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PREFERRED STOCK DEPOSIT AGREEMENT
BETWEEN
CITIBANK, N.A.
as Depositary
AND
HOLDERS OF
GLOBAL DEPOSITARY RECEIPTS
EVIDENCING
GLOBAL DEPOSITARY SHARES
REPRESENTING
SERIES III CONVERTIBLE PREFERRED STOCK
OF
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
Dated as of November 29, 1994
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TABLE OF CONTENTS
Page
ARTICLE I DEFINITIONS..........................................................................1
Section 1.01 Commission...........................................................................1
Section 1.02 Common Stock.........................................................................1
Section 1.03 Common Stock Deposit Agreement.......................................................1
Section 1.04 Company..............................................................................1
Section 1.05 Company Agreement....................................................................1
Section 1.06 Conversion Agent.....................................................................1
Section 1.07 Custodian............................................................................2
Section 1.08 Deposit Agreement....................................................................2
Section 1.09 Depositary...........................................................................2
Section 1.10 Deposited Securities.................................................................2
Section 1.11 Dollars: Pesos.......................................................................2
Section 1.12 GDRs.................................................................................2
Section 1.13 GDSs.................................................................................2
Section 1.14 Holder...............................................................................2
Section 1.15 Initial Deposit......................................................................2
Section 1.16 Nominee..............................................................................3
Section 1.17 Philippines..........................................................................3
Section 1.18 Principal New York Office............................................................3
Section 1.19 Registrar............................................................................3
Section 1.20 Securities Act.......................................................................3
Section 1.21 Securities Exchange Act..............................................................3
Section 1.22 Shares...............................................................................3
ARTICLE II FORM OF GDRs, DEPOSIT OF SHARES, EXECUTION AND DELIVERY, TRANSFER AND SURRENDER
OF GDRs..............................................................................4
Section 2.01 Form and Transferability of GDRs.....................................................4
Section 2.02 Deposit of Shares....................................................................5
Section 2.03 Execution and Delivery of GDRs.......................................................6
Section 2.04 Transfer of GDRs; Combination and Split-up of GDRs...................................7
Section 2.05 Surrender of GDRs and Withdrawal of Deposited Securities.............................7
Section 2.06 Conversion of Shares; Mandatory Conversion...........................................8
Section 2.07 Limitations on Execution and Delivery, Transfer, Etc. of GDRs; Suspension of
Delivery, Transfer, Etc.............................................................10
Section 2.08 Lost GDRs, etc......................................................................12
Section 2.09 Cancellation and Destruction of Surrendered GDRs....................................12
Section 2.10 Maintenance of Records..............................................................12
ARTICLE III CERTAIN OBLIGATIONS OF HOLDERS OF GDRs..............................................12
Section 3.01 Filing Proofs, Certificates and Other Information...................................12
Section 3.02 Liability of Holders for Taxes and Other Charges....................................13
Section 3.03 Representations and Warranties on Deposit, Transfer, Surrender and Withdrawal of
Shares or GDRs......................................................................13
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Section 3.04 Disclosure of Interests.............................................................13
Section 3.05 Ownership Restrictions..............................................................13
ARTICLE IV RIGHTS RELATING TO THE DEPOSITED SECURITIES; CERTAIN OBLIGATIONS OF THE
DEPOSITARY..........................................................................14
Section 4.01 Power of Attorney...................................................................14
Section 4.02 Cash Distributions; Withholding.....................................................14
Section 4.03 Distributions in Shares.............................................................14
Section 4.04 Distribution of Rights..............................................................15
Section 4.05 Distributions Other Than Cash, Shares or Rights.....................................16
Section 4.06 Conversion of Foreign Currency......................................................17
Section 4.07 Fixing of Record Date...............................................................18
Section 4.08 Voting of Deposited Securities......................................................18
Section 4.09 Changes Affecting Deposited Securities..............................................19
Section 4.10 Transmittal by the Depositary of Company Notices, Reports and Communications........19
Section 4.11 Withholding.........................................................................20
Section 4.12 Available Information...............................................................20
Section 4.13 Lists of Receipt Holders............................................................21
ARTICLE V THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY.......................................21
Section 5.01 Maintenance of Depositary's Office and Register.....................................21
Section 5.02 Obligations of the Depositary, the Custodian and the Company........................22
Section 5.03 Prevention or Delay in Performance by the Depositary or the Company.................22
Section 5.04 Resignation of the Depositary; Appointment of Successor Depositary..................23
Section 5.05 Charges of Depositary...............................................................23
Section 5.06 The Custodian.......................................................................24
Section 5.07 Notices, Reports and Communications.................................................25
Section 5.08 Issuance of Additional Shares, Etc..................................................26
Section 5.09 Indemnification.....................................................................26
ARTICLE VI AMENDMENT AND TERMINATION...........................................................27
Section 6.01 Amendment...........................................................................27
Section 6.02 Termination.........................................................................28
ARTICLE VII MISCELLANEOUS.......................................................................28
Section 7.01 Counterparts........................................................................28
Section 7.02 Third Party Beneficiaries...........................................................28
Section 7.03 Severability........................................................................28
Section 7.04 Holders as Parties; Binding Effect..................................................28
Section 7.05 Notices.............................................................................29
Section 7.06 Governing Law.......................................................................29
Section 7.07 Compliance with U.S. Securities Laws................................................29
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PREFERRED STOCK DEPOSIT AGREEMENT
DEPOSIT AGREEMENT dated as of November 29, 1994 between CITIBANK, N.A.,
a national banking association organized under the laws of the United States, as
depositary (such entity and any successor as depositary hereunder, the
"Depositary"), and all holders from time to time of the GDRs issued hereunder
and the GDSs evidenced by such GDRs. The GDSs shall represent Shares (as
hereinafter defined) of PHILIPPINE LONG DISTANCE TELEPHONE COMPANY, a
corporation organized under the laws of the Republic of the Philippines (the
"Company").
W I T N E S S E T H:
WHEREAS, the Depositary desires to provide for the Initial Deposit of
Shares, for the deposit of additional Shares from time to time thereafter with
the Depositary or with the Custodian, for the creation of GDSs representing the
Shares so deposited and for the execution and delivery of GDRs evidencing the
GDSs;
NOW, THEREFORE, in consideration of the premises the parties hereto
agree as follows:
ARTICLE I
DEFINITIONS
The following definitions shall for all purposes, unless otherwise
clearly indicated, apply to the respective terms used in this Deposit Agreement:
Section 1.01 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 1.02 Common Stock. The term "Common Stock" shall mean the
common capital stock of the Company, par value P5 per share, and shall include
evidence of rights to receive Common Stock (including, but not limited to,
purchase invoices as may effectuate the legal transfer of title to Common Stock
under Philippine law).
Section 1.03 Common Stock Deposit Agreement. The term "Common Stock
Deposit Agreement" shall have the meaning set forth in Section 2.06(a).
Section 1.04 Company. The term "Company" shall have the meaning set
forth in the introductory paragraph of this Deposit Agreement.
Section 1.05 Company Agreement. The term "Company Agreement" shall have
the meaning given such term in Section 4.10.
Section 1.06 Conversion Agent. The term "Conversion Agent" shall mean
the conversion agent appointed by the Company from time to time in respect of
the
Shares, which is, as of the date hereof, Citibank, N.A., Manila, 8741 Paseo de
Roxas, Makati, Metro Manila, Philippines.
Section 1.07 Custodian. The term "Custodian" shall mean, as of the date
hereof, Citibank, N.A., Manila, 8741 Paseo de Roxas, Makati, Metro Manila,
Philippines, as agent of the Depositary for the purposes of this Deposit
Agreement, and any other firm or corporation that may be appointed by the
Depositary pursuant to the terms of Section 5.07 as additional or substitute
Custodian hereunder, as the context shall require, and the term "Custodian"
shall mean all of them, collectively.
Section 1.08 Deposit Agreement. The term "Deposit Agreement" shall mean
this Deposit Agreement, as the same may be amended from time to time in
accordance with the provisions hereof and all instruments supplemental hereto.
Section 1.09 Depositary. The term "Depositary" shall have the meaning
set forth in the introductory paragraph of this Deposit Agreement.
Section 1.10 Deposited Securities. The term "Deposited Securities" as
of any time shall mean the Shares at such time deposited under this Deposit
Agreement and any and all other securities, property and cash received by the
Depositary or the Custodian in respect thereof and at such time held hereunder,
subject in the case of cash to the provisions of Section 4.06.
Section 1.11 Dollars: Pesos. The term "dollars" shall mean United
States dollars. The term "Pesos" or "P" shall mean Philippine pesos.
Section 1.12 GDRs. The term "GDRs" shall mean the Global Depositary
Receipts issued hereunder evidencing GDSs, as such Global Depositary Receipts
may be time to time in accordance with the provisions of this Deposit Agreement.
A GDR may evidence any number of GDSs.
Section 1.13 The term "GDSs" shall mean the rights evidenced by the
GDRs issued hereunder and the interests in the Deposited Securities represented
thereby. Each GDS shall represent one Share until there shall occur a
distribution upon Deposited Securities referred to in Section 4.03 or a change
in Deposited Securities referred to in Section 4.09 with respect to which
additional GDRs are not issued, and thereafter each GDS shall represent the
right to receive the Deposited Securities specified in such Sections.
Section 1.14 Holder. The term "Holder" shall mean the person or persons
in whose name a GDR is registered on the register of the Depositary maintained
for such purpose.
Section 1.15 Initial Deposit. The term "Initial Deposit" shall mean the
deposit of Shares with the Custodian as described in the Underwriting Agreement
(the "Underwriting Agreement") between the Company and the Underwriters named
therein (the "Underwriters"), dated November 21, 1994.
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Section 1.16 Nominee. The term "Nominee" when used with respect to the
Depositary shall mean Citicorp Trade Services Limited, a corporation organized
under the laws of Hong Kong. The Nominee shall perform in whatever capacity and
to whatever extent under this Deposit Agreement as the Depositary designates in
its appointment of the Nominee. Such appointment may be evidenced by written
agreement, letter, telegram, telex or facsimile transmission or orally with
subsequent confirming agreement, letter, telegram, telex or facsimile
transmission.
Section 1.17 Philippines. The term "Philippines" shall mean the
Republic of the Philippines.
Section 1.18 Principal New York Office. The term "Principal New York
Office," when used with respect to the Depositary, shall be the principal office
of the Depositary in The City of New York at which at any particular time its
corporate trust business shall be administered, which at the date of this
Deposit Agreement is located at 111 Wall Street, 5th Floor, New York, New York
10043.
Section 1.19 Registrar. The term "Registrar" shall mean any bank or
trust company having an office in the Borough of Manhattan, The City of New
York, appointed by the Depositary to register GDRs and transfers of GDRs as
herein provided, and shall include any co-registrar appointed by the Depositary
for such purposes.
Section 1.20 Securities Act. The term "Securities Act" shall mean the
United States Securities Act of 1933, as from time to time amended.
Section 1.21 Securities Exchange Act. The term "Securities Exchange
Act" shall mean the United States Securities Exchange Act of 1934, as from time
to time amended.
Section 1.22 Shares. The term "Shares" shall mean Series III
Convertible Preferred Stock of the Company, par value P10 per share, convertible
into Common Stock, and shall include evidence of rights to receive Shares
(including, but not limited to, purchase invoices and assignment as may
effectuate the legal transfer of title to Shares under Philippine law);
provided, however, that if there shall occur any change in par value, a split-up
or consolidation or any other reclassification or, upon the occurrence of an
event described in Section 4.09, an exchange or conversion in respect of the
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.
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ARTICLE II
FORM OF GDRs, DEPOSIT OF
SHARES, EXECUTION
AND DELIVERY,
TRANSFER AND SURRENDER OF GDRs
Section 2.01 Form and Transferability of GDRs. The GDRs shall be
engraved, lithographed or printed on steel engraved borders, or in such other
form as may be determined by the Depositary after consultation with the Company,
and shall be substantially in the form set forth in Exhibit A annexed to this
Deposit Agreement, with appropriate insertions, modifications and omissions, as
hereinafter provided.
GDRs shall be executed and dated by the Depositary by the manual or
facsimile signature of a duly authorized officer of the Depositary; provided,
however, that such signature may be a facsimile only if a Registrar for the GDRs
shall have been appointed and such GDRs are countersigned by the manual
signature of a duly authorized officer of the Registrar and dated by such
officer. No GDR shall be entitled to any benefits under this Deposit Agreement
or be valid or obligatory for any purpose unless such GDR shall have been
executed by the Depositary by the manual signature of a duly authorized officer
or, if a Registrar shall have been appointed, by the manual signature of a duly
authorized officer of the Registrar, and such execution of any GDR by manual
signature shall be conclusive evidence, and the only evidence, that such GDR has
been duly executed and delivered hereunder. The Depositary shall maintain a
register in which each GDR so executed and delivered as hereinafter provided and
any transfer of each such GDR shall be registered. GDRs bearing the facsimile
signature of a duly authorized signatory of the Depositary who was at any time a
proper signatory of the Depositary shall bind the Depositary, notwithstanding
that such signatory has ceased to hold such position prior to the execution of
such GDRs by the Registrar and their delivery or such signatory did not hold
such position at the date of such GDRs.
The GDRs may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes not inconsistent with the provisions of this
Deposit Agreement as may be required to comply with the requirements of any
applicable law or regulation, or with the rules and regulations of any
securities exchange or market upon which GDRs may be listed or traded or to
conform with any usage with respect thereto, or to indicate any special
limitations or restrictions to which any particular GDRs are subject by reason
of the date of issuance of the underlying Deposited Securities or as the
Depositary may from time to time determine after consultation with the Company.
Subject to any limitations set forth in a GDR or in this Deposit
Agreement, when such GDR is properly endorsed or accompanied by proper
instruments of transfer (including signature guarantees in accordance with
standard industry practice), and upon compliance with the restrictions on
transfer set forth in any legends appearing on such GDR, title to such GDR (and
to each GDS evidenced thereby) shall be transferable by delivery with the same
effect as in the case of a negotiable instrument in accordance with the laws of
the State of New York; provided, however, that the Company and the
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Depositary, notwithstanding any notice to the contrary, may deem and treat the
Holder of a GDR as the absolute owner thereof for any purpose, including but not
limited to the purpose of determining the person entitled to distribution of
dividends or other distributions or to any notice provided for in this Deposit
Agreement and neither the Depositary nor the Company shall have any obligation
or be subject to any liability under this Deposit Agreement to any holder of a
GDR unless such holder is the Holder thereof.
Section 2.02 Deposit of Shares. The Initial Deposit will be made by
physical delivery of Shares to the Custodian, registered in the name of the
Nominee. Subject to the terms and conditions of this Deposit Agreement, upon
such Initial Deposit the Depositary shall execute and deliver GDRs evidencing
the GDSs representing the Deposited Securities constituting the Initial Deposit
in the manner provided in Section 2.03 of this Deposit Agreement.
Subject to the terms and conditions of this Deposit Agreement, the
Custodian shall accept Shares for subsequent deposit hereunder when such deposit
is made by (i) delivery of certificates evidencing such Shares to the Custodian,
accompanied by any appropriate instrument or instruments of transfer or
endorsement in form satisfactory to the Custodian together with such other
documentation as the Depositary and the Company may require and the fees and
expenses of the Depositary as herein provided and (ii) a written order to the
Custodian instructing the Custodian to direct the Depositary to execute and
deliver to, or upon the written order of, the person or persons stated in such
order, a GDR or GDRs for the number of GDSs representing such deposited Shares.
The Depositary and the Custodian shall refuse to accept Shares for
deposit and issue GDRs whenever they have been notified, as hereafter provided,
that the Company has restricted transfer of such Shares to comply with the
ownership restrictions referred to in Section 3.05 or that such deposit would
result in a violation of any applicable laws or regulations. The Company has
agreed with the Depositary to notify the Depositary and the Custodian in writing
with respect to any such restrictions on transfer of its Shares for deposit
hereunder.
As a condition of accepting Shares for deposit and issuing GDRs, the
Depositary may require that the person making such deposit furnish (a) evidence
satisfactory to the Depositary (which may be an opinion of counsel) that any
necessary approval has been granted by the governmental body in the Philippines,
if any, which is then performing the function of the regulation of currency
exchange, (b) an agreement, assignment or other instrument satisfactory to the
Depositary that provides for the prompt transfer to the Nominee of any dividend
or right to subscribe for additional 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 such deposited Shares or, in lieu thereof, such
agreement of indemnity or other agreement as shall be satisfactory to the
Depositary and (c) 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 are registered in the name of the Nominee.
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At the request and risk and expense of any holder of Shares, and for
the account of such holder, the Depositary may receive Shares to be deposited
together with other orders, instruments and evidence herein specified, for the
purpose of forwarding such orders, instruments and evidence to the Custodian
hereunder.
Upon each delivery to the Custodian of Shares or other securities to be
deposited hereunder, together with any other documents and payments required
under this Deposit Agreement, the Custodian shall, as soon as is practicable,
record the transfer of such Shares or other securities in the name of the
Nominee. Deposited Securities shall be held by the Depositary or by the
Custodian for the account and to the order of the Depositary, the Custodian or
the Nominee or at such other place or places as the Depositary shall determine,
subject to any applicable laws and regulations of the Philippines.
Section 2.03 Execution and Delivery of GDRs. Upon the receipt by the
Custodian of a deposit pursuant to Section 2.02, together with the other
documents and certifications specified herein and a proper acknowledgment or
other evidence from the Company (or the appointed agent of the Company for the
transfer and registration of Shares) satisfactory to the Depositary that any
Deposited Securities are properly recorded in the name of the Nominee on the
transfer books of the Company (or such agent) maintained for that purpose, the
Custodian shall notify the Depositary of such deposit and the person or persons
to whom or upon whose written order a GDR or GDRs are deliverable in respect
thereof and the number of GDSs to be evidenced thereby. Such notification shall
be made by letter, first class airmail postage prepaid, or, at the request, risk
and expense of the person making the deposit, by cable, telex or facsimile
transmission.
Upon receiving from the Custodian such notice the Depositary or its
agent, subject to the terms and conditions of this Deposit Agreement, shall (A)
with respect to the Initial Deposit, upon receipt of directions signed by or on
behalf of the representative of the Underwriters certifying the number of GDSs
sold in connection with the Initial Deposit (the "Initial Deposit Certificate")
and directing the Depositary to execute and deliver to or upon the written order
of the persons specified in such order, GDRs evidencing the number of GDSs
specified in the Initial Deposit Certificate, execute and deliver to, or upon
the written order of, the person or persons stated in such directions such GDSs
at the Principal New York Office of the Depositary, and (B) with respect to
subsequent deposits of Shares, execute and deliver at its Principal New York
Office, to or upon the order of the person or persons named in the notice
delivered to the Depositary a GDR or GDRs registered in the name or names
requested by such person or persons, and evidencing in the aggregate the number
of GDSs to which such person or persons are entitled but, in any case, only upon
payment to the Depositary of all taxes, governmental charges and fees payable in
connection with such deposit and the transfer of the deposited Shares.
Section 2.04 Transfer of GDRs; Combination and Split-up of GDRs. The Depositary,
subject to the terms and conditions of this Deposit Agreement and any GDR, shall
without unreasonable delay register transfers of any such GDR on its transfer
books,
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upon any surrender of such GDR at the Depositary's Principal New York Office by
the Holder thereof in person or by duly authorized attorney, properly endorsed
or accompanied by proper instruments of transfer (including signature guarantees
in accordance with standard industry practice) and duly stamped as may be
required by any applicable law. Thereupon, the Depositary shall execute a new
GDR or GDRs and deliver the same to or upon the order of the person entitled
thereto.
The Depositary, subject to the terms and conditions of this Deposit
Agreement, shall upon surrender of a GDR or GDRs for the purpose of effecting a
split-up or combination of such GDR or GDRs, execute and deliver a new GDR or
GDRs in the name of the same Holder for any authorized number of GDSs requested,
evidencing the same aggregate number of GDSs as the GDR or GDRs 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 GDRs and Withdrawal of Deposited Securities.
Subject to the terms and conditions of this Deposit Agreement, upon (i)
surrender of GDSs by delivery of GDRs at the Principal New York Office of the
Depositary for the purpose of withdrawal of the Deposited Securities represented
thereby and (ii) payment of all fees (including the fees of the Depositary as
set forth on Exhibit B hereto), taxes (including stamp, transfer and capital
gains taxes) and governmental or other charges payable in connection with
surrender and cancellation of GDRs, a Holder shall be entitled to delivery, to
him or upon his order of the Shares and any other documents of title at the time
represented by the GDR together with such other delivery of Deposited Securities
(other than Shares) then represented by GDSs as the Depositary may effect.
Delivery of Deposited Securities shall be made, as provided herein,
without unreasonable delay. The Depositary shall confirm receipt of any written
instructions regarding withdrawal of Deposited Securities. A GDR surrendered and
written instructions received for such purposes may be required by the
Depositary to be properly endorsed or accompanied by properly executed
instruments of transfer. The person requesting withdrawal of Deposited
Securities shall deliver to the Depositary written instructions requesting the
Depositary to cause the Deposited Securities being withdrawn to be delivered
(subject to applicable clearing procedures and provisions of the Amended
Articles of Incorporation of the Company) to or upon the written order of a
person or persons designated in such order.
Upon receipt of such written instructions and compliance with the terms
of this Section 2.05, the Depositary shall direct the Custodian to deliver at
the principal office of such Custodian, subject to the terms and conditions of
this Deposit Agreement and applicable laws and regulations, to or upon the
written order of the person or persons designated in such written instructions,
the Deposited Securities represented by the GDSs evidenced by such surrendered
GDR; except that the Depositary may, subject to applicable law, make delivery to
such person or persons at the Principal New York Office of the Depositary of any
dividends or distributions (other than dividends or distributions consisting of
Shares) with respect to the Deposited Securities to be withdrawn, or of any
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proceeds of sale of any dividends, distributions (other than dividends or
distributions consisting of Shares) or rights with respect to the Deposited
Securities which may at the time be held by the Depositary.
At the request, risk and expense of any Holder so surrendering a GDR or
submitting such written instructions for delivery, and for the account of such
Holder, and provided that payment of any applicable tax or other governmental
charge shall have been made in accordance with Section 3.02, the Depositary
shall direct the Custodian to forward any cash or other property (other than
rights) comprising, and forward a certificate or certificates and other proper
documents of title, if any, for, the Deposited Securities represented by the
GDSs evidenced by such GDR to the Depositary for delivery at the Principal New
York Office of the Depositary. Such direction shall be given by letter or, at
the request, risk and expense of such Holder, by cable, telex or facsimile
transmission.
The Depositary shall not accept surrender of GDRs or written
instructions for the purpose of withdrawal of less than one Share. In addition,
the Depositary shall only honor requests for withdrawal of whole numbers of
Shares. In the case of surrender of a GDR evidencing a number of GDSs
representing other than a whole number of Shares, the Depositary shall cause
delivery of the appropriate whole number of Shares as provided herein, and shall
execute and deliver to the person surrendering such GDR a new GDR evidencing
GDSs representing any remaining fractional Share.
Notwithstanding anything in this Deposit Agreement to the contrary, the
Company and the Depositary each agrees that it will not exercise any rights it
has under this Deposit Agreement to prevent the withdrawal or delivery of
Deposited Securities in a manner which would violate the United States
securities laws, including, but not limited to, Section I.A. (1) of the General
Instructions to the Form F-6 Registration Statement, as amended from time to
time, under the Securities Act of 1933.
Section 2.06 Conversion of Shares; Mandatory Conversion. (a) It is
acknowledged and agreed that the GDSs are not convertible into Common Stock or
any other securities or property of the Company. Nevertheless, as a matter of
convenience, the Depositary hereby agrees to accept the surrender of GDRs and
the withdrawal of Shares represented thereby, in each case in the manner set
forth herein, for the purpose of facilitating conversions of the Shares.
For this purpose, a GDR must be surrendered at the Principal New York
Office of the Depositary, (i) together with (A) payment of all fees (including
the fees of the Depositary set forth on Exhibit B hereto), taxes (including
stamp, transfer and capital gains taxes) and governmental or other charges
payable (including, if payable pursuant to the terms and conditions of the
Shares, an amount equal to the dividend payable on the dividend payment date
immediately following the date on which the Shares to be converted are
surrendered to the Conversion Agent) in connection with the surrender and
cancellation of the GDRs and GDSs, the conversion of Shares and the issuance,
registration and delivery and, if applicable, the deposit of the Common Stock in
accordance with the terms and conditions of the depositary arrangements of the
8
Depositary, dated as of October 19, 1994, relating to the Common Stock (the
"Common Stock Deposit Agreement"), other than any capital or stamp duties or
transfer taxes payable by the Company in accordance with the terms and
conditions of the Shares or the Common Stock and (B) a duly completed and
executed Notice of Conversion in the form attached hereto as Exhibit C (the
"Notice of Conversion") and such other documentation as the Depositary may
require and (ii) in any case, subject to the terms and conditions of the Shares,
the Common Stock and of this Agreement. The surrender, delivery and payment of
the foregoing instruments and amounts shall be irrevocable absent notice to the
contrary from the Depositary.
Upon receipt of documents and payments described above, the Depositary
shall cancel each GDR so surrendered, withdraw the Shares represented thereby
from deposit hereunder and direct the Custodian to deliver, on behalf of and at
the risk and expense of the Holder surrendering the GDR, to the Conversion Agent
a certificate or certificates and other proper documents of title, if any, for
the Shares so withdrawn along with the Notice of Conversion and any amounts
payable to the Company or the Conversion Agent in connection with the conversion
of such Shares. The Depositary's directions to the Custodian shall be given by
letter or, at the request, risk and expense of such Holder by cable, telex or
facsimile transmission. Such Holder shall be entitled to delivery of Common
Stock (together with any securities, cash or other property) deliverable upon
conversion of the Shares in accordance with the terms and conditions of such
Shares and the Depositary shall have no obligations in respect of such delivery;
provided that, if requested by the Holder, the Depositary shall, subject to the
terms and conditions of this Deposit Agreement, the Shares, the Common Stock and
the Common Stock Deposit Agreement, (a) cause the Common Stock delivered upon
conversion of the Shares, to be deposited in accordance with the Common Stock
Deposit Agreement and a depositary receipt issued thereunder in the name of or
for the benefit of such Holder or (b) use reasonable efforts to sell or cause to
be sold the Common Stock delivered upon conversion of the Shares on such
Holder's behalf over the Philippine Stock Exchange and to remit the proceeds
thereof (less the fees and expenses provided herein and any brokerage fee or
selling expenses incurred in connection with such sale) to such Holder or in
accordance with such Holder's instructions, provided that no such request may be
made by any such Holder to the Depositary to sell or to cause to be sold such
Common Stock in amounts less than the minimum trading (board) lot prescribed by
the Philippine Stock Exchange.
A GDR surrendered for such purposes may be required by the Depositary
to be properly endorsed or accompanied by properly executed instruments of
transfer. The person requesting withdrawal of Shares and delivery of Common
Stock shall deliver to the Depositary (for onward transmission to the Conversion
Agent) written instructions requesting that the Common Stock deliverable upon
conversion of the Shares be delivered (subject to applicable clearing procedures
and provisions of the Amended Articles of Incorporation of the Company) to or
upon the written order of a person or persons designated in such order.
The Depositary shall not accept surrender of GDRs or written
instructions for the purpose of withdrawal and conversion of less than one
Share. In addition, the
9
Depositary shall only honor requests for withdrawal and conversion of whole
numbers of Shares. In the case of surrender of a GDR evidencing a number of GDSs
representing other than a whole number of Shares, the Depositary shall withdraw
and deliver for conversion the appropriate whole number of Shares as provided
herein, and shall execute and deliver to the person surrendering such GDR a new
GDR evidencing GDSs representing any remaining fractional Share.
No Share shall be withdrawn or delivered as provided herein unless such
written order shall be accompanied by a fully completed and signed Notice of
Conversion.
(b) Upon receipt by the Depositary of notice from the Company of the date
(the "Mandatory Conversion Date") on which the mandatory conversion of any
or all of the Shares constituting Deposited Securities shall occur, the
Depositary shall promptly fix a record date for cancellation of the GDSs
representing the Shares to be so converted and notify the Holders of record
on such date (i) of the Mandatory Conversion Date, (ii) the number of
Shares then constituting Deposited Securities called for conversion by the
Company on such date and (iii) that, upon conversion by the Company of any
Shares constituting Deposited Securities, the GDSs representing such Shares
shall be cancelled in the manner set forth herein. Neither failure to
deliver any such notice to one or more Holders nor any defect in any notice
shall affect the sufficiency of the proceedings for cancellation of such
GDSs. In the event that fewer than all the outstanding GDSs are to be so
cancelled, the GDSs to be cancelled shall be selected by lot or in any
other substantially equivalent manner determined by the Depositary.
Section 2.07 Limitations on Execution and Delivery, Transfer, Etc. of
GDRs; Suspension of Delivery, Transfer, Etc. As a condition precedent to the
execution and delivery, registration of transfer, split-up, combination or
surrender (for the purpose of withdrawal of any Deposited Securities) of any
GDR, the Depositary or the Custodian may require (i) payment from the Holder,
the presenter of a GDR or the depositor of Shares, of a sum sufficient to
reimburse it for any tax (including any transfer, capital gains or stamp tax) or
other governmental charge and any stock transfer, custody or registration fee
with respect thereto and payment of any applicable fees as herein provided; (ii)
production of proof satisfactory to it as to the identity and genuineness of any
signature, including but not limited to a signature guarantee in accordance with
industry practice; and (iii) compliance with such other restrictions, if any, as
the Depositary may, after consultation with the Company, establish consistent
with the provisions of this Deposit Agreement.
The delivery of GDRs against deposits of Shares generally or of
particular Shares may be suspended or withheld, or the registration of transfer
of GDRs in particular instances may be refused, or the registration of transfer
generally may be suspended, or the surrender of outstanding GDRs for the purpose
of withdrawal of Deposited Securities may be suspended, during any period when
the transfer books of the Depositary or the Company (or the appointed agent of
the Company for the transfer and
10
registration of Shares) are closed, or if any such action is deemed necessary or
advisable by the Company or the Depositary at any time or from time to time.
Subject to the further terms and provisions of this Section 2.07,
Citibank, N.A. and its agents, on their own behalf, may own and deal in any
class of securities of the Company and its affiliates and in GDRs. The
Depositary may issue GDRs for 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. Neither the
Depositary nor the Custodian shall lend Deposited Securities or GDRs; provided,
however, that the Depositary may issue GDRs prior to the receipt of Shares
pursuant to Section 2.02 (a "Pre-Release Transaction") and deliver Shares upon
the receipt and cancellation of GDRs which have been Pre-Released, whether or
not such cancellation is prior to the termination of such Pre-Released
Transaction or the Depositary knows that such GDR has been Pre-Released. The
Depositary may receive GDRs in lieu of Shares in satisfaction of a Pre-Release
Transaction. Each such Pre-Release Transaction will be (a) subject to (x) a
written representation from the person to whom GDRs are to be delivered (the
"Applicant") that such person, or its customer, owns the Shares to be remitted,
(y) an unconditional guarantee by such person to deliver to the Custodian the
number of Shares that are the subject of the Pre-Release Transaction and (z) any
additional restrictions or requirements that the Depositary deems appropriate,
(b) subject to a written representation to the Applicant that it will hold such
Shares in trust for the Depositary until their delivery to the Depositary or
Custodian, reflect on its records the Depositary as owner of such Shares and
deliver such Shares upon the Depositary's request, (c) at all times fully
collateralized (marked to market daily) with cash, United States government
securities or such other collateral of comparable safety and liquidity, (d)
terminable by the Depositary on not more than five (5) business days notice, and
(e) subject to such further indemnities and credit regulations as the Depositary
deems appropriate. The Depositary intends that the number of GDRs issued by it
pursuant to a Pre-Release Transaction and outstanding at any time generally will
not exceed thirty percent (300) of the GDRs issued by the Depositary and with
respect to which Shares are on deposit with the Depositary or Custodian;
provided, however, that the Depositary reserves the right to change or disregard
such limit from time to time as it deems appropriate. The Depositary will also
set limits with respect to the number of GDRs and Shares involved in
transactions to be effected hereunder with any one person on a case by case
basis as it deems appropriate.
The Depositary may retain for its own account any compensation received
by it in connection with the foregoing. Collateral provided pursuant to (b)
above, but not the earnings thereon, shall be held for the benefit of the
Holders only.
Without limitation of the foregoing, the Depositary shall not knowingly
accept for deposit under this Deposit Agreement any Shares required to be
registered pursuant to the provisions of the Securities Act (including, but not
limited to, any "restricted securities" within the meaning of Rule 144 under the
Securities Act), unless a registration statement under the Securities Act is in
effect as to such Shares. The
11
Depositary has agreed to use reasonable efforts to comply with written
instructions of the Company not to accept for deposit hereunder any Shares
identified in such instructions at such times and under such circumstances as
may reasonably be specified in such instructions in order to facilitate the
Company's compliance with the securities laws of the United States.
Section 2.08 Lost GDRs, etc. In case any GDR shall be mutilated,
destroyed, lost or stolen, the Depositary shall execute and deliver a new GDR of
like tenor, in exchange and substitution for such mutilated GDR upon
cancellation thereof, or in lieu of and in substitution for such destroyed, lost
or stolen GDR, upon the filing by the Holder thereof with the Depositary of (i)
a request for such exchange, execution and delivery before the Depositary has
notice that the GDR has been acquired by a bona fide purchaser and (ii) a
sufficient indemnity bond in favor of the Depositary and the Company, and upon
satisfying any other reasonable requirements imposed by the Depositary.
Section 2.09 Cancellation and Destruction of Surrendered GDRs. All GDRs
surrendered to the Depositary shall be cancelled by the Depositary. Cancelled
GDRs shall not be entitled to any benefits under this Deposit Agreement or be
valid or obligatory for any purpose. The Depositary is authorized to destroy
GDRs so cancelled. GDSs shall be deemed cancelled when the Deposited Securities
they represent are withdrawn from deposit hereunder and no other GDR evidencing
such GDSs is issued hereunder.
Section 2.10 Maintenance of Records. The Depositary shall maintain
records of (i) all GDRs surrendered and Deposited Securities withdrawn under
Sections 2.05 or 2.06, (ii) substitute GDRs delivered under Section 2.08 and
(iii) GDRs cancelled or destroyed under Section 2.09, in each case in accordance
with procedures followed by stock transfer agents located in The City of New
York.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS OF GDRs
Section 3.01 Filing Proofs Certificates and Other Information. Any
person depositing Shares or any Holder may be required from time to time to file
with the Depositary or the Custodian such proof of citizenship, residence,
exchange control approval, payment of all applicable taxes or other governmental
charges, compliance with all applicable laws and regulations and the terms of
this Deposit Agreement, or legal or beneficial ownership and the nature of such
interest, to provide information relating to the registration on the books of
the Company (or the appointed agent of the Company for the transfer and
registration of Shares) of the Shares presented for deposit or other
information, to execute such certificates and to make such representations and
warranties as the Depositary or the Company may deem necessary or proper to
enable the Depositary to perform its obligations hereunder or to enable the
Company or the Depositary to perform their respective obligations under the
Company Agreement. The Depositary may withhold the execution or delivery or
registration of transfer of all or part
12
of any GDR or the distribution or sale of any dividend or other distribution of
rights or of the proceeds thereof or the withdrawal of any Deposited Securities
until such proof or other information is filed or such certificates are executed
or such representations and warranties are made. The Depositary shall take such
additional actions and provide such additional information as the Depositary
shall from time to time agree with the Company.
Section 3.02 Liability of Holders for Taxes and Other Charges. If any
tax, or governmental or other charge shall become payable with respect to any
GDR or any Deposited Securities represented by the GDSs evidenced by any GDR or
any shares of Common Stock into which the Shares are convertible, such tax, or
governmental or other charge (other than any capital or stamp duties or transfer
taxes payable by the Company in accordance with the terms and conditions of the
Shares or the Common Stock) shall be payable by the Holder of such GDR to the
Depositary. The Depositary may refuse, and the Company shall be under no
obligation, to effect any registration of transfer of all or part of such GDR or
any deposit or withdrawal (including any withdrawal in connection with a
conversion of Shares) of Deposited Securities represented by the GDSs 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 GDSs evidenced by such GDR, and
may apply such dividends or other distributions or the proceeds of any such sale
in payment of such tax or governmental or other charge, the Holder of such GDR
remaining liable for any deficiency.
Section 3.03 Representations and Warranties on Deposit, Transfer,
Surrender and Withdrawal of Shares or GDRs. Each person depositing Shares under
this Deposit Agreement shall be deemed thereby to represent and warrant that
such Shares and each certificate therefor are validly issued and outstanding,
fully paid and nonassessable, that the person making such deposit is duly
authorized to do so and that such Shares are not "restricted securities" as such
term is defined in Rule 144 of the Securities Act. Such representations and
warranties shall survive the deposit of Shares and the issuance of GDRs in
respect thereof .
Section 3.04 Disclosure of Interests. The Company or the Depositary may
from time to time request Holders or former Holders to provide information as to
the capacity in which they hold or held GDRs or own or owned such beneficial
interest and the nature of such interest and various other matters. Each such
Holder agrees to provide any such information reasonably requested by the
Company or the Depositary pursuant to this Section whether or not still a Holder
at the time of such request.
Section 3.05 Ownership Restrictions. The Company may restrict transfers
of the Shares if such transfer might result in ownership of Shares exceeding
limits under any applicable law or the Company's Amended Articles of
Incorporation. The Philippine Constitution requires that at least 600 of the
capital of a corporation operating a public utility in the Philippines be owned
by Philippine citizens. The Depositary shall, if and as directed by the Company,
take action with respect to the ownership interest of any Holder in excess of
any legal or contractual limitations on the legal or beneficial ownership of
Shares or GDSs, including but not limited to a
13
mandatory sale or disposition on behalf of a Holder of the Shares represented by
the GDSs held by such Holder in excess of such limitation, if and to the extent
such disposition is permitted by applicable law.
ARTICLE IV
RIGHTS RELATING TO THE DEPOSITED SECURITIES;
CERTAIN OBLIGATIONS OF THE DEPOSITARY
Section 4.01 Power of Attorney. Each Holder, upon acceptance of a GDR
issued in accordance with the terms hereof, thereby appoints the Depositary its
attorney-in-fact, with full power to delegate, to act on its behalf and to take
any and all steps or action provided for or contemplated herein with respect to
the Deposited Securities, including but not limited to those set forth in this
Article IV, and to take such further steps or action as the Depositary in its
sole discretion may deem necessary or appropriate to carry out the purposes of
this Deposit Agreement.
Section 4.02 Cash Distributions; Withholding. Whenever the Custodian or
the Depositary receives any cash dividend or other cash distribution by the
Company in respect of any Deposited Securities, the Depositary shall, subject to
the provisions of Section 4.06, convert or cause any portion of such dividend or
distribution which is not in dollars to be converted into dollars and shall
promptly distribute such amount to the Holders entitled hereto in proportion to
the number of GDSs representing such Deposited Securities held by them
respectively, after deduction or upon payment of the fees and expenses of the
Depositary or the Custodian (and without liability for interest); provided,
however, that in the event that the Company, the Custodian or the Depositary
shall be required to withhold and does withhold from any cash dividend or other
cash distribution in respect of any Deposited Securities an amount on account of
taxes or other governmental charges, the amount distributed to Holders in
respect of GDSs representing such Deposited Securities shall be reduced
accordingly. The Depositary shall distribute only such amount, however, as can
be distributed without attributing to any Holder a fraction of one cent, and any
balance not so distributable shall be held by the Depositary (without liability
for interest thereon) and shall be added to and become part of the next sum
received by the Depositary for distribution to Holders then outstanding. The
Company has agreed with the Depositary that the Company or its agent, or the
Depositary or its agent, as appropriate, will remit to the appropriate
governmental authority or agency all amounts withheld and owing to such
authority or agency. The Depositary will forward to the Company or its !ge(R)t
such information from its records as the Company may reasonably request to
enable the Company or its agent to file necessary reports with governmental
authorities or agencies or, at the request and expense of the Company, the
Depositary or its agent may file such reports if deemed lawful and reasonably
feasible by the Depositary.
Section 4.03 Distributions in Shares. If any distribution in respect of
any Deposited Securities consists of a dividend in, or free distribution of,
Shares, the Depositary may, after consultation with the Company, distribute to
the Holders entitled thereto, in proportion to the number of GDSs representing
such Deposited Securities held
14
by them respectively, additional GDRs for an aggregate number of GDSs
representing the number of Shares received as such dividend or free
distribution, in either case, after deduction or upon payment of the fees and
expenses of the Depositary; provided, however, that if for any reason (including
any requirement that the Company or the Depositary withhold, or make an advance
payment of, an amount on account of taxes or other governmental charges or that
such Shares must be registered under the Securities Act in order to be
distributed to Holders) the Depositary reasonably deems such distribution not to
be practical or feasible, the Depositary may, after consultation with the
Company, (i) to the extent permitted by applicable law, adopt such method as it
may reasonably deem equitable and practicable for the purpose of obtaining such
dividend or effecting such distribution, including the sale (at public or
private sale) of the Shares thus received, or any part thereof, and the net
proceeds of any such sale after payment of and reimbursement of advances to pay
any taxes or governmental charges shall be distributed by the Depositary to the
Holders entitled thereto as in the case of a distribution received in cash or
(ii) if the Depositary reasonably determines that no such method of distribution
can be effected in a practicable or equitable manner, the Depositary may refrain
from effecting such distribution altogether until such time as it reasonably
determines that a practicable or equitable distribution can be effected. In lieu
of issuing GDRs or adjusting the Depositary's records for fractional GDSs 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, all in
the manner and subject to the conditions described in Section 4.02. If
additional GDRs are not so distributed (except pursuant to the preceding
sentence), or such change in the records of the Depositary is not made, each GDS
shall thenceforth also represent its proportionate interest in the additional
Shares distributed upon the Deposited Securities represented thereby.
Section 4.04 Section 2.01 Distribution of Rights. In the event that the
Company shall offer or cause to be offered to the holders of any Deposited
Securities any rights to subscribe for additional Shares or any rights of any
other nature, the Depositary, after consultation with the Company, shall have
discretion as to the procedure to be followed in making such rights available to
the Holders entitled thereto, subject to Section 5.09, or in disposing of such
rights on behalf of such Holders and making the net proceeds available in cash
to such Holders or, if by the terms of such rights offering or by reason of
applicable law, the Depositary may neither make such rights available to such
Holders nor dispose of such rights and make the net proceeds available to such
Holders, then the Depositary shall allow the rights to lapse; provided, however,
that the Depositary will, if requested by the Company, take action as follows:
(1) if at the time of the offering of any rights the Depositary
determines that it is lawful and feasible to make such rights available
to all or certain Holders by means of warrants or otherwise, the
Depositary shall, after deduction or upon payment of the fees and
expenses of the Depositary, distribute warrants or other instruments in
proportion to the number of GDSs representing such Deposited Securities
held by them respectively, or by means of such other method as it may
deem feasible in order to facilitate the exercise, sale or transfer of
rights by such Holders or
15
the sale or resale of securities obtainable upon exercise of such
rights by such Holders; or
(2) if at the time of the offering of any rights the Depositary
determines that it is not lawful or not feasible to make such rights
available to certain Holders by means of warrants or otherwise, or if
the rights represented by such warrants or such other instruments are
not exercised and appear to be about to lapse, the Depositary shall use
its reasonable efforts to sell such rights or such warrants or other
instruments, if a market therefor is available, at public or private
sales, at such place or places and upon such terms as it may deem
proper and, after deduction or upon payment of the fees and expenses of
the Depositary and any applicable taxes, allocate the net proceeds of
such sales for the account of the Holders otherwise entitled to such
rights, warrants or other instruments upon an averaged or other
practicable basis without regard to any distinctions among such Holders
because of exchange restrictions or the date of delivery of any GDR or
GDRs, or otherwise.
If registration (under the Securities Act or any other applicable law)
of the rights or the securities to which any rights relate is required in order
for the Company to offer such rights to Holders and to sell to them the
securities to which such rights relate, the Depositary will not offer such
rights to Holders unless and until a registration statement is in effect, or
unless the offering and sale of such rights or securities to such Holders are
exempt from registration under the provisions of such law and, if requested by
the Depositary, the Company furnishes to the Depositary an opinion of counsel in
the United States for the Company reasonably satisfactory to the Depositary to
such effect. The Company shall have no obligation to register such rights or
such securities under the Securities Act.
Section 4.05 Distributions Other Than Cash, Shares or Rights. Whenever
the Custodian or the Depositary shall receive any distribution other than cash,
Shares or rights upon any Deposited Securities, the Depositary shall cause the
securities or property so received to be distributed to the Holders entitled
thereto, after deduction or upon payment of the fees and expenses of the
Depositary, in proportion to the number of GDSs representing such Deposited
Securities held by them respectively, in any manner that the Depositary may deem
equitable and practicable for accomplishing such distribution; provided,
however, that if in the opinion of the Depositary it cannot cause such
securities or property to be distributed or such distribution cannot be made
proportionately among the Holders entitled thereto, or if for any other reason
(including any requirement that the Company, the Custodian or the Depositary
withhold an amount on account of taxes or other governmental charges or that
such securities must be registered under the Securities Act in order to be
distributed to Holders) the Depositary deems such distribution not to be
feasible, the Depositary may, after consultation with the Company, adopt such
method as it may deem equitable and practicable for the purpose of effecting
such distribution, including the sale (at public or private sale) of the
securities or property thus received, or any part thereof, and the net proceeds
of any such sale shall be distributed by the Depositary to the Holders entitled
thereto as in the case of a
16
distribution received in cash; provided that any unsold balance of such
securities or property shall be distributed by the Depositary to the Holders
entitled thereto, if such distribution is feasible without withholding for or on
account of any taxes or other governmental charges and without registration
under the Securities Act, in accordance with such equitable and practicable
method as the Depositary adopts.
Section 4.06 Conversion of Foreign Currency. Whenever the Custodian
receives currency other than dollars (in this Section referred to as "foreign
currency"), by way of dividends or other distributions or the net proceeds from
the sale of securities, property or rights, and if at the time of the receipt
thereof the foreign currency so received can in the judgment of the Depositary
be converted on a reasonable basis into dollars which can, at the time of
receipt thereof, be transferred to the United States and distributed to the
Holders entitled thereto, the Depositary shall promptly convert or cause to be
converted, by sale or in any other manner that it may determine, such foreign
currency into dollars, and such dollars (less any reasonable and customary
expenses incurred by the Depositary in the conversion of the foreign currency)
shall be distributed to the Holders entitled thereto or, if the Depositary shall
have distributed any warrants or other instruments which entitle the holders
thereof to such dollars, then to the holders of such warrants and/or instruments
upon surrender thereof for cancellation. Such distribution shall be made upon an
averaged or other practicable basis without regard to any distinctions among
Holders on account of any application of exchange restrictions or otherwise.
If such conversion or distribution generally or with regard to a
particular Holder can be effected only with the approval or license of any
government or agency thereof, the Depositary may file such application for
approval or license, if any, as it may deem desirable.
If at any time the Depositary determines that in its judgment any
foreign currency received by the Depositary is not convertible on a reasonable
basis into dollars distributable to Holders entitled thereto, or if any approval
or license of any government or authority or agency thereof which is required
for such conversion is denied or in the opinion of the Depositary is not
obtainable, or if any such approval or license is not obtained within a
reasonable period as determined by the Depositary, the Depositary may distribute
the foreign currency (or an appropriate document evidencing the right to receive
such foreign currency) received by the Depositary to, or in its discretion may
hold such foreign currency (without liability for interest) for the respective
accounts of, the Holders entitled to receive the same.
If any such conversion of foreign currency, in whole or in part, cannot
be effected for distribution to some Holders entitled thereto, the Depositary
may in its discretion make such conversion and distribution in dollars to the
extent permissible to the Holders for whom such conversion and distribution is
practicable and may, subject to any applicable currency and exchange
regulations, distribute the balance of the foreign currency received by the
Depositary to, or hold such balance for the account of, the Holders for whom
such conversion and distribution is not practicable.
17
Section 4.07 Fixing of Record Date. Whenever any cash dividend or other
cash distribution shall become payable or any distribution other than cash shall
be made, or whenever rights shall be issued, with respect to the Deposited
Securities, or whenever the Depositary shall receive notice of any meeting of
holders of Shares or other Deposited Securities or any other meeting of holders
of the Company's securities at which holders of Shares or other Deposited
Securities are entitled to vote, or whenever, for any reason, the Depositary
causes a change in the number of Shares that are represented by each GDS, or
whenever the Depositary finds it necessary or convenient in respect of any
matter (including in connection with a mandatory conversion of Shares by the
Company), the Depositary shall fix a record date after consultation with the
Company (which shall be as near as practicable to the corresponding record date
for such distribution or meeting set by the Company) for the determination of
the Holders who shall be entitled to receive such dividend, distribution or
rights or the net proceeds of the sale thereof, or to give instructions for the
exercise of voting rights, if any, at any such meeting or in respect of such
changed number of Shares represented by a GDS or in respect of such other
matter. Except in the case of a mandatory conversion by the Company of less than
all of the Shares deposited hereunder (which shall be governed by Section 2.06)
and subject to the provisions of Section 4.02 through 4.06 and to the other
terms and conditions of this Deposit Agreement, the Holders on such record date
shall be entitled to receive the amount distributable by the Depositary with
respect to such dividend or other distribution or such rights or the net
proceeds of sale thereof and to exercise the rights of Holders hereunder with
respect to such changed number of Shares represented by each GDS, in proportion
to the number of GDSs held by them respectively, to give such voting
instructions, to receive such notice or solicitation or to act in respect of any
matter.
Section 4.08 Voting of Deposited Securities. As soon as practicable
after receipt of notice of any meeting of holders of Shares or other Deposited
Securities or any other meeting of holders of the Company's securities at which
holders of Shares or other Deposited Securities are entitled to vote, the
Depositary shall fix a record date for determining the Holders entitled to give
instructions for the exercise of voting rights as provided in Section 4.07 and
shall mail or cause to be mailed to the Holders of record a notice which shall
contain: (a) such information as is contained in such notice of meeting and (b)
a statement that the Holders of record at the close of business on a specified
record date will be entitled, subject to any applicable provisions of the law of
the Philippines and of the Amended Articles of Incorporation and the By-Laws of
the Company, to instruct the Depositary as to the exercise of the voting rights,
if any, pertaining to the number of Shares or other Deposited Securities
represented by their respective GDSs evidenced by their respective GDRs. Upon
the written request of a Holder on such record date, received on or before the
date established by the Depositary for such purpose, the Depositary shall
endeavor insofar as is practicable to vote or cause to be voted the amount of
Deposited Securities represented by such GDSs evidenced by such GDR in
accordance with the instructions set forth in such request.
The Depositary may not itself exercise any voting discretion over any
Shares. If the Depositary does not receive instructions from a Holder on or
before the date established by the Depositary for such purpose, such Holder
shall be deemed, and
18
the Depositary shall deem such Holder, to have instructed the Depositary to give
a discretionary proxy to a person designated by the Company for the purpose of
exercising the voting rights, if any, pertaining to the Shares represented by
GDSs evidenced by such Holder's GDRs, provided that no such discretionary proxy
shall be given with respect to any matter as to which the Company informs the
Depositary that (i) the Company does not wish such proxy given, (ii) substantial
opposition exists or (iii) the rights of holders of Shares will be materially
and adversely affected.
Holders shall not have, and shall not have the right to instruct the
Depositary as to the exercise of, any dissenter's rights provided to holders of
Shares under Philippine law.
Section 4.09 Changes Affecting Deposited Securities. Upon any change in
par value, split-up, consolidation or any other reclassification of Deposited
Securities (other than as a result of any conversion of Shares into Common Stock
in accordance with the terms of the Shares), or upon any recapitalization,
reorganization, merger or consolidation of the Company or sale of assets
affecting the Company or to which it is a party, any securities that shall be
received by the Depositary or the Custodian in exchange for or in conversion of
or in respect of Deposited Securities shall be treated as new Deposited
Securities, and the GDRs shall, subject to the terms of this Deposit Agreement
and applicable laws (including any registration requirements of the Securities
Act), thenceforth represent the right to receive the new Deposited Securities so
received in exchange or conversion, unless new or additional GDRs are delivered
pursuant to the following sentence. In any such case the Depositary may, and
shall at the Company's request, subject to the terms of this Deposit Agreement,
execute and deliver additional GDRs, as in the case of a stock dividend on the
Shares, or call for the surrender of outstanding GDRs to be exchanged for new
GDRs specifically describing such new Deposited Securities.
Notwithstanding the foregoing, in the event that the Depositary
determines that any security or property so received may not be lawfully or
practicably distributed to all or certain Holders, the Depositary may and shall,
if the Company requests, sell such securities or property at public or private
sale, at such place or places and upon such terms as it may deem proper, and may
allocate the net proceeds of such sales (after payment of the expenses thereof
and any taxes or governmental charges) for the account of the Holders otherwise
entitled to such securities or property upon an averaged or other practicable
basis without regard to any distinctions among such Holders and distribute the
net proceeds so allocated to the extent practicable as in the case of a
distribution received in cash pursuant to Section 4.02.
Promptly upon receipt of notice from the Company of the occurrence of
any such change, conversion or exchange covered by this Section in respect of
the Deposited Securities, the Depositary shall give notice thereof in writing,
at the Company's expense, to all Holders.
Section 4.10 Transmittal by the Depositary of Company Notices, Reports
and Communications. The Depositary shall make available for inspection during
19
business hours by Holders at its Principal New York Office and at the principal
office of the Custodian copies of (i) this Deposit Agreement and any related
documents, (ii) the Preferred Stock Agreement dated as of the date hereof
between the Company and the Depositary relating to this Agreement (the "Company
Agreement"), (iii) the Company's Amended Articles of Incorporation and By-Laws
and the Resolutions of the Board of Directors relating to the Shares and (iv)
any notices, reports or communications, including any proxy soliciting
materials, received from the Company which are both (a) received by the
Depositary or the Custodian or the nominee of either, as the holder of the
Deposited Securities, and (b) made generally available to the holders of such
Deposited Securities by the Company. The Depositary shall also send to Holders,
at the Company's expense, copies of such notices, reports and communications
when furnished by the Company to the Depositary pursuant to Section 5.08.
Section 4.11 Withholding. Notwithstanding any other provision of this
Deposit Agreement, in the event that the Depositary determines that any
distribution of property (including Shares, rights to subscribe therefor and
other securities) is subject to any tax or governmental charges which the
Depositary is obligated to withhold, the Depositary may dispose of all or a
portion of such property (including Shares, rights to subscribe therefor and
other securities) in such amounts and in such manner as the Depositary deems
necessary and practicable to pay such taxes or governmental charges, including
by public or private sale, and the Depositary shall distribute the net proceeds
of any such sale or the balance of any such property after deduction of such
taxes or governmental charges to the Holders entitled thereto in proportion to
the number of GDSs held by them respectively and the Depositary shall, if
feasible without withholding for or on account of taxes or other governmental
charges, and otherwise in compliance with applicable law, distribute any unsold
balance of such property in accordance with the provisions of this Deposit
Agreement. To the extent that the Depositary is obligated to withhold in
accordance with the previous sentence, the Depositary shall remit to the
appropriate governmental authority or agency all amounts withheld and owing to
such authority or agency and shall file such corresponding reports as may be
required.
The Company has agreed with the Depositary that, before making any
distribution or other payment on any Deposited Securities, the Company shall
make such deductions (if any) which, by the laws or regulations of the
Philippines, the Company is required to make in respect of any income, capital
gains or other taxes and that the Company may also deduct the amount of any tax
or governmental charges payable by the Company or for which the Company might be
made liable in respect of such distribution or other payment or any document
signed in connection therewith.
Section 4.12 Available Information. The Company is subject to the
periodic reporting requirements of the Securities Exchange Act of 1934 and,
accordingly, files certain reports with the Commission. These public reports can
be inspected by Holders and copied at the public reference facilities maintained
by the Commission located at the date of this Deposit Agreement at Judiciary
Plaza, 450 Fifth Street, N.W., Washington, D.C. 20549.
20
Section 4.13 Lists of Receipt Holders. Promptly upon request by the
Company, the Depositary shall furnish to it a list, as of a recent date, of the
names, addresses and holdings of GDSs by all persons in whose names GDRs are
registered on the books of the Depositary.
ARTICLE V
THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY
Section 5.01 Maintenance of Depositary's Office and Register. Until
termination of this Deposit Agreement in accordance with its terms, the
Depositary shall maintain in the Borough of Manhattan, The City of New York,
facilities for the execution and delivery, registration, registration of
transfers and surrender of GDRs in accordance with the provisions of this
Deposit Agreement.
The Depositary shall keep books at its Principal New York Office for
the registration and transfer of GDRs which shall be open at all reasonable
times 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, the GDSs or the GDRs.
The Depositary may close the transfer books, at any time or from to
time, after giving notice reasonably in advance to the Company, when deemed
expedient by it in connection with the performance of its duties hereunder or
when requested by the Company.
If any GDSs are listed on one or more stock exchanges or automated
quotation systems in the United States, the Depositary or its agent shall act as
Registrar or, with the written approval of the Company, may appoint a Registrar
or one or more co-registrars for registration of such GDSs in accordance with
any requirements of such exchange or exchanges or system or systems. Such
Registrar or co-registrars may be removed and a substitute or substitutes
appointed by the Depositary upon the request or with the approval of the
Company. The Depositary, with the written approval of the Company, may appoint
one or more co-transfer agents for the purpose of effecting transfers,
combinations and split-ups of GDRs at designated transfer offices on behalf of
the Depositary. Such co-transfer agents with the written approval of the Company
and upon the request of the Company shall be removed and substitutes appointed
by the Depositary. Each GDR registrar, co-registrar or co-transfer agent
appointed under this Section 5.01 shall give notice in writing to the Company
and the Depositary accepting such appointment and agreeing to be bound by the
applicable terms of this Deposit Agreement.
The Depositary may perform its obligations under this Section 5.01
through any agent appointed by it (subject to the provisions of the immediately
preceding paragraph), provided that the Depositary shall notify the Company of
such appointment
21
and shall remain responsible for the performance of such obligations as if no
agent were appointed.
Section 5.02 Obligations of the Depositary, the Custodian and the
Company. The Company assumes no obligation nor shall it be subject to any
liability under this Deposit Agreement to Holders or other persons, except that
it has agreed with the Depositary to act in good faith and use reasonable
judgment in the performance of its obligations set forth in the Company
Agreement. The Depositary assumes no obligation nor shall it be subject to any
liability under this Deposit Agreement to Holders or other persons (including,
without limitation, liability with respect to the validity or worth of the
Deposited Securities), except that it agrees to act in good faith and use
reasonable judgment in the performance of its obligations set forth in this
Deposit Agreement. The Depositary undertakes to perform such duties and only
such duties as are specifically set forth in this Deposit Agreement, and no
implied covenants or obligations shall be read into this Deposit Agreement
against the Depositary or the Company.
Neither the Depositary nor the Company shall be under any obligation to
appear in, prosecute or defend any action, suit or other proceeding in respect
of any Deposited Securities or in respect of the GDRs, which in its opinion may
involve it in expense or liability, unless indemnity satisfactory to it in its
sole discretion against all expense and liability be furnished as often as may
be required, and no Custodian shall be under any obligation whatsoever with
respect to such proceedings, the Custodian being responsible solely to the
Depositary.
Neither the Depositary nor the Company shall be liable for any action
or inaction by it in reliance upon the advice of or information from legal
counsel, accountants, any person presenting Shares for deposit, any Holder, or
any other person believed by it in good faith to be competent to give such
advice or information. Each of the Depositary, its agents and the Company and
its agents may rely and shall be protected in acting upon any written notice,
request, direction or other document believed by it to be genuine and to have
been signed or presented by the proper party or parties. Subject to the
provisions of this Section 5.03, the Depositary shall not be responsible for any
failure to carry out any instructions to vote any of the Deposited Securities,
for the manner in which any such vote is cast or for the effect of any such
vote.
It is intended that neither the Depositary nor any agent of the
Depositary shall be deemed to be an "issuer" of the securities under the federal
securities laws or applicable state securities laws of the United States or any
other jurisdiction, it being expressly understood and agreed that the Depositary
and its agents are acting only in a ministerial capacity as Depositary for the
Shares.
Section 5.03 Prevention or Delay in Performance by the Depositary or
the Company. Neither the Depositary nor the Company shall incur any liability to
any Holder or other person if by reason of any present or future law,
regulation, decree, order or other action of the United States, the Philippines
or any other country or jurisdiction, or of any other governmental authority, or
by reason of any act of God, war or other circumstances beyond its control or,
in the case of the Depositary, by reason of any
22
provision, present or future, of the Amended Articles of Incorporation and
By-laws of the Company or any Deposited Securities, the Depositary or the
Company is prevented, delayed or forbidden from doing or performing any act or
thing which by the terms of this Deposit Agreement (in the case of the
Depositary) or the Company Agreement it is provided shall be done or performed;
nor shall the Depositary or the Company incur any liability to any Holder or
other person by reason of any nonperformance or delay, caused as aforesaid, in
performance of any act or thing that by the terms of this Deposit Agreement it
is provided shall or may be done or performed, or by reason of any exercise of,
or failure to exercise, any discretion provided for in this Deposit Agreement.
Where, by the terms of a distribution pursuant to Section 4.02, 4.03 or 4.05 of
this Deposit Agreement or an offering or distribution pursuant to Section 4.04
of this Deposit Agreement, or because of applicable law, such distribution or
offering may not be made available to Holders, and the Depositary may not
dispose of such distribution or offering on behalf of such Holders and make the
net proceeds available to such Holders, then the Depositary may make no such
distribution or offering, and may allow any rights, if applicable, to lapse.
Section 5.04 Resignation of the Depositary; Appointment of Successor
Depositary. The Depositary may at any time resign as Depositary hereunder by 30
days' written notice of its election so to do to the Company, such resignation
to take effect upon the appointment of a successor depositary and its acceptance
of such appointment as hereinafter provided.
In case at any time the Depositary acting hereunder shall resign, the
Company has agreed to use its best efforts to appoint a successor depositary,
which shall be a bank or trust company having an office in the Borough of
Manhattan, The City of New York. Such successor depositary shall execute and
deliver to its immediate predecessor and to the Company an instrument in writing
accepting its appointment hereunder, and thereupon such successor depositary,
without any further act or deed, shall become fully vested with all the rights,
powers, duties and obligations of its predecessor; but such immediate
predecessor, nevertheless, upon payment of all sums due it and on the written
request of the Company, shall execute and deliver an instrument transferring to
such successor depositary all rights and powers of such immediate predecessor
hereunder, shall duly assign, transfer and deliver all right, title and interest
in the Deposited Securities to such successor depositary, and shall deliver to
such successor a list of the Holders of all outstanding GDRs and such other
books and records maintained by such immediate predecessor and its agents with
respect to its function as Depositary hereunder. Any such successor depositary
shall promptly mail notice of its appointment to the Holders.
Any corporation into or with which the Depositary may be merged or
consolidated shall be the successor of the Depositary without the execution or
filing of any document or any further act.
Section 5.05 Charges of Depositary. The Company has agreed with the
Depositary that the fees of the Depositary and the Registrar, if any, shall be
paid by the Company as provided in Exhibit B hereto. Holders agree to pay
through deduction or
23
otherwise, (i) the fees of the Depositary for the issuance of GDSs pursuant to
Section 2.03 (except for such issuance in respect of the Initial Deposit), the
withdrawal of Deposited Securities upon surrender of GDSs pursuant to Section
2.05 or Section 2.06 and the sale or exercise of rights or other corporate
action involving distributions to holders of Shares, each as provided in Exhibit
B hereto, (ii) taxes and other governmental charges (including, but not limited
to any transfer, capital gains and stamp tax) other than any capital or stamp
duties or transfer taxes payable by the Company in accordance with the terms and
conditions of the Shares and the Common Stock, (iii) such registration,
transfer, custody or other fees as may from time to time be in effect for the
registration of transfers of Shares generally on the share register of the
Company or its appointed agent for the registration of transfer and accordingly
applicable to transfers of Shares to or from the name of the Nominee on the
making of deposits pursuant to Section 2.02 or withdrawals pursuant to Section
2.05 or Section 2.06, (iv) such cable, telex, facsimile transmission and
delivery expenses as are expressly provided in this Deposit Agreement to be at
the expense of persons depositing Shares or Holders and (v) such reasonable
expenses and charges as are incurred by the Depositary in the conversion of
foreign currency pursuant to Section 4.06 or in connection with other
distributions to holders of Shares pursuant to Section 4.02, 4.03, 4.04 or 4.05.
Any other charges and expenses of the Depositary hereunder and the
Registrar, if any, will be paid by the Company after consultation and agreement
and in accordance with agreements in writing entered into between the Depositary
and the Company as to the nature and amount of such charges and expenses. The
charges and expenses of the Custodian, the Nominee or any other agent of the
Depositary are for the sole account of the Depositary.
The right of the Depositary to receive payment of fees, charges and
expenses as provided in this Section 5.05 shall survive the termination of this
Deposit Agreement and, as to any Depositary, the resignation of such Depositary
pursuant to Section 5.04.
Section 5.06 The Custodian. The Depositary, after consultation with the
Company, shall from time to time appoint one or more agents to act for it as
Custodian hereunder. The Depositary has initially appointed Citibank, N.A.,
Manila, as custodian and agent of the Depositary for the purpose of this Deposit
Agreement. The Custodian in acting hereunder shall be subject at all times and
in all respects to the direction of the Depositary and shall be responsible
solely to it. The Custodian may resign and be discharged from its duties
hereunder by 30 days' prior notice of its election to do so delivered to the
Depositary;, such resignation to become effective upon appointment of a
successor Custodian and its acceptance of such appointment as hereinafter
provided. If upon such notice of resignation there shall be no Custodian acting
hereunder, the Depositary shall, promptly after receiving such notice, appoint a
substitute custodian that is organized under the laws of the Philippines which
shall thereafter be the Custodian hereunder. The Depositary may discharge any
Custodian at any time upon notice to the Custodian being discharged and appoint
a substitute or an additional custodian, who shall thereafter be a Custodian
hereunder. Forthwith upon its appointment, each such substitute or additional
custodian shall deliver to the Depositary an acceptance of such
24
appointment satisfactory in form and substance to the Depositary. Upon demand of
the Depositary, any Custodian shall deliver such of the Deposited Securities as
are requested of it to any other Custodian together with all records maintained
by it as Custodian with respect to such Deposited Securities. The Depositary
shall give notice in writing to all Holders of the name, location and the
appointment of any Custodian not named in the GDRs.
Upon the appointment of any successor depositary hereunder, any
Custodian then acting hereunder shall forthwith become, without any further act
or writing, the agent hereunder of such successor depositary and the appointment
of such successor depositary shall in no way impair the authority of any
Custodian hereunder;, but the successor depositary so appointed shall,
nevertheless, on the written request of any Custodian, execute and deliver to
such Custodian all such instruments as may be proper to give to the Custodian
full and complete power and authority as agent hereunder of such successor
depositary.
Section 5.07 Notices, Reports and Communications. The Company has
agreed with the Depositary that, on or before the first date on which the
Company gives notice, by publication or otherwise, of any meeting of holders of
Shares or other Deposited Securities or any other meeting of holders of the
Company's securities at which holders of Shares or other Deposited Securities
are entitled to vote, or of any adjourned meeting of such holders, or of the
taking of any action by such holders of Shares or other Deposited Securities
other than at a meeting, or of the taking of any action in respect of any cash
or other distributions or the offering of any rights in respect of Deposited
Securities, the Company shall transmit to the Depositary and the Custodian a
copy of the notice thereof in the English language but otherwise in the form
given or to be given to holders of Shares or other Deposited Securities. The
Company has also agreed to furnish to the Custodian and the Depositary a
summary, in English, of any applicable provisions or proposed provisions of the
Amended Articles of Incorporation of the Company that may be relevant or pertain
to such notice of meeting or be the subject of a vote thereat.
The Company has agreed with the Depositary to provide to the Custodian
and to arrange for the prompt transmittal by the Custodian to the Depositary, at
the Company's expense, of sufficient copies of (i) such notices and any other
reports and communications that are generally made available by the Company to
holders of Shares and (ii) copies, with the cooperation of the Depositary, as
agreed, of official receipts or other evidence of the payment of withholding
taxes paid by the Company to the Philippine Bureau of Internal Revenue in
respect of the Shares constituting Deposited Securities, such evidence to
include the amount of such taxes withheld, both in the aggregate and on a per
Share basis. The Depositary has agreed with the Company to arrange at the
Company's expense for prompt mailing of copies thereof to all Holders and, at
the reasonable request and at the expense of the Company, shall also make such
notices, reports and communications (including information in respect of
dividends received by the Depositary with regard to the Shares) available to all
Holders in the same manner as the Company makes them generally available to
holders of Shares or on such other basis as the Company may advise the
Depositary is required by any law or
25
regulation or any requirement of any stock exchange to which the Company may be
subject, subject to any limitations imposed by U.S. law. The Company has also
agreed to provide to the Custodian or the Depositary an English language
translation of such reports or communications concurrently with the receipt by
the Custodian of such reports or communications. The Depositary may, but shall
not be required to, at the Company's expense, obtain English translations or
adequate English summaries of any notices, reports or communications which are
generally provided by the Company to its holders of Shares which are not
initially furnished to the Depositary in English text.
Section 5.08 Issuance of Additional Shares, Etc. In the event of any
issuance of additional Shares or of other securities (including rights and
convertible or exchangeable securities) as a dividend or distribution with
respect to the Shares or other Deposited Securities, or future issuances to
Holders for cash of additional Shares or such other securities, the Depositary
shall not distribute any such additional Shares or other securities to the
Holders unless the Company shall have furnished to the Depositary a written
opinion from counsel for the Company in the United States, which counsel shall
be reasonably satisfactory to the Depositary, to the effect that such dividend
or distribution will not violate the Securities Act.
The Company has agreed with the Depositary that any future issuances of
(1) additional Shares, (2) rights, preferences or privileges to subscribe for
Shares, (3) securities convertible into or exchangeable for Shares, or (4)
rights, preferences or privileges to subscribe for securities convertible into
or exchangeable for Shares (in each case other than as a dividend or
distribution or issuance for cash to Holders as described in the immediately
preceding paragraph), shall be effected by the Company in a manner so as to not
violate the Securities Act. If the Company determines that an issuance of such
securities is required to be registered under the Securities Act, the Company
has agreed with the Depositary to (x) register such issuance to the extent
necessary, (y) alter the terms of the issuance to avoid the registration
requirements of the Securities Act or (z) direct the Depositary to take such
measures as are provided in Section 4.03 through 4.05 or other specific measures
with respect to the acceptance for deposit of Shares to prevent such issuance
from being made in violation of the registration requirements of the Securities
Act.
The Company has agreed with the Depositary that, neither the Company
nor any company controlling, controlled by or under common control with the
Company will at any time deposit any Shares, either upon original issuance or
upon a sale of Shares previously issued and reacquired by the Company or by any
such controlled or controlling company unless such transaction is registered
under the Securities Act or is exempt from registration under the Securities Act
as confirmed by a written opinion from counsel for the Company in the United
States, which counsel shall be reasonably satisfactory to the Depositary.
Section 5.09 Indemnification. The Company has agreed with the
Depositary to indemnify the Depositary, the Custodian and any of their
respective agents against, and hold each of them harmless from, any loss,
liability or expense of any kind whatsoever that may arise (a) out of or in
connection with any offer, issuance, sale,
26
resale, transfer, conversion, deposit or withdrawal of GDRs, GDSs, Shares, other
Deposited Securities, Common Stock or any offering documents in respect thereof
or (b) out of acts performed or omitted, including but not limited to any
delivery by the Depositary on behalf of the Company of information regarding the
Company, in connection with this Deposit Agreement, the Company Agreement, the
GDRs and GDSs, as the same may be amended, modified or supplemented from time to
time, in any such case (i) by the Depositary, the Custodian or any of their
respective agents, except to the extent such loss, liability or expense is due
to negligence or bad faith of any of them, or (ii) by the Company or any of its
agents, except to the extent such loss, liability or expense arises out of
information relating to the Depositary, the Custodian or any of their respective
agents, as the case may be, furnished in a signed writing to the Company by the
Depositary expressly for use in an offering document pursuant to which GDRs,
GDSs, Shares or other Deposited Securities are offered or sold.
The Depositary has agreed with the Company to indemnify the Company and
hold it harmless from any loss, liability or expense of any kind whatsoever
which may arise out of acts performed or omitted by the Depositary or the
Custodian or any of their respective agents due to the negligence or bad faith
of either the Depositary or the Custodian or any of their agents.
ARTICLE VI
AMENDMENT AND TERMINATION
Section 6.01 Amendment. The form of the GDRs and any provisions of this
Deposit Agreement may, with the consent of the Company, at any time and from
time to time be amended by the Depositary in any respect which it may deem
necessary or desirable. Any amendment which shall impose or increase any fees or
charges (other than taxes and other governmental charges), or which otherwise
prejudice any substantial existing right of Holders, shall not, however, become
effective as to outstanding GDRs until the expiration of 90 days (or 30 days in
the case of any amendment which shall impose or increase any fees of the
Depositary for the issuance, execution and delivery of GDRs or any fees or
expenses in respect of transfer or sales of Common Stock or any delivery
expenses and charges incurred by the Depositary in the conversion of foreign
currency and in connection with foreign exchange control regulations) after
notice of such amendment shall have been given to the Holders of outstanding
GDRs. Every Holder at the time any amendment becomes effective shall be deemed
by continuing to hold such GDR to consent and agree to such amendment and to be
bound by this Deposit Agreement as amended thereby. In no event shall any
amendment impair the right of any Holder to surrender such Holder's GDRs and
receive therefor the Deposited Securities represented thereby or to direct the
Depositary to forward Notices of Conversion to the Conversion Agent on such
Holder's instructions and (pursuant to the Common Stock Deposit Agreement) to
request the Depositary to use reasonable efforts to sell or cause to be sold the
shares of Common Stock delivered and deposited with the Depositary upon
conversion of Shares represented by GDRs and to distribute the proceeds from the
sale of such Common Stock to the persons entitled thereto, in any case except in
order to comply with provisions of applicable law.
27
Section 6.02 Termination. The Depositary shall at any time at the
direction of the Company terminate this Deposit Agreement by mailing notice of
such termination to the Holders of all GDRs then outstanding at least 90 days
prior to the date fixed in such notice for such termination. The Depositary may
likewise terminate this Deposit Agreement if the Depositary shall have delivered
to the Company a written notice of its election to resign, and a qualified
successor depositary shall not have been appointed and accepted its appointment
as provided in Section 5.04 within 90 days after such delivery. If any GDRs
shall remain outstanding after the date of termination, the Depositary
thereafter shall discontinue the registration of transfers of GDRs, 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 Shares, rights or other property (in all
such cases, without liability for interest), in exchange for GDRs surrendered to
the Depositary. At any time after the expiration of six months from the date of
termination, the Depositary may sell the Deposited Securities then held
hereunder and may thereafter hold the net proceeds of any such sale, together
with any other cash then held by it hereunder, without liability for interest,
for the pro rata benefit of the Holders of GDRs which have not theretofore been
surrendered. After making such sale, the Depositary shall be discharged from all
obligations under this Deposit Agreement and the Company Agreement, except to
account for such net proceeds and other cash and for its obligations under
Section 5.10.
ARTICLE VII
MISCELLANEOUS
Section 7.01 Counterparts. This Deposit Agreement may be executed in
any number of counterparts, each of which shall be deemed an original and all of
such counterparts shall constitute one and the same instrument.
Section 7.02 Third Party Beneficiaries. This Deposit Agreement is for
the exclusive benefit of the parties hereto and the Company and shall not be
deemed to give any legal or equitable right, remedy or claim whatsoever to any
other person.
Section 7.03 Severability. In case any one or more of the provisions
contained in this Deposit Agreement or in the GDRs should be or become invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall in
no way be affected, prejudiced or disturbed thereby.
Section 7.04 Holders as Parties; Binding Effect. The Holders from time
to time shall be parties to this Deposit Agreement and shall be bound by all of
the terms and conditions hereof and of the GDRs by acceptance thereof.
28
Section 7.05 Notices. Any and all notices to be given to the Company
shall be deemed to have been duly given if personally delivered, or sent by mail
(if domestic, first class, if overseas, first class airmail, postage prepaid) or
air courier, or by cable, telex or facsimile transmission confirmed by letter
sent by mail or air courier, addressed to Philippine Long Distance Telephone
Company, Ramon Cojuangco Building, Makati Avenue, P.O. Box 952, Makati, Metro
Manila, Philippines, Attention: Treasurer (facsimile number: (632) 815-8599) or
to any other address which the Company may specify by notice.
Any and all notices to be given to the Depositary shall be deemed to
have been duly given if personally delivered, or sent by mail (if domestic,
first class, if overseas, first class airmail, postage prepaid) or air courier,
or by cable, telex or facsimile transmission confirmed by letter sent by mail or
air courier, addressed to Citibank, N.A., 111 Wall Street, 5th Floor, New York,
New York 10043, Attention: ADR Department (telex number: ITT: 420392; RCA:
235530; facsimile number: (212) 825-2029), or to any other address which the
Depositary may specify by notice.
Any and all notices to be given to any Holder shall be deemed to have
been duly given if personally delivered, or sent by mail (if domestic, first
class, if overseas, first class airmail, postage prepaid) or air courier, or by
cable, telex or facsimile transmission confirmed by letter sent by mail or air
courier, addressed to such Holder at the address of such Holder as it appears on
the transfer books of the Depositary, or, if such Holder shall have filed with
the Depositary a written request that notices intended for such Holder be mailed
to some other address, at the address specified in such request.
Delivery of a notice sent by mail or air courier shall be deemed to be
effective three days (in the case of domestic mail or air courier) or seven days
(in the case of overseas mail) after dispatch and any notice sent by cable,
telex or facsimile transmission as provided in this Section shall be deemed to
be effective 24 hours after dispatch. The Depositary or the Company may,
however, act upon any cable, telex or facsimile transmission received by it from
the other or from any Holder, notwithstanding that such cable, telex or
facsimile transmission shall not subsequently be confirmed as aforesaid.
Section 7.06 Governing Law. This Deposit Agreement and the GDRs shall
be interpreted and all rights hereunder and thereunder and provisions hereof and
thereof shall be governed by the law of the State of New York.
Section 7.07 Compliance with U.S. Securities Laws. Notwithstanding
anything in this Deposit Agreement to the Contrary, the Company and the
Depositary each agrees that it will not exercise any rights it has under this
Deposit Agreement to prevent the withdrawal or delivery of Deposited Securities
in a manner which would violate the United States securities laws, including,
but not limited to, Section I.A.(1) of the General Instructions to the Form F-6
Registration Statement, as amended from time to time, under the Securities Act
of 1933.
29
IN WITNESS WHEREOF, CITIBANK, N.A. has duly executed this Deposit
Agreement as of the day and year first above set forth and all Holders shall
become parties hereto upon acceptance by them of GDRs issued in accordance with
the terms hereof.
CITIBANK, N.A.
Name:
Title:
30
EXHIBIT A
Number _______________
Global Depositary Shares (One Global
Depositary Share Represents One Fully
Paid Share of Series III Convertible
Preferred Stock)
[FORM OF FACE OF GLOBAL DEPOSITARY
RECEIPT]
GLOBAL DEPOSITARY RECEIPT
evidencing
GLOBAL DEPOSITARY SHARES
representing
DEPOSITED FULLY PAID SHARES OF SERIES III
CONVERTIBLE PREFERRED STOCK
of
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
(Incorporated under the laws of
the Republic of the Philippines)
THE HOLDER OF THIS GLOBAL DEPOSITARY RECEIPT SHALL NOT HAVE, AND SHALL NOT HAVE
THE RIGHT TO INSTRUCT THE DEPOSITARY AS TO THE EXERCISE OF, ANY DISSENTER'S
RIGHTS PROVIDED TO HOLDERS OF SHARES UNDER PHILIPPINE LAW.
CITIBANK, N.A., a national banking association organized and existing
under the laws of the United States of America, as depositary (the
"Depositary"), such Depositary's principal office being located at 111 Wall
Street, New York, New York 10043 hereby certifies that [ ],
is the owner of that number of GLOBAL DEPOSITARY SHARES, indicated on the
records of the Depositary, representing deposited fully paid Series III
Convertible Preferred Stock, par value P10 per share ("Shares"), convertible
into Common Stock, par value P5 per share, including evidence of rights to
receive such Shares (including, but not limited to, purchase invoices and
assignments as may effectuate the legal transfer of title to shares under
Philippine law), of Philippine Long Distance Telephone Company, a corporation
organized under the laws of the Republic of the Philippines (the "Company"). At
the date of the Deposit Agreement (as hereafter defined), each Global Depositary
Share ("GDS") represents one (1) Share(1) deposited under the Deposit Agreement
with the Custodian, which at the date of execution of the Deposit Agreement is
Citibank, N.A., Manila branch (the "Custodian").
(1) The Deposit Agreement. This Global Depositary Receipt is one of an
issue herein called the "GDRs" executed and delivered pursuant to the Deposit
Agreement dated as of November 29, 1994 (the "Deposit Agreement"), by and among
the Depositary and all Holders from time to time of GDRs issued thereunder, each
of whom by accepting a GDR or acquiring any beneficial interest therein agrees
to become a party thereto and becomes bound by all terms and provisions thereof.
The Deposit Agreement sets forth the rights of Holders of the GDRs 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, securities,
property and cash, collectively, the "Deposited Securities"). Copies of the
Deposit Agreement are on file at the Principal New York Office of the Depositary
and at the principal office of the Custodian. The statements made on the face
and the reverse of this GDR are summaries of certain provisions of the Deposit
Agreement and are qualified by and subject to the detailed provisions of the
Deposit Agreement, to which reference is hereby made. Terms defined in the
Deposit Agreement and not otherwise defined herein have the same defined
meanings set forth in the Deposit Agreement.
(2) Surrender of GDRs and Withdrawal of Deposited Securities. Subject
to the terms and conditions of the Deposit Agreement, upon (i) surrender of GDSs
by delivery of GDRs at the Principal New York Office of the Depositary for the
purpose of withdrawal of the Deposited Securities represented thereby and (ii)
payment of all fees (including the fees of the Depositary (which are summarized
in paragraph (9) of this GDR) provided in the Deposit Agreement, including
Exhibit B thereto), taxes
- --------
(1) Subject to amendment as provided in Article IV of the Deposit Agreement.
2
(including stamp, transfer and capital gains taxes) and governmental or other
charges payable in connection with such surrender and cancellation of GDRs, a
Holder shall be entitled to delivery, to him or upon his order, of the Shares
and any other documents of title at the time represented by the GDR together
with such other delivery of Deposited Securities (other than Shares) then
represented by GDSs as the Depositary may effect.
A GDR surrendered and written instructions received for such purposes
may be required by the Depositary to be properly endorsed or accompanied by
properly executed instruments of transfer. The person requesting withdrawal of
Deposited Securities shall deliver to the Depositary written instructions
requesting the Depositary to cause the Deposited Securities being withdrawn to
be delivered (subject to any applicable clearing procedures and provisions of
the Amended Articles of Incorporation of the Company) to or upon the written
order of a person or persons designated in such order.
Upon the receipt of such written instructions and compliance with the
terms of Section 2.05 of the Deposit Agreement, the Depositary will direct the
Custodian to deliver at the principal office of such Custodian, subject to the
terms and conditions of the Deposit Agreement and applicable laws and
regulations, to or upon the written order of the person or persons designated in
such written instructions, the Deposited Securities represented by the GDSs
evidenced by such surrendered GDR to or for the account of such person; except
that the Depositary may, subject to applicable law, make delivery to such person
or persons at the Principal New York Office of the Depositary of any dividends
or distributions (other than dividends or distributions consisting of Shares)
with respect to the Deposited Securities to be withdrawn, or of any proceeds of
sale of any dividends, distributions (other than dividends or distributions
consisting of Shares) or rights with respect to the Deposited Securities which
may at the time be held by the Depositary.
At the request, risk and expense of any Holder so surrendering a GDR or
submitting such written instructions for delivery, and for the account of such
Holder, and provided that payment of any applicable tax or governmental or other
charge shall have been made in accordance with Section 3.02 of the Deposit
Agreement, the Depositary will direct the Custodian to forward any cash or other
property (other than rights) comprising, and forward a certificate or
certificates (if certificates may be delivered) and other proper documents of
title, if any, for, the Deposited Securities represented by the GDSs evidenced
by such GDR to the Depositary for delivery at the Principal New York Office of
the Depositary. Such direction will be given by letter or, at the request, risk
and expense of such Holder, by cable, telex or facsimile transmission.
The Depositary will not accept surrender of GDRs or written
instructions for the purpose of withdrawal of less than one Share. In addition,
the Depositary shall only honor requests for withdrawal of whole numbers of
Shares. In the case of surrender of a GDR evidencing a number of GDSs
representing other than a whole number of Shares, the Depositary will cause
delivery of the appropriate whole number of Shares as provided in the Deposit
Agreement and summarized herein, and will execute and deliver to the person
surrendering such GDR a new GDR evidencing GDSs representing any
3
remaining fractional Share or continue to reflect on its records the remaining
fractional Shares.
Notwithstanding anything in the Deposit Agreement to the contrary, the
Company and the Depositary each agrees that it will not exercise any rights it
has under the Deposit Agreement to prevent the withdrawal or delivery of
Deposited Securities in a manner which would violate the United States
securities laws, including, but not limited to, Section I.A(1) of the General
Instructions to the Form F-6 Registration Statement, as amended from time to
time, under the Securities Act of 1933.
(3) Transfers, Split-ups and Combinations. Subject to the limitations
stated herein and in the Deposit Agreement, this GDR is transferable on the
books of the Depositary by the Holder hereof in person or by duly authorized
attorney, upon surrender (at the Depositary's Principal New York Office) of this
GDR 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). 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 under the Deposit
Agreement.
This GDR may be split into other GDRs or may be combined with other
GDRs into one GDR, evidencing the same aggregate number of GDSs and registered
in the name of the same Holder as the GDR or GDRs surrendered.
(4) Conversion of Shares; Mandatory Conversion. (a) The GDSs are not
convertible into Common Stock or any other securities or property of the
Company. Nevertheless, as a matter of convenience, the Depositary has agreed
under the terms of the Deposit Agreement to accept the surrender of GDRs and the
withdrawal of Shares represented thereby, in each case in the manner set forth
in the Deposit Agreement, for the purpose of facilitating conversions of the
Shares.
For the purpose of conversion, a GDR must be surrendered at the
Principal New York Office of the Depositary, (i) together with (A) payment of
all fees (including the fees of the Depositary set forth on Exhibit B to the
Deposit Agreement), taxes (including stamp, transfer and capital gains taxes)
and governmental or other charges payable (including, if payable pursuant to the
terms and conditions of the Shares, an amount equal to the dividend payable on
the dividend payment date immediately following the date on which the Shares to
be converted are surrendered to the Conversion Agent) in connection with the
surrender and cancellation of the GDRs and GDSs, the conversion of Shares and
the issuance, registration and delivery and, if applicable, the deposit of the
Common Stock in accordance with the terms and conditions of the depositary
arrangements of the Depositary, dated as of October 19, 1994, relating to the
Common Stock (the "Common Stock Deposit Agreement") other than any capital or
stamp duties or transfer taxes payable by the Company in accordance with the
terms and conditions of the Shares or the Common Stock and (B) a duly completed
and executed Notice of Conversion in the form attached as Exhibit E to the
Deposit Agreement (the "Notice of Conversion") and such other documentation as
the Depositary may require and
4
(ii) in any case, subject to the terms and conditions of the Shares, the Common
Stock and of the Deposit Agreement. The surrender, delivery and payment of the
foregoing instruments and amounts shall be irrevocable absent notice to the
contrary from the Depositary.
Upon receipt of documents and payments described above, the Depositary
will cancel each GDR so surrendered, withdraw the Shares represented thereby
from deposit under the Deposit Agreement and direct the Custodian to deliver, on
behalf of and at the risk and expense of the Holder surrendering the GDR, to the
Conversion Agent a certificate or certificates and other proper documents of
title, if any, for the Shares so withdrawn along with the Notice of Conversion
and any amounts payable to the Company or the Conversion Agent in connection
with the conversion of such Shares. The Depositary's directions to the Custodian
will be given by letter or, at the request, risk and expense of such Holder, by
cable, telex or facsimile transmission. Such Holder will be entitled to delivery
of Common Stock (together with any securities, cash or other property)
deliverable upon conversion of the Shares in accordance with the terms and
conditions of such Shares and the Depositary shall have no obligations in
respect of such delivery; provided that, if requested by the Holder, the
Depositary will, subject to the terms and conditions of the Deposit Agreement,
the Shares, the Common Stock and the Common Stock Deposit Agreement, (a) cause
the Common Stock delivered upon conversion of the Shares, to be deposited in
accordance with the Common Stock Deposit Agreement and a depositary receipt
issued thereunder in the name of or for the benefit of such Holder or (b) use
reasonable efforts to sell or cause to be sold the Common Stock delivered upon
conversion of the Shares on such Holder's behalf over the Philippine Stock
Exchange and to remit the proceeds thereof (less the fees and expenses provided
herein and any brokerage fee or selling expenses incurred in connection with
such sale) to such Holder or in accordance with such Holder's instructions,
provided that no such request may be made by any such Holder to the Depositary
to sell or to cause to be sold such Common Stock in amounts less than the
minimum trading (board) lot prescribed by the Philippine Stock Exchange.
A GDR surrendered for such purposes may be required by the Depositary
to be properly endorsed or accompanied by properly executed instruments of
transfer. The person requesting withdrawal of Shares and delivery of Common
Stock shall deliver to the Depositary (for onward transmission to the Conversion
Agent) written instructions requesting that the Common Stock deliverable upon
conversion of the Shares be delivered (subject to applicable clearing procedures
and provisions of the Amended Articles of Incorporation of the Company) to or
upon the written order of a person or persons designated in such order.
The Depositary will not accept surrender of GDRs or written
instructions for the purpose of withdrawal and conversion of less than one
Share. In addition, the Depositary will only honor requests for withdrawal and
conversion of whole numbers of Shares. In the case of surrender of a GDR
evidencing a number of GDSs representing other than a whole number of Shares,
the Depositary will withdraw and deliver for conversion the appropriate whole
number of Shares as provided in the Deposit Agreement and as described herein,
and shall execute and deliver to the person
5
surrendering such GDR a new GDR evidencing GDSs representing any remaining
fractional Share.
No Share will be withdrawn or delivered as provided in the Deposit
Agreement and as described herein unless such written order is accompanied by a
fully completed and signed Notice of Conversion.
(b) Upon receipt by the Depositary of notice from the Company of the
date (the "Mandatory Conversion Date") on which the mandatory conversion of any
or all of the Shares constituting Deposited Securities shall occur, the
Depositary will promptly fix a record date for cancellation of the GDSs
representing the Shares to be so converted and notify the Holders of record on
such date (i) of the Mandatory Conversion Date, (ii) the number of Shares then
constituting Deposited Securities called for conversion by the Company on such
date and (iii) that, upon conversion by the Company of any Shares constituting
Deposited Securities, the GDSs representing such Shares shall be cancelled in
the manner set forth in the Deposit Agreement and as described herein. Neither
failure to deliver any such notice to one or more Holders nor any defect in any
notice will affect the sufficiency of the proceedings for cancellation of such
GDSs. In the event that fewer than all the outstanding GDSs are to be so
cancelled, the GDSs to be cancelled will be selected by lot or in any other
substantially equivalent manner determined by the Depositary.
If any Shares constituting Deposited Securities are converted by the
Company on the Mandatory Conversion Date, the Depositary will, on such date,
cancel the number of GDSs representing the number of Shares so converted.
The GDSs cancelled by the Depositary will be deemed no longer to be
outstanding and all rights of the Holders of the GDRs evidencing such GDSs
(except the right to the delivery by the Depositary to the Conversion Agent of
certain documents and payments as provided in the Deposit Agreement and
described herein) will, in respect of the GDSs so cancelled, cease and
terminate.
In respect of any cancelled GDS, upon the delivery to the Depositary of
(x) a duly executed and completed Notice of Conversion with respect to the
Shares formerly represented by such GDSs, (y) evidence satisfactory to the
Depositary that the person executing such Notice of Conversion is or is acting
on behalf of the beneficial owner of GDRs evidencing such cancelled GDSs and (z)
the fees, taxes and governmental and other charges described in Section 2.06 (a)
of the Deposit Agreement, the Depositary will, subject to the terms and
conditions of the Deposit Agreement, direct the Custodian to deliver, on behalf
of and at the risk and expense of such beneficial owner, to the Conversion Agent
without unreasonable delay, a certificate or certificates and other proper
documents of title, if any, for the Shares formerly represented by such GDSs
along with the Notice of Conversion and any amounts payable to the Company or
the Conversion Agent in connection with the conversion of such Shares. Until
such time as the Depositary receives the foregoing documents and payments it
will have no obligation whatsoever to any Holder of GDRs representing cancelled
GDSs.
6
Pursuant to the terms and conditions of the Shares, until such time as
the Conversion Agent has received a Notice of Conversion and such other
documentation as may be required and share certificates in respect of Shares
subject to mandatory conversion by the Company, the Nominee as holder of the
shares of Common Stock delivered upon such mandatory conversion will not be
entitled to notice of, or to attend or vote at, any general or special meeting
of the Company or to receive the dividends to which such shares of Common Stock
are entitled.
(5) Limitations on Execution and Delivery, Transfer, Etc. of GDRs;
Suspension of Delivery, Transfer, Etc. As a condition precedent to the execution
and delivery, registration of transfer, split-up, combination or surrender of
any GDR for the purpose of withdrawal of any Deposited Securities, the
Depositary or the Custodian may require (i) payment from the Holder, the
presenter of a GDR or the depositor of Shares, of a sum sufficient to reimburse
it for any taxes (including any transfer, capital gains or stamp taxes) or
governmental or other charges and any stock transfer, custody or registration
fee with respect thereto and payment of any applicable fees (which are
summarized in paragraph (9) of this GDR) provided for in the Deposit Agreement,
including Exhibit B thereto, (ii) production of proof satisfactory to it as to
the identity and genuineness of any signature, including but not limited to a
signature guarantee in accordance with industry practice, and (iii) compliance
with such other restrictions, if any, as the Depositary and the Company may
establish consistent with the provisions of the Deposit Agreement.
The delivery of GDRs against deposits of Shares generally or of
particular Shares may be suspended or withheld, or the registration of transfer
of GDRs in particular instances may be refused, or the registration of transfer
generally may be suspended, or the surrender of outstanding GDRs for the purpose
of withdrawal of Deposited Securities may be suspended, during any period when
the transfer books of the Depositary or the Company (or the appointed agent of
the Company for the transfer and registration of Shares) are closed, or if any
such action is deemed necessary or advisable by the Company or the Depositary at
any time or from time to time.
Subject to the further terms and provisions of Section 2.07 of the
Deposit Agreement (which are summarized in this paragraph (5)), Citibank, N.A.
and its agents, on their own behalf, may own and deal in any class of securities
of the Company and its affiliates and in GDRs. The Depositary may issue GDRs for
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 hereof. Neither the Depositary nor the
Custodian shall lend Deposited Securities or GDRs; provided, however, that the
Depositary may issue GDRs prior to the receipt of Shares pursuant to Section
2.02 of the Deposit Agreement (a "Pre-Release Transaction") and deliver Shares
upon the receipt and cancellation of GDRs which have been Pre-Released, whether
or not such cancellation is prior to the termination of such PreRelease
Transaction or the Depositary knows that such GDR has been Pre-Released. The
Depositary may receive GDRs in lieu of Shares in satisfaction of a Pre-Release
Transaction. Each such Pre-Release transaction will be
7
(a) subject to (x) a written representation from the person to whom GDRs are to
be delivered, that such person, or its customer, owns the Shares to be remitted,
(y) an unconditional guarantee by such person to deliver to the Custodian the
number of Shares that are the subject of the Pre-Release Transaction and (z) any
additional restrictions or requirements that the Depositary deems appropriate,
(b) subject to a written representation to the Applicant that it will hold such
Shares in trust for the Depositary until their delivery to the Depositary or
Custodian, reflect on its records the Depositary as owner of such Shares and
deliver such Shares upon the Depositary's request, (c) at all times fully
collateralized (marked to market daily) with cash, United States government
securities or such other collateral of comparable safety and liquidity, (d)
terminable by the Depositary on not more than five (5) business days notice, and
(e) subject to such further indemnities and credit regulations as the Depositary
deems appropriate. The Depositary intends that the number of GDRs issued by it
pursuant to a Pre-Release Transaction and outstanding at any time generally will
not exceed thirty percent (30%) of the GDRs issued by the Depositary and with
respect to which Shares are on deposit with the Depositary or Custodian;
provided, however, that the Depositary reserves the right to change or disregard
such limit from time to time as it deems appropriate. The Depositary will also
set limits with respect to the number of GDRs and Shares involved in
transactions to be effected hereunder with any one person on a case by case
basis as it deems appropriate.
The Depositary may retain for its own account any compensation received
by it in connection with the foregoing. Collateral provided pursuant to (b)
above, but not the earnings thereon, shall be held for the benefit of the
Holders only.
Without limitation of the foregoing, the Depositary will not knowingly
accept for deposit under this Deposit Agreement any Shares required to be
registered pursuant to the provisions of the Securities Act (including, but not
limited to, any "restricted securities" within the meaning of Rule 144 under the
Securities Act), unless a registration statement under the Securities Act is in
effect as to such Shares. The Depositary will use reasonable efforts to comply
with written instructions of the Company not to accept for deposit under the
Deposit Agreement any Shares identified in such instructions at such times and
under such circumstances as may reasonably be specified in such instructions in
order to facilitate the Company's compliance with the securities laws of the
United States.
Any person depositing Shares or any Holder may be required from time to
time to file with the Depositary or the Custodian such proof of citizenship,
residence, exchange control approval, payment of all applicable taxes or other
governmental charges, compliance with all applicable laws and regulations and
the terms of the Deposit Agreement, or legal or beneficial ownership and the
nature of such interest, to provide information relating to the registration on
the books of the Company (or the appointed agent of the Company for the transfer
and registration of Shares) of the Shares presented for deposit or other
information, to execute such certificates and to make such representations and
warranties as the Depositary or the Company may deem necessary or proper to
enable the Depositary to perform its obligations under the Deposit Agreement or
to enable the Company or the Depositary to perform their respective obligations
under
8
the Company Agreement (as hereinafter defined). The Depositary may withhold the
execution or delivery or registration of transfer of all or part of any GDR or
the distribution or sale of any dividend or other distribution of rights or of
the proceeds thereof or the withdrawal of any Deposited Securities until such
proof or other information is filed or such certificates are executed or such
representations and warranties are made. The Depositary shall take such
additional actions and provide such additional information as the Depositary
shall from time to time agree with the Company.
(6) Liability of Holders for Taxes and Other Charges. If any tax or
governmental or other charge shall become payable with respect to this GDR, to
any Deposited Securities represented by the GDSs evidenced hereby or to any
shares of Common Stock into which the Shares are convertible, such tax or
governmental or other charge (other than any capital or stamp duties or transfer
taxes payable by the Company in accordance with the terms and conditions of the
Shares or the Common Stock) shall be payable by the Holder hereof to the
Depositary. The Depositary may refuse, and the Company shall be under no
obligation, to effect any registration of transfer of all or any part of this
GDR or any deposit or withdrawal (including any withdrawal in connection with a
conversion of Shares) of Deposited Securities represented by the GDSs evidenced
hereby until such payment is made, and may withhold any dividends or other
distributions, or may sell for the account of the Holder hereof any part or all
of the Deposited Securities represented by the GDSs evidenced hereby, and may
apply such dividends or other distributions or the proceeds of any such sale in
payment of such tax or governmental or other charge, the Holder hereof remaining
liable for any deficiency.
(7) Warranties by Depositor. Each person depositing Shares under the
Deposit Agreement shall be deemed thereby to represent and warrant that such
Shares and each certificate therefor are validly issued and outstanding, fully
paid and nonassessable and that the person making such deposit is duly
authorized to do so. Such representations and warranties shall survive the
deposit of Shares and issuance of GDRs in respect thereof.
(8) Compliance with U.S. Securities Laws. Notwithstanding anything in
the Deposit Agreement to the contrary, the Company and the Depositary have each
agreed that it will not exercise any rights it has under the Deposit Agreement
to prevent the withdrawal or delivery of Deposited Securities in a manner which
would violate the United States securities laws, including, but not limited to,
Section I.A. (1) of the General Instructions to the Form F-6 Registration
Statement, as amended from time to time, under the Securities Act of 1933.
(9) Charges of Depositary. Except for GDSs issued in respect of the
Initial Deposit, the Depositary will charge the party receiving a GDR against
deposit of Shares or other depositary receipts, $0.05 per GDS. The Depositary
will charge the party surrendering a GDR in connection with the withdrawal of
Deposited Securities (including any withdrawal for the purpose of conversion of
Shares), $0.05 per GDS. The Depositary will charge the party for whom the sale
or exercise of rights, is made, $0.02 for each GDS per distribution. Holders
will pay through deduction or otherwise, in addition to the fees and charges
summarized above in this paragraph (9) and set forth in
9
Exhibit B to the Deposit Agreement, (i) taxes and other governmental charges
(including, but not limited to, any transfer, capital gains and stamp tax) other
than any capital or stamp duties or transfer taxes payable by the Company in
accordance with the terms and conditions of the Shares and the Common Stock,
(ii) such registration, transfer, custody or other fees as may from time to time
be in effect for the registration of transfers of Shares generally on the share
register of the Company or its appointed agent for the registration of transfer
and accordingly applicable to transfers of Shares to or from the name of the
Nominee on the making of deposits pursuant to Section 2.02 of the Deposit
Agreement or withdrawals pursuant to Section 2.05 of the Deposit Agreement, or
Section 2.06 of the Deposit Agreement, (iii) such cable, telex, facsimile
transmission and delivery expenses as are expressly provided in the Deposit
Agreement to be at the expense of persons depositing Shares or Holders and (iv)
such reasonable expenses and charges as are incurred by the Depositary in the
conversion of foreign currency pursuant to Section 4.06 of the Deposit Agreement
(which is summarized in paragraph (19) hereof) or in connection with other
distributions to holders of Shares pursuant to Section 4.02, 4.03, 4.04 or 4.05
of the Deposit Agreement (which are summarized in paragraphs (15), (16), (17)
and (18), respectively, hereof).
Any other charges and expenses of the Depositary under the Deposit
Agreement and the Registrar, if any, will be paid by the Company after
consultation and agreement and in accordance with agreements in writing entered
into between the Depositary and the Company as to the nature and amount of such
charges and expenses. The charges and expenses of the Custodian, the Nominee or
any other agent of the Depositary are for the sole account of the Depositary.
The right of the Depositary to receive payment of fees, charges and
expenses as provided in Section 5.05 of the Deposit Agreement (and summarized in
this paragraph (9)) shall survive the termination of this Deposit Agreement and,
as to any Depositary, the resignation of such Depositary pursuant to Section
5.04 of the Deposit Agreement.
(10) Title to GDRs. Subject to any limitations set forth herein or in
the Deposit Agreement, it is a condition of this GDR, and every successive
Holder hereof by accepting or holding the same consents and agrees, that when
properly endorsed or accompanied by proper instruments of transfer (including
signature guarantees in accordance with standard industry practice), title to
this GDR (and to each GDS evidenced hereby) is transferable by delivery with the
same effect as in the case of a negotiable instrument in accordance with the
laws of the State of New York; provided, however, that the Depositary and the
Company, notwithstanding any notice to the contrary, may deem and treat the
Holder of this GDR as the absolute owner hereof for any purpose, including,
without limitation, the purpose of determining the person entitled to
distribution of dividends or other distributions or to any notice provided for
in the Deposit Agreement and neither the Depositary nor the Company shall have
any obligation or be subject to any liability under the Deposit Agreement to any
holder hereof unless such holder is the Holder hereof.
10
(11) Validity of GDR. This GDR shall not be entitled to any benefits
under the Deposit Agreement or be valid or obligatory for any purpose unless
this GDR has been executed by the Depositary by the manual signature of a duly
authorized officer of the Depositary or, if a Registrar shall have been
appointed, such signature may be a facsimile if this GDR is counter-signed by
the manual signature of a duly authorized officer of the Registrar and dated by
such officer.
(12) Disclosure of Interests. The Company or the Depositary may from
time to time request Holders or former Holders to provide information as to the
capacity in which they hold or held this GDR 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.
(13) Ownership Restrictions. The Company may restrict transfers of the
Shares if such transfer might result in ownership of Shares exceeding the limits
under any applicable law or the Company's Amended Articles of Incorporation. The
Philippine Constitution requires that at least 60% of the capital of a
corporation operating a public utility in the Philippines be owned by Philippine
citizens. The Depositary will, if and as directed by the Company, take action
with respect to the ownership interest of any Holder in excess of any legal or
contractual limitations on the legal or beneficial ownership of Shares or GDSs,
including but not limited to a mandatory sale or disposition on behalf of a
Holder of the Shares represented by the GDSs held by such Holder in excess of
such limitation, if and to the extent such disposition is permitted by
applicable law.
(14) Available Information. The Company is subject the periodic
reporting requirements of the Securities Exchange Act of 1934 and, accordingly,
files certain reports with the Commission. These public reports can be inspected
by Holders and copies at the public reference facilities maintained by the
Commission located at the date of this Deposit Agreement at Judiciary Plaza, 450
Fifth Street, N.W. Washington, D.C. 20549.
Dated:
CITIBANK, N.A., as Depositary
Countersigned
By: By:
Authorized Signatory Vice President
The address of the Principal New York Office of the Depositary is 111
Wall Street, 5th Floor, New York, New York 10043.
11
(FORM OF REVERSE OF
GLOBAL DEPOSITARY RECEIPT)
SUMMARY OF CERTAIN ADDITIONAL PROVISIONS
OF THE DEPOSIT AGREEMENT
(15) Cash Distributions in Respect of Deposited Securities;
Withholding. Whenever the Custodian or the Depositary receives any cash dividend
or other cash distribution by the Company in respect of any Deposited
Securities, the Depositary will, subject to the provisions of Section 4.06 of
the Deposit Agreement (which are summarized in paragraph (19) below) convert or
cause any portion of such dividend or distribution which is not in dollars to be
converted into dollars and shall promptly distribute such amount to the Holders
entitled hereto in proportion to the number of GDSs representing such Deposited
Securities held by them respectively, after deduction or upon payment of the
fees and expenses of the Depositary or the Custodian (and without liability for
interest); provided, however, that in the event that the Company, the Custodian
or the Depositary shall be required to withhold and does withhold from any cash
dividend or other cash distribution in respect of any Deposited Securities an
amount on account of taxes or other governmental charges, the amount distributed
to Holders in respect of GDSs representing such Deposited Securities shall be
reduced accordingly. The Depositary will distribute only such amount, however,
as can be distributed without attributing to any Holder a fraction of one cent,
and any balance not so distributable will be held by the Depositary (without
liability for interest thereon) and will be added to and become part of the next
sum received by the Depositary for distribution to Holders then outstanding. The
Company has agreed with the Depositary that the Company or its agent, or the
Depositary or its agent, as appropriate, will remit to the appropriate
governmental authority or agency all amounts withheld and owing to such
authority or agency. The Depositary will forward to the Company or its agent
such information from its records as the Company may reasonably request to
enable the Company or its agent to file necessary reports with governmental
authorities or agencies or, at the request and expense of the Company, the
Depositary or its agent may file such reports if deemed lawful and reasonably
feasible by the Depositary.
(16) Distributions in Shares. If any distribution in respect of any
Deposited Securities consists of a dividend in, or free distribution of, Shares,
the Depositary may, after consultation with the Company, distribute to the
Holders entitled thereto, in proportion to the number of GDSs representing such
Deposited Securities held by them respectively, additional GDRs for an aggregate
number of GDSs representing the number of Shares received as such dividend or
free distribution, in either case, after deduction or upon payment of the fees
and expenses of the Depositary; provided, however, that if for any reason
(including any requirement that the Company or the Depositary withhold, or make
an advance payment of, an amount on account of taxes or other governmental
charges or that such Shares must be registered under the Securities Act in order
to be distributed to Holders) the Depositary reasonably deems such distribution
not to be practical or feasible, the Depositary may, after consultation with the
Company, (i) to the extent permitted by applicable law, adopt such method as it
may reasonably deem equitable and practicable for the purpose of obtaining such
dividend or
12
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 after payment of and reimbursement of advances to pay any taxes or
governmental charges shall be distributed by the Depositary to the Holders
entitled thereto as in the case of a distribution received in cash or (ii) if
the Depositary reasonably determines that no such method of distribution can be
effected in a practicable or equitable manner, the Depositary may refrain from
effecting such distribution altogether until such time as it reasonably
determines that a practicable or equitable distribution can be effected. In lieu
of issuing GDRs or adjusting the Depositary's records for fractional GDSs in any
such case, the Depositary will sell the number of Shares represented by the
aggregate of such fractions and distribute the net proceeds in dollars, all in
the manner and subject to the conditions set forth in Section 4.02 of the
Deposit Agreement (which are summarized in paragraph 15 above). If additional
GDRs are not so distributed (except pursuant to the preceding sentence), or such
change in the records of the Depositary is not made, each GDS will thenceforth
also represent its proportionate interest in the additional Shares distributed
upon the Deposited Securities represented thereby.
(17) Distribution of Rights. In the event that the Company shall offer
or cause to be offered to the holders of any Deposited Securities any rights to
subscribe for additional Shares or any rights of any other nature, the
Depositary, after consultation with the Company, has discretion as to the
procedure to be followed in making such rights available to the Holders entitled
thereto, subject to certain conditions set forth in Section 5.09 of the Deposit
Agreement (which are summarized in paragraph (28) below), or in disposing of
such rights on behalf of such Holders and making the net proceeds available in
cash to such Holders or, if by the terms of such rights offering or by reason of
applicable law, the Depositary may neither make such rights available to such
Holders nor dispose of such rights and make the net proceeds available to such
Holders, then the Depositary will allow the rights to lapse; provided, however,
that the Depositary will, if requested by the Company, take action as follows:
(i) if at the time of the offering of any rights the Depositary
determines that it is lawful and feasible to make such rights available
to all or certain Holders by means of warrants or otherwise, the
Depositary will, after deduction or upon payment of the fees and
expenses of the Depositary, distribute warrants or other instruments in
proportion to the number of GDSs representing such Deposited Securities
held by them respectively, or by means of such other method as it may
deem feasible in order to facilitate the exercise, sale or transfer of
rights by such Holders or the sale or resale of securities obtainable
upon exercise of such rights by such Holders; or
(ii) if at the time of the offering of any rights the Depositary
determines that it is not lawful or not feasible to make such rights
available to certain Holders by means of warrants or otherwise, or if
the rights represented by such warrants or such other instruments are
not exercised and appear to be about to lapse, the Depositary will use
its reasonable efforts to sell such rights or such warrants or other
instruments,
13
if a market therefor is available, at public or private sales, at such
place or places and upon such terms as it may deem proper and, after
deduction or upon payment of the fees and expenses of the Depositary
and any applicable taxes, allocate the net proceeds of such sales for
the account of the Holders otherwise entitled to such rights, warrants
or other instruments upon an averaged or other practicable basis
without regard to any distinctions among such Holders because of
exchange restrictions or the date of delivery of any GDR or GDRs, or
otherwise.
If registration (under the Securities Act or any other applicable law)
of the rights or the securities to which any rights relate is required in order
for the Company to offer such rights to Holders and to sell to them the
securities to which such rights relate, the Depositary will not offer such
rights to Holders unless and until a registration statement is in effect, or
unless the offering and sale of such rights or securities to such Holders are
exempt from registration under the provisions of such law and, if requested by
the Depositary, the Company furnishes to the Depositary an opinion of counsel in
the United States for the Company reasonably satisfactory to the Depositary to
such effect. The Company shall have no obligation to register such rights or
such securities under the Securities Act.
(18) Distributions Other Than Cash. Shares or Rights. Whenever the
Custodian or the Depositary shall receive any distribution other than cash,
Shares or rights upon any Deposited Securities, the Depositary will cause the
securities or property so received to be distributed to the Holders entitled
thereto, after deduction or upon payment of the fees and expenses of the
Depositary, in proportion to the number of GDSs representing such Deposited
Securities held by them respectively, in any manner that the Depositary may deem
equitable and practicable for accomplishing such distribution; provided,
however, that if in the opinion of the Depositary it cannot cause such
securities or property to be distributed or such distribution cannot be made
proportionately among the Holders entitled thereto, or if for any other reason
(including any requirement that the Company, the Custodian or the Depositary
withhold an amount on account of taxes or other governmental charges or that
such securities must be registered under the Securities Act in order to be
distributed to Holders) the Depositary deems such distribution not to be
feasible, the Depositary may, after consultation with the Company, adopt such
method as it may deem equitable and practicable for the purpose of effecting
such distribution, including the sale (at public or private sale) of the
securities or property thus received, or any part thereof, and the net proceeds
of any such sale will be distributed by the Depositary to the Holders entitled
thereto as in the case of a distribution received in cash; provided that any
unsold balance of such securities or property will be distributed by the
Depositary to the Holders entitled thereto, if such distribution is feasible
without withholding for or on account of any taxes or other governmental charges
and without registration under the Securities Act, in accordance with such
equitable and practicable method as the Depositary adopts.
(19) Conversion of Foreign Currency. Whenever the Custodian receives
currency other than dollars (in this paragraph referred to as "foreign
currency"), by way of dividends or other distributions or the net proceeds from
the sale of securities,
14
property or rights, and if at the time of the receipt thereof the foreign
currency so received can in the judgment of the Depositary be converted on a
reasonable basis into dollars which can, at the time of receipt thereof, be
transferred to the United States and distributed to the Holders entitled
thereto, the Depositary will promptly convert or cause to be converted, by sale
or in any other manner that it may determine, such foreign currency into
dollars, and such dollars (less any reasonable and customary expenses incurred
by the Depositary in the conversion of the foreign currency) will be distributed
to the Holders entitled thereto or, if the Depositary shall have distributed any
warrants or other instruments which entitle the holders thereof to such dollars,
then to the holders of such warrants and/or instruments upon surrender thereof
for cancellation. Such distribution will be made upon an averaged or other
practicable basis without regard to any distinctions among Holders on account of
any application of exchange restrictions or otherwise.
If such conversion or distribution generally or with regard to a
particular Holder can be effected only with the approval or license of any
government or agency thereof, the Depositary may file such application for
approval or license, if any, as it may deem desirable.
If at any time the Depositary determines that in its judgment any
foreign currency received by the Depositary is not convertible on a reasonable
basis into dollars distributable to Holders entitled thereto, or if any approval
or license of any government or authority or agency thereof which is required
for such conversion is denied or in the opinion of the Depositary is not
obtainable, or if any such approval or license is not obtained within a
reasonable period as determined by the Depositary, the Depositary may distribute
the foreign currency (or an appropriate document evidencing the right to receive
such foreign currency) received by the Depositary to, or in its discretion may
hold such foreign currency (without liability for interest) for the respective
accounts of, the Holders entitled to receive the same.
If any such conversion of foreign currency, in whole or in part, cannot
be effected for distribution to some Holders entitled thereto, the Depositary
may in its discretion make such conversion and distribution in dollars to the
extent permissible to the Holders for whom such conversion and distribution is
practicable and may, subject to any applicable currency and exchange
regulations, distribute the balance of the foreign currency received by the
Depositary to, or hold such balance for the account of, the Holders for whom
such conversion and distribution is not practicable.
(20) Fixing of Record Date. Whenever any cash dividend or other cash
distribution shall become payable or any distribution other than cash shall be
made, or whenever rights shall be issued, with respect to the Deposited
Securities, or whenever the Depositary receives notice of any meeting of holders
of Shares or other Deposited Securities or any other meeting of holders of the
Company's securities at which holders of Shares or other Deposited Securities
are entitled to vote, or whenever, for any reason, the Depositary causes a
change in the number of Shares that are represented by each GDS, or whenever the
Depositary finds it necessary or convenient in respect of any matter (including
in connection with a mandatory conversion of Shares by the Company),
15
the Depositary will fix a record date after consultation with the Company (which
shall be as near as practicable to the corresponding record date for such
distribution or meeting set by the Company) for the determination of the Holders
who shall be entitled to receive such dividend, distribution or rights or the
net proceeds of the sale thereof, or to give instructions for the exercise of
voting rights, if any, at any such meeting or in respect of such changed number
of Shares represented by a GDS or in respect of such other matter. Except in the
case of a mandatory conversion by the Company of less than all of the Shares
deposited hereunder (which shall be governed by Section 2.06 of the Deposit
Agreement, the terms of which are described in paragraph (4) above) and subject
to the provisions of Sections 4.02 through 4.06 of the Deposit Agreement (which
are summarized in paragraphs (15) through (19), respectively, above) and to the
other terms and conditions of the Deposit Agreement, the Holders on such record
date will be entitled to receive the amount distributable by the Depositary with
respect to such dividend or other distribution or such rights or the net
proceeds of sale thereof and to exercise the rights of Holders under the Deposit
Agreement with respect to such changed number of Shares represented by each GDS,
in proportion to the number of GDSs held by them respectively, to give such
voting instructions, to receive such notice or solicitation or to act in respect
of any matter.
(21) Voting of Deposited Securities. As soon as practicable after
receipt of notice of any meeting of holders of Shares or other Deposited
Securities or any other meeting of holders of the Company's securities at which
holders of Shares or other Deposited Securities are entitled to vote, the
Depositary will fix a record date for determining the Holders entitled to give
instructions for the exercise of voting rights as provided in Section 4.07 of
the Deposit Agreement (and summarized in paragraph (20) above) and will mail or
cause to be mailed to the Holders of record a notice which will contain: (a)
such information as is contained in such notice of meeting and (b) a statement
that the Holders of record at the close of business on a specified record date
will be entitled, subject to any applicable provisions of the law of the
Philippines and of the Amended Articles of Incorporation and the By-Laws of the
Company, to instruct the Depositary as to the exercise of the voting rights, if
any, pertaining to the number of Shares or other Deposited Securities
represented by their respective GDSs evidenced by their respective GDRs. Upon
the written request of a Holder on such record date, received on or before the
date established by the Depositary for such purpose, the Depositary will
endeavor insofar as is practicable to vote or cause to be voted the amount of
Deposited Securities represented by such GDSs evidenced by such GDR in
accordance with the instructions set forth in such request.
The Depositary may not itself exercise any voting discretion over any
Shares. If the Depositary does not receive instructions from a Holder on or
before the date established by the Depositary for such purpose, such Holder
shall be deemed, and the Depositary shall deem such Holder, to have instructed
the Depositary to give a discretionary proxy to a person designated by the
Company for the purpose of exercising the voting rights, if any, pertaining to
the Shares represented by GDSs evidenced by such Holder's GDRs, provided that no
such discretionary proxy shall be given with respect to any matter as to which
the Company informs the Depositary that (i) the Company does
16
not wish such proxy given, (ii) substantial opposition exists or (iii) the
rights of holders of Shares will be materially and adversely affected.
Holders do not have, and will not have the right to instruct the
Depositary as to the exercise of, any dissenter's rights provided to holders of
Shares under Philippine law.
(22) Changes Affecting Deposited Securities. Upon any change in par
value, split-up, consolidation or any other reclassification of Deposited
Securities (other than as a result of any conversion of Shares into Common Stock
in accordance with the terms of the Shares), or upon any recapitalization,
reorganization, merger or consolidation of the Company or sale of assets
affecting the Company or to which it is a party, any securities that shall be
received by the Depositary or the Custodian in exchange for or in conversion of
or in respect of Deposited Securities will be treated as new Deposited
Securities, and the GDRs will, subject to the terms of the Deposit Agreement and
applicable laws (including any registration requirements of the Securities Act),
thenceforth represent the right to receive the new Deposited Securities so
received in exchange or conversion, unless new or additional GDRs are delivered
pursuant to the following sentence. In any such case the Depositary may, and
will at the Company's request, subject to the terms of the Deposit Agreement,
execute and deliver additional GDRs, as in the case of a stock dividend on the
Shares, or call for the surrender of outstanding GDRs to be exchanged for new
GDRs specifically describing such new Deposited Securities.
Notwithstanding the foregoing, in the event that the Depositary
determines that any security or property so received may not be lawfully or
practicably distributed to all or certain Holders, the Depositary may and will,
if the Company requests, sell such securities or property at public or private
sale, at such place or places and upon such terms as it may deem proper, and may
allocate the net proceeds of such sales (after payment of the expenses thereof
and any taxes or governmental charges) for the account of the Holders otherwise
entitled to such securities or property upon an averaged or other practicable
basis without regard to any distinctions among such Holders and distribute the
net proceeds so allocated to the extent practicable as in the case of a
distribution received in cash pursuant to Section 4.02 of the Deposit Agreement
(which is summarized in paragraph (15) above) .
Promptly upon receipt of notice from the Company of the occurrence of
any such change, conversion or exchange covered by Section 4.09 of the Deposit
Agreement (as described in this paragraph (22)) in respect of the Deposited
Securities, the Depositary will give notice thereof in writing, at the Company's
expense, to all Holders.
(23) Transmittal by the Depositary of Company Notices, Reports and
Communications; Inspection of Transfer Books. The Depositary will make available
for inspection during business hours by Holders at its Principal New York Office
and at the principal office of the Custodian copies of (i) the Deposit Agreement
and any related documents, (ii) the Preferred Stock Agreement dated the date of
the Deposit Agreement
17
between the Company and the Depositary and relating thereto (the "Company
Agreement"), (iii) the Company's Amended Articles of Incorporation and By-Laws
and the Resolutions of the Board of Directors relating to the Shares and (iv)
any notices, reports or communications, including any proxy soliciting
materials, received from the Company which are both (a) received by the
Depositary or the Custodian or the nominee of either, as the holder of the
Deposited Securities, and (b) made generally available to the holders of such
Deposited Securities by the Company. The Depositary will also send to Holders,
at the Company's expense, copies of such notices, reports and communications
when furnished by the Company to the Depositary pursuant to the Deposit
Agreement. The Depositary will keep books for the registration of GDRs and their
transfer which at all reasonable times will be open for inspection by the
Company and Holders of GDRs, provided that such inspection shall not be for the
purpose of communicating with Holders of GDRs 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 GDRs.
(24) Withholding. Notwithstanding any other provision of the Deposit
Agreement, in the event that the Depositary determines that any distribution of
property (including Shares, rights to subscribe therefor and other securities)
is subject to any tax or governmental charges which the Depositary is obligated
to withhold, the Depositary may dispose of all or a portion of such property
(including Shares, rights to subscribe therefor and other securities) in such
amounts and in such manner as the Depositary deems necessary and practicable to
pay such taxes or governmental charges, including by public or private sale, and
the Depositary will distribute the net proceeds of any such sale or the balance
of any such property after deduction of such taxes or governmental charges to
the Holders entitled thereto in proportion to the number of GDSs held by them
respectively and the Depositary will, if feasible without withholding for or on
account of taxes or other governmental charges, and otherwise in compliance with
applicable law, distribute any unsold balance of such property in accordance
with the provisions of the Deposit Agreement. To the extent that the Depositary
is obligated to withhold as described in the previous sentence, the Depositary
will remit to the appropriate governmental authority or agency all amounts
withheld and owing to such authority or agency and will file such corresponding
reports as may be required.
The Company has agreed with the Depositary that, before making any
distribution or other payment on any Deposited Securities, the Company will make
such deductions (if any) which, by the laws or regulations of the Philippines,
the Company is required to make in respect of any income, capital gains or other
taxes and that the Company may also deduct the amount of any tax or governmental
charges payable by the Company or for which the Company might be made liable in
respect of such distribution or other payment or any document signed in
connection therewith.
(25) Obligations of the Depositary, the Custodian and the Company. The
Company assumes no obligation nor is it subject to any liability under the
Deposit Agreement to Holders or other persons, except that it has agreed with
the Depositary to act in good faith and use reasonable judgment in the
performance of its obligations set forth in the Company Agreement. The
Depositary assumes no obligation nor is it subject to any liability under the
Deposit Agreement to Holders or other persons (including,
18
without limitation, liability with respect to the validity or worth of the
Deposited Securities), except that it has agreed to act in good faith and use
reasonable judgment in the performance of its obligations set forth in the
Deposit Agreement. The Depositary has undertaken in the Deposit Agreement to
perform such duties and only such duties as are specifically set forth therein,
and no implied covenants or obligations shall be read into the Deposit Agreement
against the Depositary or the Company.
Neither the Depositary nor the Company are under any obligation to
appear in, prosecute or defend any action, suit or other proceeding in respect
of any Deposited Securities or in respect of the GDRs, which in its opinion may
involve it in expense or liability, unless indemnity satisfactory to it in its
sole discretion against all expense and liability be furnished as often as may
be required, and no Custodian is under any obligation whatsoever with respect to
such proceedings, the Custodian being responsible solely to the Depositary.
Neither the Depositary nor the Company shall be liable for any action
or inaction by it in reliance upon the advice of or information from legal
counsel, accountants, any person presenting Shares for deposit, any Holder, or
any other person believed by it in good faith to be competent to give such
advice or information. Each of the Depositary, its agents and the Company and
its agents may rely and shall be protected in acting upon any written notice,
request, direction or other document believed by it to be genuine and to have
been signed or presented by the proper party or parties. Subject to the
provisions of Section 5.02 of the Deposit Agreement (which are summarized in
this paragraph (25)), the Depositary is not responsible for any failure to carry
out any instructions to vote any of the Deposited Securities, for the manner in
which any such vote is cast or for the effect of any such vote.
It is intended that neither the Depositary nor any agent of the
Depositary shall be deemed to be an "issuer" of the securities under the federal
securities laws or applicable state securities laws of the United States or any
other jurisdiction, it being expressly understood and agreed that the Depositary
and its agents are acting only in a ministerial capacity as Depositary for the
Shares.
(26) Prevention or Delay in Performance by the Depositary or the
Company. Neither the Depositary nor the Company will incur any liability to any
Holder or other person if by reason of any present or future law, regulation,
decree, order or other action of the United States, the Philippines or any other
country or jurisdiction, or of any other governmental authority, or by reason of
any act of God, war or other circumstances beyond its control or, in the case of
the Depositary, by reason of any provision, present or future, of the Amended
Articles of Incorporation and By-laws of the Company or any Deposited
Securities, the Depositary or the Company is prevented, delayed or forbidden
from doing or performing any act or thing which by the terms of the Deposit
Agreement (in the case of the Depositary) or the Company Agreement it is
provided shall be done or performed; nor will the Depositary or the Company
incur any liability to any Holder or other person by reason of any
nonperformance or delay, caused as aforesaid, in performance of any act or thing
that by the terms of the Deposit Agreement it is provided shall or may be done
or performed, or by reason of any exercise
19
of, or failure to exercise, any discretion provided for in the Deposit
Agreement. Where, by the terms of a distribution pursuant to Section 4.02, 4.03
or 4.05 of the Deposit Agreement (which are summarized in paragraphs (15) , (16)
and (18), respectively, above)) or an offering or distribution pursuant to
Section 4.04 of the Deposit Agreement (which is summarized in paragraph (17)
above), or because of applicable law, such distribution or offering may not be
made available to Holders, and the Depositary may not dispose of such
distribution or offering on behalf of such Holders and make the net proceeds
available to such Holders, then the Depositary may make no such distribution or
offering, and may allow any rights, if applicable, to lapse.
(27) Resignation of the Depositary Appointment of Successor Depositary
the Custodian. The Depositary may at any time resign as Depositary under the
Deposit Agreement by 30 days' written notice of its election so to do to the
Company, such resignation to take effect upon the appointment of a successor
depositary and its acceptance of such appointment as provided in the Deposit
Agreement.
In case at any time the Depositary acting under the Deposit Agreement
resigns, the Company has agreed to use its best efforts to appoint a successor
depositary, which shall be a bank or trust company having an office in the
Borough of Manhattan, The City of New York. Any corporation into or with which
the Depositary may be merged or consolidated will be the successor of the
Depositary without the execution or filing of any document or any further act.
The Depositary, after consultation with the Company, will from time to
time appoint one or more agents to act for it as Custodian under the Deposit
Agreement. The Depositary has initially appointed Citibank, N.A., Manila, as
custodian and agent of the Depositary for the purpose of the Deposit Agreement.
The Custodian in acting under the Deposit Agreement will be subject at all times
and in all respects to the direction of the Depositary and will be responsible
solely to it.
The Custodian may resign and be discharged from its duties under the
Deposit Agreement by 30 days' prior notice of its election to do so delivered to
the Depositary; such resignation to become effective upon appointment of a
successor Custodian and its acceptance of such appointment as provided in the
Deposit Agreement. The Depositary may discharge any Custodian at any time upon
notice to the Custodian being discharged and appoint a substitute or an
additional custodian, who will thereafter be the Custodian under the Deposit
Agreement.
(28) Issuance of Additional Shares, Etc. In the event of any issuance
of additional Shares or of other securities (including rights and convertible or
exchangeable securities) as a dividend or distribution with respect to the
Shares or other Deposited Securities, or future issuances to Holders for cash of
additional Shares or such other securities, the Depositary will not distribute
any such additional Shares or other securities to the Holders unless the Company
shall have furnished to the Depositary a written opinion from counsel for the
Company in the United States, which counsel shall be reasonably satisfactory to
the Depositary, to the effect that such dividend or distribution will not
violate the Securities Act.
20
The Company has agreed with the Depositary that any future issuances of
(1) additional Shares, (2) rights, preferences or privileges to subscribe for
Shares, (3) securities convertible into or exchangeable for Shares, or (4)
rights, preferences or privileges to subscribe for securities convertible into
or exchangeable for Shares (in each case other than as a dividend or
distribution or issuance for cash to Holders as described in the immediately
preceding paragraph) shall be effected by the Company in a manner so as to not
violate the Securities Act. If the Company determines that an issuance of such
securities is required to be registered under the Securities Act, the Company
has agreed with the Depositary to (x) register such issuance to the extent
necessary, (y) alter the terms of the issuance to avoid the registration
requirements of the Securities Act or (z) direct the Depositary to take such
measures as are provided in Sections 4.03 through 4.05 of the Deposit Agreement
(which are summarized in paragraphs (16) through (18), respectively, above) or
other specific measures with respect to the acceptance for deposit of Shares to
prevent such issuance from being made in violation of the registration
requirements of the Securities Act.
The Company has agreed with the Depositary that neither the Company nor
any company controlling, controlled by or under common control with the Company
will at any time deposit any Shares, either upon original issuance or upon a
sale of Shares previously issued and reacquired by the Company or by any such
controlled or controlling company unless such transaction is registered under
the Securities Act or is exempt from registration under the Securities Act as
confirmed by a written opinion from counsel for the Company in the United
States, which counsel shall be reasonably satisfactory to the Depositary.
(29) Amendment. The form of this GDR and any provisions of the Deposit
Agreement may, with the consent of the Company, at any time and from time to
time be amended by the Depositary in any respect which it may deem necessary or
desirable. Any amendment which imposes or increases any fees or charges (other
than taxes and other governmental charges), or which otherwise prejudice any
substantial existing right of Holders, shall not, however, become effective as
to outstanding GDRs until the expiration of 90 days (or 30 days in the case of
any amendment which shall impose or increase any fees of the Depositary for the
issuance, execution and delivery of GDRs or any fees or expenses in respect of
transfer or sales of Common Stock or any delivery expenses and charges incurred
by the Depositary in the conversion of foreign currency and in connection with
foreign exchange control regulations) after notice of such amendment shall have
been given to the Holders of outstanding GDRs. Every Holder at the time any
amendment becomes effective shall be deemed by continuing to hold such GDR to
consent and agree to such amendment and to be bound by the Deposit Agreement as
amended thereby. In no event shall any amendment impair the right of any Holder
to surrender such Holder's GDRs and receive therefor the Deposited Securities
represented thereby or to direct the Depositary to forward Notices of Conversion
to the Conversion Agent on such Holder's instructions and (pursuant to the
Common Stock Deposit Agreement) request the Depositary to use reasonable efforts
to sell or cause to be sold the shares of Common Stock delivered and deposited
with the Depositary upon conversion of Shares represented by GDRs and to
distribute the proceeds from the sale of
21
such Common Stock to the persons entitled thereto, in any case except in order
to comply with provisions of applicable law.
(30) Termination. The Depositary will at any time at the direction of
the Company terminate the Deposit Agreement by mailing notice of such
termination to the Holders of all GDRs then outstanding at least 90 days prior
to the date fixed in such notice for such termination. The Depositary may
likewise terminate the Deposit Agreement if the Depositary delivers to the
Company a written notice of its election to resign, and a qualified successor
depositary shall not have been appointed and accepted its appointment as
provided in Section 5.04 of the Deposit Agreement (which is summarized in
paragraph (27) above) within 90 days after such delivery. If any GDRs remain
outstanding after the date of termination, the Depositary thereafter will
discontinue the registration of transfers of GDRs, will suspend the distribution
of dividends to the Holders thereof, will not accept deposits of Shares (and
will instruct each Custodian to act accordingly), and will not give any further
notices or perform any further acts under the Deposit Agreement, except that the
Depositary will continue to collect dividends and other distributions pertaining
to Deposited Securities, will sell property and rights and convert Deposited
Securities into cash as provided in the Deposit Agreement, and will continue to
deliver Deposited Securities, together with any dividends or other distributions
received with respect thereto and the net proceeds of the sale of any Shares,
rights or other property (in all such cases, without liability for interest), in
exchange for GDRs surrendered to the Depositary. At any time after the
expiration of six months from the date of termination, the Depositary may sell
the Deposited Securities then held under the Deposit Agreement and may
thereafter hold the net proceeds of any such sale, together with any other cash
then held by it under the Deposit Agreement, without liability for interest, for
the pro rata benefit of the Holders of GDRs which have not theretofore been
surrendered. After making such sale, the Depositary will be discharged from all
obligations under the Deposit Agreement and the Company Agreement, except to
account for such net proceeds and other cash and for its obligations under the
indemnification provisions of Section 5.10 of the Deposit Agreement.
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FOR VALUE RECEIVED, the undersigned Holder hereby sell(s), assign(s)
and transfer(s) unto whose taxpayer identification number is and whose address
including postal zip code is the within GDR and all rights thereunder, hereby
irrevocably constituting and appointing attorney-in-fact to transfer said GDR on
the books of the Depositary with full power of substitution in the premises.
Dated: Name:
By:
Title:
NOTICE: The signature of the Holder to
this assignment must correspond with the
name as written upon the face of the
within instrument in every particular,
without alteration or enlargement or any
change whatsoever.
SIGNATURE GUARANTEED
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EXHIBIT B
CHARGES OF THE DEPOSITARY
Service Rate By Whom Paid
------- ---- ------------
1) Creation of Global Depositary GDR Waived N/A
program
2) Annual maintenance fee for GDR Waived N/A
program
3) Issuance of GDR against deposit $0.05 per GDS Party receiving
of GDR Shares (except upon
Initial Deposit) or other
depositary receipts
4) Withdrawal of Deposited $0.05 per GDS Party
Securities (including for the surrendering GDR
purpose of conversion of the
Shares) against surrender of GDRs
5) Sale or exercise of rights or $0.02 per GDS per Party for whom the sale or
other corporate action involving distribution exercise of rights, is made
distributions in respect of
Deposited Securities
EXHIBIT C
NOTICE OF CONVERSION
Citibank, N.A., as Depositary
ADR Department
111 Wall Street
New York, New York 10043
Re: Philippine Long Distance Telephone
Company (the "Company")
(a) The undersigned Holder hereby irrevocably authorizes the Depositary on such
Holder's behalf, to exercise the option to convert shares of the Series III
Convertible Preferred Stock of the Company (the "Shares") represented by the
GDSs evidenced by the GDR surrendered in connection herewith into shares of
Common Stock (and any other applicable securities or property) of the Company in
accordance with the terms of and conditions of the Shares and as provided in
Section 2.06 of the Deposit Agreement relating to the Shares, dated as of
November 29, 1994, among Citibank, N.A., as Depositary, and the Holders from
time to time of the GDRs issued thereunder, and directs that Common Stock of the
Company deliverable upon such conversion be registered in the name of and
delivered, together with a check in payment for any fractional shares of Common
Stock and any other property deliverable upon conversion, to the undersigned
unless a different name has been indicated below.
(b) If the undersigned desires that the shares of Common Stock deliverable upon
conversion of the Shares be deposited in accordance with the terms and
conditions of the depositary arrangements of the Depositary dated as of October
19, 1994 relating to the Common Stock (the "Common Stock Deposit Agreement"),
the undersigned should so indicate below and designate Citicorp Trade Services
Limited as the registered holder of such Common Stock.
(c) The undersigned hereby agrees to pay all fees (including the fees of the
Depositary), taxes (including stamp, transfer and capital gains taxes) and
governmental or other charges payable in connection with the surrender and
cancellation of the GDRs and GDSs, the conversion of the Shares and the
issuance, registration and delivery and, if applicable, the deposit of the
Common Stock in accordance with the terms and conditions of the Common Stock
Deposit Agreement (other than any capital or stamp duties payable in the
Philippines in respect of the Common Stock that are payable by the Company). If
the number of Shares indicated above is less than the number of Shares on
deposit with the Depositary in respect of a GDR surrendered in connection
herewith the undersigned directs the Depositary to issue to the undersigned,
unless a different name is indicated below, a new GDR evidencing Shares for the
balance not to be converted.
(d) The undersigned understands and agrees that the Depositary has agreed to
forward to the Conversion Agent this Notice of Conversion and the Shares being
converted in connection herewith as a matter of convenience only and that this
Notice of Conversion will not be effective until received by the Conversion
Agent and all conditions precedent to the conversion of Shares have been
satisfied. Neither the
Depositary nor the Custodian shall be responsible or liable to any Holder for
any loss, liability or expense suffered by such Holder arising from any delay in
forwarding this Notice of Conversion or the Shares being converted in connection
herewith to the Conversion Agent.
(e) Name and address of person in whose name the Common Stock delivered upon
conversion of the Shares are to be registered:
Name:
Address:
(f) The undersigned hereby requests that the certificates for the Common Stock
(together with any securities, cash or other property) required to be delivered
upon conversion:
(a) be delivered at the office in Manila of the Conversion Agent
(which currently is Citibank, Manila, 8741 Paseo de Roxas, Makati,
Metro Manila, Philippines) to the order of:
Name:
Address:
OR
(b) be despatched (at the undersigned's risk and expense) to the
person whose name and address is given below and in the manner
specified below:
Name:
Address:
Manner of despatch:
(g) The undersigned acknowledges that the terms of the Shares set forth certain
conditions precedent which must be fulfilled before the Shares specified above
will be treated as effectively deposited for conversion.
(h) The undersigned acknowledges that if Section 6(b) above is completed,
despatch will be made at the risk and expense of the converting Shareholder and
the converting Shareholder will be required to prepay the expenses of, and
submit any necessary documents required in order to effect, despatch in the
manner specified.
Name: Date:
Address:
Signature:
* * * *
For Custodian's use only:
Certificate numbers of Shares delivered to Conversion Agent:
For Conversion Agent's use only:
1. Date of Receipt:
2. (A) Aggregate number of Shares deposited for conversion multiplied by the
Reference Amount (US$25 per Share): .
(B) Conversion Price: .
(C) Number of shares of Common Stock issuable: (disregard fractions)
3. If applicable, amount of cash payment due to converting holder in respect of
fractions of shares of Common Stock: .