreement. This American Depositary Receipt is one of
an issue herein called the "ADRs" executed and delivered pursuant to the Common
Stock Deposit Agreement dated as of October 19, 1994 (the "Deposit Agreement"),
by and among the Depositary and all Holders from time to time of ADRs issued
thereunder, each of whom by accepting an ADR or acquiring any beneficial
interest therein agrees to become a party thereto and becomes bound by all terms
and provisions thereof. The Deposit Agreement sets forth the rights of Holders
of the ADRs and the rights and duties of the Depositary in respect of the Common
Stock deposited thereunder and any and all other securities, property and cash
from time to time received in respect of such Shares and held thereunder (such
Common Stock, securities, property and cash, collectively, the "Deposited
Securities"). Copies of the Deposit Agreement are on file at the Principal New
York Office of the Depositary and at the principal office of the Custodian. The
statements made on the face and the reverse of this ADR are summaries of certain
provisions of the Deposit Agreement and are qualified by and subject to the
detailed provisions of the Deposit Agreement, to which reference is hereby made.
Terms defined in the Deposit Agreement and not otherwise defined herein have the
same defined meanings set forth in the Deposit Agreement.
(2) Surrender of ADRs and Withdrawal of Deposited Securities. Subject
to the terms and conditions of the Deposit Agreement, upon (i) surrender of ADSs
by delivery of ADRs at the Principal New York Office of the Depositary for the
purpose of withdrawal or sale of the Deposited Securities represented thereby
and (ii) payment of all fees (including the fees of the Depositary (which are
summarized in paragraph (8) of this ADR) provided in the Deposit Agreement,
including Exhibit B thereto), taxes (including stamp, transfer and capital gains
taxes) and governmental or other charges payable in connection with such
surrender and cancellation of ADRs, a Holder is entitled to (A) physical
delivery, to him or upon his order, or electronic delivery, if available, to an
account outside the United States designated by such person of the Common Stock
and any other documents of title at the time represented by the ADR together
with such other delivery of Deposited Securities (other than Common Stock) then
represented by ADSs as the Depositary may effect or (B) request that the
Depositary use reasonable efforts to sell or cause to be sold the Common Stock
represented by the ADSs evidenced by such ADRs on such Holder's behalf over the
Philippine Stock Exchange and to remit the proceeds thereof (less the fees and
expenses provided herein and any brokerage fee or selling expenses incurred in
connection with such sale) to such Holder or in accordance with such Holder's
instructions; provided that no such request may be made by any such Holder to
the Depositary to sell or to cause to be sold such Common Stock in amounts less
than the minimum trading (board) lot prescribed by the Philippine Stock
Exchange.
--------
* Subject to amendment as provided in Article IV of the Deposit Agreement.
A-2
An ADR surrendered and written instructions received for such purposes
may be required by the Depositary to be properly endorsed or accompanied by
properly executed instruments of transfer. The person requesting withdrawal of
Deposited Securities or the sale of Common Stock as provided under the Deposit
Agreement and described herein shall deliver to the Depositary written
instructions requesting the Depositary to cause (i) the Deposited Securities
being withdrawn to be delivered (subject to any applicable clearing procedures
and provisions of the Amended Articles of Incorporation of the Company and
subject to the provisions of this paragraph (2)) to or upon the written order of
a person or persons designated in such order or (ii) the Common Stock being
withdrawn to be so sold.
Upon the receipt of written instructions to use reasonable efforts to
sell or cause to be sold the Common Stock represented by ADSs being withdrawn
from deposit under the Deposit Agreement and compliance with the other
provisions of Section 2.05 of the Deposit Agreement, the Depositary will,
subject to the terms and conditions of the Deposit Agreement and applicable laws
and regulations, direct the Custodian to make reasonable efforts, in its sole
discretion, to sell or cause to be sold the Common Stock represented by the ADSs
so surrendered, through a securities company in the Philippines selected by the
Depositary, over the Philippine Stock Exchange. Any such sale of Common Stock
will be at the risk and expense (including any brokerage commissions), of the
Holder requesting such sale. Upon receipt of any proceeds from such sale (less
any fees and expenses incurred in connection with such sale, including brokerage
commissions) the Depositary will, subject to the terms of Section 4.06 of the
Deposit Agreement (which are summarized in paragraph (18) below), convert or
cause to be converted any such proceeds into dollars and distribute any such
proceeds to or to the order of the person or persons designated in such written
instructions. The Depositary may make delivery to such person or persons at the
Principal New York Office of the Depositary of any such proceeds of sale. The
parties acknowledge that no assurance can be given that the Depositary will be
able to effect any sale of any Common Stock in a timely manner or at a specified
price, particularly during periods of trading illiquidity or volatility with
respect to Common Stock.
Upon the receipt of written instructions requesting the withdrawal and
delivery of Deposited Securities from deposit under the Deposit Agreement and
compliance with the other provisions of Section 2.05 of the Deposit Agreement,
the Depositary will direct the Custodian to deliver at the principal office of
such Custodian, subject to the terms and conditions of the Deposit Agreement and
applicable laws and regulations, to or upon the written order of the person or
persons designated in such written instructions, the Deposited Securities
represented by the ADSs evidenced by such surrendered ADR or represented by the
ADSs specified in such written instructions; except that the Depositary may,
subject to applicable law, make delivery to such person or persons at the
Principal New York Office of the Depositary of any dividends or distributions
(other than dividends or distributions consisting of Common Stock) with respect
to the Deposited Securities to be withdrawn, or of any proceeds of sale of any
dividends, distributions (other than dividends or distributions consisting of
Common
A-3
Stock) or rights with respect to the Deposited Securities which may at the time
be held by the Depositary.
At the request, risk and expense of any Holder so surrendering an ADR
or submitting such written instructions for delivery, and for the account of
such Holder, and provided that payment of any applicable tax or governmental or
other charge shall have been made in accordance with Section 3.02 of the Deposit
Agreement, the Depositary will direct the Custodian to forward any cash or other
property (other than rights) comprising, and forward a certificate or
certificates (if certificates may be delivered) and other proper documents of
title, if any, for, the Deposited Securities represented by the ADSs evidenced
by such ADR to the Depositary for delivery at the Principal New York Office of
the Depositary. Such direction will be given by letter or, at the request, risk
and expense of such Holder, by cable, telex or facsimile transmission.
The Depositary will not accept surrender of ADRs or written
instructions for the purpose of withdrawal of less than one share of Common
Stock. In addition, the Depositary shall only honor requests for withdrawal of
whole numbers of shares of Common Stock. In the case of surrender of an ADR
evidencing a number of ADSs representing other than a whole number of shares of
Common Stock, the Depositary will cause delivery of the appropriate whole number
of shares of Common Stock as provided in the Deposit Agreement and summarized
herein, and will execute and deliver to the person surrendering such ADR a new
ADR evidencing ADSs representing any remaining fractional shares of Common
Stock.
Notwithstanding anything in the Deposit Agreement to the contrary, the
Company and the Depositary each agrees that it will not exercise any rights it
has under the Deposit Agreement to prevent the withdrawal or delivery of
Deposited Securities in a manner which would violate the United States
securities laws, including, but not limited to, Section I.A(1) of the General
Instructions to the Form F-6 Registration Statement, as amended from time to
time, under the Securities Act of 1933.
(3) Transfers, Split-ups and Combinations. Subject to the limitations
stated herein and in the Deposit Agreement, this ADR is transferable on the
books of the Depositary by the Holder hereof in person or by duly authorized
attorney, upon surrender (at the Depositary's Principal New York Office) of this
ADR properly endorsed or accompanied by proper instruments of transfer
(including signature guarantees in accordance with standard industry practice)
and duly stamped as may be required by any applicable law. Thereupon, the
Depositary will execute a new ADR or ADRs and deliver the same to or upon the
order of the person entitled thereto.
This ADR may be split into other ADRs or may be combined with other
ADRs into one ADR, evidencing the same aggregate number of ADSs and registered
in the name of the same Holder as the ADR or ADRs surrendered.
(4) Limitations on Execution and Delivery, Transfer, Etc. of ADRs;
Suspension of Delivery, Transfer, Etc. As a condition precedent to the execution
and delivery, registration of transfer, split-up, combination or surrender of
any ADR for the purpose of withdrawal of any Deposited Securities, the
Depositary or the Custodian may
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require (i) payment from the Holder, the presenter of an ADR or the depositor of
Common Stock, of a sum sufficient to reimburse it for any taxes (including any
transfer, capital gains or stamp taxes) or governmental or other charges and any
stock transfer, custody or registration fee with respect thereto and payment of
any applicable fees (which are summarized in paragraph (8) of this ADR) provided
for in the Deposit Agreement, including Exhibit B thereto, (ii) production of
proof satisfactory to it as to the identity and genuineness of any signature,
including, but not limited to, a signature guarantee in accordance with industry
practice, and (iii) compliance with such other restrictions, if any, as the
Depositary may, after consultation with the Company, establish consistent with
the provisions of the Deposit Agreement.
The delivery of ADRs against deposits of Common Stock generally or of
particular Common Stock may be suspended or withheld, or the registration of
transfer of ADRs in particular instances may be refused, or the registration of
transfer generally may be suspended, or the surrender of outstanding ADRs for
the purpose of withdrawal of Deposited Securities may be suspended, during any
period when the transfer books of the Depositary or the Company (or the
appointed agent of the Company for the transfer and registration of Common
Stock) are closed, or if any such action is deemed necessary or advisable by the
Company or the Depositary at any time or from time to time.
Subject to the further terms and provisions of Section 2.06 of the
Deposit Agreement (which are summarized in this paragraph (4)), Citibank, N.A.
and its agents, on their own behalf, may own and deal in any class of securities
of the Company and its affiliates and in ADRs. The Depositary may issue ADRs for
evidence of rights to receive Common Stock from the Company, or any custodian,
registrar, transfer agent, clearing agency or other entity involved in ownership
or transaction records in respect of the Common Stock. Such evidence of rights
shall consist of written blanket or specific guarantees of ownership of Common
Stock furnished on behalf of the Holder hereof. Neither the Depositary nor the
Custodian shall lend Deposited Securities or ADRs; provided, however, that the
Depositary may issue ADRs prior to the receipt of Common Stock pursuant to
Section 2.02 of the Deposit Agreement (a "Pre-Release Transaction") and deliver
shares of Common Stock upon the receipt and cancellation of ADRs which have been
Pre-Released, whether or not such cancellation is prior to the termination of
such Pre-Release Transaction or the Depositary knows that such ADR has been Pre-
Released. The Depositary may receive ADRs in lieu of shares in satisfaction of a
Pre- Release Transaction. Each such Pre-Release transaction will be (a) subject
to (x) a written representation from the person to whom ADRs are to be delivered
(the "Applicant") that such person, or its customer, owns the Common Stock to be
remitted, (y) an unconditional guarantee by such person to deliver to the
Custodian the number of shares of Common Stock that are the subject of the
Pre-Release Transaction and (z) any additional restrictions or requirements that
the Depositary deems appropriate, (b) subject to a written representation to the
Applicant that it will hold such shares of Common Stock in trust for the
Depositary until their delivery to the Depositary or Custodian, reflect on its
records the Depositary as owner of such shares of Common Stock and deliver such
Common Stock upon the Depositary's request, (c) at all times fully
collateralized (marked
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to market daily) with cash, United States government securities or such other
collateral of comparable safety and liquidity, (d) terminable by the Depositary
on not more than five (5) business days notice, and (e) subject to such further
indemnities and credit regulations as the Depositary deems appropriate. The
Depositary intends that the number of ADRs issued by it pursuant to a
Pre-Release Transaction and outstanding at anytime generally will not exceed
thirty percent (30%) of the ADRs issued by the Depositary and with respect to
which shares of Common Stock are on deposit with the Depositary or Custodian;
provided, however, that the Depositary reserves the right to change or disregard
such limit from time to time as it deems appropriate. The Depositary will also
set limits with respect to the number of ADRs and Common Stock involved in
transactions to be effected hereunder 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 connection with the foregoing. Collateral provided pursuant to (b)
above, but not the earnings thereon, shall be held for the benefit of the
Holders only.
Without limitation of the foregoing, the Depositary will not knowingly
accept for deposit under this Deposit Agreement any Common Stock required to be
registered pursuant to the provisions of the Securities Act (including, but not
limited to, any "restricted securities" within the meaning of Rule 144 under the
Securities Act), unless a registration statement under the Securities Act is in
effect as to such Common Stock. The Depositary will use reasonable efforts to
comply with written instructions of the Company not to accept for deposit under
the Deposit Agreement any Common Stock identified in such instructions at such
times and under such circumstances as may reasonably be specified in such
instructions in order to facilitate the Company's compliance with the securities
laws of the United States.
Any person depositing Common Stock or any Holder may be required from
time to time to file with the Depositary or the Custodian such proof of
citizenship, residence, exchange control approval, payment of all applicable
taxes or other governmental charges, compliance with all applicable laws and
regulations and the terms of the Deposit Agreement, or legal or beneficial
ownership and the nature of such interest, to provide information relating to
the registration on the books of the Company (or the appointed agent of the
Company for the transfer and registration of Common Stock) of the Common Stock
presented for deposit or other information, to execute such certificates and to
make such representations and warranties as the Depositary or the Company may
deem necessary or proper to enable the Depositary to perform its obligations
under the Deposit Agreement or to enable the Company or the Depositary to
perform their respective obligations under the Company Agreement (as hereinafter
defined). The Depositary may withhold the execution or delivery or registration
of transfer of all or part of any ADR or the distribution or sale of any
dividend or other distribution of rights or of the proceeds thereof or the
withdrawal of any Deposited Securities until such proof or other information is
filed or such certificates are executed or such representations and warranties
are made. The Depositary shall take such additional actions and provide such
additional information as the Depositary shall from time to time agree with the
Company.
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(5) Liability of Holders for Taxes and Other Charges. If any tax or
governmental or other charge shall become payable with respect to this ADR, to
any Deposited Securities represented by the ADSs evidenced hereby, such tax or
governmental or other charge (other than any capital or stamp duties or transfer
taxes payable by the Company in accordance with the terms and conditions of the
Common Stock) shall be payable by the Holder hereof to the Depositary. The
Depositary may refuse, and the Company shall be under no obligation, to effect
any registration of transfer of all or any part of this ADR or any deposit or
withdrawal of Deposited Securities represented by the ADSs evidenced hereby
until such payment is made, and may withhold any dividends or other
distributions, or may sell for the account of the Holder hereof any part or all
of the Deposited Securities represented by the ADSs evidenced hereby, and may
apply such dividends or other distributions or the proceeds of any such sale in
payment of such tax or governmental or other charge, the Holder hereof remaining
liable for any deficiency.
(6) Warranties by Depositor. Each person depositing Common Stock under
the Deposit Agreement shall be deemed thereby to represent and warrant that such
Common Stock and each certificate therefor are validly issued and outstanding,
fully paid and nonassessable, that the person making such deposit is duly
authorized to do so and that such shares of Common Stock are not "restricted
securities" as such term is defined in Rule 144 of the Securities Act. Such
representations and warranties shall survive the deposit of Common Stock and
issuance of ADRs in respect thereof.
(7) Compliance with U.S. Securities Laws. Notwithstanding anything in
the Deposit Agreement to the contrary, the Company and the Depositary have each
agreed that it will not exercise any rights it has under the Deposit Agreement
to prevent the withdrawal or delivery of Deposited Securities in a manner which
would violate the United States securities laws, including, but not limited to,
Section I.A. (1) of the General Instructions to the Form F-6 Registration
Statement, as amended from time to time, under the Securities Act of 1933.
(8) Charges of Depositary. The Depositary will charge the party
receiving an ADR against deposit of Common Stock or other depositary receipts,
$0.05 per ADS. The Depositary will charge the party surrendering an ADR in
connection with the withdrawal of Deposit Securities, $0.05 per ADS. The
Depositary will charge the party for whom the sale or exercise of rights, is
made, $0.02 per ADS per distribution. Holders will pay through deduction or
otherwise, in addition to the fees and charges summarized above in this
paragraph (8) and set forth in Exhibit B to the Deposit Agreement, (i) taxes and
other governmental charges (including, but not limited to, any transfer, capital
gains and stamp tax) other than any capital or stamp duties or transfer taxes
payable by the Company in accordance with the terms and conditions of the Common
Stock, (ii) such registration, transfer, custody or other fees as may from time
to time be in effect for the registration of transfers of Common Stock generally
on the share
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register of the Company or its appointed agent for the registration of transfer
and accordingly applicable to transfers of Common Stock to or from the name of
the Nominee on the making of deposits pursuant to Section 2.02 of the Deposit
Agreement or withdrawals pursuant to Section 2.05 of the Deposit Agreement,
(iii) such cable, telex, facsimile transmission and delivery expenses as are
expressly provided in the Deposit Agreement to be at the expense of persons
depositing Common Stock or Holders and (iv) such reasonable expenses and charges
as are incurred by the Depositary in the conversion of foreign currency pursuant
to Section 4.06 of the Deposit Agreement (which is summarized in paragraph (18)
hereof) or in connection with other distributions to holders of Common Stock
pursuant to Section 4.02, 4.03, 4.04 or 4.05 of the Deposit Agreement (which are
summarized in paragraphs (14), (15), (16) and (17), respectively, hereof).
Any other charges and expenses of the Depositary under the Deposit
Agreement and the Registrar, if any, will be paid by the Company after
consultation and agreement and in accordance with agreements in writing entered
into between the Depositary and the Company as to the nature and amount of such
charges and expenses. The charges and expenses of the Custodian, the Nominee or
any other agent of the Depositary are for the sole account of the Depositary.
The right of the Depositary to receive payment of fees, charges and
expenses as provided in Section 5.05 of the Deposit Agreement (and summarized in
this paragraph (8)) shall survive the termination of the Deposit Agreement and,
as to any Depositary, the resignation of such Depositary pursuant to Section
5.04 of the Deposit Agreement.
(9) Title to ADRs. Subject to any limitations set forth herein or in
the Deposit Agreement, it is a condition of this ADR, and every successive
Holder hereof by accepting or holding the same consents and agrees, that when
properly endorsed or accompanied by proper instruments of transfer (including
signature guarantees in accordance with standard industry practice) title to
this ADR (and to each ADS evidenced hereby) is transferable by delivery with the
same effect as in the case of a negotiable instrument in accordance with the
laws of the State of New York; provided, however, that the Depositary and the
Company, notwithstanding any notice to the contrary, may deem and treat the
Holder of this ADR as the absolute owner hereof for any purpose, including,
without limitation, the purpose of determining the person entitled to
distribution of dividends or other distributions or to any notice provided for
in the Deposit Agreement and neither the Depositary nor the Company shall have
any obligation or be subject to any liability under the Deposit Agreement to any
holder hereof unless such holder is the Holder hereof.
(10) Validity of ADR. This ADR shall not be entitled to any benefits
under the Deposit Agreement or be valid or obligatory for any purpose unless
this ADR has been executed by the Depositary by the manual signature of a duly
authorized officer of the Depositary or, if a Registrar shall have been
appointed, such signature may be a facsimile if this ADR is counter-signed by
the manual signature of a duly authorized officer of the Registrar and dated by
such officer.
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(11) Disclosure of Interests. The Company or the Depositary may from
time to time request Holders or former Holders to provide information as to the
capacity in which they hold or held this ADR and the nature of such interest and
various other matters. Each such Holder agrees to provide any such information
reasonably requested by the Company or the Depositary pursuant to the Deposit
Agreement whether or not still a Holder at the time of such request.
(12) Ownership Restrictions. The Company may restrict transfers of
Common Stock if such transfer might result in ownership of Common Stock
exceeding the limits under any applicable law or the Company's Amended Articles
of Incorporation. The Philippine Constitution requires that at least 60% of the
capital of a corporation operating a public utility in the Philippines be owned
by Philippine citizens. The Depositary will, if and as directed by the Company,
take action with respect to the ownership interest of any Holder in excess of
any legal or contractual limitations on the legal or beneficial ownership of
Common Stock or ADSs, including, but not limited to, a mandatory sale or
disposition on behalf of a Holder of the Common Stock represented by the ADSs
held by such Holder in excess of such limitation, if and to the extent such
disposition is permitted by applicable law.
(13) Available Information. The Company is subject to the periodic
reporting requirements of the Securities Exchange Act of 1934 and, accordingly,
files certain reports with the Commission. These public reports can be inspected
by Holders and copied at the public reference facilities maintained by the
Commission located at the date of this Deposit Agreement at Judiciary Plaza, ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇.▇., ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇.
CITIBANK, NA, as depositary
By:_____________________
Dated:
The address of the Principal New York Office of the Depositary is ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
A-9
(FORM OF REVERSE OF AMERICAN DEPOSITARY RECEIPT)
SUMMARY OF CERTAIN ADDITIONAL PROVISIONS
OF THE DEPOSIT AGREEMENT
(14) Cash Distributions; Withholding. Whenever the Custodian or the
Depositary receives any cash dividend or other cash distribution by the Company
in respect of any Deposited Securities, the Depositary will, subject to the
provisions of Section 4.06 of the Deposit Agreement (which are summarized in
paragraph (18) below), convert or cause any portion of such dividend or
distribution which is not in dollars to be converted into dollars and shall
promptly distribute such amount to the Holders entitled hereto in proportion to
the number of ADSs representing such Deposited Securities held by them
respectively, after deduction or upon payment of the fees and expenses of the
Depositary or the Custodian (and without liability for interest); provided,
however, that in the event that the Company, the Custodian or the Depositary
shall be 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 or other governmental charges, the amount distributed to Holders in
respect of ADSs representing such Deposited Securities shall be reduced
accordingly. The Depositary will distribute only such amount, however, as can be
distributed without attributing to any Holder a fraction of one cent, and any
balance not so distributable will be held by the Depositary (without liability
for interest thereon) and will be added to and become part of the next sum
received by the Depositary for distribution to Holders then outstanding. The
Company has agreed with the Depositary that the Company or its agent, or the
Depositary or its agent, as appropriate, will remit to the appropriate
governmental authority or agency all amounts withheld and owing to such
authority or agency. The Depositary will forward to the Company or its agent
such information from its records as the Company may reasonably request to
enable the Company or its agent to file necessary reports with governmental
authorities or agencies or, at the request and expense of the Company, the
Depositary or its agent may file such reports if deemed lawful and reasonably
feasible by the Depositary.
(15) Distributions in Common Stock. If any distribution in respect of
any Deposited Securities consists of a dividend in, or free distribution of,
Common Stock, the Depositary may, after consultation with the Company,
distribute to the Holders entitled thereto, in proportion to the number of ADSs
representing such Deposited Securities held by them respectively, additional
ADRs for an aggregate number of ADSs representing the number of shares of Common
Stock received as such dividend or free distribution, in either case, after
deduction or upon payment of the fees and expenses of the Depositary; provided,
however, that if for any reason (including any requirement that the Company or
the Depositary withhold, or make an advance payment of, an amount on account of
taxes or other governmental charges or that such Common Stock must be registered
under the Securities Act in order to be distributed to Holders) the Depositary
reasonably deems such distribution not to be practical or feasible, the
Depositary may, after consultation with the Company, (i) to the extent permitted
by applicable law, adopt such method as it may reasonably deem equitable and
practicable for the purpose of obtaining such dividend or effecting such
distribution, including the sale (at public or private sale) of the Common Stock
thus received, or any part thereof, and the net proceeds of any such sale after
payment of and reimbursement of advances to pay any
A-10
taxes or governmental charges shall be distributed by the Depositary to the
Holders entitled thereto as in the case of a distribution received in cash or
(ii) if the Depositary reasonably determines that no such method of distribution
can be effected in a practicable or equitable manner, the Depositary may refrain
from effecting such distribution altogether until such time as it reasonably
determines that a practicable or equitable distribution can be effected. In lieu
of issuing ADRs or adjusting the Depositary's records for fractional ADSs in any
such case, the Depositary will sell the number of shares of Common Stock
represented by the aggregate of such fractions and distribute the net proceeds
in dollars, all in the manner and subject to the conditions set forth in Section
4.02 of the Deposit Agreement (which are summarized in paragraph (14) above). If
additional ADRs are not so distributed (except pursuant to the preceding
sentence), or such change in the records of the Depositary is not made, each ADS
will thenceforth also represent its proportionate interest in the additional
shares of Common Stock distributed upon the Deposited Securities represented
thereby.
(16) Distribution of Rights. In the event that the Company shall offer
or cause to be offered to the holders of any Deposited Securities any rights to
subscribe for additional Common Stock or any rights of any other nature, the
Depositary, after consultation with the Company, has discretion as to the
procedure to be followed in making such rights available to the Holders entitled
thereto, subject to certain conditions set forth in Section 5.09 of the Deposit
Agreement (which are summarized in paragraph (27) below), or in disposing of
such rights on behalf of such Holders and making the net proceeds available in
cash to such Holders or, if by the terms of such rights offering or by reason of
applicable law, the Depositary may neither make such rights available to such
Holders nor dispose of such rights and make the net proceeds available to such
Holders, then the Depositary will allow the rights to lapse; provided, however,
that the Depositary will, if requested by the Company, take action as follows:
(i) if at the time of the offering of any rights the
Depositary determines that it is lawful and feasible to make such rights
available to all or certain Holders by means of warrants or otherwise, the
Depositary will, after deduction or upon payment of the fees and expenses
of the Depositary, distribute warrants or other instruments in proportion
to the number of ADSs representing such Deposited Securities held by them
respectively, or by means of such other method as it may deem feasible in
order to facilitate the exercise, sale or transfer of rights by such
Holders or the sale or resale of securities obtainable upon exercise of
such rights by such Holders; or
(ii) if at the time of the offering of any rights the
Depositary determines that it is not lawful or not feasible to make such
rights available to certain Holders by means of warrants or otherwise, or
if the rights represented by such warrants or such other instruments are
not exercised and appear to be about to lapse, the Depositary will use its
reasonable efforts to sell such rights or such warrants or other
instruments, if a market therefor is available, at public or private sales,
at such place or places and upon such terms as it may deem proper and,
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after deduction or upon payment of the fees and expenses of the Depositary
and any applicable taxes, allocate the net proceeds of such sales for the
account of the Holders otherwise entitled to such rights, warrants or other
instruments upon an averaged or other practicable basis without regard to
any distinctions among such Holders because of exchange restrictions or the
date of delivery of any ADR or ADRs, or otherwise.
If registration (under the Securities Act or any other applicable law)
of the rights or the securities to which any rights relate is required in order
for the Company to offer such rights to Holders and to sell to them the
securities to which such rights relate, the Depositary will not offer such
rights to Holders unless and until a registration statement is in effect, or
unless the offering and sale of such rights or securities to such Holders are
exempt from registration under the provisions of such law and, if requested by
the Depositary, the Company furnishes to the Depositary an opinion of counsel in
the United States for the Company reasonably satisfactory to the Depositary to
such effect. The Company shall have no obligation to register such rights or
such securities under the Securities Act.
(17) Distributions Other Than Cash, Common Stock or Rights. Whenever
the Custodian or the Depositary shall receive any distribution other than cash,
Common Stock or rights upon any Deposited Securities, the Depositary will cause
the securities or property so received to be distributed to the Holders entitled
thereto, after deduction or upon payment of the fees and expenses of the
Depositary, in proportion to the number of ADSs representing such Deposited
Securities held by them respectively, in any manner that the Depositary may deem
equitable and practicable for accomplishing such distribution; provided,
however, that if in the opinion of the Depositary it cannot cause such
securities or property to be distributed or such distribution cannot be made
proportionately among the Holders entitled thereto, or if for any other reason
(including any requirement that the Company, the Custodian or the Depositary
withhold an amount on account of taxes or other governmental charges or that
such securities must be registered under the Securities Act in order to be
distributed to Holders) the Depositary deems such distribution not to be
feasible, the Depositary may, after consultation with the Company, adopt such
method as it may deem equitable and practicable for the purpose of effecting
such distribution, including the sale (at public or private sale) of the
securities or property thus received, or any part thereof, and the net proceeds
of any such sale will be distributed by the Depositary to the Holders entitled
thereto as in the case of a distribution received in cash; provided that any
unsold balance of such securities or property will be distributed by the
Depositary to the Holders entitled thereto, if such distribution is feasible
without withholding for or on account of any taxes or other governmental charges
and without registration under the Securities Act, in accordance with such
equitable and practicable method as the Depositary adopts.
(18) Conversion of Foreign Currency. Whenever the Custodian receives
currency other than dollars (in this paragraph referred to as "foreign
currency"), by way of dividends or other distributions or the net proceeds from
the sale of securities, property or rights, and if at the time of the receipt
thereof the foreign currency so received can in the judgment of the Depositary
be converted on a reasonable basis into dollars which can,
A-12
at the time of receipt thereof, be transferred to the United States and
distributed to the Holders entitled thereto, the Depositary will promptly
convert or cause to be converted, by sale or in any other manner that it may
determine, such foreign currency into dollars, and such dollars (less any
reasonable and customary expenses incurred by the Depositary in the conversion
of the foreign currency) will be distributed to the Holders entitled thereto or,
if the Depositary shall have distributed any warrants or other instruments which
entitle the holders thereof to such dollars, then to the holders of such
warrants and/or instruments upon surrender thereof for cancellation. Such
distribution will 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 may file such application for
approval or license, if any, as it may deem desirable.
If at any time the Depositary determines that in its judgment any
foreign currency received by the Depositary is not convertible on a reasonable
basis into dollars distributable to Holders entitled thereto, or if any approval
or license of any government or authority or agency thereof which is required
for such conversion is denied or in the opinion of the Depositary is not
obtainable, or if any such approval or license is not obtained within a
reasonable period as determined by the Depositary, the Depositary may distribute
the foreign currency (or an appropriate document evidencing the right to receive
such foreign currency) received by the Depositary to, or in its discretion may
hold such foreign currency (without liability for interest) for the respective
accounts of, the Holders entitled to receive the same.
If any such conversion of foreign currency, in whole or in part, cannot
be effected for distribution to some Holders entitled thereto, the Depositary
may in its discretion make such conversion and distribution in dollars to the
extent permissible to the Holders for whom such conversion and distribution is
practicable and may, subject to any applicable currency and exchange
regulations, distribute the balance of the foreign currency received by the
Depositary to, or hold such balance for the account of, the Holders for whom
such conversion and distribution is not practicable.
(19) Fixing of Record Date. Whenever any cash dividend or other cash
distribution shall become payable or any distribution other than cash shall be
made, or whenever rights shall be issued, with respect to the Deposited
Securities, or whenever the Depositary receives notice of any meeting of holders
of Common Stock or other Deposited Securities or any other meeting of holders of
the Company's securities at which holders of Common Stock or other Deposited
Securities are entitled to vote, or whenever, for any reason, the Depositary
causes a change in the number of shares of Common Stock that are represented by
each ADS, or whenever the Depositary finds it necessary or convenient in respect
of any matter, the Depositary will fix a record date after consultation with the
Company (which shall be as near as practicable to the
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corresponding record date for such distribution or meeting set by the Company)
for the determination of the Holders who shall be entitled to receive such
dividend, distribution or rights or the net proceeds of the sale thereof, or to
give instructions for the exercise of voting rights, if any, at any such meeting
or in respect of such changed number of shares of Common Stock represented by a
ADS or in respect of such other matter. Subject to the provisions of Sections
4.02 through 4.06 of the Deposit Agreement (which are summarized in paragraphs
(14) through (18), respectively, above) and to the other terms and conditions of
the Deposit Agreement, the Holders on such record date will be entitled to
receive the amount distributable by the Depositary with respect to such dividend
or other distribution or such rights or the net proceeds of sale thereof and to
exercise the rights of Holders under the Deposit Agreement with respect to such
changed number of shares of Common Stock represented by each ADS, in proportion
to the number of ADSs held by them respectively, to give such voting
instructions, to receive such notice or solicitation or to act in respect of any
matter.
(20) Voting of Deposited Securities. As soon as practicable after
receipt of notice of any meeting of holders of Common Stock or other Deposited
Securities or any other meeting of holders of the Company's securities at which
holders of Common Stock or other Deposited Securities are entitled to vote, the
Depositary will fix a record date for determining the Holders entitled to give
instructions for the exercise of voting rights as provided in Section 4.07 of
the Deposit Agreement (and summarized in paragraph (19) above) and will mail or
cause to be mailed to the Holders of record a notice which will contain: (a)
such information as is contained in such notice of meeting and (b) a statement
that the Holders of record at the close of business on a specified record date
will be entitled, subject to any applicable provisions of the law of the
Philippines and of the Amended Articles of Incorporation and the By-Laws of the
Company, to instruct the Depositary as to the exercise of the voting rights, if
any, pertaining to the number of shares of Common Stock or other Deposited
Securities represented by their respective ADSs evidenced by their respective
ADRs. Upon the written request of a Holder on such record date, received on or
before the date established by the Depositary for such purpose, the Depositary
will endeavor insofar as is practicable to vote or cause to be voted the amount
of Deposited Securities represented by such ADSs evidenced by such ADR in
accordance with the instructions set forth in such request.
The Depositary may not itself exercise any voting discretion over any
Common Stock. If the Depositary does not receive instructions from a Holder on
or before the date established by the Depositary for such purpose, such Holder
shall be deemed, and the Depositary shall deem such Holder, to have instructed
the Depositary to give a discretionary proxy to a person designated by the
Company for the purpose of exercising the voting rights, if any, pertaining to
the Common Stock represented by ADSs evidenced by such Holder's ADRs, provided
that no such discretionary proxy shall be given with respect to any matter as to
which the Company informs the Depositary that (i) the Company does not wish such
proxy given, (ii) substantial opposition exists or (iii) the rights of holders
of Common Stock will be materially and adversely affected.
A-14
Holders do not have, and will not have the right to instruct the
Depositary as to the exercise of, any dissenter's rights provided to holders of
Common Stock under Philippine law.
(21) Changes Affecting Deposited Securities. Upon any change in par
value, split-up, consolidation or any other reclassification of Deposited
Securities, or upon any recapitalization, reorganization, merger or
consolidation of the Company or sale of assets affecting the Company or to which
it is a party, any securities that shall be received by the Depositary or the
Custodian in exchange for or in conversion of or in respect of Deposited
Securities will be treated as new Deposited Securities, and the ADRs will,
subject to the terms of the Deposit Agreement and applicable laws (including any
registration requirements of the Securities Act), thenceforth represent the
right to receive the new Deposited Securities so received in exchange or
conversion, unless new or additional ADRs are delivered pursuant to the
following sentence. In any such case the Depositary may, and will at the
Company's request, subject to the terms of the Deposit Agreement, execute and
deliver additional ADRs, as in the case of a stock dividend on the Common Stock,
or call for the surrender of outstanding ADRs to be exchanged for new ADRs
specifically describing such new Deposited Securities.
Notwithstanding the foregoing, in the event that the Depositary
determines that any security or property so received may not be lawfully or
practicably distributed to all or certain Holders, the Depositary may and will,
if the Company requests, sell such securities or property 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 (after payment of the expenses thereof
and any taxes or governmental charges) for the account of the Holders otherwise
entitled to such securities or property 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 4.02 of the Deposit Agreement
(which is summarized in paragraph (14) above).
Promptly upon receipt of notice from the Company of the occurrence of
any such change, conversion or exchange covered by Section 4.09 of the Deposit
Agreement (which is summarized in this paragraph (21)) in respect of the
Deposited Securities, the Depositary will give notice thereof in writing, at the
Company's expense, to all Holders.
(22) Transmittal by the Depositary of Company Notices, Reports and
Communications; Inspection of Transfer Books. The Depositary will make available
for inspection during business hours by Holders at its Principal New York Office
and at the principal office of each Custodian copies of (i) the Deposit
Agreement and any related documents, (ii) the Common Stock Agreement dated the
date of the Deposit Agreement between the Company and the Depositary and
relating thereto (the "Company Agreement"), (iii) the Company's Amended Articles
of Incorporation and By-Laws and the Resolutions of the Board of Directors
relating to the Common Stock and (iv) any
A-15
notices, reports or communications, including any proxy soliciting materials,
received from the Company which are both (a) received by the Depositary or the
Custodian or the nominee of either, as the holder of the Deposited Securities,
and (b) made generally available to the holders of such Deposited Securities by
the Company. The Depositary will also send to Holders, at the Company's expense,
copies of such notices, reports and communications when furnished by the Company
to the Depositary pursuant to Section 5.07 of the Deposit Agreement. The
Depositary will keep books for the registration of ADRs and their transfer which
at all reasonable times will be open for inspection by the Company and Holders
of ADRs, provided that such inspection shall not be for the purpose of
communicating with Holders of ADRs in the interest of a business or object other
than the business of the Company or a matter related to the Deposit Agreement or
the ADRs.
(23) Withholding. Notwithstanding any other provision of the Deposit
Agreement, in the event that the Depositary determines that any distribution of
property (including Common Stock, rights to subscribe therefor and other
securities) is subject to any tax or governmental charges which the Depositary
is obligated to withhold, the Depositary may dispose of all or a portion of such
property (including Common Stock, rights to subscribe therefor and other
securities) in such amounts and in such manner as the Depositary deems necessary
and practicable to pay such taxes or governmental charges, including by public
or private sale, and the Depositary will distribute the net proceeds of any such
sale or the balance of any such property after deduction of such taxes or
governmental charges to the Holders entitled thereto in proportion to the number
of ADSs held by them respectively and the Depositary will, if feasible without
withholding for or on account of taxes or other governmental charges, and
otherwise in compliance with applicable law, distribute any unsold balance of
such property in accordance with the provisions of the Deposit Agreement. To the
extent that the Depositary is obligated to withhold as described in the previous
sentence, the Depositary will remit to the appropriate governmental authority or
agency all amounts withheld and owing to such authority or agency and will file
such corresponding reports as may be required.
The Company has agreed with the Depositary that, before making any
distribution or other payment on any Deposited Securities, the Company will make
such deductions (if any) which, by the laws or regulations of the Philippines,
the Company is required to make in respect of any income, capital gains or other
taxes and that the Company may also deduct the amount of any tax or governmental
charges payable by the Company or for which the Company might be made liable in
respect of such distribution or other payment or any document signed in
connection therewith.
(24) Obligations of the Depositary, the Custodian and the Company. The
Company assumes no obligation nor is it subject to any liability under the
Deposit Agreement to Holders or other persons, except that it has agreed with
the Depositary to act in good faith and use reasonable judgment in the
performance of its obligations set forth in the Company Agreement. The
Depositary assumes no obligation nor is it subject to any liability under the
Deposit Agreement to Holders or other persons (including, without limitation,
liability with respect to the validity or worth of the Deposited
A-16
Securities), except that it has agreed to act in good faith and use reasonable
judgment in the performance of its obligations set forth in the Deposit
Agreement. The Depositary has undertaken in the Deposit Agreement to perform
such duties and only such duties as are specifically set forth therein, and no
implied covenants or obligations shall be read into the Deposit Agreement
against the Depositary or the Company.
Neither the Depositary nor the Company are 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 ADRs, which in its opinion may
involve it in expense or liability, unless indemnity satisfactory to it in its
sole discretion against all expense and liability be furnished as often as may
be required, and no Custodian is under any obligation whatsoever with respect to
such proceedings, the Custodian being responsible solely to the Depositary.
Neither the Depositary nor the Company shall be liable for any action
or inaction by it in reliance upon the advice of or information from legal
counsel, accountants, any person presenting Common Stock for deposit, any
Holder, or any other person believed by it in good faith to be competent to give
such advice or information. Each of the Depositary, its agents and the Company
and its agents may rely and shall be protected in acting upon any written
notice, request, direction or other document believed by it to be genuine and to
have been signed or presented by the proper party or parties. Subject to the
provisions of Section 5.02 of the Deposit Agreement (which are summarized in
this paragraph (24)), the Depositary is not responsible for any failure to carry
out any instructions to vote any of the Deposited Securities, for the manner in
which any such vote is cast or for the effect of any such vote.
It is intended that neither the Depositary nor any agent of the
Depositary shall be deemed to be an "issuer" of the securities under the federal
securities laws or applicable state securities laws of the United States or any
other jurisdiction, it being expressly understood and agreed that the Depositary
and its agent are acting only in a ministerial capacity as Depositary for the
Common Stock.
(25) Prevention or Delay in Performance by the Depositary or the
Company. Neither the Depositary nor the Company will incur any liability to any
Holder or other person if by reason of any present or future law, regulation,
decree, order or other action of the United States, the Philippines or any other
country or jurisdiction, or of any other governmental authority, or by reason of
any act of God, war or other circumstances beyond its control or, in the case of
the Depositary, by reason of any provision, present or future, of the Amended
Articles of Incorporation and By-laws of the Company or any Deposited
Securities, the Depositary or the Company is prevented, delayed or forbidden
from doing or performing any act or thing which by the terms of the Deposit
Agreement (in the case of the Depositary) or the Company Agreement it is
provided shall be done or performed; nor will the Depositary or the Company
incur any liability to any Holder or other person by reason of any
nonperformance or delay, caused as aforesaid, in performance of any act or thing
that by the terms of the Deposit Agreement it is provided
A-17
shall or may be done or performed, or by reason of any exercise of, or failure
to exercise, any discretion provided for in the Deposit Agreement. Where, by the
terms of a distribution pursuant to Section 4.02, 4.03 or 4.05 of the Deposit
Agreement (which are summarized in paragraphs (14), (15) and (17), respectively,
above)) or an offering or distribution pursuant to Section 4.04 of the Deposit
Agreement (which is summarized in paragraph (16) above), or because of
applicable law, such distribution or offering may not be made available to
Holders, and the Depositary may not dispose of such distribution or offering on
behalf of such Holders and make the net proceeds available to such Holders, then
the Depositary may make no such distribution or offering, and may allow any
rights, if applicable, to lapse.
(26) Resignation of the Depositary; Appointment of Successor
Depositary; the Custodian. The Depositary may at any time resign as Depositary
under the Deposit Agreement by 30 days' written notice of its election so to do
to the Company, such resignation to take effect 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 under the Deposit Agreement
resigns, the Company has agreed to 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. Any corporation into or with which
the Depositary may be merged or consolidated will be the successor of the
Depositary without the execution or filing of any document or any further act.
The Depositary, after consultation with the Company, will from time to
time appoint one or more agents to act for it as Custodian under the Deposit
Agreement. The Depositary has initially appointed Citibank, N.A., Manila, as
custodian and agent of the Depositary for the purpose of the Deposit Agreement.
The Custodian in acting under the Deposit Agreement will be subject at all times
and in all respects to the direction of the Depositary and will be responsible
solely to it.
The Custodian may resign and be discharged from its duties under the
Deposit Agreement by 30 days' prior notice of its election to do so delivered to
the Depositary; such resignation to become effective upon appointment of a
successor Custodian and its acceptance of such appointment as provided in the
Deposit Agreement. The Depositary may discharge any Custodian at any time upon
notice to the Custodian being discharged and appoint a substitute or an
additional custodian, who will thereafter be the Custodian under the Deposit
Agreement.
(27) Issuance of Additional Common Stock, Etc. In the event of any
issuance of additional Common Stock or of other securities (including rights and
convertible or exchangeable securities) as a dividend or distribution with
respect to the Common Stock or other Deposited Securities, or future issuances
to Holders for cash of additional Common Stock or such other securities, the
Depositary will not distribute any such additional Common Stock or other
securities to the Holders unless the Company shall have furnished to the
Depositary a written opinion from counsel for the Company in the United States,
which counsel shall be reasonably satisfactory to the Depositary,
A-18
stating whether or not the circumstances of such issue are such as to make it
necessary for a registration statement under the Securities Act to be in effect
at or prior to making such dividend or distribution available to the Holders
entitled thereto and, if in the opinion of such counsel a registration statement
is required, stating that there is a registration statement in effect which will
cover the issuance of such securities.
The Company has agreed with the Depositary that any future issuances of
(1) additional Common Stock, (2) rights, preferences or privileges to subscribe
for Common Stock, (3) securities convertible into or exchangeable for Common
Stock, or (4) rights, preferences or privileges to subscribe for securities
convertible into or exchangeable for Common Stock (in each case other than as a
dividend or distribution or issuance for cash to Holders as described in the
immediately preceding paragraph, shall be effected by the Company in a manner so
as to not violate the Securities Act. If the Company determines that an issuance
of such securities is required to be registered under the Securities Act, the
Company has agreed with the Depositary to (x) register such issuance to the
extent necessary, (y) alter the terms of the issuance to avoid the registration
requirements of the Securities Act or (z) direct the Depositary to take such
measures as are provided in Sections 4.03 through 4.05 of the Deposit Agreement
(which are summarized as described in paragraphs (15) through (17),
respectively, above) or other specific measures with respect to the acceptance
for deposit of Common Stock to prevent such issuance from being made in
violation of the registration requirements of the Securities Act.
The Company has agreed with the Depositary that neither the Company nor
any company controlling, controlled by or under common control with the Company
will at any time deposit any Common Stock, either upon original issuance or upon
a sale of Common Stock previously issued and reacquired by the Company or by any
such controlled or controlling company unless such transaction is registered
under the Securities Act or is exempt from registration under the Securities Act
as confirmed by a written opinion from counsel for the Company in the United
States, which counsel shall be reasonably satisfactory to the Depositary.
(28) Amendment. The form of this ADR and any provisions of the Deposit
Agreement may, with the consent of the Company, at any time and from time to
time be amended by the Depositary in any respect which it may deem necessary or
desirable. Any amendment which imposes or increases any fees or charges (other
than taxes and other governmental charges), or which otherwise prejudice any
substantial existing right of Holders, shall not, however, become effective as
to outstanding ADRs until the expiration of 90 days (or 30 days in the case of
any amendment which shall impose or increase any fees of the Depositary for the
issuance, execution and delivery of ADRs or any fees or expenses in respect of
transfer or sales of Common Stock or any delivery expenses and charges incurred
by the Depositary in the conversion of foreign currency and in connection with
foreign exchange control regulations) after notice of such amendment shall have
been given to the Holders of outstanding ADRs. Every Holder at the time any
amendment becomes effective shall be deemed by continuing to
A-19
hold such ADR to consent and agree to such amendment and to be bound by the
Deposit Agreement as amended thereby. In no event shall any amendment impair the
right of any Holder to surrender such Holder's ADRs and receive therefor the
Deposited Securities represented thereby or to request the Depositary to use
reasonable efforts to sell or cause to be sold Common Stock constituting
Deposited Securities over a stock exchange in the Philippines and to distribute
the proceeds therefrom to the persons entitled thereto, in any case except in
order to comply with provisions of applicable law.
(29) Termination. The Depositary will at any time at the direction of
the Company terminate the Deposit Agreement by mailing notice of such
termination to the Holders of all ADRs then outstanding at least 90 days prior
to the date fixed in such notice for such termination. The Depositary may
likewise terminate the Deposit Agreement if the Depositary delivers to the
Company a written notice of its election to resign, and a qualified successor
depositary shall not have been appointed and accepted its appointment as
provided in Section 5.04 of the Deposit Agreement (which is summarized in
paragraph (26) above) within 90 days after such delivery. If any ADRs remain
outstanding after the date of termination, the Depositary thereafter will
discontinue the registration of transfers of ADRs, will suspend the distribution
of dividends to the Holders thereof, will not accept deposits of Common Stock
(and will instruct each Custodian to act accordingly), and will not give any
further notices or perform any further acts under the Deposit Agreement, except
that the Depositary will continue to collect dividends and other distributions
pertaining to Deposited Securities, will sell property and rights and convert
Deposited Securities into cash as provided in the Deposit Agreement, and will
continue to deliver Deposited Securities, together with any dividends or other
distributions received with respect thereto and the net proceeds of the sale of
any Common Stock, rights or other property (in all such cases, without liability
for interest), in exchange for ADRs surrendered to the Depositary. At any time
after the expiration of six months from the date of termination, the Depositary
may sell the Deposited Securities then held under the Deposit Agreement and may
thereafter hold the net proceeds of any such sale, together with any other cash
then held by it under the Deposit Agreement, without liability for interest, for
the pro rata benefit of the Holders of ADRs which have not theretofore been
surrendered. After making such sale, the Depositary will be discharged from all
obligations under the Deposit Agreement and the Company Agreement, except to
account for such net proceeds and other cash and for its obligations under the
indemnification provisions of Section 5.10 of the Deposit Agreement.
A-20
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 ADR and all rights thereunder, hereby irrevocably constituting and
appointing _______________ attorney-in-fact to transfer said ADR on the books of
the Depositary with full power of substitution in the premises.
Dated: Name:
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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.
------------------------------------------------------ ------------------------------------------------------
SIGNATURE GUARANTEED
------------------------------------------------------ ------------------------------------------------------
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A-21
EXHIBIT B
CHARGES OF THE DEPOSITARY
Service Rate By Whom Paid
------- ---- ------------
1) Creation of Global Depositary ADR Waived N/A
program
2) Annual maintenance feefob ADR Waived N/A
program
3) Issuance of ADR against deposit of $0.05 per ADS Party receiving
Common Stock or other depositary ADR
receipts
4) Withdrawal of Deposited Securities $0.05 per ADS Party surrendering
against surrender of ADRs ADR
5) Sale or exercise of rights or other $0.02 per ADS per Party for whom the
corporate action involving distribution sale or exercise of
distributions in respect of Deposited rights, is made
Securities
B-1