Exhibit (a)
Deposit Agreement, dated as of
July 22, 2004
EXECUTION
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Deposit Agreement
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▇▇.▇▇▇▇▇▇▇ LCD CO., LTD.
AND
CITIBANK, N.A.
As Depositary
AND
ALL HOLDERS AND BENEFICIAL OWNERS OF
AMERICAN DEPOSITARY SHARES EVIDENCED BY
AMERICAN DEPOSITARY RECEIPTS
ISSUED HEREUNDER
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Dated as of July 22, 2004
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TABLE OF CONTENTS
Page
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ARTICLE I DEFINITIONS............................................................................1
SECTION 1.01. Affiliate..............................................................................1
SECTION 1.02. American Depositary Shares; ADSs.......................................................1
SECTION 1.03. Beneficial Owner.......................................................................1
SECTION 1.04. Commission.............................................................................2
SECTION 1.05. Company................................................................................2
SECTION 1.06. CSD....................................................................................2
SECTION 1.07. Custodian..............................................................................2
SECTION 1.08. Deliver; Deposit; Surrender; Transfer; Withdraw........................................2
SECTION 1.09. Deposit Agreement......................................................................2
SECTION 1.10. Depositary.............................................................................2
SECTION 1.11. Deposited Securities...................................................................2
SECTION 1.12. Dollars................................................................................2
SECTION 1.13. DTC....................................................................................2
SECTION 1.14. DTC Participant........................................................................3
SECTION 1.15. Holder.................................................................................3
SECTION 1.16. Korea..................................................................................3
SECTION 1.17. NYSE...................................................................................3
SECTION 1.18. Principal Office.......................................................................3
SECTION 1.19. Receipts; ADRs.........................................................................3
SECTION 1.20. Registrar..............................................................................3
SECTION 1.21. Restricted Securities..................................................................3
SECTION 1.22. Restricted ADR(s); Restricted ADS(s); Restricted Shares................................4
SECTION 1.23. Securities Act of 1933.................................................................4
SECTION 1.24. Securities Exchange Act of 1934........................................................4
SECTION 1.25. Shares.................................................................................4
SECTION 1.26. Subsidiary.............................................................................4
SECTION 1.27. United States..........................................................................4
SECTION 1.28. Won....................................................................................4
ARTICLE II BOOK-ENTRY SYSTEM; FORM OF RECEIPTS; DEPOSIT OF SHARES; EXECUTION AND
DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS...........................................4
SECTION 2.01. Form and Transferability of Receipts...................................................4
SECTION 2.02. Deposit of Shares......................................................................6
SECTION 2.03. Execution and Delivery of Receipts.....................................................8
SECTION 2.04. Transfer of Receipts; Combination and Split-up of Receipts.............................8
SECTION 2.05. Surrender of Receipts and Withdrawal of Deposited Securities...........................9
SECTION 2.06. Limitations on Execution and Delivery, Transfer, Etc. of Receipts; Suspension of
Delivery, Transfer, Etc...............................................................10
SECTION 2.07. Lost Receipts, Etc....................................................................11
SECTION 2.08. Cancellation and Destruction of Surrendered Receipts..................................11
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SECTION 2.09. Maintenance of Records................................................................11
SECTION 2.10. Restricted ADSs.......................................................................11
ARTICLE III CERTAIN OBLIGATIONS OF HOLDERS........................................................13
SECTION 3.01. Filing Proofs, Certifications and Other Information...................................13
SECTION 3.02. Liability of Holders and Beneficial Owners for Taxes and Other Charges................13
SECTION 3.03. Representations and Warranties on Deposit, Transfer and Surrender and Withdrawal
of Shares or Receipts.................................................................14
SECTION 3.04. Disclosure of Beneficial Ownership....................................................14
SECTION 3.05. Ownership Restrictions................................................................14
ARTICLE IV RIGHTS RELATING TO THE DEPOSITED SECURITIES; CERTAIN OBLIGATIONS OF THE
DEPOSITARY............................................................................15
SECTION 4.01. Power of Attorney.....................................................................15
SECTION 4.02. Cash Distributions; Withholding of Taxes and other Governmental Charges...............15
SECTION 4.03. Distributions Other Than Cash, Shares or Rights.......................................16
SECTION 4.04. Distributions in Shares...............................................................16
SECTION 4.05. Elective Distributions in Cash or Shares..............................................17
SECTION 4.06. Rights................................................................................17
SECTION 4.07. Conversion of Foreign Currency........................................................19
SECTION 4.08. Fixing of Record Date.................................................................20
SECTION 4.09. Voting of Deposited Securities........................................................20
SECTION 4.10. Changes Affecting Deposited Securities................................................22
SECTION 4.11. Transmittal by the Depositary of Company Notices, Reports and Communications..........23
SECTION 4.12. Taxation..............................................................................23
SECTION 4.13. Available Information.................................................................25
ARTICLE V THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY.........................................25
SECTION 5.01. Maintenance of Office and Transfer Books by the Depositary............................25
SECTION 5.02. Lists of Receipt Holders..............................................................26
SECTION 5.03. Obligations of the Depositary, the Custodian and the Company..........................26
SECTION 5.04. Prevention or Delay in Performance by the Depositary or the Company...................27
SECTION 5.05. Resignation and Removal of the Depositary, Appointment of Successor Depositary........27
SECTION 5.06. Charges of Depositary.................................................................28
SECTION 5.07. The Custodian.........................................................................28
SECTION 5.08. Notices and Reports...................................................................29
SECTION 5.09. Issuance of Additional Shares, Etc....................................................30
SECTION 5.10. Indemnification.......................................................................31
SECTION 5.11. Certain Rights of the Depositary; Limitations.........................................32
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ARTICLE VI AMENDMENT AND TERMINATION.............................................................33
SECTION 6.01. Amendment; Supplement.................................................................33
SECTION 6.02. Termination...........................................................................33
ARTICLE VII MISCELLANEOUS.........................................................................34
SECTION 7.01. Counterparts..........................................................................34
SECTION 7.02. No Third Party Beneficiaries..........................................................34
SECTION 7.03. Severability..........................................................................35
SECTION 7.04. Holders and Beneficial Owners as Parties; Binding Effect..............................35
SECTION 7.05. Notices...............................................................................35
SECTION 7.06. Governing Law.........................................................................36
SECTION 7.07. Prohibition of Assignment.............................................................37
SECTION 7.08. Compliance with United States Securities Laws.........................................37
SECTION 7.09. Korean Law References.................................................................37
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EXHIBIT A
FORM OF FACE OF RECEIPT
Introductory Paragraph..............................................................................A-1
(1) The Deposit Agreement........................................................................A-1
(2) Surrender of Receipts and Withdrawal of Deposited Securities.................................A-2
(3) Transfers, Split-ups and Combinations........................................................A-3
(4) Certain Limitations..........................................................................A-3
(5) Liability of Holders and Beneficial Owners for Taxes and Other Charges.......................A-4
Signature of Depositary.............................................................................A-5
Address of Depositary's Principal Office............................................................A-5
FORM OF REVERSE OF RECEIPT
Summary of Certain Additional Provisions of the Deposit Agreement
(6) Warranties by Depositor......................................................................A-6
(7) Charges of Depositary........................................................................A-6
(8) Title to Receipts............................................................................A-7
(9) Validity of Receipt..........................................................................A-8
(10) Disclosure of Beneficial Ownership and Ownership Restrictions................................A-8
(11) Available Information........................................................................A-9
(12) Dividends and Distributions; Rights..........................................................A-9
(13) Record Dates................................................................................A-13
(14) Voting of Deposited Securities..............................................................A-13
(15) Changes Affecting Deposited Securities......................................................A-15
(16) Reports; Inspection of Transfer Books.......................................................A-15
(17) Withholding.................................................................................A-16
(18) Liability of the Company and Depositary.....................................................A-16
(19) Certain Rights of the Depositary; Limitations...............................................A-17
(20) Resignation and Removal of Depositary; Substitution of Custodian............................A-18
(21) Amendment and Supplement of Deposit Agreement and Receipts..................................A-18
(22) Termination of Deposit Agreement............................................................A-19
(23) Governing Law...............................................................................A-20
(24) Power of Attorney...........................................................................A-20
EXHIBIT B
Fee Schedule - Depositary Fees and Related Charges......................................................B-1
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DEPOSIT AGREEMENT
DEPOSIT AGREEMENT dated as of July 22, 2004 (the "Deposit
Agreement") among ▇▇.▇▇▇▇▇▇▇ LCD CO., LTD., a corporation established under the
laws of the Republic of Korea (the "Company"), Citibank, N.A., a national
banking association organized under the laws of the United States of America
(the "Depositary"), and all Holders and Beneficial Owners (each as hereinafter
defined) from time to time of the American Depositary Shares evidenced by
American Depositary Receipts issued hereunder.
W I T N E S S E T H :
WHEREAS, the Company desires to provide for the deposit of Shares
(as hereinafter defined) from time to time with the Depositary or with the
Custodian (as hereinafter defined), as agent of the Depositary for the purposes
set forth in this Deposit Agreement, for the creation of American Depositary
Shares representing the Shares so deposited and for the execution and delivery
of American Depositary Receipts evidencing the American Depositary Shares;
NOW THEREFORE, in consideration of the premises the parties 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. Affiliate. The term "Affiliate" shall have the meaning
assigned to such term by the Commission (as hereinafter defined) under
Regulation C promulgated under the Securities Act of 1933 (as hereinafter
defined), or under any successor regulation thereto.
SECTION 1.02. American Depositary Shares; ADSs. The terms "American
Depositary Shares" and "ADSs" shall mean the rights evidenced by the Receipts
issued hereunder and the interests in the Deposited Securities represented
thereby. Every two (2) American Depositary Shares shall represent one (1) Share,
until there shall occur a distribution upon Deposited Securities covered by
Section 4.04 or a change in Deposited Securities covered by Section 4.10 with
respect to which additional ADSs are not created, and thereafter American
Depositary Shares shall represent the Shares or other Deposited Securities
specified in such Sections.
SECTION 1.03. Beneficial Owner. The term "Beneficial Owner" shall
mean any person owning any beneficial interest in an ADS issued hereunder. A
Beneficial Owner of ADSs may or may not be the Holder of the ADR(s) evidencing
such ADSs. A Beneficial Owner shall be able to exercise any right or receive any
benefit hereunder solely through the person who is the Holder of the ADR(s)
evidencing the ADSs owned by such Beneficial Owner.
SECTION 1.04. 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 1.05. Company. The term "Company" shall mean ▇▇.▇▇▇▇▇▇▇ LCD
Co., Ltd., a corporation organized and existing under the laws of Korea, having
its principal office at 17th Floor, West Tower, LG Twin Towers, ▇▇ ▇▇▇▇▇-▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇-▇▇, ▇▇▇▇▇, ▇▇▇▇▇, 150-721, and its successors.
SECTION 1.06. CSD. The term "CSD" shall mean any institution
authorized under applicable law to effect book-entry transfers of securities of
Korean corporations, which may include Korea Securities Depository.
SECTION 1.07. Custodian. The term "Custodian" shall mean, as of the
date hereof, Korea Securities Depository, as agent of the Depositary for the
purposes of this Deposit Agreement, and any other firm or corporation which may
be appointed by the Depositary pursuant to the terms of Section 5.07, as
substitute custodian or as additional custodian hereunder, as the context shall
require, and the term "Custodian" shall mean all of them, collectively.
SECTION 1.08. Deliver; Deposit; Surrender; Transfer; Withdraw. The
terms "deliver", "deposit", "surrender", "transfer" or "withdraw", or their
respective noun forms, (including to or by the Custodian) when used with respect
to Shares or ADSs shall refer, where the context requires, to (i) a book-entry
or entries or an electronic transfer or transfers in or to an account or
accounts maintained by (a) in the case of Shares, a CSD or (b) in the case of
ADSs, DTC or (ii) the physical transfer of certificates representing Shares or
ADSs, as applicable.
SECTION 1.09. Deposit Agreement. The term "Deposit Agreement" shall
mean this agreement as it may from time to time be amended in accordance with
the terms hereof and all agreements supplemental hereto.
SECTION 1.10. Depositary. The term "Depositary" shall mean Citibank,
N.A., a national banking association organized under the laws of the United
States of America, and any successor as depositary hereunder.
SECTION 1.11. Deposited Securities. The term "Deposited Securities"
as of any time shall mean Shares at such time deposited under the 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 4.07. The collateral
delivered in connection with pre-release transactions described in Section 5.11
shall not constitute Deposited Securities.
SECTION 1.12. Dollars. The term "dollars" shall mean United States
dollars.
SECTION 1.13. DTC. The term "DTC" shall mean The Depository Trust
Company, a national clearinghouse and the central book-entry settlement system
for securities traded in the United States and, as such, the custodian for the
securities of DTC Participants (as hereinafter defined) maintained in DTC, and
any successor thereto.
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SECTION 1.14. DTC Participant. The term "DTC Participant" shall mean
any financial institution (or any nominee of such institution) having one or
more participant accounts with DTC for receiving, holding and delivering the
securities and cash held in DTC.
SECTION 1.15. Holder. The term "Holder" shall mean the person, from
time to time, in whose name an ADR is registered on the books of the Registrar
maintained for such purpose. If a Holder is not the Beneficial Owner of the ADSs
evidenced by the ADR registered in its name, such person shall be deemed to have
all requisite authority to act on behalf of the Beneficial Owners of the ADSs
evidenced by such ADR, other than as specified by such Beneficial Owners to the
Depositary in writing; provided, that any such notification that conflicts with
any term of this Deposit Agreement shall be of no force.
SECTION 1.16. Korea. The term "Korea" shall mean The Republic of
Korea.
SECTION 1.17. NYSE. The term "NYSE" shall mean the New York Stock
Exchange, Inc.
SECTION 1.18. Principal Office. The term "Principal Office," when
used with respect to the Depositary, shall mean the Corporate Agency Office of
the Depositary at which at any particular time its depositary receipts business
shall be administered, which, currently the Depositary's Corporate Agency Office
is located at ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇.▇.▇.
The Depositary's Corporate Agency Office is at a different address than its
Principal Executive Office. Its Principal Executive Office is at ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
SECTION 1.19. Receipts; ADRs. The term "Receipts" or "ADRs" shall
mean the American Depositary Receipts issued hereunder evidencing American
Depositary Shares, as such American Depositary Receipts may be amended from time
to time in accordance with the provisions of this Deposit Agreement. A Receipt
or ADR may evidence any number of American Depositary Shares and may, in the
case of ADSs held through a central depository such as DTC, be in the form of a
"Balance Certificate."
SECTION 1.20. Registrar. The term "Registrar" shall mean the
Depositary or any bank or trust company having an office in the Borough of
Manhattan, The City of New York, which shall be appointed by the Depositary to
register Receipts and transfers of Receipts as herein provided, and shall
include any co-registrar appointed by the Depositary for such purposes.
SECTION 1.21. Restricted Securities. The term "Restricted
Securities" shall mean Shares, Deposited Securities or ADSs which (i) have been
acquired directly or indirectly from the Company or any of its Affiliates in a
transaction or chain of transactions not involving any public offering and are
subject to resale limitations under the Securities Act of 1933 (as hereinafter
defined) or the rules issued thereunder, or (ii) are held by an officer or
director (or persons performing similar functions) or other Affiliate of the
Company, or (iii) are subject to other restrictions on sale or deposit under the
laws of the United States, Korea, or under a shareholder agreement or the
Articles of Incorporation of the Company or under the regulations of an
applicable securities exchange unless, in each case, such Shares, Deposited
3
Securities or ADSs are being transferred or sold to persons other than an
Affiliate of the Company in a transaction (a) covered by an effective resale
registration statement, or (b) exempt from the registration requirements of the
Securities Act of 1933 (as hereinafter defined), and the Shares, Deposited
Securities or ADSs are not, when held by such person(s), Restricted Securities.
SECTION 1.22. Restricted ADR(s); Restricted ADS(s); Restricted
Shares. The terms "Restricted ADR(s)", "Restricted ADS(s)" and "Restricted
Shares" shall have the respective meanings set forth in Section 2.10.
SECTION 1.23. Securities Act of 1933. The term "Securities Act of
1933" shall mean the United States Securities Act of 1933, as from time to time
amended.
SECTION 1.24. Securities Exchange Act of 1934. The term "Securities
Exchange Act of 1934" shall mean the United States Securities Exchange Act of
1934, as from time to time amended.
SECTION 1.25. Shares. The term "Shares" shall mean any shares of the
common stock, par value 5,000 Won per share, of the Company and shall include
evidence of rights to receive such shares; 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 4.10,
an exchange or conversion in respect of the Shares of the Company, the term
"Shares" 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 1.26. Subsidiary. The term "Subsidiary" shall mean an entity
in which the Company owns or otherwise controls, directly or indirectly through
one or more intermediaries, 50% or more of the outstanding equity interests in
such entity.
▇▇▇▇▇▇▇ ▇.▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇. The term "United States" shall have the
meaning assigned to it under Regulation S under the Securities Act of 1933.
SECTION 1.28. Won. The term "Won" shall mean Korean Won.
ARTICLE II
BOOK-ENTRY SYSTEM; FORM OF RECEIPTS;
DEPOSIT OF SHARES; EXECUTION AND DELIVERY,
TRANSFER AND SURRENDER OF RECEIPTS
SECTION 2.01. Form and Transferability of Receipts. Subject to the
requirements of the NYSE or any applicable rule or regulation of any other
securities exchange or market upon which the ADSs may be listed or traded, the
Receipts shall be engraved, printed or lithographed in such form as may be
agreed upon by the Company and the Depositary, and shall be substantially in the
form set forth as Exhibit A annexed to this Deposit Agreement, with appropriate
insertions, modifications and omissions, as hereinafter provided.
ADRs shall be (i) dated, (ii) signed by the manual or facsimile
signature of a duly authorized signatory of the Depositary, (iii) countersigned
by the manual or facsimile signature of a duly authorized signatory of the
Registrar, and (iv) registered in the books maintained by the Registrar for the
4
registration of issuances and transfers of ADRs. No ADR or ADS evidenced thereby
shall be entitled to any benefits under the Deposit Agreement or be valid or
enforceable for any purpose, unless such ADR shall have been so dated, signed,
countersigned and registered. ADRs bearing the manual or facsimile signature of
a duly-authorized signatory of the Depositary or the Registrar, who at the time
of signature was a duly-authorized signatory of the Depositary or the Registrar,
as the case may be, shall bind the Depositary, notwithstanding the fact that
such signatory has ceased to be so authorized prior to the delivery of such ADR
by the Depositary. The Registrar shall maintain books in which each ADR so
executed and delivered as hereinafter provided and the transfer of each such ADR
shall be registered.
The ADRs shall bear a CUSIP number or numbers different from the
CUSIP number or numbers that may be assigned to any depositary shares
subsequently issued pursuant to any other arrangement with the Depositary which
are not ADSs issued hereunder.
The ADRs may be endorsed with, or have incorporated in the text
thereof, such legends or recitals not inconsistent with the provisions of this
Deposit Agreement as may be (i) necessary to enable the Depositary and the
Company to perform their respective obligations hereunder, (ii) required to
comply with any applicable laws or regulations, or with the rules and
regulations of any securities exchange or market upon which ADSs may be traded,
listed or quoted, or to conform with any usage with respect thereto, (iii)
necessary to indicate any special limitations or restrictions to which any
particular ADRs or ADSs are subject by reason of the date of issuance of the
Deposited Securities or otherwise, or (iv) required by any book-entry system in
which the ADSs are held. Holders and Beneficial Owners shall be deemed, for all
purposes, to have notice of, and to be bound by, the terms and conditions of the
legends set forth, in the case of Holders, on the ADR registered in the name of
the applicable Holders or, in the case of Beneficial Owners, on the ADR
representing the ADSs owned by such Beneficial Owners.
Subject to any limitations set forth in a Receipt or in this Deposit
Agreement, when such Receipt is properly endorsed or accompanied by proper
instruments of transfer (including signature guarantees in accordance with
standard industry practice), title to such Receipt (and to each ADS evidenced
thereby) shall be transferable by delivery as in the case of a certificated
security under the laws of the State of New York. Notwithstanding any notice to
the contrary, the Depositary and the Company may deem and treat the Holder of an
ADR as the absolute owner thereof for all purposes. Neither the Depositary nor
the Company shall have any obligation nor be subject to any liability under this
Deposit Agreement or any ADR to any holder of an ADR or any Beneficial Owner
unless such holder is the Holder of such ADR registered on the books of the
Depositary or, in the case of a Beneficial Owner, such Beneficial Owner, or the
Beneficial Owner's representative, is the Holder registered on the books of the
Depositary.
The Depositary shall make all necessary arrangements for the
acceptance of the ADSs into DTC. A single ADR in the form of a "Balance
Certificate" will evidence all ADSs held through DTC, will be registered in the
name of the nominee for DTC (currently "Cede & Co.") and will provide that it
represents the aggregate number of ADSs from time to time indicated in the
records of the Depositary as being issued hereunder and that the aggregate
number of ADSs represented thereby may from time to time be increased or
decreased by making adjustments on such records of the Depositary and of DTC or
5
its nominee as hereinafter provided. As such, the nominee for DTC will be the
only "Holder" of the ADR evidencing all ADSs held through DTC. Citibank, N.A.
(or such other entity as is appointed by DTC or its nominee) may hold the
"Balance Certificate" as custodian for DTC. Each Beneficial Owner of ADSs held
through DTC must rely upon the procedures of DTC and the DTC Participants to
exercise or be entitled to any rights attributable to such ADSs. The DTC
Participants shall for all purposes be deemed to have all requisite power and
authority to act on behalf of the Beneficial Owners of the ADSs held in the DTC
Participants' respective accounts in DTC and the Depositary shall for all
purposes be authorized to rely upon any instructions and information given to it
by DTC Participants on behalf of Beneficial Owners of ADSs, unless otherwise
specified in the manner provided in Section 1.15. So long as ADSs are held
through DTC or unless otherwise required by law, ownership of beneficial
interests in the ADR registered in the name of the nominee for DTC will be shown
on, and transfers of such ownership will be effected only through, records
maintained by (i) DTC or its nominee (with respect to the interests of DTC
Participants), or (ii) DTC Participants or their nominees (with respect to the
interests of clients of DTC Participants).
SECTION 2.02. Deposit of Shares. Subject to the terms and conditions
of this Deposit Agreement and any applicable laws and regulations of Korea, the
Depositary shall cause the Custodian to accept Shares for deposit from or on
behalf of any person (in the case of the Company or any of its Affiliates,
subject to Section 5.09 hereof) when such deposit is made by (i) physical
delivery of Shares to the Custodian, accompanied by any appropriate instrument
or instruments of transfer or endorsement, in form satisfactory to such
Custodian, (ii) electronic transfer of Shares to the account of the Custodian
maintained for that purpose or (iii) delivery to the Custodian of evidence
satisfactory to the Custodian that irrevocable instructions have been given to
cause such Shares to be transferred to such account, in any such case
accompanied by delivery to the Depositary or the Custodian, as the case may be,
of a written order from or on behalf of such person directing the Depositary to
execute and deliver a Receipt or Receipts for the number of ADSs representing
the Shares so deposited and any payments required under this Deposit Agreement.
As a condition of accepting Shares for deposit, the Depositary may require that
the person making such deposit furnish (1) evidence reasonably satisfactory to
the Depositary (which may be an opinion of counsel) that any necessary approval
has been granted by any relevant governmental agency or agencies in Korea, if
any, including those which are then performing the function of the regulation of
currency exchange, (2) an agreement or assignment, or other instrument
satisfactory to the Depositary, which provides for the prompt transfer to the
Depositary of any dividend or right to subscribe for additional Shares or to
receive other property which any person in whose name the Shares are or have
been recorded may thereafter receive upon or in respect of any such deposited
Shares, or, in lieu thereof, such agreement of indemnity as shall be
satisfactory to the Depositary and (3) if the Shares are registered in the name
of the person on whose behalf they are presented for deposit, a proxy or proxies
entitling the Custodian to vote such deposited Shares for any and all purposes
until the Shares so deposited are registered in the name of a CSD for the
account of the Depositary or its nominee or the Custodian or its nominee.
Without limitation of the foregoing, the Depositary shall not
knowingly accept for deposit under this Deposit Agreement any Shares required to
be registered under the Securities Act of 1933 prior to being offered and sold
publicly in the United States unless a registration statement is in effect as to
such Shares.
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Each of the Depositary and the Custodian shall refuse to accept Shares for
deposit whenever it has been notified, as hereafter provided, that the Company
has restricted transfer of such Shares to comply with any applicable ownership
restrictions, that such deposit would result in any violation of applicable
laws, or that such deposit would cause the total number of Shares deposited to
exceed a level from time to time determined by the Company. The Company shall
notify the Depositary and the Custodian in writing with respect to any such
restrictions on transfer of its Shares for deposit hereunder. In addition, the
Depositary and the Company have agreed to limit the number of Shares accepted
for deposit under this Deposit Agreement to eighty percent (80%) of an aggregate
of 33,600,000 Shares (including Shares sold in the form of ADSs) sold in the
Company's initial global offering made on July 15, 2004 (the "Global Offering")
or any greater number of Shares as the Company may determine with the Depositary
from time to time (i.e., as a result of a subsequent offering, described in
Section 5.09 hereof or any rights offer or distribution of a dividend in Shares
described in Sections 4.06 and 4.04 hereof, respectively), unless the deposit is
prohibited by applicable laws or violates the Company's Articles of
Incorporation; provided, however, that if any over-allotment of Shares
(including Shares represented by ADSs) is made by the joint global coordinators
in the Global Offering (up to an aggregate of 3,744,000 Shares) or, in the case
of any subsequent offer, rights offer or distribution in Shares under the
Deposit Agreement, by the Company or any of its Affiliates, the 80% limit on the
number of Shares on deposit hereunder shall not apply to any such
over-allotment, or subsequent offering by the Company or its Affiliates, and the
number of Shares so issued, delivered or sold (whether in the form of Shares or
ADSs) shall be eligible for deposit hereunder, it being understood that in the
case of any over-allotment made by the joint global coordinators for the Global
Offering (or the stabilization agent or any other agent designated by the joint
global coordinators (any such agent of the joint global coordinators hereinafter
called a "Designee")), such deposit (up to an aggregate of 3,744,000 Shares) may
only be made by the Company or its Affiliates or by the joint global
coordinators for the Global Offering or any Designee except (i) to the extent
such deposit is prohibited by applicable laws or violates the Company's Articles
of Incorporation, or (ii) in the case of a subsequent offer by the Company or
its Affiliates, as the Company may determine with the Depositary from time to
time to limit the number of Shares eligible for deposit hereunder in order to
maintain liquidity for the Shares in Korea as may be requested by the relevant
Korean authorities. In the event of any deposit in connection with an
over-allotment made by the joint global coordinators for the Global Offering or
any Designee, the joint global coordinators or any Designee will be required to
certify to the Depositary and/or the Custodian that each such deposit of Shares
is being made pursuant to and in support of an over-allotment by the joint
global coordinators contemplated in this Section 2.02.
At the request, risk and expense of any holder of Shares, and for
the account of such holder, the Depositary may receive Shares to be deposited or
evidence that Shares have been transferred electronically or through book-entry
or that irrevocable instructions have been given to cause the transfer of such
Shares to the account of the Custodian, together with the 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 a Custodian of Shares (or other Deposited
Securities pursuant to Section 4.04, 4.05, 4.06 or 4.10) to be deposited
hereunder together with the other documents above specified, such Custodian
shall, as soon as transfer and recordation can be accomplished, transfer and
7
record the Shares being deposited in the name of the Depositary or, subject to
applicable law, its nominee on the shareholders' register or the books of the
CSD, if applicable. Deposited Securities shall be held by the Depositary or by a
Custodian for the account and to the order of the Depositary, or at such other
place or places as the Depositary shall determine, subject to the applicable
laws of Korea.
Without limiting any other provision of this Deposit Agreement, the
Depositary shall instruct the Custodian not to, and the Depositary shall not
knowingly, accept for deposit (a) any Restricted Securities (except as
contemplated in Section 2.10) nor (b) any fractional Shares or fractional
Deposited Securities nor (c) a number of Shares or Deposited Securities which
upon application of the ADS-to-Shares ratio would give rise to fractional ADSs.
SECTION 2.03. Execution and Delivery of Receipts. Upon receipt by a
Custodian of a deposit pursuant to Section 2.02 hereunder and a proper
acknowledgment or other evidence (i) from the Company (or the appointed agent of
the Company for transfer and registration of Shares), reasonably satisfactory to
the Depositary that any Deposited Securities are properly recorded upon the
shareholders' register of the Company (or such agent) maintained for that
purpose in the name of the Depositary or (ii) where such deposit is made by
entry in the books of a CSD, from such CSD that any Deposited Securities have
been recorded upon the books of such CSD in the name of the Depositary, together
with the other documents required as above specified, such Custodian shall
notify the Depositary of such deposit and recordation and the person or persons
to whom or upon whose written order a Receipt or Receipts are deliverable in
respect thereof and the number of American Depositary Shares to be evidenced
thereby. Such notification may be made by letter, cable, telex, SWIFT message
or, at the request, risk and expense of the person making the deposit, by
facsimile or other means of electronic transmission.
Upon receiving such notice from such Custodian, the Depositary or
its agent, subject to the terms and conditions of this Deposit Agreement, shall
execute and deliver at its Principal Office to or upon the order of the person
or persons named in the notice delivered to the Depositary a Receipt or Receipts
registered in the name or names requested in such notice and evidencing the
aggregate number of American Depositary Shares to which such person is entitled,
but only upon payment to the Depositary of the fee of the Depositary and all
taxes and governmental charges and fees payable in connection with such deposit
and the transfer of the deposited Shares. Nothing herein shall prohibit any
pre-release transaction upon the terms set forth in this Deposit Agreement or
any other agreement between the Depositary and the Company.
SECTION 2.04. Transfer of Receipts; Combination and Split-up of
Receipts. The Registrar, subject to the terms and conditions of this Deposit
Agreement and any Receipt, shall, without unreasonable delay, register transfers
of any such Receipt on its transfer books, upon any surrender of such Receipt by
the Holder thereof in person or by duly authorized attorney, 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; provided, however, that the Registrar shall
refuse to register any transfer of an ADR if such registration would cause the
total number of Shares represented by ADSs evidenced by ADRs held by any Holder
to exceed the number of Shares as determined by the Company in order to comply
with any applicable ownership restrictions and notified in writing, from time to
time, to the Registrar. Thereupon the Depositary shall execute a new Receipt or
Receipts and deliver the same to or upon the order of the person entitled
thereto.
8
The Depository, subject to the terms and conditions of this Deposit
Agreement, shall upon surrender of a Receipt or Receipts for the purpose of
effecting a split-up or combination of such Receipt or Receipts, execute and
deliver a new Receipt or Receipts in the name of the same Holder for any
authorized number of ADSs requested, evidencing the same class and aggregate
number of ADSs as the Receipt or Receipts 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 Receipts and Withdrawal of Deposited
Securities. Upon surrender at the Principal Office of the Depositary of a
Receipt for the purpose of withdrawal of the Deposited Securities represented by
the ADSs evidenced by such Receipt, and upon payment of the fee of the
Depositary for the surrender and cancellation of Receipts (as set forth on
Exhibit B hereto) and payment of all taxes and governmental charges payable in
connection with such surrender, and subject to the terms and conditions of this
Deposit Agreement, any applicable ownership restrictions and applicable laws and
regulations of Korea, the Holder of such Receipt shall be entitled to physical
delivery, to him or upon his order, or to electronic delivery or book-entry
transfer to an account in Korea designated by such Holder, of the Deposited
Securities at the time represented by the ADSs evidenced by such Receipt or
constituting such beneficial interest, as the case may be; provided, that such
withdrawals of Shares constituting Deposited Securities are not permitted unless
and until such Shares are listed on the Korea Stock Exchange (such Shares, the
"Listed Shares"). The parties hereto acknowledge and agree that (i) the
Depositary will deliver Shares represented by ADSs presented for cancellation
pursuant to this Section 2.05 only to the extent of the number of Listed Shares
then deposited with the Custodian, (ii) the Depositary will process
presentations of ADSs for withdrawal of Listed Shares under this Section 2.05 on
a first come, first served basis, (iii) the Depositary will complete requests
for cancellation of ADSs and withdrawal of the Shares represented thereby only
to the extent of the number of Listed Shares at such time deposited with the
Custodian, (iv) the Depositary will refuse to complete a request for
cancellation of ADSs and withdrawal of Shares to the extent the number of Shares
requested for withdrawal exceeds the number of Listed Shares at such time
deposited with the Custodian and (v) the Depositary reserves the right to
suspend withdrawals of Shares under this Section 2.05 until such time as Listed
Shares are deposited with the Custodian. The Company agrees to deliver to the
Custodian written confirmation of the number of Listed Shares deposited with the
Custodian under this Deposit Agreement promptly upon receipt of confirmation of
listing of such Shares from the Korea Stock Exchange. Subject to applicable
Korean laws and regulations, physical delivery of such Deposited Securities may
be made by the delivery of certificates to an agent of such Holder in Korea or
to such Holder or as ordered by him. Physical or electronic delivery or
book-entry transfer of Deposited Securities shall be made, as hereinafter
provided, without unreasonable delay.
A Receipt surrendered or written instructions received for such
purposes may be required by the Depositary to be properly endorsed in blank or
accompanied by properly executed instruments of transfer in blank. The person
requesting withdrawal of Deposited Securities for delivery to someone other than
9
the Holder shall, if requested by the Depositary, deliver to the Depositary a
written order directing it to cause the Deposited Securities being withdrawn to
be delivered to or upon the written order of a person or persons designated in
such order subject to applicable Korean laws and regulations. Upon the receipt
of complete written instructions, the Depositary shall direct the Custodian to
deliver the Deposited Securities at the principal office of such Custodian,
subject to Sections 2.06, 3.01 and 3.02 and to the other terms and conditions of
this Deposit Agreement, to or upon the written order of the person or persons
designated in such written instructions.
The Depositary shall not accept for surrender ADSs representing less
than one Share. In the case of the delivery to it of ADSs representing a number
other than a whole number of Shares, the Depositary shall cause ownership of the
appropriate whole number of Shares to be delivered in accordance with the terms
hereof, and shall, at the discretion of the Depositary, either (i) return to the
person surrendering such ADSs the number of ADSs representing any remaining
fractional Share, or (ii) sell or cause to be sold the fractional Share
represented by the ADSs so surrendered and remit the proceeds of such sale (net
of (a) applicable fees and charges of, and expenses incurred by, the Depositary
and (b) taxes withheld) to the person surrendering the ADSs.
Notwithstanding anything else contained in any ADR or this Deposit
Agreement, the Depositary may make delivery at the Principal Office of the
Depositary of (i) any cash dividends or cash distributions, or (ii) any proceeds
from the sale of any distributions of shares or rights, which are at the time
held by the Depositary in respect of the Deposited Securities represented by the
ADSs surrendered for cancellation and withdrawal. At the request, risk and
expense of any Holder so surrendering ADSs, and for the account of such Holder,
the Depositary shall direct the Custodian to forward (to the extent permitted by
law) any cash or other property (other than securities) held by the Custodian in
respect of the Deposited Securities represented by such ADSs to the Depositary
for delivery at the Principal Office of the Depositary. Such direction shall be
given by letter or, at the request, risk and expense of such Holder, by cable,
telex or facsimile transmission.
SECTION 2.06. Limitations on Execution and Delivery, Transfer, Etc.
of Receipts; Suspension of Delivery, Transfer, Etc. As a condition precedent to
the execution and delivery, registration of transfer, split-up, combination or
surrender of any Receipt or withdrawal of any Deposited Securities, the
Depositary or the Custodian may require payment from the presenter of a Receipt
or the depositor of Shares of a sum sufficient to reimburse it for any tax or
other governmental charge and any stock transfer or registration fee with
respect thereto (including any such tax or charge and fee with respect to Shares
being deposited or withdrawn) and payment of any applicable fees as herein
provided, and may, but is not obligated to, require the production of proof
satisfactory to it as to the identity and genuineness of any signature appearing
on any form, certification or other document delivered to the Depositary in
connection with this Deposit Agreement, including but not limited to, in the
case of Receipts, a signature guarantee in accordance with industry practice,
and may also require compliance with any laws or governmental regulations
relating to depositary receipts in general or to the withdrawal of Deposited
Securities.
10
The delivery of Receipts against deposits of Shares generally or of
particular Shares may be suspended or withheld, or the registration of transfer
of Receipts in particular instances may be refused, or the registration of
transfer generally may be suspended during any period when the transfer books of
the Depositary, the shareholders' register of the Company (or the appointed
agent of the Company for the transfer and registration of Shares) or the books
of the CSD are closed, or if any such action is deemed necessary or advisable by
the Company, the Depositary or the CSD, in good faith, at any time or from time
to time. Notwithstanding anything else herein to the contrary, the surrender of
outstanding Receipts and withdrawal of Deposited Securities represented thereby
may be suspended, but only as required in connection with (i) temporary delays
caused by closing the transfer books of the Depositary or the issuer of any
Deposited Securities (or the appointed agent or agents for such issuer for the
transfer and registration of such Deposited Securities) in connection with
voting at a shareholders' meeting or the payment of dividends, (ii) payment of
fees, taxes and similar charges, (iii) compliance with any United States or
foreign laws or governmental regulations relating to the Receipts or to the
withdrawal of the Deposited Securities or (iv) other circumstances specifically
contemplated by Instruction I.A.(l) of the General Instructions to Form F-6 (as
such General Instructions may be amended from time to time).
SECTION 2.07. Lost Receipts, Etc. In case any ADR shall be
mutilated, destroyed, lost or stolen, the Depositary shall execute, register and
deliver a new ADR of like tenor at the expense of the Holder (a) in the case of
a mutilated ADR, in exchange of and substitution for such mutilated ADR upon
cancellation thereof, or (b) in the case of a destroyed, lost or stolen ADR, in
lieu of and in substitution for such destroyed, lost or stolen ADR, after the
Holder thereof (i) has submitted to the Depositary a written request for such
exchange and substitution before the Depositary has notice that the ADR has been
acquired by a bona fide purchaser, (ii) has provided such security or indemnity
(including an indemnity bond) as may be required by the Depositary to save it
and any of its agents harmless, and (iii) has satisfied any other reasonable
requirements imposed by the Depositary, including, without limitation, evidence
reasonably satisfactory to the Depositary of such destruction, loss or theft of
such ADR, the authenticity thereof and the Holder's ownership thereof.
SECTION 2.08. Cancellation and Destruction of Surrendered Receipts.
All Receipts physically surrendered to the Depositary shall be canceled by the
Depositary. Canceled Receipts shall not be entitled to any benefits under this
Deposit Agreement or be valid or enforceable for any purpose. The Depositary is
authorized to destroy Receipts so canceled.
SECTION 2.09. Maintenance of Records. The Depositary agrees to
maintain records of all Receipts surrendered and Deposited Securities withdrawn
under Section 2.05, of substitute Receipts delivered under Section 2.07 and of
Receipts canceled or destroyed under Section 2.08, in keeping with procedures
ordinarily followed by stock transfer agents located in The City of New York.
SECTION 2.10. Restricted ADSs. The Depositary shall, at the request
and expense of the Company, establish procedures enabling the deposit hereunder
of Shares that are Restricted Securities in order to enable the holder of such
Shares to hold its ownership interests in such Restricted Securities in the form
of ADSs issued under the terms hereof (such Shares, "Restricted Shares"). Upon
receipt of a written request from the Company to accept Restricted Shares for
11
deposit hereunder, the Depositary agrees to establish procedures permitting the
deposit of such Restricted Shares and the issuance of ADSs representing such
deposited Restricted Shares (such ADSs, the "Restricted ADSs," and the ADRs
evidencing such Restricted ADSs, the "Restricted ADRs"). The Company shall
assist the Depositary in the establishment of such procedures and agrees that it
shall take all steps necessary and reasonably satisfactory to the Depositary to
insure that the establishment of such procedures does not violate the provisions
of the Securities Act of 1933 or any other applicable laws. The depositors of
such Restricted Shares and the holders of the Restricted ADSs may be required
prior to the deposit of such Restricted Shares, the transfer of the Restricted
ADRs and the Restricted ADSs evidenced thereby or the withdrawal of the
Restricted Shares represented by Restricted ADSs to provide such written
certifications or agreements as the Depositary or the Company may reasonably
require. The Company shall provide to the Depositary in writing the legend(s) to
be affixed to the Restricted ADRs, which legends shall (i) be in a form
reasonably satisfactory to the Depositary and (ii) contain the specific
circumstances under which the Restricted ADRs and the Restricted ADSs evidenced
thereby may be transferred or the Restricted Shares withdrawn. The Restricted
ADSs issued upon the deposit of Restricted Shares shall be separately identified
on the books of the Depositary and the Restricted Shares so deposited shall be
held separate and distinct from the other Deposited Securities held hereunder.
The Restricted Shares and the Restricted ADSs shall not be eligible for
pre-release transactions. The Restricted ADSs shall not be eligible for
inclusion in any book-entry settlement system, including, without limitation,
DTC, and shall not in any way be fungible with the ADSs issued under the terms
hereof that are not Restricted ADSs. The Restricted ADRs and the Restricted ADSs
evidenced thereby shall be transferable only by the Holder thereof upon delivery
to the Depositary of (i) all documentation otherwise contemplated by this
Deposit Agreement and (ii) an opinion of counsel reasonably satisfactory to the
Depositary setting forth, inter alia, the conditions upon which the Restricted
ADR presented is, and the Restricted ADSs evidenced thereby are, transferable by
the Holder thereof under applicable securities laws and the transfer
restrictions contained in the legend set forth on the Restricted ADR presented
for transfer. Except as set forth in this Section 2.10 and except as required by
applicable law, the Restricted ADRs and the Restricted ADSs evidenced thereby
shall be treated as ADRs and ADSs issued and outstanding under the terms of this
Deposit Agreement. In the event that, in determining the rights and obligations
of parties hereto with respect to any Restricted ADSs, any conflict arises
between (a) the terms of this Deposit Agreement (other than this Section 2.10)
and (b) the terms of (i) this Section 2.10 or (ii) the applicable Restricted
ADR, the terms and conditions set forth in this Section 2.10 and of the
Restricted ADR shall be controlling and shall govern the rights and obligations
of the parties to this Deposit Agreement pertaining to the deposited Restricted
Shares, the Restricted ADSs and Restricted ADRs.
If the Restricted ADRs, the Restricted ADSs and the Restricted
Shares are no longer Restricted Securities, the Depositary, upon receipt of (x)
an opinion of counsel reasonably satisfactory to the Depositary setting forth,
inter alia, that the Restricted ADRs, the Restricted ADSs and the Restricted
Shares are not as of such time Restricted Securities, and (y) instructions from
the Company to remove the restrictions applicable to the Restricted ADRs, the
Restricted ADSs and the Restricted Shares, shall (i) eliminate the distinctions
and separations between the applicable Restricted Shares held on deposit under
this Section 2.10 and the other Shares held on deposit under the terms of the
Deposit Agreement that are not Restricted Shares, (ii) treat the newly
unrestricted ADRs and ADSs on the same terms as, and fully fungible with, the
12
other ADRs and ADSs issued and outstanding under the terms of the Deposit
Agreement that are not Restricted ADRs or Restricted ADSs, (iii) take all
actions necessary to remove any distinctions, limitations and restrictions
previously existing under this Section 2.10 between the applicable Restricted
ADRs and Restricted ADSs, respectively, on the one hand, and the other ADRs and
ADSs that are not Restricted ADRs or Restricted ADSs, respectively, on the other
hand, including, without limitation, by making the newly-unrestricted ADSs
eligible for pre-release transactions and for inclusion in the applicable
book-entry settlement systems.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
SECTION 3.01. Filing Proofs, Certifications and Other Information.
Any person presenting Shares for deposit, any Holder and any Beneficial Owner
may be required, and every Holder and Beneficial Owner agrees, from time to time
to provide to the Depositary and the Custodian such proof of citizenship or
residence, taxpayer status, payment of all applicable taxes or other
governmental charges, exchange control approval, legal or beneficial ownership
of ADSs and Deposited Securities, compliance with applicable laws, the terms of
this Deposit Agreement or the ADR(s) evidencing the ADSs and the provisions of,
or governing, the Deposited Securities, to execute such certifications and to
make such representations and warranties, and to provide such other information
and documentation (or, in the case of Shares in registered form presented for
deposit, such information relating to the registration on the books of the
Company or on the shareholders' register of the Company) as the Depositary or
the Custodian may deem reasonably necessary or proper or as the Company may
reasonably require by written request to the Depositary consistent with its
obligations under this Deposit Agreement and the applicable ADR(s). The
Depositary and the Registrar, as applicable, may withhold the execution or
delivery or registration of transfer of any ADR or the distribution or sale of
any dividend or distribution of rights or of the proceeds thereof or, to the
extent not limited by the terms of Section 7.08 hereof, the delivery of any
Deposited Securities until such proof or other information is filed or such
certifications are executed, or such representations and warranties are made.
The Depositary shall, at the Company's request, provide the Company, in a timely
manner, with copies or originals if necessary and appropriate of (i) any such
proofs of citizenship or residence, taxpayer status, exchange control approval
or written representations or warranties which it receives from Holders and
Beneficial Owners, and (ii) any other information or documents which the Company
may reasonably request and which the Depositary shall request and receive from
any Holder or Beneficial Owner or any person presenting Shares for deposit or
ADSs for cancellation, transfer or withdrawal. Except to the extent that
information is readily accessible from the records of the Depositary, the
Depositary shall not be required to (i) obtain any information for the Company
if not provided by the Holders or Beneficial Owners, or (ii) verify or vouch for
the accuracy of the information so provided by the Holders or Beneficial Owners.
SECTION 3.02. Liability of Holders and Beneficial Owners for Taxes
and Other Charges. If any Korean or other tax or governmental charge shall
become payable with respect to any Receipt or any Deposited Securities
represented by the ADSs evidenced by any Receipt, such tax or other governmental
charge shall be payable by the Holder of such Receipt to the Depositary and any
Beneficial Owner of such Receipt shall be liable to the Holder therefor. The
Depositary may refuse, and the Company shall be under no obligation, to effect
13
any registration of transfer of all or part of such Receipt or to execute and
deliver any new Receipt or Receipts or to permit any deposit or, subject to
Section 7.08, any 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
Receipt, and may apply such dividends or other distributions or the proceeds of
any such sale in payment of such tax or other governmental charge, the Holder
and the Beneficial Owners of such Receipt remaining liable for any deficiency.
SECTION 3.03. Representations and Warranties on Deposit, Transfer
and Surrender and Withdrawal of Shares or Receipts. Each person depositing
Shares under this Deposit Agreement shall be deemed thereby to represent and
warrant that (i) such Shares and the certificates therefor are duly authorized,
validly issued, outstanding, fully paid, non-assessable and legally obtained by
such person, (ii) all preemptive (and similar) rights, if any, with respect to
such Shares have been validly waived or exercised, (iii) the person making such
deposit is duly authorized so to do, (iv) the Shares presented for deposit are
free and clear of any lien, encumbrance, security interest, charge, mortgage or
adverse claim, and (v) the Shares presented for deposit are not, and the ADSs
issuable upon such deposit will not be, Restricted Securities (except as
contemplated in Section 2.10), and (vi) the Shares presented for deposit have
not been stripped of any rights or entitlements. Such representations and
warranties shall survive the deposit and withdrawal of Shares, the issuance and
cancellation of ADSs in respect thereof and the transfer of such ADSs. If any
such representations or warranties are false in any way, the Company and the
Depositary shall be authorized, at the cost and expense of the person depositing
Shares, to take any and all actions necessary to correct the consequences
thereof.
SECTION 3.04. Disclosure of Beneficial Ownership. 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 Receipts and regarding
the identity of any other persons then or previously interested in such Receipts
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. The Depositary agrees to use its reasonable efforts to
comply with written instructions received from the Company requesting that the
Depositary forward any such requests to such Holders and to the last known
address, if any, of such former Holders and to forward to the Company any
responses to such requests received by the Depositary, and to use its reasonable
efforts, at the Company's request and expense, to assist the Company in
obtaining such information with respect to the ADSs evidenced by an ADR,
provided that nothing herein shall be interpreted as obligating the Depositary
to provide or obtain any such information not provided to the Depositary by such
Holders or former Holders.
SECTION 3.05. Ownership Restrictions. The Company may restrict
transfers of the Shares where such transfer might result in ownership of Shares
exceeding certain limits under applicable law or under the Company's Articles of
Incorporation.
Each Holder and Beneficial Owner agrees to file reports to the
extent and in the form required by Korean laws and regulations as may be in
effect from time to time. Nothing herein shall be interpreted as obligating the
Depositary or the Company to ensure compliance with the ownership restrictions
14
described in this Section 3.05. In addition, Korean laws and regulations may
require beneficial owners of the voting share capital of Korean companies,
including Beneficial Owners of ADSs, to satisfy certain reporting requirements
or obtain regulatory approval in certain circumstances. Beneficial Owners are
solely responsible for complying with such requirements. Neither the Depositary
nor the Custodian, nor the Company, nor any of their respective agents or
affiliates shall be required to take any actions whatsoever on behalf of such
Beneficial Owners.
ARTICLE IV
RIGHTS RELATING TO THE DEPOSITED SECURITIES;
CERTAIN OBLIGATIONS OF THE DEPOSITARY
SECTION 4.01. Power of Attorney. The Company hereby appoints the
Depositary as depositary for the Deposited Securities and hereby authorizes and
directs the Depositary to act in accordance with the terms and conditions set
forth in this Deposit Agreement and the applicable ADRs. Each Holder and
Beneficial Owner, upon acceptance of a Receipt issued in accordance with the
terms hereof or any beneficial interest therein, 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 Securities, including but not limited to those set
forth in Section 3.05 and this Article IV, and to take such further steps or
action as the Depositary in its reasonable discretion may deem necessary or
appropriate to carry out the purposes of this Deposit Agreement.
SECTION 4.02. Cash Distributions; Withholding of Taxes and other
Governmental Charges. Whenever the Depositary or the Custodian shall receive any
cash dividend or other cash distribution from the Company on or with respect to
any Deposited Securities, the Depositary shall, subject to applicable Korean
laws and regulations and the provisions of Section 4.07, cause the conversion as
promptly as practicable of such dividend or distribution into dollars, establish
a record date in accordance with Section 4.08 (if applicable) and promptly
distribute such amount to the Holders entitled thereto 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;
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 the 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 or its agent or the Depositary or its agent, as
appropriate, will remit to the appropriate governmental authority or agency in
Korea or any other relevant jurisdiction 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.
15
SECTION 4.03. Distributions Other Than Cash, Shares or Rights.
Whenever the Depositary or the Custodian shall receive any distribution other
than cash, Shares or rights upon any Deposited Securities, the Depositary shall,
after consultation with the Company, cause the securities or property so
received to be distributed as promptly as practicable to the Holders entitled
thereto, as of a record date fixed pursuant to Section 4.08 hereof, 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, after
consultation with the Company, commercially feasible for accomplishing such
distribution subject to any applicable laws or regulations of Korea; 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 of 1933 in order to
be distributed to Holders) the Depositary deems such distribution not to be
commercially feasible, the Depositary may, after consultation with the Company,
adopt such method as it may deem commercially feasible 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, and provided
that any unsold balance of such securities or property shall be distributed by
the Depositary to the Holders entitled thereto subject to any applicable laws or
regulations of Korea, if such distribution is commercially feasible without
withholding for or on account of any taxes or other governmental charges and
without registration under the Securities Act of 1933, in accordance with such
commercially feasible method as the Depositary shall have adopted.
SECTION 4.04. Distributions in Shares. If any distribution upon any
Deposited Securities consists of a dividend in, or free distribution of, Shares,
the Custodian shall be required, subject to applicable law, to accept such
Shares for deposit pursuant to this Deposit Agreement and, upon receipt of
confirmation of such deposit, the Depositary shall (subject to Section 5.06)
either (i) distribute to the Holders of outstanding Receipts entitled thereto,
in proportion to the number of ADSs representing Deposited Securities held by
them respectively, additional Receipts for an aggregate number of ADSs
representing the number of Shares received as such dividend or free
distribution, or (ii) reflect on the records of the Depositary such increase in
the aggregate number of ADSs representing the aggregate number of Shares so
received, in either case, after deduction or upon payment of the fees and
expenses of the Depositary. If for any reason (including any requirement that
the Company or the Depositary withhold an amount on account of taxes or other
governmental charges or that such Shares must be registered under the Securities
Act of 1933 in order to be distributed to Holders) the Depositary deems such
distribution not to be commercially feasible, the Depositary may, after
consultation with the Company, adopt such method as it may deem commercially
feasible for the purpose of effecting such distribution, including the sale (at
public or private sale) of the Shares 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. In
lieu of issuing Receipts for fractional ADSs in any such case, the Depositary
shall sell the number of Shares represented by the aggregate of such fractions
and distribute the net proceeds in dollars. To the extent that new ADSs
16
representing such Shares are not created and such Shares are not sold or
otherwise distributed in accordance with this Section, each ADS shall
thenceforth also represent such additional Shares distributed upon the Deposited
Securities represented thereby.
SECTION 4.05. Elective Distributions in Cash or Shares. Subject to
applicable Korean law, whenever the Company intends to make a distribution
payable at the election of the holders of Shares in cash or in additional Shares
other than as provided in Sections 4.02 or 4.04, the Company shall give timely
notice thereof to the Depositary stating whether or not it wishes such elective
distribution to be made available to Holders of ADSs. Upon timely receipt of
notice indicating that the Company wishes such elective distribution to be made
available to Holders of ADSs, the Depositary shall consult with the Company to
determine, and the Company shall assist the Depositary in its determination,
whether it is lawful and commercially feasible to make such elective
distribution available to the Holders of ADSs. The Depositary shall make such
elective distribution available to Holders only if (i) the Company shall have
timely requested that the elective distribution be made available to Holders,
(ii) the Depositary shall have determined that such distribution is commercially
feasible and (iii) the Depositary shall have received satisfactory documentation
within the terms of Section 5.09. If the above conditions are not satisfied, the
Depositary shall, to the extent permitted by law, distribute to the Holders, on
the basis of the same determination as is made in Korea in respect of the Shares
for which no election is made, either (X) cash upon the terms described in
Section 4.02 or (Y) additional ADSs representing such additional Shares upon the
terms described in Section 4.04 (provided that in the case of (Y), the Shares
have been deposited pursuant to Section 4.04). If the above conditions are
satisfied, the Depositary shall establish a record date (on the terms described
in Section 4.08) and establish procedures to enable Holders to elect the receipt
of the proposed distribution in cash or in additional ADSs. The Company shall
assist the Depositary in establishing such procedures to the extent necessary.
Nothing herein shall obligate the Depositary to make available to Holders a
method to receive the elective distribution in Shares (rather than ADSs) if the
conditions set forth above are not satisfied. There can be no assurance that
Holders generally, or any Holder in particular, will be given the opportunity to
receive elective distributions on the same terms and conditions as the holders
of Shares.
SECTION 4.06. Rights. Whenever the Company intends to distribute to
the holders of the Deposited Securities rights to subscribe for additional
Shares, the Company shall give timely notice thereof to the Depositary stating
whether or not it wishes such rights to be made available to Holders of ADSs.
Upon timely receipt of a notice indicating that the Company wishes such rights
to be made available to Holders of ADSs, the Depositary shall consult with the
Company to determine, and the Company shall assist the Depositary in its
determination, whether it is lawful and commercially feasible to make such
rights available to the Holders. The Depositary shall make such rights available
to Holders only if (i) the Company shall have timely requested that such rights
be made available to Holders, (ii) the Depositary shall have received
satisfactory documentation within the terms of Section 5.09, and (iii) the
Depositary shall have determined that such distribution of rights is
commercially feasible. In the event all conditions set forth above are
satisfied, the Depositary shall establish a record date (upon the terms
described in Section 4.08) and establish procedures to (x) distribute rights to
purchase additional ADSs (by means of warrants or otherwise) in proportion to
the number of ADSs held, (y) to enable the Holders (or holders of warrants) to
exercise such rights or warrants (upon payment of the subscription price and of
the applicable (a) fees and charges of, and expenses incurred by, the Depositary
17
and (b) taxes), and, if applicable, to enable Holders or holders of warrants, as
the case may be, to sell or transfer such rights or warrants, as the case may
be, and (z) to deliver ADSs upon the valid exercise of such rights. The Company
shall assist the Depositary to the extent necessary in establishing such
procedures. Nothing herein shall obligate the Depositary to make available to
the Holders a method to exercise rights to subscribe for Shares (rather than
ADSs) if the conditions set forth above are not satisfied. In the event any of
the conditions set forth above are not satisfied or if the Company requests that
the rights not be made available to Holders of ADSs, the Depositary shall
proceed with the sale of the rights and subsequent distribution of proceeds as
contemplated below.
If (i) the Company does not timely request the Depositary to make
the rights available to Holders or requests that the rights not be made
available to Holders, (ii) the Depositary fails to receive satisfactory
documentation within the terms of Section 5.09 or determines it is not lawful or
commercially feasible to make the rights available to Holders, or (iii) any
rights made available are not exercised and appear to be about to lapse, the
Depositary shall, after consultation with the Company, determine whether it is
lawful and commercially feasible to sell such rights, in a riskless principal
capacity, at such places and upon such terms (including public or private sale)
as it may deem proper and commercially feasible. The Depositary shall consult
with the Company to determine whether such actions are lawful and commercially
feasible. The Depositary shall, upon such sale, convert and distribute proceeds
of such sale (net of applicable (a) fees and charges of, and expenses incurred
by, the Depositary and (b) taxes) upon the terms set forth in Section 4.02.
If at the time of the offering of any rights, the Depositary and the
Company determine that it is lawful and commercially feasible to make such
rights available to all or certain Holders by means of warrants or otherwise,
the Depositary shall, upon the request by the Company, after deduction or upon
payment of the fees and expenses of the Depositary, distribute warrants or other
instruments therefor in such form as it may determine to such Holders entitled
thereto, in proportion to the number of ADSs representing such Deposited
Securities held by them respectively, or employ such other method as it may deem
commercially 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.
If the Depositary is unable to make any rights available to Holders
or to arrange for the sale of the rights upon the terms described above, the
Depositary shall allow such rights to lapse.
Neither the Depositary nor the Company shall be responsible for (i)
any failure to determine that it may be lawful or commercially feasible to make
such rights available to Holders in general or any Holder in particular that is
not due to its negligence, or (ii) any foreign exchange exposure or loss
incurred in connection with such sale, or exercise. The Depositary shall not be
responsible for the content of any materials forwarded to the Holders on behalf
of the Company in connection with the rights distribution.
Notwithstanding anything to the contrary in this Section 4.06, if
registration (under the Securities Act of 1933 or any other applicable law) of
the rights or the securities to which any rights relate may be required in order
for the Company to offer such rights or such securities to Holders and to sell
18
the securities represented by such rights, the Depositary will not distribute
such rights to the Holders (i) unless and until a registration statement under
the Securities Act of 1933 (or other applicable law) covering such offering is
in effect or (ii) unless the Company furnishes the Depositary opinion(s) of
counsel for the Company in the United States and counsel to the Company in any
other applicable country in which rights would be distributed, in each case
reasonably satisfactory to the Depositary, to the effect that the offering and
sale of such securities to Holders are exempt from, or do not require
registration under, the provisions of the Securities Act of 1933 or any other
applicable laws. If Korean law requires the Depositary to obtain approval or
license from a governmental agency to effect a sale of rights, the Depositary
may file an application for such approval or license as it may deem desirable,
in good faith. Such requirements may adversely affect (1) the ability of the
Depositary to dispose of such rights or (2) the costs and expenses of the
Depositary associated with disposal of rights.
In the event that the Company, the Depositary or the Custodian shall
be required to withhold and does withhold from any distribution of property
(including rights) an amount on account of taxes or other governmental charges,
the amount distributed to the Holders of ADSs representing such Deposited
Securities shall be reduced accordingly. In the event that the Depositary
determines that any distribution in property (including Shares and rights to
subscribe therefor) is subject to any tax or other governmental charges which
the Depositary is obligated to withhold, the Depositary may dispose of all or a
portion of such property (including Shares and rights to subscribe therefor) in
such amounts and in such manner, including by public or private sale, as the
Depositary deems necessary and practicable to pay any such taxes or charges.
There can be no assurance that Holders generally, or any Holder in
particular, will be given the opportunity to receive or exercise rights on the
same terms and conditions as the holders of Shares or be able to exercise such
rights. Nothing herein shall obligate the Company to file any registration
statement in respect of any rights or Shares or other securities to be acquired
upon the exercise of such rights.
SECTION 4.07. Conversion of Foreign Currency. Whenever the
Depositary or the Custodian shall receive foreign currency other than dollars
(in this Section 4.07, hereinafter referred to as foreign currency), by way of
dividends or other distributions or the net proceeds from the sale of
securities, property or rights which can, in the reasonable judgment of the
Depositary and pursuant to applicable law, be converted on a commercially
feasible basis into dollars distributable to the Holders entitled thereto and
the resulting dollars transferred to the United States, the Depositary shall as
promptly as practicable 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) 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.
19
If such conversion with regard to a particular Holder or
distribution can be effected only with the approval or license of any government
or agency thereof, the Depositary shall file such application for approval or
license, if any, as it may deem desirable, in good faith.
If at any time the Depositary shall determine that in its judgment
any foreign currency received by the Depositary is not convertible on a
reasonable basis into dollars distributable to the 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 good faith 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, pursuant to applicable law, 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 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 4.08. 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 any Deposited
Securities, or whenever, for any reason, the Depositary causes a change in the
number of Shares that are represented by each ADS or whenever the Depositary
shall receive notice of any meeting or solicitation of consents or proxies of
holders of Shares or other Deposited Securities, 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 Shares 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 receive
notice of such meeting or solicitation of consents or proxies or to exercise the
rights of Holders with respect to such changed number of Shares. Subject to the
provisions of Sections 4.02 through 4.07 and to the other terms and conditions
of this Deposit Agreement, the Holders at the close of business in New York 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, to exercise the rights of Holders hereunder
with respect to such changed number of Shares in proportion to the number of
ADSs held by them respectively or with respect to such other matter.
SECTION 4.09. Voting of Deposited Securities. As soon as practicable
after receipt of notice of any meeting of, or solicitation by the Company of
consents or proxies from, holders of Shares or other Deposited Securities, the
Depositary shall, if requested in writing by the Company, fix a record date as
provided in Section 4.08 for determining the Holders entitled to give
instructions for the exercise of voting rights. The notice shall be provided by
the Company in English to the Depositary, with the Company using its reasonable
good faith efforts to deliver such notice to the Depositary in a timely manner
20
sufficiently in advance of such meeting to enable Holders to exercise their
voting rights on a reasonable basis, the Depositary having no obligation to
deliver such notice or make voting rights available to Holders of ADSs if such
notice is not timely received by the Depositary. The Company shall provide to
the Depositary sufficient copies, as the Depositary may reasonably request, of
notices of the Company's shareholders' meeting, the agenda therefor as well as
the English translations thereof, which the Depositary shall mail to Holders as
soon as practicable after receipt of the same by the Depositary, together with:
(a) 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
Korean law and of the Articles of Incorporation of the Company (which
provisions, if any, shall be summarized in pertinent part), to instruct the
Depositary as to the exercise of the voting rights, if any, pertaining to the
number of Shares or other Deposited Securities represented by their respective
ADSs evidenced by their respective Receipts and (b) a brief statement as to the
manner in which such instructions may be given. Voting instructions may be given
only in respect of a number of ADSs representing an integral number of Deposited
Securities.
Upon the timely request of a Holder of ADSs evidenced by a Receipt
on such record date received on or before the date established by the Depositary
for such purpose, the Depositary shall endeavor, insofar as practicable and
permitted under applicable law and the provisions of the Articles of
Incorporation of the Company, to vote or cause the Custodian to vote the Shares
represented by ADSs evidenced by such ADRs in accordance with the instructions
set forth in such request. Holders and Beneficial Owners acknowledge, however,
that the Company may not notify the Depositary sufficiently in advance of the
scheduled date of a meeting or solicitation of consents or proxies to enable the
Depositary to make a timely mailing of such notices to the Holders of ADRs, and
that the Holders of ADRs may not receive such notices sufficiently in advance of
a meeting or solicitation of consents or proxies to give instructions to the
Depositary. The Depositary shall not attempt to exercise the right to vote that
attaches to the Shares or other Deposited Securities other than in accordance
with such instructions. Absent its negligence, bad faith or willful misconduct,
neither the Depositary nor the Custodian shall, under any circumstances exercise
any discretion as to voting and neither the Depositary nor the Custodian shall
vote or attempt to exercise the right to vote the Shares or other Deposited
Securities represented by ADSs except pursuant to and in accordance with the
written voting instructions (including those instructions in electronic form)
from Holders or in accordance with the provisions of this Section 4.09 of the
Deposit Agreement.
To the extent the Depositary does not receive instructions from the
Holders on or prior to such date, the Depositary shall vote or cause to be voted
the Shares or other Deposited Securities in the same manner and in the same
proportion as the holders of all other outstanding Shares or other Deposited
Securities (except for those represented by the ADSs for which no voting
instructions have been given) vote their Shares or other Deposited Securities at
the meeting. In the event the Company has not timely delivered notice and voting
materials to the Depositary in accordance with the first paragraph of this
Section 4.09, the Depositary shall not, and shall ensure that the Custodian does
not, vote or cause the Custodian to vote the Shares or other Deposited
Securities represented by such ADSs.
Notwithstanding anything else contained in this Deposit Agreement or
any Receipt, the Depositary shall not have any obligation to take any action
with respect to any meeting, or solicitation of consents or proxies, of holders
of Deposited Securities if the taking of such action would violate U.S. laws.
The Company agrees to take any and all actions reasonably necessary to enable
Holders and Beneficial Owners to exercise the voting rights accruing to the
Deposited Securities.
21
Subject to the applicable laws or rules of any securities exchange
on which the Deposited Securities are listed or traded, at least three (3) days
prior to the date of such meeting, the Depositary shall, if requested and at the
expense of the Company, deliver to the Company a copy of the tabulation of all
voting instructions received from Holders of Receipts, if any, in accordance
with which the Depositary will vote, or cause to be voted, the Deposited
Securities represented by the ADSs evidenced by such ADRs at such meeting. A
Holder or Beneficial Owner of ADSs shall not be entitled to give any
instructions with respect to voting rights associated with ADSs evidenced by
ADRs held by such Holder if and to the extent the total number of Shares
beneficially owned by such Holder or Beneficial Owner exceeds any limit which
the Company may, from time to time, notify the Depositary. The Company and the
Depositary may take any and all action necessary or desirable to enforce the
restrictions on the exercise of voting rights set forth in the preceding
sentence.
The Company acknowledges and agrees that the provisions of Section
5.10 herein shall apply to any liability or expense of the Depositary which may
arise out of or in connection with any action of the Depositary or the Custodian
in voting pursuant to this Section 4.09.
SECTION 4.10. Changes Affecting Deposited Securities. Upon any
change in par value, split-up, cancellation, consolidation or any other
reclassification of Deposited Securities, or upon any recapitalization,
reorganization, merger or consolidation of the Company or sale of assets by the
Company, any securities which 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 ADSs shall,
subject to the terms of this Deposit Agreement and applicable laws, including
any applicable provisions of the Securities Act of 1933 and the Securities
Exchange Act of 1934, thenceforth represent the new Deposited Securities so
received, unless additional or new ADSs are created pursuant to the following
sentence. Alternatively, the Depositary may, with the Company's approval and
pursuant to applicable law, and shall, at the Company's request and pursuant to
applicable law, and subject to Section 5.09 herein, create new or additional
ADSs representing such new Deposited Securities and execute and deliver
additional Receipts evidencing such ADSs as in the case of a stock dividend on
the Shares, and may call for the surrender of outstanding Receipts to be
exchanged for new Receipts specifically describing such new Deposited
Securities.
Notwithstanding the foregoing, in the event that any security so
received may not be lawfully distributed to some or all Holders in the
reasonable judgment of the Depositary and its counsel after consultation with
the Company, the Depositary may, with the Company's approval, and shall, if the
Company requests, subject to receipt of an opinion of Company's counsel
reasonably satisfactory to the Depositary that such action is not in violation
of any applicable laws or regulations, sell such securities at public or private
sale, at such place or places and upon such terms as it may deem proper and may
allocate the net proceeds of such sales (net of (a) fees and charges of, and
expenses incurred by, the Depositary and (b) taxes) for the account of the
Holders otherwise entitled to such securities upon an averaged or other
practicable basis without regard to any distinctions among such Holders and
distribute the net proceeds so allocated to the extent practicable as in the
22
case of a distribution received in cash pursuant to Section 4.02. The Depositary
shall not be responsible for (i) any failure to determine that it may be lawful
or commercially feasible to make such securities available to Holders in general
or to any Holder in particular that is not due to its negligence, (ii) any
foreign exchange exposure or loss incurred in connection with such sale, or
(iii) any liability to the purchaser of such securities.
Immediately upon the occurrence of any such change, conversion or
exchange covered by this Section in respect of the Deposited Securities, the
Depositary shall, subject to applicable law, give notice thereof in writing, at
the Company's expense, to all Holders.
SECTION 4.11. Transmittal by the Depositary of Company Notices,
Reports and Communications. The Depositary shall make available for inspection
by Holders at its Principal Office and at the office of each Custodian copies of
this Deposit Agreement, any notices, reports or communications, including any
proxy soliciting materials, received from the Company which are both (a)
received by the Depositary or 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 copies of such notices, reports and communications when furnished by the
Company to the Depositary pursuant to Section 5.08.
SECTION 4.12. Taxation. Notwithstanding any other provision of this
Deposit Agreement, in the event that the Depositary determines, based on the
advice of counsel, that any distribution in property (including Shares or rights
to subscribe therefor or 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 Shares and rights to
subscribe therefor or 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 commercially feasible without withholding for or on account
of taxes or other governmental charges, without registration of such Shares or
other securities under the Securities Act of 1933 and otherwise in compliance
with applicable law, distribute any unsold balance of such property in
accordance with the provisions of this Deposit Agreement.
The Depositary will, and will instruct the Custodian to, forward to
the Company or its agents such information from its records as the Company may
reasonably request to enable the Company or its agents to file the necessary tax
reports with governmental authorities or agencies. The Depositary, the Custodian
or the Company and its agents may file such reports as are necessary to reduce
or eliminate applicable taxes on dividends and on other distributions in respect
of Deposited Securities under applicable tax treaties or laws for the Holders
and Beneficial Owners. In accordance with instructions from the Company and to
the extent practicable, the Depositary or the Custodian will take reasonable
administrative actions to obtain tax refunds, reduced withholding of tax at
source on dividends and other benefits under applicable tax treaties or laws
23
with respect to dividends and other distributions on the Deposited Securities.
As a condition to receiving such benefits, Holders and Beneficial Owners of ADSs
may be required from time to time, and in a timely manner, to file such proof of
taxpayer status, residence and beneficial ownership (as applicable), to execute
such certificates and to make such representations and warranties, or to provide
any other information or documents, as the Depositary or the Custodian may deem
necessary or proper to fulfill the Depositary's or the Custodian's obligations
under applicable law. The Depositary or the Custodian will take reasonable
administrative actions to provide Holders in a timely manner the required forms
or documents to allow Holders and Beneficial Owners to obtain a reduced
withholding of tax at source on dividends and other distributions on the
Deposited Securities, capital gains and other taxes, and other benefits under
applicable tax treaties or laws. The Depositary and the Company shall have no
obligation or liability to any person if any Holder or Beneficial Owner fails to
provide such information or if such information does not reach relevant tax
authorities in time for any Holder or Beneficial Owner to obtain the benefit of
any tax treaty. The Holders and Beneficial Owners shall indemnify the
Depositary, the Company, the Custodian and any of their respective directors,
employees, agents and Affiliates (other than Affiliates that are Holders or
Beneficial Owners) against, and hold each of them harmless from, any claims by
any governmental authority with respect to taxes, additions to tax, penalties or
interest arising out of any refund of taxes, reduced rate of withholding at
source or other tax benefit obtained for such Holder or Beneficial Owner
pursuant to this Section.
Notwithstanding any other provision of this Deposit Agreement,
before making any distribution or other payment on any Deposited Securities, the
Company or its agent shall make such deductions (if any) which, by the laws of
Korea, the Company or its agent is required to make in respect of any income,
capital gains or other taxes and the Company or its agent may also deduct the
amount of any tax or governmental charges payable by the Company or its agent or
for which the Company or its agent might be made liable in respect of such
distribution or other payment or any document signed in connection therewith. In
making such deductions, the Company and its agent shall have no obligation to
any Holder or Beneficial Owner to apply a rate under any treaty or other
arrangement between Korea and the country within which such Holder or Beneficial
Owner is resident unless such Holder or Beneficial Owner has timely provided to
the Company or its agent evidence of the residency of such Holder or Beneficial
Owner that is accepted by the relevant tax authorities of Korea. If the Company
(or any of its agents) withholds from any distribution any amount on account of
taxes or governmental charges, or pays any other tax in respect of such
distribution (i.e., stamp duty tax, capital gains or other similar tax), the
Company shall (and shall cause such agent to) remit promptly to the Depositary
information about such taxes or governmental charges withheld or paid, and, if
so requested, the tax receipt (or other proof of payment to the applicable
governmental authority) therefor, in each case, in a form satisfactory to the
Depositary. The Depositary shall, to the extent required by U.S. law, report to
Holders any taxes withheld by it or the Custodian, and, if such information is
provided to it by the Company, any taxes withheld by the Company. The Depositary
and the Custodian shall not be required to provide the Holders with any evidence
of the remittance by the Company (or its agents) of any taxes withheld, or of
the payment of taxes by the Company, except to the extent the evidence is
provided by the Company to the Depositary or the Custodian, as applicable.
Absent its negligence, bad faith or willful misconduct, neither the Depositary
nor the Custodian shall be liable for the failure by any Holder or Beneficial
Owner to obtain the benefits of credits on the basis of non-U.S. tax paid
against such Holder's or Beneficial Owner's income tax liability.
24
The Depositary is under no obligation to provide the Holders and
Beneficial Owners with any information about the tax status of the Company other
than as specified below. The Depositary shall not incur any liability for any
tax consequences that may be incurred by Holders and Beneficial Owners on
account of their ownership of the ADSs, including, without limitation, tax
consequences resulting from the Company (or any of its subsidiaries) being
treated as a "Foreign Personal Holding Company," or as a "Passive Foreign
Investment Company" (in each case as defined in the U.S. Internal Revenue Code
and the regulations issued thereunder) or otherwise. Upon request, the
Depositary shall promptly provide (i) each Holder and (ii) each person that was
a Holder during the period to which the information applies, a copy of such
information provided to the Depositary.
SECTION 4.13. 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. Such reports and other
information, when so filed, can be inspected and copied at the public reference
facilities maintained by the Commission at Judiciary Plaza, ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇,
▇.▇., ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇.▇. ▇▇▇▇▇. Copies of such material may be obtained
at prescribed rates. Such reports and other information may also be inspected at
the offices of The New York Stock Exchange, Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇
▇▇▇▇ ▇▇▇▇▇.
ARTICLE V
THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY
SECTION 5.01. Maintenance of Office and Transfer Books by the
Depositary. 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 Receipts in accordance with the provisions of this
Deposit Agreement.
The Depositary shall keep books at its Principal Office for the
registration of Receipts and transfers of Receipts which at all reasonable times
shall be open for inspection by Holders and the Company; provided, that such
inspection shall not to the 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 or the
Receipts.
Upon notice to the Company, the Depositary may close the transfer
books, at any time or from time to time, when deemed expedient by it in
connection with the performance of its duties hereunder.
If any Receipts or the ADSs evidenced thereby are listed on one or
more stock exchanges or automated quotation systems in the United States, the
Depositary shall act as Registrar or, with the approval of the Company, appoint
a Registrar or one or more co-registrars for registration of such Receipts 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 notice to the Company.
25
SECTION 5.02. 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 Receipts are
registered on the books of the Depositary. Any other records maintained by the
Depositary, the Registrar, any co-registrar or any co-transfer agent under this
Deposit Agreement shall be made available to the Company upon reasonable
request.
SECTION 5.03. 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 or the Receipts to Holders, Beneficial
Owners or other persons, including for any consequential or punitive damages for
any breach of the terms of this Deposit Agreement, except that it agrees to act
in good faith and without negligence in the performance of its obligations set
forth in this Deposit Agreement.
The Depositary assumes no obligation nor shall it be subject to any
liability under this Deposit Agreement or the Receipts to Holders, Beneficial
Owners of Receipts or other persons (including, without limitation, liability
with respect to the validity or worth of the Deposited Securities), including
for any consequential or punitive damages for any breach of the terms of this
Deposit Agreement, except that it agrees to act in good faith and without
negligence in the performance of its duties set forth in this Deposit Agreement.
The Depositary and the Company undertake 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 Receipts, which in its
opinion may involve it in expense or liability, unless indemnity satisfactory to
it against all expense and liability shall be furnished as often as may be
required, and no Custodian shall be under any obligation whatsoever with respect
to such proceedings, the responsibility of the Custodian being solely to the
Depositary.
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 Shares for deposit, any Holder
or Beneficial Owner, 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 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.
Neither the Depositary and its agents nor the Company shall be
liable for any failure by the Depositary to carry out any instructions to vote
any of the Deposited Securities, or for the manner in which any vote is cast or
the effect of any vote; provided, that any such action or omission is in good
faith and without negligence and in accordance with the terms of this Deposit
Agreement. Neither the Depositary nor the Company shall incur any liability for
any failure to determine that any distribution or action may be lawful or
commercially feasible, for any investment risk associated with acquiring an
interest in the Deposited Securities, for any tax consequences that may result
26
from the ownership of ADSs, Shares or Deposited Securities, for the
credit-worthiness of any third party or for allowing any rights to lapse upon
the terms of this Deposit Agreement. The Depositary shall not incur any
liability for the content of any information submitted to it by the Company for
distribution to the Holders, for any inaccuracy of any translation thereof
(provided the Depositary was not involved in translating such information), for
the validity or worth of the Deposited Securities or for the failure or
timeliness of any notice from the Company.
No disclaimer of liability under the Securities Act of 1933 is
intended by any provision of this Deposit Agreement.
SECTION 5.04. 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 Beneficial Owner if, by reason of any provision of any present
or future law of the United States, Korea or any other country or jurisdiction,
or of any other governmental authority, or by reason of any provision, present
or future, of the Articles of Incorporation of the Company, or by reason of any
act of God, terrorism or war or other circumstances beyond its control, the
Depositary or the Company shall be prevented, delayed or forbidden from, or
subject to any civil or criminal liability on account of, doing or performing
any act or thing which by the terms of this Deposit Agreement it is provided
shall be done or performed; nor shall the Depositary or the Company incur any
liability to any Holder or Beneficial Owner by reason of any non-performance or
delay, caused as aforesaid, in the performance of any act or thing which 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. Neither the Depositary nor
the Company shall be obligated to do or perform any act which is inconsistent
with the provisions of this Deposit Agreement or incur any liability for the
inability by a Holder or Beneficial Owner to benefit from any distribution,
offering, right or other benefit which is made available to holders of Deposited
Securities but is not, under the terms of this Deposit Agreement, made available
to Holders of ADSs.
SECTION 5.05. Resignation and Removal of the Depositary, Appointment
of Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by ninety (90) days' prior written notice of its election so to do
delivered to the Company, such resignation to take effect upon the appointment
of a successor depositary and its acceptance of such appointment as hereinafter
provided.
The Depositary may at any time be removed by the Company by ninety
(90) days' prior written notice of such removal, which shall become effective
upon 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 or
be removed, the Company shall use its best efforts to appoint a successor
depositary, which shall be a bank or trust company having an office in the
Borough of Manhattan, The City of New York. Every successor depositary shall
execute and deliver to its predecessor and to the Company an instrument in
writing accepting its appointment hereunder, and thereupon such successor
depositary, without any further act or deed, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor; but such
predecessor, nevertheless, upon payment of all sums due it and on the written
27
request of the Company, shall execute and deliver an instrument transferring to
such successor all rights and powers of such predecessor hereunder, shall duly
assign, transfer and deliver all right, title and interest in the Deposited
Securities to such successor and shall deliver to such successor a list of the
Holders and such other books and records maintained by such predecessor with
respect to its function as Depositary hereunder. Any such successor depositary
shall at its own cost promptly mail notice of its appointment to all 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 5.06. Charges of Depositary. The expenses, fees or charges
of the Depositary and the Registrar, if any, shall be paid by the Company only
as provided herein and in Exhibit B. The Holders, the Beneficial Owners and
persons depositing Shares or surrendering ADSs for cancellation and withdrawal
of Deposited Securities shall be required to pay to the Depositary the
Depositary's fees and related charges identified as payable by them respectively
in the Fee Schedule attached hereto as Exhibit B. All fees and charges so
payable may, at any time and from time to time, be changed by agreement between
the Depositary and the Company, but, in the case of fees and charges payable by
Holders and Beneficial Owners, only in the manner contemplated in Section 6.01.
The Depositary shall provide, without charge, a copy of its latest fee schedule
to anyone upon request.
The Company agrees to promptly pay to the Depositary such other fees
and charges and to reimburse the Depositary for such out-of-pocket expenses
(other than the charges and expenses of the Custodian or any other agent of the
Depositary) as the Depositary and the Company may agree to in writing from time
to time. Responsibility for payment of such charges may at any time and from
time to time be changed by agreement between the Company and the Depositary.
Unless otherwise agreed, the Depositary shall present its statement for such
expenses and fees or charges to the Company once every three months. Such
statement of expenses and fees will be provided to the Company in an itemized
invoice reasonably satisfactory to the Company. The charges and expenses of the
Custodian or any 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 above shall survive the termination of this Deposit
Agreement. As to any Depositary, upon the resignation or removal of such
Depositary as described in Section 5.05, such right shall extend for those fees,
charges and expenses incurred prior to the effectiveness of such resignation or
removal.
SECTION 5.07. 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 Korea Securities
Depository 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. If the Depositary receives a notice of the resignation
of the Custodian and upon effectiveness of such resignation there would be no
Custodian hereunder, the Depositary shall, promptly after receiving such notice
28
and after consultation with the Company, appoint a substitute custodian which
shall thereafter be the Custodian hereunder. Such resignation of the Custodian
shall take effect upon the appointment of a successor custodian and its
acceptance of such appointment. The Depositary, after consultation with the
Company, when it determines that it is appropriate to do so, may appoint a
substitute or an additional custodian, which shall thereafter be a Custodian
hereunder. Immediately upon any change of Custodian or appointment of additional
Custodians, the Depositary shall at its own expense give notice thereof in
writing to all Holders.
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 each
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 such Custodian
full and complete power and authority as agent hereunder of such successor
depositary.
SECTION 5.08. Notices and Reports. On or before the first date on
which the Company gives notice, by publication or otherwise, of any meeting of
holders of Shares or other Deposited Securities, or of any adjourned meeting of
such holders, 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 agrees to transmit to the Custodian and the Depositary a copy of the
notice thereof in the English language but otherwise in the form given or to be
given to holders of Shares or other Deposited Securities; provided, however,
with respect to any meeting in which the holders of Shares or other Deposited
Securities are entitled to exercise voting rights, the Company agrees to
transmit to the Depositary a copy of the notice thereof immediately upon
finalization by the Company of the form and substance of such notice, with the
Company using its reasonable good faith efforts to deliver such notice to the
Depositary in a timely manner sufficiently in advance of such meeting to enable
Holders of ADSs to exercise their voting rights on a reasonable basis, the
Depositary having no obligation to deliver such notice or make voting rights
available to Holders of ADSs if such notice is not timely received by the
Depositary.
The Company shall furnish to the Depositary (i) annual reports in
English (to the extent required by applicable regulations of the Commission),
which will include annual audited consolidated financial statements prepared in
conformity with generally accepted accounting principles of the United States
("U.S. GAAP") or, at the sole discretion of the Company, in conformity with
generally accepted accounting principles of Korea ("Korean GAAP"), with a
reconciliation of net income and shareholders' equity to U.S. GAAP, if prepared
pursuant to the Securities Exchange Act of 1934, within 180 days after the end
of the fiscal year, (ii) an English translation of its unaudited
non-consolidated financial statements prepared in conformity with U.S. GAAP or
Korean GAAP for the first six months of the fiscal year (to the extent required
by applicable regulations of the Commission) within 90 days after the end of the
first six months of the fiscal year, (iii) English versions of all other reports
(other than the Company's annual report to shareholders and semiannual or any
other periodic interim report to shareholders) and communications (to the extent
required by applicable regulations of the Commission) that are made generally
available to holders of Shares of the Company and (iv) such quantities as the
Depositary may reasonably request of the notices and summaries referred to in
preceding clauses (i), (ii) and (iii).
29
The Depositary shall arrange at the Company's expense for prompt
mailing to all Holders of copies of all such notices, summaries, reports and
communications that are furnished to it by the Company for distribution to
Holders. 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 not furnished to the Depositary in
English text.
The Depositary will make available for inspection by Holders at its
Principal Office and at the office of each Custodian copies of the Deposit
Agreement and any notices, reports or communications, including any proxy
soliciting materials, received from the Company which are both (a) received by
the Depositary or Custodian or the nominee of either, as the holder of the
Shares, and (b) made generally available to the holders of Shares by the
Company.
Additionally, the Company agrees that if, and so long as, the ADSs
are listed on the NYSE and if, and so long as, required by the rules or
regulations of the NYSE, the Company will publish all notices to holders of
Shares in such manner as required by the NYSE.
SECTION 5.09. Issuance of Additional Shares, Etc. The Company agrees
that in the event it or any of its Affiliates proposes (i) an issuance, sale or
distribution of additional Shares, (ii) an offering of rights to subscribe for
Shares or other Deposited Securities, (iii) an issuance of securities
convertible into or exchangeable for Shares, (iv) an issuance of rights to
subscribe for securities convertible into or exchangeable for Shares, (v) an
elective dividend of cash or Shares, (vi)a distribution other than cash, shares
or rights, (vii) a redemption of Deposited Securities, (viii) a meeting of
holders of Deposited Securities, or solicitation of consents or proxies,
relating to any reclassification of securities, merger or consolidation or
transfer of assets, or (ix) any reclassification, recapitalization,
reorganization, merger, consolidation or sale of assets which affects the
Deposited Securities, it will obtain U.S. legal advice and take all steps
necessary to ensure that the proposed transaction does not violate the
registration provisions of the Securities Act of 1933, or any other applicable
laws (including, without limitation, the Investment Company Act of 1940, as
amended, the Securities Exchange Act of 1934 and the securities laws of the
states of the U.S.). In support of the foregoing, the Company will furnish to
the Depositary, if so required after consultation with the Company, (a) a
written opinion of U.S. counsel (reasonably satisfactory to the Depositary)
stating whether such transaction (1) requires a registration statement under the
Securities Act to be in effect or (2) is exempt from the registration
requirements of the Securities Act and (b) an opinion of Korean counsel stating
that (1) making the transaction available to Holders and Beneficial Owners does
not violate the laws or regulations of Korea and (2) all requisite regulatory
consents and approvals have been obtained in Korea. If the filing of a
registration statement is required, the Depositary shall not have any obligation
to proceed with the transaction unless it shall have received evidence
reasonably satisfactory to it that such registration statement has been declared
effective. If, being advised by counsel, the Company determines that a
transaction is required to be registered under the Securities Act of 1933, the
Company will either (i) register such transaction to the extent necessary, (ii)
alter the terms of the transaction to avoid the registration requirements of the
Securities Act of 1933 or (iii) direct the Depositary to take specific measures,
in each case as contemplated in this Deposit Agreement, to prevent such
transaction from violating the registration requirements of the Securities Act
30
of 1933. The Company agrees with the Depositary that neither the Company nor any
of its Affiliates will at any time (x) deposit any Shares or other Deposited
Securities, either upon original issuance or upon a sale of Shares or other
Deposited Securities previously issued and reacquired by the Company or by any
such Affiliate, or (y) issue additional Shares, rights to subscribe for such
Shares, securities convertible into or exchangeable for Shares or rights to
subscribe for such securities, unless such transaction and the securities
issuable in such transaction are exempt from registration under the Securities
Act of 1933 and, if applicable, the Securities Exchange Act of 1934 or have been
registered under the Securities Act of 1933 and, if applicable, the Securities
Exchange Act of 1934 (and such registration statement has been declared
effective).
Notwithstanding anything else contained in this Deposit Agreement,
nothing in this Deposit Agreement shall be deemed to obligate the Company to
file any registration statement in respect of any proposed transaction.
SECTION 5.10. Indemnification. The Company agrees to indemnify the
Depositary and each Custodian and their respective officers, directors and
employees against, and hold each of them harmless from, any liability or
reasonable expense (including, but not limited to, the reasonable fees and
expenses of counsel) which may arise (a) in connection with the offer, issuance,
sale, resale, deposit, withdrawal or transfer of ADRs, ADSs or Shares, as the
case may be, 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 accordance with the provisions of this Deposit
Agreement and of the Receipts, as the same may be amended, modified or
supplemented from time to time, in any such case, (i) by either the Depositary
or any Custodian, except for any liability or expense arising out of the
negligence or bad faith of either of them, or (ii) by the Company, except to the
extent that such liability or expense arises out of information relating to the
Depositary or to the Custodian, as the case may be, furnished in writing to the
Company by the Depositary expressly for use in any document relating to the
ADSs.
The Depositary agrees to indemnify the Company and its officers,
directors and employees and held each of them harmless from any liability or
reasonable expense (including, but not limited to, the reasonable fees and
expenses of counsel) which may arise out of acts performed or omitted by the
Depositary due to the negligence or bad faith of the Depositary. With respect to
any liability or expense of the Company, its officers, directors or employees
arising out of acts negligently performed or omitted to be performed by the
Custodian, the Depositary agrees to assign to the Company, to the extent of such
liability or expense, such chose in action in respect of such negligent
performance or non-performance as the Depositary may have against the Custodian
pursuant to the terms of the Depositary's agreement with the Custodian.
Any person seeking indemnification hereunder (an "indemnified
person") shall notify the person from whom it is seeking indemnification (the
"indemnifying person") of the commencement of any indemnifiable action or claim
promptly after such indemnified person becomes aware of such commencement
(provided that the failure to make such notification shall not affect such
indemnified person's rights to seek indemnification except to the extent the
indemnifying person is materially prejudiced by such failure) and shall consult
in good faith with the indemnifying person as to the conduct of the defense of
31
such action or claim, which defense shall be reasonable under the circumstances.
No indemnified person shall compromise or settle any action or claim without the
consent of the indemnifying person.
The obligations set forth in this Section 5.10 shall survive the
termination of this Deposit Agreement and the succession or substitution of any
person indemnified hereby.
SECTION 5.11. Certain Rights of the Depositary; Limitations. Subject
to the further terms and provisions of this Section 5.11, Section 3.05 hereof
and applicable Korean law, the Depositary, its Affiliates and their agents may
own and deal in any class of securities of the Company and its Affiliates and in
ADSs. The Depositary may cause the issuance of ADSs against evidence of rights
to receive Shares from the Company, or any custodian, registrar, transfer agent,
clearing agency or other entity involved in ownership or transaction records in
respect of the Shares. Such evidence of rights shall consist of written blanket
or specific guarantees of ownership of Shares furnished on behalf of the holder
thereof. In its capacity as Depositary, the Depositary shall not lend Shares or
ADSs; provided, however, that to the extent permitted by Korean law, the
Depositary reserves the right to (i) cause the issuance of ADSs prior to the
receipt of Shares pursuant to Section 2.02 and (ii) deliver Shares prior to the
receipt and cancellation of ADSs pursuant to Section 2.05, including ADSs which
were issued under (i) above but for which Shares may not have been received;
further provided, however, that the Depositary shall not issue ADSs prior to the
receipt of Shares in the case of the deposit of Shares by the Company in
connection with a distribution of ADSs or pursuant to Section 4.04 or 4.06,
unless requested by the Company and to the extent permitted by applicable Korean
law. The Depositary may receive ADSs in lieu of Shares under (i) above and
receive Shares in lieu of ADSs under (ii) above. Each such transaction shall be
(a) subject to a written agreement whereby the person or entity (the
"Applicant") to whom ADSs or Shares are to be delivered (w) represents that at
the time of the pre-release transaction the Applicant or its customer owns the
Shares or ADSs that are to be delivered by the Applicant under such pre-release
transaction, (x) agrees to indicate the Depositary as owner of such Shares or
ADSs in its records and to hold such Shares or ADSs in trust for the Depositary
until such Shares or ADSs are delivered to the Depositary or the Custodian, (y)
unconditionally guarantees to deliver to the Depositary or the Custodian, as
applicable, such Shares or ADSs, and (z) agrees to any additional restrictions
or requirements that the Depositary deems reasonably appropriate, (b) at all
times fully collateralized with cash, U.S. government securities or such other
collateral as the Depositary deems appropriate, (c) terminable by the Depositary
on not more than five (5) business days' notice and (d) subject to such further
indemnities and credit regulations as the Depositary deems appropriate. The
Depositary will normally limit the number of ADSs and Shares involved in such
pre-release transactions at any one time to thirty percent (30%) of the ADSs
outstanding (without giving effect to ADSs outstanding under (i) above);
provided, however, that the Depositary reserves the right to change or disregard
such limit from time to time as it deems appropriate; further, provided,
however, that the Depositary shall not enter into any transaction under (i) or
(ii) above that will have the effect of exceeding the thirty percent (30%)
limitation without providing prior notice to the Company of the Depositary's
entering into of any such transaction.
The Depositary may also set limits with respect to the number of
ADSs and Shares involved in pre-release transactions with any one person on a
case-by-case basis as it deems appropriate; provided, however, that the
32
Depositary shall not enter into any transaction under (i) or (ii) above that
will have the effect of exceeding the thirty percent (30%) limitation without
providing prior notice to the Company of the Depositary's entering into of any
such transaction. The Depositary may retain for its own account any compensation
received by it in conjunction with the foregoing. Collateral provided pursuant
to (b) above, but not the earnings thereon, shall be held for the benefit of the
Holders (other than the Applicant).
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. Amendment; Supplement. The form of the Receipts and
any provisions of this Deposit Agreement may at any time and from time to time
be amended or supplemented by agreement between the Company and the Depositary
in any respect which they may deem necessary or desirable. Any amendment or
supplement which shall impose or increase any fees or charges (other than
charges in connection with foreign exchange control regulations, and taxes and
other governmental charges, delivery and other such expenses), or which shall
otherwise prejudice any substantial existing right of Holders or Beneficial
Owners shall not, however, become effective as to outstanding Receipts until the
expiration of 30 days after notice of such amendment or supplement shall have
been given to the Holders of outstanding Receipts in accordance with Section
7.05 hereof. The parties hereto agree that any amendments or supplements which
(i) are reasonably necessary (as agreed by the Company and the Depositary) in
order for (a) the ADSs to be registered on Form F-6 under the Securities Act of
1933 or (b) the ADSs to be traded solely in electronic book-entry form and (ii)
do not in either such case impose or increase any fees or charges to be borne by
Holders, shall be deemed not to materially prejudice any substantial rights of
Holders or Beneficial Owners. Every Holder and Beneficial Owner at the time any
amendment or supplement so becomes effective shall be deemed, by continuing to
hold such Receipt or to own any beneficial interest therein, to consent and
agree to such amendment or supplement and to be bound by the Deposit Agreement
and Receipt as amended or supplemented thereby. In no event shall any amendment
or supplement impair the right of the Holder to surrender such Receipt and
receive therefor the Deposited Securities represented thereby, except in order
to comply with mandatory provisions of applicable law. Notwithstanding the
foregoing, if any governmental body should adopt new laws, rules or regulations
which would require an amendment of, or supplement to, the Deposit Agreement to
ensure compliance therewith, the Company and the Depositary may amend or
supplement the Deposit Agreement and the ADRs at any time in accordance with
such changed laws, rules or regulations. Such amendment or supplement to the
Deposit Agreement and the ADRs in such circumstances may become effective before
a notice of such amendment or supplement is given to Holders or within any other
period of time as required for compliance with such laws, rules or regulations.
SECTION 6.02. Termination. The Depositary shall, at any time at the
written direction of the Company, terminate this Deposit Agreement by providing
notice of such termination to the Holders of all ADRs then outstanding at least
thirty (30) days prior to the date fixed in such notice for such termination. If
ninety (90) days shall have expired after (i) the Depositary shall have
delivered to the Company a written notice of its election to resign, or (ii) the
Company shall have delivered to the Depositary a written notice of the removal
of the Depositary, and in either case a successor depositary shall not have been
appointed and accepted its appointment as provided in Section 5.05, the
33
Depositary may terminate this Deposit Agreement by providing notice of such
termination to the Holders of all ADRs then outstanding at least thirty (30)
days prior to the date fixed for such termination. On and after the date of
termination of this Deposit Agreement, the Holder of an ADR will, upon surrender
of such ADR at the Principal Office of the Depositary, upon the payment of the
charges of the Depositary for the surrender of ADRs referred to in Section 2.05
and subject to the conditions and restrictions therein set forth, and upon
payment of any applicable taxes or governmental charges, be entitled to
delivery, to him or upon his order, of the amount of Deposited Securities
represented by such ADR. If any Receipts shall remain outstanding after the date
of termination, the Depositary thereafter shall discontinue the registration of
transfers of Receipts, shall suspend the distribution of dividends to the
Holders thereof, shall not accept deposits of Shares (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 rights or
other property, in exchange for Receipts surrendered to the Depositary (after
deducting, or charging, as the case may be, in each case, the charges of the
Depositary for the surrender of an ADR, any expenses for the account of the
Holder in accordance with the terms and conditions of this Deposit Agreement and
any applicable taxes or governmental charges or assessments). At any time after
the expiration of six months from the date of termination, 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, except to account for such net proceeds and other cash (after
deducting, or charging, as the case may be, in each case, the charges of the
Depositary for the surrender of an ADR, any expenses for the account of the
Holder in accordance with the terms and conditions of this Deposit Agreement and
any applicable taxes or governmental charges or assessments) and its obligations
under Section 5.10. Upon the termination of this Deposit Agreement, the Company
shall be discharged from all obligations under this Deposit Agreement except for
its obligations to the Depositary under Sections 5.06, 5.10 and 7.06 hereof.
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. No Third Party Beneficiaries. This Deposit Agreement
is for the exclusive benefit of the parties hereto and their permitted
successors and assigns and shall not be deemed to give any legal or equitable
right, remedy or claim whatsoever to any other person. Nothing in this Deposit
Agreement shall be deemed to give rise to a partnership or joint venture among
the parties nor establish a fiduciary or similar relationship among the parties.
The parties hereto acknowledge and agree that (i) the Depositary and its
34
Affiliates may at any time have multiple banking relationships with the Company
and its Affiliates, (ii) the Depositary and its Affiliates may be engaged at any
time in transactions in which parties adverse to the Company or the Holders or
Beneficial Owners may have interests and (iii) nothing contained in this Deposit
Agreement shall (a) preclude the Depositary or any of its Affiliates from
engaging in such transactions or establishing or maintaining such relationships,
or (b) obligate the Depositary or any of its Affiliates to disclose such
transactions or relationships or to account for any profit made or payment
received in such transactions or relationships.
SECTION 7.03. Severability. In case any one or more of the
provisions contained in this Deposit Agreement or in the Receipts should be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
in no way be affected, prejudiced or disturbed thereby.
SECTION 7.04. Holders and Beneficial Owners as Parties; Binding
Effect. The Holders and the Beneficial Owners 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 any Receipt by acceptance thereof or any beneficial interest
therein.
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, air courier or cable, telex or facsimile transmission, confirmed by
letter personally delivered or sent by mail or air courier, addressed to
▇▇.▇▇▇▇▇▇▇ LCD Co., Ltd., 17th Floor, West Tower, LG Twin Towers, 20 Yoido-dong,
Youngdungpo-gu, Seoul, Korea, 150-721, Attention: ▇▇▇▇▇▇▇ ▇▇▇, Vice President,
Finance and Risk Management (fax: ▇▇▇-▇▇▇-▇▇▇▇-▇▇▇▇), or to any other address
which the Company may specify in writing to the Depositary.
Any and all notices to be given to the Depositary shall be deemed to
have been duly given if personally delivered or sent by mail, air courier or
cable, telex or facsimile transmission, confirmed by letter personally delivered
or sent by mail or air courier, addressed to Citibank, N.A., ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇,
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇, U.S.A., Attention: Depositary Receipts Department, or
to any other address which the Depositary may specify in writing to the Company.
Notwithstanding anything else contained herein, delivery of a notice
sent to the Depositary or to the Company by facsimile or electronic messaging
shall not be deemed to be effective unless and until a confirmation receipt is
sent by the Depositary or the Company, as the case may be, to the sender of such
facsimile or electronic message.
Any and all notices to be given to any Holder shall be deemed to
have been duly given if (a) personally delivered or sent by mail or cable, telex
or facsimile transmission, confirmed by letter, addressed to such Holder at the
address of such Holder as it appears on the books of the Depositary or, if such
Holder shall have filed with the Depositary a request that notices intended for
such Holder be mailed to some other address, at the address specified in such
request, or (b) if a Holder shall have designated such means of notification as
an acceptable means of notification under the terms of this Deposit Agreement,
by means of electronic messaging addressed for delivery to the e-mail address
designated by the Holder for such purpose. Notice to Holders shall be deemed to
be notice to Beneficial Owners for all purposes of this Deposit Agreement.
Failure to notify a Holder or any defect in the notification to a Holder shall
35
not affect the sufficiency of notification to other Holders or to the Beneficial
Owners of ADSs held by such other Holders.
Delivery of a notice sent by mail, air courier or cable, telex or
facsimile transmission shall be deemed to be effective three days (in the case
of domestic mail or air courier) or seven days (in the case of overseas mail)
from the date when a duly addressed letter containing the same is deposited,
postage prepaid, in a post-office letter box or delivered to an air courier
service or at the time when a confirmation thereof is produced in the case of a
cable, telex or facsimile transmission, without regard for the actual receipt or
time of actual receipt thereof by a Holder. The Depositary or the Company may,
however, act upon any cable, telex or facsimile transmission received by it from
any Holder, the Custodian, the Depositary, or the Company, notwithstanding that
such cable, telex or facsimile transmission shall not be subsequently confirmed
by letter.
Delivery of a notice by means of electronic messaging shall be
deemed to be effective one day after the initiation of the transmission by the
sender (as shown on the sender's records), notwithstanding that the intended
recipient retrieves the message at a later date, fails to retrieve such message,
or fails to receive such notice on account of its failure to maintain the
designated e-mail address, its failure to designate a substitute e-mail address
or for any other reason.
SECTION 7.06. Governing Law. This Deposit Agreement and the ADRs
shall be interpreted in accordance with, and all rights hereunder and thereunder
and provisions hereof and thereof shall be governed by, the laws of the State of
New York. Notwithstanding anything contained in this Deposit Agreement, any ADR
or any present or future provisions of the laws of the State of New York, the
rights of holders of Shares and of any other Deposited Securities and the
obligations and duties of the Company in respect of the holders of Shares and
other Deposited Securities, as such, shall be governed by the laws of Korea (or,
if applicable, such other laws as may govern the Deposited Securities).
Except as set forth in the following paragraph of this Section 7.06,
the Company and the Depositary agree that the federal or state courts in the
City of New York shall have jurisdiction to hear and determine any suit, action
or proceeding and to settle any dispute between them that may arise out of or in
connection with this Deposit Agreement and, for such purposes, each irrevocably
submits to the non-exclusive jurisdiction of such courts. The Company hereby
designates, appoints and empowers ▇▇.▇▇▇▇▇▇▇ LCD America Inc. (the "Agent") now
at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ as its authorized agent to
receive and accept for and on its behalf, and on behalf of its properties,
assets and revenues, service by mail of any and all legal process, summons,
notices and documents that may be served in any suit, action or proceeding
brought against the Company in any federal or state court as described in the
preceding sentence or in the next paragraph of this Section 7.06. If for any
reason the Agent shall cease to be available to act as such, the Company agrees
to designate a new agent in New York on the terms and for the purposes of this
Section 7.06 reasonably satisfactory to the Depositary. The Company further
hereby consents and agrees to the service of any and all legal process, summons,
notices and documents in any suit, action or proceeding against the Company, by
service by mail of a copy thereof upon the Agent, with a copy mailed to the
Company by registered or certified air mail, postage prepaid, to its address
provided in Section 7.05 hereof.
36
The Company and the Depositary each irrevocably and unconditionally
waives, to the fullest extent permitted by law, any objection that it may now or
hereafter have to the laying of venue of any actions, suits or proceedings
brought in any court as provided in this Section 7.06, and hereby further
irrevocably and unconditionally waives and agrees not to plead or claim in any
such court that any such action, suit or proceeding brought in any such court
has been brought in an inconvenient forum.
The Company and the Depositary each irrevocably and unconditionally
waives, to the fullest extent permitted by law, and agrees not to plead or
claim, any right of immunity from legal action, suit or proceeding, from setoff
or counterclaim, from the jurisdiction of any court, from service of process,
from attachment upon or prior to judgment, from attachment in aid of execution
or judgment, from execution of judgment, or from any other legal process or
proceeding for the giving of any relief or for the enforcement of any judgment,
and consents to such relief and enforcement against it, its assets and its
revenues in any jurisdiction, in each case with respect to any matter existing
or arising between the Company and the Depositary out of, or in connection with,
the Deposit Agreement, any ADR or the Deposited Securities.
No disclaimer of liability under the Securities Act of 1933 is
intended by any provision of the Deposit Agreement. The provisions of this
Section 7.06 shall survive any termination of this Deposit Agreement, in whole
or in part.
SECTION 7.07. Prohibition of Assignment. Neither the Depositary nor
the Company may assign or otherwise transfer any of its rights or obligations
hereunder, except as otherwise provided herein or with the prior written consent
of the other.
SECTION 7.08. Compliance with United States 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.
SECTION 7.09. Korean Law References. Any summary of Korean laws and
regulations and of the terms of the Company's Articles of Incorporation set
forth in this Deposit Agreement have been provided by the Company solely for the
convenience of Holders, Beneficial Owners and the Depositary. While such
summaries are believed by the Company to be accurate as of the date of this
Deposit Agreement, (i) they are summaries and as such may not include all
aspects of the materials summarized applicable to a Holder or Beneficial Owner,
and (ii) these laws and regulations and the Company's Articles of Incorporation
may change after the date of this Deposit Agreement. Neither the Depositary nor
the Company has any obligation under the terms of this Deposit Agreement to
update any such summaries.
37
IN WITNESS WHEREOF, ▇▇.▇▇▇▇▇▇▇ LCD CO., LTD. and CITIBANK, N.A. have
duly executed this Deposit Agreement as of the day and year first above set
forth and all Holders and Beneficial Owners of Receipts shall become parties
hereto upon acceptance by them of Receipts in accordance with the terms hereof
or upon acquisition of any beneficial interest in such Receipts.
▇▇.▇▇▇▇▇▇▇ LCD CO., LTD.
By: /s/ Dong ▇▇▇ ▇▇▇
----------------------
Name: Dong ▇▇▇ ▇▇▇
Title: Vice President
CITIBANK, N.A.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
Title: Vice President
38
EXHIBIT A
(FORM OF FACE OF ADR)
Number _______________ CUSIP Number _________
AMERICAN DEPOSITARY SHARES (EVERY
TWO (2) AMERICAN DEPOSITARY SHARES
REPRESENTING ONE (1) SHARE)
AMERICAN DEPOSITARY RECEIPT
for
AMERICAN DEPOSITARY SHARES
representing
DEPOSITED SHARES OF COMMON STOCK,
PAR VALUE 5,000 WON PER SHARE OF
▇▇.▇▇▇▇▇▇▇ LCD CO., LTD.
(a corporation established under the laws of The Republic of Korea)
CITIBANK, N.A., a national banking association organized and
existing under the laws of the United States of America, as Depositary (the
"Depositary"), hereby certifies that [____________________] is the owner of
[_______________] American Depositary Shares indicated on the records of the
Depositary, representing deposited shares of the common stock, par value 5,000
Won per share, or evidence of rights to receive such shares ("Shares"), of
▇▇.▇▇▇▇▇▇▇ LCD Co., Ltd., a corporation established under the laws of The
Republic of Korea (the "Company"). At the date of the Deposit Agreement (as
hereinafter defined), every two (2) American Depositary Shares represents one
(1) Share deposited under the Deposit Agreement with the Custodian, which at the
date of execution of the Deposit Agreement is Korea Securities Depository. The
number of Shares represented by each ADS is subject to change as provided in
Article IV of the Deposit Agreement.
(1) The Deposit Agreement. This American Depositary Receipt is one
of an issue (herein called "ADRs" or "Receipts"), all issued and to be issued
upon the terms and conditions set forth in the Deposit Agreement dated as of
July 22, 2004 (the "Deposit Agreement"), among the Company, the Depositary and
all Holders and Beneficial Owners from time to time of American Depositary
Shares evidenced by Receipts issued thereunder, each of whom by accepting a
Receipt or acquiring any beneficial interest therein agrees to become a party
thereto and becomes bound by all the terms and provisions thereof. The Deposit
Agreement sets forth the rights of Holders and Beneficial Owners and the rights
and duties of the Depositary in respect of the Shares 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 Shares, other securities,
property and cash are herein called "Deposited Securities"). Copies of the
Deposit Agreement are on file at the Principal Office of the Depositary and at
the principal office of the Custodian. The statements made on the face and the
reverse of this Receipt are summaries of certain provisions of the Deposit
Agreement and are qualified by and subject to the detailed provisions of the
A-1
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 Receipts and Withdrawal of Deposited Securities.
Upon surrender at the Principal Office of the Depositary of this Receipt for the
purpose of withdrawal of the Deposited Securities represented by the ADSs
evidenced by this Receipt, and upon payment of the fee of the Depositary for the
surrender and cancellation of this Receipt (as set forth in paragraph (7) of
this Receipt) and payment of all taxes and governmental charges payable in
connection with such surrender, and subject to the terms and conditions of the
Deposit Agreement, any applicable ownership restrictions and applicable laws and
regulations of Korea, the Holder hereof shall be entitled to physical delivery,
to him or upon his order, or to electronic delivery or book-entry transfer to an
account in Korea designated by such Holder, of the Deposited Securities at the
time represented by the ADSs evidenced by this Receipt or constituting such
beneficial interest, as the case may be; provided, that such withdrawals of
Shares constituting Deposited Securities are not permitted unless and until such
Shares are listed on the Korea Stock Exchange (such Shares, the "Listed
Shares"). The parties hereto acknowledge and agree that (i) the Depositary will
deliver Shares represented by ADSs presented for cancellation under this
paragraph (2) and pursuant to Section 2.05 of the Deposit Agreement only to the
extent of the number of Listed Shares then deposited with the Custodian, (ii)
the Depositary will process presentations of ADSs for withdrawal of Listed
Shares under this paragraph (2) and Section 2.05 of the Deposit Agreement on a
first come, first served basis, (iii) the Depositary will complete requests for
cancellation of ADSs and withdrawal of the Shares represented thereby only to
the extent of the number of Listed Shares at such time deposited with the
Custodian, (iv) the Depositary will refuse to complete a request for
cancellation of ADSs and withdrawal of Shares to the extent the number of Shares
requested for withdrawal exceeds the number of Listed Shares at such time
deposited with the Custodian and (v) the Depositary reserves the right to
suspend withdrawals of Shares under this paragraph (2) and Section 2.05 of the
Deposit Agreement until such time as Listed Shares are deposited with the
Custodian. The Company agrees to deliver to the Custodian written confirmation
of the number of Listed Shares deposited with the Custodian under this Deposit
Agreement promptly upon receipt of confirmation of listing of such Shares from
the Korea Stock Exchange. Subject to applicable Korean laws and regulations,
physical delivery of such Deposited Securities may be made by the delivery of
certificates to an agent of the Holder of such receipt in Korea or to such
Holder or as ordered by him. Physical or electronic delivery or book-entry
transfer of Deposited Securities shall be made, as hereinafter provided, without
unreasonable delay.
A Receipt surrendered or written instructions received for such
purposes may be required by the Depositary to be properly endorsed in blank or
accompanied by properly executed instruments of transfer in blank. The person
requesting withdrawal of Deposited Securities for delivery to someone other than
the Holder shall, if requested by the Depositary, deliver to the Depositary a
written order directing the Depositary to cause the Deposited Securities being
withdrawn to be delivered to or upon the written order of a person or persons
designated in such order subject to applicable Korean laws and regulations.
Upon the receipt of complete written instructions, the Depositary
shall direct the Custodian to deliver the Deposited Securities at the principal
office of such Custodian, subject to the terms and conditions of the Deposit
Agreement, to or upon the written order of the person or persons designated in
such written instructions.
A-2
The Depositary shall not accept for surrender ADSs representing less
than one Share. In the case of the delivery to it of ADSs representing a number
other than a whole number of Shares, the Depositary shall cause ownership of the
appropriate whole number of Shares to be delivered in accordance with the terms
of the Deposit Agreement, and shall, at the discretion of the Depositary, either
(i) return to the person surrendering such ADSs the number of ADSs representing
any remaining fractional Share, or (ii) sell or cause to be sold the fractional
Share represented by the ADSs so surrendered and remit the proceeds of such sale
(net of (a) applicable fees and charges of, and expenses incurred by, the
Depositary and (b) taxes withheld) to the person surrendering the ADSs.
Notwithstanding anything else contained in this Receipt or the
Deposit Agreement, the Depositary may make delivery at the Principal Office of
the Depositary of (i) any cash dividends or cash distributions, or (ii) any
proceeds from the sale of any distributions of shares or rights, which are at
the time held by the Depositary in respect of the Deposited Securities
represented by the ADSs surrendered for cancellation and withdrawal. At the
request, risk and expense of any Holder so surrendering ADSs, and for the
account of such Holder, the Depositary shall direct the Custodian to forward (to
the extent permitted by law) any cash or other property (other than securities)
held by the Custodian in respect of the Deposited Securities represented by such
ADSs to the Depositary for delivery at the Principal Office of the Depositary.
Such direction shall be given by letter or, at the request, risk and expense of
such Holder, by cable, telex or facsimile transmission.
(3) Transfers, Split-ups and Combinations. Subject to the
limitations stated herein and in the Deposit Agreement, this Receipt is
transferable, without unreasonable delay, on the books of the Registrar by the
Holder hereof in person or by duly authorized attorney, upon surrender of this
Receipt 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); provided, however,
that the Registrar shall refuse to register any transfer of an ADR if such
registration would cause the total number of Shares represented by ADSs
evidenced by ADRs held by any Holder to exceed the number of Shares as
determined by the Company in order to comply with any applicable ownership
restrictions and notified in writing, from time to time, to the Registrar. This
Receipt may be split into other Receipts or may be combined with other Receipts
into one Receipt, representing the same class and aggregate number of ADSs and
registered in the name of the same Holder as the Receipt or Receipts
surrendered. As a condition precedent to the execution and delivery,
registration of transfer, split-up, combination or surrender of any Receipt or
withdrawal of any Deposited Securities, the Depositary or the Custodian may
require from the presenter of a Receipt or the depositor of Shares a sum
sufficient to reimburse it for any tax or other governmental charge and any
stock transfer or registration fee with respect thereto (including any such tax
or charge and fee with respect to Shares being deposited or withdrawn) and
payment of any applicable fees as provided in paragraph (7) of this Receipt, and
may, but is not obligated to, require the production of proof satisfactory to it
as to the identity and genuineness of any signature appearing on any form,
certification or other document delivered to the Depositary in connection with
the Deposit Agreement, including but not limited to, in the case of Receipts, a
signature guarantee in accordance with industry practice, and may also require
compliance with any laws or governmental regulations relating to depositary
receipts in general or to the withdrawal of Deposited Securities.
A-3
(4) Certain Limitations. The Depositary and the Registrar, as
applicable, may withhold the execution or delivery or registration of transfer
of any ADR or the distribution or sale of any dividend or distribution of rights
or of the proceeds thereof or, to the extent not limited by the terms of Section
7.08 of the Deposit Agreement, the delivery of any Deposited Securities until it
has received such proof of citizenship or residence, taxpayer status, payment of
all applicable taxes or other governmental charges, exchange control approval,
legal or beneficial ownership of ADSs and Deposited Securities, compliance with
applicable laws, the terms of the Deposit Agreement or this Receipt and the
provisions of, or governing, the Deposited Securities, to execute such
certifications and to make such representations and warranties, and to provide
such other information and documentation (or, in the case of Shares in
registered form presented for deposit, such information relating to the
registration on the books of the Company or on the shareholders' register of the
Company) as the Depositary or the Custodian may deem reasonably necessary or
proper or as the Company may reasonably require by written request to the
Depositary consistent with its obligations under the Deposit Agreement and this
Receipt. The delivery of Receipts against deposits of Shares generally or of
particular Shares may be suspended or withheld, or the registration of transfer
of Receipts in particular instances may be refused, or the registration of
transfer generally may be suspended during any period when the transfer books of
the Depositary, the shareholders' register of the Company (or the appointed
agent of the Company for the transfer and the registration of Shares) or the
books of the CSD are closed, or if any such action is deemed necessary or
advisable by the Company, the Depositary or the CSD, in good faith, at any time
or from time to time in accordance with the Deposit Agreement; provided,
however, the surrender of outstanding Receipts and withdrawal of Deposited
Securities represented thereby may be suspended, but only as required in
connection with (i) temporary delays caused by closing the transfer books of the
Depositary or the issuer of any Deposited Securities (or the appointed agent or
agents for such issuer for the transfer and registration of such Deposited
Securities) in connection with voting at a shareholders' meeting or the payment
of dividends, (ii) payment of fees, taxes and similar charges, (iii) compliance
with any United States or foreign laws or governmental regulations relating to
the Receipts or to the withdrawal of the Deposited Securities or (iv) other
circumstances specifically contemplated by Instruction I.A.(l) of the General
Instructions to Form F-6 (as such General Instructions may be amended from time
to time). Without limitation to the foregoing, the Depositary shall not
knowingly accept for deposit under the Deposit Agreement any Shares required to
be registered under the Securities Act of 1933 prior to being offered and sold
publicly in the United States unless a registration statement is in effect as to
such Shares.
(5) Liability of Holders and Beneficial Owners For Taxes and Other
Charges. If any Korean or other tax or other governmental charge shall become
payable with respect hereto or to any Deposited Securities represented by the
ADSs evidenced hereby, such tax or other governmental charge shall be payable by
the Holder hereof to the Depositary and any Beneficial Owners hereof shall be
liable to the Holder therefor. 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 Receipt or to execute and deliver any new Receipt or Receipts or to
permit any deposit or (subject to Section 7.08 of the Deposit Agreement) any
withdrawal of Deposited Securities represented by the ADSs evidenced hereby
A-4
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 other governmental charge, the Holder and the Beneficial
Owners hereof remaining liable for any deficiency.
Dated:
CITIBANK, N.A.,
as Depositary
By:
---------------------------
Vice President
The address of the Corporate Agency Office of the Depositary is ▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇. The Depositary's
Corporate Agency Office is at a different address than its Principal Executive
Office. Its Principal Executive Office is at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇
▇▇▇▇▇.
A-5
(FORM OF REVERSE OF RECEIPT)
SUMMARY OF CERTAIN ADDITIONAL
PROVISIONS OF THE DEPOSIT AGREEMENT
(6) Warranties by Depositor. Each person depositing Shares under the
Deposit Agreement shall be deemed thereby to represent and warrant that (i) such
Shares and the certificates therefor are duly authorized, validly issued,
outstanding, fully paid, non-assessable and legally obtained by such person,
(ii) all preemptive (and similar) rights, if any, with respect to such Shares
have been validly waived or exercised, (iii) the person making such deposit is
duly authorized so to do, (iv) the Shares presented for deposit are free and
clear of any lien, encumbrance, security interest, charge, mortgage or adverse
claim, and (v) the Shares presented for deposit are not, and the ADSs issuable
upon such deposit will not be, Restricted Securities (except as contemplated in
Section 2.10 of the Deposit Agreement), and (vi) the Shares presented for
deposit have not been stripped of any rights or entitlements. Such
representations and warranties shall survive the deposit and withdrawal of
Shares, the issuance and cancellation of ADSs in respect thereof and the
transfer of such ADSs. If any such representations or warranties are false in
any way, the Company and the Depositary shall be authorized, at the cost and
expense of the person depositing Shares, to take any and all actions necessary
to correct the consequences thereof.
(7) Charges of Depositary. The Depositary shall charge the
following fees:
(i) Issuance Fee: to any person depositing Shares or to any person
receiving ADSs, a fee not in excess of U.S. $5.00 per 100 ADSs
(or portion thereof) so issued under the terms of the Deposit
Agreement (excluding issuances pursuant to paragraphs (iii)(b)
and (vi) below);
(ii) Cancellation Fee: to any person surrendering ADSs for purpose
of withdrawal of Deposited Securities or to whom Deposited
Securities are delivered, a fee not in excess of U.S. $5.00
per 100 ADSs (or portion thereof) so surrendered;
(iii) Dividend Fee: No Fee shall be payable upon distribution of (a)
cash dividends or (b) ADSs pursuant to stock dividends, so
long as the charging of such fee is prohibited by the exchange
upon which the ADSs are listed. If charging of such fees is
not prohibited, the fees specified in (iv) below shall be
payable;
(iv) Cash Distribution Fee: to any person to whom a distribution is
made, a fee not in excess of U.S. $2.00 per 100 ADSs (or
portion thereof) held for the distribution of (a) cash
proceeds (i.e., upon the sale of rights and other
entitlements) or (b) free shares in the form of ADSs (not
constituting a stock dividend);
(v) Rights Exercise Fee: to any person whom exercises such rights,
a fee not in excess of U.S. $2.00 per 100 ADSs (or portion
thereof) held upon the exercise of rights to purchase
additional ADSs; and
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(vi) Other Distribution Fee: to any person to whom a distribution
is made, a fee not in excess of U.S. $5.00 per unit of 100
securities (or fraction thereof) distributed for distribution
of securities other than ADSs or rights to purchase additional
ADSs.
In addition, Holders, Beneficial Owners, persons depositing Shares
and persons surrendering ADSs for cancellation and withdrawal of Deposited
Securities will be required to pay the following charges:
(i) taxes (including applicable interest and penalties) and other
governmental charges;
(ii) such registration fees as may from time to time be in effect
for the registration of Shares or other Deposited Securities
on the share register and applicable to transfers of Shares or
other Deposited Securities to or from the name of the
Custodian, the Depositary or any nominees upon the making of
deposits and withdrawals, respectively;
(iii) such cable, telex and facsimile transmission and delivery
expenses as are expressly provided in the Deposit Agreement to
be at the expense of the person depositing or withdrawing
Shares or Holders and Beneficial Owners of ADSs;
(iv) the expenses and charges incurred by the Depositary in the
conversion of foreign currency;
(v) such fees and expenses as are incurred by the Depositary in
connection with compliance with exchange control regulations
and other regulatory requirements applicable to Shares,
Deposited Securities, ADSs and ADRs; and
(vi) the fees and expenses incurred by the Depositary, the
Custodian, or any nominee in connection with the delivery or
servicing of Deposited Securities.
Any other charges and expenses of the Depositary under the Deposit
Agreement will be paid by the Company upon agreement between the Depositary and
the Company. All fees and charges may, at any time and from time to time, be
changed by agreement between the Depositary and Company but, in the case of fees
and charges payable by Holders or Beneficial Owners, only in the manner
contemplated by paragraph (21) of this Receipt and the terms of the Deposit
Agreement. The Depositary will provide, without charge, a copy of its latest fee
schedule to anyone upon request. The charges and expenses of the Custodian or
any agent of the Depositary are for the sole account of the Depositary.
(8) Title to Receipts. Subject to the limitations set forth herein
or in the Deposit Agreement, when this Receipt is properly endorsed or
accompanied by proper instruments of transfer (including signature guarantees in
accordance with standard industry practice), title to this Receipt (and to each
ADS evidenced hereby) shall be transferable by delivery as in the case of a
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certificated security under the laws of the State of New York. Notwithstanding
any notice to the contrary, the Depositary and the Company may deem and treat
the Holder of this Receipt as the absolute owner of such Receipt for all
purposes. Neither the Depositary nor the Company shall have any obligation nor
be subject to any liability under the Deposit Agreement or this Receipt to any
holder of a Receipt or any Beneficial Owner unless such holder is the Holder of
such Receipt registered on the books of the Depositary or, in the case of a
Beneficial Owner, such Beneficial Owner, or the Beneficial Owner's
representative, is the Holder registered on the books of the Depositary.
(9) Validity of Receipt. This Receipt and the ADS(s) evidenced
thereby shall not be entitled to any benefits under the Deposit Agreement or be
valid or enforceable for any purpose, unless this Receipt shall have been dated,
signed, countersigned and registered, as provided in Section 2.01 of the Deposit
Agreement. Receipts bearing the manual or facsimile signature of a
duly-authorized signatory of the Depositary or the Registrar, who at the time of
signature was a duly-authorized signatory of the Depositary or the Registrar, as
the case may be, shall bind the Depositary, notwithstanding the fact that such
signatory has ceased to be so authorized prior to the delivery of such Receipt
by the Depositary.
(10) Disclosure of Beneficial Ownership and Ownership Restrictions.
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
Receipts and regarding the identity of any other persons then or previously
interested in such Receipts 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. The Company may
restrict transfers of the Shares where such transfer might result in ownership
of Shares exceeding certain limits under applicable law or under the Company's
Articles of Incorporation. Nothing herein or in the Deposit Agreement shall be
interpreted as obligating the Depositary or the Company to ensure compliance
with the ownership restrictions described herein or in Section 3.05 of the
Deposit Agreement.
Each Holder and Beneficial Owner agrees to file reports to the
extent required by Korean laws and regulations as indicated by the Company from
time to time. In addition, Korean laws and regulations may require beneficial
owners of the voting share capital of Korean companies, including Beneficial
Owners of ADSs, to satisfy certain reporting requirements or obtain regulatory
approval in certain circumstances. Beneficial Owners are solely responsible for
complying with such requirements. Neither the Depositary nor the Custodian nor
any of their respective agents or affiliates shall be required to take any
actions whatsoever on behalf of such Beneficial Owners.
(11) 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. Such reports and other information,
when so filed, can be inspected and copied at the public reference facilities
maintained by the Commission at ▇▇▇ ▇. ▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇.
Copies of such material may be obtained at prescribed rates. Such reports and
other information may also be inspected at the offices of The New York Stock
Exchange, Inc., ▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
A-8
(12) Dividends and Distributions; Rights. Whenever the Custodian or
the Depositary shall receive any cash dividend or other cash distribution by the
Company on or with respect to any Deposited Securities, the Depositary shall,
subject to applicable Korean laws and regulations and the provisions of Section
4.07 of the Deposit Agreement, cause the conversion as promptly as practicable
of such dividend or distribution into United States dollars, establish a record
date in accordance with Section 4.08 of the Deposit Agreement (if applicable)
and promptly distribute such amount to the Holders entitled thereto 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; 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 the 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 or its agent or the Depositary or its
agent, as appropriate, will remit to the appropriate governmental authority or
agency in Korea or any other relevant jurisdiction all amounts withheld and
owing to such authority or agency.
Whenever the Depositary or the Custodian shall receive any
distribution other than cash, Shares or rights upon any Deposited Securities,
the Depositary shall, after consultation with the Company, cause the securities
or property so received to be distributed as promptly as practicable to the
Holders entitled thereto, as of a record date fixed pursuant to Section 4.08 of
the Deposit Agreement, 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, after consultation with the Company, commercially feasible
for accomplishing such distribution subject to any applicable laws or
regulations of Korea; 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 of 1933 in order to be distributed to Holders) the Depositary
deems such distribution not to be commercially feasible, the Depositary may,
after consultation with the Company, adopt such method as it may deem
commercially feasible 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 subject to any applicable laws or regulations of Korea, if such
distribution is commercially feasible without withholding for or on account of
any taxes or other governmental charges and without registration under the
Securities Act of 1933, in accordance with such commercially feasible method as
the Depositary shall have adopted.
A-9
If any distribution upon any Deposited Securities consists of a
dividend in, or free distribution of, Shares, the Custodian shall be required,
subject to applicable law, to accept such Shares for deposit pursuant to the
Deposit Agreement and, upon receipt of confirmation of such deposit, the
Depositary shall (subject to Section 5.06 of the Deposit Agreement) either (i)
distribute to the Holders of outstanding Receipts entitled thereto, in
proportion to the number of ADSs representing Deposited Securities held by them
respectively, additional Receipts for an aggregate number of ADSs representing
the number of Shares received as such dividend or free distribution, or (ii)
reflect on the records of the Depositary such increase in the aggregate number
of ADSs representing the aggregate number of Shares so received, in either case,
after deduction or upon payment of the fees and expenses of the Depositary. If
for any reason (including any requirement that the Company or the Depositary
withhold an amount on account of taxes or other governmental charges or that
such Shares must be registered under the Securities Act of 1933 in order to be
distributed to Holders) the Depositary deems such distribution not to be
commercially feasible, the Depositary may, after consultation with the Company,
adopt such method as it may deem commercially feasible for the purpose of
effecting such distribution, including the sale (at public or private sale) of
the Shares 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. In lieu of issuing Receipts for
fractional ADSs in any such case, the Depositary shall sell the number of Shares
represented by the aggregate of such fractions and distribute the net proceeds
in dollars. To the extent that new ADSs representing such Shares are not created
and such Shares are not sold or otherwise distributed in accordance with this
paragraph and the Deposit Agreement, each ADS shall thenceforth also represent
such additional Shares distributed upon the Deposited Securities represented
thereby.
Subject to applicable Korean law, whenever the Company intends to
make a distribution payable at the election of the holders of Shares in cash or
in additional Shares, other than as provided in Sections 4.02 or 4.04 of the
Deposit Agreement, the Company shall give timely notice thereof to the
Depositary stating whether or not it wishes such elective distribution to be
made available to Holders of ADSs. Upon timely receipt of notice indicating that
the Company wishes such elective distribution to be made available to Holders of
ADSs, the Depositary shall consult with the Company to determine, and the
Company shall assist the Depositary in its determination, whether it is lawful
and commercially feasible to make such elective distribution available to the
Holders of ADSs. The Depositary shall make such elective distribution available
to Holders only if (i) the Company shall have timely requested that the elective
distribution be made available to Holders, (ii) the Depositary shall have
determined that such distribution is commercially feasible and (iii) the
Depositary shall have received satisfactory documentation within the terms of
Section 5.09 of the Deposit Agreement. If the above conditions are not
satisfied, the Depositary shall, to the extent permitted by law, distribute to
the Holders, on the basis of the same determination as is made in Korea in
respect of the Shares for which no election is made, either (X) cash upon the
terms described in Section 4.02 of the Deposit Agreement or (Y) additional ADSs
representing such additional Shares upon the terms described in Section 4.04 of
the Deposit Agreement (provided that in the case of (Y), the Shares have been
deposited pursuant to Section 4.04 of the Deposit Agreement). If the above
conditions are satisfied, the Depositary shall establish a record date (on the
terms described in Section 4.08 of the Deposit Agreement) and establish
procedures to enable Holders to elect the receipt of the proposed distribution
in cash or in additional ADSs. The Company shall assist the Depositary in
A-10
establishing such procedures to the extent necessary. Nothing herein shall
obligate the Depositary to make available to Holders a method to receive the
elective distribution in Shares (rather than ADSs) if the conditions set forth
above are not satisfied. There can be no assurance that Holders generally, or
any Holder in particular, will be given the opportunity to receive elective
distributions on the same terms and conditions as the holders of Shares.
Whenever the Company intends to distribute to the holders of the
Deposited Securities rights to subscribe for additional Shares, the Company
shall give timely notice thereof to the Depositary stating whether or not it
wishes such rights to be made available to Holders of ADSs. Upon timely receipt
of a notice indicating that the Company wishes such rights to be made available
to Holders of ADSs, the Depositary shall consult with the Company to determine,
and the Company shall assist the Depositary in its determination, whether it is
lawful and commercially feasible to make such rights available to the Holders.
The Depositary shall make such rights available to Holders only if (i) the
Company shall have timely requested that such rights be made available to
Holders, (ii) the Depositary shall have received satisfactory documentation
within the terms of Section 5.09 of the Deposit Agreement, and (iii) the
Depositary shall have determined that such distribution of rights is
commercially feasible. In the event all conditions set forth above are
satisfied, the Depositary shall establish a record date (upon the terms
described in Section 4.08 of the Deposit Agreement) and establish procedures to
(x) distribute rights to purchase additional ADSs (by means of warrants or
otherwise) in proportion to the number of ADSs held, (y) to enable the Holders
(or holders of warrants) to exercise such rights or warrants (upon payment of
the subscription price and of the applicable (a) fees and charges of, and
expenses incurred by, the Depositary and (b) taxes), and, if applicable, to
enable Holders or holders of warrants, as the case may be, to sell or transfer
such rights or warrants, as the case may be, and (z) to deliver ADSs upon the
valid exercise of such rights. The Company shall assist the Depositary to the
extent necessary in establishing such procedures. Nothing herein shall obligate
the Depositary to make available to the Holders a method to exercise rights to
subscribe for Shares (rather than ADSs) if the conditions set forth above are
not satisfied. In the event any of the conditions set forth above are not
satisfied or if the Company requests that the rights not be made available to
Holders of ADSs, the Depositary shall proceed with the sale of the rights and
subsequent distribution of proceeds as contemplated below.
If (i) the Company does not timely request the Depositary to make
the rights available to Holders or requests that the rights not be made
available to Holders, (ii) the Depositary fails to receive satisfactory
documentation within the terms of Section 5.09 of the Deposit Agreement or
determines it is not lawful or commercially feasible to make the rights
available to Holders, or (iii) any rights made available are not exercised and
appear to be about to lapse, the Depositary shall, after consultation with the
Company, determine whether it is lawful and commercially feasible to sell such
rights, in a riskless principal capacity, at such places and upon such terms
(including public or private sale) as it may deem proper and commercially
feasible. The Depositary shall consult with the Company to determine whether
such actions are lawful and commercially feasible. The Depositary shall, upon
such sale, convert and distribute proceeds of such sale (net of applicable (a)
fees and charges of, and expenses incurred by, the Depositary and (b) taxes)
upon the terms set forth in Section 4.02 of the Deposit Agreement.
If at the time of the offering of any rights, the Depositary and the
Company determine that it is lawful and commercially feasible to make such
rights available to all or certain Holders by means of warrants or otherwise,
A-11
the Depositary shall, upon the request by the Company, after deduction or upon
payment of the fees and expenses of the Depositary, distribute warrants or other
instruments therefor in such form as it may determine to such Holders entitled
thereto, in proportion to the number of ADSs representing such Deposited
Securities held by them respectively, or employ such other method as it may deem
commercially 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.
If the Depositary is unable to make any rights available to Holders
or to arrange for the sale of the rights upon the terms described above, the
Depositary shall allow such rights to lapse.
Neither the Depositary nor the Company shall be responsible for (i)
any failure to determine that it may be lawful or commercially feasible to make
such rights available to Holders in general or any Holder in particular that is
not due to its negligence, or (ii) any foreign exchange exposure or loss
incurred in connection with such sale, or exercise. The Depositary shall not be
responsible for the content of any materials forwarded to the Holders on behalf
of the Company in connection with the rights distribution.
Notwithstanding anything to the contrary in Section 4.06 of the
Deposit Agreement, if registration (under the Securities Act of 1933 or any
other applicable law) of the rights or the securities to which any rights relate
may be required in order for the Company to offer such rights or such securities
to Holders and to sell the securities represented by such rights, the Depositary
will not distribute such rights to the Holders (i) unless and until a
registration statement under the Securities Act of 1933 (or other applicable
law) covering such offering is in effect or (ii) unless the Company furnishes
the Depositary opinion(s) of counsel for the Company in the United States and
counsel to the Company in any other applicable country in which rights would be
distributed, in each case reasonably satisfactory to the Depositary, to the
effect that the offering and sale of such securities to Holders are exempt from,
or do not require registration under, the provisions of the Securities Act of
1933 or any other applicable laws. If Korean law requires the Depositary to
obtain approval or license from a governmental agency to effect a sale of
rights, the Depositary may file an application for such approval or license as
it may deem desirable, in good faith. Such requirements may adversely affect (1)
the ability of the Depositary to dispose of such rights or (2) the costs and
expenses of the Depositary associated with disposal of rights.
In the event that the Company, the Depositary or the Custodian shall
be required to withhold and does withhold from any distribution of property
(including rights) an amount on account of taxes or other governmental charges,
the amount distributed to the Holders of ADSs representing such Deposited
Securities shall be reduced accordingly. In the event that the Depositary
determines that any distribution in property (including Shares and rights to
subscribe therefor) is subject to any tax or other governmental charges which
the Depositary is obligated to withhold, the Depositary may dispose of all or a
portion of such property (including Shares and rights to subscribe therefor) in
such amounts and in such manner, including by public or private sale, as the
Depositary deems necessary and practicable to pay any such taxes or charges.
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There can be no assurance that Holders generally, or any Holder in
particular, will be given the opportunity to receive or exercise rights on the
same terms and conditions as the holders of Shares or be able to exercise such
rights. Nothing herein shall obligate the Company to file any registration
statement in respect of any rights or Shares or other securities to be acquired
upon the exercise of such rights.
(13) Record Dates. 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 any Deposited
Securities, or whenever, for any reason, the Depositary causes a change in the
number of Shares that are represented by each ADS or whenever the Depositary
shall receive notice of any meeting, or solicitation of consents or proxies, of
holders of Shares or other Deposited Securities, 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 Shares 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 receive
notice of such meeting or solicitation of consents or proxies or to exercise the
rights of Holders with respect to such changed number of Shares. Subject to the
provisions of the Deposit Agreement, the Holders at the close of business in New
York 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, to exercise the rights of Holders
hereunder with respect to such changed number of Shares in proportion to the
number of American Depositary Shares held by them respectively or with respect
to such other matter.
(14) Voting of Deposited Securities. As soon as practicable after
receipt of notice of any meeting of, or solicitation by the Company of consents
or proxies from, holders of Shares or other Deposited Securities, the Depositary
shall, if requested in writing by the Company, fix a record date as provided in
Section 4.08 of the Deposit Agreement for determining the Holders entitled to
give instructions for the exercise of voting rights. The notice shall be
provided by the Company in English to the Depositary, with the Company using its
reasonable good faith efforts to deliver such notice to the Depositary in a
timely manner sufficiently in advance of such meeting to enable Holders to
exercise their voting rights on a reasonable basis, the Depositary having no
obligation to deliver such notice or make voting rights available to Holders of
ADSs if such notice is not timely received by the Depositary. The Company shall
provide to the Depositary sufficient copies, as the Depositary may reasonably
request, of notices of the Company's shareholders' meeting, the agenda therefor
as well as the English translations thereof, which the Depositary shall mail to
Holders as soon as practicable after receipt of the same by the Depositary,
together with: (a) 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 Korean law and of the Articles of Incorporation of the Company
(which provisions, if any, shall be summarized in pertinent part), to instruct
the Depositary as to the exercise of the voting rights, if any, pertaining to
the number of Shares or other Deposited Securities represented by their
respective ADSs evidenced by their respective Receipts and (b) a brief statement
as to the manner in which such instructions may be given. Voting instructions
may be given only in respect of a number of ADSs representing an integral number
of Deposited Securities.
A-13
Upon the timely request of a Holder of ADSs evidenced by a Receipt
on such record date received on or before the date established by the Depositary
for such purpose, the Depositary shall endeavor, insofar as practicable and
permitted under applicable law and the provisions of the Articles of
Incorporation of the Company, to vote or cause the Custodian to vote the Shares
represented by ADSs evidenced by such ADRs in accordance with the instructions
set forth in such request. Holders and Beneficial Owners acknowledge, however,
that the Company may not notify the Depositary sufficiently in advance of the
scheduled date of a meeting or solicitation of consents or proxies to enable the
Depositary to make a timely mailing of such notices to the Holders of ADRs, and
that the Holders of ADRs may not receive such notices sufficiently in advance of
a meeting or solicitation of consents or proxies to give instructions to the
Depositary. The Depositary shall not attempt to exercise the right to vote that
attaches to the Shares or other Deposited Securities other than in accordance
with such instructions. Absent its negligence, bad faith or willful misconduct,
neither the Depositary nor the Custodian shall, under any circumstances exercise
any discretion as to voting and neither the Depositary nor the Custodian shall
vote or attempt to exercise the right to vote the Shares or other Deposited
Securities represented by ADSs except pursuant to and in accordance with the
written voting instructions (including those instructions in electronic form)
from Holders or in accordance with the provisions of Section 4.09 of the Deposit
Agreement.
To the extent the Depositary does not receive instructions from the
Holders on or prior to such date, the Depositary shall vote or cause to be voted
the Shares or other Deposited Securities in the same manner and in the same
proportion as the holders of all other outstanding Shares or other Deposited
Securities (except for those represented by ADSs for which no voting
instructions have been given) vote their Shares or other Deposited Securities at
the meeting. In the event the Company has not timely delivered notice and voting
materials in accordance with the terms hereof and the terms of Section 4.09 of
the Deposit Agreement, the Depositary shall not, and shall ensure that the
Custodian does not, vote or cause the Custodian to vote the Shares or other
Deposited Securities represented by such ADSs.
Notwithstanding anything else contained in this Deposit Agreement or
any Receipt, the Depositary shall not have any obligation to take any action
with respect to any meeting, or solicitation of consents or proxies, of holders
of Deposited Securities if the taking of such action would violate U.S. laws.
The Company agrees to take any and all actions reasonably necessary to enable
Holders and Beneficial Owners to exercise the voting rights accruing to the
Deposited Securities.
A Holder or Beneficial Owner of ADSs shall not be entitled to give
any instructions with respect to voting rights associated with ADSs evidenced by
ADRs held by such Holder if and to the extent the total number of Shares
beneficially owned by such Holder or Beneficial Owner exceeds any limit which
the Company may, from time to time, notify the Depositary. The Company and the
Depositary may take any and all action necessary or desirable to enforce the
restrictions on the exercise of voting rights set forth in the preceding
sentence.
The Company acknowledges and agrees that the provisions of Section
5.10 of the Deposit Agreement shall apply to any liability or expense of the
Depositary which may arise out of or in connection with any action of the
Depositary or the Custodian in voting pursuant to Section 4.09 of the Deposit
Agreement.
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(15) Changes Affecting Deposited Securities. Upon any change in par
value, split-up, cancellation, consolidation or any other reclassification of
Deposited Securities, or upon any recapitalization, reorganization, merger or
consolidation of the Company or sale of assets by the Company, any securities
which will 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 under the Deposit Agreement, and the ADSs shall, subject to
the terms of the Deposit Agreement and applicable laws, including any applicable
provisions of the Securities Act of 1933 and the Securities Exchange Act of
1934, thenceforth represent the new Deposited Securities so received, unless
additional or new ADSs are created pursuant to the following sentence.
Alternatively, the Depositary may, with the Company's approval and pursuant to
applicable law, and shall, at the Company's request and pursuant to applicable
law, and subject to Section 5.09 of the Deposit Agreement, create new or
additional ADSs representing such new Deposited Securities and execute and
deliver additional Receipts evidencing such ADSs as in the case of a stock
dividend on the Shares, and may call for the surrender of outstanding Receipts
to be exchanged for new Receipts specifically describing such new Deposited
Securities. Notwithstanding the foregoing, in the event that any security so
received may not be lawfully distributed to some or all Holders in the
reasonable judgment of the Depositary and its counsel after consultation with
the Company, the Depositary may, with the Company's approval, and shall, if the
Company requests, subject to receipt of an opinion of Company's counsel
reasonably satisfactory to the Depositary that such action is not in violation
of any applicable laws or regulations, sell such securities at public or private
sale, at such place or places and upon such terms as it may deem proper and may
allocate the net proceeds of such sales (net of (a) fees and charges of, and
expenses incurred by, the Depositary and (b) taxes) for the account of the
Holders otherwise entitled to such securities upon an averaged or other
practicable basis without regard to any distinctions among such Holders and
distribute the net proceeds so allocated to the extent practicable as in the
case of a distribution received in cash pursuant to Section 4.02 of the Deposit
Agreement. The Depositary shall not be responsible for (i) any failure to
determine that it may be lawful or commercially feasible to make such securities
available to Holders in general or to any Holder in particular that is not due
to its negligence, (ii) any foreign exchange exposure or loss incurred in
connection with such sale, or (iii) any liability to the purchaser of such
securities. Immediately upon the occurrence of any such change, conversion or
exchange covered by Section 4.10 of the Deposit Agreement in respect of the
Deposited Securities, the Depositary shall, subject to applicable law, give
notice thereof, at the Company's expense, in writing to all Holders.
(16) Reports; Inspection of Transfer Books. The Depositary shall
make available for inspection by Holders at its Principal Office and at the
office of each Custodian copies of the Deposit Agreement, any notices, reports
or communications, including any proxy soliciting materials, received from the
Company which are both (a) received by the Depositary or 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 copies of such notices, reports and
communications when furnished by the Company to the Depositary as provided in
the Deposit Agreement. The Depositary shall keep books at its Principal Office
for the registration of Receipts and their transfer which at all reasonable
times will be open for inspection by Holders and the Company; provided, that
such inspection shall not to the 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 the Deposit Agreement or the
A-15
Receipts. Upon notice to the Company, the Depositary may close the transfer
books, at any time or from time or time, when deemed expedient by it in
connection with the performance of its duties under the Deposit Agreement.
(17) Withholding. Notwithstanding any other provision of the Deposit
Agreement, in the event that the Depositary determines, based on the advice of
counsel, that any distribution in property (including Shares or rights to
subscribe therefor or 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 Shares and rights to
subscribe therefor or 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 commercially feasible without withholding for or on account
of taxes or other governmental charges, without registration of such Shares or
other securities under the Securities Act of 1933 and otherwise in compliance
with applicable law, distribute any unsold balance of such property in
accordance with the provisions of the Deposit Agreement.
(18) Liability of the Company and Depositary. Neither the Depositary
nor the Company shall incur any liability to any Holder or Beneficial Owner if,
by reason of any provision of any present or future law of the United States,
Korea or any other country or jurisdiction, or of any other governmental
authority, or by reason of any provision, present or future, of the Articles of
Incorporation of the Company, or by reason of any act of God, terrorism or war
or other circumstances beyond its control, the Depositary or the Company shall
be prevented, delayed or forbidden from, or subject to any civil or criminal
liability on account of, doing or performing any act or thing which by the terms
of the Deposit Agreement it is provided shall be done or performed; nor shall
the Depositary or the Company incur any liability to any Holder or Beneficial
Owner by reason of any non-performance or delay, caused as aforesaid, in the
performance of any act or thing which by the terms of the 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 the Deposit Agreement.
Neither the Depositary nor the Company shall be obligated to do or perform any
act which is inconsistent with the provisions of the Deposit Agreement or incur
any liability for the inability by a Holder or Beneficial Owner to benefit from
any distribution, offering, right or other benefit which is made available to
holders of Deposited Securities but is not, under the terms of the Deposit
Agreement, made available to Holders of ADSs. Neither the Company nor the
Depositary assumes any obligation or shall be subject to any liability under the
Deposit Agreement or this Receipt to Holders, Beneficial Owners or other
persons, including for any consequential or punitive damages for any breach of
the terms of the Deposit Agreement, except that each of them agrees to act in
good faith and without negligence in the performance of its obligations as are
specifically set forth in the Deposit Agreement. The Depositary and the Company
undertake to perform such duties and only such duties as are specifically set
forth in the Deposit Agreement, 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 shall be under any obligation to appear in,
prosecute or defend any action, suit or other proceeding in respect of any
Deposited Securities or in respect of the Receipts, which in its opinion may
involve it in expense and liability, unless indemnity satisfactory to it against
A-16
all expense and liability shall be furnished as often as may be required, and no
Custodian shall be under any obligation whatsoever with respect to such
proceedings, the responsibility of the Custodian being solely to the Depositary.
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 Shares for deposit, any Holder or Beneficial
Owner, 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
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.
Neither the Depositary and its agents nor the Company shall be
liable for any failure by the Depositary to carry out any instructions to vote
any of the Deposited Securities, or for the manner in which any vote is cast or
the effect of any vote; provided, that any such action or omission is in good
faith and without negligence and in accordance with the terms of the Deposit
Agreement. Neither the Depositary nor the Company shall incur any liability for
any failure to determine that any distribution or action may be lawful or
commercially feasible, for any investment risk associated with acquiring an
interest in the Deposited Securities, for any tax consequences that may result
from the ownership of ADSs, Shares or Deposited Securities, for the
credit-worthiness of any third party or for allowing any rights to lapse upon
the terms of the Deposit Agreement. The Depositary shall not incur any liability
for the content of any information submitted to it by the Company for
distribution to the Holders, for any inaccuracy of any translation thereof
(provided the Depositary was not involved in translating such information), for
the validity or worth of the Deposited Securities or for the failure or
timeliness of any notice from the Company.
No disclaimer of liability under the Securities Act of 1933 is
intended by any provision of the Deposit Agreement.
(19) Certain Rights of the Depositary; Limitations. Subject to the
further terms and provisions of Sections 5.11 and 3.05 of the Deposit Agreement
and applicable Korean law, the Depositary, its Affiliates and their agents may
own and deal in any class of securities of the Company and its Affiliates and in
ADSs. The Depositary may cause the issuance of ADSs against evidence of rights
to receive Shares from the Company, or any custodian, registrar, transfer agent,
clearing agency or other entity involved in ownership or transaction records in
respect of the Shares. Such evidence of rights shall consist of written blanket
or specific guarantees of ownership of Shares furnished on behalf of the holder
thereof. In its capacity as Depositary, the Depositary shall not lend Shares or
ADSs; provided, however, that to the extent permitted by Korean law, the
Depositary reserves the right to (i) cause the issuance of ADSs prior to the
receipt of Shares pursuant to Section 2.02 of the Deposit Agreement and (ii)
deliver Shares prior to the receipt and cancellation of ADSs pursuant to Section
2.05 of the Deposit Agreement, including ADSs which were issued under (i) above
but for which Shares may not have been received; further provided, however, that
the Depositary shall not issue ADSs prior to the receipt of Shares in the case
of the deposit of Shares by the Company in connection with an offering of ADSs
or pursuant to Sections 4.04 or 4.06 of the Deposit Agreement, unless requested
by the Company and to the extent permitted by applicable Korean law. The
Depositary may receive ADSs in lieu of Shares under (i) above and receive Shares
in lieu of ADSs under (ii) above. Each such transaction shall be (a) subject to
A-17
a written agreement whereby the person or entity (the "Applicant") to whom ADSs
or Shares are to be delivered (w) represents that at the time of the pre-release
transaction the Applicant or its customer owns the Shares or ADSs that are to be
delivered by the Applicant under such pre-release transaction, (x) agrees to
indicate the Depositary as owner of such Shares or ADSs in its records and to
hold such Shares or ADSs in trust for the Depositary until such Shares or ADSs
are delivered to the Depositary or the Custodian, (y) unconditionally guarantees
to deliver to the Depositary or the Custodian, as applicable, such Shares or
ADSs, and (z) agrees to any additional restrictions or requirements that the
Depositary deems reasonably appropriate, (b) at all times fully collateralized
with cash, U.S. government securities or such other collateral as the Depositary
deems appropriate, (c) terminable by the Depositary on not more than five (5)
business days' notice and (d) subject to such further indemnities and credit
regulations as the Depositary deems appropriate. The Depositary will normally
limit the number of ADSs and Shares involved in such pre-release transactions at
any one time to thirty percent (30%) of the ADSs outstanding (without giving
effect to ADSs outstanding under (i) above); provided, however, that the
Depositary reserves the right to change or disregard such limit from time to
time as it deems appropriate; further, provided, however, that the Depositary
shall not enter into any transaction under (i) or (ii) above that will have the
effect of exceeding the thirty percent (30%) limitation without providing prior
notice to the Company of the Depositary's entering into of any such transaction.
The Depositary may also set limits with respect to the number of
ADSs and Shares involved in pre-release transactions with any one person on a
case-by-case basis as it deems appropriate; provided, however, that the
Depositary shall not enter into any transaction under (i) or (ii) above that
will have the effect of exceeding the thirty percent (30%) limitation without
providing prior notice to the Company of the Depositary's entering into of any
such transaction. The Depositary may retain for its own account any compensation
received by it in conjunction with the foregoing. Collateral provided pursuant
to (b) above, but not the earnings thereon, shall be held for the benefit of the
Holders (other than the Applicant).
(20) Resignation and Removal of Depositary; Substitution of
Custodian. The Depositary may at any time resign as Depositary under the Deposit
Agreement by ninety (90) days' prior written notice of its election so to do
delivered 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. The Depositary may at any time be removed by the Company
by ninety (90) days' prior written notice of such removal, which shall become
effective upon the appointment of a successor depositary and its acceptance of
such appointment as provided in the Deposit Agreement. The Depositary may after
consultation with the Company, when it determines that it is appropriate to do
so, appoint a substitute or an additional custodian and the term "Custodian"
shall also refer to such substitute or additional custodian.
(21) Amendment and Supplement of Deposit Agreement and Receipts.
This Receipt and the Deposit Agreement may at any time and from time to time be
amended or supplemental by agreement between the Company and the Depositary in
any respect which they may deem necessary or desirable. Any amendment or
supplement which shall impose or increase any fees or charges (other than
charges in connection with foreign exchange control regulations, and taxes and
other governmental charges, delivery and other such expenses), or which shall
otherwise prejudice any substantial existing right of Holders or Beneficial
A-18
Owners shall not, however, become effective as to outstanding Receipts until the
expiration of 30 days after notice of such amendment or supplement shall have
been given to the Holders of outstanding Receipts in accordance with Section
7.05 of the Deposit Agreement. The parties to the Deposit Agreement agree that
any amendments or supplements which (i) are reasonably necessary (as agreed by
the Company and the Depositary) in order for (a) the ADSs to be registered on
Form F-6 under the Securities Act of 1933 or (b) the ADSs to be traded solely in
electronic book-entry form and (ii) do not in either such case impose or
increase any fees or charges to be borne by Holders, shall be deemed not to
materially prejudice any substantial rights of Holders or Beneficial Owners.
Every Holder and Beneficial Owner at the time any amendment or supplement so
becomes effective shall be deemed, by continuing to hold this Receipt or to own
any beneficial interest herein, to consent and agree to such amendment or
supplement and to be bound by the Deposit Agreement and this Receipt as amended
or supplemented thereby. In no event shall any amendment or supplement impair
the right of the Holder to surrender this Receipt and receive therefor the
Deposited Securities represented thereby, except in order to comply with
mandatory provisions of applicable law. Notwithstanding the foregoing, if any
governmental body should adopt new laws, rules or regulations which would
require an amendment of, or supplement to, the Deposit Agreement to ensure
compliance therewith, the Company and the Depositary may amend or supplement the
Deposit Agreement and this Receipt at any time in accordance with such changed
laws, rules or regulations. Such amendment or supplement to the Deposit
Agreement and this Receipt in such circumstances may become effective before a
notice of such amendment or supplement is given to Holders or within any other
period of time as required for compliance with such laws, rules or regulations.
(22) Termination of Deposit Agreement. The Depositary shall, at any
time at the written direction of the Company, terminate the Deposit Agreement by
providing notice of such termination to the Holders of all ADRs then outstanding
at least thirty (30) days prior to the date fixed in such notice for such
termination. If ninety (90) days shall have expired after (i) the Depositary
shall have delivered to the Company a written notice of its election to resign,
or (ii) the Company shall have delivered to the Depositary a written notice of
the removal of the Depositary, and in either case a successor depositary shall
not have been appointed and accepted its appointment as provided in Section 5.05
of the Deposit Agreement, the Depositary may terminate the Deposit Agreement by
providing notice of such termination to the Holders of all ADRs then outstanding
at least thirty (30) days prior to the date fixed for such termination. On and
after the date of termination of the Deposit Agreement, the Holder of an ADR
will, upon surrender of such ADR at the Principal Office of the Depositary, upon
the payment of the charges of the Depositary for the surrender of ADRs referred
to in Section 2.05 of the Deposit Agreement and subject to the conditions and
restrictions therein set forth, and upon payment of any applicable taxes or
governmental charges, be entitled to delivery, to him or upon his order, of the
amount of Deposited Securities represented by such ADR. If any Receipts shall
remain outstanding after the date of termination, the Depositary thereafter
shall discontinue the registration of transfers of Receipts, shall suspend the
distribution of dividends to the Holders thereof, shall not accept deposits of
Shares (and shall instruct each Custodian to act accordingly), and shall not
give any further notices or perform any further acts under the Deposit
Agreement, except that the Depositary shall continue to collect dividends and
other distributions pertaining to Deposited Securities, shall sell property and
rights and convert Deposited Securities into cash as provided in the Deposit
Agreement, and shall continue to deliver Deposited Securities, together with any
A-19
dividends or other distributions received with respect thereto and the net
proceeds of the sale of any rights or other property, in exchange for Receipts
surrendered to the Depositary (after deducting, or charging, as the case may be,
in each case, the charges of the Depositary for the surrender of an ADR, any
expenses for the account of the Holder in accordance with the terms and
conditions of the Deposit Agreement and any applicable taxes or governmental
charges or assessments). At any time after the expiration of six 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 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 the Deposit Agreement, except to account
for such net proceeds and other cash (after deducting, or charging, as the case
may be, in each case, the charges of the Depositary for the surrender of an ADR,
any expenses for the account of the Holder in accordance with the terms and
conditions of the Deposit Agreement and any applicable taxes or governmental
charges or assessments) and its obligations under Section 5.10 of the Deposit
Agreement. Upon the termination of the Deposit Agreement, the Company shall be
discharged from all obligations under the Deposit Agreement except for its
obligations to the Depositary under Sections 5.06, 5.10 and 7.06 of the Deposit
Agreement.
(23) Governing Law. The Deposit Agreement and this Receipt shall be
interpreted in accordance with, and all rights thereunder and hereunder and
provisions thereof and hereof shall be governed by, the laws of the State of New
York. Notwithstanding anything contained in the Deposit Agreement, this Receipt
or any present or future provisions of the laws of the State of New York, the
rights of holders of Shares and of any other Deposited Securities and the
obligations and duties of the Company in respect of the holders of Shares and
other Deposited Securities, as such, shall be governed by the laws of Korea (or,
if applicable, such other laws as may govern the Deposited Securities).
(24) Power of Attorney. Each Holder and Beneficial Owner, upon
acceptance of this Receipt hereby 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 or in the Deposit Agreement with
respect to the Deposited Securities, including but not limited to those set
forth in Section 3.05 and Article IV of the Deposit Agreement, and to take such
further steps or action as the Depositary in its reasonable discretion may deem
necessary or appropriate to carry out the purposes of the Deposit Agreement.
A-20
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and transfers unto
--------------------------------------------------------------------------------
whose taxpayer identification number is
--------------------------------------------------------------------------------
and whose address is 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: Signature
---------------- ----------------------------------------------
Name:
Title:
SIGNATURE GUARANTEED 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
-------------------- alternation or enlargement or any change whatsoever. If
the endorsement be executed by an attorney, executor,
administrator, trustee or guardian, the person executing
the endorsement must give his/her full title in such
capacity and proper evidence of authority to act in such
capacity, if not on file with the Depositary, must be
forwarded with this ADR.
All endorsements or assignments of Receipts must be
guaranteed by a member of a Medallion Signature Program
approved by the Securities Transfer Association Inc.
A-21
EXHIBIT B
FEE SCHEDULE
DEPOSITARY FEES AND RELATED CHARGES
All capitalized terms used but not otherwise defined herein shall
have the meaning given to such terms in the Deposit Agreement.
(a) Depositary Fees
The Holders, the Beneficial Owners, the persons depositing Shares or
surrendering ADSs for cancellation and, to the extent applicable to it, the
Company agree to pay the following fees of the Depositary:
---------------------------------------- ------------------------------------- -------------------------------------
Service Rate By Whom Paid
---------------------------------------- ------------------------------------- -------------------------------------
(1) Issuance of ADSs upon deposit Up to U.S. $5.00 per 100 ADSs (or Person depositing Shares or person
of Shares (excluding fraction thereof) issued. receiving ADSs.
issuances contemplated by
paragraphs (3)(b) and (6)
below).
---------------------------------------- ------------------------------------- -------------------------------------
(2) Delivery of Deposited Up to U.S. $5.00 per 100 ADSs (or Person surrendering ADSs for
Securities against surrender fraction thereof) surrendered. purpose of withdrawal of Deposited
of ADSs. Securities or person to whom
Deposited Securities are delivered.
---------------------------------------- ------------------------------------- -------------------------------------
(3) Distribution of (a) cash No fee, to the extent prohibited by Person to whom distribution is made.
dividends or (b) ADSs the exchange upon which the ADSs
pursuant to stock dividends. are listed. If the charging of
such fee is not prohibited, the
fees specified in (4) below shall
be payable.
---------------------------------------- ------------------------------------- -------------------------------------
(4) Distribution of (a) cash Up to U.S. $2.00 per 100 ADSs (or Person to whom distribution is made.
proceeds (i.e., upon sale of fraction thereof) held.
rights and other
entitlements) or (b) free
shares in the form of ADSs
(not constituting a stock
dividend).
---------------------------------------- ------------------------------------- -------------------------------------
(5) Distribution of securities Up to U.S. $5.00 per unit of 100 Person to whom distribution is made.
other than ADSs or rights to securities (or fraction thereof)
purchase additional ADSs distributed.
(i.e., spin-off shares).
---------------------------------------- ------------------------------------- -------------------------------------
(6) Distribution of ADSs pursuant Up to U.S. $2.00 per 100 ADSs (or Person who exercises such rights.
to exercise of rights to fraction thereof) held.
purchase additional ADSs.
---------------------------------------- ------------------------------------- -------------------------------------
B-1
(b) Charges
Holders, Beneficial Owners, persons depositing Shares for deposit
and persons surrendering ADSs for cancellation and for the purpose of
withdrawing Deposited Securities shall be responsible for the following charges:
(i) taxes (including applicable interest and penalties) and other
governmental charges;
(ii) such registration fees as may from time to time be in effect
for the registration of Shares or other Deposited Securities
on the share register and applicable to transfers of Shares or
other Deposited Securities to or from the name of the
Custodian, the Depositary or any nominees upon the making of
deposits and withdrawals, respectively;
(iii) such cable, telex and facsimile transmission and delivery
expenses as are expressly provided in the Deposit Agreement to
be at the expense of the person depositing or withdrawing
Shares or Holders and Beneficial Owners of ADSs;
(iv) the expenses and charges incurred by the Depositary in the
conversion of foreign currency;
(v) such fees and expenses as are incurred by the Depositary in
connection with compliance with exchange control regulations
and other regulatory requirements applicable to Shares,
Deposited Securities, ADSs and ADRs; and
(vi) the fees and expenses incurred by the Depositary, the
Custodian or any nominee in connection with the servicing or
delivery of Deposited Securities.
B-2
