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COMMON STOCK AGREEMENT
Between
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
and
CITIBANK, N.A.
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Dated as of October 19, 1994
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Related to the Purchase of
Common Stock and the Deposit Thereof in
accordance with the Common Stock Deposit Agreement
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COMMON STOCK AGREEMENT
AGREEMENT dated as of October 19, 1994 between PHILIPPINE LONG DISTANCE
TELEPHONE COMPANY, a corporation organized under the laws of the Republic of the
Philippines (the "Company") and CITIBANK, N.A., a national banking association
organized under the laws of the United States of America (the "Depositary").
W I T N E S S E T H:
WHEREAS, the Depositary has entered into a Common Stock Deposit
Agreement dated the date hereof to provide for the deposit of Common Stock of
the Company from time to time with the Depositary or a Custodian, as agent of
the Depositary; for the creation of American Depositary Shares representing such
Common Stock so deposited and for the execution and delivery of American
Depositary Receipts evidencing such American Depositary Shares and;
WHEREAS, the Company benefits from this Agreement by having a liquid
depositary receipt facility for its Common Stock.
NOW, THEREFORE, in consideration of the premises the parties hereto
agree as follows:
1. Ownership Restrictions. The Company may restrict transfers of the
Common Stock if such transfer might result in ownership of Common Stock
exceeding limits under any applicable law or the Company's Amended Articles of
Incorporation. The Company shall notify the Depositary and the Custodian in
writing of any such restrictions imposed on Common Stock constituting Deposited
Securities.
2. Withholding. In the event that the Company or the Depositary as
appropriate shall be required to withhold and does withhold from any cash
dividend or other cash distribution in respect of any Common Stock or other
securities deposited under or received by the Depositary or its agent in
accordance with the Deposit Agreement ("Deposited Securities") an amount on
account of taxes or other governmental charges, the Company or its agent or the
Depositary or its agent, as appropriate, will remit to the appropriate
governmental authority or agency all amounts withheld and owing to such
authority or agency. The Depositary will forward to the Company or its agent
such information from its records as the Company may reasonably request to
enable the Company or its agent to file with governmental authorities or
agencies or, at the request and expense of the Company, the Depositary or its
agent may file such reports if deemed lawful and reasonably feasible by the
Depositary.
The Company will provide to the Depositary copies of official receipts
or other evidence of payment of such withholding tax paid by the Company to the
Philippine Bureau of Internal Revenue (on the appropriate governmental form, if
applicable) in respect of the Common Stock constituting Deposited Securities,
such evidence to include the amount of such taxes withheld, both in the
aggregate and on a per
Share basis. The Depositary will, in turn, provide the Company with such
information from its records (on the appropriate governmental form if
applicable) as it will enable the Company to comply with its obligations under
the previous sentence and will distribute and otherwise make available to
Holders such information in accordance with Section 5.
Notwithstanding any other provision of this Agreement, before making
any distribution or other payment on any Deposited Securities, the Company shall
make such deductions (if any) which, by the laws or regulations of the
Philippines, the Company is required to make in respect of any income, capital
gains or other taxes and the Company may also deduct the amount of any tax or
governmental charges payable by the Company or for which the Company might be
made liable in respect of such distribution or other payment or any document
signed in connection therewith.
3. Obligations of the Company and the Depositary. The Company and the
Depositary shall act in good faith and use reasonable judgment in the
performance of their respective obligations set forth in this Agreement. The
Depositary and the Company undertake to perform such duties and only such duties
as are specifically set forth in this Agreement and no implied covenants or
obligations shall be read into this Agreement against the Depositary or the
Company.
4. Charges of Depositary. The fees, if any, of the Depositary and the
registrar under the Deposit Agreement (the "Registrar"), which are specified in
Exhibit B to the Deposit Agreement, shall be paid as provided in such Exhibit.
Any charges and expenses of the Depositary and the Registrar, if any,
under the Deposit Agreement that are not paid by Holders of ADRs will be paid by
the Company in accordance with agreements in writing entered into between the
Depositary and the Company as to the nature and amount of such charges and
expenses. 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, the nominee under the Deposit
Agreement 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 Agreement and the Deposit Agreement shall survive
the termination of this Agreement and the Deposit Agreement and the resignation
of the Depositary pursuant to this Agreement and the Deposit Agreement.
5. Notices, Reports and Communications. On or before the first date on
which the Company gives notice, by publication or otherwise, of any meeting of
holders of Common Stock or other Deposited Securities, of any other meeting of
holders of the Company's securities at which holders of Common Stock or other
Deposited Securities are entitled to vote or of any adjourned meeting of such
holders, or of the taking of any action by such holders of Common Stock or other
Deposited Securities other than at a meeting, or of the taking of any action in
respect of any cash or other distributions or the offering of any rights in
respect of Deposited Securities, the Company agrees to transmit to the
Depositary and the Custodian a copy of the notice thereof in the
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English language but otherwise in the form given or to be given to holders of
Common Stock or other Deposited Securities. The Company shall also furnish to
the Custodian and the Depositary a summary, in English, of any applicable
provisions or proposed provisions of the Amended Articles of Incorporation of
the Company that may be relevant or pertain to such notice of meeting or be the
subject of a vote thereat.
The Company will provide to the Custodian and the Depositary will, at
the Company's expense, arrange for the prompt transmittal by the Custodian to
the Depositary, of sufficient copies of such notices and any other reports and
communications that are generally made available by the Company to holders of
Common Stock. The Depositary shall arrange at the Company's expense for prompt
mailing of copies thereof and copies of the withholding tax information provided
to the Depositary pursuant to Section 2 to all Holders and, at the reasonable
request and at the expense of the Company, shall also make such notices, reports
and communications (including information in respect of dividends received by
the Depositary with regard to the Common Stock) available to all Holders in the
same manner as the Company makes them generally available to holders of Common
Stock or on such other basis as the Company may advise the Depositary is
required by any law or regulation or any requirement of any stock exchange to
which the Company may be subject, subject to any limitations imposed by U.S.
law. The Company will also provide to the Custodian or the Depositary an English
language translation of such reports or communications concurrently with the
receipt by the Custodian of such reports or communications. The Depositary may,
but shall not be required to, at the Company's expense, obtain English
translations or adequate English summaries of any notices, reports or
communications which are generally provided by the Company to its holders of
Common Stock which are not initially furnished to the Depositary in English
text.
6. Issuance of Additional Common Stock, Etc. In the event of any
issuance of additional Common Stock or of other securities (including rights and
convertible or exchangeable securities) as a dividend or distribution with
respect to the Common Stock or other Deposited Securities, or future issuances
to Holders for cash of additional Common Stock or such other securities, the
Depositary shall not distribute any such additional Common Stock or other
securities to the Holders unless the Company shall have furnished to the
Depositary a written opinion from counsel for the Company in the United States,
which counsel shall be reasonably satisfactory to the Depositary, stating
whether or not the circumstances of such issue are such as to make it necessary
for a registration statement under the Securities Act to be in effect at or
prior to making such dividend or distribution available to the Holders entitled
thereto and, if in the opinion of such counsel a registration statement is
required, stating that there is a registration statement in effect which will
cover the issuance of such securities. If, for any reason, the Depositary
reasonably deems such a distribution of Common Stock not to be practical, lawful
or feasible, the Depositary may after consultation with the Company (i) to the
extent permitted by applicable law, adopt such method as the Depositary
reasonably deems equitable or practicable for the purpose of obtaining such
distribution or effecting such distribution or (ii) if the Depositary reasonably
determines that no such method of distribution can be effected in a practicable
or equitable manner, the
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Depositary may refrain from effecting such distribution altogether until such
time as it reasonably determines that a practicable or equitable distribution
can be effected.
Any future issuances of (1) additional Common Stock, (2) rights,
preferences or privileges to subscribe for Common Stock, (3) securities
convertible into or exchangeable for Common Stock, or (4) rights, preferences or
privileges to subscribe for securities convertible into or exchangeable for
Common Stock other than as a dividend or distribution or issuance for cash to
Holders as described in the immediately preceding paragraph), shall be effected
by the Company in a manner so as to not violate the Securities Act. If the
Company determines that an issuance of such securities is required to be
registered under the Securities Act, the Company will (x) register such issuance
to the extent necessary, (y) alter the terms of the issuance to avoid the
registration requirements of the Securities Act or (z) direct the Depositary to
take such measures as are provided in Sections 4.03 through 4.05 of the Deposit
Agreement or other specific measures with respect to the acceptance for deposit
of Common Stock to prevent such issuance from being made in violation of the
registration requirements of the Securities Act.
Neither the Company nor any company controlling, controlled by or under
common control with the Company will at any time deposit any Common Stock,
either upon original issuance or upon a sale of Common Stock previously issued
and reacquired by the Company or by any such controlled or controlling company
unless such transaction is registered under the Securities Act or is exempt from
registration under the Securities Act as confirmed by a written opinion from
counsel for the Company in the United States, which counsel shall be reasonably
satisfactory to the Depositary.
7. Execution and Delivery of Additional ADRS. The Depositary may, and
shall, if the Company so requests, execute and deliver additional ADRs or call
for the surrender of outstanding ADRs to be exchanged for new ADRs upon any
change in par value, split-up, consolidation, or any other reclassification of
the Common Stock, or upon recapitalization, reorganization, merger or
consolidation or sale of assets affecting the Company or to which it is a party
which results in securities being received by the Depositary or the Custodian in
exchange for, in conversion of or in respect of Common Stock.
8. Further Obligations of the Depositary to Consult with the Company.
The Depositary shall consult with the Company under the following circumstances:
(i) If the Custodian or the Depositary receives any distribution
upon any deposited Convertible Preferred Shares in property (other than
cash or rights upon any Deposited Securities) and, in the opinion of the
Depositary, such distribution can not be made proportionately among such
ADR Holders or if for any other reason the Depositary deems such
distribution to be impracticable, unlawful or unfeasible, the Depositary
shall consult with the Company and adopt such method as it deems equitable
or practicable following such consultation to effect such distribution.
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(ii) The Depositary shall consult with the Company when fixing a
record date pursuant to the Deposit Agreement.
9. Further Obligations of the Depositary. The Depositary shall have the
following further obligations:
(i) The Depositary shall use reasonable efforts to comply with
written instructions of the Company not to accept for deposit under the
Deposit Agreement any Common Stock identified in such instructions at such
times and under such circumstances as may reasonably be specified in such
instructions in order to facilitate the Company's compliance with the
securities laws of the United States.
(ii) The Depositary shall take such additional actions and provide
such additional information as the Depositary shall from time to time agree
with the Company.
10. Resignation of the Depositary; Appointment of Successor Depositary.
The Depositary will not resign as Depositary under the Deposit Agreement and
terminate this Agreement unless it has given 30 days' written notice of its
election so to do to the Company, such resignation and termination to take
effect upon the appointment of a successor depositary and its acceptance of such
appointment as hereinafter provided.
In case at any time the Depositary acting under the Deposit Agreement
shall resign, the Company shall use its best efforts to name a successor
depositary, which shall be a bank or trust company having an office in the
Borough of Manhattan, The City of New York. Such successor depositary shall
execute and deliver to its immediate predecessor depositary and to the Company
an agreement substantially in the form hereof and an instrument in writing
accepting its appointment under the Deposit Agreement, 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 immediate
predecessor; but such immediate predecessor, nevertheless, upon payment of all
sums due it and on the written request of the Company, shall execute and deliver
an instrument transferring to such successor depositary all rights and powers of
such immediate predecessor hereunder and under the Deposit Agreement, 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 of all outstanding ADRs and such other books and records maintained by
such predecessor and its agents with respect to its function as Depositary. Any
such successor depositary shall promptly mail notice of its appointment to the
Holders.
Any corporation into or with which the Depositary may be merged or
consolidated shall be the successor of the Depositary without the execution or
filing of any document or any further act.
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11. Termination. The Company may at any time direct the Depositary to
terminate the Deposit Agreement and the Deposit Agreement will be terminated by
the Depositary's mailing notice of such termination to the Holders of all ADRs
then outstanding at least 90 days prior to the date fixed in such notice for
such termination. The Depositary may likewise terminate the Deposit Agreement if
the Depositary shall have delivered to the Company a written notice of its
election to resign, and a qualified successor depositary shall not have been
appointed and accepted its appointment as provided in Section 10 within 90 days
after such delivery. Upon the termination of the Deposit Agreement, the
Depositary shall be discharged from all obligations under this Agreement, except
for its obligations under Section 12. Upon the termination of the Deposit
Agreement, the Company shall be discharged from all obligations under this
Agreement, except for its obligations under Sections 4 and 12.
12. Indemnification. The Company shall indemnify the Depositary, the
Custodian and any of their respective agents against, and hold each of them
harmless from, any loss, liability or expense of any kind whatsoever that may
arise (a) out of or in connection with any offer, issuance, sale, resale,
transfer, conversion, deposit or withdrawal of ADRs, ADSs, Common Stock, other
Deposited Securities, Shares or any offering documents in respect thereof or (b)
out of acts performed or omitted, including but not limited to any delivery by
the Depositary on behalf of the Company of information regarding the Company, in
connection with this Agreement, the Deposit Agreement, the ADRs and the ADSs, as
the same may be amended, modified or supplemented from time to time, in any such
case (i) by the Depositary, the Custodian or any of their respective agents,
except to the extent such loss, liability or expense is due to negligence or bad
faith of any of them, or (ii) by the Company or any of its agents, except to the
extent such loss, liability or expense arises out of information relating to the
Depositary, the Custodian or any of their respective agents, as the case may be,
furnished in a signed writing to the Company by the Depositary expressly for use
in an offering document pursuant to which ADRs, ADSs, Common Stock or other
Deposited Securities are offered or sold.
The Depositary shall indemnify the Company and hold it harmless from
any loss, liability or expense of any kind whatsoever which may arise out of
acts performed or omitted by the Depositary, the Custodian or any of their
respective agents due to the negligence or bad faith of either the Depositary or
the Custodian or any of their agents.
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. No indemnified person shall compromise or
settle any action or claim without the consent of the indemnifying person.
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The obligations set forth in this Section shall survive the termination
of this Agreement and the Deposit Agreement and the succession or substitution
of any indemnified person.
Nothing in this Agreement shall be construed as creating a relationship
of principal and agent between the Company and the Depositary.
13. Amendment. The form of the ADRs and any provisions of the Deposit
Agreement will not, without the consent of the company, at any time and from
time to time be amended by the Depositary in any respect.
14. Notices. Any and all notices to be given to the Company under this
Agreement or the Deposit Agreement shall be deemed to have been duly given if
personally delivered, or sent by mail (if domestic, first class, if overseas,
first class airmail, postage prepaid) or air courier, or by cable, telex or
facsimile transmission confirmed by letter sent by mail or air courier,
addressed to Philippine Long Distance Telephone Company, Xxxxx Cojuangco
Building, Makati Avenue, Makati, Metro Manila, Republic of the Philippines,
Attention: Treasurer (facsimile number: (000) 000-0000) or to any other address
which the Company may specify by notice.
Any and all notices to be given to the Depositary shall be deemed to
have been duly given if personally delivered, or sent by mail (if domestic,
first class, if overseas, first class airmail, postage prepaid) or air courier,
or by cable, telex or facsimile transmission confirmed by letter sent by mail or
air courier, addressed to Citibank, N.A., 000 Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx,
Xxx Xxxx 00000, Attention: ADR Department (telex number: ITT: 420392; RCA:
235530; facsimile number: (000) 000-0000), or to any other address which the
Depositary may specify by notice.
Any and all notices to be given to the Custodian shall be deemed to
have been duly given if personally delivered, or sent by mail (if domestic,
first class, if overseas, first class airmail, postage prepaid) or air courier,
or by cable, telex or facsimile transmission confirmed by letter sent by mail or
air courier, addressed to Citibank, N.A., Manila, 0000 Xxxxx xx Xxxxx, Xxxxxx,
Xxxxx Xxxxxx, Xxxxxxxx of the Philippines, Attention: Investment Services Unit
(telex number: CITIPHMMAISU; facsimile number: (000) 000-0000), or to any other
address which the Custodian may specify by notice.
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, the Custodian or the
Company may, however, act upon any cable, telex or facsimile transmission
received by it from the other or from any Holder, notwithstanding that such
cable, telex or facsimile transmission shall not subsequently be confirmed as
aforesaid.
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15. Amended Articles, Bar-laws and Resolutions. Upon execution of this
Agreement, the Company agrees to promptly provide to the Depositary two copies
of the Company's Amended Articles of Incorporation and By-laws and the
Resolutions of the Board of Directors relating to the Common Stock. The Company
agrees that such Amended Articles, By-laws and Resolutions and this Agreement
may be made available for inspection by the Depositary at its Principal New York
Office.
16. Notice of Mandatory Conversion Date. All notices of mandatory
conversion of any Common Stock registered in the name of Citicorp Trade Services
Limited (or any successor thereto) shall promptly be sent to the Custodian in
the manner set out in this Agreement.
17. Defined Terms. Terms used herein but not otherwise defined shall
have the meanings ascribed to such terms in the Deposit Agreement.
18. Counterparts. This 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.
19. Benefit of this Agreement and the Deposit Agreement. This Agreement
shall be binding upon and inure to the benefit of and be enforceable by the
parties hereto and the other persons specified herein as beneficiaries of one or
more provisions of this Agreement. The Depositary acknowledges that the Company
is the intended third-party beneficiary of the restrictions described in Section
2.06 of the Deposit Agreement and any related documents relating to the issuance
of ADRs prior to the receipt of Common Stock attributable thereto and the
delivery of Common Stock prior to the receipt and cancellation of ADRs
attributable thereto. The Company and the Depositary acknowledge that the
holders of American Depositary Receipts under the Common Stock Deposit Agreement
are intended third-party beneficiaries of this Agreement.
20. Severability. In case any one or more of the provisions contained
in this Agreement 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.
21. Governing Law. This Agreement shall be interpreted and all rights
hereunder and thereunder and provisions hereof and thereof shall be governed by
the laws of the State of New York.
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IN WITNESS WHEREOF, PHILIPPINE LONG DISTANCE TELEPHONE COMPANY and
CITIBANK, N.A. have duly executed this Agreement as of the day and year first
above set forth.
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
/s/
------------------------------------------
Name:
Title:
CITIBANK, N.A.
/s/
------------------------------------------
Name:
Title:
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