================================================================================
Amendment No. 1
to
Preferred Stock Deposit Agreement
between
CITIBANK, N.A.,
As Depositary
AND
HOLDERS OF
GLOBAL DEPOSITARY RECEIPTS EVIDENCING GLOBAL
DEPOSITARY SHARES
REPRESENTING
SERIES III CONVERTIBLE PREFERRED STOCK
of
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
Dated as of September 6, 1999
================================================================================
================================================================================
AMENDMENT NO. 1 TO PREFERRED STOCK DEPOSIT AGREEMENT
AMENDMENT NO. 1 TO PREFERRED STOCK DEPOSIT AGREEMENT, is dated as of
September 6, 1999 (the "Amendment"), between CITIBANK, N.A., a national banking
association organized under the laws of the United States of America and acting
solely as depositary (the "Depositary"), and all holders from time to time of
Global Depositary Receipts issued under the Deposit Agreement (as defined
below).
W I T N E S S E T H T H A T:
- - - - - - - - - - - - - -
WHEREAS, the parties hereto have entered into that certain Preferred
Stock Deposit Agreement, dated as of November 29, 1994 (the "Deposit
Agreement"), to provide for the deposit of Series III Convertible Preferred
Stock of Philippine Long Distance Telephone Company, a corporation organized
under the laws of the Republic of the Philippines (the "Company") for the
creation of Global Depositary Receipts ("GDRs") evidencing Global Depositary
Shares ("GDSs") representing the Shares (as defined in the Deposit Agreement) so
deposited and for the execution and delivery of such GDRs evidencing such GDSs;
WHEREAS, pursuant to Section 6.01 of the Deposit Agreement, the
Depositary deems it necessary and desirable, with the consent of the Company, to
amend the Deposit Agreement and the form of GDR annexed thereto as Exhibit A for
the purposes set forth herein;
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. All capitalized terms used, but not
otherwise defined herein, shall have the meaning given to such terms in the
Deposit Agreement.
ARTICLE II
AMENDMENTS TO DEPOSIT AGREEMENT
SECTION 2.01. Deposit Agreement. All references in the Deposit
Agreement to the term "Deposit Agreement" shall, as of the date hereof refer to
the Deposit Agreement, dated as of November 29, 1994, as amended by this
Amendment.
SECTION 2.02. Termination. (a) Article VI of the Deposit Agreement is
hereby amended by inserting the following phrase at the end of the first
sentence of Section 6.02:
================================================================================
================================================================================
"provided that, if the Company shall provide to the
Depositary a notice announcing a mandatory conversion of any
or all of the Shares constituting Deposited Securities (such
an event, a "Mandatory Conversion") prior to or
simultaneously with a notice of termination, the Depositary
shall, at the direction of the Company, terminate this
Deposit Agreement by mailing notice of such termination to
Holders of all GDRs then outstanding at least 60 days prior
to the date fixed in such notice for such termination".
(b) Section 6.02 of the Deposit Agreement is further amended by
inserting the following phrase at the end of the fourth sentence:
"; provided that, such term shall be extended to seven
months from the date of termination, when such termination
is in connection with a Mandatory Conversion."
ARTICLE III
AMENDMENTS TO THE FORM OF GDR
SECTION 3.01. GDR Amendment. The first sentence of Paragraph (1) of the
Form of GDR is hereby amended as of the date hereof to delete such sentence in
its entirety and to insert the following in its stead:
"This Global Depositary Receipt is one of an issue (herein
called the "GDRs") executed and delivered pursuant to the
Deposit Agreement, dated as of November 29, 1994 as amended
by Amendment No. 1 to Preferred Stock Deposit Agreement,
dated as of September 6, 1999 (as so amended and as further
amended from time to time, the "Deposit Agreement"), by and
among the Depositary and all Holders of GDRs issued
thereunder, each of whom by accepting a GDR or acquiring any
beneficial interest therein agrees to become a party thereto
and becomes bound by all the terms and provisions thereof."
SECTION 3.02. Termination. (a) The Form of reverse of the GDR attached
as Exhibit A to the Deposit Agreement is hereby amended by inserting the
following phrase at the end of the first sentence of Paragraph (30):
"provided that, if the Company shall provide to the
Depositary a notice announcing a mandatory conversion of any
or all of the Shares constituting Deposited Securities (such
an event, a "Mandatory Conversion") prior to or
simultaneously with a notice of termination, the Depositary
================================================================================
2
================================================================================
shall, at the direction of the Company, terminate this
Deposit Agreement by mailing notice of such termination to
Holders of all GDRs then outstanding at least 60 days prior
to the date fixed in such notice for such termination".
(b) Paragraph (30) of the Form of GDR is further amended by inserting
the following phrase at the end of the fourth sentence:
"; provided that, such term shall be extended to seven
months from the date of termination, when such termination
is in connection with a Mandatory Conversion."
ARTICLE IV
SECTION 4.01. Consent to Amend Preferred Stock Deposit Agreement.
Pursuant to Section 6.01 of the Deposit Agreement, the Company hereby consents
to the terms of this Amendment No. 1 to the Deposit Agreement as executed by the
Depositary.
SECTION 4.02. Representations and Warranties. The Company represents
and warrants to, and agrees with, the Depositary and the Holders, that:
(a) This Amendment, when executed and delivered by the Company, and
the Deposit Agreement and all other documentation executed and
delivered by the Company in connection therewith, will be and have
been, respectively, duly and validly authorized, executed and
delivered by the Company, and constitute the legal, valid and binding
obligations of the Company, enforceable against the Company in
accordance with their respective terms, subject to bankruptcy,
insolvency, fraudulent transfer, moratorium and similar laws of
general applicability relating to or affecting creditors' rights and
to general equity principles; and
(b) In order to ensure the legality, validity, enforceability or
admissibility into evidence of this Amendment or the Deposit Agreement
as amended hereby, and any other document furnished hereunder or
thereunder in The Republic of the Philippines, neither of such
agreements need to be filed or recorded with any court or other
authority in The Republic of the Philippines, nor does any stamp or
similar tax need to be paid in The Republic of the Philippines on or
in respect of such agreements.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. Effective Date. This Amendment is dated as of the date
set forth above and shall be effective as of such date (the "Effective Date").
================================================================================
3
================================================================================
SECTION 5.02. New GDRs. From and after the Effective Date, the
Depositary shall arrange to have new GDRs printed or amended to reflect the
changes to the form of GDR effected by this Amendment. All GDRs issued hereunder
after the Effective Date, once such new GDRs are available, whether upon the
deposit of Shares or other Deposited Securities or upon the transfer,
combination or split-up of existing GDRs, shall be subsequently in the form of
the specimen GDR attached as Exhibit A hereto. However, GDRs issued prior or
subsequent to the date hereof, which do not reflect the changes to the form of
GDR effected hereby, do not need to be called in for exchange and may remain
outstanding until such time as the Holders thereof choose to surrender them for
any reason under the Deposit Agreement. The Depositary is authorized and
directed to take any and all actions deemed necessary to effect the foregoing.
SECTION 5.03. Ratification. Except as specifically amended by this
Amendment, (a) the Deposit Agreement shall continue in full force and effect in
accordance with the terms and provisions thereof and (b) such terms and
provisions are hereby ratified and confirmed in all respects.
SECTION 5.04. Governing Law. This Amendment shall be interpreted and
all rights hereunder and thereunder and provisions hereof and thereof shall be
governed by the law of the State of New York.
SECTION 5.05. Counterparts. This Amendment may be executed in any
number counterparts, each of which shall be deemed an original and all of such
counterparts shall constitute one and the same instrument.
================================================================================
4
================================================================================
IN WITNESS WHEREOF, Citibank, N.A. has duly executed this Amendment as
of the Effective Date and all holders shall become parties hereto upon
acceptance by them of GDRs issued in accordance with the terms hereof or upon
acquisition of any beneficial interest therein.
CITIBANK, N.A., as Depositary
By: /s/ Emi Mak
-------------------------------------
Name: Emi Mak
-----------------------------------
Title: Vice President
----------------------------------
Acknowledged and Agreed to only with respect to Article IV:
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
By: /s/ Xxxxxxxx Xxx-Xxxx
-------------------------------------
Name: Xxxxxxxx Xxx-Xxxx
-----------------------------------
Title: Treasurer
----------------------------------
================================================================================
5
EXHIBIT A
Number _______________
Global Depositary Shares
(One Global Depositary
Share Represents One
Fully Paid Share of
Series III Convertible
Preferred Stock)
[FORM OF FACE OF GLOBAL DEPOSITARY
RECEIPT]
GLOBAL DEPOSITARY RECEIPT
evidencing
GLOBAL DEPOSITARY SHARES
representing
DEPOSITED FULLY PAID SHARES OF SERIES III
CONVERTIBLE PREFERRED STOCK
of
PHILIPPINE LONG DISTANCE TELEPHONE COMPANY
(Incorporated under the laws of
the Republic of the Philippines)
THE HOLDER OF THIS GLOBAL DEPOSITARY RECEIPT SHALL NOT HAVE, AND SHALL NOT HAVE
THE RIGHT TO INSTRUCT THE DEPOSITARY AS TO THE EXERCISE OF, ANY DISSENTER'S
RIGHTS PROVIDED TO HOLDERS OF SHARES UNDER PHILIPPINE LAW.
CITIBANK, N.A., a national banking association organized and existing
under the laws of the United States of America, as depositary (the
"Depositary"), such Depositary's principal office being located at 000 Xxxx
Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 hereby certifies that [ ], is the
owner of that number of GLOBAL DEPOSITARY SHARES, indicated on the records of
the Depositary, representing deposited fully paid Series III Convertible
Preferred Stock, par value P10 per share ("Shares"), convertible into Common
Stock, par value P5 per share, including evidence of rights to receive such
Shares (including, but not limited to, purchase invoices and assignments as
may effectuate the legal transfer of title to shares under Philippine law),
of Philippine Long Distance Telephone Company, a corporation organized under
the laws of the Republic of the Philippines (the "Company"). At the date of
the Deposit Agreement (as hereafter defined), each Global Depositary Share
("GDS") represents one (1) Share(1) deposited under the Deposit Agreement
with the Custodian, which at the date of execution of the Deposit Agreement
is Citibank, N.A., Manila branch (the "Custodian").
(1) The Deposit Agreement. This Global Depositary Receipt is one of an
issue herein called the "GDRs" executed and delivered pursuant to the Deposit
Agreement dated as of November 29, 1994 (the "Deposit Agreement"), by and among
the Depositary and all Holders from time to time of GDRs issued thereunder, each
of whom by accepting a GDR or acquiring any beneficial interest therein agrees
to become a party thereto and becomes bound by all terms and provisions thereof.
The Deposit Agreement sets forth the rights of Holders of the GDRs and the
rights and duties of the Depositary in respect of the Shares deposited
thereunder and any and all other securities, property and cash from time to time
received in respect of such Shares and held thereunder (such Shares, securities,
property and cash, collectively, the "Deposited Securities"). Copies of the
Deposit Agreement are on file at the Principal New York Office of the Depositary
and at the principal office of the Custodian. The statements made on the face
and the reverse of this GDR are summaries of certain provisions of the Deposit
Agreement and are qualified by and subject to the detailed provisions of the
Deposit Agreement, to which reference is hereby made. Terms defined in the
Deposit Agreement and not otherwise defined herein have the same defined
meanings set forth in the Deposit Agreement.
(2) Surrender of GDRs and Withdrawal of Deposited Securities. Subject
to the terms and conditions of the Deposit Agreement upon (i) surrender of GDSs
by delivery of GDRs at the Principal New York Office of the Depositary for the
purpose of withdrawal of the Deposited Securities represented thereby and (ii)
payment of all fees (including the fees of the Depositary (which are summarized
in paragraph (9) of this GDR) provided in the Deposit Agreement, including
Exhibit B thereto), taxes (including
--------------------------------
(1) Subject to amendment as provided in Article IV of the Deposit Agreement.
A-2
stamp, transfer and capital gains taxes) and governmental or other charges
payable in connection with such surrender and cancellation of GDRs, a Holder
shall be entitled to delivery, to him or upon his order, of the Shares and any
other documents of title at the time represented by the GDR together with such
other delivery of Deposited Securities (other than Shares) then represented by
GDSs as the Depositary may effect.
A GDR surrendered and written instructions received for such purposes
may be required by the Depositary to be properly endorsed or accompanied by
properly executed instruments of transfer. The person requesting withdrawal of
Deposited Securities shall deliver to the Depositary written instructions
requesting the Depositary to cause the Deposited Securities being withdrawn to
be delivered (subject to any applicable clearing procedures and provisions of
the Amended Articles of Incorporation of the Company) to or upon the written
order of a person or persons designated in such order.
Upon the receipt of such written instructions and compliance with the
terms of Section 2.05 of the Deposit Agreement, the Depositary will direct the
Custodian to deliver at the principal office of such Custodian, subject to the
terms and conditions of the Deposit Agreement and applicable laws and
regulations, to or upon the written order of the person or persons designated in
such written instructions, the Deposited Securities represented by the GDSs
evidenced by such surrendered GDR to or for the account of such person; except
that the Depositary may, subject to applicable law, make delivery to such person
or persons at the Principal New York Office of the Depositary of any dividends
or distributions (other than dividends or distributions consisting of Shares)
with respect to the Deposited Securities to be withdrawn, or of any proceeds of
sale of any dividends, distributions (other than dividends or distributions
consisting of Shares) or rights with respect to the Deposited Securities which
may at the time be held by the Depositary.
At the request, risk and expense of any Holder so surrendering a GDR or
submitting such written instructions for delivery, and for the account of such
Holder, and provided that payment of any applicable tax or governmental or other
charge shall have been made in accordance with Section 3.02 of the Deposit
Agreement, the Depositary will direct the Custodian to forward any cash or other
property (other than rights) comprising, and forward a certificate or
certificates (if certificates may be delivered) and other proper documents of
title, if any, for, the Deposited Securities represented by the GDSs evidenced
by such GDR to the Depositary for delivery at the Principal New York Office of
the Depositary. Such direction will be given by letter or, at the request, risk
and expense of such Holder, by cable, telex or facsimile transmission.
The Depositary will not accept surrender of GDRs or written
instructions for the purpose of withdrawal of less than one Share. In addition,
the Depositary shall only honor requests for withdrawal of whole numbers of
Shares. In the case of surrender of a GDR evidencing a number of GDSs
representing other than a whole number of Shares, the Depositary will cause
delivery of the appropriate whole number of Shares as provided in the Deposit
Agreement and summarized herein, and will execute and deliver to the person
surrendering such GDR a new GDR evidencing GDSs representing any remaining
fractional Share or continue to reflect on its records the remaining fractional
Shares.
A-3
Notwithstanding anything in the Deposit Agreement to the contrary, the
Company and the Depositary each agrees that it will not exercise any rights it
has under the Deposit Agreement to prevent the withdrawal or delivery of
Deposited Securities in a manner which would violate the United States
securities laws, including, but not limited to, Section I.A(1) of the General
Instructions to the Form F-6 Registration Statement, as amended from time to
time, under the Securities Act of 1933.
(3) Transfers, Split-ups and Combinations. Subject to the limitations
stated herein and in the Deposit Agreement, this GDR is transferable on the
books of the Depositary by the Holder hereof in person or by duly authorized
attorney, upon surrender (at the Depositary's Principal New York Office) of this
GDR properly endorsed or accompanied by proper instruments of transfer
(including signature guarantees in accordance with standard industry practice
and duly stamped as may be required by any applicable law). The Depositary may
close the transfer books at any time or from time to time when deemed expedient
by it in connection with the performance of its duties under the Deposit
Agreement.
This GDR may be split into other GDRs or may be combined with other
GDRs into one GDR, evidencing the same aggregate number of GDSs and registered
in the name of the same Holder as the GDR or GDRs surrendered.
(4) Conversion of Shares; Mandatory Conversion. (i) The GDSs are not
convertible into Common Stock or any other securities or property of the
Company. Nevertheless, as a matter of convenience, the Depositary has agreed
under the terms of the Deposit Agreement to accept the surrender of GDRs and the
withdrawal of Shares represented thereby, in each case in the manner set forth
in the Deposit Agreement, for the purpose of facilitating conversions of the
Shares.
For the purpose of conversion, a GDR must be surrendered at the
Principal New York Office of the Depositary, (i) together with (A) payment of
all fees (including the fees of the Depositary set forth on Exhibit B to the
Deposit Agreement), taxes (including stamp, transfer and capital gains taxes)
and governmental or other charges payable (including, if payable pursuant to the
terms and conditions of the Shares, an amount equal to the dividend payable on
the dividend payment date immediately following the date on which the Shares to
be converted are surrendered to the Conversion Agent) in connection with the
surrender and cancellation of the GDRs and GDSs, the conversion of Shares and
the issuance, registration and delivery and, if applicable, the deposit of the
Common Stock in accordance with the terms and conditions of the depositary
arrangements of the Depositary, dated as of October 19, 1994, relating to the
Common Stock (the "Common Stock Deposit Agreement") other than any capital or
stamp duties or transfer taxes payable by the Company in accordance with the
terms and conditions of the Shares or the Common Stock and (B) a duly completed
and executed Notice of Conversion in the form attached as Exhibit E to the
Deposit Agreement (the "Notice of Conversion") and such other documentation as
the Depositary may require and (ii) in any case, subject to the terms and
conditions of the Shares, the Common Stock and of the Deposit Agreement. The
surrender, delivery and payment of the foregoing instruments and amounts shall
be irrevocable absent notice to the contrary from the Depositary.
A-4
Upon receipt of documents and payments described above, the Depositary
will cancel each GDR so surrendered, withdraw the Shares represented thereby
from deposit under the Deposit Agreement and direct the Custodian to deliver, on
behalf of and at the risk and expense of the Holder surrendering the GDR, to the
Conversion Agent a certificate or certificates and other proper documents of
title, if any, for the Shares so withdrawn along with the Notice of Conversion
and any amounts payable to the Company or the Conversion Agent in connection
with the conversion of such Shares. The Depositary's directions to the Custodian
will be given by letter or, at the request, risk and expense of such Holder, by
cable, telex or facsimile transmission. Such Holder will be entitled to delivery
of Common Stock (together with any securities, cash or other property)
deliverable upon conversion of the Shares in accordance with the terms and
conditions of such Shares and the Depositary shall have no obligations in
respect of such delivery; provided that, if requested by the Holder, the
Depositary will, subject to the terms and conditions of the Deposit Agreement,
the Shares, the Common Stock and the Common Stock Deposit Agreement, (a) cause
the Common Stock delivered upon conversion of the Shares, to be deposited in
accordance with the Common Stock Deposit Agreement and a depositary receipt
issued thereunder in the name of or for the benefit of such Holder or (b) use
reasonable efforts to sell or cause to be sold the Common Stock delivered upon
conversion of the Shares on such Holder's behalf over the Philippine Stock
Exchange and to remit the proceeds thereof (less the fees and expenses provided
herein and any brokerage fee or selling expenses incurred in connection with
such sale) to such Holder or in accordance with such Holder's instructions,
provided that no such request may be made by any such Holder to the Depositary
to sell or to cause to be sold such Common Stock in amounts less than the
minimum trading (board) lot prescribed by the Philippine Stock Exchange.
A GDR surrendered for such purposes may be required by the Depositary
to be properly endorsed or accompanied by properly executed instruments of
transfer. The person requesting withdrawal of Shares and delivery of Common
Stock shall deliver to the Depositary (for onward transmission to the Conversion
Agent) written instructions requesting that the Common Stock deliverable upon
conversion of the Shares be delivered (subject to applicable clearing procedures
and provisions of the Amended Articles of Incorporation of the Company) to or
upon the written order of a person or persons designated in such order.
The Depositary will not accept surrender of GDRs or written
instructions for the purpose of withdrawal and conversion of less than one
Share. In addition, the Depositary will only honor requests for withdrawal and
conversion of whole numbers of Shares. In the case of surrender of a GDR
evidencing a number of GDSs representing other than a whole number of Shares,
the Depositary will withdraw and deliver for conversion the appropriate whole
number of Shares as provided in the Deposit Agreement and as described herein,
and shall execute and deliver to the person surrendering such GDR a new GDR
evidencing GDSs representing any remaining fractional Share.
No Share will be withdrawn or delivered as provided in the Deposit
Agreement and as described herein unless such written order is accompanied by a
fully completed and signed Notice of Conversion.
A-5
(ii) Upon receipt by the Depositary of notice from the Company of the
date (the "Mandatory Conversion Date") on which the mandatory conversion of any
or all of the Shares constituting Deposited Securities shall occur, the
Depositary will promptly fix a record date for cancellation of the GDSs
representing the Shares to be so converted and notify the Holders of record on
such date (i) of the Mandatory Conversion Date, (ii) the number of Shares then
constituting Deposited Securities called for conversion by the Company on such
date and (iii) that, upon conversion by the Company of any Shares constituting
Deposited Securities, the GDSs representing such Shares shall be cancelled in
the manner set forth in the Deposit Agreement and as described herein. Neither
failure to deliver any such notice to one or more Holders nor any defect in any
notice will affect the sufficiency of the proceedings for cancellation of such
GDSs. In the event that fewer than all the outstanding GDSs are to be so
cancelled, the GDSs to be cancelled will be selected by lot or in any other
substantially equivalent manner determined by the Depositary.
If any Shares constituting Deposited Securities are converted by the
Company on the Mandatory Conversion Date, the Depositary will, on such date,
cancel the number of GDSs representing the number of Shares so converted.
The GDSs cancelled by the Depositary will be deemed no longer to be
outstanding and all rights of the Holders of the GDRs evidencing such GDSs
(except the right to the delivery by the Depositary to the Conversion Agent of
certain documents and payments as provided in the Deposit Agreement and
described herein) will, in respect of the GDSs so cancelled, cease and
terminate.
In respect of any cancelled GDS, upon the delivery to the Depositary of
(x) a duly executed and completed Notice of Conversion with respect to the
Shares formerly represented by such GDSs, (y) evidence satisfactory to the
Depositary that the person executing such Notice of Conversion is or is acting
on behalf of the beneficial owner of GDRs evidencing such cancelled GDSs and (z)
the fees, taxes and governmental and other charges described in Section 2.06 (a)
of the Deposit Agreement, the Depositary will, subject to the terms and
conditions of the Deposit Agreement, direct the Custodian to deliver, on behalf
of and at the risk and expense of such beneficial owner, to the Conversion Agent
without unreasonable delay, a certificate or certificates and other proper
documents of title, if any, for the Shares formerly represented by such GDSs
along with the Notice of Conversion and any amounts payable to the Company or
the Conversion Agent in connection with the conversion of such Shares. Until
such time as the Depositary receives the foregoing documents and payments it
will have no obligation whatsoever to any Holder of GDRs representing cancelled
GDSs.
Pursuant to the terms and conditions of the Shares, until such time as
the Conversion Agent has received a Notice of Conversion and such other
documentation as may be required and share certificates in respect of Shares
subject to mandatory conversion by the Company, the Nominee as holder of the
shares of Common Stock delivered upon such mandatory conversion will not be
entitled to notice of, or to attend or vote at, any general or special meeting
of the Company or to receive the dividends to which such shares of Common Stock
are entitled.
A-6
(5) Limitations on Execution and Delivery, Transfer, Etc. of GDRs;
Suspension of Delivery, Transfer, Etc. As a condition precedent to the execution
and delivery, registration of transfer, split-up, combination or surrender of
any GDR for the purpose of withdrawal of any Deposited Securities, the
Depositary or the Custodian may require (i) payment from the Holder, the
presenter of a GDR or the depositor of Shares, of a sum sufficient to reimburse
it for any taxes (including any transfer, capital gains or stamp taxes) or
governmental or other charges and any stock transfer, custody or registration
fee with respect thereto and payment of any applicable fees (which are
summarized in paragraph (9) of this GDR) provided for in the Deposit Agreement,
including Exhibit B thereto, (ii) production of proof satisfactory to it as to
the identity and genuineness of any signature, including but not limited to a
signature guarantee in accordance with industry practice, and (iii) compliance
with such other restrictions, if any, as the Depositary and the Company may
establish consistent with the provisions of the Deposit Agreement.
The delivery of GDRs against deposits of Shares generally or of
particular Shares may be suspended or withheld, or the registration of transfer
of GDRs in particular instances may be refused, or the registration of transfer
generally may be suspended, or the surrender of outstanding GDRs for the purpose
of withdrawal of Deposited Securities may be suspended, during any period when
the transfer books of the Depositary or the Company (or the appointed agent of
the Company for the transfer and registration of Shares) are closed, or if any
such action is deemed necessary or advisable by the Company or the Depositary at
any time or from time to time.
Subject to the further terms and provisions of Section 2.07 of the
Deposit Agreement (which are summarized in this paragraph (5)), Citibank, N.A.
and its agents, on their own behalf, may own and deal in any class of securities
of the Company and its affiliates and in GDRs. The Depositary may issue GDRs for
evidence of rights to receive Shares from the Company, or any custodian,
registrar, transfer agent, clearing agency or other entity involved in ownership
or transaction records in respect of the Shares. Such evidence of rights shall
consist of written blanket or specific guarantees of ownership of Shares
furnished on behalf of the Holder hereof. Neither the Depositary nor the
Custodian shall lend Deposited Securities or GDRs; provided, however, that the
Depositary may issue GDRs prior to the receipt of Shares pursuant to Section
2.02 of the Deposit Agreement (a "Pre-Release Transaction") and deliver Shares
upon the receipt and cancellation of GDRs which have been Pre-Released, whether
or not such cancellation is prior to the termination of such PreRelease
Transaction or the Depositary knows that such GDR has been Pre-Released. The
Depositary may receive GDRs in lieu of Shares in satisfaction of a Pre-Release
Transaction. Each such Pre-Release transaction will be (a) subject to (x) a
written representation from the person to whom GDRs are to be delivered, that
such person, or its customer, owns the Shares to be remitted, (y) an
unconditional guarantee by such person to deliver to the Custodian the number of
Shares that are the subject of the Pre-Release Transaction and (z) any
additional restrictions or requirements that the Depositary deems appropriate,
(b) subject to a written representation to the Applicant that it will hold such
Shares in trust for the Depositary until their delivery to the Depositary or
Custodian, reflect on its records the Depositary as owner of such Shares and
deliver such Shares upon the Depositary's request, (c) at all
A-7
times fully collateralized (marked to market daily) with cash, United States
government securities or such other collateral of comparable safety and
liquidity, (d) terminable by the Depositary on not more than five (5) business
days notice, and (e) subject to such further indemnities and credit regulations
as the Depositary deems appropriate. The Depositary intends that the number of
GDRs issued by it pursuant to a Pre-Release Transaction and outstanding at any
time generally will not exceed thirty percent (30%) of the GDRs issued by the
Depositary and with respect to which Shares are on deposit with the Depositary
or Custodian; provided, however, that the Depositary reserves the right to
change or disregard such limit from time to time as it deems appropriate. The
Depositary will also set limits with respect to the number of GDRs and Shares
involved in transactions to be effected hereunder with any one person on a case
by case basis as it deems appropriate.
The Depositary may retain for its own account any compensation received
by it in connection with the foregoing. Collateral provided pursuant to (b)
above, but not the earnings thereon, shall be held for the benefit of the
Holders only.
Without limitation of the foregoing, the Depositary will not knowingly
accept for deposit under this Deposit Agreement any Shares required to be
registered pursuant to the provisions of the Securities Act (including, but not
limited to, any "restricted securities" within the meaning of Rule 144 under the
Securities Act), unless a registration statement under the Securities Act is in
effect as to such Shares. The Depositary will use reasonable efforts to comply
with written instructions of the Company not to accept for deposit under the
Deposit Agreement any Shares identified in such instructions at such times and
under such circumstances as may reasonably be specified in such instructions in
order to facilitate the Company's compliance with the securities laws of the
United States.
Any person depositing Shares or any Holder may be required from time to
time to file with the Depositary or the Custodian such proof of citizenship,
residence, exchange control approval, payment of all applicable taxes or other
governmental charges, compliance with all applicable laws and regulations and
the terms of the Deposit Agreement, or legal or beneficial ownership and the
nature of such interest, to provide information relating to the registration on
the books of the Company (or the appointed agent of the Company for the transfer
and registration of Shares) of the Shares presented for deposit or other
information, to execute such certificates and to make such representations and
warranties as the Depositary or the Company may deem necessary or proper to
enable the Depositary to perform its obligations under the Deposit Agreement or
to enable the Company or the Depositary to perform their respective obligations
under the Company Agreement (as hereinafter defined). The Depositary may
withhold the execution or delivery or registration of transfer of all or part of
any GDR or the distribution or sale of any dividend or other distribution of
rights or of the proceeds thereof or the withdrawal of any Deposited Securities
until such proof or other information is filed or such certificates are executed
or such representations and warranties are made. The Depositary shall take such
additional actions and provide such additional information as the Depositary
shall from time to time agree with the Company.
A-8
(6) Liability of Holders for Taxes and Other Charges. If any tax or
governmental or other charge shall become payable with respect to this GDR, to
any Deposited Securities represented by the GDSs evidenced hereby or to any
shares of Common Stock into which the Shares are convertible, such tax or
governmental or other charge (other than any capital or stamp duties or transfer
taxes payable by the Company in accordance with the terms and conditions of the
Shares or the Common Stock) shall be payable by the Holder hereof to the
Depositary. The Depositary may refuse, and the Company shall be under no
obligation, to effect any registration of transfer of all or any part of this
GDR or any deposit or withdrawal (including any withdrawal in connection with a
conversion of Shares) of Deposited Securities represented by the GDSs evidenced
hereby until such payment is made, and may withhold any dividends or other
distributions, or may sell for the account of the Holder hereof any part or all
of the Deposited Securities represented by the GDSs evidenced hereby, and may
apply such dividends or other distributions or the proceeds of any such sale in
payment of such tax or governmental or other charge, the Holder hereof remaining
liable for any deficiency.
(7) Warranties by Depositor. Each person depositing Shares under the
Deposit Agreement shall be deemed thereby to represent and warrant that such
Shares and each certificate therefor are validly issued and outstanding, fully
paid and nonassessable and that the person making such deposit is duly
authorized to do so. Such representations and warranties shall survive the
deposit of Shares and issuance of GDRs in respect thereof .
(8) Compliance with U.S. Securities Laws. Notwithstanding anything in
the Deposit Agreement to the contrary, the Company and the Depositary have each
agreed that it will not exercise any rights it has under the Deposit Agreement
to prevent the withdrawal or delivery of Deposited Securities in a manner which
would violate the United States securities laws, including, but not limited to,
Section I.A.(1) of the General Instructions to the Form F-6 Registration
Statement, as amended from time to time, under the Securities Act of 1933.
(9) Charges of Depositary. Except for GDSs issued in respect of the
Initial Deposit, the Depositary will charge the party receiving a GDR against
deposit of Shares or other depositary receipts, $0.05 per GDS. The Depositary
will charge the party surrendering a GDR in connection with the withdrawal of
Deposited Securities (including any withdrawal for the purpose of conversion of
Shares), $0.05 per GDS. The Depositary will charge the party for whom the sale
or exercise of rights, is made, $0.02 for each GDS per distribution. Holders
will pay through deduction or otherwise, in addition to the fees and charges
summarized above in this paragraph (9) and set forth in Exhibit B to the Deposit
Agreement, (i) taxes and other governmental charges (including, but not limited
to any transfer, capital gains and stamp tax) other than any capital or stamp
duties or transfer taxes payable by the Company in accordance with the terms and
conditions of the Shares and the Common Stock, (ii) such registration, transfer,
custody or other fees as may from time to time be in effect for the registration
of transfers of Shares generally on the share register of the Company or its
appointed agent for the registration of transfer and accordingly applicable to
transfers of Shares to or from the name of the Nominee on the making of deposits
pursuant to Section 2.02 of the Deposit
A-9
Agreement or withdrawals pursuant to Section 2.05 of the Deposit Agreement, or
Section 2.06 of the Deposit Agreement, (iii) such cable, telex, facsimile
transmission and delivery expenses as are expressly provided in the Deposit
Agreement to be at the expense of persons depositing Shares or Holders and (iv)
such reasonable expenses and charges as are incurred by the Depositary in the
conversion of foreign currency pursuant to Section 4.06 of the Deposit Agreement
(which is summarized in paragraph (19) hereof) or in connection with other
distributions to holders of Shares pursuant to Section 4.02, 4.03, 4.04 or 4.05
of the Deposit Agreement (which are summarized in paragraphs (15), (16), (17)
and (18), respectively, hereof).
Any other charges and expenses of the Depositary under the Deposit
Agreement and the Registrar, if any, will be paid by the Company after
consultation and agreement and in accordance with agreements in writing entered
into between the Depositary and the Company as to the nature and amount of such
charges and expenses. The charges and expenses of the Custodian, the Nominee or
any other agent of the Depositary are for the sole account of the Depositary.
The right of the Depositary to receive payment of fees, charges and
expenses as provided in Section 5.05 of the Deposit Agreement (and summarized in
this paragraph (9)) shall survive the termination of this Deposit Agreement and,
as to any Depositary, the resignation of such Depositary pursuant to Section
5.04 of the Deposit Agreement.
(10) Title to GDRs. Subject to any limitations set forth herein or in
the Deposit Agreement, it is a condition of this GDR, and every successive
Holder hereof by accepting or holding the same consents and agrees, that when
properly endorsed or accompanied by proper instruments of transfer (including
signature guarantees in accordance with standard industry practice), title to
this GDR (and to each GDS evidenced hereby) is transferable by delivery with the
same effect as in the case of a negotiable instrument in accordance with the
laws of the State of New York; provided, however, that the Depositary and the
Company, notwithstanding any notice to the contrary, may deem and treat the
Holder of this GDR as the absolute owner hereof for any purpose, including,
without limitation, the purpose of determining the person entitled to
distribution of dividends or other distributions or to any notice provided for
in the Deposit Agreement and neither the Depositary nor the Company shall have
any obligation or be subject to any liability under the Deposit Agreement to any
holder hereof unless such holder is the Holder hereof.
(11) Validity of GDR. This GDR shall not be entitled to any benefits
under the Deposit Agreement or be valid or obligatory for any purpose unless
this GDR has been executed by the Depositary by the manual signature of a duly
authorized officer of the Depositary or, if a Registrar shall have been
appointed, such signature may be a facsimile if this GDR is counter-signed by
the manual signature of a duly authorized officer of the Registrar and dated by
such officer.
(12) Disclosure of Interests. The Company or the Depositary may from
time to time request Holders or former Holders to provide information as to the
capacity in which they hold or held this GDR and the nature of such interest and
various other matters.
A-10
Each such Holder agrees to provide any such information reasonably requested by
the Company or the Depositary pursuant to the Deposit Agreement whether or not
still a Holder at the time of such request.
(13) Ownership Restrictions. The Company may restrict transfers of the
Shares if such transfer might result in ownership of Shares exceeding the limits
under any applicable law or the Company's Amended Articles of Incorporation. The
Philippine Constitution requires that at least 60% of the capital of a
corporation operating a public utility in the Philippines be owned by Philippine
citizens. The Depositary will, if and as directed by the Company, take action
with respect to the ownership interest of any Holder in excess of any legal or
contractual limitations on the legal or beneficial ownership of Shares or GDSs,
including but not limited to a mandatory sale or disposition on behalf of a
Holder of the Shares represented by the GDSs held by such Holder in excess of
such limitation, if and to the extent such disposition is permitted by
applicable law.
(14) Available Information. The Company is subject the periodic
reporting requirements of the Securities Exchange Act of 1934 and, accordingly,
files certain reports with the Commission. These public reports can be inspected
by Holders and copies at the public reference facilities maintained by the
Commission located at the date of this Deposit Agreement at Judiciary Plaza, 000
Xxxxx Xxxxxx, X.X. Xxxxxxxxxx, X.X. 00000.
Dated:
Countersigned CITIBANK, N.A., as Depositary
By: By:
-------------------------------- ---------------------------------
Authorized Signatory Vice President
The address of the Principal New York Office of the Depositary is 000
Xxxx Xxxxxx, 0xx Xxxxx, Xxx Xxxx, Xxx Xxxx 00000.
A-11
(FORM OF REVERSE OF
GLOBAL DEPOSITARY RECEIPT)
SUMMARY OF CERTAIN ADDITIONAL PROVISIONS
OF THE DEPOSIT AGREEMENT
(15) Cash Distributions in Respect of Deposited Securities;
Withholding. Whenever the Custodian or the Depositary receives any cash dividend
or other cash distribution by the Company in respect of any Deposited
Securities, the Depositary will, subject to the provisions of Section 4.06 of
the Deposit Agreement (which are summarized in paragraph (19) below) convert or
cause any portion of such dividend or distribution which is not in dollars to be
converted into dollars and shall promptly distribute such amount to the Holders
entitled hereto in proportion to the number of GDSs representing such Deposited
Securities held by them respectively, after deduction or upon payment of the
fees and expenses of the Depositary or the Custodian (and without liability for
interest); provided, however, that in the event that the Company, the Custodian
or the Depositary shall be required to withhold and does withhold from any cash
dividend or other cash distribution in respect of any Deposited Securities an
amount on account of taxes or other governmental charges, the amount distributed
to Holders in respect of GDSs representing such Deposited Securities shall be
reduced accordingly. The Depositary will distribute only such amount, however,
as can be distributed without attributing to any Holder a fraction of one cent,
and any balance not so distributable will be held by the Depositary (without
liability for interest thereon) and will be added to and become part of the next
sum received by the Depositary for distribution to Holders then outstanding. The
Company has agreed with the Depositary that the Company or its agent, or the
Depositary or its agent, as appropriate, will remit to the appropriate
governmental authority or agency all amounts withheld and owing to such
authority or agency. The Depositary will forward to the Company or its agent
such information from its records as the Company may reasonably request to
enable the Company or its agent to file necessary reports with governmental
authorities or agencies or, at the request and expense of the Company, the
Depositary or its agent may file such reports if deemed lawful and reasonably
feasible by the Depositary.
(16) Distributions in Shares. If any distribution in respect of any
Deposited Securities consists of a dividend in, or free distribution of, Shares,
the Depositary may, after consultation with the Company, distribute to the
Holders entitled thereto, in proportion to the number of GDSs representing such
Deposited Securities held by them respectively, additional GDRs for an aggregate
number of GDSs representing the number of Shares received as such dividend or
free distribution, in either case, after deduction or upon payment of the fees
and expenses of the Depositary; provided, however, that if for any reason
(including any requirement that the Company or the Depositary withhold, or make
an advance payment of, an amount on account of taxes or other governmental
charges or that such Shares must be registered under the Securities Act in order
to be distributed to Holders) the Depositary reasonably deems such distribution
not to be practical or feasible, the Depositary may, after consultation with the
Company, (i) to the extent permitted by applicable law, adopt such method as it
may reasonably deem equitable and practicable for the purpose of obtaining such
dividend or effecting such
A-12
distribution, including the sale (at public or private sale) of the Shares thus
received, or any part thereof, and the net proceeds of any such sale after
payment of and reimbursement of advances to pay any taxes or governmental
charges shall be distributed by the Depositary to the Holders entitled thereto
as in the case of a distribution received in cash or (ii) if the Depositary
reasonably determines that no such method of distribution can be effected in a
practicable or equitable manner, the Depositary may refrain from effecting such
distribution altogether until such time as it reasonably determines that a
practicable or equitable distribution can be effected. In lieu of issuing GDRs
or adjusting the Depositary's records for fractional GDSs in any such case, the
Depositary will sell the number of Shares represented by the aggregate of such
fractions and distribute the net proceeds in dollars, all in the manner and
subject to the conditions set forth in Section 4.02 of the Deposit Agreement
(which are summarized in paragraph 15 above). If additional GDRs are not so
distributed (except pursuant to the preceding sentence), or such change in the
records of the Depositary is not made, each GDS will thenceforth also represent
its proportionate interest in the additional Shares distributed upon the
Deposited Securities represented thereby.
(17) Distribution of Rights. In the event that the Company shall offer
or cause to be offered to the holders of any Deposited Securities any rights to
subscribe for additional Shares or any rights of any other nature, the
Depositary, after consultation with the Company, has discretion as to the
procedure to be followed in making such rights available to the Holders entitled
thereto, subject to certain conditions set forth in Section 5.09 of the Deposit
Agreement (which are summarized in paragraph (28) below), or in disposing of
such rights on behalf of such Holders and making the net proceeds available in
cash to such Holders or, if by the terms of such rights offering or by reason of
applicable law, the Depositary may neither make such rights available to such
Holders nor dispose of such rights and make the net proceeds available to such
Holders, then the Depositary will allow the rights to lapse; provided, however,
that the Depositary will, if requested by the Company, take action as follows:
(i) if at the time of the offering of any rights the
Depositary determines that it is lawful and feasible to make such
rights available to all or certain Holders by means of warrants
or otherwise, the Depositary will, after deduction or upon
payment of the fees and expenses of the Depositary, distribute
warrants or other instruments in proportion to the number of GDSs
representing such Deposited Securities held by them respectively,
or by means of such other method as it may deem feasible in order
to facilitate the exercise, sale or transfer of rights by such
Holders or the sale or resale of securities obtainable upon
exercise of such rights by such Holders; or
(ii) if at the time of the offering of any rights the
Depositary determines that it is not lawful or not feasible to
make such rights available to certain Holders by means of
warrants or otherwise, or if the rights represented by such
warrants or such other instruments are not exercised and appear
to be about to lapse, the Depositary will use its reasonable
efforts to sell such rights or such warrants or other
instruments,
A-13
if a market therefor is available, at public or private sales, at
such place or places and upon such terms as it may deem proper
and, after deduction or upon payment of the fees and expenses of
the Depositary and any applicable taxes, allocate the net
proceeds of such sales for the account of the Holders otherwise
entitled to such rights, warrants or other instruments upon an
averaged or other practicable basis without regard to any
distinctions among such Holders because of exchange restrictions
or the date of delivery of any GDR or GDRs, or otherwise.
If registration (under the Securities Act or any other applicable law)
of the rights or the securities to which any rights relate is required in order
for the Company to offer such rights to Holders and to sell to them the
securities to which such rights relate, the Depositary will not offer such
rights to Holders unless and until a registration statement is in effect, or
unless the offering and sale of such rights or securities to such Holders are
exempt from registration under the provisions of such law and, if requested by
the Depositary, the Company furnishes to the Depositary an opinion of counsel in
the United States for the Company reasonably satisfactory to the Depositary to
such effect. The Company shall have no obligation to register such rights or
such securities under the Securities Act.
(18) Distributions Other Than Cash. Shares or Rights. Whenever the
Custodian or the Depositary shall receive any distribution other than cash,
Shares or rights upon any Deposited Securities, the Depositary will cause the
securities or property so received to be distributed to the Holders entitled
thereto, after deduction or upon payment of the fees and expenses of the
Depositary, in proportion to the number of GDSs representing such Deposited
Securities held by them respectively, in any manner that the Depositary may deem
equitable and practicable for accomplishing such distribution provided, however,
that if in the opinion of the Depositary it cannot cause such securities or
property to be distributed or such distribution cannot be made proportionately
among the Holders entitled thereto, or if for any other reason (including any
requirement that the Company, the Custodian or the Depositary withhold an amount
on account of taxes or other governmental charges or that such securities must
be registered under the Securities Act in order to be distributed to Holders)
the Depositary deems such distribution not to be feasible, the Depositary may,
after consultation with the Company, adopt such method as it may deem equitable
and practicable for the purpose of effecting such distribution, including the
sale (at public or private sale) of the securities or property thus received, or
any part thereof, and the net proceeds of any such sale will be distributed by
the Depositary to the Holders entitled thereto as in the case of a distribution
received in cash; provided that any unsold balance of such securities or
property will be distributed by the Depositary to the Holders entitled thereto,
if such distribution is feasible without withholding for or on account of any
taxes or other governmental charges and without registration under the
Securities Act, in accordance with such equitable and practicable method as the
Depositary adopts.
(19) Conversion of Foreign Currency. Whenever the Custodian receives
currency other than dollars (in this paragraph referred to as "foreign
currency"), by way of dividends or other distributions or the net proceeds from
the sale of securities, property
A-14
or rights, and if at the time of the receipt thereof the foreign currency so
received can in the judgment of the Depositary be converted on a reasonable
basis into dollars which can, at the time of receipt thereof, be transferred to
the United States and distributed to the Holders entitled thereto, the
Depositary will promptly convert or cause to be converted, by sale or in any
other manner that it may determine, such foreign currency into dollars, and such
dollars (less any reasonable and customary expenses incurred by the Depositary
in the conversion of the foreign currency) will be distributed to the Holders
entitled thereto or, if the Depositary shall have distributed any warrants or
other instruments which entitle the holders thereof to such dollars, then to the
holders of such warrants and/or instruments upon surrender thereof for
cancellation. Such distribution will be made upon an averaged or other
practicable basis without regard to any distinctions among Holders on account of
any application of exchange restrictions or otherwise.
If such conversion or distribution generally or with regard to a
particular Holder can be effected only with the approval or license of any
government or agency thereof, the Depositary may file such application for
approval or license, if any, as it may deem desirable.
If at any time the Depositary determines that in its judgment any
foreign currency received by the Depositary is not convertible on a reasonable
basis into dollars distributable to Holders entitled thereto, or if any approval
or license of any government or authority or agency thereof which is required
for such conversion is denied or in the opinion of the Depositary is not
obtainable, or if any such approval or license is not obtained within a
reasonable period as determined by the Depositary, the Depositary may distribute
the foreign currency (or an appropriate document evidencing the right to receive
such foreign currency) received by the Depositary to, or in its discretion may
hold such foreign currency (without liability for interest) for the respective
accounts of, the Holders entitled to receive the same.
If any such conversion of foreign currency, in whole or in part, cannot
be effected for distribution to some Holders entitled thereto, the Depositary
may in its discretion make such conversion and distribution in dollars to the
extent permissible to the Holders for whom such conversion and distribution is
practicable and may, subject to any applicable currency and exchange
regulations, distribute the balance of the foreign currency received by the
Depositary to, or hold such balance for the account of, the Holders for whom
such conversion and distribution is not practicable.
(20) Fixing of Record Date. Whenever any cash dividend or other cash
distribution shall become payable or any distribution other than cash shall be
made, or whenever rights shall be issued, with respect to the Deposited
Securities, or whenever the Depositary receives notice of any meeting of holders
of Shares or other Deposited Securities or any other meeting of holders of the
Company's securities at which holders of Shares or other Deposited Securities
are entitled to vote, or whenever, for any reason, the Depositary causes a
change in the number of Shares that are represented by each GDS, or whenever the
Depositary finds it necessary or convenient in respect of any matter (including
in connection with a mandatory conversion of Shares by the Company), the
Depositary will fix a record date after consultation with the Company (which
shall be
A-15
as near as practicable to the corresponding record date for such distribution or
meeting set by the Company) for the determination of the Holders who shall be
entitled to receive such dividend, distribution or rights or the net proceeds of
the sale thereof, or to give instructions for the exercise of voting rights, if
any, at any such meeting or in respect of such changed number of Shares
represented by a GDS or in respect of such other matter. Except in the case of a
mandatory conversion by the Company of less than all of the Shares deposited
hereunder (which shall be governed by Section 2.06 of the Deposit Agreement, the
terms of which are described in paragraph (4) above) and subject to the
provisions of Sections 4.02 through 4.06 of the Deposit Agreement (which are
summarized in paragraphs (15) through (19), respectively, above) and to the
other terms and conditions of the Deposit Agreement, the Holders on such record
date will be entitled to receive the amount distributable by the Depositary with
respect to such dividend or other distribution or such rights or the net
proceeds of sale thereof and to exercise the rights of Holders under the Deposit
Agreement with respect to such changed number of Shares represented by each GDS,
in proportion to the number of GDSs held by them respectively, to give such
voting instructions, to receive such notice or solicitation or to act in respect
of any matter.
(21) Voting of Deposited Securities. As soon as practicable after
receipt of notice of any meeting of holders of Shares or other Deposited
Securities or any other meeting of holders of the Company's securities at which
holders of Shares or other Deposited Securities are entitled to vote, the
Depositary will fix a record date for determining the Holders entitled to give
instructions for the exercise of voting rights as provided in Section 4.07 of
the Deposit Agreement (and summarized in paragraph (20) above) and will mail or
cause to be mailed to the Holders of record a notice which will contain: (a)
such information as is contained in such notice of meeting and (b) a statement
that the Holders of record at the close of business on a specified record date
will be entitled, subject to any applicable provisions of the law of the
Philippines and of the Amended Articles of Incorporation and the By-Laws of the
Company, to instruct the Depositary as to the exercise of the voting rights, if
any, pertaining to the number of Shares or other Deposited Securities
represented by their respective GDSs evidenced by their respective GDRs. Upon
the written request of a Holder on such record date, received on or before the
date established by the Depositary for such purpose, the Depositary will
endeavor insofar as is practicable to vote or cause to be voted the amount of
Deposited Securities represented by such GDSs evidenced by such GDR in
accordance with the instructions set forth in such request.
The Depositary may not itself exercise any voting discretion over any
Shares. If the Depositary does not receive instructions from a Holder on or
before the date established by the Depositary for such purpose, such Holder
shall be deemed, and the Depositary shall deem such Holder, to have instructed
the Depositary to give a discretionary proxy to a person designated by the
Company for the purpose of exercising the voting rights, if any, pertaining to
the Shares represented by GDSs evidenced by such Holder's GDRs, provided that no
such discretionary proxy shall be given with respect to any matter as to which
the Company informs the Depositary that (i) the Company does not wish such proxy
given, (ii) substantial opposition exists or (iii) the rights of holders of
Shares will be materially and adversely affected.
A-16
Holders do not have, and will not have the right to instruct the
Depositary as to the exercise of, any dissenter's rights provided to holders of
Shares under Philippine law.
(22) Changes Affecting Deposited Securities. Upon any change in par
value, split-up, consolidation or any other reclassification of Deposited
Securities (other than as a result of any conversion of Shares into Common Stock
in accordance with the terms of the Shares), or upon any recapitalization,
reorganization, merger or consolidation of the Company or sale of assets
affecting the Company or to which it is a party, any securities that shall be
received by the Depositary or the Custodian in exchange for or in conversion of
or in respect of Deposited Securities will be treated as new Deposited
Securities, and the GDRs will, subject to the terms of the Deposit Agreement and
applicable laws (including any registration requirements of the Securities Act),
thenceforth represent the right to receive the new Deposited Securities so
received in exchange or conversion, unless new or additional GDRs are delivered
pursuant to the following sentence. In any such case the Depositary may, and
will at the Company's request, subject to the terms of the Deposit Agreement,
execute and deliver additional GDRs, as in the case of a stock dividend on the
Shares, or call for the surrender of outstanding GDRs to be exchanged for new
GDRs specifically describing such new Deposited Securities.
Notwithstanding the foregoing, in the event that the Depositary
determines that any security or property so received may not be lawfully or
practicably distributed to all or certain Holders, the Depositary may and will,
if the Company requests, sell such securities or property at public or private
sale, at such place or places and upon such terms as it may deem proper, and may
allocate the net proceeds of such sales (after payment of the expenses thereof
and any taxes or governmental charges) for the account of the Holders otherwise
entitled to such securities or property upon an averaged or other practicable
basis without regard to any distinctions among such Holders and distribute the
net proceeds so allocated to the extent practicable as in the case of a
distribution received in cash pursuant to Section 4.02 of the Deposit Agreement
(which is summarized in paragraph (15) above) .
Promptly upon receipt of notice from the Company of the occurrence of
any such change, conversion or exchange covered by Section 4.09 of the Deposit
Agreement (as described in this paragraph (22)) in respect of the Deposited
Securities, the Depositary will give notice thereof in writing, at the Company's
expense, to all Holders.
(23) Transmittal by the Depositary of Company Notices, Reports and
Communications; Inspection of Transfer Books. The Depositary will make available
for inspection during business hours by Holders at its Principal New York Office
and at the principal office of the Custodian copies of (i) the Deposit Agreement
and any related documents, (ii) the Preferred Stock Agreement dated the date of
the Deposit Agreement between the Company and the Depositary and relating
thereto (the "Company Agreement"), (iii) the Company's Amended Articles of
Incorporation and By-Laws and the Resolutions of the Board of Directors relating
to the Shares and (iv) any notices, reports or communications, including any
proxy soliciting materials, received from the Company which are both (a)
received by the Depositary or the Custodian or the nominee of either, as the
holder of the Deposited Securities, and (b) made generally available to
A-17
the holders of such Deposited Securities by the Company. The Depositary will
also send to Holders, at the Company's expense, copies of such notices, reports
and communications when furnished by the Company to the Depositary pursuant to
the Deposit Agreement. The Depositary will keep books for the registration of
GDRs and their transfer which at all reasonable times will be open for
inspection by the Company and Holders of GDRs, provided that such inspection
shall not be for the purpose of communicating with Holders of GDRs in the
interest of a business or object other than the business of the Company or a
matter related to the Deposit Agreement or the GDRs.
(24) Withholding. Notwithstanding any other provision of the Deposit
Agreement, in the event that the Depositary determines that any distribution of
property (including Shares, rights to subscribe therefor and other securities)
is subject to any tax or governmental charges which the Depositary is obligated
to withhold, the Depositary may dispose of all or a portion of such property
(including Shares, rights to subscribe therefor and other securities) in such
amounts and in such manner as the Depositary deems necessary and practicable to
pay such taxes or governmental charges, including by public or private sale, and
the Depositary will distribute the net proceeds of any such sale or the balance
of any such property after deduction of such taxes or governmental charges to
the Holders entitled thereto in proportion to the number of GDSs held by them
respectively and the Depositary will, if feasible without withholding for or on
account of taxes or other governmental charges, and otherwise in compliance with
applicable law, distribute any unsold balance of such property in accordance
with the provisions of the Deposit Agreement. To the extent that the Depositary
is obligated to withhold as described in the previous sentence, the Depositary
will remit to the appropriate governmental authority or agency all amounts
withheld and owing to such authority or agency and will file such corresponding
reports as may be required.
The Company has agreed with the Depositary that, before making any
distribution or other payment on any Deposited Securities, the Company will make
such deductions (if any) which, by the laws or regulations of the Philippines,
the Company is required to make in respect of any income, capital gains or other
taxes and that the Company may also deduct the amount of any tax or governmental
charges payable by the Company or for which the Company might be made liable in
respect of such distribution or other payment or any document signed in
connection therewith.
(25) Obligations of the Depositary the Custodian and the Company. The
Company assumes no obligation nor is it subject to any liability under the
Deposit Agreement to Holders or other persons, except that it has agreed with
the Depositary to act in good faith and use reasonable judgment in the
performance of its obligations set forth in the Company Agreement. The
Depositary assumes no obligation nor is it subject to any liability under the
Deposit Agreement to Holders or other persons (including, without limitation,
liability with respect to the validity or worth of the Deposited Securities),
except that it has agreed to act in good faith and use reasonable judgment in
the performance of its obligations set forth in the Deposit Agreement. The
Depositary has undertaken in the Deposit Agreement to perform such duties and
only such duties as are specifically set forth therein, and no implied covenants
or obligations shall be read into the Deposit Agreement against the Depositary
or the Company.
A-18
Neither the Depositary nor the Company are under any obligation to
appear in, prosecute or defend any action, suit or other proceeding in respect
of any Deposited Securities or in respect of the GDRs, which in its opinion may
involve it in expense or liability, unless indemnity satisfactory to it in its
sole discretion against all expense and liability be furnished as often as may
be required, and no Custodian is under any obligation whatsoever with respect to
such proceedings, the Custodian being responsible solely to the Depositary.
Neither the Depositary nor the Company shall be liable for any action
or inaction by it in reliance upon the advice of or information from legal
counsel, accountants, any person presenting Shares for deposit, any Holder or
any other person believed by it in good faith to be competent to give such
advice or information. Each of the Depositary, its agents and the Company and
its agents may rely and shall be protected in acting upon any written notice,
request, direction or other document believed by it to be genuine and to have
been signed or presented by the proper party or parties. Subject to the
provisions of Section 5.02 of the Deposit Agreement (which are summarized in
this paragraph (25)), the Depositary is not responsible for any failure to carry
out any instructions to vote any of the Deposited Securities, for the manner in
which any such vote is cast or for the effect of any such vote.
It is intended that neither the Depositary nor any agent of the
Depositary shall be deemed to be an "issuer" of the securities under the federal
securities laws or applicable state securities laws of the United States or any
other jurisdiction, it being expressly understood and agreed that the Depositary
and its agents are acting only in a ministerial capacity as Depositary for the
Shares.
(26) Prevention or Delay in Performance by the Depositary or the
Company. Neither the Depositary nor the Company will incur any liability to any
Holder or other person if by reason of any present or future law, regulation,
decree, order or other action of the United States, the Philippines or any other
country or jurisdiction, or of any other governmental authority, or by reason of
any act of God, war or other circumstances beyond its control or, in the case of
the Depositary, by reason of any provision, present or future, of the Amended
Articles of Incorporation and By-laws of the Company or any Deposited
Securities, the Depositary or the Company is prevented, delayed or forbidden
from doing or performing any act or thing which by the terms of the Deposit
Agreement (in the case of the Depositary) or the Company Agreement it is
provided shall be done or performed; nor will the Depositary or the Company
incur any liability to any Holder or other person by reason of any
nonperformance or delay, caused as aforesaid, in performance of any act or thing
that by the terms of the Deposit Agreement it is provided shall or may be done
or performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for in the Deposit Agreement. Where, by the terms of a
distribution pursuant to Section 4.02, 4.03 or 4.05 of the Deposit Agreement
(which are summarized in paragraphs (15), (16) and (18), respectively, above) or
an offering or distribution pursuant to Section 4.04 of the Deposit Agreement
(which is summarized in paragraph (17) above), or because of applicable law,
such distribution or offering may not be made available to Holders, and the
Depositary may not dispose of such distribution or offering on behalf of such
Holders and make the net proceeds available to
A-19
such Holders, then the Depositary may make no such distribution or offering, and
may allow any rights, if applicable, to lapse.
(27) Resignation of the Depositary Appointment of Successor Depositary
the Custodian. The Depositary may at any time resign as Depositary under the
Deposit Agreement by 30 days' written notice of its election so to do to the
Company, such resignation to take effect upon the appointment of a successor
depositary and its acceptance of such appointment as provided in the Deposit
Agreement.
In case at any time the Depositary acting under the Deposit Agreement
resigns, the Company has agreed to use its best efforts to appoint a successor
depositary, which shall be a bank or trust company having an office in the
Borough of Manhattan, The City of New York. Any corporation into or with which
the Depositary may be merged or consolidated will be the successor of the
Depositary without the execution or filing of any document or any further act.
The Depositary, after consultation with the Company, will from time to
time appoint one or more agents to act for it as Custodian under the Deposit
Agreement. The Depositary has initially appointed Citibank, N.A., Manila, as
custodian and agent of the Depositary for the purpose of the Deposit Agreement.
The Custodian in acting under the Deposit Agreement will be subject at all times
and in all respects to the direction of the Depositary and will be responsible
solely to it. The Custodian may resign and be discharged from its duties under
the Deposit Agreement by 30 days' prior notice of its election to do so
delivered to the Depositary; such resignation to become effective upon
appointment of a successor Custodian and its acceptance of such appointment as
provided in the Deposit Agreement. The Depositary may discharge any Custodian at
any time upon notice to the Custodian being discharged and appoint a substitute
or an additional custodian, who will thereafter be the Custodian under the
Deposit Agreement.
(28) Issuance of Additional Shares, Etc. In the event of any issuance
of additional Shares or of other securities (including rights and convertible or
exchangeable securities) as a dividend or distribution with respect to the
Shares or other Deposited Securities, or future issuances to Holders for cash of
additional Shares or such other securities, the Depositary will not distribute
any such additional Shares or other securities to the Holders unless the Company
shall have furnished to the Depositary a written opinion from counsel for the
Company in the United States, which counsel shall be reasonably satisfactory to
the Depositary, to the effect that such dividend or distribution will not
violate the Securities Act.
The Company has agreed with the Depositary that any future issuances of
(1) additional Shares, (2) rights, preferences or privileges to subscribe for
Shares, (3) securities convertible into or exchangeable for Shares, or (4)
rights, preferences or privileges to subscribe for securities convertible into
or exchangeable for Shares (in each case other than as a dividend or
distribution or issuance for cash to Holders as described in the immediately
preceding paragraph) shall be effected by the Company in a manner so as to not
violate the Securities Act. If the Company determines that an issuance of such
securities is required to be registered under the Securities Act, the Company
has
A-20
agreed with the Depositary to (x) register such issuance to the extent
necessary, (y) alter the terms of the issuance to avoid the registration
requirements of the Securities Act or (z) direct the Depositary to take such
measures as are provided in Sections 4.03 through 4.05 of the Deposit Agreement
(which are summarized in paragraphs (16) through (18), respectively, above) or
other specific measures with respect to the acceptance for deposit of Shares to
prevent such issuance from being made in violation of the registration
requirements of the Securities Act.
The Company has agreed with the Depositary that neither the Company nor
any company controlling, controlled by or under common control with the Company
will at any time deposit any Shares, either upon original issuance or upon a
sale of Shares previously issued and reacquired by the Company or by any such
controlled or controlling company unless such transaction is registered under
the Securities Act or is exempt from registration under the Securities Act as
confirmed by a written opinion from counsel for the Company in the United
States, which counsel shall be reasonably satisfactory to the Depositary.
(29) Amendment. The form of this GDR and any provisions of the Deposit
Agreement may, with the consent of the Company, at any time and from time to
time be amended by the Depositary in any respect which it may deem necessary or
desirable. Any amendment which imposes or increases any fees or charges (other
than taxes and other governmental charges), or which otherwise prejudice any
substantial existing right of Holders, shall not, however, become effective as
to outstanding GDRs until the expiration of 90 days (or 30 days in the case of
any amendment which shall impose or increase any fees of the Depositary for the
issuance, execution and delivery of GDRs or any fees or expenses in respect of
transfer or sales of Common Stock or any delivery expenses and charges incurred
by the Depositary in the conversion of foreign currency and in connection with
foreign exchange control regulations) after notice of such amendment shall have
been given to the Holders of outstanding GDRs. Every Holder at the time any
amendment becomes effective shall be deemed by continuing to hold such GDR to
consent and agree to such amendment and to be bound by the Deposit Agreement as
amended thereby. In no event shall any amendment impair the right of any Holder
to surrender such Holder's GDRs and receive therefor the Deposited Securities
represented thereby or to direct the Depositary to forward Notices of Conversion
to the Conversion Agent on such Holder's instructions and (pursuant to the
Common Stock Deposit Agreement) request the Depositary to use reasonable efforts
to sell or cause to be sold the shares of Common Stock delivered and deposited
with the Depositary upon conversion of Shares represented by GDRs and to
distribute the proceeds from the sale of such Common Stock to the persons
entitled thereto, in any case except in order to comply with provisions of
applicable law.
(30) Termination. The Depositary will at any time at the direction of
the Company terminate the Deposit Agreement by mailing notice of such
termination to the Holders of all GDRs then outstanding at least 90 days prior
to the date fixed in such notice for such termination. The Depositary may
likewise terminate the Deposit Agreement if the Depositary delivers to the
Company a written notice of its election to resign, and a qualified successor
depositary shall not have been appointed and accepted
A-21
its appointment as provided in Section 5.04 of the Deposit Agreement (which is
summarized in paragraph (27) above) within 90 days after such delivery. If any
GDRs remain outstanding after the date of termination, the Depositary thereafter
will discontinue the registration of transfers of GDRs, will suspend the
distribution of dividends to the Holders thereof, will not accept deposits of
Shares (and will instruct each Custodian to act accordingly), and will not give
any further notices or perform any further acts under the Deposit Agreement,
except that the Depositary will continue to collect dividends and other
distributions pertaining to Deposited Securities, will sell property and rights
and convert Deposited Securities into cash as provided in the Deposit Agreement,
and will continue to deliver Deposited Securities, together with any dividends
or other distributions received with respect thereto and the net proceeds of the
sale of any Shares, rights or other property (in all such cases, without
liability for interest), in exchange for GDRs surrendered to the Depositary. At
any time after the expiration of six months from the date of termination, the
Depositary may sell the Deposited Securities then held under the Deposit
Agreement and may thereafter hold the net proceeds of any such sale, together
with any other cash then held by it under the Deposit Agreement, without
liability for interest, for the pro rata benefit of the Holders of GDRs which
have not theretofore been surrendered. After making such sale, the Depositary
will be discharged from all obligations under the Deposit Agreement and the
Company Agreement, except to account for such net proceeds and other cash and
for its obligations under the indemnification provisions of Section 5.10 of the
Deposit Agreement.
FOR VALUE RECEIVED, the undersigned Holder hereby sell(s), assign(s)
and transfer(s) unto whose taxpayer identification number is and whose address
including postal zip code is the within GDR and all rights thereunder, hereby
irrevocably constituting and appointing attorney-in-fact to transfer said GDR on
the books of the Depositary with full power of substitution in the premises.
Dated: Name:
-------------------------- ---------------------------------
By:
-----------------------------------
Title:
--------------------------------
NOTICE: The signature of the Holder
to this assignment must correspond
with the name as written upon the face
of the within instrument in every
particular, without alteration or
enlargement or any change whatsoever.
SIGNATURE GUARANTEED
--------------------------------
A-22
EXHIBIT B
CHARGES OF THE DEPOSITARY
Service Rate By Whom Paid
------- ---- ------------
1) Creation of Global Depositary Waived N/A
GDR program
2) Annual maintenance fee for Waived N/A
GDR program
3) Issuance of GDR against deposit $0.05 per GDS Party receiving
of GDR Shares (except upon
Initial Deposit) or other
depositary receipts
4) Withdrawal of Deposited $0.05 per GDS Party
Securities (including for the surrendering GDR
purpose of conversion of the
Shares) against surrender
of GDRs
5) Sale or exercise of rights or $0.02 per GDS per Party for whom the
other corporate action involving distribution sale or exercise of
distributions in respect of rights, is made
Deposited Securities
EXHIBIT C
NOTICE OF CONVERSION
Citibank, N.A., as Depositary
ADR Department
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Re: Philippine Long Distance Telephone
Company (the "Company")
1. The undersigned Holder hereby irrevocably authorizes the Depositary
on such Holder's behalf, to exercise the option to convert shares of the Series
III Convertible Preferred Stock of the Company (the "Shares") represented by the
GDSs evidenced by the GDR surrendered in connection herewith into shares of
Common Stock (and any other applicable securities or property) of the Company in
accordance with the terms of and conditions of the Shares and as provided in
Section 2.06 of the Deposit Agreement relating to the Shares, dated as of
November 29, 1994, among Citibank, N.A., as Depositary, and the Holders from
time to time of the GDRs issued thereunder, and directs that Common Stock of the
Company deliverable upon such conversion be registered in the name of and
delivered, together with a check in payment for any fractional shares of Common
Stock and any other property deliverable upon conversion, to the undersigned
unless a different name has been indicated below.
2. If the undersigned desires that the shares of Common Stock
deliverable upon conversion of the Shares be deposited in accordance with the
terms and conditions of the depositary arrangements of the Depositary dated as
of October 19, 1994 relating to the Common Stock (the "Common Stock Deposit
Agreement"), the undersigned should so indicate below and designate Citicorp
Trade Services Limited as the registered holder of such Common Stock.
3. The undersigned hereby agrees to pay all fees (including the fees
of the Depositary), taxes (including stamp, transfer and capital gains taxes)
and governmental or other charges payable in connection with the surrender and
cancellation of the GDRs and GDSs, the conversion of the Shares and the
issuance, registration and delivery and, if applicable, the deposit of the
Common Stock in accordance with the terms and conditions of the Common Stock
Deposit Agreement (other than any capital or stamp duties payable in the
Philippines in respect of the Common Stock that are payable by the Company). If
the number of Shares indicated above is less than the number of Shares on
deposit with the Depositary in respect of a GDR surrendered in connection
herewith the undersigned directs the Depositary to issue to the undersigned,
unless a different name is indicated below, a new GDR evidencing Shares for the
balance not to be converted.
4. The undersigned understands and agrees that the Depositary has
agreed to forward to the Conversion Agent this Notice of Conversion and the
Shares being converted in connection herewith as a matter of convenience only
and that this Notice of Conversion will not be effective until received by the
Conversion Agent and all
conditions precedent to the conversion of Shares have been satisfied. Neither
the Depositary nor the Custodian shall be responsible or liable to any Holder
for any loss, liability or expense suffered by such Holder arising from any
delay in forwarding this Notice of Conversion or the Shares being converted in
connection herewith to the Conversion Agent.
5. Name and address of person in whose name the Common Stock delivered
upon conversion of the Shares are to be registered:
Name:
--------------------------------
Address:
-----------------------------
---------------------------------------
6. The undersigned hereby requests that the certificates for the
Common Stock (together with any securities, cash or other property) required to
be delivered upon conversion:
(a) be delivered at the office in Manila of the Conversion Agent (which
currently is Citibank, Manila, 0000 Xxxxx xx Xxxxx, Xxxxxx, Xxxxx
Xxxxxx, Xxxxxxxxxxx) to the order of .
Name:
------------------------------------
Address:
---------------------------------
-----------------------------------------
OR
(b) be despatched (at the undersigned's risk and expense) to the person
whose name and address is given below and in the manner specified
below:
Name:
------------------------------------
Address:
---------------------------------
-----------------------------------------
Manner of despatch:
----------------------
7. The undersigned acknowledges that the terms of the Shares set forth
certain conditions precedent which must be fulfilled before the Shares specified
above will be treated as effectively deposited for conversion.
8. The undersigned acknowledges that if Section 6(b) above is
completed, despatch will be made at the risk and expense of the converting
Shareholder and the converting Shareholder will be required to prepay the
expenses of, and submit any necessary documents required in order to effect,
despatch in the manner specified.
Name: Date:
--------------------------------------- ----------------------------
Address:
-----------------------------------------------------------------------
Signature:
--------------------------------------------------
* * * *
For Custodian's use only:
Certificate numbers of Shares delivered to Conversion Agent:
_____________________________________________________________________
_____________________________________________________________________
For Conversion Agent's use only:
1. Date of Receipt:__________________________
2. (A) Aggregate number of Shares deposited for conversion multiplied by the
Reference Amount (US$25 per Share):_______________ .
(B) Conversion Price:_______________ .
(C) Number of shares of Common Stock issuable:________________ (disregard
fractions)
3. If applicable, amount of cash payment due to converting holder in respect
of fractions of shares of Common Stock:__________________ .
