- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
AU OPTRONICS CORP.
AND
CITIBANK, N.A.,
As Depositary,
AND
ALL HOLDERS AND BENEFICIAL OWNERS OF
AMERICAN DEPOSITARY SHARES EVIDENCED BY
AMERICAN DEPOSITARY RECEIPTS
ISSUED AND OUTSTANDING UNDER THE
DEPOSIT AGREEMENT, DATED AS OF MAY 29, 2002
Amendment No. 1
to
Deposit Agreement
-------------------------------------------
Dated as of__________, 2006
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
Page
----
ARTICLE I DEFINITIONS..........................................................3
SECTION 1.01. Definitions.............................................3
SECTION 1.02. Effective Date..........................................3
ARTICLE II AMENDMENTS TO DEPOSIT AGREEMENT.....................................4
SECTION 2.01. Deposit Agreement.......................................4
SECTION 2.02. Principal Office........................................4
SECTION 2.03. Submission of Proposals.................................4
SECTION 2.04. Submission of Nominations...............................7
ARTICLE III AMENDMENTS TO THE RECEIPTS........................................11
SECTION 3.01. Amendments to Receipts.................................11
SECTION 3.02. Addition to Receipts...................................12
ARTICLE IV REPRESENTATIONS AND WARRANTIES.....................................20
SECTION 4.01. Representations and Warranties.........................20
ARTICLE V MISCELLANEOUS.......................................................21
SECTION 5.01. New Receipts...........................................21
SECTION 5.02. Notice of Amendment to Holders.........................21
SECTION 5.03. Indemnification........................................22
(i)
AMENDMENT NO. 1 TO DEPOSIT AGREEMENT
AMENDMENT NO. 1 TO DEPOSIT AGREEMENT, dated as of _____________, 2006 (the
"Amendment"), by and among AU Optronics Corp., a company organized and existing
under the laws of the Republic of China (the "Company"), Citibank, N.A., a
national banking association organized under the laws of the United States of
America (the "Depositary"), and all Holders and Beneficial Owners from time to
time of American Depositary Shares evidenced by American Depositary Receipts
issued and outstanding under the Deposit Agreement, dated as of May 29, 2002.
WITNESSETH THAT:
WHEREAS, the Company and the Depositary entered into that certain Deposit
Agreement, dated as of May 29, 2002 (the "Deposit Agreement"), for the creation
of American Depositary Shares representing the Shares (as defined in the Deposit
Agreement) so deposited and for the execution and delivery of American
Depositary Receipts ("Receipts") in respect of the American Depositary Shares
("ADSs"); and
WHEREAS, the Company Law of the Republic of China has been amended to
permit certain shareholders of the Company to make proposals to be considered at
the annual ordinary meeting of the Company's shareholders and the Company
desires to amend the Deposit Agreement to reflect such change and to permit
Beneficial Owners of ADSs, subject to the conditions set forth herein, to
instruct the Depositary to make a proposal for consideration at the annual
ordinary meeting of the Company's shareholders; and
WHEREAS, the Company Law of the Republic of China has been amended to
permit certain shareholders of the Company to nominate candidates to be
considered for election as directors at a meeting of the Company's shareholders
2
involving the election of directors if the Company amends its Articles of
Incorporation to adopt a Candidate Nomination System, as hereinafter defined,
and the Company desires to amend the Deposit Agreement to reflect such change
and to permit Beneficial Owners of ADSs, subject to the amendment of the
Company's Articles of Incorporation and the conditions set forth herein, to
instruct the Depositary to nominate candidates to be considered for election as
directors at a meeting of the Company's shareholders; and
WHEREAS, pursuant to Section 6.1 of the Deposit Agreement, the Company and
the Depositary deem it desirable to amend the Deposit Agreement, the Receipts
currently outstanding and the form of Receipt annexed to the Deposit Agreement
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 Company and the Depositary
hereby agree to amend the Deposit Agreement, the Receipts and the form of
Receipt attached as Exhibit A to the Deposit Agreement as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. Unless otherwise specified in this Amendment,
all capitalized terms used, but not defined, herein shall have the meanings
given to such terms in the Deposit Agreement.
SECTION 1.02. Effective Date. The term "Effective Date" shall mean the
date set forth above and as of which this Amendment shall become effective.
3
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 Effective Date, refer to the
Deposit Agreement, dated as of May 29, 2002, as amended by this Amendment.
SECTION 2.02. Principal Office. The definition of "Principal Office" in
Section 1.30 of the Deposit Agreement is, as of the Effective Date, deleted in
its entirety and in its stead the following is inserted:
"SECTION 1.30 "Principal Office", when used with respect to the
Depositary, shall mean the principal office of the Depositary at which at
any particular time its depositary receipts business shall be
administered, which, at the date of the Deposit Agreement, is located at
388 Greenwich Street, New York, New York 10013, U.S.A."
SECTION 2.03. Submission of Proposals. The Deposit Agreement is hereby
amended, as of the Effective Date, to add the following Section 4.16 at the end
of Article IV of the Deposit Agreement:
"Section 4.16 Right to Submit Proposals at Annual Ordinary Meeting
of Shareholders.
(a) Proposals by Shareholders.
The Company has informed the Depositary that under ROC Company Law,
as in effect as of the date of the Deposit Agreement, holders of one
percent (1%) or more of the total issued and outstanding Shares of the
Company, as of the applicable record date for determining holders of
Shares with the right to vote at an annual ordinary meeting of the
Company's shareholders (the "Shareholder Proposal Record Date"), are
entitled to submit one (1) written proposal (such proposal shall not
include a Beneficial Owner's right to nominate candidates for election as
directors at a meeting of the Company's shareholders in accordance with
the terms and subject to the conditions of Section 4.17 hereof, the
"Proposal") each year for consideration at the annual ordinary meeting of
the Company's shareholders, provided that: (i) the Proposal is in the
Chinese language and does not exceed 300 Chinese characters (including the
reason(s) for the Proposal and all punctuation marks) in length, (ii) the
Proposal is submitted to the Company prior to the expiration of the period
for submission of Proposals (the "Submission Period") announced by the
Company (which Submission Period and the place for eligible shareholders
to submit the Proposal the Company undertakes to announce publicly each
year in a report on Form 6-K submitted to the Commission prior to the
commencement of the 60 days closed period prior to the annual ordinary
meeting of the Company's shareholders), (iii) only one (1) matter for
4
consideration at the annual ordinary meeting of the Company's shareholders
shall be allowed in each Proposal, and (iv) the proposing shareholder
shall attend, in person or by a proxy, such annual ordinary meeting of the
Company's shareholders whereat his or her or its Proposal is to be
discussed in the Chinese language and such proposing shareholder, or his
or her or its proxy, shall take part in the discussion of such Proposal in
the Chinese language. As the holder of the Deposited Securities, the
Depositary or its nominee is entitled, provided the conditions of ROC law
are satisfied, to submit only one (1) Proposal each year in respect of all
of the Shares held on deposit as of the applicable Shareholder Proposal
Record Date. Holders and Beneficial Owners of ADSs do not under ROC law
have individual rights to submit Proposals to the Company for
consideration at the annual ordinary meeting of the Company's shareholders
but may be able to submit Proposals to the Company for consideration at
the annual ordinary meeting of the Company's shareholders if the
Beneficial Owners (i) timely present their ADSs to the Depositary for
cancellation pursuant to the terms of the Deposit Agreement and become
holders of Shares in the ROC prior to the expiration of the Submission
Period and prior to the applicable Shareholder Proposal Record Date, and
(ii) otherwise satisfy the conditions of ROC law applicable to the
submission of Proposals to the Company for consideration at an annual
ordinary meeting of the Company's shareholders. Beneficial Owners of ADSs
may not receive sufficient advance notice of an annual ordinary meeting of
the Company's shareholders to enable the timely withdrawal of Shares to
make a Proposal to the Company and may not be able to re-deposit under the
Deposit Agreement the Shares so withdrawn. The Company has informed the
Depositary that a Proposal shall only be voted upon at the annual ordinary
meeting of the Company's shareholders if the Proposal is accepted by the
board of directors of the Company as eligible in accordance with Article
172-1 of the ROC Company Law and the Company's Articles of Incorporation
for consideration at an annual ordinary meeting of the Company's
shareholders.
(b) Single Proposal by Depositary or its Nominee on behalf of
Beneficial Owners.
Holders and Beneficial Owners of ADSs do not have individual
proposal rights. The Depositary will, if so requested by a Beneficial
Owner(s) as of the applicable ADS Record Date that own(s), individually or
as a group, at least 51% of the ADSs outstanding as of the applicable ADS
Record Date (such Beneficial Owner(s), the "Submitting Holder(s)"), submit
to the Company for consideration at the annual ordinary meeting of the
Company's shareholders one (1) Proposal each year, provided that: (i) the
Proposal submitted to the Depositary by the Submitting Holder(s) is in the
Chinese language and does not exceed 300 Chinese characters (including the
reason(s) for the Proposal and all punctuation marks) in length, (ii) the
5
Proposal is submitted to the Depositary by the Submitting Holder(s) at
least two (2) Business Days prior to the expiration of the Submission
Period, (iii) the Proposal is accompanied by a written certificate signed
by each Submitting Holder, addressed to the Depositary and the Company and
in a form satisfactory to the Depositary and the Company (the "First
Proposal Certificate"), certifying, inter alia, (w) that each Submitting
Holder has only certified the said Proposal, (x) that the Submitting
Holder(s) own(s), individually or in the aggregate, at least 51% of the
ADSs outstanding as of the date the Proposal is submitted by the
Submitting Holder(s) to the Depositary (the "Proposal Submission Date"),
(y) if the Proposal Submission Date is (i) on or after the applicable ADS
Record Date, that the Submitting Holder(s) owned at least 51% of the ADSs
outstanding as of the applicable ADS Record Date, and (ii) prior to the
applicable ADS Record Date, that the Submitting Holder(s) will continue to
own at least 51% of the ADSs outstanding as of the applicable ADS Record
Date and will provide the Second Proposal Certificate, as defined below,
and (z) the name(s) and address(es) of the Submitting Holder(s) and the
number of ADSs owned by each Submitting Holder (together with certified
evidence of each Submitting Holder's ownership of the applicable ADSs as
of the Proposal Submission Date, in the case of (y)(ii) above), and the
applicable ADS Record Date, in the case of (y)(i) above), (iv) if the
Proposal Submission Date is prior to the applicable ADS Record Date, the
Submitting Holder(s) must also provide, within five (5) Business Days
after the applicable ADS Record Date, a second written certificate signed
by each Submitting Holder, addressed to the Depositary and the Company and
in a form satisfactory to the Depositary and the Company (the "Second
Proposal Certificate"), certifying, inter alia, that the Submitting
Holder(s) continued to own at least 51% of the ADSs outstanding as of the
applicable ADS Record Date (together with certified evidence of each
Submitting Holder's ownership of the applicable ADSs as of such applicable
ADS Record Date), (v) the Proposal is accompanied by a joint and several
irrevocable undertaking of all Submitting Holders (which undertaking may
be contained in the First Proposal Certificate or the Second Proposal
Certificate) that each such Submitting Holder shall pay all fees and
expenses incurred in relation to the submission of the Proposal for voting
at the annual ordinary meeting of the Company's shareholders (including,
but not limited to, the costs and expenses of the Submitting Holder(s), or
his, her, its or their representative, to attend the annual ordinary
meeting of the Company's shareholders), (vi) the Shares registered in the
name of the Depositary or its nominee as representative of the Holders and
Beneficial Owners constitute one percent (1%) or more of the total issued
and outstanding Shares of the Company as of the Shareholder Proposal
Record Date, (vii) such Proposal contains only one (1) matter for
consideration at the annual ordinary meeting of the Company's
shareholders, and (viii) the Submitting Holder(s), or his, her, its or
their representative, attend(s) the annual ordinary meeting of the
Company's shareholders and take(s) part in the discussions of the Proposal
in the Chinese language, provided further that only one (1) individual may
attend, and take part in the discussion of the Proposal at such annual
ordinary meeting on behalf of a Submitting Holder(s). Each Beneficial
Owner hereby agrees and acknowledges that (i) if the Submitting Holder(s),
or his,
6
her, its or their representative, does not attend the annual ordinary
meeting of the Company's shareholders, the chairman of such meeting may
ask the attending shareholders to discuss, or not discuss, the Proposal,
and (ii) in no event shall a Submitting Holder's, or his, her, its or
their representative's, presence at an annual ordinary meeting of the
Company's shareholders entitle such Submitting Holder(s), or his, her, its
or their representative, to vote the Shares represented by such Submitting
Holder's ADSs (or any other ADSs) at such annual ordinary meeting of the
Company's shareholders.
Upon the timely receipt by the Depositary of any Proposal which the
Depositary reasonably believes to be in full compliance with the
immediately preceding paragraph, the Depositary shall submit a copy of
such Proposal and of the other materials received from the Submitting
Holder(s) to the Company prior to the expiration of the Submission Period.
Any Proposal so submitted as to which the Depositary has not received
within five (5) Business Days after the applicable ADS Record Date any
Second Proposal Certificate required under the immediately preceding
paragraph shall be deemed irrevocably withdrawn at the expiration of such
five (5) Business Day period. In the event the Depositary receives more
than one (1) Proposal by a Submitting Holder, or a group of Submitting
Holders, each of which appears to satisfy the requirements set forth in
the immediately preceding paragraph, the Depositary is hereby authorized
and instructed to disregard all Proposals received from such Submitting
Holder(s), except for the first Proposal received by the Depositary from
such Submitting Holder(s) and shall submit such Proposal to the Company
for consideration at the annual ordinary meeting of the Company's
shareholders in accordance with the terms hereof. The Depositary shall not
have any obligation to verify the accuracy of the information contained in
any document submitted to it by the Submitting Holder(s). Neither the
Depositary nor its nominee shall be obligated to attend and speak at the
annual ordinary meeting of the Company's shareholders on behalf of the
Submitting Holder(s).
Notwithstanding anything contained in the Deposit Agreement or any
ADR and except that the Depositary shall arrange, at the request of the
Company and at the Company's expense, for the mailing to Holders of copies
of materials that the Company has made available to the Depositary for
such purpose, the Depositary shall not be obligated to provide to the
Holders or Beneficial Owners of ADSs any notices relating to the proposal
rights, including, without limitation, notice of the Submission Period, or
the receipt of any Proposal(s) from Submitting Holders, or of the holdings
of any ADSs by any persons, except that the Depositary shall, upon a
Holder's request, inform such Holder of the total number of ADSs then
issued and outstanding."
SECTION 2.04. Submission of Nominations. The Deposit Agreement is hereby
amended, as of the Effective Date, to add the following Section 4.17 at the end
of Article IV of the Deposit Agreement:
"Section 4.17 Right to Submit Nominations at Meeting of
Shareholders.
7
(a) No Right Absent Amendment to Articles of Incorporation.
No rights under this Section 4.17 shall be effective absent an
amendment to the Company's Articles of Incorporation adopting a system
whereby candidates may be nominated by holders of Shares to serve on the
Company's board of directors (a "Candidate Nomination System") and any
rights so arising shall, at all times, be subject to the provisions of the
Company's Articles of Incorporation, as amended, and ROC Company Law, as
amended.
(b) Nominations by Shareholders.
The Company has informed the Depositary that under ROC Company Law,
in the event that the Company amends its Articles of Incorporation to
adopt a Candidate Nomination System, holders of one percent (1%) or more
of the total issued and outstanding Shares of the Company as of the
applicable record date for determining holders of Shares with the right to
vote at a meeting of the Company's shareholders (the "Candidate Nomination
Record Date"), would be entitled to submit a roster of candidates (the
"Nomination") to be considered for nomination to the Company's board of
directors at a meeting of the Company's shareholders involving the
election of directors, provided that: (i) the number of director
candidates contained in the Nomination shall not exceed the number of the
directors to be elected at such meeting, (ii) the Nomination is submitted
to the Company prior to the expiration of the period for submission of
Nominations (the "Nomination Submission Period") announced by the Company
(which Nomination Submission Period, the number of the directors to be
elected, the place for eligible shareholders to submit the Nomination and
other applicable information the Company undertakes to announce publicly
in a report on Form 6-K submitted to the Commission prior to the
commencement of the 60 days (for an ordinary meeting) or 30 days (for an
extraordinary meeting) closed period prior to the subject meeting of the
Company's shareholders), (iii) the Nomination shall contain the name,
educational background and past work experience of each director candidate
identified in the Nomination, (iv) the Nomination shall include a letter
of consent issued by each director candidate identified in the Nomination
consenting to act as director if she/he/it is elected as such, (v) a
written statement by each director candidate assuring that she/he/it is
not in violation of any of the circumstances set forth in Article 30 of
the ROC Company Law, as amended, (vi) if a director candidate is a
corporate shareholder of the Company (which cannot be the Depositary or
its nominee), or such corporate shareholder's representative, additional
information and documents reflecting the basic registration information of
such corporate shareholder and the document certifying the number of
Shares in its possession, and (vii) any further conditions under Article
192-1 of the ROC Company Law, as amended, and of the Company's amended
Articles of Incorporation are so satisfied. In the event that the Company
were to amend its Articles of Incorporation to adopt a Candidate
Nomination System, as holder of the Deposited Securities, the Depositary
or its nominee would be entitled, provided the conditions of the Company's
amended Articles of Incorporation are satisfied, to submit only one (1)
Nomination for each meeting involving the election of directors in respect
of all of the Shares held on deposit as of the Candidate Nomination Record
Date. The Company shall promptly notify the Depositary of an amendment of
its Articles of Incorporation adopting a Candidate Nomination System.
Holders and Beneficial Owners of ADSs do not under ROC law have individual
rights to submit Nominations to the Company for consideration at a meeting
of the Company's shareholders involving the election of directors but may
be able to submit a Nomination to the Company for
8
consideration at a meeting of the Company's shareholders involving the
election of directors if the Beneficial Owners (i) timely present their
ADSs to the Depositary for cancellation pursuant to the terms of the
Deposit Agreement and become holders of Shares in the ROC prior to the
expiration of the Nomination Submission Period and prior to the Candidate
Nomination Record Date, and (ii) otherwise satisfy the conditions of ROC
law applicable to the submission of Nominations to the Company for
consideration at a meeting of the Company's shareholders involving the
election of directors. Beneficial Owners of ADSs may not receive
sufficient advance notice of a meeting of the Company's shareholders
involving the election of directors to enable the timely withdrawal of
Shares to make a Nomination to the Company and may not be able to
re-deposit under the Deposit Agreement the Shares so withdrawn. The
Company has informed the Depositary that a Nomination shall only be voted
upon at a meeting of the Company's shareholders involving the election of
directors if the Nomination is accepted by the board of directors of the
Company as eligible in accordance with Article 192-1 of the ROC Company
Law and the Company's Article of Incorporation for consideration at a
meeting of the Company's shareholders involving the election of directors.
(c) Single Nomination by Depositary or its Nominee on Behalf of
Beneficial Owners.
Holders and Beneficial Owners of ADSs do not have individual
nomination rights. In the event that the Company were to amend its
Articles of Incorporation to adopt a Candidate Nomination System, the
Depositary would, if so requested by a Beneficial Owner(s) as of the
applicable ADS Record Date that own(s), individually or as a group, at
least 51% of the ADSs outstanding as of the applicable ADS Record Date
(such Beneficial Owner(s), the "Nominating Holder(s)"), submit to the
Company for consideration at a meeting of the Company's shareholders
involving the election of directors one (1) Nomination, provided that: (i)
the number of director candidates contained in the Nomination shall not
exceed the number of the directors to be elected at such meeting, (ii) the
Nomination shall contain the name, educational background and past work
experience of each director candidate identified in the Nomination, (iii)
the Nomination shall include a letter of consent issued by each director
candidate identified in the Nomination consenting to act as director if
she/he/it is
9
elected as such, (iv) a written statement by each director candidate
assuring that she/he/it is not in violation of any of the circumstances
set forth in Article 30 of the ROC Company Law, as amended, (v) if a
director candidate is corporate shareholder of the Company (which cannot
be the Depositary or its nominee), or such corporate shareholder's
representative, additional information and documents reflecting the basic
registration information of such corporate shareholder and the document
certifying the number of Shares in its possession, (vi) any further
conditions under Article 192-1 of the ROC Company Law, as amended, and of
the Company's amended Articles of Incorporation are so satisfied, (vii)
the Nomination is submitted to the Depositary by the Nominating Holder(s)
at least two (2) Business Days prior to the expiration of the Nomination
Submission Period, (viii) the Nomination is accompanied by a written
certificate signed by each Nominating Holder, addressed to the Depositary
and the Company and in a form satisfactory to the Depositary and the
Company (the "First Nomination Certificate"), certifying, inter alia, (w)
that each Nominating Holder has only endorsed the said Nomination, (x)
that the Nominating Holder(s) own(s), individually or in the aggregate, at
least 51% of the ADSs outstanding as of the date the Nomination is
submitted by the Nominating Holder(s) to the Depositary (the "Nomination
Submission Date"), (y) if the Nomination Submission Date is (i) on or
after the applicable ADS Record Date, that the Nominating Holder(s) owned
at least 51% of the ADSs outstanding as of the applicable ADS Record Date,
and (ii) prior to the applicable ADS Record Date, that the Submitting
Holder(s) will continue to own at least 51% of the ADSs outstanding as of
the applicable ADS Record Date and will provide the Second Nomination
Certificate, as defined below, and (z) the name(s) and address(es) of the
Nominating Holder(s) and the number of ADSs owned by each Nominating
Holder (together with certified evidence of each Nominating Holder's
ownership of the applicable ADSs as of the Nomination Submission Date, in
the case of (y)(ii) above, and the applicable ADS Record Date, in the case
of (y)(i)above), (ix) if the Nomination Submission Date is prior to the
applicable ADS Record Date, the Nominating Holder(s) must also provide,
within five (5) Business Days after the applicable ADS Record Date, a
second written certificate signed by each Nominating Holder addressed to
the Depositary and the Company and in a form satisfactory to the
Depositary and the Company (the "Second Nomination Certificate"),
certifying, inter alia, that the Nominating Holder(s) continued to own at
least 51% of the ADSs outstanding as of the applicable ADS Record Date
(together with certified evidence of each Nominating Holder's ownership of
the applicable ADSs as of such applicable ADS Record Date), (x) the
Nomination is accompanied by a joint and several irrevocable undertaking
of all Nominating Holders (which undertaking may be contained in the First
Nomination Certificate or the Second Nomination Certificate) that each
such Nominating Holder shall pay all fees and expenses incurred in
relation to the submission of the Nomination at the meeting of the
Company's shareholders, and (xi) the Shares registered in the name of the
Depositary or its nominee as representative of the Holders and Beneficial
Owners constitute one percent (1%) or more of the total issued and
outstanding Shares of the Company as of the Candidate Nomination Record
Date. Each Beneficial Owner hereby agrees and acknowledges that in no
event shall the Depositary or its nominee be nominated by the Nominating
Holder(s) for election as a director at a meeting of the Company's
shareholders.
10
Upon the timely receipt by the Depositary of any Nomination which
the Depositary reasonably believes to be in full compliance with the
immediately preceding paragraph, the Depositary shall submit a copy of
such Nomination and of the other materials received from the Nominating
Holder(s) to the Company prior to the expiration of the Nomination
Submission Period. Any Nomination so submitted as to which the Depositary
has not received within five (5) Business Days after the applicable ADS
Record Date any Second Nomination Certificate required under the
immediately preceding paragraph shall be deemed irrevocably withdrawn at
the expiration of such five (5) Business Day period. In the event the
Depositary receives more than one (1) Nomination by a Nominating Holder,
or a group of Nominating Holders, each of which appears to satisfy the
requirements set forth in the immediately preceding paragraph, the
Depositary is hereby authorized and instructed to disregard all
Nominations received from such Submitting Holder(s), except for the first
Nomination received by the Depositary from such Nominating Holder(s) and
shall submit such Nomination to the Company for consideration at a meeting
of the Company's shareholders involving the election of directors in
accordance with the terms hereof. The Depositary shall not have any
obligation to verify the accuracy of the information contained in any
document submitted to it by the Nominating Holder(s). Neither the
Depositary nor its nominee shall be obligated to attend and speak at the
meeting of the Company's shareholders involving the election of directors
on behalf of the Nominating Holder(s).
Notwithstanding anything contained in the Deposit Agreement or any
ADR, and except that the Depositary shall arrange, at the request of the
Company and at the Company's expense, for the mailing to Holders of copies
of materials that the Company has made available to the Depositary for
such purpose, the Depositary shall not be obligated to provide to the
Holders or Beneficial Owners of ADSs any notices relating to the
nomination rights, including, without limitation, notice of the Nomination
Submission Period, or the receipt of any Nomination(s) from Nominating
Holders, or of the holdings of any ADSs by any persons, except that the
Depositary shall, upon a Holder's request, inform such Holder of the total
number of ADSs then issued and outstanding."
ARTICLE III
AMENDMENTS TO THE RECEIPTS
SECTION 3.01. Amendments to Receipts.
(a) The last sentence of the introductory paragraph of the form of
Receipt attached as Exhibit A to the Deposit Agreement and of each of the
Receipts issued and outstanding under the Deposit Agreement as of the Effective
Date is hereby amended as of the Effective Date by deleting such sentence in its
entirety and inserting the following in its stead: "The Depositary's Principal
Office is located at 388 Greenwich Street, New York, New York 10013, U.S.A."
11
(b) The address of the Principal Office of the Depositary identified
on the bottom of the front page of the Receipt attached as Exhibit A to the
Deposit Agreement and of each of the Receipts issued and outstanding under the
Deposit Agreement as of the Effective Date is hereby amended as of the Effective
Date by identifying such address as "388 Greenwich Street, New York, New York
10013, U.S.A."
(c) The first sentence of paragraph (1) of the form of Receipt
attached as Exhibit A to the Deposit Agreement and of each of the Receipts is
issued and outstanding under the terms of the Deposit Agreement as of the
Effective Date is hereby amended as of the Effective Date by deleting such
sentence in its entirety and inserting the following in its stead:
"This American Depositary Receipt is one of an issue of American
Depositary Receipts ("Receipts"), all issued and to be issued upon the
terms and conditions set forth in the Deposit Agreement, dated as of May
29, 2002, as amended by Amendment No. 1 to Deposit Agreement, dated as of
_________________, 2006 (as so amended and further amended from time to
time, the "Deposit Agreement"), by and among the Company, the Depositary
and all Holders and Beneficial Owners from time to time of American
Depositary Shares ("ADSs") evidenced by Receipts issued thereunder, each
of whom by accepting an ADS (or an interest therein) agrees to become a
party thereto and becomes bound by all the terms and provisions thereof."
SECTION 3.02. Addition to Receipts.
Each of the Receipts issued and outstanding as of the Effective Date
and the form of Receipt attached as Exhibit A to the Deposit Agreement is hereby
amended as of the Effective Date to add the following Paragraphs (25) and (26)
at the end of the Receipt:
"(25) Right to Submit Proposals at Annual Ordinary Meeting of
Shareholders.
(a) Proposals by Shareholders.
12
The Company has informed the Depositary that under ROC Company Law,
as in effect as of the date of the Deposit Agreement, holders of one
percent (1%) or more of the total issued and outstanding Shares of the
Company, as of the applicable record date for determining holders of
Shares with the right to vote at an annual ordinary meeting of the
Company's shareholders (the "Shareholder Proposal Record Date"), are
entitled to submit one (1) written proposal (such proposal shall not
include a Beneficial Owner's right to nominate candidates for election as
directors at a meeting of the Company's shareholders in accordance with
the terms and subject to the conditions of Section 4.17 of the Deposit
Agreement, the "Proposal") each year for consideration at the annual
ordinary meeting of the Company's shareholders, provided that: (i) the
Proposal is in the Chinese language and does not exceed 300 Chinese
characters (including the reason(s) for the Proposal and all punctuation
marks) in length, (ii) the Proposal is submitted to the Company prior to
the expiration of the period for submission of Proposals (the "Submission
Period") announced by the Company (which Submission Period and the place
for eligible shareholders to submit the Proposal the Company undertakes to
announce publicly each year in a report on Form 6-K submitted to the
Commission prior to the commencement of the 60 days closed period prior to
the annual ordinary meeting of the Company's shareholders), (iii) only one
(1) matter for consideration at the annual ordinary meeting of the
Company's shareholders shall be allowed in each Proposal, and (iv) the
proposing shareholder shall attend, in person or by a proxy, such annual
ordinary meeting of the Company's shareholders whereat his or her or its
Proposal is to be discussed in the Chinese language and such proposing
shareholder, or his or her or its proxy, shall take part in the discussion
of such Proposal in the Chinese language. As the holder of the Deposited
Securities, the Depositary or its nominee is entitled, provided the
conditions of ROC law are satisfied, to submit only one (1) Proposal each
year in respect of all of the Shares held on deposit as of the applicable
Shareholder Proposal Record Date. Holders and Beneficial Owners of ADSs do
not under ROC law have individual rights to submit Proposals to the
Company for consideration at the annual ordinary meeting of the Company's
shareholders but may be able to submit Proposals to the Company for
consideration at the annual ordinary meeting of the Company's shareholders
if the Beneficial Owners (i) timely present their ADSs to the Depositary
for cancellation pursuant to the terms of the Deposit Agreement and become
holders of Shares in the ROC prior to the expiration of the Submission
Period and prior to the applicable Shareholder Proposal Record Date, and
(ii) otherwise satisfy the conditions of ROC law applicable to the
submission of Proposals to the Company for consideration at an annual
ordinary meeting of the Company's shareholders. Beneficial Owners of ADSs
may not receive sufficient advance notice of an annual ordinary meeting of
the Company's shareholders to enable the timely withdrawal of Shares to
make a Proposal to the Company and may not be able to re-deposit under the
Deposit Agreement the Shares so withdrawn. The Company has informed the
Depositary that a Proposal shall only be voted upon at the annual ordinary
meeting of the Company's shareholders if the Proposal is accepted by the
board of directors of the Company as eligible in accordance with Article
172-1 of the ROC Company Law and the Company's Articles of Incorporation
for consideration at an annual ordinary meeting of the Company's
shareholders.
13
(b) Single Proposal by Depositary or its Nominee on behalf of
Beneficial Owners.
Holders and Beneficial Owners of ADSs do not have individual
proposal rights. The Depositary will, if so requested by (a) Beneficial
Owner(s) as of the applicable ADS Record Date that own(s), individually or
as a group, at least 51% of the ADSs outstanding as of the applicable ADS
Record Date (such Beneficial Owner(s), the "Submitting Holder(s)"), submit
to the Company for consideration at the annual ordinary meeting of the
Company's shareholders one (1) Proposal each year, provided that: (i) the
Proposal submitted to the Depositary by the Submitting Holder(s) is in the
Chinese language and does not exceed 300 Chinese characters (including the
reason(s) for the Proposal and all punctuation marks) in length, (ii) the
Proposal is submitted to the Depositary by the Submitting Holder(s) at
least two (2) Business Days prior to the expiration of the Submission
Period, (iii) the Proposal is accompanied by a written certificate signed
by each Submitting Holder, addressed to the Depositary and the Company and
in a form satisfactory to the Depositary and the Company (the "First
Proposal Certificate"), certifying, inter alia, (w) that each Submitting
Holder has only certified the said Proposal, (x) that the Submitting
Holder(s) own(s), individually or in the aggregate, at least 51% of the
ADSs outstanding as of the date the Proposal is submitted by the
Submitting Holder(s) to the Depositary (the "Proposal Submission Date"),
(y) if the Proposal Submission Date is (i) on or after the applicable ADS
Record Date, that the Submitting Holder(s) owned at least 51% of the ADSs
outstanding as of the applicable ADS Record Date, and (ii) prior to the
applicable ADS Record Date, that the Submitting Holder(s) will continue to
own at least 51% of the ADSs outstanding as of the applicable ADS Record
Date and will provide the Second Proposal Certificate, as defined below,
and (z) the name(s) and address(es) of the Submitting Holder(s) and the
number of ADSs owned by each Submitting Holder (together with certified
evidence of each Submitting Holder's ownership of the applicable ADSs as
of the Proposal Submission Date, in the case of (y)(ii) above, and the
applicable ADS Record Date, in the case of (y)(i) above)), (iv) if the
Proposal Submission Date is prior to the applicable ADS Record Date, the
Submitting Holder(s) must also provide, within five (5) Business Days
after the applicable ADS Record Date, a second written certificate signed
by each Submitting Holder, addressed to the Depositary and the Company and
in a form satisfactory to the Depositary and the Company (the "Second
Proposal Certificate"), certifying, inter alia, that the Submitting
Holder(s) continued to own at least 51% of the ADSs outstanding as of the
applicable ADS Record Date (together with certified evidence of each
Submitting Holder's ownership of the applicable ADSs as of such applicable
ADS Record Date), (v) the Proposal is accompanied by a joint and several
irrevocable undertaking of all Submitting Holders (which undertaking may
be contained in the First Proposal Certificate or the Second Proposal
Certificate) that each such Submitting Holder shall pay all fees and
expenses incurred in relation to the submission of the Proposal for voting
at the annual ordinary meeting of the Company's shareholders (including,
but not limited to, the costs and expenses of the Submitting Holder(s), or
his, her, its or their representative, to attend the annual ordinary
meeting of the Company's shareholders), (vi) the Shares registered in the
name of the Depositary or its nominee as representative of the Holders and
Beneficial Owners constitute one percent (1%) or more of the total issued
14
and outstanding Shares of the Company as of the Shareholder Proposal
Record Date, (vii) such Proposal contains only one (1) matter for
consideration at the annual ordinary meeting of the Company's
shareholders, and (viii) the Submitting Holder(s), or his, her, its or
their representative, attend(s) the annual ordinary meeting of the
Company's shareholders and take(s) part in the discussions of the Proposal
in the Chinese language, provided further that only one (1) individual may
attend, and take part in the discussion of the Proposal at such annual
ordinary meeting on behalf of a Submitting Holder(s). Each Beneficial
Owner hereby agrees and acknowledges that (i) if the Submitting Holder(s),
or his, her, its or their representative, does not attend the annual
ordinary meeting of the Company's shareholders, the chairman of such
meeting may ask the attending shareholders to discuss, or not discuss, the
Proposal, and (ii) in no event shall a Submitting Holder's, or his, her,
its or their representative's, presence at an annual ordinary meeting of
the Company's shareholders entitle such Submitting Holder(s), or his, her,
its or their representative, to vote the Shares represented by such
Submitting Holder's ADSs (or any other ADSs) at such annual ordinary
meeting of the Company's shareholders.
Upon the timely receipt by the Depositary of any Proposal which the
Depositary reasonably believes to be in full compliance with the
immediately preceding paragraph, the Depositary shall submit a copy of
such Proposal and of the other materials received from the Submitting
Holder(s) to the Company prior to the expiration of the Submission Period.
Any Proposal so submitted as to which the Depositary has not received
within five (5) Business Days after the applicable ADS Record Date any
Second Proposal Certificate required under the immediately preceding
paragraph shall be deemed irrevocably withdrawn at the expiration of such
five (5) Business Day period. In the event the Depositary receives more
than one (1) Proposal by a Submitting Holder, or a group of Submitting
Holders, each of which appears to satisfy the requirements set forth in
the immediately preceding paragraph, the Depositary is hereby authorized
and instructed to disregard all Proposals received from such Submitting
Holder(s), except for the first Proposal received by the Depositary from
such Submitting Holder(s) and shall submit such Proposal to the Company
for consideration at the annual ordinary meeting of the Company's
shareholders in accordance with the terms of the Deposit Agreement. The
Depositary shall not have any obligation to verify the accuracy of the
information contained in any document submitted to it by the Submitting
Holder(s). Neither the Depositary nor its nominee shall be obligated to
attend and speak at the annual ordinary meeting of the Company's
shareholders on behalf of the Submitting Holder(s).
Notwithstanding anything contained in the Deposit Agreement or any
ADR and except that the Depositary shall arrange, at the request of the
15
Company and at the Company's expense, for the mailing to Holders of copies
of materials that the Company has made available to the Depositary for
such purpose, the Depositary shall not be obligated to provide to the
Holders or Beneficial Owners of ADSs any notices relating to the proposal
rights, including, without limitation, notice of the Submission Period, or
the receipt of any Proposal(s) from Submitting Holders, or of the holdings
of any ADSs by any persons, except that the Depositary shall, upon a
Holder's request, inform such Holder of the total number of ADSs then
issued and outstanding.
(26) Right to Submit Nominations at Meeting of Shareholders.
(a) No Right Absent Amendment to Articles of Incorporation.
No rights under this paragraph shall be effective absent an
amendment to the Company's Articles of Incorporation adopting a system
whereby candidates may be nominated by holders of Shares to serve on the
Company's board of directors (a "Candidate Nomination System") and any
rights so arising shall, at all times, be subject to the provisions of the
Company's Articles of Incorporation, as amended, and ROC Company Law, as
amended.
(b) Nominations by Shareholders.
The Company has informed the Depositary that under ROC Company Law,
in the event that the Company amends its Articles of Incorporation to
adopt a Candidate Nomination System, holders of one percent (1%) or more
of the total issued and outstanding Shares of the Company as of the
applicable record date for determining holders of Shares with the right to
vote at a meeting of the Company's shareholders (the "Candidate Nomination
Record Date"), would be entitled to submit a roster of candidates (the
"Nomination") to be considered for nomination to the Company's board of
directors at a meeting of the Company's shareholders involving the
election of directors, provided that: (i) the number of director
candidates contained in the Nomination shall not exceed the number of the
directors to be elected at such meeting, (ii) the Nomination is submitted
to the Company prior to the expiration of the period for submission of
Nominations (the "Nomination Submission Period") announced by the Company
(which Nomination Submission Period, the number of the directors to be
elected, the place for eligible shareholders to submit the Nomination and
other applicable information the Company undertakes to announce publicly
in a report on Form 6-K submitted to the Commission prior to the
commencement of the 60 days (for an ordinary meeting) or 30 days (for an
extraordinary meeting) closed period prior to the subject meeting of the
Company's shareholders), (iii) the Nomination shall contain the name,
educational background and past work experience of each director candidate
identified in the Nomination, (iv) the Nomination shall include a letter
of consent issued by each director candidate identified in the Nomination
consenting to act as director if she/he/it is elected as such, (v) a
written statement by each director candidate assuring that she/he/it is
not in violation of any of the circumstances set forth in Article 30 of
the ROC Company Law, as amended, (vi) if a
16
director candidate is a corporate shareholder of the Company (which cannot
be the Depositary or its nominee), or such corporate shareholder's
representative, additional information and documents reflecting the basic
registration information of such corporate shareholder and the document
certifying the number of Shares in its possession, and (vii) any further
conditions under Article 192-1 of the ROC Company Law, as amended, and of
the Company's amended Articles of Incorporation are so satisfied. In the
event that the Company were to amend its Articles of Incorporation to
adopt a Candidate Nomination System, as holder of the Deposited
Securities, the Depositary or its nominee would be entitled, provided the
conditions of the Company's amended Articles of Incorporation are
satisfied, to submit only one (1) Nomination for each meeting involving
the election of directors in respect of all of the Shares held on deposit
as of the Candidate Nomination Record Date. The Company shall promptly
notify the Depositary of an amendment of its Articles of Incorporation
adopting a Candidate Nomination System. Holders and Beneficial Owners of
ADSs do not under ROC law have individual rights to submit Nominations to
the Company for consideration at a meeting of the Company's shareholders
involving the election of directors but may be able to submit a Nomination
to the Company for consideration at a meeting of the Company's
shareholders involving the election of directors if the Beneficial Owners
(i) timely present their ADSs to the Depositary for cancellation pursuant
to the terms of the Deposit Agreement and become holders of Shares in the
ROC prior to the expiration of the Nomination Submission Period and prior
to the Candidate Nomination Record Date, and (ii) otherwise satisfy the
conditions of ROC law applicable to the submission of Nominations to the
Company for consideration at a meeting of the Company's shareholders
involving the election of directors. Beneficial Owners of ADSs may not
receive sufficient advance notice of a meeting of the Company's
shareholders involving the election of directors to enable the timely
withdrawal of Shares to make a Nomination to the Company and may not be
able to re-deposit under the Deposit Agreement the Shares so withdrawn.
The Company has informed the Depositary that a Nomination shall only be
voted upon at a meeting of the Company's shareholders involving the
election of directors if the Nomination is accepted by the board of
directors of the Company as eligible in accordance with Article 192-1 of
the ROC Company Law and the Company's Article of Incorporation for
consideration at a meeting of the Company's shareholders involving the
election of directors.
(c) Single Nomination by Depositary or its Nominee on Behalf of
Beneficial Owners.
Holders and Beneficial Owners of ADSs do not have individual
nomination rights. In the event that the Company were to amend its
Articles of Incorporation to adopt a Candidate Nomination System, the
Depositary would, if so requested by (a) Beneficial Owner(s) as of the
applicable ADS Record Date that own(s), individually or as a group, at
least 51% of the ADSs outstanding as of the applicable ADS Record Date
(such Beneficial Owner(s), the "Nominating Holder(s)"), submit to the
Company for consideration at a meeting of the Company's shareholders
17
involving the election of directors one (1) Nomination, provided that: (i)
the number of director candidates contained in the Nomination shall not
exceed the number of the directors to be elected at such meeting, (ii) the
Nomination shall contain the name, educational background and past work
experience of each director candidate identified in the Nomination, (iii)
the Nomination shall include a letter of consent issued by each director
candidate identified in the Nomination consenting to act as director if
she/he/it is elected as such, (iv) a written statement by each director
candidate assuring that she/he/it is not in violation of any of the
circumstances set forth in Article 30 of the ROC Company Law, as amended,
(v) if a director candidate is corporate shareholder of the Company (which
cannot be the Depositary or its nominee), or such corporate shareholder's
representative, additional information and documents reflecting the basic
registration information of such corporate shareholder and the document
certifying the number of Shares in its possession, (vi) any further
conditions under Article 192-1 of the ROC Company Law, as amended, and of
the Company's amended Articles of Incorporation are so satisfied, (vii)
the Nomination is submitted to the Depositary by the Nominating Holder(s)
at least two (2) Business Days prior to the expiration of the Nomination
Submission Period, (viii) the Nomination is accompanied by a written
certificate signed by each Nominating Holder, addressed to the Depositary
and the Company and in a form satisfactory to the Depositary and the
Company (the "First Nomination Certificate"), certifying, inter alia, (w)
that each Nominating Holder has only endorsed the said Nomination, (x)
that the Nominating Holder(s) own(s), individually or in the aggregate, at
least 51% of the ADSs outstanding as of the date the Nomination is
submitted by the Nominating Holder(s) to the Depositary (the "Nomination
Submission Date"), (y) if the Nomination Submission Date is (i) on or
after the applicable ADS Record Date, that the Nominating Holder(s) owned
at least 51% of the ADSs outstanding as of the applicable ADS Record Date,
and (ii) prior to the applicable ADS Record Date, that the Submitting
Holder(s) will continue to own at least 51% of the ADSs outstanding as of
the applicable ADS Record Date and will provide the Second Nomination
Certificate as defined below, and (z) the name(s) and address(es) of the
Nominating Holder(s) and the number of ADSs owned by each Nominating
Holder (together with certified evidence of each Nominating Holder's
ownership of the applicable ADSs as of the Nomination Submission Date, in
the case of (y)(ii) above, and the applicable ADS Record Date, in the case
of (y)(i) above, (ix) if the Nomination Submission Date is prior to the
applicable ADS Record Date, the Nominating Holder(s) must also provide,
within five (5) Business Days after the applicable ADS Record Date, a
second written certificate signed by each Nominating Holder addressed to
the Depositary and the Company and in a form satisfactory to the
Depositary and the Company (the "Second Nomination Certificate"),
certifying, inter alia, that the Nominating Holder(s) continued to own at
least 51% of the ADSs outstanding as of the applicable ADS Record Date
(together with certified evidence of each Nominating Holder's ownership of
18
the applicable ADSs as of such applicable ADS Record Date), (x) the
Nomination is accompanied by a joint and several irrevocable undertaking
of all Nominating Holders (which undertaking may be contained in the First
Nomination Certificate or the Second Nomination Certificate) that each
such Nominating Holder shall pay all fees and expenses incurred in
relation to the submission of the Nomination at the meeting of the
Company's shareholders, and (xi) the Shares registered in the name of the
Depositary or its nominee as representative of the Holders and Beneficial
Owners constitute one percent (1%) or more of the total issued and
outstanding Shares of the Company as of the Candidate Nomination Record
Date. Each Beneficial Owner hereby agrees and acknowledges that in no
event shall the Depositary or its nominee be nominated by the Nominating
Holder(s) for election as a director at a meeting of the Company's
shareholders.
Upon the timely receipt by the Depositary of any Nomination which
the Depositary reasonably believes to be in full compliance with the
immediately preceding paragraph, the Depositary shall submit a copy of
such Nomination and of the other materials received from the Nominating
Holder(s) to the Company prior to the expiration of the Nomination
Submission Period. Any Nomination so submitted as to which the Depositary
has not received within five (5) Business Days after the applicable ADS
Record Date any Second Nomination Certificate required under the
immediately preceding paragraph shall be deemed irrevocably withdrawn at
the expiration of such five (5) Business Day period. In the event the
Depositary receives more than one (1) Nomination by a Nominating Holder,
or a group of Nominating Holders, each of which appears to satisfy the
requirements set forth in the immediately preceding paragraph, the
Depositary is hereby authorized and instructed to disregard all
Nominations received from such Submitting Holder(s), except for the first
Nomination received by the Depositary from such Nominating Holder(s) and
shall submit such Nomination to the Company for consideration at a meeting
of the Company's shareholders involving the election of directors in
accordance with the terms of the Deposit Agreement. The Depositary shall
not have any obligation to verify the accuracy of the information
contained in any document submitted to it by the Nominating Holder(s).
Neither the Depositary nor its nominee shall be obligated to attend and
speak at the meeting of the Company's shareholders involving the election
of directors on behalf of the Nominating Holder(s).
Notwithstanding anything contained in the Deposit Agreement or any
ADR, and except that the Depositary shall arrange, at the request of the
Company and at the Company's expense, for the mailing to Holders of copies
of materials that the Company has made available to the Depositary for
such purpose, the Depositary shall not be obligated to provide to the
Holders or Beneficial Owners of ADSs any notices relating to the
nomination rights, including, without limitation, notice of the Nomination
Submission Period, or the receipt of any Nomination(s) from Nominating
Holders, or of the holdings of any ADSs by any persons, except that the
Depositary shall, upon a Holder's request, inform such Holder of the total
number of ADSs then issued and outstanding."
19
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
SECTION 4.01. Representations and Warranties. The Company represents and
warrants to, and agrees with, the Depositary and the Holders and Beneficial
Owners, 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 other document furnished hereunder or thereunder in the
Republic of China, neither of such agreements need to be filed or recorded with
any court or other authority in the Republic of China, except for filing this
Amendment with the Financial Supervisory Commission, nor does any stamp or
similar tax need be paid in the Republic of China on or in respect of such
agreements; and
(c) None of the terms of this Amendment violate or conflict with,
nor does the execution and delivery of this Amendment, the filing of the related
Post-Effective Amendment No. 1 to the Registation Statement on Form F-6 or the
consummation of the transactions contemplated therein violate or conflict with
any agreement to which the Company is a party or by which the Company is bound;
and
20
(d) All of the information provided to the Depositary by the Company
in connection with this Amendment is true, accurate and correct.
ARTICLE V
MISCELLANEOUS
SECTION 5.01. New Receipts. From and after the Effective Date, the
Depositary shall arrange to have new Receipts printed or amended that reflect
the changes to the form of Receipt effected by this Amendment. All Receipts
issued hereunder after the Effective Date, once such new Receipts are available,
whether upon the deposit of Shares or other Deposited Securities or upon the
transfer, combination or split-up of existing Receipts, shall be substantially
in the form of the specimen Receipt attached as Exhibit A hereto. However,
Receipts issued prior or subsequent to the date hereof, which do not reflect the
changes to the form of Receipt 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 5.02. Notice of Amendment to Holders . The Depositary is hereby
directed to send notices informing the Holders (i) of the terms of this
Amendment, (ii) of the Effective Date of this Amendment, and (iii) that the
Holders shall be given the opportunity, but that it is unnecessary, to
substitute their Receipts with new Receipts reflecting the changes effected by
this Amendment, as provided in Section 5.01 hereof.
21
SECTION 5.03. Indemnification. The Company hereby agrees that, to the
extent the Depositary (or any of its directors, employees and officers) incur
any liability as a result of the terms of this Amendment and the transactions
contemplated herein, the Depositary (and all of its directors, employees and
officers) shall be indemnified and held harmless by the Company in the manner
provided for in Section 5.8 of the Deposit Agreement.
22
IN WITNESS WHEREOF, the Company and the Depositary have caused this
Amendment to be executed by representatives thereunto duly authorized as of the
date set forth above.
AU OPTRONICS CORP.
By:
-------------------------------
Name:
Title:
CITIBANK, N.A., as Depositary
By:
-------------------------------
Name:
Title:
23
EXHIBIT A
[FORM OF RECEIPT]
Number CUSIP NUMBER: 002255 10 7
AUO ___________________
[American Depositary Shares
(each American Depositary Share
representing ten (10) Fully Paid
shares of common stock, par
NT$10.00 per share)]
[COP American Depositary Shares
(each COP American Depositary
Share representing an undivided
interest in a global
Certificates of Payment, each
interest representing the
irrevocable right to receive ten
(10) Fully Paid shares of common
stock par value NT$10.00 per
share)]
[EC American Depositary Shares
(each EC American Depositary
Share representing an undivided
interest in an Entitlement
Certificate, each interest
representing the irrevocable
right to receive ten (10) shares
of common stock par NT$10.00 per
share)]
A-1
AMERICAN DEPOSITARY RECEIPT
FOR
AMERICAN DEPOSITARY SHARES
representing
[DEPOSITED SHARES OF COMMON STOCK]
[INTERESTS IN THE DEPOSITED CERTIFICATE(S) OF PAYMENT]
[DEPOSITED ENTITLEMENT CERTIFICATE(S)]
of
AU Optronics Corp.
(Incorporated under the laws of the Republic of China)
CITIBANK, N.A., a national banking association organized and
existing under the laws of the United States of America, as depositary (the
"Depositary"), hereby certifies that _____________is the owner of ______________
American Depositary Shares (hereinafter "ADS"), representing deposited [shares
of common stock] [interests in the global Certificate(s) of Payment representing
the irrevocable right to receive shares of common stock] [Entitlement
Certificate(s) representing the irrevocable right to receive shares of common
stock], par value NT$10.00 per share, or evidence of rights to receive such
[shares of common stock (the "Shares")] [interests in the global Certificate(s)
of Payment (the "Certificate(s) of Payment"][Entitlement Certificate(s) (the
"Entitlement Certificate(s)")] (such [Shares][Certificate(s) of
Payment][Entitlement Certificate(s)] are hereafter called "Eligible Securities")
of AU Optronics Corp., a company incorporated under the laws of the Republic of
China (the "Company"). As of the date of the Deposit Agreement (as hereinafter
defined), each ADS represents [ten (10) Shares][an undivided interest in an
Entitlement Certificate, each interest representing the irrevocable right to
receive [ten (10)] Shares][an undivided interest in a global Certificate(s) of
Payment, each interest representing the irrevocable right to receive ten (10)
Shares] deposited under the Deposit Agreement with the Custodian, which at the
date of execution of the Deposit Agreement is Citibank, N.A., (Taipei) (the
"Custodian"). The ratio of American Depositary Shares to Eligible Securities is
subject to amendment as provided in Article IV of the Deposit Agreement. The
Depositary's Principal Office is located at 388 Greenwich Street, New York, New
York 10013, U.S.A.
1. The Deposit Agreement. This American Depositary Receipt is one of
an issue of American Depositary Receipts ("Receipts"), all issued and to be
issued upon the terms and conditions set forth in the Deposit Agreement, dated
as of May 29, 2002, as amended by Amendment No. 1 to Deposit Agreement, dated as
of _______________, 2006 (as so amended and further amended from time to time,
the "Deposit Agreement"), by and among the Company, the Depositary and all
Holders and Beneficial Owners from time to time of American Depositary Shares
A-2
("ADSs") evidenced by Receipts issued thereunder, each of whom by accepting an
ADS (or an interest therein) agrees to become a party thereto and becomes bound
by all the terms and provisions thereof. The Deposit Agreement sets forth the
rights and obligations of Holders and Beneficial Owners of Receipts and the
rights and duties of the Depositary in respect of the Eligible Securities
deposited thereunder and any and all other securities, property and cash from
time to time received in respect of such Eligible Securities and held thereunder
(such Eligible Securities, securities, property and cash are herein called
"Deposited Securities"). Copies of the Deposit Agreement are on file at the
Principal Office of the Depositary and with the Custodian.
The statements made on the face and reverse of this Receipt are
summaries of certain provisions of the Deposit Agreement and the Articles of
Incorporation of the Company (as in effect on the date of the signing of the
Deposit Agreement) and are qualified by and subject to the detailed provisions
of the Deposit Agreement and the Articles of Incorporation, to which reference
is hereby made. All capitalized terms used herein which are not otherwise
defined herein shall have the meanings ascribed thereto in the Deposit
Agreement. The Depositary makes no representation or warranty as to the validity
or worth of the Deposited Securities. The Depositary has made arrangements for
the acceptance of the ADSs into DTC. Each Beneficial Owner of ADSs held through
DTC must rely on the procedures of DTC and the DTC Participants to exercise and
be entitled to any rights attributable to such ADSs.
2. Surrender of ADSs and Withdrawal and Sale of Deposited
Securities. The Depositary and the Company have been advised that under ROC law,
until three (3) months after the closing of the Offering, a Holder is not
entitled to withdraw or sell Shares from the ADS Facility, consequently, the
Company and the Depositary agree to prohibit the surrender of ADSs and the sale
or Delivery of any Shares deposited in connection with the Offering until the
expiration of such three-month period. A Holder wishing to withdraw Shares from
the ADS Facility shall be required under ROC law to appoint an eligible agent in
the Republic of China to open a securities trading account with a local
brokerage firm after receiving an approval from the TSE and a bank account (the
securities trading account and the bank account, collectively, the "Accounts"),
to pay ROC taxes, remit funds, exercise stockholders' rights and perform such
other functions as may be designated by such withdrawing Holder. In addition,
such withdrawing Holder is also required to appoint a custodian bank to hold the
securities in safekeeping, make confirmations and settle trades and report all
relevant information. Without making such appointment and until approval from
the TSE is obtained, the withdrawing Holder would be unable to receive, hold, or
subsequently sell the Deposited Securities withdrawn from the ADS Facilities on
the TSE or otherwise.
(a) Sale of Deposited Securities. Upon surrender of Receipts
at the Principal Office and upon payment of any fees, reasonable expenses, taxes
or other governmental charges as provided hereunder, subject to the terms of
this Deposit Agreement, and the transfer restrictions applicable to the
Deposited Securities, if any, Holders may request that the Deposited Securities
represented by such Holders' Receipts be sold on such Holders' behalf. Any
Holder requesting a sale of Deposited Securities may be required by the
Depositary to deliver, or cause to be delivered, to the Depositary a written
order requesting the Depositary to sell, or cause to be sold, such Deposited
Securities. Any such sale of Deposited Securities will be conducted in
accordance with applicable ROC law through a securities company in the ROC on
the TSE or in such other manner as is or may be permitted under applicable ROC
law. Any such sale of Deposited Securities will be at the expense and risk of
the Holder requesting such sale.
A-3
Upon receipt of any proceeds from any such sale, the Depositary
shall, subject to any restrictions imposed by ROC law and regulations, and as
provided hereunder and under the Deposit Agreement, convert or cause to be
converted any such proceeds into U.S. dollars and distribute any such proceeds
to the Holders entitled thereto after deduction or payment of any fees,
reasonable expenses, taxes or governmental charges incurred in connection with
such sale, as provided under the Deposit Agreement. Any such sale may be subject
to ROC taxation on capital gains, if any, and will be subject to a securities
transaction tax in the ROC.
(b) Withdrawal of Deposited Securities. The Holder of ADSs
shall be entitled to Delivery (at the Custodian's designated office) of the
Deposited Securities at the time represented by the ADS(s) upon satisfaction of
each of the following conditions: (i) the Holder (or a duly authorized attorney
of the Holder) has duly Delivered ADSs to the Depositary at its Principal Office
(and if applicable, the Receipts evidencing such ADSs) for the purpose of
withdrawal of the Deposited Securities represented thereby, (ii) if so required
by the Depositary, the Receipts Delivered to the Depositary for such purpose
have been properly endorsed in blank or are accompanied by proper instruments of
transfer in blank (including signature guarantees in accordance with standard
securities industry practice), (iii) if so required by the Depositary, the
Holder of the ADSs has executed and delivered to the Depositary a written order
directing the Depositary to cause the Deposited Securities being withdrawn to be
Delivered to or upon the written order of the person(s) designated in such
order, (iv) the Holder has delivered to the Depositary the certification
contemplated in Exhibit C to the Deposit Agreement, duly completed by or on
behalf of the Beneficial Owner(s) of the ADSs surrendered for withdrawal (unless
the Depositary is otherwise instructed by the Company), and (v) all applicable
fees and charges of, and reasonable expenses incurred by, the Depositary and all
applicable taxes and governmental charges (as are set forth in Section 5.9 of,
and Exhibit B to, the Deposit Agreement) have been paid, subject, however, in
each case, to the terms and conditions of the Receipts evidencing the
surrendered ADSs, of the Deposit Agreement, of the Company's Articles of
Incorporation and of any applicable laws and the regulations and rules of the
Republic of China and the rules of the TSE and the Taiwan Securities Central
Depository, and to any provisions of or governing the Deposited Securities, in
each case as in effect at the time thereof.
Upon satisfaction of each of the conditions specified above, the
Depositary (i) shall cancel the ADSs Delivered to it (and, if applicable, the
Receipts evidencing the ADSs so Delivered), (ii) shall direct the Registrar to
record the cancellation of the ADSs so Delivered on the books maintained for
such purpose, and (iii) shall direct the Custodian to Deliver (without
unreasonable delay) at the Custodian's designated office the Deposited
Securities represented by the ADSs so canceled together with any certificate or
other document of title for the Deposited Securities, or evidence of the
electronic transfer thereof (if available), as the case may be, to or upon the
written order of the person(s) designated in the order delivered to the
Depositary for such purpose, subject however, in each case, to the terms and
conditions of the Deposit Agreement, of the Receipts evidencing the ADSs so
canceled, of the Articles of Incorporation of the Company, of applicable laws
and the rules and regulations of the Republic of China and the rules of the TSE
and the Taiwan Securities Central Depository, and to the terms and conditions of
or governing the Deposited Securities, in each case as in effect at the time
thereof.
A-4
The Depositary shall not accept for surrender ADSs representing less
than one Eligible Security. In the case of the Delivery to it of ADSs
representing a number other than a whole number of Eligible Securities, the
Depositary shall cause ownership of the appropriate whole number of Eligible
Securities to be Delivered in accordance with the terms hereof, and shall, at
the discretion of the Depositary, either (i) return to the person surrendering
such ADSs the number of ADSs representing any remaining fractional Eligible
Security, or (ii) sell or cause to be sold the fractional Eligible Security
represented by the ADS(s) so surrendered and remit the proceeds of such sale
(net of (a) applicable fees and charges of, and expenses incurred by, the
Depositary and (b) taxes withheld) to the person surrendering the ADSs. In
addition, trading restrictions on the TSE may result in the price per Eligible
Security or on any lot of any type of Eligible Security other than an integral
multiple of 1,000 Eligible Securities being lower than the price of Eligible
Securities in lots of integral multiples of 1,000 Eligible Securities.
Notwithstanding anything else contained in any Receipt or the
Deposit Agreement, the Depositary may make delivery at the Principal Office of
the Depositary of (i) any cash dividends or cash distributions, or (ii) any
proceeds from the sale of any distributions of securities or rights, which are
at the time held by the Depositary in respect of the Deposited Securities
represented by the ADSs surrendered for cancellation and withdrawal. At the
request, risk and expense of any Holder so surrendering ADSs, and for the
account of such Holder, the Depositary shall direct the Custodian to forward (to
the extent permitted by law) any cash or other property (other than securities)
held by the Custodian in respect of the Deposited Securities represented by such
ADSs to the Depositary for delivery at the Principal Office of the Depositary.
Such direction shall be given by letter or, at the request, risk and expense of
such Holder, by cable, telex or facsimile transmission.
3. Transfer, Combination and Split-Up of Receipts. The Registrar
shall register the transfer of this Receipt (and of the ADSs represented
thereby) on the books maintained for such purpose and the Depositary shall
cancel this Receipt and execute new Receipts evidencing the same aggregate
number and type of ADSs as those evidenced by this Receipt when canceled, shall
cause the Registrar to countersign such new Receipts and shall Deliver such new
Receipts to or upon the order of the person entitled thereto, if each of the
following conditions has been satisfied: (i) this Receipt has been duly
Delivered by the Holder (or by a duly authorized attorney of the Holder) to the
Depositary at its Principal Office for the purpose of effecting a transfer
thereof, (ii) this Receipt has been properly endorsed or is accompanied by
proper instruments of transfer (including signature guarantees in accordance
with standard securities industry practice), (iii) this Receipt has been duly
stamped (if required by the laws of the State of New York or of the United
States), and (iv) all applicable fees and charges of, and expenses incurred by,
the Depositary and all applicable taxes and governmental charges (as are set
forth in Section 5.9 of, and Exhibit B to, the Deposit Agreement) have been
paid, subject, however, in each case, to the terms and conditions of this
Receipt, of the Deposit Agreement and of applicable law, in each case as in
effect at the time thereof.
The Registrar shall register the split-up or combination of this
Receipt (and of the ADSs represented hereby) on the books maintained for such
purpose and the Depositary shall cancel this Receipt and execute new Receipts
for the number of ADSs requested, but in the aggregate not exceeding the number
of the same type of ADSs evidenced by this Receipt (when canceled), shall cause
the Registrar to countersign such new Receipts and shall Deliver such new
Receipts to or upon the order of the Holder thereof, if each of the following
conditions has been satisfied: (i) this Receipt has been duly Delivered by the
A-5
Holder (or by a duly authorized attorney of the Holder) to the Depositary at its
Principal Office for the purpose of effecting a split-up or combination hereof,
and (ii) all applicable fees and charges of, and expenses incurred by, the
Depositary and all applicable taxes and government charges (as are set forth in
Section 5.9 of, and Exhibit B to, the Deposit Agreement) have been paid,
subject, however, in each case, to the terms and conditions of this Receipt, of
the Deposit Agreement and of applicable law, in each case as in effect at the
time thereof.
4. Pre-Conditions to Registration, Transfer, Etc. As a condition
precedent to the execution and delivery, registration of transfer, split-up,
combination or surrender of any Receipt, the delivery of any distribution
thereon, or the withdrawal of any Deposited Securities, the Depositary or the
Custodian may require (i) payment from the depositor of Eligible Securities or
presenter of ADSs or of a Receipt of a sum sufficient to reimburse it for any
tax or other governmental charge and any stock transfer or registration fee with
respect thereto (including any such tax or charge and fee with respect to
Eligible Securities being deposited or withdrawn) and payment of any applicable
fees and charges of the Depositary as provided in the Deposit Agreement and in
this Receipt, (ii) the production of proof satisfactory to it as to the identity
and genuineness of any signature or any other matters contemplated in the
Deposit Agreement, and (iii) compliance with (A) any laws or governmental
regulations relating to the execution and delivery of Receipts or ADSs or to the
deposit of Eligible Securities or to the withdrawal of Deposited Securities and
(B) such reasonable regulations as the Depositary and the Company may establish
consistent with the provisions of this Receipt, the Deposit Agreement and
applicable law.
The issuance of ADSs against deposits of Eligible Securities
generally or against deposits of particular Eligible Securities may be
suspended, or the deposit of particular Eligible Securities may be refused, or
the registration of transfer of Receipts in particular instances may be refused,
or the registration of transfer of Receipts generally may be suspended, during
any period when the transfer books of the Company, the Depositary, a Registrar
or the Eligible Securities Registrar are closed or if any such action is deemed
necessary or advisable by the Depositary or the Company, in good faith, at any
time or from time to time because of any requirement of law, any government or
governmental body or commission or any securities exchange upon which the ADSs
or Eligible Securities are listed, or under any provision of the Deposit
Agreement or this Receipt, or under any provision of, or governing, the
Deposited Securities, or because of a meeting of shareholders of the Company or
for any other reason, subject in all cases to Paragraph (23) hereof. In
addition, the Depositary and the Custodian shall refuse to accept Shares for
deposit (i) whenever notified, as provided in the Deposit Agreement that the
Company has restricted transfer of such Shares to comply with delivery or
transfer requirements and/or ownership restrictions referred to in the Deposit
Agreement or under applicable law, or (ii) in the case of a deposit of Shares
requested under the terms of Section 2.3(iv) of the Deposit Agreement, if such
deposit is not permitted under any restriction notified by the Company to the
Depositary from time to time, which restrictions may specify black-out periods
during which deposits may not be made, minimum or maximum numbers of Shares and
frequencies of deposit.
A-6
Notwithstanding any provision of the Deposit Agreement or this
Receipt to the contrary, Holders are entitled to surrender outstanding ADSs to
withdraw the Deposited Securities at any time subject only to (i) temporary
delays caused by closing the transfer books of the Depositary or the Company, or
the deposit of Eligible Securities in connection with voting at a shareholders'
meeting or the payment of dividends, (ii) the payment of fees, taxes and similar
charges, (iii) compliance with any U.S. or foreign laws or governmental
regulations relating to the Receipts or to the withdrawal of the Deposited
Securities, and (iv) other circumstances specifically contemplated by Section
I.A.(l) of the General Instructions to Form F-6 (as such General Instructions
may be amended from time to time).
5. Compliance With Information Requests. Notwithstanding any other
provision of the Deposit Agreement or this Receipt, each Holder and Beneficial
Owner of the ADSs represented hereby agrees to comply with requests from the
Company pursuant to applicable law, the rules and requirements of the TSE, and
any other stock exchange on which the Eligible Securities or ADSs are, or will
be, registered, traded or listed, or the Articles of Incorporation of the
Company, which are made to provide information, inter alia, as to the capacity
in which such Holder or Beneficial Owner owns ADSs (and Eligible Securities and
Deposited Securities, as the case may be) and regarding the identity of any
other person(s) interested in such ADSs and the nature of such interest and
various other matters, whether or not they are Holders and/or Beneficial Owners
at the time of such request.
6. Ownership Restrictions. Notwithstanding any provision of this
Receipt or of the Deposit Agreement, the Company may restrict transfers of the
Shares, Eligible Securities or securities convertible into Shares where the
Company informs the Depositary that such transfer might result in ownership of
Shares exceeding limits imposed by applicable law, the SFC, the TSE or Articles
of Incorporation of the Company. The Company may also restrict, in such manner
as it deems appropriate, transfers of ADSs where such transfer may result in the
total number of Shares, Deposited Securities or securities convertible into
Shares represented by the ADSs owned by a single Holder or Beneficial Owner to
exceed any such limits. The Company may, in its sole discretion, but subject to
applicable law, instruct the Depositary to take action with respect to the
ownership interest of any Holder or Beneficial Owner in excess of the limits set
forth in the preceding sentence, including but not limited to, the imposition of
restrictions on the transfer of ADSs, the removal or limitation of voting rights
or the mandatory sale or disposition on behalf of a Holder or Beneficial Owner
of the Deposited Securities represented by the ADSs held by such Holder or
Beneficial Owner in excess of such limitations, if and to the extent such
disposition is permitted by applicable law and the Articles of Incorporation of
the Company.
7. Liability of Holder for Taxes and Other Charges. If any tax or
other governmental charge shall become payable with respect to any Receipt or
any Deposited Securities or ADSs, such tax or other governmental charge shall be
payable by the Holders and Beneficial Owners to the Depositary. The Company, the
Custodian and/or Depositary may withhold or deduct from any distributions made
in respect of Deposited Securities and may sell for the account of a Holder
and/or Beneficial Owner any or all of the Deposited Securities and apply such
distributions and sale proceeds in payment of such taxes or governmental
charges, (including applicable interest and penalties), the Holder and the
Beneficial Owner hereof remaining liable for any deficiency. The Custodian may
refuse the deposit of Eligible Securities and the Depositary may refuse to issue
ADSs, to deliver ADRs, register the transfer, split-up or combination of ADRs
A-7
and (subject to Paragraph (23) hereof) the withdrawal of Deposited Securities
until payment in full of such tax, charge, penalty or interest is received.
Every Holder and Beneficial Owner may be asked to indemnify the Depositary, the
Company, the Custodian, and any of their respective agents, officers, employees
and Affiliates for, and hold each of them harmless from, any claims with respect
to taxes (including applicable interest and penalties thereon) arising from any
inaccuracy in the information provided by such Holder and/or Beneficial Owner in
connection with obtaining any tax benefit for such Holder and/or Beneficial
Owner.
8. Representations and Warranties of Depositors. Each person
depositing Shares under the Deposit Agreement shall be deemed thereby to
represent and warrant that (i) such Shares and the certificates therefor are
duly authorized, validly issued, fully paid, non-assessable and legally obtained
by such person, (ii) all preemptive (and similar) rights, if any, with respect
to such Shares have been validly waived or exercised, (iii) the person making
such deposit is duly authorized to make such deposit, (iv) the Shares presented
for deposit are free and clear of any lien, encumbrance, security interest,
charge, mortgage or adverse claim and are not, and the ADSs issuable upon such
deposit will not be, Restricted Securities except (as contemplated in Section
2.14 of the Deposit Agreement), and (v) the Shares presented for deposit have
not been stripped of any rights or entitlements. Such representations and
warranties shall survive the deposit and withdrawal of Shares, the issuance and
cancellation of ADSs in respect thereof and the transfer of such ADSs. Each
person depositing Certificates of Payment under the Deposit Agreement shall be
deemed thereby to represent and warrant that (i) such Certificates of Payment
are duly authorized, validly issued, fully paid, non-assessable and legally
obtained by such person, (ii) all preemptive (and similar) rights, if any, with
respect to such Certificates of Payment have been validly waived or exercised,
(iii) the person making such deposit is duly authorized to make such deposit,
(iv) the Certificates of Payment presented for deposit are free and clear of any
lien, encumbrance, security interest, charge, mortgage or adverse claim, and are
not, and the Temporary COP ADSs issuable upon such deposit will not be,
Restricted Securities (except as contemplated in Section 2.14 of the Deposit
Agreement) and (v) the Certificates of Payment presented for deposit have not
been stripped of any rights or entitlements. Such representations and warranties
shall survive the deposit of Certificates of Payment, the issuance and
cancellation of Temporary COP ADSs in respect thereof and the transfer of such
Temporary COP ADSs. Each person depositing Entitlement Certificates under the
Deposit Agreement shall be deemed thereby to represent and warrant that (i) such
Entitlement Certificates are duly authorized, validly issued, fully paid and
legally obtained by such person, (ii) all preemptive (and similar) rights, if
any, with respect to such Entitlement Certificates have been validly waived or
exercised, (iii) the person making such deposit is duly authorized to do so,
(iv) the Entitlement Certificates presented for deposit are free and clear of
any lien, encumbrance, security interest, charge, mortgage or adverse claim, and
are not, and the Temporary EC ADSs issuable upon such deposit will not be,
Restricted Securities and (v) the Entitlement Certificates presented for deposit
have not been stripped of any rights or entitlements. Such representations and
warranties shall survive the deposit of Entitlement Certificates, the issuance
and cancellation of Temporary EC ADSs in respect thereof and the transfer of
such Temporary EC ADSs.
If any such representations or warranties are false in any way, the
Company and Depositary shall be authorized, at the cost and expense of the
person depositing, Shares, Certificates of Payment or Entitlement Certificates,
to take any and all actions necessary to correct the consequences thereof.
A-8
9. Filing Proofs, Certificates and Other Information. Any person
presenting Eligible Securities for deposit, any Holder and any Beneficial Owner
may be required, and every Holder and Beneficial Owner agrees, from time to time
to provide to the Depositary and the Custodian such proof of citizenship or
residence, taxpayer status, payment of all applicable taxes or other
governmental charges, exchange control approvals and any other applicable
regulatory approval, legal or beneficial ownership of ADSs and Deposited
Securities, compliance with applicable laws and the terms of the Deposit
Agreement or this receipt evidencing the ADS(s) and the provisions of, or
governing, the Deposited Securities, to execute such certifications and to make
such representations and warranties, and to provide such other information and
documentation (or, in the case of Eligible Securities in registered form
presented for deposit, such information relating to the registration on the
books of the Company or of the Eligible Securities Registrar) as the Depositary
or the Custodian may deem reasonably necessary or proper or as the Company may
reasonably require by written request to the Depositary consistent with its
obligations under the Deposit Agreement, this Receipt and applicable laws and
regulations. The Depositary and the Registrar, as applicable, may withhold the
execution or delivery or registration of transfer of any Receipt or the
distribution or sale of any dividend or distribution of rights or of the
proceeds thereof or, to the extent not limited by Paragraph (23) hereof, the
delivery of any Deposited Securities until such proof or other information is
filed or such certificates are executed, or such representations are made, or
such information and documentation are provided, in each case to the
Depositary's, the Registrar's and the Company's satisfaction.
10. Charges of Depositary. The Depositary shall charge the following
fees for the services performed under the terms of the Deposit Agreement:
(i) to any person to whom ADSs are issued upon the deposit of
Eligible Securities, a fee not in excess of U.S. $ 5.00 per 100 ADSs (or
fraction thereof) so issued under the terms of the Deposit Agreement
(excluding issuances pursuant to paragraphs (iii)(b) and (v) below);
(ii) to any person surrendering ADSs for cancellation and
withdrawal of Deposited Securities, a fee not in excess of U.S. $ 5.00 per
100 ADSs (or fraction thereof) so surrendered;
(iii) No fee shall be payable upon distribution of (a) cash
dividends or (b) ADSs pursuant to stock dividends (or other free
distributions of stock) so long as the charging of such fee is prohibited
by the exchange upon which the ADSs are listed. If charging of such fees
is not prohibited, the fees specified in (i) above shall be payable in
respect of ADS distributions pursuant to stock dividends (or other free
distributions of stock) and the fees specified in (iv) below shall be
payable in respect of distributions of cash;
A-9
(iv) to any Holder of ADSs, a fee not in excess of U.S. $ 2.00
per 100 ADSs (or fraction thereof) held for the distribution of cash
proceeds (i.e., upon the sale of rights and other entitlements); and
(v) to any Holder of ADSs, a fee not in the excess of U.S. $
5.00 per 100 ADSs (or fraction thereof) issued upon the exercise of rights
to purchase additional ADSs.
In addition, Holders, Beneficial Owners, persons depositing Eligible
Securities for deposit and persons surrendering ADSs for cancellation and
withdrawal of Deposited Securities will be required to pay the following
charges:
(b) taxes (including applicable interest and penalties) and
other governmental charges;
(c) such registration fees as may from time to time be in
effect for the registration of Deposited Securities on the share register and
applicable to transfers of Deposited Securities to or from the name of the
Custodian, the Depositary or any nominees upon the making of deposits and
withdrawals, respectively;
(d) such cable, telex and facsimile transmission and delivery
expenses as are expressly provided in the Deposit Agreement to be at the expense
of the person depositing or withdrawing Deposited Securities or Holders and
Beneficial Owners of ADSs;
(e) the expenses and charges incurred by the Depositary in the
conversion of foreign currency;
(f) such fees and expenses as are incurred by the Depositary
in connection with compliance with exchange control regulations and other
regulatory requirements applicable to Eligible Securities, Deposited Securities,
ADSs and ADRs; and
(g) the fees and expenses incurred by the Depositary in
connection with the delivery of Deposited Securities.
Any other charges and expenses of the Depositary under the Deposit
Agreement will be paid by the Company upon agreement between the Depositary and
the Company. All fees and charges may, at any time and from time to time, be
changed by agreement between the Depositary and Company but, in the case of fees
and charges payable by Holders or Beneficial Owners, only in the manner
contemplated by Paragraph (21) of this Receipt. The Depositary will provide,
without charge, a copy of its latest fee schedule to anyone upon request. The
charges and expenses of the Custodian are for the sole account of the
Depositary.
11. Title to Receipts. It is a condition of this Receipt, and every
successive Holder of this Receipt by accepting or holding the same consents and
agrees, that title to this Receipt (and to each ADS evidenced hereby) shall be
transferable upon the same terms as a certificated security under the laws of
the State of New York, provided that the Receipt has been properly endorsed or
is accompanied by proper instruments of transfer. Notwithstanding any notice to
the contrary, the Depositary and the Company may deem and treat the Holder of
this Receipt (that is, the person in whose name this Receipt is registered on
A-10
the books of the Depositary) as the absolute owner thereof for all purposes.
Neither the Depositary nor the Company shall have any obligation nor be subject
to any liability under the Deposit Agreement or this Receipt to any holder of
this Receipt or any Beneficial Owner unless such holder is the Holder of this
Receipt registered on the books of the Depositary or, in the case of a
Beneficial Owner, such Beneficial Owner or the Beneficial Owner's representative
is the Holder registered on the books of the Depositary.
12. Validity of Receipt. This Receipt (and the ADSs represented
hereby) shall not be entitled to any benefits under the Deposit Agreement or be
valid or enforceable for any purpose against the Depositary or the Company
unless this Receipt has been (i) dated, (ii) signed by the manual or facsimile
signature of a duly authorized signatory of the Depositary, (iii) countersigned
by the manual or facsimile signature of a duly authorized signatory of the
Registrar, and (iv) registered in the books maintained by the Registrar for the
registration of issuances and transfers of Receipts. Receipts bearing the
facsimile signature of a duly authorized signatory of the Depositary or the
Registrar, who at the time of signature was a duly authorized signatory of the
Depositary or the Registrar, as the case may be, shall bind the Depositary,
notwithstanding the fact that such signatory has ceased to be so authorized
prior to the delivery of such Receipt by the Depositary.
13. Available Information; Reports; Inspection of Transfer Books.
The Company is subject to the periodic reporting requirements of the Exchange
Act and accordingly files certain information with the Commission. These reports
and documents can be inspected and copied at the public reference facilities
maintained by the Commission located at Judiciary Plaza, 100 F Street, N.E.,
Washington D.C. 20549. The Depositary shall make available for inspection by
Holders at its Principal Office any reports and communications, including any
proxy soliciting materials, received from the Company which are both (a)
received by the Depositary, the Custodian, or the nominee of either of them, as
the holder of the Deposited Securities and (b) made generally available to the
holders of such Deposited Securities by the Company.
The Registrar shall keep books for the registration of issuances and
transfers of Receipts which at all reasonable times shall be open for inspection
by the Company and by the Holders of such Receipts, provided that such
inspection shall not be, to the Registrar's knowledge, for the purpose of
communicating with Holders of such Receipts in the interest of a business or
object other than the business of the Company or other than a matter related to
the Deposit Agreement or the Receipts.
A-11
The Registrar may close the transfer books with respect to the
Receipts, at any time or from time to time, when deemed necessary or advisable
by it in good faith in connection with the performance of its duties hereunder,
or at the reasonable written request of the Company subject, in all cases, to
Paragraph (23) hereof.
Dated: CITIBANK, N.A.,
as Depositary
By:
------------------------
Authorized Signatory
CITIBANK, N.A.
Transfer Agent and Registrar
By:
-----------------------
Authorized Signatory
The address of the Principal Office of the Depositary is 388
Greenwich Street, New York, New York 10013, U.S.A.
A-12
[FORM OF REVERSE OF RECEIPT]
SUMMARY OF CERTAIN ADDITIONAL PROVISIONS
OF THE DEPOSIT AGREEMENT
14. Dividends and Distributions in Cash, Eligible Securities, etc.
Subject always to the laws and regulations of the Republic of China, whenever
the Depositary receives directly confirmation from the Custodian of receipt of
any cash dividend or other cash distribution on any Deposited Securities, or
receives proceeds from the sale of any Deposited Securities or any entitlements
held in respect of Deposited Securities under the terms of the Deposit
Agreement, the Depositary will (i) promptly convert or cause to be converted
such cash dividend, distribution or proceeds into Dollars (upon the terms of the
Deposit Agreement), (ii) if applicable, establish the ADS Record Date upon the
terms described in Paragraph (15) hereof and in Section 4.9 of the Deposit
Agreement, and (iii) distribute promptly the amount thus received (net of (a)
applicable fees and charges of, and reasonable expenses incurred by, the
Depositary and (b) taxes withheld) to the Holders entitled thereto as of the ADS
Record Date in proportion to the number of ADS held as of the ADS Record Date.
The Depositary shall distribute only such amount, however, as can be distributed
without attributing to any Holder a fraction of one cent, and any balance not so
distributed shall be held by the Depositary (without liability for interest
thereon) and shall be added to and become part of the next sum received by the
Depositary for distribution to Holders of ADSs then outstanding at the time of
the next distribution. If the Company, the Custodian or the Depositary is
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, duties or other governmental charges, the amount distributed to Holders
on the ADSs representing such Deposited Securities shall be reduced accordingly.
Such withheld amounts shall be forwarded by the Company, the Custodian or the
Depositary to the relevant governmental authority.
If any distribution upon any Deposited Securities consists of a
dividend in, or free distribution of, Eligible Securities, the Company shall
cause such Eligible Securities to be deposited with the Custodian and
registered, as the case may be, in the name of the Depositary, the Custodian or
their respective nominees. Upon receipt of confirmation of such deposit from the
Custodian, the Depositary shall, subject to and in accordance with the Deposit
Agreement and the laws and regulations of the Republic of China, establish the
ADS Record Date and either (i) the Depositary shall distribute to the Holders as
of the ADS Record Date in proportion to the number of ADSs held as of the ADS
Record Date, additional ADSs (of the applicable series), which represent in
aggregate the number of Eligible Securities received as such dividend, or free
distribution, subject, however, in each case, to the terms of the Deposit
Agreement (including, without limitation, the limitations set forth on the face
of this Receipt and in Article II of the Deposit Agreement and net of (a) the
applicable fees and charges of, and reasonable expenses incurred by, the
Depositary and (b) taxes), or (ii) if additional ADSs are not so distributed,
each ADS issued and outstanding after the ADS Record Date shall, to the extent
permissible by law, thenceforth also represent rights and interest in the
additional integral number of Shares distributed upon the Deposited Securities
represented thereby (subject, however, in each case, to the laws and regulations
of the Republic of China and net of (a) the applicable fees and charges of, and
the reasonable expenses incurred by, the Depositary and (b) taxes). In lieu of
delivering fractional ADSs, the Depositary shall sell the number of Eligible
Securities or ADSs, as the case may be, represented by the aggregate of such
fractions and distribute the net proceeds upon the terms set forth in the
Deposit Agreement.
A-13
In the event that the Depositary determines that any distribution in
property (including Eligible Securities) is subject to any tax or other
governmental charges which the Depositary is obligated to withhold, or, if the
Company in the fulfillment of its obligations under the Deposit Agreement, has
furnished an opinion of U.S. counsel determining that Eligible Securities must
be registered under the Securities Act or other laws in order to be distributed
to Holders (and no such registration statement has been declared effective), the
Depositary may dispose of all or a portion of such property (including Eligible
Securities and rights to subscribe therefor) in such amounts and in such manner,
including by public or private sale, as the Depositary deems necessary and
practicable and the Depositary shall distribute the net proceeds of any such
sale (after deduction of (a) taxes and (b) fees and charges of, and reasonable
expenses incurred by, the Depositary) to Holders entitled thereto upon the terms
of the Deposit Agreement. The Depositary shall hold and/or distribute any unsold
balance of such property in accordance with the provisions of the Deposit
Agreement.
Upon timely receipt of a notice indicating that the Company wishes
an elective distribution to be made available to Holders upon the terms
described in the Deposit Agreement, the Company and the Depositary shall
determine whether such distribution is lawful and reasonably practicable. If so,
the Depositary shall, subject to the terms and conditions of the Deposit
Agreement, establish an ADS record date according to Paragraph (15) and
establish procedures to enable the Holder hereof to elect to receive the
proposed distribution in cash or in additional ADSs. If a Holder elects to
receive the distribution in cash, the dividend shall be distributed as in the
case of a distribution in cash. If the Holder hereof elects to receive the
distribution in additional ADSs, the distribution shall be distributed as in the
case of a distribution in Eligible Securities. If such elective distribution is
not lawful or not reasonably practicable, the Depositary shall, to the extent
permitted by law, distribute to Holders, on the basis of the same determination
as is made in the Republic of China in respect of the Deposited Securities for
which no election is made, either (x) cash or (y) additional ADSs representing
such additional Eligible Securities, in each case, upon the terms described in
the Deposit Agreement. Nothing herein or in the Deposit Agreement shall obligate
the Depositary to make available to the Holder hereof a method to receive the
elective distribution in Eligible Securities (rather than ADSs). There can be no
assurance that the Holder hereof will be given the opportunity to receive
elective distributions on the same terms and conditions as the holders of
Deposited Securities.
Upon timely receipt by the Depositary of a notice indicating that
the Company wishes rights to subscribe for additional Eligible Securities to be
made available to Holders of ADSs, the Depositary upon consultation with the
Company, shall determine, whether it is lawful and reasonably practicable to
make such rights available to the Holders. If and whenever the Company shall
announce its intention to make any offer or invitation to the holders of
Eligible Securities to subscribe for or to acquire Eligible Securities or other
assets by way of rights, the Depositary shall as soon as practicable thereafter
give notice of the same to the Holders, including if applicable, the last date
for acceptance thereof and the manner by which and the time during which Holders
may instruct the Depositary to exercise such rights. The Depositary shall make
such rights available to any Holders only if (i) the Company shall have timely
requested the Depositary to make such rights available to Holders, (ii) the
Depositary shall have received satisfactory documentation contemplated in the
Deposit Agreement, and (iii) the Depositary shall have determined that such
distribution of rights is reasonably practicable. In the event any of the
conditions set forth above are not satisfied or if the Company requests the
Depositary that the rights not be made available to Holders of ADSs, the
Depositary shall proceed with the sale of rights as contemplated below. In the
event that the conditions set forth above are satisfied, the Depositary shall
establish an ADS Record Date (upon the terms described in the Deposit Agreement)
A-14
and establish procedures (x) to distribute rights to purchase additional ADSs
(by means of warrants or otherwise), (y) to enable the Holders to exercise the
rights (upon payment of the subscription price and of the applicable (a) fees
and charges of, and expenses incurred by, the Depositary and (b) taxes), and (z)
to deliver ADSs upon the valid exercise of such rights. Nothing herein or in the
Deposit Agreement shall obligate the Depositary to make available to the Holders
a method to exercise rights to subscribe for Eligible Securities (rather than
ADSs). If (i) the Company does not timely request the Depositary to make the
rights available to Holders or if the Company requests that the rights not be
made available to Holders, (ii) the Depositary fails to receive satisfactory
documentation required by the Deposit Agreement or determines it is not lawful
or not reasonably practicable to make the rights available to Holders, or (iii)
any rights made available are not exercised and appear to be about to lapse, the
Depositary shall determine whether it is lawful and reasonably practicable to
sell such rights, in a riskless principal capacity, at such place and upon such
terms (including public and private sale) as it may deem reasonably practicable.
The Depositary shall, upon such sale, convert and distribute proceeds of such
sale (net of applicable fees and charges of, and reasonable expenses incurred
by, the Depositary and taxes) upon the terms hereof and of the Deposit
Agreement. If the Depositary is unable to make any rights available to Holders
or to arrange for the sale of the rights upon the terms described above, the
Depositary shall allow such rights to lapse. The Depositary shall not be
responsible for (i) any failure to determine that it may be lawful or
practicable to make such rights available to Holders in general or any Holders
in particular, (ii) any foreign exchange exposure or loss incurred in connection
with such sale, or exercise, or (iii) the content of any materials forwarded to
the ADR Holders on behalf of the Company in connection with the rights
distribution.
Notwithstanding anything herein or in the Deposit Agreement to the
contrary, if registration (under the Securities Act or any other applicable law)
of the rights or the securities to which any rights relate may be required in
order for the Company to offer such rights or such securities to Holders and to
sell the securities represented by such rights, the Depositary will not
distribute such rights to the Holders (i) unless and until a registration
statement under the Securities Act (or other applicable law) covering such
offering is in effect or (ii) unless the Company furnishes the Depositary
opinion(s) of counsel for the Company in the United States and counsel to the
Company in any other applicable country in which rights would be distributed in
each case satisfactory to the Depositary, to the effect that the offering and
sale of such securities to Holders and Beneficial Owners are exempt from, or do
not require registration under, the provisions of the Securities Act or other
applicable securities laws. In the event that the Company, the Depositary or the
Custodian shall be required to withhold and does withhold from any distribution
of property (including rights) an amount on account of taxes or other
governmental charges, the amount distributed to the Holders of ADSs representing
such Deposited Securities shall be reduced accordingly. In the event that the
A-15
Depositary determines that any distribution in property (including Eligible
Securities and rights to subscribe therefor) is subject to any tax or other
governmental charges which the Depositary is obligated to withhold, the
Depositary may dispose of all or a portion of such property (including Eligible
Securities and rights to subscribe therefor) in such amounts and in such manner,
including by public or private sale, as the Depositary deems necessary and
practicable to pay any such taxes or charges.
There can be no assurance that Holders generally, or any Holder in
particular, will be given the opportunity to exercise rights on the same terms
and conditions as the holders of Deposited Securities or be able to exercise
such rights. Nothing herein or in the Deposit Agreement shall obligate the
Company to file any registration statement in respect of any rights or Eligible
Securities or other securities to be acquired upon the exercise of such rights.
Upon receipt of a notice indicating that the Company wishes property
other than cash, Eligible Securities or rights to purchase additional Eligible
Securities, to be made to Holders of ADSs, the Depositary shall determine
whether such distribution to Holders is lawful and reasonably practicable. The
Depositary shall not make such distribution unless (i) the Company shall have
requested the Depositary to make such distribution to Holders, (ii) the
Depositary shall have received the documentation contemplated in the Deposit
Agreement, and (iii) the Depositary shall have determined that such distribution
is reasonably practicable. Upon satisfaction of such conditions, the Depositary
shall distribute the property so received to the Holders of record, as of the
ADS Record Date, in proportion to the respective number of ADSs held by them and
in such manner as the Depositary may deem practicable for accomplishing such
distribution (i) upon receipt of payment or net of the applicable fees and
charges of, and expenses incurred by, the Depositary, and (ii) net of any taxes
withheld. The Depositary may dispose of all or a portion of the property so
distributed and deposited, in such amounts and in such manner (including public
or private sale) as the Depositary may deem practicable or necessary to satisfy
any taxes (including applicable interest and penalties) or other governmental
charges applicable to the distribution.
If the conditions above are not satisfied, the Depositary shall sell
or cause such property to be sold in a public or private sale, at such place or
places and upon such terms as it may deem practicable and shall (i) cause the
proceeds of such sale, if any, to be converted into Dollars and (ii) distribute
the proceeds of such conversion received by the Depositary (net of applicable
(a) fees and charges of, and expenses incurred by, the Depositary and (b) taxes)
to the Holders as of the ADS Record Date upon the terms hereof and of the
Deposit Agreement. If the Depositary is unable to sell such property, the
Depositary may dispose of such property in any way it deems reasonably
practicable under the circumstances.
15. Fixing of ADS Record Date. Whenever the Depositary shall receive
notice of the fixing of a record date by the Company for the determination of
holders of Deposited Securities entitled to receive any distribution (whether in
cash, Eligible Securities, rights or other distribution), or whenever for any
reason the Depositary causes a change in the number of Deposited Securities that
are represented by each ADS, or whenever the Depositary shall receive notice of
any meeting of, or solicitation of consents or proxies of, holders of Deposited
Securities, or whenever the Depositary shall find it necessary or convenient in
connection with the giving of any notice, solicitation of any consent or any
other matter, the Depositary shall fix a record date (the "ADS Record Date") for
the determination of the Holders of Receipts who shall be entitled to receive
A-16
such distribution, to give instructions for the exercise of voting rights at any
such meeting, to give or withhold such consent, to receive such notice or
solicitation or to otherwise take action, or to exercise the rights of Holders
with respect to such changed number of Deposited Securities represented by each
ADS. The Depositary shall make reasonable efforts to establish the ADS Record
Date as closely as possible to the applicable record date for the Deposited
Securities (if any) set by the Company in the Republic of China. Subject to
applicable law and the terms and conditions of this Receipt and the Deposit
Agreement, only the Holders of Receipts at the close of business in New York on
such ADS Record Date shall be entitled to receive such distributions, to give
such instructions, to receive such notice or solicitation, or otherwise take
action.
16. Voting of Deposited Securities. (a) Voting by Shareholders. The
following is a summary of certain rights of holders of Shares, interests in
Certificate(s) of Payment and Entitlement Certificate(s), if any, to vote at
shareholders' meetings under ROC Company Law and the Articles of Incorporation
of the Company, in each case, as in effect on the date hereof: (i) a holder of
Shares (including holders of interests in any Certificate of Payment evidencing
the irrevocable right to receive Shares) is entitled to one vote for each Share
held, (ii) the election of directors and supervisors takes place by means of
cumulative voting, and (iii) a shareholder must, as to all matters subject to a
vote of shareholders (other than the election of directors and supervisors),
exercise the voting rights for all Shares held by such shareholder in the same
manner (e.g., a holder of 1,000 Shares cannot split his/her votes but must vote
all 1,000 Shares in the same manner except in the event of cumulative voting for
an election of directors and supervisors). Pursuant to ROC law, the voting
rights attaching to the Deposited Securities must be exercised by, or on behalf
of, the Depositary's nominee, as representative of the Holders and Beneficial
Owners, collectively in the same manner, except in the case of an election of
directors and supervisors, which currently should be on a cumulative basis.
Deposited Securities which have been withdrawn from the applicable ADS Facility
and timely transferred on the Company's register of shareholders to a person
other than the Depositary may be voted by the Registered Holder(s) thereof
directly, subject, in each case, to the limitations of ROC law and the Articles
of Incorporation of the Company. Holders may not receive sufficient advance
notice of shareholders' meetings to enable them to timely withdraw the Deposited
Securities and vote at such meetings and may not be able to re-deposit the
withdrawn securities under the terms of the Deposit Agreement.
(b) Voting by ADS Holders. Holders of ADSs have no individual
voting rights with respect to the Deposited Securities represented by their
ADSs. Each Holder shall, by acceptance of ADSs or acquisition of any beneficial
interest therein, have authorized and directed the Depositary's nominee, without
liability, to appoint the Chairman of the Board of Directors of the Company (or
the Chairman's designate) (the "Voting Representative"), as representative of
the Depositary's nominee, who is registered in the ROC as representative of the
Holders and Beneficial Owners in respect of the Deposited Securities (the
"Registered Holder"), to vote the Shares or Deposited Securities in accordance
with the terms hereof.
The Company agrees to use its best efforts to timely notify the
Depositary of any proposed shareholders' meeting and to timely provide to the
Depositary in New York, at least twenty-four (24) calendar days before any
ordinary shareholders' meeting or at least fourteen (14) calendar days before
any extraordinary shareholders' meeting, a sufficient number of copies
reasonably requested by the Depositary of an English language translation of the
A-17
Company's notice of shareholders' meeting and the agenda of the materials to be
voted on (in the form the Company generally makes available to holders of Shares
in the ROC, including, without limitation, a list of candidates proposed by the
Company for an election of directors or supervisors) (such materials
collectively, the "Shareholder Notice"). As soon as practicable after receipt by
the Depositary of the requisite number of Shareholder Notices, the Depositary
shall establish the ADS Record Date (upon the terms of Paragraph (15) hereof and
Section 4.9 of the Deposit Agreement) and shall, at the Company's expense and
provided that no U.S. legal prohibitions exist, deliver to Holders as of the
applicable ADS Record Date, (i) the Shareholder Notice, (ii) a depositary notice
setting forth the manner in which Holders of ADSs may instruct the Depositary to
cause the Deposited Securities represented by their ADSs to be voted under the
terms of the Deposit Agreement, including a description of the Management
Instruction (as defined below), together with a form of voting instructions
and/or other means to provide voting instructions (the depositary notice and the
related materials prepared by the Depositary collectively, the "Depositary
Notice"). The Depositary is under no obligation to mail the Shareholder Notice
and the Depositary Notice to Holders if the Company has failed to provide to the
Depositary in New York the requisite number of Shareholder Notices at least
twenty-four (24) calendar days prior to the date of any ordinary shareholders'
meeting or at least fourteen (14) calendar days before the date of any
extraordinary shareholders' meeting. If the Depositary has not delivered the
Shareholder Notice or Depositary Notice to Holders, it will endeavor to cause
all Deposited Securities represented by ADRs to be present at the relevant
shareholders' meeting insofar as practicable and permitted under applicable law
but will not cause the Shares or other Deposited Securities to be voted;
provided, however, that the Depositary may determine, in its sole discretion, to
send such Shareholder Notice and Depositary Notice to Holders and/or cause the
Shares or other Deposited Securities to be voted as it deems appropriate. There
can be no assurance that Holders generally or any Holder in particular will
receive Shareholder Notices and Depositary Notices with sufficient time to
enable the return of voting instructions to the Depositary in a timely manner.
Notwithstanding anything else contained in the Deposit Agreement,
the Depositary shall not have any obligation to take any action with respect to
any meeting, or solicitation of consents or proxies or instructions, of holders
of Shares or other Deposited Securities if the taking of such action would
violate U.S. laws.
(c) Voting of Deposited Securities Upon ADS Holders'
Instructions. If Holders of ADSs together holding at least 51% of all the ADSs
(including Temporary ADSs) outstanding as of the relevant ADS Record Date shall
instruct the Depositary, prior to the date established for such purpose by the
Depositary, to vote in the same manner in respect of one or more resolutions to
be proposed at a shareholders' meeting (including resolutions for the election
of directors and/or supervisors), the Depositary shall notify the Voting
Representative as the representative of the Registered Holder to attend such
shareholders' meeting and vote all Deposited Securities evidenced by ADSs then
outstanding as of the ADS Record Date (including Temporary ADSs) in the manner
so instructed by such Holders. If voting instructions are received by the
Depositary on or before the date established by the Depositary for the receipt
of such instructions from any Holder as of the ADS Record Date, which are signed
but without further indication as to voting instructions, the Depositary shall
deem such Holder to have instructed a vote in favor of the items set forth in
such instructions. The Depositary and Custodian shall not have any obligation to
monitor, and shall not incur any liability for, the actions, or the failure to
act, of the Voting Representative (or his/her designate) as representative of
the Registered Holder.
A-18
(d) Depositary Authorization. If, for any reason (other than a
failure by the Company to supply the requisite number of Shareholder Notices to
the Depositary within the requisite time period provided in the Deposit
Agreement), the Depositary has not, prior to the date established for such
purpose by the Depositary, received instructions from Holders together holding
at least 51% of all ADSs (including Temporary ADSs) outstanding at the relevant
ADS Record Date, to vote in the same manner in respect of any resolution
(including resolutions for the election of directors and/or supervisors), then,
subject to the following paragraph, the Holders shall be deemed to have
authorized and directed the Depositary's nominee to authorize (the "Depositary
Authorization") the Voting Representative as the representative of the
Registered Holder to attend and vote at such meeting all the Deposited
Securities represented by ADSs then outstanding (including Temporary ADSs) in
his or her discretion. In such circumstances, the Voting Representative shall be
free to exercise the votes attaching to the Deposited Securities in any manner
she/he wishes, which may not be in the interests of the Holders.
The Depositary's Authorization, provided in the manner and under the
circumstances described in the preceding paragraph, shall be subject to the
receipt by the Depositary prior to each shareholders' meeting of an opinion of
ROC counsel of the Company addressed to, and in form and substance satisfactory
to, the Depositary to the effect that under ROC law (i) the arrangements
relating to the Depositary Authorization are permissible, and (ii) the
Depositary will not be deemed to be authorized to exercise any discretion when
causing the voting in accordance with Section 4.10 of the Deposit Agreement and
will not (in the absence of negligence, bad faith or breach of contract, and
subject to general principles of agency) be subject to any liability under ROC
law for losses arising from the exercise of the voting arrangements set out in
Section 4.10 of the Deposit Agreement on the grounds that voting in accordance
with Section 4.10 of the Deposit Agreement is in violation of ROC law. In the
event the Depositary does not receive such opinion, the Depositary will not
grant the Depositary Authorization, but will cause the Deposited Securities to
be present at the shareholders' meeting to the extent practicable and permitted
by applicable law and will not cause the Deposited Securities to be voted.
The Depositary shall not, and the Depositary shall ensure that the
Custodian and its nominees do not, vote or attempt to exercise the right to vote
that attaches to the Shares or other Deposited Securities, other than in
accordance with instructions given in accordance with Section 4.10 of the
Deposit Agreement. The terms of Section 4.10 of the Deposit Agreement may be
amended from time to time in accordance with the terms of the Deposit Agreement.
By continuing to hold ADSs after the effective time of such amendment, all
Holders and Beneficial Owners shall be deemed to have agreed to the terms of the
Deposit Agreement as so amended.
17. Changes Affecting Deposited Securities. Upon any change in
nominal or par value, split-up, cancellation, consolidation or any other
reclassification of Deposited Securities, or upon any recapitalization,
reorganization, merger or consolidation or sale of assets affecting the Company
or to which it is a party, any securities which shall be received by the
Depositary or the Custodian in exchange for, or in conversion of or replacement
A-19
of or otherwise in respect of, such Deposited Securities shall, to the extent
permitted by law, be substituted for and treated as Deposited Securities under
the Deposit Agreement, and the Receipts shall, subject to the provisions of the
Deposit Agreement and applicable law, evidence ADSs representing the right to
receive such additional or replacement securities, as applicable. The Depositary
may, with the Company's approval, and shall, if the Company shall so request,
subject to the terms of the Deposit Agreement and receipt by the Depositary of
(a) a written opinion of U.S. counsel (reasonably satisfactory to the
Depositary) stating whether or not: (1) such exchange, conversion or replacement
requires registration of such securities under the Securities Act and/or
Exchange Act or (2) such exchange, conversion or replacement of such securities
as then contemplated is exempt from the registration requirements of the
Securities Act and/or Exchange Act and (b) a written opinion of ROC counsel
(reasonably satisfactory to the Depositary) stating that (1) such exchange,
conversion or replacement does not violate the laws or regulations of the
Republic of China and (2) all requisite regulatory consents and approvals
relating to such exchange, conversion or replacement have been obtained in the
Republic of China, execute and deliver additional Receipts as in the case of a
dividend of Eligible Securities, or call for the surrender of outstanding
Receipts to be exchanged for new Receipts, in either case, as well as in the
event of newly deposited Shares, with necessary modifications to the form of
Receipt contained herein, specifically describing such new Deposited Securities
or corporate change. Notwithstanding the foregoing, in the event that any
security so received may not be lawfully distributed to some or all Holders, the
Depositary may, with the Company's approval, and shall, if the Company requests,
subject to receipt of an opinion of the Company 's counsel, satisfactory to the
Depositary, that such action is not in violation of any applicable laws or
regulations, sell such securities at public or private sale, at such place or
places and upon such terms as it may deem proper and may allocate the net
proceeds of such sales (net of (a) fees and charges of, and reasonable expenses
incurred by, the Depositary and (b) taxes) for the account of the Holders
otherwise entitled to such securities upon an averaged or other practicable
basis without regard to any distinctions among such Holders and distribute the
net proceeds so allocated to the extent practicable as in the case of a
distribution received in cash pursuant to the Deposit Agreement. The Depositary
shall not be responsible for (i) any failure to determine that it may be lawful
or feasible to make such securities available to Holders in general or any
Holder in particular, (ii) any foreign exchange exposure or loss incurred in
connection with such sale, or (iii) any liability to the purchaser of such
securities.
18. Exoneration. Neither the Depositary nor the Company shall be
obligated to do or perform any act which is inconsistent with the provisions of
the Deposit Agreement or incur any liability (i) if the Depositary or the
Company shall be prevented or forbidden from, or delayed in, doing or performing
any act or thing required by the terms of the Deposit Agreement and this
Receipt, by reason of any provision of any present or future law or regulation
of the United States, the Republic of China or any other country, or of any
other governmental authority or regulatory authority or stock exchange, or on
account of the possible criminal or civil penalties or restraint, or by reason
of any provision, present or future of the Articles of Incorporation of the
Company or any provision of or governing any Deposited Securities, or by reason
of any act of God, terrorism or war or other circumstances beyond its control
(including, without limitation, nationalization, expropriation, currency
restrictions, work stoppage, strikes, civil unrest, revolutions, rebellions,
explosions and computer failure), (ii) by reason of any exercise of, or failure
to exercise, any discretion provided for in the Deposit Agreement or in the
A-20
Articles of Incorporation of the Company or provisions of or governing Deposited
Securities, (iii) for any action or inaction in reliance upon the advice or
information from legal counsel, accountants, any person presenting Shares for
deposit, any Holder, any Beneficial Owner or authorized representative thereof,
or any other person believed by it in good faith to be competent to give such
advice or information, (iv) for the inability by a Holder or Beneficial Owner to
benefit from any distribution, offering, right or other benefit which is made
available to holders of Deposited Securities but is not, under the terms of this
Deposit Agreement, made available to Holders of ADS or (v) for any consequential
or punitive damages for any breach of the terms of the Deposit Agreement. The
Depositary, its controlling persons, its agents, any Custodian and the Company,
its controlling persons and its agents may rely and shall be protected in acting
upon any written notice, request or other document believed by it to be genuine
and to have been signed or presented by the proper party or parties. No
disclaimer of liability under the Securities Act is intended by any provision of
the Deposit Agreement or this Receipt.
19. Standard of Care. The Company and its agents assume no
obligation and shall not be subject to any liability under the Deposit Agreement
or the Receipts to Holders or Beneficial Owners or other persons, except that
the Company and its agents agree to perform their obligations specifically set
forth in the Deposit Agreement without negligence or bad faith. The Depositary
and its agents assume no obligation and shall not be subject to any liability
under the Deposit Agreement or the Receipts to Holders or Beneficial Owners or
other persons, except that the Depositary and its agents agree to perform their
obligations specifically set forth in the Deposit Agreement without negligence
or bad faith. Without limitation of the foregoing, neither the Depositary, nor
the Company, nor any of their respective controlling persons, or agents, shall
be under any obligation to appear in, prosecute or defend any action, suit or
other proceeding in respect of any Deposited Securities or in respect of the
Receipts, which in its opinion may involve it in expense or liability, unless
indemnity satisfactory to it against all expense (including reasonable fees and
disbursements of counsel) and liability be furnished as often as may be required
(and no Custodian shall be under any obligation whatsoever with respect to such
proceedings, the responsibility of the Custodian being solely to the
Depositary). The Depositary and its agents shall not be liable for any failure
to carry out any instructions to vote any of the Deposited Securities, or for
the manner in which any vote is cast or the effect of any vote, provided that
any such action or omission is in good faith and without negligence and in
accordance with the terms of the Deposit Agreement. Provided that the Depositary
acts or omits to act in good faith and without negligence, the Depositary shall
not incur any liability for any failure to determine that any distribution or
action may be lawful or reasonably practicable, for the content of any
information submitted to it by the Company for distribution to the Holders or
for any inaccuracy of any translation thereof, for any investment risk
associated with acquiring an interest in the Deposited Securities, for the
validity or worth of the Deposited Securities or for any tax consequences that
may result from the ownership of ADSs, Shares or Deposited Securities, for the
credit-worthiness of any third party, for allowing any rights to lapse upon the
terms of the Deposit Agreement, for the failure or timeliness of any notice from
the Company. Nothing in this Receipt or in the Deposit Agreement shall cause the
Depositary or any of its agents to incur any liability as a result of any action
or failure to act by any trustee under a Trust Deed governing the Bonds.
A-21
20. Resignation and Removal of the Depositary; Appointment of
Successor Depositary. The Depositary may at any time resign as Depositary under
the Deposit Agreement by written notice of resignation delivered to the Company,
such resignation to be effective on the earlier of (i) the 60th day after
delivery thereof to the Company, or (ii) upon the appointment of a successor
depositary and its acceptance of such appointment as provided in the Deposit
Agreement. The Depositary may at any time be removed by the Company by written
notice of such removal which notice shall be effective on the earlier of (i) the
60th day after delivery thereof to the Depositary, or (ii) 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 hereunder shall
resign or be removed, the Company shall use its best efforts to appoint a
successor depositary, which shall be a bank or trust company having an office in
the Borough of Manhattan, the City of New York. Every successor depositary shall
be required by the Company to execute and deliver to its predecessor and to the
Company an instrument in writing accepting its appointment hereunder, and
thereupon such successor depositary, without any further act or deed (except as
required by applicable law), shall become fully vested with all the rights,
powers, duties and obligations of its immediate predecessor other than as
contemplated in the Deposit Agreement. The immediate predecessor depositary,
upon payment of all sums due to it and on the written request of the Company,
shall (i) execute and deliver an instrument transferring to such successor all
rights and powers of such predecessor hereunder (other than as contemplated in
the Deposit Agreement), (ii) duly assign, transfer and deliver all rights,
titles and interests to the Deposited Securities to such successor, and (iii)
deliver to such successor a list of the Holders of all outstanding Receipts and
such other information relating to Receipts and Holders thereof as the successor
may reasonably request. Any such successor depositary shall promptly provide
notice of its appointment to such 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.
21. Amendment/Supplement. This Receipt and any provisions of the
Deposit Agreement may at any time and from time to time be amended or
supplemented by written agreement between the Company and the Depositary in any
respect which they may deem necessary or desirable without the prior written
consent of the Holders or Beneficial Owners. Any amendment or supplement which
shall impose or increase any fees or charges (other than the charges in
connection with foreign exchange control regulations, and taxes and other
governmental charges, delivery and other such expenses), or which shall
otherwise materially prejudice any substantial existing right of Holders or
Beneficial Owners, shall not, however, become effective as to outstanding
Receipts until the expiration of thirty (30) days after notice of such amendment
or supplement shall have been given to the Holders of outstanding Receipts. The
parties hereto agree that any amendments or supplements which (i) are reasonably
necessary (as agreed by the Company and the Depositary) in order for (a) the
ADSs to be registered on Form F-6 under the Securities Act or (b) the ADSs to be
traded solely in electronic book-entry form and (ii) do not in either such case
impose or increase any fees or charges to be borne by Holders, shall be deemed
not to materially prejudice any substantial rights of Holders or Beneficial
Owners. Every Holder and Beneficial Owner at the time any amendment or
A-22
supplement becomes effective shall be deemed, by continuing to hold such ADS(s),
to consent and agree to such amendment or supplement and to be bound by the
Deposit Agreement as amended or supplemented thereby. In no event shall any
amendment or supplement impair the right of the Holder to surrender such Receipt
and receive therefor the Deposited Securities represented thereby, except in
order to comply with mandatory provisions of applicable law. Notwithstanding the
foregoing, if any governmental body should adopt new laws, rules or regulations
which would require amendment or supplement of the Deposit Agreement to ensure
compliance therewith, the Company and the Depositary may amend or supplement the
Deposit Agreement and this Receipt at any time in accordance with such changed
laws, rules or regulations. Such amendment or supplement to the Deposit
Agreement in such circumstances may become effective before a notice of such
amendment or supplement is given to Holders or within any other period of time
as required for compliance with such laws, rules or regulations.
22. Termination. The Depositary shall, at any time at the written
direction of the Company, terminate the Deposit Agreement by providing notice of
such termination to the Holders of all Receipts then outstanding at least thirty
(30) days prior to the date fixed in such notice for such termination. If sixty
(60) days shall have expired after (i) the Depositary shall have delivered to
the Company a written notice of its election to resign, or (ii) the Company
shall have delivered to the Depositary a written notice of the removal of the
Depositary, and in either case a successor depositary shall not have been
appointed and accepted its appointment as provided herein and in the Deposit
Agreement, the Depositary may terminate the Deposit Agreement by providing
notice of such termination to the Holders of all Receipts then outstanding at
least thirty (30) days prior to the date fixed for such termination. On and
after the date of termination of the Deposit Agreement, the Holder of a Receipt
will, upon surrender of such Receipt at the Principal Office of the Depositary,
upon the payment of the charges of the Depositary for the surrender of Receipts
referred to in Paragraph (2) hereof and in the Deposit Agreement and subject to
the conditions and restrictions therein set forth and subject always to the
restrictions on withdrawal as may be in effect under the laws and regulations of
the Republic of China, and upon payment of any applicable taxes or governmental
charges, be entitled to Delivery, to him or upon his order, of the amount of
Deposited Securities represented by such Receipt. If any Receipts shall remain
outstanding after the date of termination of the Deposit Agreement, the
Registrar thereafter shall discontinue the registration of transfers of
Receipts, and the Depositary shall suspend the distribution of dividends to the
Holders thereof, and shall not give any further notices or perform any further
acts under the Deposit Agreement, except that the Depositary shall continue to
collect dividends and other distributions pertaining to Deposited Securities,
shall sell rights as provided in the Deposit Agreement, and shall continue to
deliver Deposited Securities, subject to the conditions and restrictions set
forth in the Deposit Agreement, together with any dividends or other
distributions received with respect thereto and the net proceeds of the sale of
any rights or other property, in exchange for Receipts surrendered to the
Depositary (after deducting, or charging, as the case may be, in each case the
charges of the Depositary for the surrender of a Receipt, any expenses for the
account of the Holder in accordance with the terms and conditions of the Deposit
Agreement and any applicable taxes or governmental charges or assessments). At
any time after the expiration of six (6) months from the date of termination of
the Deposit Agreement, the Depositary may sell the Deposited Securities then
held hereunder and may thereafter hold uninvested the net proceeds of any such
sale, together with any other cash then held by it hereunder, in an unsegregated
account, without liability for interest for the pro rata benefit of the Holders
A-23
whose Receipts have not theretofore been surrendered, such Holders thereupon
becoming general creditors of the Depositary with respect to such net proceeds.
After making such sale, the Depositary shall be discharged from all obligations
under the Deposit Agreement with respect to the Receipts, the Deposited
Securities and the ADSs, except to account for such net proceeds and other cash
(after deducting, or charging, as the case may be, in each case, the charges of
the Depositary for the surrender of a Receipt, any expenses for the account of
the Holder in accordance with the terms and conditions of the Deposit Agreement
and any applicable taxes or governmental charges or assessments). Upon the
termination of the Deposit Agreement, the Company shall be discharged from all
obligations under the Deposit Agreement except as set forth in the Deposit
Agreement.
23. Compliance with U.S. Securities Laws. Notwithstanding any
provisions in this Receipt or the Deposit Agreement to the contrary, the
withdrawal or delivery of Deposited Securities will not be suspended by the
Company or the Depositary except as would be permitted by Instruction I.A.(1) of
the General Instructions to Form F-6 Registration Statement, as amended from
time to time, under the Securities Act of 1933.
24. Certain Rights of the Depositary; Limitations. Subject always to
the laws and regulations of the Republic of China and to the further terms and
provisions of this Paragraph (24) and Section 5.10 of the Deposit Agreement, the
Depositary, its Affiliates and their agents, on their own behalf, may own and
deal in any class of securities of the Company and its Affiliates and in ADSs.
In its capacity as Depositary, the Depositary shall not lend Deposited
Securities or ADSs; provided, however, that the Depositary may, to the extent
permitted by applicable law, (i) issue ADSs prior to the receipt of Eligible
Securities pursuant to Section 2.3 of the Deposit Agreement and (ii) deliver
Deposited Securities only upon the prior receipt of ADSs for cancellation upon
withdrawal of Deposited Securities pursuant to Section 2.7 of the Deposit
Agreement, including ADSs which were issued under (i) above but for which
Eligible Securities may not have been received (each such transaction in (i)
above a "Pre-Release Transaction"). The Depositary may receive ADSs in lieu of
Eligible Securities under (i) above. Each such Pre-Release Transaction will be
(a) subject to a written agreement whereby the person or entity (the
"Applicant") to whom ADSs or Deposited Securities are to be delivered (w)
represents that at the time of the Pre-Release Transaction the Applicant or its
customer owns the Eligible Securities that are to be delivered by the Applicant
under such Pre-Release Transaction, (x) agrees to indicate the Depositary as
owner of such Eligible Securities in its records and to hold such Eligible
Securities in trust for the Depositary until such Eligible Securities are
delivered to the Depositary or the Custodian, (y) unconditionally guarantees to
deliver to the Depositary or the Custodian, as applicable, such Eligible
Securities, and (z) agrees to any additional restrictions or requirements that
the Depositary deems appropriate, (b) at all times fully collateralized with
cash, United States government securities or such other collateral as the
Depositary deems appropriate, (c) terminable by the Depositary on not more than
five (5) business days' notice and (d) subject to such further indemnities and
credit regulations as the Depositary deems appropriate. The Depositary will
normally limit the number of ADSs and Eligible Securities involved in such
Pre-Release Transactions at any one time to thirty percent (30%) of the ADSs
outstanding (without giving effect to ADSs outstanding under (i) above),
provided, however, that the Depositary reserves the right to disregard such
limit from time to time as it deems appropriate and may, with the prior written
consent of the Company, change such limit for purposes of general application.
The Depositary may also set limits with respect to the number of
ADSs and Eligible Securities involved in Pre-Release Transactions with any one
person on a case by case basis as it deems appropriate. The Depositary may
A-24
retain for its own account any compensation received by it in conjunction with
the foregoing. Collateral provided pursuant to (b) above, but not the earnings
thereon, shall be held for the benefit of the Holders (other than the
Applicant). Temporary COP ADSs, Temporary EC ADSs, Certificate of Payment and
Entitlement Certificates shall not be eligible for Pre-Release Transactions
hereunder.
In addition, to the extent permitted under applicable law, in its
capacity as Depositary, the Depositary may, when a Holder of ADSs so requests,
cause the Deposited Shares to be sold and deliver the proceeds of the sale prior
to the receipt and cancellation of ADSs (each such transaction a
"Pre-Cancellation Sale") prior to the receipt of ADSs for cancellation. Each
such Pre-Cancellation Sale will be (a) accompanied by or subject to a written
agreement whereby the person or entity (the "Applicant") to whom the proceeds of
the sale of Deposited Securities are to be delivered which, (i) represents that
at the time of the Pre-Cancellation Sale, the Applicant or its customer owns the
ADSs that are to be delivered by the Applicant under such Pre-Cancellation Sale,
(ii) agrees to indicate the Depositary as owner of such ADSs in its records and
to hold such ADSs in trust for the Depositary until such ADSs are delivered to
the Depositary, (iii) unconditionally guarantees to deliver to the Depositary
such ADSs, and (iv) agrees to any additional restrictions or requirements that
the Depositary deems appropriate; (b) at all times fully collateralized with
cash, United States government securities or such other collateral as the
Depositary deems appropriate; (c) terminable by the Depositary on not more than
five (5) business days notice; and (d) subject to such further indemnities and
credit regulations as the Depositary deems appropriate and may, with the prior
written consent of the Company, change such limit for purposes of general
application.
The Depositary will normally limit the number of Deposited
Securities involved in such Pre-Cancellation Sales at any one time to thirty
percent (30%) of the Deposited Securities outstanding, provided, however, that
the Depositary reserves the right to disregard such limit from time to time as
it deems appropriate.
(25) Right to Submit Proposals at Annual Ordinary Meeting of
Shareholders.
(a) Proposals by Shareholders.
The Company has informed the Depositary that under ROC Company Law,
as in effect as of the date of the Deposit Agreement, holders of one percent
(1%) or more of the total issued and outstanding Shares of the Company, as of
the applicable record date for determining holders of Shares with the right to
vote at an annual ordinary meeting of the Company's shareholders (the
"Shareholder Proposal Record Date"), are entitled to submit one (1) written
proposal (such proposal shall not include a Beneficial Owner's right to nominate
candidates for election as directors at a meeting of the Company's shareholders
in accordance with the terms and subject to the conditions of Section 4.17 of
the Deposit Agreement, the "Proposal") each year for consideration at the annual
ordinary meeting of the Company's shareholders, provided that: (i) the Proposal
is in the Chinese language and does not exceed 300 Chinese characters (including
the reason(s) for the Proposal and all punctuation marks) in length, (ii) the
Proposal is submitted to the Company prior to the expiration of the period for
submission of Proposals (the "Submission Period") announced by the Company
A-25
(which Submission Period and the place for eligible shareholders to submit the
Proposal the Company undertakes to announce publicly each year in a report on
Form 6-K submitted to the Commission prior to the commencement of the 60 days
closed period prior to the annual ordinary meeting of the Company's
shareholders), (iii) only one (1) matter for consideration at the annual
ordinary meeting of the Company's shareholders shall be allowed in each
Proposal, and (iv) the proposing shareholder shall attend, in person or by a
proxy, such annual ordinary meeting of the Company's shareholders whereat his or
her or its Proposal is to be discussed in the Chinese language and such
proposing shareholder, or his or her or its proxy, shall take part in the
discussion of such Proposal in the Chinese language. As the holder of the
Deposited Securities, the Depositary or its nominee is entitled, provided the
conditions of ROC law are satisfied, to submit only one (1) Proposal each year
in respect of all of the Shares held on deposit as of the applicable Shareholder
Proposal Record Date. Holders and Beneficial Owners of ADSs do not under ROC law
have individual rights to submit Proposals to the Company for consideration at
the annual ordinary meeting of the Company's shareholders but may be able to
submit Proposals to the Company for consideration at the annual ordinary meeting
of the Company's shareholders if the Beneficial Owners (i) timely present their
ADSs to the Depositary for cancellation pursuant to the terms of the Deposit
Agreement and become holders of Shares in the ROC prior to the expiration of the
Submission Period and prior to the applicable Shareholder Proposal Record Date,
and (ii) otherwise satisfy the conditions of ROC law applicable to the
submission of Proposals to the Company for consideration at an annual ordinary
meeting of the Company's shareholders. Beneficial Owners of ADSs may not receive
sufficient advance notice of an annual ordinary meeting of the Company's
shareholders to enable the timely withdrawal of Shares to make a Proposal to the
Company and may not be able to re-deposit under the Deposit Agreement the Shares
so withdrawn. The Company has informed the Depositary that a Proposal shall only
be voted upon at the annual ordinary meeting of the Company's shareholders if
the Proposal is accepted by the board of directors of the Company as eligible in
accordance with Article 172-1 of the ROC Company Law and the Company's Articles
of Incorporation for consideration at an annual ordinary meeting of the
Company's shareholders.
(b) Single Proposal by Depositary or its Nominee on behalf of
Beneficial Owners.
Holders and Beneficial Owners of ADSs do not have individual
proposal rights. The Depositary will, if so requested by (a) Beneficial Owner(s)
as of the applicable ADS Record Date that own(s), individually or as a group, at
least 51% of the ADSs outstanding as of the applicable ADS Record Date (such
Beneficial Owner(s), the "Submitting Holder(s)"), submit to the Company for
consideration at the annual ordinary meeting of the Company's shareholders one
(1) Proposal each year, provided that: (i) the Proposal submitted to the
Depositary by the Submitting Holder(s) is in the Chinese language and does not
exceed 300 Chinese characters (including the reason(s) for the Proposal and all
punctuation marks) in length, (ii) the Proposal is submitted to the Depositary
by the Submitting Holder(s) at least two (2) Business Days prior to the
expiration of the Submission Period, (iii) the Proposal is accompanied by a
written certificate signed by each Submitting Holder, addressed to the
Depositary and the Company and in a form satisfactory to the Depositary and the
Company (the "First Proposal Certificate"), certifying, inter alia, (w) that
each Submitting Holder has only certified the said Proposal, (x) that the
Submitting Holder(s) own(s), individually or in the aggregate, at least 51% of
the ADSs outstanding as of the date the Proposal is submitted by the Submitting
Holder(s) to the Depositary (the "Proposal Submission Date"), (y) if the
Proposal Submission Date is (i) on or after the applicable ADS Record Date, that
the Submitting Holder(s) owned at least 51% of the ADSs outstanding as of the
applicable ADS Record Date, and (ii) prior to the applicable ADS Record Date,
A-26
that the Submitting Holder(s) will continue to own at least 51% of the ADSs
outstanding as of the applicable ADS Record Date and will provide the Second
Proposal Certificate, as defined below, and (z) the name(s) and address(es) of
the Submitting Holder(s) and the number of ADSs owned by each Submitting Holder
(together with certified evidence of each Submitting Holder's ownership of the
applicable ADSs as of the Proposal Submission Date, in the case of (y)(ii)
above, and the applicable ADS Record Date, in the case of (y)(i) above, (iv) if
the Proposal Submission Date is prior to the applicable ADS Record Date, the
Submitting Holder(s) must also provide, within five (5) Business Days after the
applicable ADS Record Date, a second written certificate signed by each
Submitting Holder, addressed to the Depositary and the Company and in a form
satisfactory to the Depositary and the Company (the "Second Proposal
Certificate"), certifying, inter alia, that the Submitting Holder(s) continued
to own at least 51% of the ADSs outstanding as of the applicable ADS Record Date
(together with certified evidence of each Submitting Holder's ownership of the
applicable ADSs as of such applicable ADS Record Date), (v) the Proposal is
accompanied by a joint and several irrevocable undertaking of all Submitting
Holders (which undertaking may be contained in the First Proposal Certificate or
the Second Proposal Certificate) that each such Submitting Holder shall pay all
fees and expenses incurred in relation to the submission of the Proposal for
voting at the annual ordinary meeting of the Company's shareholders (including,
but not limited to, the costs and expenses of the Submitting Holder(s), or his,
her, its or their representative, to attend the annual ordinary meeting of the
Company's shareholders), (vi) the Shares registered in the name of the
Depositary or its nominee as representative of the Holders and Beneficial Owners
constitute one percent (1%) or more of the total issued and outstanding Shares
of the Company as of the Shareholder Proposal Record Date, (vii) such Proposal
contains only one (1) matter for consideration at the annual ordinary meeting of
the Company's shareholders, and (viii) the Submitting Holder(s), or his, her,
its or their representative, attend(s) the annual ordinary meeting of the
Company's shareholders and take(s) part in the discussions of the Proposal in
the Chinese language, provided further that only one (1) individual may attend,
and take part in the discussion of the Proposal at such annual ordinary meeting
on behalf of a Submitting Holder(s). Each Beneficial Owner hereby agrees and
acknowledges that (i) if the Submitting Holder(s), or his, her, its or their
representative, does not attend the annual ordinary meeting of the Company's
shareholders, the chairman of such meeting may ask the attending shareholders to
discuss, or not discuss, the Proposal, and (ii) in no event shall a Submitting
Holder's, or his, her, its or their representative's, presence at an annual
ordinary meeting of the Company's shareholders entitle such Submitting
Holder(s), or his, her, its or their representative, to vote the Shares
represented by such Submitting Holder's ADSs (or any other ADSs) at such annual
ordinary meeting of the Company's shareholders.
Upon the timely receipt by the Depositary of any Proposal which the
Depositary reasonably believes to be in full compliance with the immediately
preceding paragraph, the Depositary shall submit a copy of such Proposal and of
the other materials received from the Submitting Holder(s) to the Company prior
to the expiration of the Submission Period. Any Proposal so submitted as to
which the Depositary has not received within five (5) Business Days after the
applicable ADS Record Date any Second Proposal Certificate required under the
immediately preceding paragraph shall be deemed irrevocably withdrawn at the
expiration of such five (5) Business Day period. In the event the Depositary
receives more than one (1) Proposal by a Submitting Holder, or a group of
A-27
Submitting Holders, each of which appears to satisfy the requirements set forth
in the immediately preceding paragraph, the Depositary is hereby authorized and
instructed to disregard all Proposals received from such Submitting Holder(s),
except for the first Proposal received by the Depositary from such Submitting
Holder(s) and shall submit such Proposal to the Company for consideration at the
annual ordinary meeting of the Company's shareholders in accordance with the
terms of the Deposit Agreement. The Depositary shall not have any obligation to
verify the accuracy of the information contained in any document submitted to it
by the Submitting Holder(s). Neither the Depositary nor its nominee shall be
obligated to attend and speak at the annual ordinary meeting of the Company's
shareholders on behalf of the Submitting Holder(s).
Notwithstanding anything contained in the Deposit Agreement or any
ADR and except that the Depositary shall arrange, at the request of the Company
and at the Company's expense, for the mailing to Holders of copies of materials
that the Company has made available to the Depositary for such purpose, the
Depositary shall not be obligated to provide to the Holders or Beneficial Owners
of ADSs any notices relating to the proposal rights, including, without
limitation, notice of the Submission Period, or the receipt of any Proposal(s)
from Submitting Holders, or of the holdings of any ADSs by any persons, except
that the Depositary shall, upon a Holder's request, inform such Holder of the
total number of ADSs then issued and outstanding.
(26) Right to Submit Nominations at Meeting of Shareholders.
(a) No Right Absent Amendment to Articles of Incorporation.
No rights under this paragraph shall be effective absent an
amendment to the Company's Articles of Incorporation adopting a system whereby
candidates may be nominated by holders of Shares to serve on the Company's board
of directors (a "Candidate Nomination System") and any rights so arising shall,
at all times, be subject to the provisions of the Company's Articles of
Incorporation, as amended, and ROC Company Law, as amended.
(b) Nominations by Shareholders.
The Company has informed the Depositary that under ROC Company Law,
in the event that the Company amends its Articles of Incorporation to adopt a
Candidate Nomination System, holders of one percent (1%) or more of the total
issued and outstanding Shares of the Company as of the applicable record date
for determining holders of Shares with the right to vote at a meeting of the
Company's shareholders (the "Candidate Nomination Record Date"), would be
entitled to submit a roster of candidates (the "Nomination") to be considered
for nomination to the Company's board of directors at a meeting of the Company's
shareholders involving the election of directors, provided that: (i) the number
of director candidates contained in the Nomination shall not exceed the number
of the directors to be elected at such meeting, (ii) the Nomination is submitted
to the Company prior to the expiration of the period for submission of
Nominations (the "Nomination Submission Period") announced by the Company (which
Nomination Submission Period, the number of the directors to be elected, the
place for eligible shareholders to submit the Nomination and other applicable
A-28
information the Company undertakes to announce publicly in a report on Form 6-K
submitted to the Commission prior to the commencement of the 60 days (for an
ordinary meeting) or 30 days (for an extraordinary meeting) closed period prior
to the subject meeting of the Company's shareholders), (iii) the Nomination
shall contain the name, educational background and past work experience of each
director candidate identified in the Nomination, (iv) the Nomination shall
include a letter of consent issued by each director candidate identified in the
Nomination consenting to act as director if she/he/it is elected as such, (v) a
written statement by each director candidate assuring that she/he/it is not in
violation of any of the circumstances set forth in Article 30 of the ROC Company
Law, as amended, (vi) if a director candidate is a corporate shareholder of the
Company (which cannot be the Depositary or its nominee), or such corporate
shareholder's representative, additional information and documents reflecting
the basic registration information of such corporate shareholder and the
document certifying the number of Shares in its possession, and (vii) any
further conditions under Article 192-1 of the ROC Company Law, as amended, and
of the Company's amended Articles of Incorporation are so satisfied. In the
event that the Company were to amend its Articles of Incorporation to adopt a
Candidate Nomination System, as holder of the Deposited Securities, the
Depositary or its nominee would be entitled, provided the conditions of the
Company's amended Articles of Incorporation are satisfied, to submit only one
(1) Nomination for each meeting involving the election of directors in respect
of all of the Shares held on deposit as of the Candidate Nomination Record Date.
The Company shall promptly notify the Depositary of an amendment of its Articles
of Incorporation adopting a Candidate Nomination System. Holders and Beneficial
Owners of ADSs do not under ROC law have individual rights to submit Nominations
to the Company for consideration at a meeting of the Company's shareholders
involving the election of directors but may be able to submit a Nomination to
the Company for consideration at a meeting of the Company's shareholders
involving the election of directors if the Beneficial Owners (i) timely present
their ADSs to the Depositary for cancellation pursuant to the terms of the
Deposit Agreement and become holders of Shares in the ROC prior to the
expiration of the Nomination Submission Period and prior to the Candidate
Nomination Record Date, and (ii) otherwise satisfy the conditions of ROC law
applicable to the submission of Nominations to the Company for consideration at
a meeting of the Company's shareholders involving the election of directors.
Beneficial Owners of ADSs may not receive sufficient advance notice of a meeting
of the Company's shareholders involving the election of directors to enable the
timely withdrawal of Shares to make a Nomination to the Company and may not be
able to re-deposit under the Deposit Agreement the Shares so withdrawn. The
Company has informed the Depositary that a Nomination shall only be voted upon
at a meeting of the Company's shareholders involving the election of directors
if the Nomination is accepted by the board of directors of the Company as
eligible in accordance with Article 192-1 of the ROC Company Law and the
Company's Article of Incorporation for consideration at a meeting of the
Company's shareholders involving the election of directors.
(c) Single Nomination by Depositary or its Nominee on Behalf
of Beneficial Owners.
Holders and Beneficial Owners of ADSs do not have individual
nomination rights. In the event that the Company were to amend its Articles of
Incorporation to adopt a Candidate Nomination System, the Depositary would, if
so requested by a Beneficial Owner(s) as of the applicable ADS Record Date that
own(s), individually or as a group, at least 51% of the ADSs outstanding as of
the applicable ADS Record Date (such Beneficial Owner(s), the "Nominating
Holder(s)"), submit to the Company for consideration at a meeting of the
Company's shareholders involving the election of directors one (1) Nomination,
provided that: (i) the number of director candidates contained in the Nomination
shall not exceed the number of the directors to be elected at such meeting, (ii)
A-29
the Nomination shall contain the name, educational background and past work
experience of each director candidate identified in the Nomination, (iii) the
Nomination shall include a letter of consent issued by each director candidate
identified in the Nomination consenting to act as director if she/he/it is
elected as such, (iv) a written statement by each director candidate assuring
that she/he/it is not in violation of any of the circumstances set forth in
Article 30 of the ROC Company Law, as amended, (v) if a director candidate is
corporate shareholder of the Company (which cannot be the Depositary or its
nominee), or such corporate shareholder's representative, additional information
and documents reflecting the basic registration information of such corporate
shareholder and the document certifying the number of Shares in its possession,
(vi) any further conditions under Article 192-1 of the ROC Company Law, as
amended, and of the Company's amended Articles of Incorporation are so
satisfied, (vii) the Nomination is submitted to the Depositary by the Nominating
Holder(s) at least two (2) Business Days prior to the expiration of the
Nomination Submission Period, (viii) the Nomination is accompanied by a written
certificate signed by each Nominating Holder, addressed to the Depositary and
the Company and in a form satisfactory to the Depositary and the Company (the
"First Nomination Certificate"), certifying, inter alia, (w) that each
Nominating Holder has only endorsed the said Nomination, (x) that the Nominating
Holder(s) own(s), individually or in the aggregate, at least 51% of the ADSs
outstanding as of the date the Nomination is submitted by the Nominating
Holder(s) to the Depositary (the "Nomination Submission Date"), (y) if the
Nomination Submission Date is (i) on or after the applicable ADS Record Date,
that the Nominating Holder(s) owned at least 51% of the ADSs outstanding as of
the applicable ADS Record Date, and (ii) prior to the applicable ADS Record
Date, that the Submitting Holder(s) will continue to own at least 51% of the
ADSs outstanding as of the applicable ADS Record Date and will provide the
Second Nomination Certificate, as defined below, and (z) the name(s) and
address(es) of the Nominating Holder(s) and the number of ADSs owned by each
Nominating Holder (together with certified evidence of each Nominating Holder's
ownership of the applicable ADSs as of the Nomination Submission Date, in the
case of (y)(ii) above, and the applicable ADS Record Date, in the case of (y)(i)
above), (ix) if the Nomination Submission Date is prior to the applicable ADS
Record Date, the Nominating Holder(s) must also provide, within five (5)
Business Days after the applicable ADS Record Date, a second written certificate
signed by each Nominating Holder addressed to the Depositary and the Company and
in a form satisfactory to the Depositary and the Company (the "Second Nomination
Certificate"), certifying, inter alia, that the Nominating Holder(s) continued
to own at least 51% of the ADSs outstanding as of the applicable ADS Record Date
(together with certified evidence of each Nominating Holder's ownership of the
applicable ADSs as of such applicable ADS Record Date), (x) the Nomination is
accompanied by a joint and several irrevocable undertaking of all Nominating
Holders (which undertaking may be contained in the First Nomination Certificate
or the Second Nomination Certificate) that each such Nominating Holder shall pay
all fees and expenses incurred in relation to the submission of the Nomination
at the meeting of the Company's shareholders, and (xi) the Shares registered in
the name of the Depositary or its nominee as representative of the Holders and
Beneficial Owners constitute one percent (1%) or more of the total issued and
outstanding Shares of the Company as of the Candidate Nomination Record Date.
Each Beneficial Owner hereby agrees and acknowledges that in no event shall the
Depositary or its nominee be nominated by the Nominating Holder(s) for election
as a director at a meeting of the Company's shareholders.
A-30
Upon the timely receipt by the Depositary of any Nomination which
the Depositary reasonably believes to be in full compliance with the immediately
preceding paragraph, the Depositary shall submit a copy of such Nomination and
of the other materials received from the Nominating Holder(s) to the Company
prior to the expiration of the Nomination Submission Period. Any Nomination so
submitted as to which the Depositary has not received within five (5) Business
Days after the applicable ADS Record Date any Second Nomination Certificate
required under the immediately preceding paragraph shall be deemed irrevocably
withdrawn at the expiration of such five (5) Business Day period. In the event
the Depositary receives more than one (1) Nomination by a Nominating Holder, or
a group of Nominating Holders, each of which appears to satisfy the requirements
set forth in the immediately preceding paragraph, the Depositary is hereby
authorized and instructed to disregard all Nominations received from such
Submitting Holder(s), except for the first Nomination received by the Depositary
from such Nominating Holder(s) and shall submit such Nomination to the Company
for consideration at a meeting of the Company's shareholders involving the
election of directors in accordance with the terms of the Deposit Agreement. The
Depositary shall not have any obligation to verify the accuracy of the
information contained in any document submitted to it by the Nominating
Holder(s). Neither the Depositary nor its nominee shall be obligated to attend
and speak at the meeting of the Company's shareholders involving the election of
directors on behalf of the Nominating Holder(s).
Notwithstanding anything contained in the Deposit Agreement or any
ADR, and except that the Depositary shall arrange, at the request of the Company
and at the Company's expense, for the mailing to Holders of copies of materials
that the Company has made available to the Depositary for such purpose, the
Depositary shall not be obligated to provide to the Holders or Beneficial Owners
of ADSs any notices relating to the nomination rights, including, without
limitation, notice of the Nomination Submission Period, or the receipt of any
Nomination(s) from Nominating Holders, or of the holdings of any ADSs by any
persons, except that the Depositary shall, upon a Holder's request, inform such
Holder of the total number of ADSs then issued and outstanding."
A-31
(ASSIGNMENT AND TRANSFER SIGNATURE LINES)
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 Receipt and all rights
thereunder, hereby irrevocably constituting and appointing
________________________ attorney-in-fact to transfer said Receipt 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.
If the endorsement be executed by an
attorney, executor, administrator,
trustee or guardian, the person
executing the endorsement must give
his/her full title in such capacity
and proper evidence of authority to
act in such capacity, if not on file
with the Depositary, must be
forwarded with this Receipt.
All endorsements or assignments of
Receipts must be guaranteed by a
member of a Medallion Signature
Program approved by the Securities
Transfer Association, Inc.
SIGNATURE GUARANTEED
A-32
Legends
[The Receipts issued in respect of Partial Entitlement American Depositary
Shares shall bear the following legend on the face of the Receipt: "This Receipt
evidences American Depositary Shares representing partial entitlement' [common
shares][interests in the global Certificates of Payment][Entitlement
Certificates] of AU Optronics Corp., and as such do not entitle the holders
thereof to the same per-security entitlement as other [common shares][interests
in the global Certificates of Payment][Entitlement Certificates] (which are
'full entitlement' [common shares][interests in the global Certificates of
Payment][Entitlement Certificates]) issued and outstanding at such time. The
American Depositary Shares represented by this Receipt shall entitle holders to
distributions and entitlements identical to other American Depositary Shares
when the [common shares][interests in the global Certificates of
Payment][Entitlement Certificates] represented by such American Depositary
Shares become 'full entitlement' [common shares][interests in the global
Certificates of Payment][Entitlement Certificates]".]
A-33