EXECUTION COPY
KOREA TELECOM CORP.
AND
CITIBANK, N.A.,
As Depositary
AND
HOLDERS AND BENEFICIAL OWNERS OF
AMERICAN DEPOSITARY RECEIPTS
-----------------------
Deposit Agreement
-----------------------
Dated as of May 25, 1999
TABLE OF CONTENTS
Page
SECTION 1.01. American Depositary Shares; ADSs ...............................1
SECTION 1.02. Beneficial Owner ...............................................1
SECTION 1.03. Commission .....................................................1
SECTION 1.04. Company ........................................................1
SECTION 1.05. CSD ............................................................2
SECTION 1.06. Custodian ......................................................2
SECTION 1.07. Deliver; Deposit; Surrender; Transfer; Withdraw ................2
SECTION 1.08. Deposit Agreement ..............................................2
SECTION 1.09. Depositary .....................................................2
SECTION 1.10. Deposited Securities ...........................................2
SECTION 1.11. Dollars ........................................................2
SECTION 1.12. Holder .........................................................2
SECTION 1.13. Korea ..........................................................2
SECTION 1.14. Non-Voting Stock ...............................................3
SECTION 1.15. NYSE ...........................................................3
SECTION 1.16. Principal London Office ........................................3
SECTION 1.17. Principal New York Office ......................................3
SECTION 1.18. Receipts; ADRs .................................................3
SECTION 1.19. Registrar ......................................................3
SECTION 1.20. Securities Act of 1933 .........................................3
SECTION 1.21. Securities Exchange Act of 1934 ................................3
SECTION 1.22. Shares .........................................................3
SECTION 1.23. United States ..................................................4
SECTION 1.24. Won ............................................................4
SECTION 2.01. Form and Transferability of Receipts ...........................4
SECTION 2.02. Deposit of Shares ..............................................5
SECTION 2.03. Execution and Delivery of Receipts .............................6
SECTION 2.04. Transfer of Receipts; Combination and Split-up of Receipts .....6
SECTION 2.05. Surrender of Receipts and Withdrawal of Deposited Securities ...7
SECTION 2.07. Lost Receipts, Etc .............................................8
SECTION 2.08. Cancellation and Destruction of Surrendered Receipts ...........9
SECTION 2.09. Maintenance of Records .........................................9
SECTION 3.01. Filing Proofs, Certificates and Other Information ..............9
SECTION 3.02. Liability of Holders and Beneficial Owners for Taxes and
Other Charges ...............................................9
SECTION 3.03. Representations and Warranties on Deposit, Transfer and
Surrender and Withdrawal of Shares or Receipts .............10
SECTION 3.04. Disclosure of Beneficial Ownership ............................10
SECTION 3.05. Ownership Restrictions ........................................11
SECTION 4.01. Power of Attorney .............................................11
SECTION 4.02. Cash Distributions; Withholding of Taxes and other
Governmental Charges .......................................11
SECTION 4.03. Distributions Other Than Cash, Shares, Non-Voting Stock or
Rights .....................................................12
SECTION 4.04. Distributions in Shares .......................................12
SECTION 4.05. Distribution of Non-Voting Stock ..............................13
SECTION 4.06. Rights ........................................................13
SECTION 4.07. Conversion of Foreign Currency ................................14
SECTION 4.08. Fixing of Record Date .........................................15
SECTION 4.09. Voting of Deposited Securities ................................15
SECTION 4.10. Changes Affecting Deposited Securities ........................17
SECTION 4.11. Transmittal by the Depositary of Company Notices, Reports
and Communications .........................................17
SECTION 4.12. Taxation ......................................................17
SECTION 5.01. Maintenance of Office and Transfer Books by the Depositary ....19
SECTION 5.02. Lists of Receipt Holders ......................................19
SECTION 5.03. Obligations of the Depositary, the Custodian and the Company ..19
SECTION 5.04. Prevention or Delay in Performance by the Depositary or the
Company ....................................................20
SECTION 5.05. Resignation and Removal of the Depositary; Appointment of
Successor Depositary .......................................21
SECTION 5.06. Charges of Depositary .........................................21
SECTION 5.07. The Custodian .................................................22
SECTION 5.08. Notices and Reports ...........................................22
SECTION 5.09. Issuance of Additional Shares, Etc ............................23
SECTION 5.10. Indemnification ...............................................24
SECTION 5.11. Certain Rights of the Depositary; Limitations .................25
SECTION 6.01. Amendment .....................................................26
SECTION 6.02. Termination ...................................................26
SECTION 7.01. Counterparts ..................................................27
SECTION 7.02. No Third Party Beneficiaries ..................................27
SECTION 7.03. Severability ..................................................27
SECTION 7.04. Holders and Beneficial Owners as Parties; Binding Effect ......27
SECTION 7.05. Notices .......................................................27
SECTION 7.06. Governing Law .................................................28
SECTION 7.07. Prohibition of Assignment .....................................28
SECTION 7.08. Compliance with United States Securities Laws .................28
EXHIBIT A
FORM OF FACE OF RECEIPT
Introductory Paragraph ......................................................A-1
(1) The Deposit Agreement .................................................A-1
(2) Surrender of Receipts and Withdrawal of Deposited Securities ..........A-2
(3) Transfers, Split-ups and Combinations .................................A-3
(4) Certain Limitations ...................................................A-3
(5) Liability of Holder for Taxes and other Charges .......................A-4
(6) Warranties by Depositor ...............................................A-4
(7) Charges of Depositary .................................................A-4
(8) Title to Receipts .....................................................A-5
(9) Validity of Receipt ...................................................A-5
(10) Disclosure of Beneficial Ownership and Ownership Restrictions .........A-5
(11) Available Information .................................................A-6
ii
Signature of Depositary .....................................................A-6
Address of Principal Office .................................................A-6
FORM OF REVERSE OF RECEIPT--Summary of Certain
Additional Provisions of the Deposit Agreement
(12) Dividends and Distributions; Rights ...................................A-7
(13) Record Dates ..........................................................A-9
(14) Voting of Deposited Securities .......................................A-10
(15) Changes Affecting Deposited Securities ...............................A-11
(16) Reports; Inspection of Transfer Books ................................A-11
(17) Withholding ..........................................................A-12
(18) Liability of the Company and Depositary ..............................A-12
(19) Certain Rights of the Depositary; Limitations ........................A-13
(20) Resignation and Removal of Depositary; Substitution of Custodian .....A-14
(21) Amendment of Deposit Agreement and Receipts ..........................A-14
(22) Termination of Deposit Agreement .....................................A-14
(23) Governing Law ........................................................A-15
(24) Power of Attorney ....................................................A-15
EXHIBIT B
Charges of the Depositary ...................................................B-1
iii
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT dated as of May 25, 1999 (the "Deposit Agreement")
among KOREA TELECOM CORP., a corporation established under the laws of the
Republic of Korea (the "Company"), Citibank, N.A., a national banking
association organized under the laws of the United States of America (the
"Depositary"), and all Holders and Beneficial Owners (each as hereinafter
defined) from time to time of the American Depositary Receipts issued hereunder.
W I T N E S S E T H:
WHEREAS, the Company desires to provide for the deposit of Shares
(as hereinafter defined) from time to time with the Depositary or with the
Custodian (as hereinafter defined), as agent of the Depositary for the purposes
set forth in this Deposit Agreement, for the creation of American Depositary
Shares representing the Shares so deposited and for the execution and delivery
of American Depositary Receipts evidencing the American Depositary Shares;
NOW THEREFORE, in consideration of the premises the parties agree as
follows:
ARTICLE I
DEFINITIONS
The following definitions shall for all purposes, unless otherwise
clearly indicated, apply to the respective terms used in this Deposit Agreement:
SECTION 1.01. American Depositary Shares; ADSs. The terms "American
Depositary Shares" and "ADSs" shall mean the rights evidenced by the Receipts
issued hereunder and the interests in the Deposited Securities represented
thereby. Each American Depositary Share shall represent one-half of one Share,
until there shall occur a distribution upon Deposited Securities covered by
Section 4.04 or a change in Deposited Securities covered by Section 4.10 with
respect to which additional ADSs are not created, and thereafter American
Depositary Shares shall represent the Shares or other Deposited Securities
specified in such Sections.
SECTION 1.02. Beneficial Owner. The term "Beneficial Owner" shall
mean any person owning any beneficial interest in a Receipt issued hereunder but
who is not the Holder of such Receipt.
SECTION 1.03. Commission. The term "Commission" shall mean the
Securities and Exchange Commission of the United States or any successor
governmental agency in the United States.
SECTION 1.04. Company. The term "Company" shall mean Korea Telecom
Corp., a corporation organized and existing under the laws of Korea, having its
principal office at 206 Jungja-dong, Pundang-gu, Songnam, Kyunggi-do, Korea, and
its successors.
SECTION 1.05. CSD. The term "CSD" shall mean any institution
authorized under the applicable law to effect book-entry transfers of securities
of Korean corporations, which may include Korea Securities Depository.
SECTION 1.06. Custodian. The term "Custodian" shall mean, as of the
date hereof, Korea Securities Depository, as agent of the Depositary for the
purposes of this Deposit Agreement, and any other firm or corporation which may
be appointed by the Depositary pursuant to the terms of Section 5.07, as
substitute custodian or as additional custodian hereunder, as the context shall
require, and the term "Custodian" shall mean all of them, collectively.
SECTION 1.07. Deliver; Deposit; Surrender; Transfer; Withdraw. The
terms "deliver", "deposit", "surrender", "transfer" or "withdraw", or their
respective noun forms, (including to or by the Custodian) when used with respect
to Shares shall refer, where the context requires, to (i) a book-entry or
entries or an electronic transfer or transfers in or to an account or accounts
maintained by a CSD or (ii) the physical transfer of certificates representing
Shares.
SECTION 1.08. Deposit Agreement. The term "Deposit Agreement" shall
mean this agreement as it may from time to time be amended in accordance with
the terms hereof and all agreements supplemental hereto.
SECTION 1.09. Depositary. The term "Depositary" shall mean Citibank,
N.A., a national banking association organized under the laws of the United
States of America, and any successor as depositary hereunder.
SECTION 1.10. Deposited Securities. The term "Deposited Securities"
as of any time shall mean Shares at such time deposited under the Deposit
Agreement and any and all other securities, property and cash received by the
Depositary or the Custodian in respect thereof and at such time held hereunder,
subject in the case of cash to the provisions of Section 4.07.
SECTION 1.11. Dollars. The term "dollars" shall mean United States
dollars.
SECTION 1.12. Holder. The term "Holder" shall mean the person, from
time to time, in whose name a Receipt is registered on the books of the
Registrar maintained for such purpose.
SECTION 1.13. Korea. The term "Korea" shall mean The Republic of
Korea.
2
SECTION 1.14. Non-Voting Stock. The term "Non-Voting Stock" shall
mean any shares of the non-voting capital stock, par value 5,000 Won per share,
of the Company and shall include evidence of rights to receive such shares;
provided, however, that, if there shall occur any change in par value, a
split-up or consolidation or any other reclassification or, upon the occurrence
of an event described in Section 4.10, an exchange or conversion in respect of
the Non-Voting Stock of the Company, the term "Non-Voting Stock" shall
thereafter represent the successor securities resulting from such change in par
value, split-up or consolidation or such other reclassification or such exchange
or conversion.
SECTION 1.15. NYSE. The term "NYSE" shall mean the New York Stock
Exchange, Inc.
SECTION 1.16. Principal London Office. The term "Principal London
Office," when used with respect to the Depositary, shall mean the principal
office of the Depositary in London, England, which, at the date of this Deposit
Agreement, is located at Cottons Centre, Hays Lane, London SE1 2QT, England.
SECTION 1.17. Principal New York Office. The term "Principal New
York Office," when used with respect to the Depositary, shall mean the principal
office of the Depositary in The City of New York, which, at the date of this
Deposit Agreement, is located at 111 Wall Street, New York, New York 10043.
SECTION 1.18. Receipts; ADRs. The term "Receipts" or "ADRs" shall
mean the American Depositary Receipts issued hereunder evidencing American
Depositary Shares, as such American Depositary Receipts may be amended from time
to time in accordance with the provisions of this Deposit Agreement. A Receipt
or ADR may evidence any number of American Depositary Shares.
SECTION 1.19. Registrar. The term "Registrar" shall mean the
Depositary or any bank or trust company having an office in the Borough of
Manhattan, The City of New York, which shall be appointed by the Depositary to
register Receipts and transfers of Receipts as herein provided, and shall
include any co-registrar appointed by the Depositary for such purposes.
SECTION 1.20. Securities Act of 1933. The term "Securities Act of
1933" shall mean the United States Securities Act of 1933, as from time to time
amended.
SECTION 1.21. Securities Exchange Act of 1934. The term "Securities
Exchange Act of 1934" shall mean the United States Securities Exchange Act of
1934, as from time to time amended.
SECTION 1.22. Shares. The term "Shares" shall mean any shares of the
common stock, par value 5,000 Won per share, of the Company and shall include
evidence of rights to receive such shares; provided, however, that, if there
shall occur any change in par value, a split-up or consolidation or any other
reclassification or, upon the occurrence of an event described in Section 4.10,
an exchange or conversion in respect of the Shares of the Company,
3
the term "Shares" shall thereafter represent the successor securities resulting
from such change in par value, split-up or consolidation or such other
reclassification or such exchange or conversion.
SECTION 1.23. United States. The term "United States" shall have the
meaning assigned to it under Regulation S under the Securities Act of 1933.
SECTION 1.24. Won. The term "Won" shall mean Korean Won.
ARTICLE II
BOOK-ENTRY SYSTEM, FORM OF RECEIPTS,
DEPOSIT OF SHARES, EXECUTION AND
DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS
SECTION 2.01. Form and Transferability of Receipts. Subject to the
requirements of the NYSE or any applicable rule or regulation of any other
securities exchange or market upon which the ADSs may be listed or traded, the
Receipts shall be engraved, printed or lithographed on steel-engraved borders or
in such other form as may be agreed upon by the Company and the Depositary, and
shall be substantially in the form set forth as Exhibit A annexed to this
Deposit Agreement, with appropriate insertions, modifications and omissions, as
hereinafter provided.
Receipts shall be executed by the Depositary by the manual or
facsimile signature of a duly authorized signatory of the Depositary and
countersigned by the manual or facsimile signature of a duly authorized
signatory of the Registrar and dated by such signatory. No Receipt shall be
entitled to any benefits under this Deposit Agreement or be valid or obligatory
for any purpose, unless such Receipt shall have been so executed and dated by
the Depositary and the Registrar. The Registrar shall maintain books in which
each Receipt so executed and delivered as hereinafter provided and the transfer
of each such Receipt shall be registered. Receipts bearing the manual or
facsimile signature of a duly authorized signatory of the Depositary or the
Registrar, who at the time of signature was a duly authorized signatory of the
Depositary or the Registrar, as the case may be, shall bind the Depositary,
notwithstanding the fact that such signatory has ceased to be so authorized
prior to the delivery of such Receipts by the Depositary.
The ADRs shall bear a CUSIP number or numbers different from the
CUSIP number or numbers that may be assigned to any depositary shares
subsequently issued pursuant to any other arrangement with the Depositary which
are not ADSs issued hereunder.
Subject to any limitations set forth in a Receipt or in this Deposit
Agreement, when such Receipt is properly endorsed or accompanied by proper
instruments of transfer (including signature guarantees in accordance with
standard industry practice), title to such Receipt (and to each ADS evidenced
thereby) shall be transferable by delivery as in the case of a certificated
security under the laws of the State of New York; provided, however, that the
Company and the Depositary, notwithstanding any notice to the contrary, may deem
and treat the Holder of an ADR as the absolute owner thereof for any purpose,
including but not limited to the purpose of determining the person entitled to
distribution of dividends or other distributions or to any notice provided for
in this Deposit Agreement, and neither the Depositary nor the Company
4
shall have any obligation or be subject to any liability under this Deposit
Agreement to any holder of a Receipt unless such holder is the Holder thereof.
SECTION 2.02. Deposit of Shares. Subject to the terms and conditions
of this Deposit Agreement and any applicable laws and regulations of Korea, the
Depositary shall cause the Custodian to accept Shares for deposit from or on
behalf of any person (in the case of the Company or any of its affiliates,
subject to Section 5.09 hereof) when such deposit is made by (i) physical
delivery of Shares to the Custodian, accompanied by any appropriate instrument
or instruments of transfer or endorsement, in form satisfactory to such
Custodian, (ii) electronic transfer of Shares to the account of the Custodian
maintained for that purpose or (iii) delivery to the Custodian of evidence
satisfactory to the Custodian that irrevocable instructions have been given to
cause such Shares to be transferred to such account, in any such case
accompanied by delivery to the Depositary or the Custodian, as the case may be,
of a written order from or on behalf of such person directing the Depositary to
execute and deliver a Receipt or Receipts for the number of ADSs representing
the Shares so deposited and any payments required under this Deposit Agreement.
As a condition of accepting Shares for deposit, the Depositary may require that
the person making such deposit furnish (1) evidence satisfactory to the
Depositary (which may be an opinion of counsel) that any necessary approval has
been granted by any relevant governmental agency or agencies in Korea, if any,
including those which are then performing the function of the regulation of
currency exchange, (2) an agreement or assignment, or other instrument
satisfactory to the Depositary, which provides for the prompt transfer to the
Depositary of any dividend or right to subscribe for additional Shares or to
receive other property which any person in whose name the Shares are or have
been recorded may thereafter receive upon or in respect of any such deposited
Shares, or, in lieu thereof, such agreement of indemnity as shall be
satisfactory to the Depositary and (3) if the Shares are registered in the name
of the person on whose behalf they are presented for deposit, a proxy or proxies
entitling the Custodian to vote such deposited Shares for any and all purposes
until the Shares so deposited are registered in the name of a CSD for the
account of the Depositary or its nominee or the Custodian or its nominee.
Notwithstanding the foregoing, no outstanding Shares shall be accepted for
deposit hereunder unless (i) the Company shall have consented to such deposit or
(ii) Korean counsel shall have advised the Depositary that the consent required
under clause (i) above is no longer required under Korean laws and regulations.
Each of the Depositary and the Custodian shall refuse to accept
Shares for deposit whenever it has been notified, as hereafter provided, that
the Company has restricted transfer of such Shares to comply with the ownership
restrictions referred to in Section 3.05, that such deposit would result in any
violation of applicable laws, or that such deposit would cause the total number
of Shares deposited to exceed a level from time to time determined by the
Company. The Company shall notify the Depositary and the Custodian in writing
with respect to any such restrictions on transfer of its Shares for deposit
hereunder.
At the request, risk and expense of any holder of Shares, and for
the account of such holder, the Depositary may receive Shares to be deposited or
evidence that Shares have been transferred electronically or through book-entry
or that irrevocable instructions have been given to cause the transfer of such
Shares to the account of the Custodian, together with the other orders,
instruments and evidence herein specified, for the purpose of forwarding such
orders, instruments and evidence to the Custodian hereunder.
5
Upon each delivery to a Custodian of Shares (or other Deposited
Securities pursuant to Section 4.03, 4.04, 4.05, 4.06 or 4.10) to be deposited
hereunder together with the other documents above specified, such Custodian
shall, as soon as transfer and recordation can be accomplished, transfer and
record the Shares being deposited in the name of the Depositary or, subject to
applicable law, its nominee on the shareholders' register or the books of the
CSD, if applicable. Deposited Securities shall be held by the Depositary or by a
Custodian for the account and to the order of the Depositary, or at such other
place or places as the Depositary shall determine, subject to the applicable
laws of Korea.
SECTION 2.03. Execution and Delivery of Receipts. Upon receipt by a
Custodian of a deposit pursuant to Section 2.02 hereunder and a proper
acknowledgment or other evidence (i) from the Company (or the appointed agent of
the Company for transfer and registration of Shares), satisfactory to the
Depositary that any Deposited Securities are properly recorded upon the
shareholders' register of the Company (or such agent) maintained for that
purpose in the name of the Depositary or (ii) where such deposit is made by
entry in the books of a CSD, from such CSD that any Deposited Securities have
been recorded upon the books of such CSD in the name of the Depositary, together
with the other documents required as above specified, such Custodian shall
notify the Depositary of such deposit and recordation and the person or persons
to whom or upon whose written order a Receipt or Receipts are deliverable in
respect thereof and the number of American Depositary Shares to be evidenced
thereby. Such notification shall be made by letter or, at the request, risk and
expense of the person making the deposit, by cable, telex or facsimile
transmission.
Upon receiving such notice from such Custodian, the Depositary or
its agent, subject to the terms and conditions of this Deposit Agreement, shall
execute and deliver at its Principal London Office or its Principal New York
Office to or upon the order of the person or persons named in the notice
delivered to the Depositary a Receipt or Receipts registered in the name or
names requested in such notice and evidencing in the aggregate the number of
American Depositary Shares to which such person is entitled, but only upon
payment to the Depositary of the fee of the Depositary and all taxes and
governmental charges and fees payable in connection with such deposit and the
transfer of the deposited Shares. The Depositary shall not be required to issue
any fractional Receipts or any Receipts for fractional Shares.
SECTION 2.04. Transfer of Receipts; Combination and Split-up of
Receipts. The Registrar, subject to the terms and conditions of this Deposit
Agreement and any Receipt, shall, without unreasonable delay, register transfers
of any such Receipt on its transfer books, upon any surrender of such Receipt by
the Holder thereof in person or by duly authorized attorney, properly endorsed
or accompanied by proper instruments of transfer (including signature guarantees
in accordance with standard industry practice) and duly stamped as may be
required by any applicable law; provided, however, that the Registrar shall
refuse to register any transfer of an ADR if such registration would cause the
total number of shares represented by ADSs evidenced by ADRs held by any Holder
to exceed the number of Shares as determined by the Company in order to comply
with the ownership restrictions referred to in Section 3.05 and notified in
writing, from time to time, to the Registrar. Thereupon the Depositary shall
execute a new Receipt or Receipts and deliver the same to or upon the order of
the person entitled thereto.
6
The Depositary, subject to the terms and conditions of this Deposit
Agreement, shall upon surrender of a Receipt or Receipts for the purpose of
effecting a split-up or combination of such Receipt or Receipts, execute and
deliver a new Receipt or Receipts in the name of the same Holder for any
authorized number of ADSs requested, evidencing the same class and aggregate
number of ADSs as the Receipt or Receipts surrendered. In connection with any
split-up or combination pursuant to this paragraph, the Depositary shall not be
obligated to obtain any certification or endorsement otherwise required by the
terms of this Deposit Agreement.
SECTION 2.05. Surrender of Receipts and Withdrawal of Deposited
Securities. Upon surrender at the Principal London Office or Principal New York
Office of the Depositary of a Receipt for the purpose of withdrawal of the
Deposited Securities represented by the ADSs evidenced by such Receipt, and upon
payment of the fee of the Depositary for the surrender and cancellation of
Receipts (as set forth on Exhibit B hereto) and payment of all taxes and
governmental charges payable in connection with such surrender, and subject to
the terms and conditions of this Deposit Agreement, the ownership restrictions
referred to in Section 3.05 and applicable laws and regulations of Korea, the
Holder of such Receipt shall be entitled to physical delivery, to him or upon
his order, or to electronic delivery or book-entry transfer to an account in
Korea or, if permissible under applicable Korean law, outside Korea designated
by such Holder, of the Deposited Securities at the time represented by the ADSs
evidenced by such Receipt or constituting such beneficial interest, as the case
may be; provided, however, that such withdrawals will not be permitted until 30
days after (i) the closing of the Company's initial public offering of ADSs
(and/or the closing of any over-allotment option in connection therewith) and
(ii) the issuance of ADSs hereunder issued in respect of newly issued Shares.
Physical delivery of such Deposited Securities may be made by the delivery of
certificates to an agent in Korea of such Holder or, if permissible under
applicable Korean law, to such Holder or as ordered by him. Physical or
electronic delivery or book-entry transfer of Deposited Securities shall be
made, as hereinafter provided, without unreasonable delay.
A Receipt surrendered or written instructions received for such
purposes may be required by the Depositary to be properly endorsed in blank or
accompanied by properly executed instruments of transfer in blank. The person
requesting withdrawal of Deposited Securities for delivery to someone other than
the Holder shall, if requested by the Depositary, deliver to the Depositary a
written order directing it to cause the Deposited Securities being withdrawn to
be delivered to or upon the written order of a person or persons designated in
such order subject to applicable Korean laws and regulations. Upon the receipt
of complete written instructions, the Depositary shall direct the Custodian to
deliver at the principal office of such Custodian, subject to Sections 2.06,
3.01 and 3.02 and to the other terms and conditions of this Deposit Agreement,
to or upon the written order of the person or persons designated in such written
instructions, the Deposited Securities represented by the ADSs evidenced by such
Receipt or constituting such beneficial interest, except that the Depositary may
make delivery to such persons or person at the Principal New York Office or
Principal London Office of the Depositary of any such Deposited Securities which
are in the form of cash.
At the request, risk and expense of any Holder so surrendering a
Receipt 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
7
in accordance with Section 3.02, the Depositary shall, if permitted by
applicable Korean law, direct the Custodian to forward a certificate or
certificates (if available) and other proper documents of title, if any, for the
Deposited Securities represented by such ADSs for delivery at the Principal New
York Office or Principal London 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 for
surrender a Receipt evidencing fewer than two ADSs or evidencing a number of
ADSs not evenly divisible by two.
SECTION 2.06. Limitations on Execution and Delivery, Transfer, Etc.
of Receipts; Suspension of Delivery, Transfer, Etc. As a condition precedent to
the execution and delivery, registration of transfer, split-up, combination or
surrender of any Receipt or withdrawal of any Deposited Securities, the
Depositary or the Custodian may require payment from the presenter of a Receipt
or the depositor of Shares of a sum sufficient to reimburse it for any tax or
other governmental charge and any stock transfer or registration fee with
respect thereto (including any such tax or charge and fee with respect to Shares
being deposited or withdrawn) and payment of any applicable fees as herein
provided, and may, but is not obligated to, require the production of proof
satisfactory to it as to the identity and genuineness of any signature appearing
on any form, certification or other document delivered to the Depositary in
connection with this Deposit Agreement, including but not limited to, in the
case of Receipts, a signature guarantee in accordance with industry practice,
and may also require compliance with any laws or governmental regulations
relating to depositary receipts in general or to the withdrawal of Deposited
Securities.
The delivery of Receipts against deposits of Shares generally or of
particular Shares may be suspended or withheld, or the registration of transfer
of Receipts in particular instances may be refused, or the registration of
transfer generally may be suspended during any period when the transfer books of
the Depositary, the shareholders' register of the Company (or the appointed
agent of the Company for the transfer and registration of Shares) or the books
of the CSD are closed, or if any such action is deemed necessary or advisable by
the Company, the Depositary or the CSD, in good faith, at any time or from time
to time. The surrender of outstanding Receipts and withdrawal of Deposited
Securities represented thereby may be suspended, but only as required in
connection with (i) temporary delays caused by closing the transfer books of the
Depositary or the issuer of any Deposited Securities (or the appointed agent or
agents for such issuer for the transfer and registration of such Deposited
Securities) in connection with voting at a shareholders' meeting or the payment
of dividends, (ii) payment of fees, taxes and similar charges, or (iii)
compliance with any United States or foreign laws or governmental regulations
relating to the Receipts or to the withdrawal of the Deposited Securities.
Without limitation of the foregoing, the Depositary shall not knowingly accept
for deposit under the Deposit Agreement any Shares required to be registered
under the Securities Act of 1933 prior to being offered and sold publicly in the
United States unless a registration statement is in effect as to such Shares.
SECTION 2.07. Lost Receipts, Etc. In case any Receipt shall be
mutilated, destroyed, lost or stolen, the Depositary shall execute and deliver a
new Receipt of like tenor and registered in the same name, in exchange and
substitution for such mutilated Receipt upon cancellation thereof, or in lieu of
and in substitution for such destroyed, lost or stolen Receipt, upon the filing
by the Holder thereof with the Depositary of (a) a request for such exchange,
8
execution and delivery before the Depositary has notice that the Receipt has
been acquired by a bona fide purchaser and (b) a sufficient indemnity bond, and
upon satisfying any other reasonable requirements imposed by the Depositary.
SECTION 2.08. Cancellation and Destruction of Surrendered Receipts.
All Receipts physically surrendered to the Depositary shall be canceled by the
Depositary. Canceled Receipts shall not be entitled to any benefits under this
Deposit Agreement or be valid or obligatory for any purpose. The Depositary is
authorized to destroy Receipts so canceled.
SECTION 2.09. Maintenance of Records. The Depositary agrees to
maintain records of all Receipts surrendered and Deposited Securities withdrawn
under Section 2.05, of substitute Receipts delivered under Section 2.07 and of
Receipts canceled or destroyed under Section 2.08, in keeping with procedures
ordinarily followed by stock transfer agents located in The City of New York.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS
SECTION 3.01. Filing Proofs, Certificates and Other Information. Any
person depositing Shares, any Holder or any Beneficial Owner may be required
from time to time to file with the Depositary or the Custodian such proof of
citizenship, residence, taxpayer status, exchange control approval, payment of
applicable Korean or other taxes or governmental charges, or legal or beneficial
ownership and the nature of such interest, to provide information relating to
the registration on the shareholders' register of the Company (or the appointed
agent of the Company for the transfer and registration of Shares) or the books
of the CSD 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 or to enable the
Depositary or the Company to perform its obligations hereunder. The Depositary
may withhold the execution or delivery or registration of transfer of all or
part of any Receipt or the distribution or sale of any dividend or other
distribution of rights or of the proceeds thereof or the delivery 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 provide the Company, unless otherwise instructed by the
Company, in a timely manner, with copies of any such proofs and certificates and
such written representations and warranties provided as aforesaid.
SECTION 3.02. Liability of Holders and Beneficial Owners for Taxes
and Other Charges. If any Korean or other tax or governmental charge shall
become payable with respect to any Receipt or any Deposited Securities
represented by the ADSs evidenced by any Receipt, such tax or other governmental
charge shall be payable by the Holder of such Receipt to the Depositary and any
Beneficial Owner of such Receipt shall be liable to the Holder therefor. The
Depositary may refuse, and the Company shall be under no obligation, to effect
any registration of transfer of all or part of such Receipt or to execute and
deliver any new Receipt or Receipts or to permit any deposit or any withdrawal
of Deposited Securities represented by the ADSs evidenced thereby until such
payment is made, and may withhold any dividends or other distributions, or may
sell for the account of the Holder thereof any part or all of the Deposited
Securities represented by the ADSs evidenced by such Receipt, and may apply such
dividends or
9
other distributions or the proceeds of any such sale in payment of such tax or
other governmental charge, the Holder and the Beneficial Owners of such Receipt
remaining liable for any deficiency.
SECTION 3.03. Representations and Warranties on Deposit, Transfer
and Surrender and Withdrawal of Shares or Receipts. Each person depositing
Shares under this Deposit Agreement shall be deemed thereby to represent and
warrant that (i) such Shares and each certificate therefor are validly issued,
outstanding, fully paid and nonassessable, (ii) any preemptive or similar rights
with respect thereto have been exercised or validly waived, (iii) the person
making such deposit is duly authorized so to do and (iv) such Shares are not,
and the ADSs issuable upon such deposit will not be, "restricted securities" as
defined in Rule I 44(a)(3) under the Securities Act of 1933. Such
representations and warranties shall survive the deposit of Shares and the
issuance of Receipts or adjustments in the Depositary's records in respect
thereof.
SECTION 3.04. Disclosure of Beneficial Ownership. The Company or the
Depositary may from time to time request Holders or former Holders to provide
information as to the capacity in which they hold or held Receipts and regarding
the identity of any other persons then or previously interested in such Receipts
and the nature of such interest and various other matters. Each such Holder
agrees to provide any such information reasonably requested by the Company or
the Depositary pursuant to this Section whether or not still a Holder at the
time of such request. The Depositary agrees to use its reasonable efforts to
comply with written instructions received from the Company requesting that the
Depositary forward any such requests to such Holders and to the last known
address, if any, of such former Holders and to forward to the Company any
responses to such requests received by the Depositary, and to use its reasonable
efforts, at the Company's request and expense, to assist the Company in
obtaining such information with respect to the ADSs evidenced by an ADR,
provided that nothing herein shall be interpreted as obligating the Depositary
to provide or obtain any such information not provided to the Depositary by such
Holders or former Holders.
10
SECTION 3.05. Ownership Restrictions. The Company may restrict
transfers of the Shares where such transfer might result in ownership of Shares
exceeding certain limits under applicable law or under the Company's Articles of
Incorporation. The Company may also restrict, in such manner as it deems
appropriate, transfers of ADSs where such transfer would result in the total
number of Shares beneficially owned by a single holder to exceed fifteen percent
(15%) of the aggregate number of Shares of the Company then issued and
outstanding or any other limits under applicable law or the Company's Articles
of Incorporation with respect to which the Company may, from time to time,
notify the Depositary. The Company, may, in its sole discretion, instruct the
Depositary to take action with respect to the beneficial ownership of any Holder
or Beneficial Owner who holds ADSs in excess of the limitation set forth in the
preceding sentence, including but not limited to, the imposition of restrictions
on the transfer of ADSs, the removal or limitation of voting rights or the
mandatory sale or disposition on behalf and for the account of a Holder or
Beneficial Owner of the Shares represented by the ADSs held by such Holder or
Beneficial Owner in excess of such limitations (and the cancellation of such
ADSs), if and to the extent such disposition is permitted by applicable law.
Nothing herein shall be interpreted as obligating the Depositary to ensure
compliance with the ownership restrictions described in this Section 3.05.
ARTICLE IV
RIGHTS RELATING TO THE DEPOSITED SECURITIES;
CERTAIN OBLIGATIONS OF THE DEPOSITARY
SECTION 4.01. Power of Attorney. Each Holder and Beneficial Owner,
upon acceptance of a Receipt issued in accordance with the terms hereof or any
beneficial interest therein, thereby appoints the Depositary its
attorney-in-fact, with full power to delegate, to act on its behalf and to take
any and all steps or action provided for or contemplated herein with respect to
the Deposited Securities, including but not limited to those set forth in
Section 3.05 and this Article IV, and to take such further steps or action as
the Depositary in its sole discretion may deem necessary or appropriate to carry
out the purposes of this Deposit Agreement.
SECTION 4.02. Cash Distributions; Withholding of Taxes and other
Governmental Charges. Whenever the Depositary or the Custodian shall receive any
cash dividend or other cash distribution by the Company on any Deposited
Securities, the Depositary shall, subject to applicable Korean laws and
regulations and the provisions of Section 4.07, cause the conversion as promptly
as practicable of such dividend or distribution into dollars and promptly
distribute such amount to the Holders entitled thereto in proportion to the
number of ADSs representing such Deposited Securities held by them respectively,
after deduction or upon payment of the fees and expenses of the Depositary;
provided, however, that in the event that the Company, the Custodian or the
Depositary shall be required to withhold and does withhold from any cash
dividend or other cash distribution in respect of any Deposited Securities an
amount on account of taxes or other governmental charges, the amount distributed
to the Holders in respect of ADSs representing such Deposited Securities shall
be reduced accordingly. The Depositary shall distribute only such amount,
however, as can be distributed without attributing to any Holder a fraction of
one cent, and any balance not so distributable shall be held by the Depositary
(without liability for interest thereon) and shall be added to and become part
of the next sum received by the Depositary for distribution to Holders then
outstanding. The Company or its agent or the Depositary or its agent, as
appropriate, will remit to the appropriate
11
governmental authority or agency in Korea or any other relevant jurisdiction all
amounts withheld and owing to such authority or agency. The Depositary will
forward to the Company or its agent such information from its records as the
Company may reasonably request to enable the Company or its agent to file
necessary reports with governmental authorities or agencies.
SECTION 4.03. Distributions Other Than Cash, Shares, Non-Voting
Stock or Rights. Whenever the Depositary or the Custodian shall receive any
distribution other than cash, Shares, Non-Voting Stock or rights upon any
Deposited Securities, the Depositary shall cause the securities or property so
received to be distributed as promptly as practicable to the Holders entitled
thereto, as of a record date fixed pursuant to Section 4.08 hereof, after
deduction or upon payment of the fees and expenses of the Depositary, in
proportion to the number of ADSs representing such Deposited Securities held by
them respectively, in any manner that the Depositary may deem, after
consultation with the Company, equitable and practicable for accomplishing such
distribution subject to any applicable laws or regulations of Korea; provided,
however, that if in the opinion of the Depositary it cannot cause such
securities or property to be distributed or such distribution cannot be made
proportionately among the Holders entitled thereto, or if for any other reason
(including any requirement that the Company, the Custodian or the Depositary
withhold an amount on account of taxes or other governmental charges or that
such securities must be registered under the Securities Act of 1933 in order to
be distributed to Holders) the Depositary deems such distribution not to be
feasible, the Depositary may, after consultation with the Company, adopt such
method as it may deem equitable and practicable for the purpose of effecting
such distribution, including the sale (at public or private sale) of the
securities or property thus received, or any part thereof, and the net proceeds
of any such sale shall be distributed by the Depositary to the Holders entitled
thereto as in the case of a distribution received in cash, provided that any
unsold balance of such securities or property shall be distributed by the
Depositary to the Holders entitled thereto subject to any applicable laws or
regulations of Korea, 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 of 1933, in accordance with such equitable
and practicable method as the Depositary shall have adopted.
SECTION 4.04. Distributions in Shares. If any distribution upon any
Deposited Securities consists of a dividend in, or free distribution of, Shares,
the Depositary may, with the Company's approval, and shall, if the Company shall
so request, cause such Shares to be deposited pursuant to this Deposit Agreement
and either (i) distribute to the Holders of outstanding Receipts entitled
thereto, in proportion to the number of ADSs representing Deposited Securities
held by them respectively, additional Receipts for an aggregate number of ADSs
representing the number of Shares received as such dividend or free
distribution, or (ii) reflect on the records of the Depositary such increase in
the aggregate the number of ADSs representing the number of Shares so received,
in either case, after deduction or upon payment of the fees and expenses of the
Depositary. If for any reason (including any requirement that the Company or the
Depositary withhold an amount on account of taxes or other governmental charges
or that such Shares must be registered under the Securities Act of 1933 in order
to be distributed to Holders) the Depositary deems such distribution not to be
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 Shares
thus received, or any part thereof, and the net proceeds of any such sale shall
12
be distributed by the Depositary to the Holders entitled thereto as in the case
of a distribution received in cash. In lieu of issuing Receipts for fractional
ADSs in any such case, the Depositary shall sell the number of Shares
represented by the aggregate of such fractions and distribute the net proceeds
in dollars. To the extent that new ADSs representing such Shares are not created
and such Shares are not sold or otherwise distributed in accordance with this
Section, each ADS shall thenceforth also represent such additional Shares
distributed upon the Deposited Securities represented thereby.
SECTION 4.05. Distribution of Non-Voting Stock. If any distribution
upon any Deposited Securities consists of a dividend in Non-Voting Stock, the
Depositary shall cause such Non-Voting Stock to be deposited under a Non-Voting
Stock Deposit Agreement (the "Non-Voting Stock Deposit Agreement") which may be
entered into among the Company, the Depositary and all holders and beneficial
owners from time to time of global depositary receipts issued thereunder and
shall cause the depositary shares issuable in respect of such deposit to be
distributed to the Holders entitled thereto, in proportion to the number of ADSs
representing such Deposited Securities held by them respectively; provided,
however, that if for any reason (including any requirement that the Company or
the Depositary withhold an amount on account of taxes or other governmental
charges or that such Non-Voting Stock must be registered under the Securities
Act of 1933 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 Non-Voting Stock thus received, or any part thereof, and the net
proceeds of any such sale shall be distributed by the Depositary to the Holders
entitled thereto as in the case of a distribution received in cash. In lieu of
issuing receipts for fractional depositary shares representing such Non-Voting
Stock in any such case, the Depositary shall sell the number of shares of such
Non-Voting Stock represented by the aggregate of such fractions and distribute
the net proceeds in dollars, all in the manner and subject to the conditions
described in Section 4.02. The Company will not be obliged to list depositary
shares representing Non-Voting Stock on any exchange.
SECTION 4.06. 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 distributing the net proceeds in dollars 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 distribute the net proceeds to such Holders, then the Depositary
shall allow the rights to lapse; provided, however, that the Depositary shall,
if requested in writing by the Company, take action as follows:
(i) if at the time of the offering of any rights the Depositary
determines that it is lawful and feasible to make such rights available to
all or certain Holders by means of warrants or otherwise, the Depositary
shall, after deduction or upon payment of the fees and expenses of the
Depositary, distribute warrants or other instruments therefor in such form
as it may determine to such Holders entitled thereto, in proportion to the
number of ADSs representing such Deposited Securities held by them
respectively, or employ such
13
other method as it may deem feasible in order to facilitate the exercise,
sale or transfer of rights by such Holders or the sale or resale of
securities obtainable upon exercise of such rights by such Holders; or
(ii) if at the time of the offering of any rights the Depositary
determines that it is not lawful or not feasible to make such rights
available to certain Holders by means of warrants or otherwise, or if the
rights represented by such warrants or such other instruments are not
exercised and appear to be about to lapse, the Depositary shall use its
reasonable efforts to sell such rights or such warrants or other
instruments 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, 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 Receipt or Receipts, or
otherwise.
Subject to the foregoing, in the event that the Company issues any
rights with respect to Non-Voting Stock, the securities issuable upon any
exercise, whether by subscription or otherwise, of such rights by Holders or
Beneficial Owners shall be depositary shares representing such Non-Voting Stock
issued pursuant to the terms and provisions of the Non-Voting Stock Deposit
Agreement.
Notwithstanding anything to the contrary in this Section 4.06, if
registration under the Securities Act of 1933 or any other applicable law of the
rights or the securities to which any rights relate, or any filing, report,
approval or consent of any third party is required in order for the Company to
offer such rights to Holders or Beneficial Owners and to sell the securities
represented by such rights, the Depositary will not offer such rights to the
Holders unless and until a registration statement is in effect, or unless the
offering and sale of such securities to the Holders are exempt from or not
subject to the registration provisions of the Securities Act of 1933 or such
filing, report, approval or consent has been submitted, obtained or granted, as
the case may be. Neither the Depositary nor the Company shall have any
obligation to register such rights or such securities under the Securities Act
of 1933 or to submit, obtain or request, as the case may be, any such filing,
report, approval or consent.
SECTION 4.07. Conversion of Foreign Currency. Whenever the
Depositary or the Custodian shall receive foreign currency other than dollars
(in this Section 4.07, hereinafter referred to as foreign currency), by way of
dividends or other distributions or the net proceeds from the sale of
securities, property or rights which can, in the reasonable judgment of the
Depositary and pursuant to applicable law, be converted on a reasonable basis
into dollars distributable to the Holders entitled thereto and the resulting
dollars transferred to the United States, the Depositary shall as promptly as
practicable convert or cause to be converted, by sale or in any other manner
that it may determine, such foreign currency into dollars, and such dollars
(less any reasonable and customary expenses incurred by the Depositary in the
conversion of the foreign currency) shall be distributed to the Holders entitled
thereto or, if the Depositary shall have distributed any warrants or other
instruments which entitle the holders thereof to such dollars, then to the
holders of such warrants and/or instruments upon surrender thereof for
cancellation. Such distribution shall be made upon an averaged or other
practicable basis
14
without regard to any distinctions among Holders on account of any application
of exchange restrictions or otherwise.
If such conversion with regard to a particular Holder or
distribution can be effected only with the approval or license of any government
or agency thereof, the Depositary shall file such application for approval or
license, if any, as it may deem desirable, in good faith.
If at any time the Depositary shall determine that in its judgment
any foreign currency received by the Depositary is not convertible on a
reasonable basis into dollars distributable to the Holders entitled thereto, or
if any approval or license of any government or authority or agency thereof
which is required for such conversion is denied or in the good faith opinion of
the Depositary, is not obtainable, or if any such approval or license is not
obtained within a reasonable period as determined by the Depositary, the
Depositary may distribute, pursuant to applicable law, the foreign currency (or
an appropriate document evidencing the right to receive such foreign currency)
received by the Depositary to, or in its discretion may hold such foreign
currency (without liability for interest) for the respective accounts of, the
Holders entitled to receive the same.
If any such conversion of foreign currency, in whole or in part,
cannot be effected for distribution to some Holders entitled thereto, the
Depositary may in its discretion make such conversion and distribution in
dollars to the extent permissible to the Holders for whom such conversion and
distribution is practicable and may distribute the balance of the foreign
currency received by the Depositary to, or hold such balance for the account of,
the Holders for whom such conversion and distribution is not practicable.
SECTION 4.08. Fixing of Record Date. Whenever any cash dividend or
other cash distribution shall become payable or any distribution other than cash
shall be made, or whenever rights shall be issued, with respect to any Deposited
Securities, or whenever, for any reason, the Depositary causes a change in the
number of Shares that are represented by each ADS or whenever the Depositary
shall receive notice of any meeting of holders of Shares or other Deposited
Securities, the Depositary shall fix a record date after consultation with the
Company (which shall be as near as practicable to the corresponding record date
for Shares set by the Company) for the determination of the Holders who shall be
entitled to receive such dividend, distribution or rights, or the net proceeds
of the sale thereof, or to receive notice of such meeting or to exercise the
rights of Holders with respect to such changed number of Shares. Subject to the
provisions of Sections 4.02 through 4.07 and to the other terms and conditions
of this Deposit Agreement, the Holders on such record date shall be entitled to
receive the amount distributable by the Depositary with respect to such dividend
or other distribution or such rights or the net proceeds of sale thereof, to
exercise the rights of Holders hereunder with respect to such changed number of
Shares in proportion to the number of ADSs held by them respectively or with
respect to such other matter.
SECTION 4.09. Voting of Deposited Securities. As soon as practicable
after receipt of notice of any meeting of, or solicitation by the Company of
consents or proxies from, holders of Shares or other Deposited Securities, the
Depositary shall, if requested in writing by the Company, fix a record date as
provided in Section 4.08 for determining the Holders entitled to give
instructions for the exercise of voting rights. The notice shall be provided by
the
15
Company in English to the Depositary immediately upon finalization of the form
and substance thereof, in accordance with Section 5.08, but in no event less
than the number of days in advance of such meeting required by applicable laws
and regulations of Korea for notices to shareholders (at the date hereof,
fourteen (14) days). The Company shall provide to the Depositary sufficient
copies, as the Depositary may reasonably request, of notices of the Company's
shareholders' meeting, the agenda therefor as well as the English translations
thereof, which the Depositary shall mail to Holders as soon as practicable after
receipt of the same by the Depositary, together with: (a) a statement that the
Holders of record at the close of business on a specified record date will be
entitled, subject to any applicable provisions of Korean law and of the Articles
of Incorporation of the Company (which provisions, if any, shall be summarized
in pertinent part), to instruct the Depositary as to the exercise of the voting
rights, if any, pertaining to the number of Shares or other Deposited Securities
represented by their respective ADSs evidenced by their respective Receipts and
(b) a brief statement as to the manner in which such instructions may be given.
Upon the written request of a Holder of ADSs evidenced by a Receipt
on such record date received on or before the date established by the Depositary
for such purpose, the Depositary shall endeavor, insofar as practicable and
permitted under applicable law and the provisions of the Articles of
Incorporation of the Company, to vote or cause the Custodian to vote the Shares
represented by ADSs evidenced by such ADRs in accordance with the instructions
set forth in such request. Holders acknowledge, however, that the Company may
not notify the Depositary sufficiently in advance of the scheduled date of a
meeting or solicitation of consents or proxies to enable the Depositary to make
a timely mailing of such notices to the Holders of ADRs, and that the Holders of
ADRs may not receive such notices sufficiently in advance of a meeting or
solicitation of consents or proxies to give instructions to the Depositary. The
Depositary shall not attempt to exercise the right to vote that attaches to the
Shares other than in accordance with such instructions. ADSs for which no
specific voting instructions are received by the Depositary from the Holder
shall not be voted. Neither the Depositary nor the Custodian shall, under any
circumstances exercise any discretion as to voting and neither the Depositary
nor the Custodian shall vote or attempt to exercise the right to vote the Shares
or other Deposited Securities represented by ADSs except pursuant to and in
accordance with such written instructions from Holders.
Subject to the applicable laws or rules of any securities exchange
on which the Deposited Securities are listed or traded, at least three (3) days
prior to the date of such meeting, the Depositary shall deliver to the Company a
tabulation of the voting instructions received from Holders of Receipts, if any,
in accordance with which the Depositary will vote, or cause to be voted, the
Deposited Securities represented by the ADSs evidenced by such ADRs at such
meeting. A Holder or Beneficial Owner of ADSs shall not be entitled to give any
instructions with respect to voting rights associated with ADSs evidenced by
ADRs held by such Holder if and to the extent the total number of Shares
beneficially owned by such Holder or Beneficial Owner exceeds fifteen percent
(15%) of the total number of Shares outstanding, or any other limit under
applicable Law or the Company's Articles of Incorporation with respect to which
the Company may, from time to time, notify the Depositary. The Company and the
Depositary may take any and all action necessary or desirable to enforce the
restrictions on the exercise of voting rights set forth in the preceding
sentence. Voting rights, if any, may be exercised only in respect of two ADSs,
or multiples thereof.
16
The Company acknowledges and agrees that the provisions of Section
5.10 herein shall apply to any liability or expense of the Depositary which may
arise out of or in connection with any action of the Depositary or the Custodian
in voting pursuant to this Section 4.09.
SECTION 4.10. Changes Affecting Deposited Securities. Upon any
change in par value, split-up, consolidation or any other reclassification of
Deposited Securities, or upon any recapitalization, reorganization, merger or
consolidation of the Company or sale of assets by the Company, any securities
which shall be received by the Depositary or the Custodian in exchange for or in
conversion of or in respect of Deposited Securities shall be treated as new
Deposited Securities, and the ADSs shall, subject to the terms of this Deposit
Agreement and applicable laws, including any applicable provisions of the
Securities Act of 1933, thenceforth represent the new Deposited Securities so
received, unless additional or new ADSs are created pursuant to the following
sentence. Alternatively, the Depositary may, with the Company's approval and
pursuant to applicable law, and shall, at the Company's request and pursuant to
applicable law, and subject to Section 5.09 herein, create new or additional
ADSs representing such new Deposited Securities and execute and deliver
additional Receipts evidencing such ADSs as in the case of a stock dividend on
the Shares, and may call for the surrender of outstanding Receipts to be
exchanged for new Receipts specifically describing such new Deposited
Securities.
Immediately upon 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 4.11. Transmittal by the Depositary of Company Notices,
Reports and Communications. The Depositary shall make available for inspection
by Holders at its Principal New York Office and Principal London Office and at
the office of each Custodian copies of this Deposit Agreement, any notices,
reports or communications, including any proxy soliciting materials, received
from the Company which are both (a) received by the Depositary or Custodian or
the nominee of either, as the holder of the Deposited Securities, and (b) made
generally available to the holders of such Deposited Securities by the Company.
The Depositary shall also send to Holders copies of such notices, reports and
communications when furnished by the Company to the Depositary pursuant to
Section 5.08.
SECTION 4.12. Taxation. Notwithstanding any other provision of this
Deposit Agreement, in the event that the Depositary determines that any
distribution in property (including Shares, Non-Voting Stock or rights to
subscribe therefor or other securities) is subject to any tax or governmental
charges which the Depositary is obligated to withhold, the Depositary may
dispose of all or a portion of such property (including Shares, Non-Voting Stock
and rights to subscribe therefor) in such amounts and in such manner as the
Depositary deems necessary and practicable to pay such taxes or governmental
charges, including by public or private sale, and the Depositary shall
distribute the net proceeds of any such sale or the balance of any such property
after deduction of such taxes or governmental charges to the Holders entitled
thereto in proportion to the number of ADSs held by them respectively and the
Depositary shall, if feasible without withholding for or on account of taxes or
other governmental charges, without registration of such Shares or other
securities under the Securities Act of 1933 and otherwise in
17
compliance with applicable law, distribute any unsold balance of such property
in accordance with the provisions of this Deposit Agreement.
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 agencies, and
the Depositary, the Custodian or the Company or its agents may file such reports
as are necessary to obtain benefits under applicable tax treaties for the
Holders.
Neither the Company nor the Depositary shall have any obligation to
any Holder to apply a Korean tax withholding rate under any treaty or other
arrangement between Korea and the country within which such Holder is resident
unless such Holder has timely provided to the Company evidence of the residence
of such Holder that is accepted by the relevant tax authorities of Korea. The
Holder shall indemnify the Depositary, the Company, the Custodian and any of
their respective directors, employees, agents and affiliates against, and hold
each of them harmless from, any claims by any governmental authority with
respect to penalties or interest arising out of any reduced rate of withholding
at source or other tax benefit obtained for such Holder pursuant to this
Section.
The Depositary is under no obligation to provide the Holder with
evidence of foreign taxes withheld, but will, upon the reasonable request of a
Holder, provide the Holder with copies of evidence provided by the Company to
the Depositary of foreign taxes withheld. In no event shall the Depositary be
held liable for a Holder's failure to obtain foreign tax credits against the
Holder's United States federal income tax liability.
If any withholding tax is imposed at source on any amounts paid
under this Deposit Agreement and the Company is required to withhold and pay
such tax, the Company shall promptly provide to the Depositary a copy of the
original tax receipt or other proof of payment if available. Additionally, if
any tax is paid by the Company (e.g., stamp duty tax or capital gains tax)
relating to any amounts paid under this Deposit Agreement, the Company shall
provide to the Depositary a copy of the tax receipt or other proof of payment if
available.
In no event shall the Depositary be held liable if the Company or
any subsidiary thereof constitutes a Foreign Personal Holding Company, Passive
Foreign Investment Company, or any other type of entity that may result in a
Holder's or Beneficial Owner's increased tax liability in respect of (i) gain
realized on the sale or other disposition of the ADSs or (ii) dividends. The
Depositary is under no obligation to provide any Holder or Beneficial Owner with
any information regarding the tax status of the Company in the current or any
succeeding taxable years. Upon request, the Depositary shall promptly provide to
(i) each Holder and (ii) each person that was a Holder during the period to
which the information applies, a copy of such information provided by the
Company relevant to the tax status of the Company.
SECTION 4.13. Available Information. The Company is subject to the
periodic reporting requirements of the Securities Exchange Act of 1934 and,
accordingly, files certain reports with the Commission. Such reports and other
information, when so filed, can be inspected and copied at the public reference
facilities maintained by the Commission at Judiciary Plaza, 450 Fifth Street,
N.W., Room 1024, Washington D.C. 20549; and at the regional offices
18
of the Commission at Seven World Trade Center, 13th Floor, New York, New York
10048; and at Citicorp Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661. Copies of such material may be obtained at prescribed rates.
Such reports and other information may also be inspected at the offices of the
New York Stock Exchange, Inc., 11 Wall Street, New York, New York 10005.
ARTICLE V
THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY
SECTION 5.01. Maintenance of Office and Transfer Books by the
Depositary. Until termination of this Deposit Agreement in accordance with its
terms, the Depositary shall maintain in the Borough of Manhattan, The City of
New York, facilities for the execution and delivery, registration, registration
of transfers and surrender of Receipts in accordance with the provisions of this
Deposit Agreement.
The Depositary shall keep books at its Principal New York Office for
the registration of Receipts and transfers of Receipts which at all reasonable
times shall be open for inspection by Holders and the Company, provided that
such inspection shall not to the Depositary's knowledge be for the purpose of
communicating with Holders in the interest of a business or object other than
the business of the Company or a matter related to this Deposit Agreement or the
Receipts.
Upon notice to the Company, the Depositary may close the transfer
books, at any time or from time to time, when deemed expedient by it in
connection with the performance of its duties hereunder.
If any Receipts or the ADSs evidenced thereby are listed on one or
more stock exchanges or automated quotation systems in the United States, the
Depositary shall act as Registrar or, with the approval of the Company, appoint
a Registrar or one or more co-registrars for registration of such Receipts in
accordance with any requirements of such exchange or exchanges or system or
systems. Such Registrar or co-registrars may be removed and a substitute or
substitutes appointed by the Depositary upon notice to the Company.
SECTION 5.02. Lists of Receipt Holders. Promptly upon request by the
Company, the Depositary shall furnish to it a list, as of a recent date, of the
names, addresses and holdings of ADSs by all persons in whose names Receipts are
registered on the books of the Depositary. Any other records maintained by the
Depositary, the Registrar, any co-registrar or any co-transfer agent under this
Deposit Agreement shall be made available to the Company upon reasonable
request.
SECTION 5.03. Obligations of the Depositary, the Custodian and the
Company. The Company assumes no obligation nor shall it be subject to any
liability under this Deposit Agreement or the Receipts to Holders, Beneficial
Owners or other persons, including for any consequential or punitive damages for
any breach of the terms of this Deposit Agreement, except that it agrees to act
in good faith and without negligence in the performance of its obligations set
forth in this Deposit Agreement.
19
The Depositary assumes no obligation nor shall it be subject to any
liability under this Deposit Agreement or the Receipts to Holders, Beneficial
Owners or other persons of Receipts (including, without limitation, liability
with respect to the validity or worth of the Deposited Securities), including
for any consequential or punitive damages for any breach of the terms of this
Deposit Agreement, except that it agrees to act in good faith and without
negligence in the performance of its duties set forth in this Deposit Agreement.
The Depositary and the Company undertake to perform such duties and
only such duties as are specifically set forth in this Deposit Agreement, and no
implied covenants or obligations shall be read into this Deposit Agreement
against the Depositary or the Company.
Neither the Depositary nor the Company shall be under any obligation
to appear in, prosecute or defend any action, suit or other proceeding in
respect of any Deposited Securities or in respect of the Receipts, which in its
opinion may involve it in expense or liability, unless indemnity satisfactory to
it against all expense and liability shall be furnished as often as may be
required, and no Custodian shall be under any obligation whatsoever with respect
to such proceedings, the responsibility of the Custodian being solely to the
Depositary.
Neither the Depositary nor the Company shall be liable for any
action or inaction by it in reliance upon the advice of or information from
legal counsel, accountants, any person presenting Shares for deposit, any Holder
or Beneficial Owner, or any other person believed by it in good faith to be
competent to give such advice or information. Each of the Depositary, its agents
and the Company may rely and shall be protected in acting upon any written
notice, request, direction or other document believed by it to be genuine and to
have been signed or presented by the proper party or parties.
No disclaimer of liability under the Securities Act of 1933 is
intended by any provision of this Deposit Agreement.
SECTION 5.04. Prevention or Delay in Performance by the Depositary
or the Company. Neither the Depositary nor the Company shall incur any liability
to any Holder or Beneficial Owner if, by reason of any provision of any present
or future law of the United States, Korea or any other country or jurisdiction,
or of any other governmental authority, or by reason of any provision, present
or future, of the Articles of Incorporation of the Company, or by reason of any
act of God or war or other circumstances beyond its control, the Depositary or
the Company shall be prevented, delayed or forbidden from, or subject to any
civil or criminal liability on account of, doing or performing any act or thing
which by the terms of this Deposit Agreement it is provided shall be done or
performed; nor shall the Depositary or the Company incur any liability to any
Holder or Beneficial Owner by reason of any non-performance or delay, caused as
aforesaid, in performance of any act or thing which by the terms of this Deposit
Agreement it is provided shall or may be done or performed, or by reason of any
exercise of, or failure to exercise, any discretion provided for in this Deposit
Agreement. Where, by the terms of a distribution pursuant to Section 4.02, 4.03,
4.04 or 4.05 of this Deposit Agreement or a distribution and offering pursuant
to Section 4.06 or 4.10 of this Deposit Agreement, or because of applicable law,
such distribution or offering may not be made available to Holders, or some of
them, 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 not make such distribution or offering, and may allow any
rights, if applicable, to lapse.
20
SECTION 5.05. Resignation and Removal of the Depositary; Appointment
of Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by 60 days' prior written notice of its election so to do delivered to
the Company, such resignation to take effect upon the appointment of a successor
depositary and its acceptance of such appointment as hereinafter provided.
The Depositary may at any time be removed by the Company by 60 days'
prior written notice of such removal, which shall become effective upon the
appointment of a successor depositary and its acceptance of such appointment as
hereinafter provided.
In case at any time the Depositary acting hereunder shall resign or
be removed, the Company shall use its best efforts to appoint a successor
depositary, which shall be a bank or trust company having an office in the
Borough of Manhattan, The City of New York. Every successor depositary shall
execute and deliver to its predecessor and to the Company an instrument in
writing accepting its appointment hereunder, and thereupon such successor
depositary, without any further act or deed, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor; but such
predecessor, nevertheless, upon payment of all sums due it and on the written
request of the Company, shall execute and deliver an instrument transferring to
such successor all rights and powers of such predecessor hereunder, shall duly
assign, transfer and deliver all right, title and interest in the Deposited
Securities to such successor and shall deliver to such successor a list of the
Holders and such other books and records maintained by such predecessor with
respect to its function as Depositary hereunder. Any such successor depositary
shall at its own cost promptly mail notice of its appointment to all Holders.
Any corporation into or with which the Depositary may be merged or
consolidated shall be the successor of the Depositary without the execution or
filing of any document or any further act.
SECTION 5.06. Charges of Depositary. The expenses, fees or charges
of the Depositary and the Registrar, if any, shall be paid by the Company only
as provided herein. Persons depositing Shares or the Holders, as applicable,
agree to pay (1) the fees of the Depositary for the delivery of Receipts
pursuant to Section 2.03, the surrender of Receipts for the purpose of
withdrawal of Deposited Securities pursuant to Section 2.05 and the distribution
of dividends and sale or exercise of rights or other corporate action involving
distribution to holders of Shares, each as provided in Exhibit B hereto, (2)
taxes and other governmental charges, (3) such registration fees as may from
time to time be in effect for the registration of transfers of Shares generally
on the shareholders' register of the Company and accordingly applicable to
transfers of Shares to or from the name of the Depositary on the making of
deposits pursuant to Section 2.02 or the withdrawal of Deposited Securities
pursuant to Section 2.05, (4) such cable, telex and 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 (5) such reasonable
expenses as are incurred by the Depositary in the conversion of foreign currency
pursuant to Section 4.07.
21
Any other charges and expenses of the Depositary hereunder and the
Registrar (other than the charges and expenses of the Custodian or any other
agent of the Depositary) 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 amount and nature of such charges and
expenses. Such charges may at any time and from time to time be changed by
agreement between the Company and the Depositary. Unless otherwise agreed, the
Depositary shall present its statement for such expenses and fees or charges to
the Company once every three months. The charges and expenses of the Custodian
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 5.06 shall survive the termination of this
Deposit Agreement and, as to any Depositary, the resignation or removal of such
Depositary pursuant to Section 5.05.
SECTION 5.07. The Custodian. The Depositary, after consultation with
the Company, shall from time to time appoint one or more agents to act for it as
Custodian hereunder. The Depositary has initially appointed Korea Securities
Depository as custodian and agent of the Depositary for the purpose of this
Deposit Agreement. The Custodian in acting hereunder shall be subject at all
times and in all respects to the direction of the Depositary and shall be
responsible solely to it. If the Depositary receives a notice of the resignation
of the Custodian and upon effectiveness of such resignation there would be no
Custodian hereunder, the Depositary shall, promptly after receiving such notice
and after consultation with the Company, appoint a substitute custodian which
shall thereafter be the Custodian hereunder. Such resignation of the Custodian
shall take effect upon the appointment of a successor custodian and its
acceptance of such appointment. The Depositary, after consultation with the
Company, when it reasonably appears to be in the best interest of the Holders to
do so, may appoint a substitute or an additional custodian, which shall
thereafter be a Custodian hereunder. Immediately upon any change of Custodian or
appointment of additional Custodians, the Depositary shall at its own expense
give notice thereof in writing to all Holders.
Upon the appointment of any successor depositary hereunder, any
Custodian then acting hereunder shall forthwith become, without any further act
or writing, the agent hereunder of such successor depositary and the appointment
of such successor depositary shall in no way impair the authority of each
Custodian hereunder; but the successor depositary so appointed shall,
nevertheless, on the written request of any Custodian, execute and deliver to
such Custodian all such instruments as may be proper to give to such Custodian
full and complete power and authority as agent hereunder of such successor
depositary.
SECTION 5.08. Notices and Reports. On or before the first date on
which the Company gives notice, by publication or otherwise, of any meeting of
holders of Shares or other Deposited Securities, or of any adjourned meeting of
such holders, or of the taking of any action in respect of any cash or other
distributions or the offering of any rights in respect of Deposited Securities,
the Company agrees to transmit to the Custodian and the Depositary a copy of the
notice thereof in the English language but otherwise in the form given or to be
given to holders of Shares or other Deposited Securities; provided, however,
with respect to any meeting in which the holders of Shares or other Deposited
Securities are entitled to exercise voting rights, the Company agrees to
transmit to the Depositary a copy of the notice thereof immediately upon
22
finalization by the Company of the form and substance of such notice, but in no
event less than the number of days in advance of such meeting required by
applicable laws and regulations of Korea for notices to shareholders (at the
date hereof, fourteen (14) days).
The Company shall furnish to the Depositary (i) annual reports in
English (to the extent required by applicable regulations of the Commission),
which will include a review of operations, and annual audited consolidated
financial statements prepared in conformity with generally accepted accounting
principles of Korea ("Korean GAAP"), with a reconciliation of net income and
shareholders' equity to generally accepted accounting principles in the United
States, if prepared pursuant to the Securities Exchange Act of 1934, within 180
days after the end of the fiscal year, (ii) an English translation of its
unaudited non-consolidated financial statements prepared in conformity with
Korean GAAP for the first six months of the fiscal year (to the extent required
by applicable regulations of the Commission) within 90 days after the end of the
first six months of the fiscal year, (iii) English versions of all other reports
(other than the Company's annual report to shareholders and semiannual or any
other periodic interim report to shareholders) and communications (to the extent
required by applicable regulations of the Commission) that are made generally
available to holders of Shares of the Company and (iv) such quantities as the
Depositary may reasonably request of the notices and summaries referred to in
preceding clauses (i), (ii) and (iii).
The Depositary shall arrange at the Company's expense for prompt
mailing to all Holders of copies of all such notices, summaries, reports and
communications that are furnished to it by the Company for distribution to
Holders. The Depositary may, but shall not be required to, at the Company's
expense, obtain English translations or adequate English summaries of any
notices, reports or communications which are not furnished to the Depositary in
English text.
The Depositary will make available for inspection by Holders at its
Principal New York Office and its Principal London Office and at the office of
each Custodian copies of the Deposit Agreement and any notices, reports or
communications, including any proxy soliciting materials, received from the
Company which are both (a) received by the Depositary or Custodian or the
nominee of either, as the holder of the Shares, and (b) made generally available
to the holders of Shares by the Company.
Additionally, the Company agrees that if, and so long as, the ADSs
are listed on the NYSE and/or the Official List of The London Stock Exchange
Limited (the "London Stock Exchange") and if, and so long as, required by the
rules or regulations of the NYSE and/or the London Stock Exchange, the Company
will publish all notices to holders of Shares in such manner as required by the
NYSE and/or the London Stock Exchange.
SECTION 5.09. 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 Deposited Securities or any future issuance to Holders for cash of
such additional securities, the Depositary shall not distribute any such
additional securities to the Holders unless the Depositary shall have received,
if it shall so require after consultation with the Company, a written opinion
from counsel in the United States, which counsel shall be satisfactory to the
Depositary and the Company, at the cost of the Company, stating whether or not
the circumstances of such issuance are such as to make it
23
necessary for a Registration Statement under the Securities Act of 1933 to be in
effect prior to making such dividend or distribution available to the Holders
entitled thereto and, if in the opinion of such counsel a Registration Statement
is required, stating that there is a Registration Statement in effect which will
cover such issuance.
In the event of any issuance by the Company of (a) additional
Shares, (b) rights, preferences or privileges to subscribe for Shares, (c)
securities convertible into or exchangeable for Shares, or (d) rights,
preferences or privileges to subscribe for securities convertible into or
exchangeable for Shares (in each event other than as a dividend or distribution,
or issuance for cash to Holders, in each such case as set forth above), such
issuance shall be effected by the Company in a manner so as not to violate the
Securities Act of 1933. If the Company determines that an issuance of such
securities is required to be registered under the Securities Act of 1933, the
Company will register such issuance to the extent necessary, alter the terms of
the issuance to avoid the registration requirements of the Securities Act of
1933 or direct the Depositary or the Custodian to take 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 such Act. The
Company shall have no obligation to register any such issuance under the
Securities Act of 1933.
The Company agrees with the Depositary that neither the Company nor
any company controlled by 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 company under its control, unless such
transaction is registered under the Securities Act of 1933 or is not required to
be registered under the Securities Act of 1933 as confirmed by an opinion of
United States counsel.
SECTION 5.10. Indemnification. The Company agrees to indemnify the
Depositary and each Custodian and their respective officers, directors and
employees against, and hold each of them harmless from, any liability or expense
which may arise in connection with the offer, issuance, sale, resale, withdrawal
or transfer of ADSs or Shares or which may arise out of acts performed or
omitted, including but not limited to any delivery by the Depositary on behalf
of the Company of information regarding the Company, in accordance with the
provisions of this Deposit Agreement and of the Receipts, as the same may be
amended, modified or supplemented from time to time, in any such case, (i) by
either the Depositary or any Custodian, except for any liability or expense
arising out of the negligence or bad faith of either of them, or (ii) by the
Company, except to the extent that such liability or expense arises out of
information relating to the Depositary or to the Custodian, as the case may be,
furnished in a signed writing to the Company by the Depositary expressly for use
in any document relating to the ADSs.
The Depositary agrees to indemnify the Company and its officers,
directors and employees and hold each of them harmless from any liability or
expense which may arise out of acts performed or omitted by the Depositary due
to the negligence or bad faith of the Depositary. With respect to any liability
or expense of the Company, its officers, directors or employees arising out of
acts negligently performed or omitted to be performed by the Custodian, the
Depositary agrees to assign to the Company, to the extent of such Liability or
expense, such chose in action in respect of such negligent performance or
non-performance as the Depositary may have against the Custodian pursuant to the
terms of the Custodian Agreement.
24
Any person seeking indemnification hereunder (an "indemnified
person") shall notify the person from whom it is seeking indemnification (the
"indemnifying person") of the commencement of any indemnifiable action or claim
promptly after such indemnified person becomes aware of such commencement and
shall consult in good faith with the indemnifying person as to the conduct of
the defense of such action or claim, which defense shall be reasonable under the
circumstances. No indemnified person shall compromise or settle any action or
claim without the consent of the indemnifying person.
The obligations set forth in this Section 5.10 shall survive the
termination of this Deposit Agreement and the succession or substitution of any
person indemnified hereby.
SECTION 5.11. Certain Rights of the Depositary; Limitations. Subject
to the further terms and provisions of this Section 5.11 and Section 3.05 and
applicable Korean law, the Depositary, its affiliates and their agents may own
and deal in any class of securities of the Company and its affiliates and in
ADSs. The Depositary may cause the issuance of ADSs against evidence of rights
to receive Shares from the Company, or any custodian, registrar, transfer agent,
clearing agency or other entity involved in ownership or transaction records in
respect of the Shares. Such evidence of rights shall consist of written blanket
or specific guarantees of ownership of Shares furnished on behalf of the holder
thereof. In its capacity as Depositary, the Depositary shall not lend Shares or
ADSs; provided, however, that to the extent permitted by Korean law, the
Depositary reserves the right to (i) cause the issuance of ADSs prior to the
receipt of Shares pursuant to Section 2.02 and (ii) deliver Shares prior to the
receipt and cancellation of ADSs pursuant to Section 2.05, including ADSs which
were issued under (i) above but for which Shares may not have been received;
further provided, however, that the Depositary shall not issue ADSs prior to the
receipt of Shares in the case of the deposit of Shares by the Company in
connection with an offering of ADSs or pursuant to Section 4.04 or 4.06, unless
requested by the Company and to the extent permitted by applicable Korean law.
The Depositary may receive ADSs in lieu of Shares under (i) above and receive
Shares in lieu of ADSs under (ii) above. Each such transaction shall be (a)
subject to (x) a written representation by the person or entity (the
"Applicant") to whom ADSs or Shares are delivered that, at the time the
Depositary causes the issuance of such ADSs or delivers such Shares, the
Applicant or its customer owns the Shares or ADSs to be delivered to the
Depositary, or (y) such evidence of ownership of Shares or ADSs as the
Depositary deems appropriate, (b) subject to a written agreement by the
Applicant that it will hold such Shares or ADSs in trust for the Depositary
until their delivery to the Depositary or Custodian, reflect on its records the
Depositary as owner of such Shares or ADSs and deliver such Shares or ADSs upon
the Depositary's request, (c) at all times fully collateralized (marked to
market daily) with cash, United States government securities, or 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 ADSs issued under (i) above and
outstanding at any time generally will not exceed thirty percent (30%) of the
ADSs then outstanding and with respect to which Shares are on deposit with the
Depositary and that the Shares released at any time generally under (ii) above
will not exceed 30% of the Shares that remain on deposit; provided, however,
that the Depositary reserves the right to change or disregard such limit from
time to time as the Depositary reasonably deems appropriate; further provided,
however, that the Depositary will not enter into
25
any transaction under (i) or (ii) above that will have the immediate effect of
exceeding the 30% limitation until after consultation with the Company. The
Depositary will also set limits with respect to the number of ADSs and Shares
involved in transactions to be effected pursuant to this Section 5.11 with any
one person on a case-by-case basis as it deems appropriate.
Collateral provided by an Applicant for ADSs or Shares, but not the
earnings thereon, shall be held for the benefit of the Holders (other than the
Applicant). The Depositary may retain for its own account any compensation
received by it in connection with the foregoing, including, without limitation,
earnings on the collateral.
ARTICLE VI
AMENDMENT AND TERMINATION
SECTION 6.01. Amendment. The form of the Receipts and any provisions
of this Deposit Agreement may at any time and from time to time be amended by
agreement between the Company and the Depositary in any respect which they 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
shall otherwise prejudice any substantial existing right of Holders shall not,
however, become effective as to outstanding Receipts until the expiration of 30
days after notice of such amendment shall have been given to the Holders of
outstanding Receipts in accordance with Section 7.05 hereof. Every Holder and
Beneficial Owner at the time any amendment so becomes effective shall be deemed,
by continuing to hold such Receipt or to own any beneficial interest therein, to
consent and agree to such amendment and to be bound by the Deposit Agreement as
amended thereby. In no event shall any amendment impair the right of the Holder
to surrender such Receipt and receive therefor the Deposited Securities
represented thereby, except in order to comply with mandatory provisions of
applicable law.
SECTION 6.02. Termination. The Depositary shall at any time at the
direction of the Company, upon 90 days' prior written notice from the Company,
terminate this Deposit Agreement by mailing notice of such termination to the
Holders of all Receipts then outstanding at least 30 days prior to the date
fixed in such notice for such termination. The Depositary may likewise terminate
this Deposit Agreement if at any time 90 days after the Depositary shall have
delivered to the Company a written notice of its election to resign a successor
depositary shall not have been appointed and accepted its appointment as
provided in Section 5.05. If any Receipts shall remain outstanding after the
date of termination, the Depositary thereafter shall discontinue the
registration of transfers of Receipts, shall suspend the distribution of
dividends to the Holders thereof, shall not accept deposits of Shares (and shall
instruct each Custodian to act accordingly), and shall not give any further
notices or perform any further acts under this Deposit Agreement, except that
the Depositary shall continue to collect dividends and other distributions
pertaining to Deposited Securities, shall sell property and rights and convert
Deposited Securities into cash as provided in this Deposit Agreement, and shall
continue to deliver Deposited Securities, together with any dividends or other
distributions received with respect thereto and the net proceeds of the sale of
any rights or other property, in exchange for Receipts surrendered to the
Depositary. 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
26
liability for interest, for the pro rata benefit of the Holders of ADRs which
have not theretofore been surrendered. After making such sale, the Depositary
shall be discharged from all obligations under this Deposit Agreement, except to
account for such net proceeds and other cash. Upon the termination of this
Deposit Agreement, the Company shall be discharged from all obligations under
this Deposit Agreement except for its obligations to the Depositary under
Sections 5.06 and 5.10 hereof
ARTICLE VII
MISCELLANEOUS
SECTION 7.01. Counterparts. This Deposit Agreement may be executed
in any number of counterparts, each of which shall be deemed an original and all
of such counterparts shall constitute one and the same instrument.
SECTION 7.02. No Third Party Beneficiaries. This Deposit Agreement
is for the exclusive benefit of the parties hereto and their permitted
successors and assigns and shall not be deemed to give any legal or equitable
right, remedy or claim whatsoever to any other person.
SECTION 7.03. Severability. In case any one or more of the
provisions contained in this Deposit Agreement or in the Receipts should be or
become invalid, illegal or unenforceable in any respect, the validity, legality
and enforceability of the remaining provisions contained herein or therein shall
in no way be affected, prejudiced or disturbed thereby.
SECTION 7.04. Holders and Beneficial Owners as Parties; Binding
Effect. The Holders and the Beneficial Owners from time to time shall be parties
to this Deposit Agreement and shall be bound by all of the terms and conditions
hereof and of any Receipt by acceptance thereof or any beneficial interest
therein.
SECTION 7.05. Notices. Any and all notices to be given to the
Company shall be deemed to have been duly given if personally delivered, or sent
by air courier, or by cable, telex or facsimile transmission confirmed by letter
personally delivered or sent by air courier, addressed to Korea Telecom Corp.,
206 Jungja-dong, Pundang-gu, Songnam, Kyunggi-do, Korea; Attention: Director,
Finance & Accounting Office, Stocks Management Division (facsimile number: (82)
342-727-0939), or to any other address which the Company may specify in writing.
Any and all notices to be given to the Depositary shall be deemed to have been
duly given if personally delivered, or sent by air courier, or by cable, telex
or facsimile transmission confirmed by letter personally delivered or sent by
air courier, addressed to Citibank, N.A., 111 Wall Street, New York, New York
10043, Attention: ADR Department (telex number: ITT 420392 or TRT: 175826, in
each case marked "NYADR"; facsimile number: (212) 825-5398), or to any other
address which the Depositary may specify in writing.
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) 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 for Receipts of the Depositary, or, if such Holder shall have
filed with the
27
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 by letter as
aforesaid.
SECTION 7.06. Governing Law. This Deposit Agreement and the Receipts
shall be interpreted under, and all rights hereunder and thereunder shall be
governed by, the laws of the State of New York without regard to the principles
of conflicts of laws thereof. The Company and the Depositary agree that New York
State or federal courts located in The City of New York shall have jurisdiction
to hear and determine any suit, action or proceeding and to settle any dispute
between them that may arise out of or in connection with this Deposit Agreement
and, for such purposes, each irrevocably submits to the non-exclusive
jurisdiction of such courts and waives any objection to legal actions or
proceedings in such courts whether on the ground of venue or on the ground that
the proceedings have been brought in an inconvenient forum. The Company
irrevocably designates and appoints Korea Exchange Bank, New York Branch,
presently located at 460 Park Avenue, New York, New York 10022, U.S.A., as its
authorized agent upon which process may be served in any suit or proceeding
arising out of or relating to this Deposit Agreement or the transactions
contemplated hereby which may be instituted in any federal or state court in The
City of New York, and agrees that service of process upon such agent shall be
deemed in every respect effective service of process upon the Company in any
such suit or proceeding. The Company further agrees to take any and all actions
as may be necessary to maintain such designation and appointment of such agent
in full force and effect.
SECTION 7.07. Prohibition of Assignment. Neither the Depositary nor
the Company may assign or otherwise transfer any of its rights or obligations
hereunder, except as otherwise provided herein or with the prior written consent
of the other.
SECTION 7.08. Compliance with United States Securities Laws.
Notwithstanding anything in this Deposit Agreement to the contrary, the Company
and the Depositary each agrees that it will not exercise any rights it has under
this Deposit Agreement to prevent the withdrawal or delivery of Deposited
Securities in a manner which would violate the United States securities laws,
including, but not limited to, Section I.A.(1) of the General Instructions to
the Form F-6 Registration Statement, as amended from time to time, under the
Securities Act of 1933.
28
IN WITNESS WHEREOF, KOREA TELECOM CORP. and CITIBANK, N.A. have duly
executed this agreement as of the day and year first above set forth and all
Holders and Beneficial Owners of Receipts shall become parties hereto upon
acceptance by them of Receipts in accordance with the terms hereof or upon
acquisition of any beneficial interest in such Receipts.
KOREA TELECOM CORP.
By: /s/ Soo Ho Maeng
--------------------------------
Name: Soo Ho Maeng
Title: Managing Director
CITIBANK, N.A.
By:
--------------------------------
Name: John H. Moore
Title: Vice President
IN WITNESS WHEREOF, KOREA TELECOM CORP. and CITIBANK, N.A. have duly
executed this agreement as of the day and year first above set forth and all
Holders and Beneficial Owners of Receipts shall become parties hereto upon
acceptance by them of Receipts in accordance with the terms hereof or upon
acquisition of any beneficial interest in such Receipts.
KOREA TELECOM CORP.
By:
--------------------------------
Name:
Title:
CITIBANK, N.A.
By: /s/ John H. Moore
--------------------------------
Name: John H. Moore
Title: Vice President
EXHIBIT A
Number____________
CUSIP Number________
AMERICAN DEPOSITARY SHARES (EACH
AMERICAN DEPOSITARY SHARE
REPRESENTING ONE-HALF OF ONE
SHARE)
(FORM OF FACE OF ADR)
AMERICAN DEPOSITARY RECEIPT
FOR
AMERICAN DEPOSITARY SHARES
representing
DEPOSITED SHARES OF COMMON STOCK,
PAR VALUE 5,000 WON PER SHARE OF
KOREA TELECOM CORP.
(a corporation under the laws of The Republic of Korea)
CITIBANK, N.A., a national banking association organized and
existing under the laws of the United States of America, as Depositary (the
"Depositary"), hereby certifies that _____ is the owner of that number of
American Depositary Shares indicated on the records of the Depositary,
representing deposited shares of the common stock, par value 5,000 Won per
share, or evidence of rights to receive such shares ("Shares"), of Korea Telecom
Corp., a corporation under the laws of the Republic of Korea (the "Company"). At
the date of the Deposit Agreement (as hereinafter defined), each American
Depositary Share represents one-half of one Share deposited under the Deposit
Agreement with the Custodian, which at the date of execution of the Deposit
Agreement is Korea Securities Depository. The number of Shares represented by
each ADS is subject to change as provided in Article IV of the Deposit
Agreement.
(1) The Deposit Agreement. This American Depositary Receipt is one
of an issue (herein called "ADRs" or "Receipts"), all issued and to be issued
upon the terms and conditions set forth in the Deposit Agreement dated as of May
25, 1999 (the "Deposit Agreement"), among the Company, the Depositary and all
Holders and Beneficial Owners from time to time of Receipts issued thereunder,
each of whom by accepting a Receipt or acquiring any beneficial interest therein
agrees to become a party thereto and becomes bound by all the terms and
provisions thereof. The Deposit Agreement sets forth the rights of Holders and
Beneficial Owners and the rights and duties of the Depositary in respect of the
Shares deposited thereunder and any and all other securities, property and cash
from time to time received in respect of such Shares and held thereunder (such
Shares, other securities, property and cash are herein called "Deposited
Securities"). Copies of the Deposit Agreement are on file at the Principal New
York Office and Principal London Office of the Depositary and at the principal
office of the Custodian. The statements made on the face and the reverse of this
Receipt are summaries of certain provisions of the Deposit Agreement and are
qualified by and subject to the
A-1
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 Receipts and Withdrawal of Deposited Securities.
Upon surrender at the Principal London Office or Principal New York Office of
the Depositary of this Receipt for the purpose of withdrawal of the Deposited
Securities represented by the ADSs evidenced by this Receipt, and upon payment
of the fee of the Depositary provided in paragraph (7) of this Receipt, and
payment of all taxes and governmental charges payable in connection with such
surrender, and subject to the terms and conditions of the Deposit Agreement, the
ownership restrictions referred to in Section 3.05 of the Deposit Agreement and
applicable laws and regulations of Korea, the Holder hereof is entitled to
physical delivery, to him or upon his order, or to electronic delivery or book
entry transfer to an account in Korea or, if permissible under applicable Korean
law, outside the United States designated by such Holder, of the Deposited
Securities at the time represented by the ADSs evidenced by this Receipt or
constituting such beneficial interest, as the case may be; provided, however,
that such withdrawals are not permitted until 30 days after the issuance of the
ADSs issued under the Deposit Agreement in the case of ADSs issued in receipt of
newly issued Shares. Physical delivery of such Deposited Securities may be made
by the delivery of certificates to an agent in Korea of such Holder or, if
permissible under applicable Korean law, to such Holder or as ordered by him.
Physical or electronic delivery or book-entry transfer of Deposited Securities
will be made without unreasonable delay. The Depositary shall confirm to the
person surrendering a Receipt or so giving written instructions the surrender of
a Receipt or the receipt of instructions regarding withdrawal of Deposited
Securities.
A Receipt surrendered or written instructions received for such
purposes will be required by the Depositary to be properly endorsed in blank or
accompanied by properly executed instruments of transfer in blank. The person
requesting withdrawal of Deposited Securities shall deliver to the Depositary a
written order directing the Depositary to cause the Deposited Securities being
withdrawn to be delivered to or upon the written order of a person or persons
designated in such order subject to applicable Korean laws and regulations.
Upon the receipt of complete written instructions, the Depositary
shall direct the Custodian to deliver at the principal office of such Custodian,
subject to the terms and conditions of the Deposit Agreement, to or upon the
written order of the person or persons designated in such written instruments,
the Deposited Securities represented by the ADSs evidenced by such Receipt or
constituting such beneficial interest, except that the Depositary may make
delivery to such person or persons at the Principal New York Office or Principal
London Office of the Depositary or any such Deposited Securities which are in
the form of cash.
At the request, risk and expense of any Holder so surrendering a
Receipt or submitting such written instructions for delivery, and for the
account of such Holder, and provided that payment of any applicable tax or other
government charge shall have been made in accordance with Section 3.02 of the
Deposit Agreement, the Depositary shall, if permitted by applicable Korean law,
direct the Custodian to forward a certificate or certificates (if available) and
other proper documents of title, if any, for the Deposited Securities
represented by such ADSs for delivery at the Principal New York Office or
Principal London Office of the
A-2
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 for surrender a Receipt evidencing fewer than two
ADSs or evidencing a number of ADSs not evenly divisible by two.
(3) Transfers, Split-ups and Combinations. Subject to the
limitations stated herein and in the Deposit Agreement, this Receipt is
transferable on the books of the Registrar by the Holder hereof in person or by
duly authorized attorney, upon surrender of this Receipt properly endorsed or
accompanied by proper instruments of transfer (including signature guarantees in
accordance with standard industry practice and duly stamped as may be required
by any applicable law); provided, however, that the Registrar shall refuse to
register any transfer of an ADR if such registration would cause the total
number of Shares represented by ADSs evidenced by ADRs held by any Holder to
exceed the number of shares as determined by the Company in order to comply with
the ownership restrictions referred in Section 3.05 of the Deposit Agreement and
notified in writing, from time to time, to the Registrar. This Receipt may be
split into other Receipts or may be combined with other Receipts into one
Receipt, representing the same class and aggregate number of ADSs and registered
in the name of the same Holder as the Receipt or Receipts surrendered. As a
condition precedent to the execution and delivery, registration of transfer,
split-up, combination or surrender of any Receipt or withdrawal of any Deposited
Securities, the Depositary or the Custodian may require from the presenter of a
Receipt or the depositor of Shares a sum sufficient to reimburse it for any tax
or other governmental charge and any stock transfer or registration fee with
respect thereto and payment of any applicable fees as provided in paragraph (7)
of this Receipt, and may require the production of proof satisfactory to it as
to the identity and genuineness of any signature appearing on any form,
certification or other document delivered to the Depositary in connection with
the Deposit Agreement, including but not limited to a signature guarantee in
accordance with industry practice, and may also require compliance with any laws
or governmental regulations relating to depositary receipts in general or to the
withdrawal of Deposited Securities.
(4) Certain Limitations. The Depositary may refuse to execute and to
deliver Receipts, register the transfer of any Receipt, or make any distribution
of, or related to, Deposited Securities until it has received such proof of
citizenship, residence, exchange control approval, payment of applicable Korean
or other taxes or governmental charges, legal or beneficial ownership or other
information as it or the Company may deem necessary or proper. The delivery of
Receipts against deposits of Shares generally or of particular Shares may be
suspended or withheld, or the registration of transfer of Receipts in particular
instances may be refused, or the registration of transfer generally may be
suspended, during any period when the transfer books of the Depositary, the
shareholders' register of the Company (or the appointed agent of the Company for
the transfer and the registration of shares) or books of the CSD are closed, or
if any such action is deemed necessary or advisable by the Company, the
Depositary or the CSD, in good faith, at any time or from time to time in
accordance with the Deposit Agreement; provided, however, the surrender of
outstanding Receipts and withdrawal of Deposited Securities represented thereby
may be suspended, but only as required in connection with (i) temporary delays
caused by closing the transfer books of the Depositary or the issuer of any
Deposited Securities (or the appointed agent or agents for such issuer for the
transfer and registration of such Deposited Securities) in connection with
voting at a shareholders' meeting or the payment of dividends, (ii) payment of
fees, taxes and similar charges, or (iii) compliance
A-3
with any United States or foreign laws or governmental regulations relating to
the Receipts or to the withdrawal of the Deposited Securities. Without
limitation to the foregoing, the Depositary shall not knowingly accept for
deposit under the Deposit Agreement any Shares required to be registered under
the Securities Act of 1933 prior to being offered and sold publicly in the
United States unless a registration statement is in effect as to such Shares.
(5) Liability of Holders and Beneficial Owners For Taxes and Other
Charges. If any Korean or other tax or other governmental charge shall become
payable with respect hereto or to any Deposited Securities represented by the
ADSs evidenced hereby, such tax or other governmental charge shall be payable by
the Holder hereof to the Depositary and shall be payable by Beneficial Owners to
the Holder. The Depositary may refuse, and the Company shall be under no
obligation, to effect any registration of transfer of all or any part of this
Receipt or to execute and deliver any new Receipt or Receipts or to permit any
deposit or any withdrawal of Deposited Securities represented by the ADSs
evidenced hereby until such payment is made, and may withhold any dividends or
other distributions, or may sell for the account of the Holder hereof any part
or all of the Deposited Securities represented by the ADSs evidenced hereby, and
may apply such dividends or other distributions or the proceeds of any such sale
in payment of such tax or other governmental charge, the Holder and the
Beneficial Owners hereof remaining liable for any deficiency.
(6) Warranties by Depositor. Each person depositing Shares under the
Deposit Agreement shall be deemed thereby to represent and warrant that (i) such
Shares and each certificate therefor are validly issued, outstanding, fully paid
and non-assessable, (ii) any preemptive or similar rights with respect thereto
have been exercised or validly waived, (iii) the person making such deposit is
duly authorized so to do, and (iv) such Shares are not, and the ADSs issuable
upon such deposit will not be "restricted securities" as defined in Rule
144(a)(3) under the Securities Act of 1933. Such representations and warranties
shall survive the deposit of Shares and issuance of Receipts or adjustments in
the Depositary's records in respect thereof.
(7) Charges of Depositary. The Depositary will charge the party to
whom ADSs are delivered against deposits of Shares and the party surrendering
ADSs for delivery of Deposited Securities up to $5.00 per 100 ADSs (or portion
thereof) surrendered unless otherwise provided in the Deposit Agreement. Unless
prohibited by an exchange upon which the ADSs may be listed, the Depositary will
charge the party to whom any cash distribution, or for whom the sale or exercise
of rights or other corporate action involving distributions to shareholders, is
made with respect to ADSs up to $0.02 per ADS held plus the expenses of the
Depositary on a per-ADS basis. The Company will pay the expenses of the
Depositary and any Registrar only as specified in the Deposit Agreement. The
Depositary will pay any other charges and expenses of the Depositary and the
Registrar. Holders of Receipts shall pay (i) taxes and other governmental
charges, (ii) share transfer registration fees on deposits of Shares, (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 of Receipts and (iv) such reasonable expenses as are incurred
by the Depositary in the conversion of foreign currency into United States
dollars.
All such charges may be changed by agreement between the Depositary
and the Company at any time and from time to time, subject to the Deposit
Agreement. The right of the
A-4
Depositary to receive payment of fees, charges and expenses shall survive the
termination of this Deposit Agreement and, as to any Depositary, the resignation
or removal of such Depositary pursuant to Section 5.05 of the Deposit Agreement.
(8) Title to Receipts. Subject to the limitations set forth herein
or in the Deposit Agreement, it is a condition of this Receipt, 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 Receipt (and to each ADS evidenced hereby) is transferable by
delivery as in the case of a certificated security under the laws of the State
of New York; provided, however, that the Company and the Depositary,
notwithstanding any notice to the contrary, may deem and treat the Holder of
this Receipt 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.
(9) Validity of Receipt. This Receipt shall not be entitled to any
benefits under the Deposit Agreement or be valid or obligatory for any purpose,
unless this Receipt shall have been executed by the Depositary by the manual or
facsimile signature of a duly authorized signatory of the Depositary and
countersigned by the manual or facsimile signature of a duly authorized
signatory of the Registrar.
(10) Disclosure of Beneficial Ownership and Ownership Restrictions.
The Company or the Depositary may from time to time request Holders or former
Holders to provide information as to the capacity in which they hold or held
Receipts and regarding the identity of any other persons then or previously
interested in such Receipts and the nature of such interest and various other
matters. Each such Holder agrees to provide any such information reasonably
requested by the Company or the Depositary pursuant to the Deposit Agreement
whether or not still a Holder at the time of such request. The Company may
restrict, in such manner as it deems appropriate, transfers of ADSs where such
transfer would result in the total number of Shares beneficially owned by a
single holder to exceed fifteen percent (15%) of the aggregate number of Shares
of the Company then issued and outstanding or any other limits under applicable
law or the Company's Articles of Incorporation with respect to which the Company
may, from time to time, notify the Depositary. The Company, may, in its sole
discretion, instruct the Depositary to take action with respect to the
beneficial ownership of any Holder or Beneficial Owner, who holds ADSs in excess
of the limitation set forth in the preceding sentence, including but not limited
to, the imposition of restrictions on the transfer of ADSs, the removal or
limitation of voting rights or the mandatory sale or disposition on behalf and
for the account of a Holder or Beneficial Owner of the Shares represented by the
ADSs held by such Holder or Beneficial Owner, in excess of such limitations (and
the cancellation of such ADSs), if and to the extent such disposition is
permitted by applicable law. Nothing herein or in the Deposit Agreement shall be
interpreted as obligating the Depositary to ensure compliance with the ownership
restrictions described herein or in Section 3.05 of the Deposit Agreement.
A-5
(11) Available Information. The Company is subject to the periodic
reporting requirements of the Securities Exchange Act of 1934 and, accordingly,
files certain reports with the Commission. Such reports and other information,
when so filed, can be inspected and copied at the public reference facilities
maintained by the Commission at Judiciary Plaza, 450 Fifth Street, N.W., Room
1024, Washington D.C. 20549; and at the regional offices of the Commission at
Seven World Trade Center, 13th Floor, New York, New York 10048; and at Citicorp
Center, 500 West Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of
such material may be obtained at prescribed rates. Such reports and other
information may also be inspected at the offices of the New York Stock Exchange,
Inc., 11 Wall Street, New York, New York 10005.
Dated:
CITIBANK, N.A.,
as Depositary
By:_______________________________
Vice President
The address of the Principal New York Office of the Depositary is
111 Wall Street, New York, New York 10043.
A-6
(FORM OF REVERSE OF RECEIPT)
SUMMARY OF CERTAIN ADDITIONAL PROVISIONS
OF THE DEPOSIT AGREEMENT
(12) Dividends and Distributions; Rights. Whenever the Custodian or
the Depositary receives a cash dividend or other cash distribution on the
Deposited Securities or the net proceeds from the sale of securities, property
or rights, the Depositary will, if at the time of receipt thereof any amounts
received in a foreign currency can, in the reasonable judgment of the Depositary
and pursuant to applicable law, be converted on a reasonable basis into United
States dollars distributable to the Holders entitled thereto and subject to the
provisions of the Deposit Agreement, convert or cause to be converted as
promptly as practicable such foreign currency into United States dollars and
will distribute promptly the amount thus received and any other dollars received
by the Custodian or Depositary in respect of Deposited Securities (less any
reasonable expenses incurred by the Depositary in converting such foreign
currency) to the Holders entitled thereto, in proportion to the number of ADSs
representing such Deposited Securities held by them respectively, after
deduction or upon payment of the fees and expenses of the Depositary; provided,
however, that the amount distributed will be reduced by any amounts required to
be withheld by the Company, the Depositary or the Custodian in respect of taxes
or other governmental charges. If in the judgment of the Depositary amounts
received in foreign currency may not be converted on a reasonable basis into
United States dollars distributable to the Holders entitled thereto, or may not
be so convertible for all of the Holders entitled thereto, the Depositary may in
its discretion make such conversion, if any, and distribution in United States
dollars to the extent permissible to the Holders entitled thereto and may
distribute the balance of the foreign currency received and not so convertible
by the Depositary to, or hold such balance (without liability for interest) for
the account of, the Holders entitled to receive the same.
Whenever the Depositary or the Custodian receives any distribution
other than cash, Shares, Non-Voting Stock or rights upon any Deposited
Securities, the Depositary will, after consultation with the Company cause the
securities or property received by the Custodian to be distributed as promptly
as practicable to the Holders entitled thereto, as of a record date fixed
pursuant to Section 4.08 of the Deposit Agreement, after deduction or upon
payment of the fees and expenses of the Depositary, in proportion to the number
of ADSs representing such Deposited Securities held by them respectively, in any
manner that the Depositary may deem equitable and practicable for accomplishing
such distribution subject to any applicable laws or regulations of Korea. If in
the opinion of the Depositary any distribution other than cash, Shares,
Non-Voting Stock or rights upon any Deposited Securities cannot be made
proportionately among the Holders entitled thereto, or if for any other reason
the Depositary deems such distribution not to be feasible, the Depositary, after
consultation with the Company, may 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 party thereof, and the net proceeds of any such sale will be distributed by
the Depositary to the Holders entitled thereto subject to any applicable laws or
regulations of Korea as in the case of a distribution received in cash.
A-7
If any distribution upon any Deposited Securities consists of a
dividend in, or free distribution of, Shares, the Depositary may with the
Company's approval and pursuant to applicable law, and will, if the Company so
requests, deposit such Shares under the Deposit Agreement and either (i)
distribute to the Holders of outstanding Receipts entitled thereto, in
proportion to the number of ADSs representing Deposited Securities held by them
respectively, additional Receipts for an aggregate number of ADSs representing
the number of Shares received as such dividend or free distribution or (ii)
reflect on the records of the Depositary such increase in the aggregate number
of ADSs representing the number of Shares so received, in either case after
deduction or upon payment of the fees and expenses of the Depositary. If the
Depositary deems such distribution for any reasons (including any requirement
that the Company or the Depositary withhold an amount on account of taxes or
other governmental charges or that such Shares must be registered under the
Securities Act of 1933 in order to be distributed to Holders) not to be
feasible, the Depositary, after consultation with the Company, may 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 Shares
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. In lieu of issuing Receipts for fractional
ADSs 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.
To the extent that new ADSs representing such Shares are not created and such
Shares are not sold or otherwise distributed, each ADS will thenceforth also
represent such additional Shares distributed upon the Deposited Securities
represented thereby. The Company will not be obliged to list depositary shares
representing Non-Voting Stock on any exchange.
If any distribution upon any Deposited Securities consists of a
dividend in Non-Voting Stock, the Depositary shall cause such Non-Voting Stock
to be deposited under a Non-Voting Stock Deposit Agreement (the "Non-Voting
Stock Deposit Agreement") which may be entered into among the Company, the
Depositary and all holders and beneficial owners from time to time of global
depositary receipts issued thereunder and, subject to the terms and conditions
of the Non-Voting Stock Deposit Agreement, will cause the depositary shares
issuable in respect of such deposit to be distributed to the Holders entitled
thereto, in proportion to the number of ADSs representing such Deposited
Securities held by them respectively; provided, however, that if for any reason
(including any requirement that the Company or the Depositary withhold an amount
on account of taxes or other governmental charges or that such Non-Voting Stock
must be registered under the Securities Act of 1933 in order to be distributed
to Holders) the Depositary deems such distribution not to be feasible, the
Depositary, after consultation with the Company, may 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 Non-Voting Stock thus
received, or any part thereof, and the net proceeds of any such sale shall be
distributed by the Depositary to the Holders entitled thereto as in the case of
a distribution received in cash. In lieu of issuing receipts for fractional
depositary shares representing such Non-Voting Stock in any such case, the
Depositary shall sell the number of shares of such Non-Voting Stock represented
by the aggregate of such factions and distribute the net proceeds in dollars,
all in the manner and subject to the conditions described in Section 4.02 of the
Deposit Agreement.
A-8
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, will have discretion as to the procedure to be followed in
making such rights available to the Holders entitled thereto, subject to Section
5.09 of the Deposit Agreement, or in disposing of such rights on behalf of such
Holders and distributing the net proceeds in dollars 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 distribute the net proceeds to such Holders, then the Depositary
shall allow the rights to lapse; provided, however, that the Depositary will, if
requested in writing by the Company, either (a) make such rights available to
all or certain Holders or Beneficial Owners by means of warrants or otherwise,
if lawful and feasible, after deduction or upon payment of the fees and expenses
of the Depositary, or (b) if making such rights available to certain Holders or
Beneficial Owners is not lawful or not feasible, or if the rights represented by
such warrants or other instruments are not exercised and appear to be about to
lapse, make reasonable efforts to sell such rights or warrants or other
instruments at public or private sales, at such place or places and upon such
terms as the Depositary may deem proper, and after deduction or upon payment of
the fees and expenses of the Depositary, allocate the net proceeds of such sales
for the account of the Holders otherwise entitled thereto 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 Receipt or
Receipts, or otherwise.
Subject to the foregoing, in the event that the Company issues any
rights with respect to Non-Voting Stock, the securities issuable upon any
exercise, whether by subscription or otherwise, of such rights by Holders or
Beneficial Owners shall be depositary shares representing such Non-Voting Stock
issued pursuant to the terms and provisions of the Non-Voting Stock Deposit
Agreement.
Notwithstanding anything to the contrary in Section 4.06 of the
Deposit Agreement, if registration under the Securities Act of 1933 or any other
applicable law of the rights or the securities to which any rights relate, or
any filing, report, approval or consent of any third party is required in order
for the Company to offer such rights to Holders or Beneficial Owners and to sell
the securities represented by such rights, the Depositary will not offer such
rights to the Holders unless and until a registration statement is in effect, or
unless the offering and sale of such securities to the Holders are exempt from
or not subject to the registration provisions of the Securities Act of 1933 or
such filing, report, approval or consent has been submitted, obtained or
granted, as the case may be. Neither the Depositary nor the Company shall have
any obligation to register such rights or such securities under the Securities
Act of 1933 or to submit, obtain or request, as the case may be, of such filing,
report approval or consent.
(13) Record Dates. Whenever any cash dividend or other cash
distribution shall become payable or any distribution other than cash shall be
made, or whenever rights shall be issued, with respect to any Deposited
Securities, or whenever, for any reason, the Depositary causes a change in the
number of Shares that are represented by each ADS, or whenever the Depositary
shall receive notice of any meeting of holders of Shares or other Deposited
Securities, the Depositary will fix a record date after consultation with the
Company (which shall
A-9
be as near as practicable to the corresponding record date for Shares set by the
Company) for the determination of the Holders who will be entitled to receive
such dividend, distribution or rights, or the net proceeds of the sale thereof,
or to receive notice of such meeting or to exercise the rights of Holders with
respect to such changed number of Shares. Subject to the provisions of the
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, to
exercise the rights of Holders hereunder with respect to such changed number of
Shares in proportion to the number of American Depositary Shares held by them
respectively.
(14) Voting of Deposited Securities. As soon as practicable after
receipt of notice of, or solicitation of consents or proxies from, any meeting
of holders of Shares or other Deposited Securities, such notice to be provided
by the Company in English to the Depositary immediately upon finalization by the
Company of the form and substance of such notice (in accordance with Section
5.08 of the Deposit Agreement), the Depositary shall, if requested in writing by
the Company and as soon as practicable thereafter, fix a record date for
determining the Holders entitled to give instructions for the exercise of voting
rights as provided in Section 4.08 of the Deposit Agreement. The Company shall
provide to the Depositary sufficient copies, as the Depositary may reasonably
request, of notices of the Company's shareholders' meeting, the agenda therefor
as well as the English translations thereof, which the Depositary shall mail to
Holders as soon as practicable after receipt of the same by the Depositary,
together with: (a) a statement that the Holders of record at the close of
business on a specified record date will be entitled, subject to any applicable
provisions of Korean law and of the Articles of Incorporation of the Company
(which provisions, if any, shall be summarized in pertinent part), to instruct
the Depositary as to the exercise of the voting rights, if any, pertaining to
the number of Shares or other Deposited Securities represented by their
respective ADSs evidenced by their respective Receipts and (b) a brief statement
as to the manner in which such instructions may be given.
Upon the written request of a Holder of ADSs evidenced by a Receipt
on such record date received on or before the date established by the Depositary
for such purpose, the Depositary shall endeavor, insofar as practicable and
permitted under applicable law and the provisions of the Articles of
Incorporation of the Company, to vote or cause the Custodian to vote the Shares
represented by ADSs evidenced by such ADRs in accordance with the instructions
set forth in such request. Holders acknowledge, however, that the Company may
not notify the Depositary sufficiently in advance of the scheduled date of a
meeting or solicitation of consents or proxies to enable the Depositary to make
a timely mailing of such notices to the Holders of ADRs, and that the Holders of
ADRs may not receive such notices sufficiently in advance of a meeting or
solicitation of consents or proxies to give instructions to the Depositary. The
Depositary shall not attempt to exercise the right to vote that attaches to the
Shares other than in accordance with such instructions. ADSs for which no
specific voting instructions are received by the Depositary from the Holder
shall not be voted. Neither the Depositary nor the Custodian shall, under any
circumstances exercise any discretion as to voting and neither the Depositary
nor the Custodian shall vote or attempt to exercise the right to vote the Shares
or other Deposited Securities of such Series represented by ADSs except pursuant
to and in accordance with such written instructions from Holders.
A-10
Subject to the applicable laws or rules of any securities exchange
on which the Deposited Securities are listed or traded, at least three (3) days
prior to the date of such meeting, the Depositary shall deliver to the Company a
tabulation of the voting instructions received from Holders of Receipts, if any,
in accordance with which the Depositary will vote, or cause to be voted, the
Deposited Securities represented by the ADSs evidenced by such ADRs at such
meeting. A Holder or Beneficial Owner of ADRs shall not be entitled to give any
instructions with respect to voting rights associated with ADSs evidenced by
ADRs held by such Holder if and to the extent the total number of Shares
beneficially owned by such Holder or Beneficial Owner exceeds fifteen percent
(15%) of the total number of Shares outstanding, or any other limit under
applicable law or the Company's Articles of Incorporation with respect to which
the Company may, from time to time, notify the Depositary. The Company and the
Depositary may take any and all action necessary or desirable to enforce the
restrictions on the exercise of voting rights set forth in the preceding
sentence. Voting rights, if any, may be exercised only in respect of two ADSs,
or multiples thereof.
The Company acknowledges and agrees that the provisions of Section
5.10 of the Deposit Agreement will apply to any liability or expense of the
Depositary which may arise out of or in connection with any action of the
Depositary or the Custodian in voting pursuant to Section 4.09 of the Deposit
Agreement.
(15) Changes Affecting Deposited Securities. Upon any change in par
value, split-up, consolidation or any other reclassification of Deposited
Securities, or upon any recapitalization, reorganization, merger or
consolidation of the Company or sale of assets by the Company, any securities
which will be received by the Depositary or the Custodian in exchange for or in
conversion of or in respect of Deposited Securities will be treated as new
Deposited Securities under the Deposit Agreement, and the ADSs will, subject to
the terms of the Deposit Agreement and applicable laws, including any applicable
provisions of the Securities Act of 1933, thenceforth represent the new
Deposited Securities so received, unless additional or new ADSs are created
pursuant to the following sentence. Alternatively, the Depositary may, with the
Company's approval and pursuant to applicable law, and will, if the Company so
requests and pursuant to applicable law, and subject to Section 5.09 of the
Deposit Agreement, create new or additional ADSs representing such new Deposited
Securities and execute and deliver additional Receipts evidencing such ADSs as
in the case of a stock dividend on the Shares, and may call for the surrender of
outstanding Receipts to be exchanged for new Receipts specifically describing
such new Deposited Securities. Immediately upon the occurrence of any such
change, conversion or exchange covered by Section 4.10 of the Deposit Agreement
in respect of the Deposited Securities, the Depositary will give notice thereof,
at the Company's expense, in writing to all Holders.
(16) Reports; Inspection of Transfer Books. The Depositary will make
available for inspection by Holders at its Principal New York Office and
Principal London Office and at the office of each Custodian copies of the
Deposit Agreement, any notices, reports or communications, including any proxy
soliciting materials, received from the Company which are both (a) received by
the Depositary or Custodian or the nominee of either, as the holder of the
Deposited Securities, and (b) made generally available to the holders of such
Deposited Securities by the Company. The Depositary will also send to Holders
copies of such notices, reports and communications when furnished by the Company
to the Depositary as provided in
A-11
the Deposit Agreement. The Depositary will keep books at its Principal New York
Office for the registration of Receipts and their transfer which at all
reasonable times will be open for inspection by Holders and the Company,
provided that such inspection shall not to the Depositary's knowledge be for the
purpose of communicating with Holders in the interest of a business or object
other than the business of the Company or a matter related to the Deposit
Agreement or the Receipts. Upon notice to the Company, the Depositary may close
the transfer books, at any time or from time or time, when deemed expedient by
it in connection with the performance of its duties under the Deposit Agreement.
(17) Withholding. Notwithstanding any other provision of the Deposit
Agreement, in the event that the Depositary determines that any distribution in
property (including Shares or rights to subscribe therefor or other securities)
is subject to any tax or governmental charges which the Depositary is obligated
to withhold, the Depositary may dispose of all or a portion of such property
(including Shares and rights to subscribe therefor) in such amounts and in such
manner as the Depositary deems necessary and practicable to pay such taxes or
governmental charges, including by public or private sale, and the Depositary
will distribute the net proceeds of any such sale or the balance of any such
property after deduction of such taxes or governmental charges to the Holders
entitled thereto in proportion to the number of ADSs held by them respectively.
(18) Liability of the Company and Depositary. Neither the Depositary
nor the Company will incur any liability to any Holder or Beneficial Owner, if
by reason of any provision of any present or future law of the United States,
Korea or any other country or jurisdiction, or of any other governmental
authority, or by reason of any provision, present or future, of the Articles of
Incorporation of the Company, or by reason of any act of God or war or other
circumstances beyond its control, the Depositary or the Company shall be
prevented, delayed or forbidden from, or subject to any civil or criminal
liability on account of, doing or performing any act or thing which by the terms
of the Deposit Agreement it is provided shall be done or performed. Neither the
Company nor the Depositary assumes any obligation or shall be subject to any
liability under the Deposit Agreement to Holders or Beneficial Owners, including
for any consequential or punitive damages for any breach of the Deposit
Agreement, except that each of them agrees to act in good faith and without
negligence in the performance of such duties as are specifically set forth in
the Deposit Agreement. The Depositary and the Company undertake to perform such
duties and only such duties as are specifically set forth in the Deposit
Agreement, and no implied covenants or obligations shall be read into the
Deposit Agreement against the Depositary or the Company. Neither the Depositary
nor the Company will be under any obligation to appear in, prosecute or defend
any action, suit or other proceeding in respect of any Deposited Securities or
in respect of the Receipts, which in its opinion may involve it in expense and
liability, unless indemnity satisfactory to it against all expense and liability
be furnished as often as may be required, and no Custodian will be under any
obligation whatsoever with respect to such proceedings, the responsibility of
the Custodian being solely to the Depositary. Neither the Depositary nor the
Company will be liable for any action or inaction by it in reliance upon the
advice of or information from legal counsel, accountants, any person presenting
Shares for deposit, any Holder or Beneficial Owner, or any other person believed
by it in good faith to be competent to give such advice or information. Each of
the Depositary, its agents and the Company may rely and shall be protected in
acting upon any written notice,
A-12
request, direction or other document believed by it to be genuine and to have
been signed or presented by the proper party or parties.
(19) Certain Rights of the Depositary; Limitations. Subject to the
further terms and provisions of Sections 5.11 and 3.05 of the Deposit Agreement
and applicable Korean law, the Depositary and its agents may own and deal in any
class of securities of the Company and its affiliates and in ADSs. The
Depositary may cause the issuance of ADSs against evidence of rights to receive
Shares from the Company, or any custodian, registrar, transfer agent, clearing
agency or other entity involved in ownership or transaction records in respect
of the Shares. Such evidence of rights shall consist of written blanket or
specific guarantees of ownership of Shares furnished on behalf of the holder
thereof. In its capacity as Depositary, the Depositary shall not lend Shares or
ADSs; provided, however, that to the extent permitted by Korean law, the
Depositary reserves the right to (i) cause the issuance of ADSs prior to the
receipt of Shares pursuant to Section 2.02 of the Deposit Agreement and (ii)
deliver Shares prior to the receipt and cancellation of ADSs pursuant to Section
2.05 of the Deposit Agreement, including ADSs which were issued under (i) above
but for which Shares may not have been received; further provided, however, that
the Depositary shall not issue ADSs prior to the receipt of Shares in the case
of the deposit of Shares by the Company in connection with an offering of ADSs
or pursuant to the Deposit Agreement, unless requested by the Company and to the
extent permitted by applicable Korean law. The Depositary may receive ADSs in
lieu of Shares under (i) above and receive Shares in lieu of ADSs under (ii)
above. Each such transaction shall be (a) subject to (x) a written
representation by the person or entity (the "Applicant") to whom ADSs or Shares
are delivered that, at the time the Depositary causes the issuance of such ADSs
or delivers such Shares, the Applicant or its customer owns the Shares or ADSs
to be delivered to the Depositary, or (y) such evidence of ownership of Shares
or ADSs as the Depositary deems appropriate, (b) subject to a written agreement
by the Applicant that it will hold such Shares or ADSs in trust for the
Depositary until their delivery to the Depositary or Custodian, reflect on its
records the Depositary as owner of such Shares or ADSs and deliver such Shares
or ADSs upon the Depositary's request, (c) at all times fully collateralized
(marked to market daily) with cash, United States government securities, or
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 ADSs issued under (i)
above and outstanding at any time generally will not exceed thirty percent (30%)
of the ADSs then outstanding and with respect to which Shares are on deposit
with the Depositary and that the Shares released at any time generally under
(ii) above will not exceed 30% of the Shares that remain on deposit; provided,
however, that the Depositary reserves the right to change or disregard such
limit from time to time as the Depositary reasonably deems appropriate; further
provided, however, that the Depositary will not enter into any transaction under
(i) or (ii) above that will have the immediate effect of exceeding the 30%
limitation until after consultation with the Company. The Depositary will also
set limits with respect to the number of ADSs and Shares involved in
transactions to be effected pursuant to Section 5.11 of the Deposit Agreement
with any one person on a case-by-case basis as it deems appropriate.
Collateral provided by an Applicant for ADSs or Shares, but not the
earnings thereon, shall be held for the benefit of the Holder. The Depositary
may retain for its own
A-13
account any compensation received by it in connection with the foregoing,
including without limitation earnings on the collateral.
(20) Resignation and Removal of Depositary; Substitution of
Custodian. The Depositary may at any time resign as Depositary under the Deposit
Agreement by 60 days' prior written notice of its election so to do delivered to
the Company, such resignation to take effect upon the appointment of a successor
depositary and its acceptance of such appointment as provided in the Deposit
Agreement. The Depositary may at any time be removed by the Company by 60 days'
prior written notice of such removal, which shall become effective upon the
appointment of a successor depositary and its acceptance of such appointment as
provided in the Deposit Agreement. The Depositary may, after consultation with
the Company, when it reasonably appears to be in the best interest of the
Holders to do so, appoint a substitute or an additional custodian and the term
"Custodian" shall also refer to such substitute or additional custodian.
(21) Amendment of Deposit Agreement and Receipts. This Receipt and
the Deposit Agreement may at any time and from time to time be amended by
Agreement between the Company and the Depositary. Any amendment which shall
impose or increase any fees or charges (other than taxes or other governmental
charges), or which shall otherwise prejudice any substantial existing right of
Holders shall not, however, become effective as to outstanding Receipts until
the expiration of 30 days after notice of such amendment shall have been given
to the Holders of outstanding Receipts. Every Holder and Beneficial Owner at the
time any amendment so becomes effective shall be deemed, by continuing to hold
any Receipt or to own any beneficial interest herein, 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 the Holder to surrender such
Receipt and receive therefor the Deposited Securities represented thereby,
except in order to comply with mandatory provisions of applicable law.
(22) Termination of Deposit Agreement. The Depositary will at any
time at the direction of the Company, upon 90 days' prior written notice from
the Company, terminate the Deposit Agreement by mailing notice of such
termination to the Holders of all Receipts then outstanding at least 30 days
prior to the date fixed in such notice for such termination. The Depositary may
likewise terminate the Deposit Agreement if at any time 90 days after the
Depositary shall have delivered to the Company a written notice of its election
to resign and a successor depositary shall not have been appointed and accepted
its appointment. If any Receipts shall remain outstanding after the date of
termination, the Depositary thereafter will discontinue the registration of
transfers of Receipts, 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, 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 rights or other property, in exchange for Receipts 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
A-14
liability for interest, for the pro rata benefit of the Holders not theretofore
surrendered. Thereafter the Depositary will be discharged from all obligations
under the Deposit Agreement, except to account for such net proceeds and other
cash.
(23) Governing Law. The Deposit Agreement and the Receipts shall be
interpreted under, and all rights hereunder and thereunder shall be governed by,
the laws of the State of New York without regard to the principles of conflicts
of laws thereof.
(24) Power of Attorney. Each Holder and Beneficial Owner, upon
acceptance of this Receipt hereby appoints the Depositary its attorney-in-fact,
with full power to delegate, to take any and all steps or action provided for or
contemplated herein with respect to the Deposited Securities, including but not
limited to those set forth in Section 3.05 and Article IV of the Deposit
Agreement, and to take such further steps or action as the Depositary in its
reasonable discretion may deem necessary or appropriate to carry out the
purposes of the Deposit Agreement.
A-15
FOR VALUE RECEIVED, the undersigned hereby sells, assigns and
transfers unto
_________________________________________ _____________________________________
(Please insert social security or other (Please print or typewrite name and
identifying number of assignee) address of assignee)
the within American Depositary Receipt and all rights and interests represented
thereby, and hereby irrevocably constitutes and appoints _______________________
________________________________________________________________________________
attorney to transfer the same on the books of the within named Depositary, with
full power of substitution in the premises.
Dated:___________________________________ Signature____________________________
NOTE: The signature to any
endorsement hereon must correspond
with the name as written upon the
face of the Receipt in every
particular, without alteration or
enlargement or any change whatever.
If the endorsement be executed by an
attorney, executor, administrator,
trustee or guardian, the person
executing the endorsement must give
his full title in such capacity, and
proper evidence of authority to act
in such capacity, if not on file with
the Depositary, must be forwarded
with this Receipt.
All endorsements or assignments of
Receipts must be guaranteed by a
member of a Medallion Signature
Program approved by the Securities
Transfer Association Inc.
A-16
EXHIBIT B
CHARGES OF THE DEPOSITARY
Service Rate Fees Payable By
------- ---- ---------------
(1) Issuance of ADSs upon deposit of Up to $5.00 per 100 ADSs (or portion Party receiving ADSs*
Shares (excluding issuances thereof)
contemplated by (3) below)
(2) Delivery of Deposited Securities Up to $5.00 per 100 ADSs (or portion Party surrendering ADSs
against surrender of ADSs thereof)
(3) Distributions (other than cash or Up to $0.02 per ADS held Party to whom distribution, or for whom
stock dividends); sale or exercise sale or exercise of rights, or other
of rights; or other corporate corporate action is made
action involving distributions to
shareholders (including any
distribution in the form of
Shares, Non-Voting Capital Stock
or delivery of ADSs upon exercise
of rights)
- ----------
* In any offering of ADSs by the Company or the Government of Korea, the
Depositary agrees to waive the fees specified in clause (1) above as might
otherwise be payable by the party receiving the ADSs in connection with
such offering.
B-1