TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED
AND
CITIBANK, N.A., As Depositary,
AND
HOLDERS AND BENEFICIAL OWNERS FROM TIME TO TIME OF
AMERICAN DEPOSITARY SHARES ISSUED HEREUNDER
Amended and Restated Deposit Agreement
Dated as of ______, 2007
TABLE OF CONTENTS
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ARTICLE I DEFINITIONS....................................................2
Section 1.01. "Accounts"..................................................2
Section 1.02. "ADR Facilities"............................................2
Section 1.03. "ADRs"; "American Depositary Receipts" or "Receipts"........2
Section 1.04. "Affiliate".................................................2
Section 1.05. "American Depositary Shares"or "ADSs".......................2
Section 1.06. "Applicant".................................................3
Section 1.07. "Beneficial Owner"..........................................3
Section 1.08. "Business Day"..............................................3
Section 1.09. "CBC".......................................................3
Section 1.10. "Certificated ADS(s)".......................................3
Section 1.11. "Certificate(s) of Payment".................................3
Section 1.12. "Chairman"..................................................3
Section 1.13. "Commission"................................................3
Section 1.14. "Company"...................................................4
Section 1.15. "Custodian".................................................4
Section 1.16. "Deposit Agreement".........................................4
Section 1.17. "Depositary"................................................4
Section 1.18. "Deposited Securities"......................................4
Section 1.19. "DTC".......................................................4
Section 1.20. "DTC Participant"...........................................5
Section 1.21. "Eligible Securities".......................................5
Section 1.22. "Eligible Securities Registrar".............................5
Section 1.23. "Exchange Act"..............................................5
Section 1.24. "First Certificate".........................................5
Section 1.25. "First Nomination Certificate"..............................5
Section 1.26. "Foreign Currency"..........................................5
Section 1.27. "FSC".......................................................5
Section 1.28. The words "herein" and "hereof".............................5
Section 1.29. "Holder"....................................................6
Section 1.30. "Initial Deposit"...........................................6
Section 1.31. "Master Certificate"........................................6
Section 1.32. "Nominating Owners".........................................6
Section 1.33. "Nomination"................................................6
Section 1.34. "Nomination Submission Date"................................6
Section 1.35. "Nomination Submission Period"..............................6
Section 1.36. "NT Dollars" or "NT$".......................................6
Section 1.37. "Offering"..................................................7
Section 1.38. "Original ADR(s)"...........................................7
Section 1.39. "Original ADR Facility".....................................7
Section 1.40. "Original ADS(s)"...........................................7
Section 1.41. "Original Deposit Agreement"................................7
Section 1.42. "Overseas Offering Rules"...................................7
Section 1.43. "Preamble"..................................................7
Section 1.44. "Pre-Release Transaction"...................................7
Section 1.45. "Primary Issue Deposit".....................................7
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TABLE OF CONTENTS
(continued)
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Section 1.46. "Principal Office"..........................................8
Section 1.47. "Proposal"..................................................8
Section 1.48. "Registrar".................................................8
Section 1.49. "Representative"............................................8
Section 1.50. "Republic of China"; "ROC" and "Taiwan".....................8
Section 1.51. "Regulation S"..............................................8
Section 1.52. "Restricted Securities".....................................8
Section 1.53. "Scripless Shares"..........................................9
Section 1.54. "Second Certificate"........................................9
Section 1.55. "Second Nomination Certificate".............................9
Section 1.56. "Securities Act"............................................9
Section 1.57. "Share ADR Facility"........................................9
Section 1.58. "Share ADR(s)" and "Share American Depositary Receipt(s)"...9
Section 1.59. "Share ADS(s)" and "Share American Depositary Share(s)".....9
Section 1.60. "Share Listing Date".......................................10
Section 1.61. "Shares"...................................................10
Section 1.62. "Shareholder Record Date"..................................10
Section 1.63. "Submission Date"..........................................10
Section 1.64. "Submission Period"........................................10
Section 1.65. "Submitting Holders".......................................10
Section 1.66. "Taiwan Securities Central Depository".....................11
Section 1.67. "Taiwan Stock Exchange" and "TSE"..........................11
Section 1.68. "Temporary ADR Facility"...................................11
Section 1.69. "Temporary ADR(s)".........................................11
Section 1.70. "Temporary ADS(s)".........................................11
Section 1.71. "Uncertificated ADS(s)"....................................11
Section 1.72. "United States"............................................12
Section 1.73. "U.S. dollars".............................................12
Section 1.74. "Voting Instruction".......................................12
Section 1.75. "Voting Instructions Notice"...............................12
Section 1.76. "Voting Materials".........................................12
ARTICLE II APPOINTMENT OF DEPOSITARY, FORM OF RECEIPTS, DEPOSIT OF
SHARES, EXECUTION AND DELIVERY, TRANSFER AND
SURRENDER OF RECEIPTS.........................................12
Section 2.01. Appointment of Depositary..................................12
Section 2.02. Form and Transferability of Certificated ADSs..............12
Section 2.03. Deposit of Eligible Securities.............................14
Section 2.04. Execution and Delivery of Receipts and ADSs................16
Section 2.05. Transfer of ADSs; Combination and Split-up of Receipts;
Interchange of Certificated and Uncertificated ADSs........17
Section 2.06. Surrender of ADSs and Withdrawal of Deposited Securities...18
Section 2.07. Additional Limitations on Execution and Delivery,
Transfer, Etc. of ADSs; Suspension of Delivery,
Transfer, Etc..............................................21
Section 2.08. Lost Receipts, Etc.........................................22
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TABLE OF CONTENTS
(continued)
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Section 2.09. Cancellation and Destruction of Surrendered Receipts.......22
Section 2.10. Maintenance of Records.....................................22
Section 2.11. Partial Entitlement ADSs...................................23
Section 2.12. Temporary ADSs.............................................23
Section 2.13. Certificated/Uncertificated ADSs...........................25
ARTICLE III CERTAIN OBLIGATIONS OF HOLDERS OF ADSs........................26
Section 3.01. Filing Proofs, Certificates and Other Information..........26
Section 3.02. Liability of Holders for Taxes and Other Charges...........27
Section 3.03. Representations and Warranties on Deposit, Transfer,
Surrender and Withdrawal of Eligible Securities or ADSs....27
Section 3.04. Disclosure of Beneficial Ownership.........................28
Section 3.05. Ownership Restrictions.....................................28
Section 3.06. Compliance with Information Requests.......................29
ARTICLE IV RIGHTS RELATING TO THE DEPOSITED SECURITIES; CERTAIN
OBLIGATIONS OF THE DEPOSITARY.................................29
Section 4.01. Cash Distributions.........................................29
Section 4.02. Distributions in Eligible Securities.......................30
Section 4.03. Distributions of Rights....................................30
Section 4.04. Distributions Other Than Cash, Eligible Securities
or Rights..................................................32
Section 4.05. Conversion of Foreign Currency.............................32
Section 4.06. Fixing of Record Date......................................33
Section 4.07. Voting of Deposited Securities.............................34
Section 4.08. Right to Submit Proposal at General Meeting
of Shareholders............................................36
Section 4.09. Right to Submit Nomination for Independent Director
at Meeting of Shareholders.................................37
Section 4.10. Changes Affecting Deposited Securities.....................39
Section 4.11. Transmittal by the Depositary of Company Notices,
Reports and Communications.................................39
Section 4.12. Taxation...................................................40
Section 4.13. Available Information......................................41
Section 4.14. Disclosure of Ownership and Shareholders' Rights...........41
ARTICLE V THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY.................41
Section 5.01. Maintenance of Depositary's Office and Register............41
Section 5.02. Lists of Receipt Holders...................................42
Section 5.03. Obligations of the Depositary, the Custodian
and the Company............................................42
Section 5.04. Prevention or Delay in Performance by the Depositary
or the Company.............................................43
Section 5.05. Resignation and Removal of the Depositary,
Appointment of Successor Depositary........................44
Section 5.06. Charges of Depositary......................................44
Section 5.07. The Custodian..............................................45
Section 5.08. Notices and Reports........................................45
Section 5.09. Issuance of Additional Eligible Securities, ADSs Etc.......46
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TABLE OF CONTENTS
(continued)
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Section 5.10. Indemnification............................................47
Section 5.11. Certain Rights of the Depositary; Limitations..............47
Section 5.12. Undertakings of the Company................................48
ARTICLE VI AMENDMENT AND TERMINATION.....................................49
Section 6.01. Amendment..................................................49
Section 6.02. Termination................................................49
ARTICLE VII MISCELLANEOUS.................................................50
Section 7.01. Counterparts...............................................50
Section 7.02. No Third Party Beneficiaries...............................50
Section 7.03. Severability...............................................50
Section 7.04. Holders as Parties, Binding Effect.........................50
Section 7.05. Notices....................................................50
Section 7.06. Governing Law and Jurisdiction; Appointment of Agent;
Waiver of Immunities.......................................51
Section 7.07. Compliance with U.S. Securities Laws.......................52
Section 7.08. Assignment.................................................52
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AMENDED AND RESTATED DEPOSIT AGREEMENT
AMENDED AND RESTATED DEPOSIT AGREEMENT dated as of [DATE], 2007 (this
"Deposit Agreement") among TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED, a
company limited by shares and organized 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 acting in its capacity as depositary,
and any successor as depositary hereunder (the "Depositary"), and all Holders
and Beneficial Owners, each as hereinafter defined, from time to time of the
American Depositary Shares issued hereunder.
WITNESSETH:
WHEREAS, the Company has duly authorized the issuance of common shares par
value NT$10 per share of the Company (the "Shares") and already has outstanding
Shares, with such terms and provisions as are specified in the Articles of
Incorporation of the Company as the same may be amended or otherwise modified
from time to time;
WHEREAS, the Company and the Depositary previously entered into a deposit
agreement, dated as of October 14, 1997 as amended and restated as of June 7,
2000, July 14, 2003, April 13, 2005 and November 30, 2005 (as so amended and
restated, the "Original Deposit Agreement"), which provides for (i) the deposit
of the Shares from time to time with the Depositary or with the Custodian (each
defined therein) as agent of the Depositary for the purposes set forth in the
Original Deposit Agreement, (ii) for the creation of American Depositary Shares
(the "Original ADSs") representing the Shares so deposited (the depositary
facility for such Original ADSs, the "Original ADR Facility"), and (iii) the
execution and delivery of the American Depositary Receipts evidencing the
Original ADSs (the "Original ADRs");
WHEREAS, the Company and the Depositary desire to amend and restate the
Original Deposit Agreement to (i) make ADSs eligible for direct registration, as
required by the New York Stock Exchange, by providing that ADSs may be
certificated or uncertificated securities, (ii) enable the distribution of the
Company's reports by electronic means, and (iii) reflect changes in ROC law in
connection with the nomination of candidates for independent director for voting
at the meeting of the shareholders of the Company;
WHEREAS, the Depositary is willing to act as the Depositary for the ADR
Facilities upon the terms set forth in this Deposit Agreement; and
WHEREAS, any American Depositary Receipts issued pursuant to the terms of
this Deposit Agreement are to be substantially in the form of Exhibit A annexed
hereto with appropriate insertions, modifications and omissions, as hereinafter
provided in this Deposit Agreement and as shall be specified in or pursuant to
any resolutions of the Company's Board of Directors;
NOW, THEREFORE, in consideration of the premises it is agreed by and among
the parties hereto as follows;
ARTICLE I
DEFINITIONS
The following definitions shall for all purposes, unless otherwise clearly
indicated, apply to the respective terms used in this Deposit Agreement:
Section 1.01. "Accounts"shall have the meaning given to such term in
Section 2.06 hereof.
Section 1.02. "ADR Facilities" shall mean, collectively, the Share ADR
Facility and the Temporary ADR Facility.
Section 1.03. "ADRs"; "American Depositary Receipts" or "Receipts" shall,
unless otherwise specifically set forth herein, mean any series of certificates
issued by the Depositary hereunder evidencing American Depositary Shares in the
form of Certificated ADS(s), as such American Depositary Receipts may be amended
from time to time in accordance with the provisions of this Deposit Agreement. A
Receipt or ADR may represent any number of American Depositary Shares. Unless
otherwise specifically set forth herein, the term "Receipts" shall include the
Temporary ADRs evidencing the Temporary ADSs issued hereunder. Notwithstanding
anything else contained herein or therein, the Original ADRs issued and
outstanding under the Original Deposit Agreement to evidence Original ADSs
shall, from and after the date hereof, be treated as Receipts issued hereunder
and shall, from and after the date hereof, be subject to the terms hereof in all
respects.
Section 1.04. "Affiliate" shall have the meaning assigned to it under
Regulation C under the Securities Act or under any successor regulation thereto.
Section 1.05. "American Depositary Shares"or "ADSs" shall mean the rights
and interests in the Deposited Securities granted to the Holders and Beneficial
Owners pursuant to the terms and conditions of this Deposit Agreement and, if
issued as Certificated ADS(s), the American Depositary Receipts issued hereunder
to evidence such ADSs. ADS(s) may be issued under the terms of this Deposit
Agreement in the form of (a) Certificated ADS(s), in which case the ADS(s) are
evidenced by ADR(s), or (b) Uncertificated ADS(s), in which case the ADS(s) are
not evidenced by ADR(s) but are reflected on the direct registration records
maintained by the Depositary for such purposes under the terms of Section 2.13.
Unless otherwise specified in this Deposit Agreement or in any ADR, or unless
the context otherwise requires, any reference to ADS(s) shall include
Certificated ADS(s) and Uncertificated ADS(s), individually or collectively, as
the context may require. The Original ADSs issued and outstanding as of the date
hereof shall, from and after the date hereof, be deemed for all purposes to be
Share ADSs issued and outstanding under the terms of this Deposit Agreement,
unless otherwise specifically noted, and shall be subject to the terms and
conditions of this Deposit Agreement in all respects. Each American Depositary
Share will represent (i) in the case of Share ADSs, five (5) Shares and (ii) in
the case of Temporary ADSs, interests in the Certificate of Payment, each
interest representing the irrevocable right to receive five (5) Shares from the
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Company, in each case until there shall occur a distribution upon Deposited
Securities referred to in Section 4.02 or a change in Deposited Securities
referred to in Section 4.10 with respect to which additional ADSs are not issued
and delivered, and thereafter each American Depositary Share shall represent the
right to receive the Deposited Securities specified in such Sections. Unless
otherwise specifically set forth in this Deposit Agreement or the applicable
ADR, the terms "American Depositary Shares" and "ADSs" shall include Temporary
ADSs.
Section 1.06. "Applicant" shall have the meaning given to such term in
Section 5.11 hereof.
Section 1.07. "Beneficial Owner" shall mean as to any ADS, any person or
entity having a beneficial interest deriving from the ownership of such ADS. A
Beneficial Owner of ADSs may or may not be the Holder of such ADS(s). A
Beneficial Owner shall be able to exercise any right or receive any benefit
hereunder solely through the person who is the Holder of the ADS(s) owned by
such Beneficial Owner. Beneficial Owners of Original ADSs issued and outstanding
as of the date hereof shall, from and after the date hereof, be deemed for all
purposes to be Beneficial Owners of Share ADSs under the terms hereof, unless
otherwise specifically noted.
Section 1.08. "Business Day" shall mean any day on which both the banks in
Taipei, the Republic of China and the banks in The City of New York are open for
business.
Section 1.09. "CBC" shall mean the Central Bank of the Republic of China
(Taiwan).
Section 1.10. "Certificated ADS(s)" shall have the meaning given to such
term in Section 2.13 hereof.
Section 1.11. "Certificate(s) of Payment" shall mean the single global
Certificate of Payment issued by the Company evidencing the irrevocable right to
receive the Shares delivered by the Company in respect of each Offering of
Shares by the Company.
Section 1.12. "Chairman" shall have the meaning given to such term in
Section 4.07 hereof.
Section 1.13. "Commission" shall mean the Securities and Exchange
Commission of the United States or any successor governmental agency thereto in
the United States.
Section 1.14. "Company" shall mean Taiwan Semiconductor Manufacturing
Company Limited, a corporation organized under the laws of the Republic of
China, having its principal executive office at No. 8, Li-Hsin Rd. 6, Hsinchu
Science Park, Hsinchu, Taiwan, Republic of China.
Section 1.15. "Custodian" shall mean, as of the date hereof, Citibank,
N.A. Taipei Branch, currently located at East Road, Section 4, Taipei, Taiwan,
Republic of China, as custodian and agent of the Depositary for the purposes of
this Deposit Agreement, and any other entity that may be appointed by the
Depositary pursuant to the terms of Section 5.07 as additional or substitute
custodian hereunder, and the term "Custodian" shall mean any custodian
individually or all custodians collectively, as the context may require.
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Section 1.16. "Deposit Agreement" shall mean this Amended and Restated
Deposit Agreement and all exhibits hereto, as the same may be amended or
otherwise modified from time to time in accordance with the provisions hereof.
Section 1.17. "Depositary" shall mean Citibank, N.A., a national banking
association organized under the laws of the United States, and any successor
depositary appointed pursuant to the terms of Section 5.05 hereof.
Section 1.18. "Deposited Securities" shall mean, collectively or
individually, as the context may require and unless otherwise specifically set
forth herein, (a) with respect to Share ADSs, Shares and (b) with respect to
Temporary ADSs, interests in the Certificate of Payment, in each case at any
time deposited under this Deposit Agreement and any and all other securities,
property and cash received by the Depositary or the Custodian in respect or in
lieu thereof, subject, in the case of cash to the provisions of Section 4.05.
Notwithstanding anything else contained herein, the securities, property and
cash delivered to the Custodian in respect of Shares held in connection with the
Original ADSs then outstanding, and any other deposited securities held as of
the date hereof under the Original Deposit Agreement in respect of the Original
ADSs and defined as "Deposited Securities" thereunder in respect of the Original
ADSs, shall, for all purposes, from and after the date hereof, be considered to
be and treated as, Deposited Securities hereunder in all respects.
Section 1.19. "DTC" shall mean The Depository Trust Company, a national
clearinghouse and the central book-entry settlement system for securities traded
in the United States and, as such, the custodian for the securities of DTC
Participants maintained in DTC, and any successor thereto.
Section 1.20. "DTC Participant" shall mean any financial institution (or
any nominee of such institution) having one or more participant accounts with
DTC for receiving, holding and delivering the securities and cash held in DTC. A
DTC Participant may or may not be a Beneficial Owner. If a DTC Participant is
not the Beneficial Owner of the ADSs credited to its account at DTC, or of the
ADSs in respect of which the DTC Participant is otherwise acting, such DTC
Participant shall be deemed, for all purposes hereunder, to have all requisite
authority to act on behalf of the Beneficial Owner(s) of the ADSs credited to
its account at DTC or in respect of which the DTC Participant is so acting.
Section 1.21. "Eligible Securities" shall mean, collectively or
individually as the context may require and unless otherwise specifically set
forth herein, (a) with respect to Share ADSs, Shares and (b) with respect to
Temporary ADSs, interests in the Certificate of Payment, in each case to the
extent eligible for deposit hereunder at any time and from time to time from and
after the date hereof.
Section 1.22. "Eligible Securities Registrar" shall mean Chinatrust
Commercial Bank or any other institution appointed by the Company to carry out
the duties of registrar for the Shares and/or any Certificate of Payment, and
any successor thereto.
Section 1.23. "Exchange Act" shall mean the United States Securities
Exchange Act of 1934, as from time to time amended.
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Section 1.24. "First Certificate" shall have the meaning given to such
term in Section 4.08 hereof.
Section 1.25. "First Nomination Certificate" shall have the meaning given
to such term in Section 4.09 hereof.
Section 1.26. "Foreign Currency" shall have the meaning given to such term
in Section 4.05 hereof.
Section 1.27. "FSC" shall mean the Financial Supervisory Commission of the
Republic of China.
Section 1.28. The words "herein" and "hereof" shall refer to this Deposit
Agreement in its entirety and not to any specific Article or Section of this
Deposit Agreement.
Section 1.29. "Holder" shall mean the person or persons in whose name ADSs
are registered on the books of the Depositary or the Registrar, if any,
maintained for such purpose. Holders of Original ADRs shall, from and after the
date hereof, by the terms of this Deposit Agreement automatically become Holders
of Share ADRs issued hereunder. A Holder may or may not be a Beneficial Owner.
If a Holder is not the Beneficial Owner of the ADSs registered in its name, such
person shall be deemed to have all requisite authority to act on behalf of the
Beneficial Owners of such ADSs. Any reference to Holders of ADR(s) or ADS(s) in
this Deposit Agreement shall, in the context of the Uncertificated ADSs, refer
to the person(s) in whose name the Uncertificated ADSs are registered on the
books of the Depositary or Registrar maintained for such purpose.
Section 1.30. "Initial Deposit" shall mean the initial deposit of Shares
and/or the Certificate of Payment, as the case may be, in connection with each
Offering. The term Initial Deposit shall include any Primary Issue Deposits made
by the Company.
Section 1.31. "Master Certificate" shall have the meaning given to such
term in Section 2.03 hereof.
Section 1.32. "Nominating Owners" shall have the meaning given to such
term in Section 4.09 hereof.
Section 1.33. "Nomination" shall have the meaning given to such term in
Section 4.09 hereof.
Section 1.34. "Nomination Submission Date" shall mean the date on which
the Nominating Owners submit a Nomination pursuant to Section 4.09.
Section 1.35. "Nomination Submission Period"shall mean the period
applicable to shareholders of the Company for submission of their nomination of
candidates for independent director to the Company as publicly announced by the
Company at a time prior to the commencement of a general meeting or a special
meeting of shareholders of the Company, in each case involving the election of
independent directors, as the case may be.
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Section 1.36. "NT Dollars" or "NT$" shall mean New Taiwan dollars, the
lawful currency of the Republic of China.
Section 1.37. "Offering" shall mean any offering by the Company of ADSs
representing Shares or the rights to receive Shares, whether newly issued or
otherwise, or the sale by certain approved holders of ADSs, within and/or
outside the United States.
Section 1.38. "Original ADR(s)" shall have the meaning set forth in the
third paragraph of the Preamble hereto. Notwithstanding anything else contained
herein or therein, the Original ADRs issued and outstanding as of the date
hereof under the Original Deposit Agreement evidencing Original ADSs shall, from
and after the date hereof, be treated as Share ADRs issued hereunder and shall,
from and after the date hereof, be subject to the terms hereof in all respects.
Section 1.39. "Original ADR Facility" shall have the meaning given to such
term in the third paragraph of the Preamble hereto.
Section 1.40. "Original ADS(s)" shall mean the American Depositary Shares
issued under the Original Deposit Agreement and outstanding as of the date
hereof, as described in the third paragraph of the Preamble hereto.
Notwithstanding anything else contained herein or therein, the Original ADSs
issued and outstanding as of the date hereof under the Original Deposit
Agreement shall, from and after the date hereof, be treated as Share ADSs issued
hereunder and shall, from and after the date hereof, be subject to the terms
hereof in all respects.
Section 1.41. "Original Deposit Agreement" shall mean the Deposit
Agreement, dated as of October 14, 1997 and amended as of June 7, 2000, July 14,
2003, April 13, 2005 and November 30, 2005, as further described in the third
paragraph of the Preamble hereto.
Section 1.42. "Overseas Offering Rules" shall have the meaning given to
such term in Section 5.12(b) hereof.
Section 1.43. "Preamble" shall mean the part of this Deposit Agreement
prior to Article I.
Section 1.44. "Pre-Release Transaction" shall have the meaning given to
such term in Section 5.11 hereof.
Section 1.45. "Primary Issue Deposit" shall have the meaning given to such
term in Section 2.03 hereof.
Section 1.46. "Principal Office" when used with respect to the Depositary,
shall be the principal office of the Depositary in New York at which at any
particular time its depositary receipt business shall be administered, which, at
the date of this Deposit Agreement, is located at 388 Greenwich Street, New
York, New York 10013, U.S.A.
Section 1.47. "Proposal" shall have the meaning given to such term in
Section 4.08 hereof.
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Section 1.48. "Registrar" shall mean the Depositary or, upon the request
or with the approval of the Company, any bank or trust company having an office
in the Borough of Manhattan, The City of New York, which shall be appointed by
the Depositary to register issuances, transfers and cancellations of ADSs as
herein provided, and shall include any co-registrar appointed by the Depositary
for such purposes. Registrars (other than the Depositary) may be removed and
substitutes appointed by the Depositary. Each Registrar (other than the
Depositary) appointed pursuant to this Deposit Agreement shall be required to
give notice in writing to the Depositary and the Company accepting such
appointment and agreeing to be bound by the applicable terms of this Deposit
Agreement.
Section 1.49. "Representative" shall have the meaning given to such term
in Section 4.07 hereof.
Section 1.50. "Republic of China"; "ROC" and "Taiwan" shall mean the
Republic of China.
Section 1.51. "Regulation S" shall mean Regulation S under the Securities
Act, as from time to time amended.
Section 1.52. "Restricted Securities" shall mean collectively or
individually, as the context may require, Eligible Securities, Deposited
Securities or ADSs, which (i) have been acquired directly or indirectly from the
Company or any of its Affiliates in a transaction or chain of transactions not
involving any public offering and are subject to resale limitations under the
Securities Act or the rules promulgated thereunder, or (ii) are held directly or
indirectly by an officer or director (or persons performing similar functions)
or other Affiliate of the Company, or (iii) are subject to other restrictions on
sale or deposit under (a) the laws of the United States, (b) the laws of the
Republic of China, (c) a shareholders agreement, (d) the Articles of
Incorporation of the Company, or (e) the regulations of an applicable securities
exchange unless, in any case, (x) such Eligible Securities, Deposited Securities
or ADSs are being sold to persons other than an Affiliate of the Company in a
transaction covered by an effective resale registration statement under, or
exempt from the registration requirements of, the Securities Act, and (y) the
Eligible Securities, Deposited Securities or ADSs are not, when held by such
person(s), Restricted Securities.
Section 1.53. "Scripless Shares" shall have the meaning given to such term
in Section 2.03 hereof.
Section 1.54. "Second Certificate" shall have the meaning given to such
term in Section 4.08 hereof.
Section 1.55. "Second Nomination Certificate" shall have the meaning given
to such term in Section 4.09 hereof.
Section 1.56. "Securities Act" shall mean the United States Securities Act
of 1933, as from time to time amended.
Section 1.57. "Share ADR Facility" shall mean the ADR facility into which
Shares are deposited in accordance with the terms of this Deposit Agreement.
Notwithstanding anything else contained herein, the ADR facility into which
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Shares were deposited under the Original Deposit Agreement in respect of the
Original Share ADSs and defined as the "Share ADR Facility" thereunder, shall,
for all purposes, from and after the date hereof, be considered and treated as
the Share ADR Facility hereunder in all respects.
Section 1.58. "Share ADR(s)" and "Share American Depositary Receipt(s)"
shall mean the Receipts issued by the Depositary to evidence Share ADSs issued
under the terms of this Deposit Agreement in the form of Certificated ADSs, as
such Share ADRs may be amended from time to time in accordance with the
provisions hereof. A Share ADR may evidence any number of Share ADSs and may, in
the case of Share ADSs held through a central depository such as DTC, be in the
form of a balance certificate. Unless otherwise specifically set forth herein,
the term "Share ADRs" shall, from and after the date hereof, include the
Original ADRs issued under the Original Deposit Agreement. Share ADRs shall,
unless otherwise specifically set forth herein or in the applicable ADR(s), be
deemed to be Receipts for all purposes under this Deposit Agreement.
Section 1.59. "Share ADS(s)" and "Share American Depositary Share(s)"
shall mean the rights and interests in deposited Shares granted to Holders and
Beneficial Owners pursuant to the terms and conditions of this Deposit Agreement
and, if issued as Certificated ADS(s), the Share ADRs issued hereunder to
evidence such Share ADSs. Share ADS(s) may be issued under the terms of this
Deposit Agreement in the form of (a) Certificated ADS(s), in which case the
Share ADS(s) are evidenced by Share ADR(s), or (b) Uncertificated ADS(s), in
which case the Share ADS(s) are not evidenced by Share ADR(s) but are reflected
on the direct registration records maintained by the Depositary for such
purposes under the terms of Section 2.13. Unless otherwise specified in this
Deposit Agreement or in any Share ADR, or unless the context otherwise requires,
any reference to Share ADS(s) shall include Certificated ADS(s) and
Uncertificated ADS(s), individually or collectively, as the context may require.
The Original ADSs issued under the Original Deposit Agreement and outstanding as
of the date hereof shall, from and after the date hereof, be deemed for all
purposes to be Share ADSs issued hereunder and shall be subject to the terms and
conditions of this Deposit Agreement in all respects. Share ADSs shall, unless
otherwise specifically set forth herein, be deemed to be American Depositary
Shares or ADSs, as the context may require, for all purposes under this Deposit
Agreement.
Section 1.60. "Share Listing Date" shall have the meaning given to such
term in Section 2.12 hereof.
Section 1.61. "Shares" shall mean the common shares of the Company,
whether in physical certificated form or in scripless form represented by a
Master Certificate, each having a par value NT$10 per share, duly and validly
authorized, issued and outstanding, fully paid, nonassessable and free of any
preemptive rights and may, if the Depositary so agrees after consultation with
the Company, include evidence of the right to receive Shares (other than
interests in any Certificate of Payment); provided, however, that in no event
shall Shares include evidence of the right to receive Shares with respect to
which the full purchase price has not been paid or Shares as to which preemptive
rights (if any) have theretofore not been validly waived or exercised, provided
further, however, that if there shall occur any change in nominal or par value,
split-up or consolidation or any other reclassification or, upon the occurrence
of an event described in Section 4.10, an exchange, replacement or conversion in
respect of the Shares, the term "Shares" shall thereafter to the maximum extent
permitted by law represent the successor securities resulting from such change
in nominal or par value, split-up or consolidation or any other such
reclassification or exchange, replacement or conversion.
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Section 1.62. "Shareholder Record Date" shall mean, for the purpose
Section 4.08, the relevant record date applicable to shareholders for voting at
the general meeting, or, for the purpose of Section 4.09, the relevant record
date applicable to shareholders for voting at the general meeting or the special
meeting.
Section 1.63. "Submission Date" shall mean the date on which the
Submitting Holders submit a Proposal pursuant to Section 4.08 to the Depositary.
Section 1.64. "Submission Period" shall mean the period applicable to
shareholders of the Company for the submission of shareholder proposals to the
Company as publicly announced each year by the Company.
Section 1.65. "Submitting Holders" shall have the meaning given to such
term in Section 4.08 hereof.
Section 1.66. "Taiwan Securities Central Depository" shall mean the
central depository for Shares in the Republic of China, and any successor
thereto.
Section 1.67. "Taiwan Stock Exchange" and "TSE" shall mean the primary
stock exchange in the Republic of China, upon which the Shares are listed for
trading and any successor stock exchange thereto.
Section 1.68. "Temporary ADR Facility" shall mean the ADR facility into
which any Certificate of Payment is deposited in accordance with the terms of
this Deposit Agreement.
Section 1.69. "Temporary ADR(s)" shall mean the Receipts issued by the
Depositary to evidence Temporary ADSs issued under the terms of this Deposit
Agreement (including, without limitation, Section 2.12 hereof) in the form of
Certificated ADSs, as such Temporary ADRs may be amended from time to time in
accordance with the terms hereof. A Temporary ADR may evidence any number of
Temporary ADSs and may, in the case of Temporary ADSs held through a central
depository such as DTC, be in the form of a "balance certificate". Temporary
ADRs shall, unless otherwise specifically set forth herein or in the applicable
Temporary ADR(s), be deemed to be Receipts for all purposes under this Deposit
Agreement.
Section 1.70. "Temporary ADS(s)" shall mean the rights and interests in
any deposited Certificate of Payment granted to Holders and Beneficial Owners
pursuant to the terms and conditions of this Deposit Agreement (including,
without limitation, Section 2.12 hereof) and if issued as Certificated ADS(s)
the applicable Temporary ADR(s) issued hereunder to evidence such Temporary
ADSs. Subject to Section 2.12, Temporary ADS(s) may be issued under the terms of
this Deposit Agreement in the form of (a) Certificated ADS(s), in which case the
Temporary ADS(s) are evidenced by Temporary ADR(s), or (b) Uncertificated
ADS(s), in which case the Temporary ADS(s) are not evidenced by Temporary ADR(s)
but are reflected on the direct registration records maintained by the
Depositary for such purposes under the terms of Section 2.13. Unless otherwise
specified in this Deposit Agreement or in any Temporary ADR, or unless the
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context otherwise requires, any reference to Temporary ADS(s) shall include
Certificated ADS(s) and Uncertificated ADS(s), individually or collectively, as
the context may require. Temporary ADSs shall, unless otherwise specifically set
forth herein or in the applicable Temporary ADR(s), be deemed to be American
Depositary Shares or ADSs, as the context may require, for all purposes under
this Deposit Agreement.
Section 1.71. "Uncertificated ADS(s)" shall have the meaning given to such
term in Section 2.13 hereof.
Section 1.72. "United States" shall have the meaning assigned to it in
Regulation S as promulgated by the Commission under the Securities Act.
Section 1.73. "U.S. dollars" shall mean the lawful currency of the United
States.
Section 1.74. "Voting Instruction" shall have the meaning given to such
term in Section 4.07 hereof.
Section 1.75. "Voting Instructions Notice" shall have the meaning given to
such term in Section 4.07 hereof.
Section 1.76. "Voting Materials" shall have the meaning given to such term
in Section 4.07 hereof.
ARTICLE II
APPOINTMENT OF DEPOSITARY, FORM OF RECEIPTS,
DEPOSIT OF SHARES, EXECUTION AND DELIVERY,
TRANSFER AND SURRENDER OF RECEIPTS
Section 2.01. Appointment of Depositary. The Company hereby appoints the
Depositary as depositary for the Deposited Securities and hereby authorizes and
directs the Depositary to act in accordance with the terms set forth in this
Deposit Agreement. Each Holder and each Beneficial Owner, upon acceptance of any
ADS (or any interest therein) issued in accordance with the terms of this
Deposit Agreement and each holder and each beneficial owner of Original ADSs who
continues to hold such securities from and after the date hereof, shall be
deemed for all purposes to (a) be a party to and bound by the terms of this
Deposit Agreement and (b) appoint the Depositary its attorney-in-fact, with full
power to delegate, to act on its behalf and to take any and all actions
contemplated in this Deposit Agreement (including, without limitation, Section
2.12 hereof), to adopt any and all procedures necessary to comply with
applicable law and to take such action as the Depositary in its sole discretion
may deem necessary or appropriate to carry out the purposes of this Deposit
Agreement the taking of such actions to be the conclusive determinant of the
necessity and appropriateness thereof.
Section 2.02. Form and Transferability of Certificated ADSs. Certificated
ADSs shall be evidenced by definitive Receipts which shall be engraved, printed,
lithographed or produced in such other manner as may be agreed upon by the
Company and the Depositary. Receipts may be issued under the Deposit Agreement
in denominations of any whole number of ADSs. The Receipts shall be
substantially in the form set forth in Exhibit A to the Deposit Agreement, with
any appropriate insertions, modifications and omissions, in each case as
otherwise contemplated in the Deposit Agreement or required by law. Receipts
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shall be (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. No Receipt and no Certificated ADS
evidenced thereby shall be entitled to any benefits under the Deposit Agreement
or be valid or enforceable for any purpose against the Depositary or the
Company, unless such Receipt shall have been so dated, signed, countersigned and
registered. Receipts bearing the manual or facsimile signature of a
duly-authorized signatory of the Depositary or the Registrar, who at the time of
signature was a duly authorized signatory of the Depositary or the Registrar, as
the case may be, shall bind the Depositary, notwithstanding the fact that such
signatory has ceased to be so authorized prior to the delivery of such Receipt
by the Depositary.
The Receipts may be endorsed with, or have incorporated in the text
thereof, such legends or recitals or changes, including requirements with
respect to registration of transfer, not inconsistent with this Deposit
Agreement (i) as may be necessary to enable the Depositary to perform its
obligations hereunder, (ii) as may be required to comply with any applicable
laws or regulations, in order for the ADSs to meet any listing requirements or
other rules or regulations of the New York Stock Exchange or any other exchange
or stock quotation system upon which the ADSs may be listed, traded or quoted or
to conform with any usage with respect to such laws, regulations, requirements
or rules, (iii) as may be necessary to indicate any special limitations or
restrictions to which any particular Receipts or ADSs are subject by reason of
the date or manner of issuance or type of the underlying Deposited Securities or
otherwise, or (iv) as may be required by any book-entry system in which the ADSs
are held.
The Share ADSs and the Temporary ADSs shall each bear a separate and
distinct CUSIP number that is different from one another and from any CUSIP
number that was, is or may be assigned to any depositary receipts previously or
subsequently issued pursuant to any other arrangement between the Depositary (or
any other depositary) and the Company which are not ADSs issued hereunder and
are Restricted Securities.
Subject to any limitations set forth in a Receipt or in this Deposit
Agreement, when properly endorsed or accompanied by properly executed
instruments of transfer (including signature guarantees in accordance with
standard industry practice) title to such Receipt (and to the Certificated ADSs
evidenced thereby) shall be transferable by delivery with the same effect as in
the case of a certificated security under the laws of the State of New York;
provided, however, that the Company and the Depositary, notwithstanding any
notice to the contrary, may deem and treat the registered Holder of a Receipt
(and the Certificated ADSs evidenced thereby) as the absolute owner thereof for
any purpose, including but not limited to the purpose of determining the person
entitled to distribution of dividends or other distributions or to any notice
provided for in this Deposit Agreement, and neither the Depositary nor the
Company shall have any obligation or be subject to any liability under this
Deposit Agreement to any Beneficial Owner of a Receipt (and the Certificated
ADSs evidenced thereby) unless such Beneficial Owner is the registered Holder
thereof. ADSs are transferable on the books of the Depositary, provided that the
Depositary may close the transfer books at any time when deemed necessary by it
in connection with the performance of its duties hereunder or at the written
request of the Company.
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The Depositary shall make arrangements for the acceptance of the Share
ADSs and the Temporary ADSs into DTC. All Share ADSs and Temporary ADSs held
through DTC will be registered in the name of the nominee for DTC (currently
"Cede & Co."). Uncertificated ADSs not held through DTC will be issued as
described in Section 2.13 and Certificated ADSs will be issued as described in
this Section 2.02. Unless issued by the Depositary as Uncertificated ADSs, each
of the Share ADSs and the Temporary ADSs registered in the name of Cede & Co.
will be evidenced by a single Share ADR or Temporary ADR, as the case may be, in
the form of a "balance certificate", which will provide that it represents the
aggregate amount of Share ADSs or Temporary ADSs from time to time indicated in
the records of the Depositary as being issued hereunder and that the aggregate
amount of Share ADSs or Temporary ADSs represented thereby may from time to time
be increased or decreased by making adjustments on such records of the
Depositary and of DTC or its nominee as hereinafter provided. As such, the
nominee for DTC will be the only "Holder" of the Share ADSs and the Temporary
ADSs registered in the name of such nominee for DTC. Citibank, N.A. (or such
other entity as is appointed by DTC or its nominee) may hold the balance
certificates as custodian for DTC. Each Beneficial Owner holding Share ADSs or
the Temporary ADSs through DTC must rely upon the procedures of DTC and the DTC
Participants to exercise or be entitled to any rights attributable to such ADSs.
The DTC Participants shall for all purposes be deemed to have all requisite
power and authority to act on behalf of the Beneficial Owners of the Share ADSs
or Temporary ADSs held in the DTC Participants' respective accounts in DTC and
the Depositary shall for all purposes be authorized to rely upon any
instructions and information given to it by DTC Participants. So long as ADSs
are held in the name of the nominee for DTC through DTC or unless otherwise
required by law, ownership of beneficial interests in the Share ADSs or
Temporary ADSs registered in the name of the nominee for DTC will be shown on,
and transfers of such ownership will be effected only through, records
maintained by (i) DTC or its nominee (with respect to the interests of DTC
Participants), or (ii) DTC Participants or their nominees (with respect to the
interests of clients of DTC Participants).
Section 2.03. Deposit of Eligible Securities. Subject to applicable laws,
regulations of the ROC and the terms and conditions of this Deposit Agreement,
Eligible Securities or evidence of rights to receive Eligible Securities other
than Restricted Securities may be deposited by any person, including the
Depositary in its individual capacity, at any time, whether or not the transfer
books of the Company or the Eligible Securities Registrar, if any, are closed,
by delivery to the Custodian of (i) certificates therefor accompanied by
appropriate instrument or instruments of transfer or endorsement in a form
satisfactory to the Custodian, or (ii) evidence satisfactory to the Custodian
that irrevocable instructions have been given to cause such Eligible Securities
to be delivered to such account, in each case along with (x) appropriate written
instructions as to issuance, (y) payment of applicable fees, charges and taxes
and (z) such other documentation or certification as the Depositary or the
Company may reasonably require (including any opinions of counsel with respect
to whether such Eligible Securities or evidences of rights to receive Eligible
Securities are Restricted Securities deemed necessary by the Depositary or the
Company; provided, however, that no opinion of counsel shall be necessary in
connection with the deposit by the Company of a free distribution of Eligible
Securities by way of dividend or stock split).
The Depositary and the Company have been advised that under current ROC
law, no deposits of Eligible Securities may be made in the ADR Facilities, and
no ADSs may be issued against such deposits, without specific approval of the
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FSC except in connection with the offering and the issuance of additional ADSs
in connection with (i) dividends on or free distributions of Eligible
Securities, (ii) the exercise by Holders of their preemptive rights applicable
to Eligible Securities evidenced by ADSs in the event of capital increases for
cash or (iii) as permitted hereunder, the deposit of Shares purchased by any
person directly or through the Depositary on the TSE or held by such person for
deposit in the Share ADR Facility, provided that the total number of ADSs
outstanding after an issuance described in clause (iii) does not exceed the
aggregate number of issued ADSs previously approved by the FSC (plus any ADSs
created pursuant to clauses (i) and (ii) above), and subject to any adjustment
in the number of Eligible Securities represented by each ADS. The Depositary and
the Company have been advised that under current ROC law, issuances under clause
(iii) above will be permitted only to the extent that previously issued ADSs
have been cancelled. The Depositary will not accept any Shares for deposit
pursuant to clause (iii) unless it receives satisfactory opinions of ROC and
U.S. counsel to the effect that such Shares may lawfully be deposited pursuant
to the Deposit Agreement and are not Restricted Securities. The laws of the
Republic of China applicable to the deposit of Eligible Securities may change
from time to time. There can be no assurances that current law will continue in
effect or that future changes of Republic of China law will not adversely affect
the ability to deposit Eligible Securities hereunder.
The Initial Deposit(s) of Eligible Securities into the ADR Facilities will
be made, by or on behalf of the Company and certain shareholders approved to
sell ADSs in any Offering, by (i) the delivery to the Custodian by the Company
of physical Share certificates and/or a Certificate of Payment evidencing the
irrevocable right to receive the physical share certificates representing the
Shares registered in the name of the nominee of the Depositary as representative
of the Holders, as instructed by the Depositary and (ii) the delivery to the
Custodian of physical Share certificates by or on behalf of the certain selling
shareholders or otherwise pursuant to the provisions of Section 5.11. Subject to
the terms and conditions of this Deposit Agreement, upon such Initial
Deposit(s), the Depositary shall issue ADSs representing the Deposited
Securities constituting the Initial Deposit(s) in the manner provided in
Sections 2.04 and 2.12.
In connection with each deposit of Eligible Securities by the Company
constituted by Shares newly issued by the Company in connection with a capital
increase by cash (the "Primary Issue Deposit"), the Company shall, no later than
the second business day in the ROC following such deposit, apply to the TSE for
listing of a master certificate (in scripless form or in certificated form) in
respect of the Shares (the "Master Certificate"). Immediately upon the listing
of the Master Certificate on the TSE, the Company shall cause the Taiwan
Securities Central Depository to credit into the Custodian's account by
book-entry transfer such number of Shares in scripless form (the "Scripless
Shares") as represented by the Master Certificate, to replace the Certificate of
Payment.
The Depositary and the Custodian shall each refuse to accept for deposit
Eligible Securities that it reasonably believes to be Restricted Securities.
Persons depositing Eligible Securities, other than (i) the Initial Deposit and
(ii) the Company depositing Eligible Securities constituting a free distribution
of Eligible Securities by way of dividend or stock split, will be required to
present appropriate evidence (including, if requested, opinions of counsel, at
such persons' expense) satisfactory to the Depositary and the Company that such
Eligible Securities and the issuance of ADSs issuable upon such deposit are not
Restricted Securities. In addition, the Depositary and the Custodian shall
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refuse to accept Eligible Securities for deposit (i) whenever notified, as
hereinafter provided, that the Company has restricted transfer of such Eligible
Securities to comply with delivery or transfer requirements and/or ownership
restrictions referred to in this Deposit Agreement or under applicable law and
(ii) in the case of a deposit of Shares requested under this Section 2.03, if
such deposit is not permitted under any restriction notified by the Company to
the Depositary from time to time, which restriction may specify black out
periods during which deposits may not be made and minimum or maximum sizes and
frequency of deposits. The Company shall notify the Depositary and the Custodian
in writing with respect to any such restrictions on transfer of its Eligible
Securities for deposit hereunder or transfer of ADSs to any Holder.
At the request, risk and expense of any Holder, and for the account of
such Holder, the Depositary may receive Eligible Securities to be deposited,
evidence that Eligible Securities have been electronically transferred or that
irrevocable instructions have been given to cause the transfer of such Eligible
Securities to the account of the Custodian, together with the other orders,
instruments and evidence herein specified, for the purpose of forwarding such
Eligible Securities to the Custodian for deposit hereunder.
As a condition of accepting Eligible Securities for deposit other than the
Initial Deposit, the Depositary may require that the person making such deposit
furnish, whether or not any register of shareholders of the Company is closed,
(a) an agreement or assignment, or other instrument satisfactory to the
Depositary, that provides for the prompt transfer to the Custodian of any
dividend or right to subscribe for additional Eligible Securities or to receive
other property which any person in whose name the Eligible Securities are or
have been recorded may thereafter receive upon or in respect of such deposited
Eligible Securities, or in lieu thereof such agreement of indemnity or other
agreement as shall be satisfactory to the Depositary, and (b) if the Eligible
Securities are registered in the name of the person presenting them, or on whose
behalf they any presented, for deposit, a proxy or proxies entitling the
Custodian to vote such deposited Eligible Securities for any and all purposes
until the Eligible Securities are registered in the name of the Depositary or
its nominee.
Upon each delivery to the Custodian of Eligible Securities other than the
Initial Deposit (or other Deposited Securities pursuant to Sections 4.03, 4.04
or 4.10) to be deposited hereunder, together with any other documents and
payments required under this Deposit Agreement, the Custodian may require, as
soon as is practicable, confirmation of the recordation of transfer of such
Eligible Securities (or other Deposited Securities) in the name of the
Depositary or its nominee at the cost and expense of the person making the
deposit (or for whose benefit such deposit is made).
Deposited Securities shall be held by the Depositary or by the Custodian
for the account and to the order of the Depositary or at such other place or
places as the Depositary shall determine.
Section 2.04. Execution and Delivery of Receipts and ADSs. After the
deposit of any Eligible Securities pursuant to Section 2.03 and upon delivery to
the Custodian of Eligible Securities pursuant to appropriate instruments of
transfer or endorsement in form satisfactory to the Custodian, the Custodian
shall notify the Depositary of such deposit and the person or persons to whom or
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upon whose written order ADSs are to be issued in respect thereof. Such
notification shall be made by letter, first class airmail postage prepaid, or,
at the request, risk and expense of the person making the deposit, by air
courier, cable, telex, facsimile transmission or other means of electronic
transmission. After receiving such notice from the Custodian, or its agent,
subject to this Deposit Agreement and applicable law and the provisions of the
Articles of Incorporation of the Company and the Eligible Securities, the
Depositary will issue ADSs representing the Eligible Securities so deposited to,
or upon the written order of, the person or persons named in the notice of the
Custodian delivered to the Depositary or requested by the person depositing such
Eligible Securities with the Depositary, and, if applicable, will execute and
deliver an ADR or ADRs at its Principal Office, registered in the name or names
of such person or persons, to which such persons are entitled but only upon
payment to the Depositary or Custodian of all fees, expenses, taxes and
governmental charges payable in connection with such deposit, the transfer of
the deposited Eligible Securities, the issuance of ADSs and the execution and
delivery of Receipts if such ADSs are to be evidenced by Receipts. The
Depositary shall have at all times a sufficient supply of Receipts to meet the
demands of transfer of Certificated ADSs or Eligible Securities deposited with
the Depositary or the Custodian.
Section 2.05. Transfer of ADSs; Combination and Split-up of Receipts;
Interchange of Certificated and Uncertificated ADSs. The Depositary, subject to
the terms and conditions of this Deposit Agreement and, in the case of any
Certificated ADS, any Receipt, shall promptly register, or cause the Registrar
to register, transfers of any such ADSs on its transfer books maintained for
such purpose, upon any surrender thereof by a Holder, with instructions, at the
Principal Office of the Depositary in person or by duly authorized attorney (in
the case of Certificated ADSs, by surrendering the Receipt representing such
Certificated ADSs properly endorsed or accompanied by proper instruments of
transfer, including signature guarantees in accordance with standard industry
practice and the full and accurate completion of any endorsements appearing on
such Receipt relating to compliance with the applicable restrictions on transfer
thereof, and duly stamped as may be required by any applicable law of the State
of New York or of the United States or of the ROC). Upon payment to the
Depositary of the fees and charges set forth in Exhibit B hereto, the Depositary
shall execute a new Receipt or Receipts (in the case of Certificated ADSs) and
deliver ADSs (and any Receipts in the case of Certificated ADSs) to or upon the
order of the person entitled thereto, subject to receipt of any certifications
by such person as the Depositary and the Company may require in order to comply
with applicable laws. Holders of Uncertificated ADSs and Holders of Certificated
ADSs shall at all times have the right to exchange their Uncertificated ADSs for
Certificated ADSs, or their Certificated ADSs for Uncertificated ADSs, as the
case may be, subject to and in accordance with Section 2.13 hereof. The
Depositary may close the transfer books at any time or from time to time when
deemed necessary by it in connection with the performance of its duties
hereunder or at the written request of the Company.
The Depositary, subject to the terms and conditions of this Deposit
Agreement and any Receipt shall, upon surrender of a Receipt or Receipts for the
purpose of effecting a split-up or combination of such Receipt or Receipts and
upon payment to the Depositary of the fees and charges set forth in Exhibit B
hereto, cancel such Receipts and execute and deliver a new Receipt or Receipts
in the name of the same Holder for any authorized number of ADSs requested,
evidencing the same aggregate number of ADSs as the Receipt or Receipts
surrendered. In connection with any split-up or combination of Receipts pursuant
to this paragraph, the Depositary shall not be obligated to obtain any
certification or endorsement otherwise required by the terms of this Deposit
Agreement.
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Section 2.06. Surrender of ADSs and Withdrawal of Deposited Securities.
Upon (i) surrender of ADSs at the Principal Office (and, in the case of
Certificated ADSs, a Receipt or Receipts evidencing such ADSs) for the purpose
of withdrawal of the Deposited Securities represented by such ADSs, (ii) payment
of the fees of the Depositary for the surrender of ADSs, including the charges
of the Depositary for the making of withdrawals and cancellation of ADSs and, in
the case of Certificated ADSs, Receipts (as set forth in Exhibit B hereto),
governmental charges and taxes payable in connection with such surrender and
withdrawal, (iii) delivery to the Depositary of written instructions of the
Holder for delivery of the Deposited Securities represented thereby and (iv)
delivery to the Depositary any and all certifications necessary to allow the
Company to comply with applicable ROC law reporting requirements, 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
subject to the terms and conditions of this Deposit Agreement, the clearing
procedures of the Registrar and the Articles of Incorporation of the Company and
to the provisions of or governing the Deposited Securities, the Holder of such
ADSs will be entitled to delivery to him or to his order of the amount of
Deposited Securities at the time represented by the ADS or ADSs surrendered,
subject to temporary delays caused by the closing of the transfer books of the
Depositary or the Company in connection with voting at a shareholders' meeting
or the payment of dividends or rights offering. Such delivery of Deposited
Securities shall be made, as hereinafter provided, without unreasonable delay.
Any Holder or other person requesting withdrawal of Deposited Securities against
delivery of ADSs must deliver to the Depositary a written order containing
delivery instructions to such effect. The forwarding of share certificates,
other securities, property, cash and other documents of title for such delivery
will be at the risk and expense of the Holder.
The Depositary and the Company have been advised that under current ROC
law, a Holder wishing to withdraw Deposited Securities from the ADR Facilities
is required to appoint an eligible agent in the ROC to open a (i) securities
trading account with a local brokerage firm after receiving an approval from the
TSE and (ii) a bank account (the securities trading account and the bank
account, collectively, the "Accounts"), to pay ROC taxes, remit funds, exercise
shareholders' 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 safe-keeping, make
confirmations and settle trades and report all relevant information. Without
making such appointment and the opening of such Accounts, the withdrawing Holder
would be unable to hold or subsequently sell the Deposited Securities withdrawn
from the ADR Facility on the TSE or otherwise. The laws of the Republic of China
applicable to the withdrawal of Deposited Securities may change from time to
time. There can be no assurances that current law will remain in effect or that
future changes of the Republic of China law will not adversely affect the
ability of Holders to withdraw Deposited Securities hereunder.
Notwithstanding anything to the contrary herein, no Deposited Securities
deposited in connection with a Primary Issue Deposit may be withdrawn or sold
upon surrender of ADSs until the Certificate of Payment has been replaced by
Shares in physical certificated form or represented by the Master Certificate.
Subject to the receipt by the Company of the requisite approval from the TSE and
- 16 -
the relevant provisions hereof, on and after the fourth business day in the ROC
following the Primary Issue Deposit, and upon receipt by the Depositary of
notice of the credit of such number of Scripless Shares represented by the
Master Certificate, the Depositary shall give notice thereof to the applicable
Holders of Temporary ADSs and thereafter Temporary ADSs shall be eligible for
exchange into Share ADSs. Interests in Temporary ADSs in DTC shall be
automatically exchanged for beneficial interests in Share ADSs as follows: with
no further action by Holders, the Depositary shall instruct DTC to automatically
transfer any position held by a DTC Participant under the CUSIP number assigned
to the Temporary ADSs to the CUSIP number assigned to the Share ADSs. Holders
and Beneficial Owners of such Temporary ADSs shall thereafter be Holders and
Beneficial Owners of Share ADSs issued hereunder and shall have all the rights
and obligations specified in this Deposit Agreement and, in the case of
Certificated ADSs, any Receipt pertaining to Share ADSs, and a Holder may
withdraw and hold the Scripless Shares or the Shares in physical certificated
form, as applicable, or request the Depositary to sell or cause to be sold on
behalf of such Holder the Scripless Shares or Shares in physical certificated
form, as applicable. For the avoidance of doubt, Shares shall include the
Scripless Shares which are without physical form and traded through book-entry
settlement systems and carry the same rights as those attaching to certificated
Shares in respect of dividends and are eligible for trading on the TSE in the
same manner as certificated Shares.
Holders will be entitled to withdraw the Deposited Securities at any time
subject only to (i) temporary delays caused by the closing of the transfer books
of the Depositary or the register of shareholders of the Company in connection
with voting at a shareholders' meeting or the payment of dividends or rights
offering, (ii) the payment of fees, taxes and similar charges and (iii)
compliance with any laws or governmental regulations relating to ADSs or to the
withdrawal of Deposited Securities. The Depositary and the Company have been
advised that under current ROC law, only Shares represented by the ADSs may be
withdrawn by Holders. Upon surrender of ADSs and, in the case of Certificated
ADSs, Receipts at the Principal Office and upon payment of any fees, 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 Holder's ADSs be sold on such Holder's behalf.
Any Holder requesting a sale of Deposited Securities as set forth above
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.
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, 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, expenses, taxes or governmental charges incurred in
connection with such sale, as provided under this 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. The ROC currently does not impose tax
on capital gains arising from ROC securities transactions, but there can be no
assurance that a capital gains tax on ROC securities transactions will not be
imposed in the future or as to the manner in which any ROC capital gains tax in
respect of a sale of Deposited Securities would be imposed or calculated.
- 17 -
Any Receipt surrendered or written instructions received for such purpose
may be required by the Depositary to be properly endorsed in blank or
accompanied by properly executed instruments of transfer in blank. Any Holder or
other person requesting withdrawal of Deposited Securities against delivery of
ADSs must deliver to the Depositary a written order containing delivery
instructions directing the Depositary to cause the Deposited Securities being
withdrawn to be either electronically delivered or physically delivered, if
available, to or upon the written order of a person or persons designated in
such instructions. Prior to the Share Listing Date, there can be no assurance
that there will be sufficient numbers of certificated Shares available to give
effect to all written orders of Holders for the physical delivery of
certificated Shares upon the surrender of ADSs.
Upon the receipt of such instructions and compliance with the terms of
this Section 2.06, the Depositary shall direct the Custodian to deliver to the
principal office of such Custodian or electronically transfer, as described
above, in, each case, subject to Sections 2.07, 3.01 and 3.02 and to the other
terms and conditions of this Deposit Agreement, the clearing procedures of the
Registrar and the Articles of Incorporation of the Company, and to the
provisions of or governing the Deposited Securities and other applicable laws,
now or hereafter in effect, to or upon the written order of the person or
persons designated in such written instructions, the Deposited Securities except
that the Depositary may make delivery to such person or persons at the Principal
Office of the Depositary of any cash dividends or distributions with respect to
the Deposited Securities or of any proceeds of sale of any dividends,
distributions or rights with respect to the Deposited Securities, which may at
the time be held by the Depositary.
If permitted by ROC law, at the request, risk and expense of any Holder so
surrendering ADSs or submitting such written instructions for delivery, and for
the account of such Holder, provided that payment of any applicable tax or other
governmental charge shall have been made in accordance with Section 3.02, the
Depositary shall direct the Custodian to forward any cash or other property or
securities, and forward a certificate or certificates and other proper documents
of title, if any, for the Deposited Securities represented by such ADSs to the
Depositary for delivery at the Principal Office. Such direction shall be given
by letter or, at the request, risk and expense of such Holder, by air courier,
cable, telex or facsimile transmission.
The Depositary will only honor requests for withdrawal of whole numbers of
Shares or other Deposited Securities. In the case of a surrender of ADSs
representing other than a whole number of Shares or Deposited Securities, the
Depositary shall cause ownership of the appropriate whole number of Shares or
Deposited 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
Deposited Securities or (ii) sell or cause to be sold the Deposited Securities
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. Trading
restrictions on the TSE may result in the price per Share or any lot of Shares
other than in an integral multiple of 1,000 Shares being lower than the price of
Shares in lots of integral multiples of 1,000 Shares.
- 18 -
Section 2.07. Additional Limitations on Execution and Delivery, Transfer,
Etc. of ADSs; Suspension of Delivery, Transfer, Etc. As a condition precedent to
the execution and delivery, registration, registration of transfer, split-up,
combination or surrender of any ADS or ADR or withdrawal of any Deposited
Securities, the Depositary, the Custodian or the Registrar may require payment
from the persons presenting the ADSs or the depositor of Eligible Securities 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 payable by the Holders and
Beneficial Owners. The Depositary may refuse to deliver ADSs or ADRs, to
register the transfer of any ADS or ADR or to make any distribution on, or
related to, the Eligible Securities until it has received such proof of
citizenship or residence, or other information as it may deem necessary or
proper, or as the Company may require by written request to the Depositary. The
delivery, transfer, registration of transfer of outstanding ADSs or ADRs and
surrender of ADSs or ADRs generally may be suspended or refused during any
period when the transfer books of the Depositary, the Company or the Company's
share registrar are closed or if any such action is deemed necessary or
advisable by the Depositary or the Company, at any time or from time to time.
The delivery of ADSs against, or adjustments in the records of the
Depositary to reflect, deposits of Eligible Securities generally or of
particular Eligible Securities may be suspended or withheld, or the registration
of transfer of ADSs or Receipts in particular instances may be refused, or the
registration of transfer generally may be suspended, or the surrender of
outstanding ADSs, or the receipt of written instructions from any person having
a beneficial interest in any ADS for the purpose of withdrawal of Deposited
Securities may be suspended, during any period when the transfer books of the
Depositary or the register of shareholders of the Company are closed, or if any
such action is deemed necessary or advisable by the Company or the Depositary in
good faith at any time or from time to time. Notwithstanding any other provision
of this Deposit Agreement or any Receipts to the contrary, the surrender of
outstanding ADSs and withdrawal of Deposited Securities may not be suspended,
except as permitted in General Instruction I.A.(1) to Form F-6 (as such
instruction may be amended from time to time) under the Securities Act.
In furtherance and not in limitation of the foregoing, the Depositary
shall not, and it shall instruct the Custodian not to (i) accept for deposit
under Section 2.03 hereof Eligible Securities which the Depositary, the
Custodian or the Company has reason to believe (and in the case of the Custodian
or the Company, such belief shall have been communicated to the Depositary) are
Restricted Securities, or permit such Eligible Securities to be used to satisfy
any person's obligation with respect to transactions contemplated by Section
5.11 hereof; or (ii) accept for (w) deposit under Section 2.03 hereof, (x)
transfer or exchange under Section 2.05 hereof, (y) cancellation under Section
2.06 hereof or (z) delivery in satisfaction of any person's obligation with
respect to transactions contemplated by Section 5.11 hereof, depositary receipts
representing Eligible Securities which are Restricted Securities.
- 19 -
Subject to Section 5.11 hereof, the Depositary may issue ADSs against
evidence of rights to receive Eligible Securities from the Company, or any
custodian, registrar, transfer agent, clearing agency or other entity involved
in ownership or transaction records in respect of the Eligible Securities. Such
evidence of rights shall consist of written blanket or specific guarantees of
ownership of Eligible Securities furnished on behalf of the holder thereof,
subject to applicable ROC law.
Without limitation of the foregoing, the Depositary shall not knowingly
accept for deposit under this Deposit Agreement any Eligible Securities or other
Deposited Securities required to be registered pursuant to the provisions of the
Securities Act, unless a registration statement under the Securities Act is in
effect as to such Eligible Securities or other Deposited Securities, or any
Eligible Securities or Deposited Securities the deposit of which would violate
any provisions of the Articles of Incorporation of the Company. Also without
limitation of the foregoing, the Depositary will comply with written
instructions of the Company (received by the Depositary reasonably in advance)
not to accept for deposit hereunder any Eligible Securities identified in such
instructions at such times and under such circumstances as may reasonably be
specified in such instructions in order to facilitate the Company's compliance
with the securities laws of the United States and other jurisdictions.
Section 2.08. Lost Receipts, Etc. In case any Receipt shall be mutilated,
destroyed, lost or stolen, the Depositary shall execute and deliver a new
Receipt of like tenor at the expense of the Holder (a) in the case of a
mutilated Receipt, in exchange and substitution for such mutilated Receipt upon
cancellation thereof, or (b) in lieu of and in substitution for such destroyed,
lost or stolen Receipt, after the Holder thereof (i) has filed with the
Depositary a written request for such exchange or delivery before the Depositary
has notice that the Receipt has been acquired by a bona fide purchaser, (ii) has
provided such security or indemnity (including an indemnity bond) satisfactory
to the Depositary as may be required by the Depositary to save it and any of its
agents harmless in connection therewith, and (iii) has satisfied any other
reasonable requirements imposed by the Depositary, including, without
limitation, evidence satisfactory to the Depositary of such destruction, loss or
theft of such Receipt, the authenticity thereof and the Holder's ownership
thereof.
Section 2.09. Cancellation and Destruction of Surrendered Receipts. All
Receipts surrendered to the Depositary shall be cancelled by the Depositary.
Cancelled Receipts shall not be entitled to any benefits under this Deposit
Agreement or be valid or enforceable for any purpose. The Depositary is
authorized to destroy Receipts so cancelled. Any ADSs represented by a balance
certificate held in book-entry form (i.e., through accounts at DTC) shall be
deemed canceled when the Depositary causes the number of ADSs evidenced by the
relevant balance certificate to be reduced by the number of ADSs surrendered
(without the need to physically destroy the relevant balance certificate).
Section 2.10. Maintenance of Records. The Depositary agrees to maintain or
cause its agents to maintain records of all ADSs surrendered and Deposited
Securities withdrawn under Section 2.06, substitute Receipts delivered under
Section 2.08, and of cancelled or destroyed Receipts under Section 2.09, in
accordance with procedures ordinarily followed by stock transfer agents located
in The City of New York or as required by the laws or regulations governing the
Depositary. Upon the reasonable request of the Company, the Depositary shall
provide a copy of such records to the Company. Prior to destroying any such
records, the Depositary will notify the Company and will turn such records over
to the Company upon its request.
- 20 -
Section 2.11. Partial Entitlement ADSs. The Depositary may, or if so
directed by the Company, shall, refuse to accept for deposit any Eligible
Securities with rights, including rights to dividends, different from the rights
of the Deposited Securities then on deposit with the Depositary.
Section 2.12. Temporary ADSs. In the event that, in determining the rights
and obligations of parties hereto with respect to any Temporary ADSs, any
conflict arises between (a) the terms of this Deposit Agreement (other than this
Section 2.12) and (b) the terms of (i) the Temporary ADSs issued hereunder as
set forth in this Section 2.12 or (ii) the applicable Temporary ADR, if any, the
terms and conditions set forth in this Section 2.12 or the applicable Temporary
ADR, if any, shall be controlling and shall govern the rights and obligations of
the parties to this Deposit Agreement pertaining to the Certificate of Payment,
the Temporary ADSs and any Temporary ADRs.
Whenever the Company proposes to issue any Certificate of Payment eligible
for deposit hereunder (in connection with an Offering or otherwise), the Company
shall timely notify the Depositary thereof and provide the Depositary with
written instructions to the effect that, inter alia, (i) the Certificate of
Payment has been or is to be issued pursuant to a bona fide purchase of Eligible
Securities from the Company, (ii) the Certificate of Payment is not, and shall
not be deemed to be upon its deposit, and the Shares issuable pursuant to the
terms of the Certificate of Payment will not be, Restricted Securities, and such
written instructions shall include (a) a description of the rights (if any) to
any distribution upon Deposited Securities to be made to Holders of Temporary
ADSs representing such Certificates of Payment upon the terms set forth in
Article IV hereof, and (b) the date established by the Company upon which the
Company shall convert or cause to be converted the Certificate of Payment into
Shares on its records and on the records of the Eligible Securities Registrar.
Subject always to the laws and regulations of the Republic of China, upon
deposit of any Certificate of Payment hereunder and payment to the Depositary of
the charges of the Depositary for accepting a deposit, issuing ADSs and, if
applicable, issuing and delivering Receipts (as set forth in Section 5.06 and
Exhibit B hereto), the Depositary shall (i) cause the Custodian to hold such
Certificate of Payment separate and distinct from the Shares, any other
Certificate(s) of Payment and any other Deposited Securities and (ii) issue and
deliver Temporary ADSs representing interests in the Certificate of Payment so
deposited. The Temporary ADSs so issued shall be identified and treated
separately and distinctly from any other ADSs representing Deposited Securities
hereunder by means, inter alia, of separate CUSIP numbers and legending (if
necessary). The Depositary may issue Temporary ADSs in one or multiple series as
the Depositary in its sole discretion deems necessary and appropriate. No
Temporary ADS shall be fungible with any other ADSs issued hereunder.
The Depositary shall deliver Temporary ADSs in book-entry form only. No
certificated Temporary ADRs will be issued except for a balance certificate
evidencing all Temporary ADSs held in DTC, which shall be substantially in the
form of the Temporary ADR set forth in Exhibit A hereto, except as may be
necessary to identify and treat the Temporary ADSs as separate and distinct from
- 21 -
any other ADSs issued under the terms of this Deposit Agreement. The Depositary
shall make arrangements for the acceptance of such Temporary ADSs into DTC upon
the terms set forth in Section 2.02 hereof. The Temporary ADRs and the Temporary
ADSs evidenced thereby are identical to and confer all of the rights and
obligations set forth herein relating to Receipts and ADSs represented thereby
except that (i) Holders of Temporary ADSs will have no right to withdraw the
Deposited Securities represented by their Temporary ADSs until the Certificate
of Payment has been replaced by Shares in physical certificated form or
represented by the Master Certificate as described in the next paragraph, (ii)
Temporary ADSs shall bear separate CUSIP numbers that shall be different from
any CUSIP number that was, is or may be assigned to the other ADSs issued
hereunder, (iii) neither Temporary ADSs nor interests in any Certificate of
Payment shall be eligible for any Pre-Release Transactions described in Section
5.11 hereof and (iv) in the event that the Company makes any distributions upon
Deposited Securities upon the terms of Article IV of this Deposit Agreement, the
Depositary shall make distributions to Holders of Temporary ADSs on the basis of
the distribution(s) received from the Company in respect of the Certificate(s)
of Payment corresponding to the series of Temporary ADSs held by such Holder.
Nothing herein shall impose any obligation upon the Depositary to make any
distributions to Holders of any series of Temporary ADSs on the same basis as
Holders of Share ADSs or any other series of Temporary ADSs issued hereunder.
In connection with a Primary Issue Deposit, the Company hereby agrees to
file the application with the TSE for listing the Master Certificate on the TSE
and cause the Taiwan Securities Central Depository to credit into the
Custodian's account by book-entry transfer Scripless Shares, as represented by
the Master Certificate on or before the fourth business day in the ROC following
the Primary Issue Deposit, subject to the receipt by the Company of the
requisite approval from the TSE and the relevant provisions hereof. Upon receipt
of notice from the Company as to the crediting of Scripless Shares, the
Depositary shall instruct the Custodian to surrender any Certificate of Payment
against the credit of such number of Scripless Shares, as represented by the
Master Certificate into the Custodian's account by book-entry transfer. The
Company further agrees to issue and deliver the Shares in physical certificated
form in respect of the Scripless Shares represented by the Master Certificate
and list such Shares on the TSE on or about 60 to 80 calendar days after the
Primary Issue Deposit, subject to obtaining approvals from relevant government
authorities and the TSE. On the same date the Shares underlying the Master
Certificate are listed on the TSE (the "Share Listing Date"), the Master
Certificate will be delisted from the TSE and cancelled. Upon receipt by the
Depositary of notice of the credit of such number of Scripless Shares, the
Depositary shall give notice thereof to the applicable Holders of Temporary ADSs
and thereafter Temporary ADSs shall be eligible for exchange into Share ADSs.
Interests in Temporary ADSs in DTC shall be automatically exchanged for
beneficial interests in Share ADSs as follows: with no further action by
Holders, the Depositary shall instruct DTC to automatically transfer any
position held by a DTC Participant under the CUSIP number assigned to the
Temporary ADSs to the CUSIP number assigned to the Share ADSs. Holders and
Beneficial Owners of such Temporary ADSs shall thereafter be Holders and
Beneficial Owners of Share ADSs issued hereunder and shall have all the rights
and obligations specified in this Deposit Agreement and in the Receipts
pertaining to Share ADSs, and a Holder may withdraw and hold the Scripless
Shares or the Shares in physical certificated form, as applicable, or request
the Depositary to sell or cause to be sold on behalf of such Holder the
Scripless Shares or the Shares in physical certificated form, as applicable. The
Depositary will charge no fee for the cancellation of the Temporary ADSs and
issuance of Share ADSs in exchange therefor.
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Notwithstanding anything in this Deposit Agreement to the contrary, the
Depositary shall have no obligation to any party to exchange Temporary ADSs for
Share ADSs as provided herein unless and until, upon delivery by the Depositary
of the related Certificate of Payment, the Company shall have delivered or
credited into the Custodian's account such number of Shares represented by the
Certificate of Payment.
Section 2.13. Certificated/Uncertificated ADSs. Notwithstanding any other
provision of this Deposit Agreement, the Depositary may, at any time and from
time to time, and, so long as the rules of the New York Stock Exchange require
securities listed on the New York Stock Exchange to be eligible for a direct
registration system operated by a securities depository, shall, if so requested
by a Holder, issue ADSs that are not evidenced by ADRs (such ADSs, the
"Uncertificated ADS(s)" and the ADS(s) evidenced by ADR(s), the "Certificated
ADS(s)"). When issuing and maintaining Uncertificated ADS(s) under this Deposit
Agreement, the Depositary shall at all times be subject to (a) the standards
applicable to registrars and transfer agents maintaining direct registration
records for equity securities in New York and issuing uncertificated securities
under New York law, and (b) the terms of New York law applicable to
uncertificated equity securities. Uncertificated ADSs shall not be represented
by any instruments but shall be evidenced by registration in the books of the
Depositary maintained for such purpose. Holders of Uncertificated ADSs that are
not subject to any registered pledges, liens, restrictions or adverse claims of
which the Depositary has notice at such time shall at all times have the right
to exchange their Uncertificated ADS(s) for Certificated ADS(s) of the same type
and class, subject in each case to applicable laws and any rules and regulations
the Depositary may have established in respect of the Uncertificated ADSs.
Holders of Certificated ADSs shall, if the Depositary maintains direct
registration records for the ADSs, have the right to exchange the Certificated
ADSs for Uncertificated ADSs upon (i) the due surrender of the Certificated
ADS(s) to the Depositary for such purpose and (ii) the presentation of a written
request to that effect to the Depositary, subject in each case to (A) all liens
and restrictions noted on the ADR evidencing the Certificated ADS(s) and all
adverse claims of which the Depositary then has notice, (B) the terms of this
Deposit Agreement and the rules and regulations that the Depositary may
establish for such purposes hereunder, (C) applicable law, and (D) payment of
the Depositary fees and expenses applicable to such exchange of Certificated
ADS(s) for Uncertificated ADS(s).
Uncertificated ADSs shall in all respects be identical to Certificated
ADS(s) of the same type and class, except that (1) no ADR(s) shall be, or shall
need to be, issued to evidence Uncertificated ADS(s), (2) Uncertificated ADS(s)
shall, subject to the terms of this Deposit Agreement, be transferable upon the
same terms and conditions as uncertificated securities under New York law, (3)
the ownership of Uncertificated ADS(s) shall be recorded on the books of the
Depositary maintained for such purpose and evidence of such ownership shall be
reflected in periodic statements provided by the Depositary to the Holder(s) in
accordance with applicable New York law, (4) the Depositary may from time to
time, upon notice to the Holders of Uncertificated ADSs affected thereby,
establish rules and regulations, and amend or supplement existing rules and
regulations, as may be deemed reasonably necessary to maintain Uncertificated
- 23 -
ADS(s) on behalf of Holders, provided that (A) such rules and regulations do not
conflict with the terms of this Deposit Agreement and applicable law, and (B)
the terms of such rules and regulations are readily available to Holders upon
request, (5) the Uncertificated ADS(s) shall not be entitled to any benefits
under this Deposit Agreement or be valid or enforceable for any purpose against
the Depositary or the Company unless such Uncertificated ADS(s) is/are
registered on the books of the Depositary maintained for such purpose, (6) the
Depositary may, in connection with any deposit of Eligible Securities resulting
in the issuance of Uncertificated ADSs and with any transfer, pledge, release
and cancellation of Uncertificated ADSs, require the prior receipt of such
documentation as the Depositary may deem reasonably appropriate, and (7) upon
termination of this Deposit Agreement, the Depositary shall not require Holders
of Uncertificated ADSs to affirmatively instruct the Depositary before remitting
proceeds from the sale of the Deposited Securities represented by such Holders'
Uncertificated ADSs under the terms of Section 6.02.
When issuing ADSs under the terms of this Deposit Agreement, including,
without limitation, issuances pursuant to Sections 2.04, 4.02, 4.03, 4.04, and
4.10, the Depositary may in its discretion determine to issue Uncertificated
ADSs rather than Certificated ADSs, unless otherwise specifically instructed by
the applicable Holder to issue Certificated ADSs. All provisions and conditions
of this Deposit Agreement shall apply to Uncertificated ADSs to the same extent
as to Certificated ADSs and to Holders of Uncertificated ADSs as well as to
Holders of Receipts, except for those provisions of this Deposit Agreement that
by their nature do not apply to Uncertificated ADSs and, except as contemplated
by this Section 2.13. The Depositary is authorized and directed to take any and
all actions and establish any and all procedures deemed reasonably necessary to
give effect to the terms of this Section 2.13. Any references in this Deposit
Agreement or any ADR(s) to the terms "American Depositary Share(s)" or "ADS(s)"
shall, unless the context otherwise requires, include Certificated ADS(s) and
Uncertificated ADS(s).
Except as set forth in this Section 2.13 and except as required by
applicable law, the Uncertificated ADSs shall be treated as ADSs issued and
outstanding under the terms of this Deposit Agreement. In the event that, in
determining the rights and obligations of parties hereto with respect to any
Uncertificated ADSs, any conflict arises between (I) the terms of this Deposit
Agreement (other than this Section 2.13) and (II) the terms of this Section
2.13, the terms and conditions set forth in this Section 2.13 shall be
controlling and shall govern the rights and obligations of the parties to this
Deposit Agreement pertaining to the Uncertificated ADSs.
ARTICLE III
CERTAIN OBLIGATIONS OF HOLDERS OF ADSs
Section 3.01. Filing Proofs, Certificates and Other Information. Any
person presenting Eligible Securities for deposit or any Holder may be required
from time to time (a) to file with the Depositary or the Custodian such proof of
citizenship, residence, taxpayer status, exchange control approval, payment of
all applicable taxes or other governmental charges, compliance with all
applicable laws, regulations, and provisions of or governing Deposited
Securities and the terms of this Deposit Agreement, and legal or beneficial
ownership of ADSs, Deposited Securities and other securities, and the nature of
such interest, (b) to provide information to the Depositary or Custodian
relating to the registration on the books of the Company (or the Eligible
- 24 -
Securities Registrar) of the Eligible Securities presented for deposit or other
information, (c) to execute such certificates and (d) to make such
representations and warranties as the Depositary may deem necessary or proper or
as the Company may reasonably require by written request to the Depositary
consistent with its obligations hereunder. The Depositary and the Registrar, as
applicable, may, and at the reasonable request of the Company shall, withhold
the delivery or registration of transfer of all or part of any ADS or Receipt,
or the delivery of any dividend or other distribution of rights or of the net
proceeds of the sale thereof or the delivery of any Deposited Security, or may
refuse to adjust its records, until the foregoing is accomplished to the
Depositary's and the Company's satisfaction, subject to Section 7.07 hereof. The
Depositary shall, upon the Company's written request, provide to the Company in
a timely manner copies of any such proofs and certificates and such written
representations and warranties that it receives.
Section 3.02. Liability of Holders for Taxes and Other Charges. If any
tax, duty or other governmental charge, shall become payable by the Custodian or
the Depositary with respect to any ADS or ADR or any Deposited Securities
represented by the ADSs, such tax or other governmental charge shall be payable
by the Holder or Beneficial Owner thereof to the Depositary. The Depositary may
refuse to effect any transfer of such ADS or ADR or any withdrawal of Deposited
Securities underlying such ADS until such payment is made, and may withhold any
dividends or other distributions, or may sell for the account of the Holder
thereof any part or all of the Deposited Securities underlying such ADS, and may
apply such dividends or other distributions or the proceeds of any such sale to
pay any such tax or other governmental charge and the Holder or Beneficial Owner
thereof will remain liable for any deficiency.
Although in certain circumstances ROC income tax imposed on certain stock
dividends distributed by the Company may be deferred until the sale or other
disposition of such stock dividends, the Depositary will elect to waive the
deferral of income tax on such stock dividends.
Section 3.03. Representations and Warranties on Deposit, Transfer,
Surrender and Withdrawal of Eligible Securities or ADSs. Each person presenting
Eligible Securities for deposit under this Deposit Agreement shall be deemed
thereby to represent and warrant that (i) such Eligible Securities and each
certificate therefor, are duly and validly authorized, issued and outstanding,
fully paid and non-assessable and free of any preemptive rights and (ii) the
person making such deposit is duly authorized so to do. Such representations and
warranties shall survive the deposit and withdrawal of Eligible Securities and
the issuance or cancellation of ADSs or adjustments in the Depositary's records
in respect thereof. Each person depositing Eligible Securities, taking delivery
of or transferring ADSs or any beneficial interest therein, or surrendering ADSs
or any beneficial interest therein and withdrawing Eligible Securities under
this Deposit Agreement shall be deemed thereby to represent and warrant that
such Eligible Securities or ADSs are not Restricted Securities and that any such
deposit, transfer or surrender and withdrawal is not restricted under the
Securities Act and is in accordance with the applicable restrictions and
conditions on transferability set forth in this Deposit Agreement, in each case
in accordance with any applicable securities laws of any State of the United
States. Such representations and warranties shall survive any such deposit,
transfer or surrender and withdrawal of the Eligible Securities or the ADSs or
beneficial interest therein. If any representation or warranty deemed made
pursuant to this paragraph is false in any way, the Company and the Depositary
shall be authorized, at the cost and expense of the person deemed to have made
such representation or warranty, to take any and all actions necessary to
correct the consequences thereof.
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Whenever the Company shall deposit any Certificate of Payment under this
Deposit Agreement, the Company shall be deemed thereby to represent and warrant
that (i) such Certificate of Payment is, and the Shares to be received in
exchange therefor will be, duly authorized, validly issued, fully paid and
non-assessable, (ii) all preemptive (and similar) rights, if any, with respect
to such Certificate of Payment have been, and with respect to the Shares to be
received in exchange therefor will have been, validly waived or exercised, (iii)
the Company has duly authorized the issuance of the Shares to be delivered in
exchange for the Certificate of Payment, so presented for deposit, (iv) the
Certificate of Payment presented for deposit is, and the Shares to be deposited
upon the exchange therefor will be, free and clear of any lien, encumbrance,
security interest, charge, mortgage or adverse claim, and are not, and the
Temporary ADSs issuable upon such deposit in the case of the Certificate of
Payment, will not be, Restricted Securities and (v) the Certificate of Payment
presented for deposit has not been, and the Shares to be deposited upon the
exchange therefor will not have been, stripped of any rights or entitlements.
Such representations and warranties shall survive the deposit of any Certificate
of Payment or Master Certificate, as the case may be, and in connection with any
Certificate of Payment, the issuance and cancellation of Temporary ADSs in
respect thereof and the transfer of such Temporary ADSs.
Section 3.04. Disclosure of Beneficial Ownership. Notwithstanding any
other provision of this Deposit Agreement, the Company and the Depositary may
from time to time request Holders or former Holders to provide information as to
the capacity in which they own or owned ADSs or own or owned such beneficial
interest and regarding the identity of any other persons then or previously
interested in such ADSs and the nature of such interest and various other
matters. Each such Holder agrees to provide any such information requested by
the Company or the Depositary pursuant to this Section 3.04 whether or not such
person is still a Holder at the time of such request. The Depositary agrees to
use reasonable efforts to comply with the reasonable written instructions from
the Company requesting that the Depositary forward any such requests to
registered Holders or former registered Holders and to forward to the Company
any responses to such requests received by the Depositary; provided, that
nothing herein or in any Receipt shall be interpreted as obligating the
Depositary to provide or obtain any information not so provided by such Holders
or former Holders. Each Holder further agrees to make such disclosure of
interests in Eligible Securities of the Company as may be required to be made by
such Holder under any laws, regulations or codes of practice applicable in the
ROC or any other jurisdiction whether or not the same may be enforceable against
such Holder.
Section 3.05. Ownership Restrictions. Notwithstanding any other provision
of this Deposit Agreement, the Company may restrict transfers of the Eligible
Securities or securities convertible into Shares where the Company informs the
Depositary that such transfer might result in ownership of Eligible Securities
exceeding the limits imposed by applicable laws of the ROC, regulations and
rules of the FSC or the TSE, or the Company's Articles of Incorporation. The
Company may also restrict, in such manner as it deems appropriate, transfers of
the ADSs where such transfer may result in the total number of Deposited
Securities, or securities convertible into Shares represented by the ADSs,
beneficially owned by a single Holder to exceed such limits. The Company may, in
its sole discretion, instruct the Depositary to take action with respect to the
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ownership interest of any Holder in excess of the limitation set forth in the
preceding sentence, including but not limited to a mandatory sale or disposition
on behalf of a Holder of the Deposited Securities represented by the ADSs held
by such Holder in excess of such limitations, if and to the extent such
disposition is permitted by any applicable law. The Depositary shall use its
reasonable efforts to comply with the written instructions of the Company as
provided in this Section 3.05.
As of the date hereof, there are no such limitations affecting ownership
of Eligible Securities imposed by applicable laws of the ROC, regulations and
rules of the FSC or the TSE, the Articles of Incorporation of the Company or any
provisions of or governing Deposited Securities.
Section 3.06. Compliance with Information Requests. Notwithstanding any
other provision of this Deposit Agreement, each Holder agrees to comply with
requests from the Company pursuant to applicable U.S. and ROC laws or
regulations and any stock exchange on which the Eligible Securities 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 owns ADSs (and Deposited Securities) and regarding the
identity of any other person interested in such ADSs and the nature of such
interest, and the Depositary agrees to use its reasonable efforts to comply with
written instructions received from the Company requesting that the Depositary
forward any such request from the Company to the Holder and to forward to the
Company any such responses to such requests received by the Depositary.
ARTICLE IV
RIGHTS RELATING TO THE DEPOSITED SECURITIES;
CERTAIN OBLIGATIONS OF THE DEPOSITARY
Section 4.01. Cash Distributions. Subject always to applicable laws,
whenever the Custodian or the Depositary receives any cash dividend or other
cash distribution by the Company in respect of any Deposited Securities, the
Depositary shall, subject to the provisions of Section 4.05, promptly convert or
cause such dividend or distribution to be converted into U.S. dollars and shall
promptly distribute such amount to the registered Holders entitled thereto, as
of the record date fixed pursuant to Section 4.06 hereof, in proportion to the
number of ADSs representing such Deposited Securities held by them respectively,
after deduction or upon payment of the fees and expenses of the Depositary (and
without liability for interest); provided, however, that in the event that the
Company, the Custodian or the Depositary shall be required to withhold and does
withhold, subject to Section 4.12 hereof, from any cash dividend or other cash
distribution in respect of any Deposited Securities an amount on account of
taxes or other governmental charges, the amount distributed to the Holder in
respect of ADSs representing such Deposited Securities shall be reduced
accordingly. The Depositary shall distribute only such amount, however, as can
be distributed without attributing to any Holder a fraction of one cent, and any
balance not so distributable shall be held by the Depositary (without liability
for interest thereon) and shall be added to and become part of the next sum
received by the Depositary for distribution to Holders of ADSs then outstanding.
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Section 4.02. Distributions in Eligible Securities. Subject always to
applicable laws, if the Company declares a dividend in, or free distribution of,
Eligible Securities, the Depositary may, and will if the Company so requests,
distribute to the Holders entitled thereto, in proportion to the number of ADSs
held by them respectively, additional ADSs that represent the amount of Eligible
Securities received as such dividend or free distribution, subject to the terms
and conditions of this Deposit Agreement with respect to the deposit of Eligible
Securities and the issuance of ADSs, including the withholding of any tax or
other governmental charge, the sale of all or a portion of the Eligible
Securities received as such dividend or free distribution to pay such tax or
other governmental charge and the payment of the fees of the Depositary. In lieu
of delivering fractional ADSs in the event of any such dividend or free
distribution, the Depositary will sell the amount of Eligible Securities
represented by the aggregate of such fractions and distribute the net proceeds
in U.S. dollars, all in the manner and subject to the conditions described in
Section 4.01. If additional ADSs are not so distributed (except pursuant to the
preceding sentence), or such change in the records of the Depositary is not
made, each American Depositary Share will thenceforth also represent the
additional Eligible Securities distributed upon the Deposited Securities
represented thereby, subject to applicable ROC law. In making any distribution
on the Deposited Securities, the Depositary also may request payment from all
Holders and Beneficial Owners in lieu of withholding any tax or government
charge which may be payable in connection with such distribution.
Section 4.03. Distributions of Rights. Subject always to applicable laws,
if the Company offers or causes to be offered to the holders of any Eligible
Securities any rights to subscribe for additional Eligible Securities or any
rights of any other nature, the Company shall inform the Depositary prior to the
proposed distribution stating whether or not it wishes such rights to be made
available to Holders of ADSs. Upon receipt of a notice indicating that the
Company wishes such rights to be made available to Holders of ADSs, the
Depositary shall consult with the Company to determine, and the Company shall
assist the Depositary in its determination, whether it is lawful and reasonably
practicable to make such rights available to the Holders. To the extent that any
distribution of rights is made to Holders, such distribution shall be made in
proportion to the number of ADSs held by them respectively. The Depositary shall
make such rights available to Holders only if (i) the Company shall have timely
requested that such rights be made available to Holders, (ii) the Depositary
shall have received opinions of ROC and US Counsel and such other certificates
as it may reasonably require to determine the lawfulness of making the rights
available to such Holders, and (iii) the Depositary shall have determined that
such distribution of rights is reasonably practicable. In the event all
conditions set forth above are satisfied, the Depositary, after consultation
with the Company, will have discretion as to the procedure to be followed in
making such rights available to any Holders. In the event the conditions set
forth above are not satisfied, the Depositary, after consultation with the
Company, will have the discretion as to the procedure to be followed in
disposing of such rights for the benefit of any Holders and making the net
proceeds available in U.S. dollars to such Holders; provided, however, that if
by the terms of such rights offering or for any other reason, the Depositary may
not either make such rights available to any Holders or dispose of such rights
and make the net proceeds available to such Holders, then the Depositary shall
allow the rights to lapse; provided, further, that the Depositary may in its
discretion after consultation with the Company, and shall at the request of the
Company, if the Depositary determines (which determination may be based on
opinions of ROC and U.S. counsel that the Company will provide if requested by
the Depositary) that it is lawful and feasible, make available in proportion to
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the number of ADSs held by such Holder, warrants or other instruments therefor
in such form as it deems appropriate. If the Depositary determines in its
discretion that it is not lawful and feasible to make such rights available to
all or certain Holders, it may sell the rights, warrants or other instruments in
proportion to the number of ADSs held by the Holders to whom it has determined
it may not lawfully or feasibly make such rights available, and allocate the net
proceeds of such sales for the account of such Holders otherwise entitled to
such right, warrants or other instruments, upon an averaged or other practical
basis without regard to any distinctions among such Holders because of exchange
restrictions or the date of delivery of any ADSs, or otherwise. If the
Depositary determines that it is not lawful or feasible to make any such rights
available to ADS holders, or to sell any such rights as described above, the
Depositary will allow such rights to lapse.
In circumstances in which rights would not otherwise be distributed, if a
Holder requests the distribution of warrants or other instruments in order to
exercise the rights allocable to the ADSs of such Holder, the Depositary shall
make such rights available to such Holder upon written notice from the Company
to the Depositary that (a) the Company has elected in its sole discretion to
permit such rights to be exercised, and (b) such Holder has executed such
documents as the Company has determined in its sole discretion are reasonably
required under applicable law. Upon instruction pursuant to such warrants or
other instruments to the Depositary from such Holder to exercise such rights,
upon payment by such Holder to the Depositary for the account of such Holder of
an amount equal to the purchase price of the Eligible Securities to be received
in exercise of the rights, and upon payment of the fees of the Depositary as set
forth in such warrants or other instruments, the Depositary will, on behalf of
such Holder, exercise the rights and purchase the Eligible Securities, and the
Company shall cause the Eligible Securities so purchased to be delivered to the
Depositary on behalf of such Holder. As agent for such Holder, the Depositary
will cause the Eligible Securities so purchased to be deposited, and will issue
and deliver ADSs to such Holder, pursuant to this Deposit Agreement.
Notwithstanding anything to the contrary in this Section 4.03, the
Depositary will not offer rights to Holders unless both the rights and the
securities to which such rights relate are either exempt from registration under
the Securities Act with respect to a distribution to all Holders or are
registered under the provisions of the Securities Act; provided that nothing in
this Deposit Agreement will create, or be construed to create, any obligation on
the part of the Company to file a registration statement with respect to such
rights or underlying securities or to endeavor to have such a registration
statement declared effective. If a Holder requests the distribution of warrants
or other instruments, notwithstanding that there has been no such registration
under the Securities Act, the Depositary will not effect such distribution
unless it has received an opinion from recognized counsel in the United States
for the Company upon which the Depositary may rely that such distribution to
such Holder is exempt from such registration. The Depositary will not be
responsible for any failure to determine whether it may be lawful or feasible to
make such rights available to Holders in general or any Holder in particular.
References in this Section 4.03 to "Holders" are to Holders as of the
record date fixed pursuant to Section 4.06.
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Section 4.04. Distributions Other Than Cash, Eligible Securities or
Rights. Subject always to applicable laws, whenever the Depositary shall receive
any distribution other than cash, Eligible Securities or rights in respect of
the Deposited Securities, the Depositary will cause the securities or property
received by it to be distributed to the Holders entitled thereto, as of a record
date fixed pursuant to Section 4.06 hereof, after deduction or upon payment of
any fees and expenses of the Depositary or any taxes or other governmental
charges, in proportion to their holdings, respectively, in any manner that the
Depositary may reasonably deem equitable and practicable for accomplishing such
distribution; provided, however, that, if in the opinion of the Depositary, such
distribution cannot be made proportionately among the Holders entitled thereto,
or if for any other reason (including, but not limited to, any requirement that
the Company or the Depositary withholds an amount on account of taxes or other
governmental charges or that such securities must be registered under the
Securities Act or other law in order to be distributed to Holders) the
Depositary deems such distribution not to be feasible, the Depositary may adopt
such method as it may deem equitable and practicable for the purposes of
effecting such distribution, including, but not be limited to, the public or
private sale of the securities or property thus received, or any part thereof,
and the net proceeds of any such sale (net of the fees of the Depositary) will
be distributed by the Depositary to the Holders entitled thereto as in the lease
of a distribution received in cash.
If the Depositary determines that any distribution of property (including
Eligible Securities and rights to subscribe therefor) is subject to any taxes or
other governmental charges which the Depositary is obligated to withhold, the
Depositary may, by public or private sale, dispose of all or a portion of such
property in such amount and in such manner as the Depositary deems necessary and
practicable to pay such taxes or charges, and the Depositary will distribute the
net proceeds of any such sale after deduction of taxes or charges to the Holders
entitled thereto in proportion to the number of ADSs held by them, respectively.
Section 4.05. Conversion of Foreign Currency. Under current ROC law, the
Depositary, without obtaining further approvals from the CBC or any other
governmental authority or agency of the ROC, may convert NT Dollars into other
currencies, including U.S. dollars, in respect of the proceeds of the sale of
Eligible Securities represented by ADSs or the sale of Eligible Securities
issued as stock dividends deposited into the ADR Facilities in respect of such
Eligible Securities and any cash dividends or cash distributions received in
respect of such Eligible Securities. In addition, the Depositary, also without
any such approvals, may convert into NT Dollars inward remittances of payments
for purchase of Eligible Securities for deposit in the ADR Facilities against
the creation of additional ADSs.
Subject to any restrictions imposed by ROC law and regulations, the
Depositary is required to convert or cause to be converted as soon as reasonably
practicable into U.S. dollars to the extent that in its judgment it can do so on
a reasonable basis and can transfer the resulting U.S. dollars to the United
States, all cash dividends and other cash distributions denominated in a
currency other than U.S. dollars ("Foreign Currency"), including NT Dollars,
that it receives in respect of the deposited Eligible Securities, and to
distribute the resulting U.S. dollar amount (net of reasonable and customary
expenses incurred by the Depositary in converting such Foreign Currency) to the
Holders entitled thereto, in proportion to the number of ADSs representing such
Deposited Securities held by them, respectively. Such distribution may be made
upon an average or other practicable basis without regard to any distinctions
among Holders on account of exchange restrictions or the date of delivery of any
ADSs or otherwise. The amount distributed to the Holders will be reduced by any
amount on account of taxes to be withheld by the Company or the Depositary.
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If the Depositary determines that in its judgment any Foreign Currency
received by the Depositary or the Custodian is not convertible on a reasonable
basis into U.S. dollars transferable to the United States, or if any approval or
license of any government or agency thereof which is required for such
conversion is denied or in the opinion of the Depositary, after consultation
with the Company, is not obtainable, or if any such approval or license is not
obtained within a reasonable period, as determined by the Depositary, the
Depositary may distribute the Foreign Currency received by the Depositary or the
Custodian to, or in its discretion may hold such Foreign Currency uninvested and
without liability for interest thereon for the respective accounts of, the
Holders entitled to receive the same. If any such conversion of Foreign
Currency, in whole or in part, cannot be effected for distribution to some of
the Holders entitled thereto, the Depositary may in its discretion make such
conversion and distribution in U.S. dollars to the extent permissible to the
Holders entitled thereto, and may distribute the balance of the Foreign Currency
received by the Depositary to, or hold such balance uninvested and without
liability for interest thereon for, the respective accounts of, the Holders
entitled thereto.
If any such conversion of Foreign Currency, in whole or in part, cannot be
effected for distribution to some Holders entitled thereto, the Depositary may
in its discretion make such conversion and distribution in U.S. dollars to the
extent permissible to the registered Holders for whom such conversion and
distribution is practicable and may distribute the balance of the foreign
currency received by the Depositary to, or hold such balance (without liability
for interest) for the account of, the Holders for whom such conversion and
distribution is not practicable.
Section 4.06. Fixing of Record Date. Whenever any cash dividend or other
cash distribution shall become payable or any distribution other than cash shall
be made, or whenever rights shall be issued with respect to the Deposited
Securities, or whenever for any reason the Depositary causes a change in the
number of Eligible Securities that are represented by each ADS, or whenever the
Depositary shall receive notice of any meeting of holders of Eligible Securities
or other Deposited Securities, or whenever the Depositary shall find it
necessary or convenient, the Depositary will, subject to the requirements of
applicable law and the regulations of any stock exchange on which the ADSs may
be listed, fix a record date which shall be the same date, to the extent
practicable, as the record date for the Eligible Securities or other Deposited
Securities, or if different, to be fixed as soon thereafter as practicable, (a)
for the determination of the Holders who will be (i) entitled to receive such
dividend, distribution or rights, or the net proceeds of the sale thereof, or
(ii) entitled to give instructions for the exercise of voting rights at any such
meeting, or (b) on or after which each ADS will represent the changed number of
Eligible Securities, subject to the provisions contained herein. Subject to the
provisions of Sections 4.01 through 4.05 and 5.09 and to the other terms and
conditions of this Deposit Agreement, the Holders on such record date shall be
entitled to receive the amount distributable by the Depositary with respect to
such dividend or other distribution or such rights or the net proceeds of the
sale thereof, to give voting instructions for the Deposited Securities, or to
exercise the rights of Holders hereunder with respect to such changed number of
Eligible Securities, represented by each ADS, in proportion to the number of
ADSs held by them respectively, or with respect to such other matter. The
Depositary shall promptly notify the New York Stock Exchange, Inc. of any action
to fix a record date for the ADSs or to close the transfer books for the ADSs.
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Section 4.07. Voting of Deposited Securities. Each Holder of ADSs appoints
the Depositary as its representative to exercise the voting rights with respect
to the Shares or other Deposited Securities represented by the ADSs. Holders may
exercise voting rights with respect to the Shares represented by such ADSs only
in accordance with the provisions contained herein. Except as described below,
Holders will not be able to exercise voting rights attaching to the Deposited
Securities on an individual basis. According to ROC Company Law, a shareholder's
voting rights attaching to shareholdings in a ROC company must, as to all
matters subject to a vote of shareholders (other than the election of directors,
if such election is done by means of cumulative voting), be exercised as to all
shares held by such shareholder in the same manner. Accordingly, the voting
rights attaching to the Deposited Securities must be exercised as to all matters
subject to a vote of shareholders by the Depositary, as representative of the
Holders, collectively in the same manner, except in the case of an election of
directors, if such election is done by means of cumulative voting. The election
of directors is by means of cumulative voting unless the Company's Articles of
Incorporation stipulate otherwise.
The Company will provide to the Depositary sufficient copies (including
English translations), as the Depositary may reasonably request, of notices of
meetings of shareholders of the Company and the agenda therefor (containing an
indication of the number of directors to be elected if an election of directors
is to be held at the meeting), and, upon the request of the Depositary, a list
of the candidates who have expressed their intentions to run for an election of
directors (collectively, the "Voting Materials") which the Depositary will mail
to Holders as soon as practicable after receipt of the same by the Depositary,
together with instructions (the "Voting Instructions Notice") as to the manner
in which each Holder may give instructions to the Depositary to vote for or
against each resolution specified in the agenda for the meeting and to vote, on
a cumulative basis (if the election is done by means of cumulative voting), for
the persons designated by such Holder as directors. In order for such voting
instructions to be valid, such voting instructions must be returned to the
Depositary in the manner specified by the Depositary for such purposes in the
Voting Instructions Notice by such date as the Depositary may specify, not to be
earlier than 10 days after mailing of the Voting Materials and Voting
Instructions Notice to the Holders, and not to be later than five days prior to
the date of the shareholders' meeting. For the benefit of the Holders, the
Depositary hereby agrees to request the list of candidates who have expressed
their intentions to run for election of directors. In connection with an
election for the directors, additional or different candidates may be nominated
at the meeting of the shareholders than those proposed in the list provided by
the Company. In the event (i) any such additional or different candidates are
nominated at the meeting or (ii) the number of directors to be elected is
changed subsequent to the mailing of the Voting Materials and Voting
Instructions Notice to the Holders by the Depositary, the Depositary may develop
procedures to calculate votes in a manner not inconsistent with the provisions
of this Section 4.07; provided, however, that, the Depositary shall not exercise
any discretion with regard to any voting rights and if the Depositary elects to
develop such procedures, it shall do so in such a manner so as to give effect,
to the extent practicable, to the instructions received from the Holders.
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Subject to the provisions described in the second succeeding paragraph,
which will apply to the election of directors done by means of cumulative
voting, if a Holder or Holders together holding at least 51 % of the ADSs
outstanding at the relevant record date instruct the Depositary to vote in the
same manner in respect of one or more resolutions to be proposed at the meeting
(other than the election of directors), the Depositary will notify the
instructions to the Chairman of the Board of Directors of the Company (the
"Chairman") or such other person as the Chairman may designate (the
"Representative") and appoint the Representative as the representative of the
Depositary and the Holders to attend such meeting and vote all the Deposited
Securities represented by ADSs to be voted in the manner so instructed by such
Holder or Holders in relation to such resolution or resolutions (the "Voting
Instruction").
If, for any reason, the Depositary has not by the date specified by it
received instructions from a Holder or Holders together holding at least 51% of
all the ADSs outstanding at the relevant record date to vote in the same manner
in respect of any of the resolutions specified in the agenda for the meeting
(other than the elections of directors done by means of cumulative voting), then
such Holders will be deemed to have instructed the Depositary to authorize and
appoint the Representative as representative of the Depositary and the Holders
to attend such meeting and vote all the Deposited Securities represented by ADSs
as such Representative deems appropriate with respect to such resolution or
resolutions, which may not be in the interests of the Holders.
The Depositary will notify the instructions for the election of directors
received from Holders to the Representative and appoint the Representative as
the representative of the Depositary and the Holders to attend such meeting and
vote the Deposited Securities represented by ADSs as to which the Depositary has
received instructions from Holders for the election of directors in the manner
so instructed to the extent practicable, subject to any restrictions under ROC
law and the Articles of Incorporation of the Company. Such Holders who by the
date specified by the Depositary have not delivered instructions to the
Depositary, will be deemed to have instructed the Depositary to authorize and
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appoint the Representative as the representative of the Depositary and the
Holders to attend such meeting and vote all the Deposited Securities represented
by ADSs as to which the Depositary has not received instructions from the
Holders for the election of directors as the Representative deems appropriate
with respect to such resolution or resolutions, which may not be in the best
interests of the Holders. Candidates standing for election as representatives of
a shareholder may be replaced by such shareholder prior to the meeting of
shareholders and the votes cast by the Holder for such candidates shall be
counted as votes for their replacements.
The Depositary's notification of a Voting Instruction or appointment of a
Representative in the manner and circumstances described above shall be subject
to the receipt (at the sole cost and expense of the Depositary) by the
Depositary of a ROC legal opinion (which opinion may be delivered at the time of
entering into the Deposit Agreement) addressed to, and in the form and substance
satisfactory to, the Depositary, to the effect that under ROC law (i) this
Deposit Agreement is valid, binding and enforceable against the Company and the
Holders of ADSs (subject to certain assumptions and qualifications) and (ii) the
Depositary will not be deemed to be authorized to exercise any discretion when
voting in accordance with this paragraph and will not, in the absence of
negligence, bad faith or breach of contract, be subject to any potential
liability under ROC law for losses arising from such voting on the ground that
the voting in accordance with this Section 4.07 is in violation of ROC law;
provided, however, in the event of a change in applicable ROC law after the date
of this Deposit Agreement the Depositary shall be entitled to an opinion of ROC
outside counsel with respect to (i) and (ii) above prior to the next occurring
shareholders' meeting subsequent to such change in applicable ROC law. The
Company and the Depositary shall take such actions, including the amendment of
this Section 4.07, as they shall deem appropriate to endeavor to provide for the
exercise of voting rights attached to the Shares at future shareholders'
meetings of the Company in a manner consistent with applicable ROC law.
By continuing to hold ADSs, all Holders will be deemed to have agreed to
the voting provisions set forth herein as they may be amended from time to time.
As of the date hereof, the ROC Company Law and the Articles of
Incorporation of the Company provide that a holder of Shares (including any
holder of an interest in any Certificate of Payment evidencing the irrevocable
right to receive Shares) has one vote for each Share.
The Depositary will not, and the Depositary will endeavor to ensure that
the Custodian and their respective nominees (including the Representative) do
not (except as described above), exercise any discretion as to voting, nor vote
or attempt to exercise the right to vote that attaches to the Deposited
Securities, other than in accordance with such instructions.
Section 4.08. Right to Submit Proposal at General Meeting of Shareholders.
Beneficial Owners that individually or together with other Beneficial Owners
hold at least 51% of the ADSs outstanding at the Shareholder Record Date are
entitled to submit each year one written proposal (the "Proposal") for voting at
the general meeting of shareholders of the Company; provided, that (i) the
Proposal is in Chinese language and does not exceed 300 Chinese characters in
length, (ii) the Proposal is submitted to the Depositary at least two Business
Days prior to the expiry of the Submission Period, which Submission Period shall
be publicly announced by the Company each year in a report on Form 6-K filed
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with the Commission prior to the commencement of the closed period, during which
under the ROC laws the Company shall close its share transfer book, for general
meetings of shareholders of the Company as required by relevant law, (iii) the
Proposal is accompanied by a written certificate to the Depositary (the "First
Certificate"), in the form required by the Depositary, certifying that the
Proposal is being submitted by Beneficial Owners ("Submitting Holders") that
individually or together with other Beneficial Owners hold at least 51% of the
ADSs outstanding at the Submission Date and, if the Submission Date is on or
after the Shareholder Record Date, also certifying that the Submitting Holders
held at least 51% of the ADSs outstanding as of the Shareholder Record Date,
(iv) if the Submission Date is prior to the Shareholder Record Date, the
Submitting Holders must also provide, within five Business Days after the
Shareholder Record Date, a second written certificate (the "Second Certificate")
to the Depositary, in the form required by the Depositary, certifying that the
Submitting Holders continued to hold at least 51% of the ADSs outstanding at the
Shareholder 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 Certificate or the Second 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 general meeting of the shareholders
of the Company (including the costs and expenses of the Depositary or its agent
to attend the general meeting of the shareholders of the Company) as such fees
and expenses may be reasonably determined and documented by the Depositary or
the Company, and (vi) the Proposal shall only be voted upon at the general
meeting of shareholders of the Company if the Proposal is accepted by the board
of directors of the Company as eligible in accordance with law for consideration
at a shareholders meeting.
Any Proposal(s) received by the Depositary which the Depositary reasonably
believes to be in full compliance with the preceding paragraph shall be
submitted by the Depositary to the Company prior to the expiration of the
Submission Period. The Depositary shall withdraw any Proposal so submitted as to
which the Depositary has not received within five Business Days after the
Shareholder Record Date any Second Certificate required under the preceding
paragraph.
This Section 4.08 shall cease to be applicable whenever the Shares
registered in the name of the Depositary as representative of the Holders
constitute less than one percent (1%) of the total issued and outstanding Shares
of the Company as of the Shareholder Record Date.
Section 4.09. Right to Submit Nomination for Independent Director at
Meeting of Shareholders. The Depositary will, if so requested by Beneficial
Owners that individually or together with other Beneficial Owners own at least
51% of the ADSs outstanding at the applicable Shareholder Record Date (such
Beneficial Owners, the "Nominating Owners") submit one (1) nomination of a
roster of candidates (a "Nomination") to be considered for nomination as
independent directors to the Company's board of directors for voting at the
meeting of shareholders of the Company; provided, that: (i) the number of
independent director candidates contained in the Nomination shall not exceed the
number of the independent directors to be elected at such meeting, (ii) the
Nomination shall contain the name, educational background and past work
experience of each independent director candidate identified in the Nomination,
(iii) the Nomination shall include (a) a letter of consent issued by each
independent director candidate identified in the Nomination consenting to act as
a director if such independent director candidate is elected as such, (b) a
written statement by each independent director candidate identified in the
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Nomination assuring that such independent director candidate complies with
relevant ROC laws and regulations, each as amended, and that the requirements,
if any, required to be fulfilled by the independent director candidate under
relevant ROC law and the Company's Articles of Incorporation are satisfied, and
(c) any other documents as may be required by law or the Company from time to
time, (iv) the Nomination is submitted to the Depositary at least two Business
Days prior to the expiration of the Nomination Submission Period (which
Nomination Submission Period shall be publicly announced by the Company in a
report on Form 6-K filed with the Commission prior to the commencement of the
closed period, during which under the ROC laws the Company shall close its share
transfer book, for a general or special meeting of shareholders of the Company
as required by relevant law when the meeting of shareholders of the Company
involves the election of independent directors), (v) the Nomination is
accompanied by a written certificate to the Depositary signed by each Nominating
Owner (the "First Nomination Certificate"), in a form satisfactory to the
Depositary and the Company, certifying that (a) each Nominating Owner has only
endorsed the said Nomination, (b) the Nomination is being submitted by
Nominating Owners that individually or together with other Nominating Owners own
at least 51% of the ADSs outstanding at the Nomination Submission Date and (x)
if the Nomination Submission Date is on or after the applicable Shareholder
Record Date, also certifying that the Nominating Owners owned at least 51% of
the ADSs outstanding as of such Shareholder Record Date, or (y) if the
Nomination Submission Date is prior to the applicable Shareholder Record Date,
also certifying that the Nominating Owners will continue to own at least 51% of
the ADSs outstanding as of such Shareholder Record Date and will provide, within
five Business Days after such Shareholder Record Date, a second written
certificate to the Depositary signed by each Nominating Owner (the "Second
Nomination Certificate"), in a form satisfactory to the Depositary and the
Company, certifying that the Nominating Owners continued to own at least 51% of
the ADSs outstanding on the applicable Shareholder Record Date (together with
certified evidence of each Nominating Owner's ownership of the applicable ADSs
as of such applicable Shareholder Record Date), and (c) the name(s) and
address(es) of the Nominating Owner(s) and the number of ADSs owned by each
Nominating Owner (together with certified evidence of each Nominating Owner's
ownership of the applicable ADSs as of the Nomination Submission Date, in the
case of (a), and the applicable Shareholder Record Date, in the case of (b)),
(vi) the Nomination is accompanied by a joint and several irrevocable
undertaking of all Nominating Owners (which undertaking may be contained in the
First Nomination Certificate or the Second Nomination Certificate) that each
such Nominating Owner shall pay all fees and expenses incurred in relation to
the submission of the Nomination for voting at the meeting of the shareholders
of the Company (including the costs and expenses of the Depositary or its agent
to attend any meeting of the shareholders of the Company) as such fees and
expenses may be reasonably determined and documented by the Depositary or the
Company, and (vii) the Nomination shall only be voted upon at the meeting of
shareholders of the Company if the Nomination is accepted by the board of
directors of the Company as eligible in accordance with law for consideration at
a shareholders meeting. Each Beneficial Owner hereby agrees and acknowledges
that in no event shall the Depositary or its nominee be nominated by the
Nominating Owner(s) for election as an independent director at a meeting of the
Company's shareholders.
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Any Nomination timely received by the Depositary which the Depositary
reasonably believes to be in full compliance with the preceding paragraph shall
be submitted by the Depositary 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
Shareholder Record Date any Second Nomination Certificate required under the
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 Owner, or a group of Nominating Owners,
each of which appears to satisfy the requirements set forth in the preceding
paragraph, the Depositary is hereby authorized and instructed to disregard all
Nominations received from such Nominating Owner(s), except for the first
Nomination received by the Depositary from such Nominating Owner(s) and shall
submit such Nomination to the Company for consideration at a meeting of the
Company's shareholders involving the election of independent 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 Owner(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 independent directors on behalf of the Nominating
Owner(s).
Notwithstanding anything contained in this 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 Owners, 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.
This Section 4.09 shall cease to be applicable whenever the Shares
registered in the name of the Depositary as representative of the Holders
constitute less than one percent (1%) of the total issued and outstanding Shares
of the Company as of the Shareholder Record Date or the Company's Articles of
Incorporation no longer provide shareholders of the Company with the right to
nominate candidates for election as independent directors.
Section 4.10. Changes Affecting Deposited Securities. Upon any change in
nominal or par value, split-up, consolidation or 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,
and upon the Depositary having obtained specific regulatory approval, if
necessary, for the issuance of additional ADSs from the appropriate governmental
entity in the ROC, any securities which shall be received by the Depositary or
the Custodian in exchange for, in conversion of, or in respect of Deposited
Securities will be treated as new Deposited Securities under this Deposit
Agreement, and the ADSs shall thenceforth represent, in addition to the existing
Deposited Securities, the right to receive the new Deposited Securities so
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received, unless additional ADSs are delivered pursuant to the following
sentence. In any such case, the Depositary may, after consultation with the
Company, and will, if the Company so requests, issue and deliver additional ADSs
as in the case of a distribution in Eligible Securities, or call for the
surrender of outstanding ADSs to be exchanged for new ADSs specifically
describing such new Deposited Securities. Furthermore, the Company and the
Depositary shall determine whether any amendments to the terms of this Deposit
Agreement are required in any such case.
Notwithstanding the foregoing, in the event that any security or property
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 Company's counsel reasonably 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 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 Section 4.01.
Section 4.11. Transmittal by the Depositary of Company Notices, Reports
and Communications. The Depositary shall make available for inspection by
Holders at its Principal Office any reports and communications received from the
Company which are both (a) received by the Depositary as representative of the
holder of record of the Deposited Securities, and (b) made generally available
to the holders of such Deposited Securities by the Company. The Depositary shall
also promptly provide or make available to the Holders copies of such reports
and communications when furnished by the Company pursuant to Section 5.08. Any
such reports and communications furnished or made available to shareholders
(including any proxy form and agenda) furnished to the Depositary by the Company
will be furnished in English when so required pursuant to any regulations of the
Commission or any stock exchange on which the ADSs are listed.
Section 4.12. Taxation. The Depositary or the Custodian will forward to
the Company or its agents such information from its records as the Company may
reasonably request to enable the Company or its agent to file necessary reports
with governmental authorities or agencies, and the Depositary, the Custodian or
the Company or its agents may file such reports as are necessary to reduce or
eliminate applicable taxes on dividends and on other distributions in respect of
Deposited Securities. In accordance with instructions from the Company and to
the extent practicable and at the expense of the Company, the Depositary will
take, or will cause the Custodian to take, reasonable administrative actions to
obtain tax refunds, reduced withholding of tax at source on dividends and other
benefits under applicable tax treaties with respect to dividends and other
distributions on the Deposited Securities. Holders may be required from time to
time to file such proof of taxpayer status or residence, to execute such
certificates and to make such representations and warranties, or to provide any
other information or documents as the Depositary may deem necessary or proper to
fulfill the Depositary's obligations under applicable law. Holders shall provide
the Depositary, in a timely manner, with copies, or originals if necessary and
appropriate, of any such proofs of residence, taxpayer status, beneficial
ownership and any other information or documents which the Depositary may
reasonably request. The Holder shall indemnify the Depositary, the Company, the
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Custodian and any of their respective directors, employees, agents and
Affiliates against, and hold each of them harmless from, any claims by any
governmental authority with respect to taxes, additions to tax, penalties or
interest arising out of any refund of taxes, reduced rate of withholding at
source or other tax benefit obtained for such Holder pursuant to this Section
4.12.
Upon the request of any Holder, the Depositary shall provide such Holder
with a copy of the receipt of foreign taxes withheld, or proof of such payment,
if such receipt or proof is received by the Depositary from the Company, but in
no event shall the Depositary be held liable for a Holder's failure to obtain
foreign tax credits against the Holder's United States federal income tax
liability.
If any withholding tax is imposed at source on any amounts paid under this
Deposit Agreement and the Company is required to withhold and pay such tax, the
Company shall promptly surrender to the Depositary the original tax receipt or
other proof of payment in a form reasonably satisfactory to the Depositary,
subject to applicable ROC law.
Additionally, if any tax is paid by the Company (e.g., stamp duty tax or
capital gains tax) relating to any amounts paid under this Deposit Agreement,
the Company shall promptly surrender to the Depositary the original tax receipt
or other proof of payment in a form reasonably satisfactory to the Depositary,
subject to applicable ROC law.
In no event shall the Depositary be held liable if the Company or any
subsidiary thereof constitutes a Foreign Personal Holding Company, Passive
Foreign Investment Company, or any other type of entity that may result in a
Holder's increased tax liability in respect of (i) gain realized on the sale or
other disposition of the ADSs or (ii) dividends. The Depositary is under no
obligation to provide any Holder with any information regarding the tax status
of the Company in the current or any succeeding taxable years.
Section 4.13. Available Information. The Company is currently subject to
the periodic reporting requirements of the Exchange Act and, accordingly, is
required to file or submit certain reports with the Commission. These public
reports and other information can be retrieved from the Commission's website
(www.sec.gov) and can be inspected by Holders and copied at the public reference
facilities maintained by the Commission located at the date of this Deposit
Agreement at 100 F Street, N.E., Room 1580, Washington, D.C. 20549.
Section 4.14. Disclosure of Ownership and Shareholders' Rights. The
Company hereby agrees, for so long as may be required for the benefit of Holders
of ADSs while this Deposit Agreement remains in effect, that it shall register
the Depositary or its nominee in its register of shareholders with respect to
all Eligible Securities or other Deposited Securities deposited with the
Custodian at any time and from time to time for the benefit of Holders of ADSs.
The Company further covenants, for so long as this Deposit Agreement
remains in effect, that, with respect to all Eligible Securities or other
Deposited Securities deposited with the Custodian at any time and from time to
time for the benefit of Holders of ADSs, it will not suspend (a) the status of
the Depositary or its nominee as registered shareholder of the Company or (b)
the rights of holders of Eligible Securities or other Deposited Securities,
including the right to vote, in or connected to such Eligible Securities or
other Deposited Securities deposited with the Custodian, subject to the
provisions of this Deposit Agreement.
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Notwithstanding that the Depositary will act for the Holders of ADSs and
will be unable to make the disclosures or declarations required under the
Company's Articles of Incorporation, the Company shall treat the Depositary,
acting for the Holders of ADSs, equally with any other registered holder of
Eligible Securities or other Deposited Securities with respect to the exercise
of all rights of registered holders of Eligible Securities or other Deposited
Securities, including, but not limited to, the right to vote and to receive
dividends or other distributions, subject to the provisions of this Deposit
Agreement.
If as a result of a change of ROC law, the Depositary acting for the
Holders of ADSs shall no longer be able to exercise the rights of a registered
holder of Eligible Securities as provided in the preceding paragraphs, the
Company agrees to use its reasonable efforts to give the Depositary and the
Holders not less than thirty (30) days prior written notice thereof.
ARTICLE V
THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY
Section 5.01. Maintenance of Depositary's Office and Register. Until the
termination of this Deposit Agreement in accordance with its terms, the
Depositary shall maintain in the Borough of Manhattan, the City of New York,
facilities for the issuance and delivery, registration, registration of
transfers and surrender of ADSs and, if applicable, to countersign ADRs
evidencing the ADSs so issued, transferred, combined or split-up, in accordance
with the provisions of this Deposit Agreement.
The Depositary shall keep books at its Principal Office for the
registration and transfers of ADSs, which office shall be open at all reasonable
times for inspection by Holders and the Company, provided that such inspection
shall not be for the purpose of communicating with Holders in the interest of a
business or object other than the business of the Company or a matter related to
this Deposit Agreement, the ADSs or any Receipts.
The Depositary may close the transfer books, at any time or from time to
time, when deemed necessary by it in connection with the performance of its
duties hereunder or at the reasonable request of the Company.
If any ADSs are listed on one or more stock exchanges or quoted on any
automated quotation systems in the United States, the Depositary or its agent
may act as Registrar if appointed by the Company or, upon the written request
of, or with the written approval of the Company, appoint a Registrar or one or
more co-registrars for registration of such ADSs in accordance with any
requirements of such exchange or exchanges or systems and with the terms of any
such appointment. Such Registrar or co-registrars may be removed and a
substitute or substitutes appointed by the Depositary upon the request or with
the approval of the Company. In carrying out its functions, a co-transfer agent
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may require evidence of authority and compliance with applicable laws and other
requirements by Holders or persons entitled thereto and will be entitled to
protection and indemnity to the same extent as the Depositary. Upon the written
approval of the Company, the Depositary may appoint one or more co-transfer
agents for the purpose of effecting transfers, combinations and split-ups of
ADSs and, if applicable, ADRs at designated transfer offices on behalf of the
Depositary. In carrying out its functions, a co-transfer agent may require
evidence of authority and compliance with applicable laws and other requirements
by Holders or persons entitled to ADSs and will be entitled to protection and
indemnity to the same extent as the Depositary. Each Receipt registrar,
co-registrar or co-transfer agent appointed under this Section 5.01 (other than
Citibank, N.A.) shall give notice in writing within five business days from the
day of such appointment to the Company and the Depositary accepting such
appointment and agreeing to be bound by the applicable terms of this Deposit
Agreement.
The Depositary may perform its obligations under this Section 5.01 through
any agent appointed by it pursuant to this Deposit Agreement, provided that the
Depositary shall notify the Company of such appointment and shall remain
responsible for the performance of such obligations as if no agent were
appointed.
Section 5.02. Lists of Receipt Holders. Notwithstanding any other
provision of this Deposit Agreement, promptly upon request by the Company, the
Depositary shall furnish to it (i) a list, as of a recent date, of the names,
addresses and holdings of ADSs by all registered Holders and (ii) copies of all
certifications delivered to the Depositary pursuant to the first sentence of
Section 2.06 hereof.
Section 5.03. Obligations of the Depositary, the Custodian and the
Company. The obligations of the Company and the Depositary and their respective
agents under this Deposit Agreement are expressly limited to performing their
respective duties specified herein in good faith and using their reasonable
judgment.
Each of the Depositary and its agents assumes no obligation and shall be
subject to no liability under this Deposit Agreement or the Receipts to Holders
or other persons, except to perform such obligations as are specifically set
forth and undertaken by it in this Deposit Agreement without negligence and in
good faith. The Depositary and the Company undertake to perform such duties and
only such duties as are specifically set forth in this Deposit Agreement, and no
implied covenants or obligations shall be read into this Deposit Agreement
against the Depositary or the Company or their respective agents. Without
limitation of the preceding, none of the Depositary, its Affiliates nor its
agents or the Company, its Affiliates or its 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 ADSs or
Receipts, which in its opinion may involve it in expense or liability, unless an
indemnity satisfactory to it in its sole discretion against all expense
(including fees and disbursements of counsel) and liability shall be furnished
as often as may be required, and no Custodian shall be under any obligation
whatsoever with respect to such proceedings, the Custodian being responsible
solely to the Depositary. Neither the Depositary, its Affiliates, nor its
agents, or the Company, its Affiliates, nor its agents shall be liable for any
action or inaction by it or them in reliance upon the advice of or information
from legal counsel, accountants, any person presenting Eligible Securities for
deposit, any Holder or any other person believed by it or them in good faith to
be competent to give such advice or information. Each of the Depositary, its
Affiliates and its agents and the Company, its Affiliates and its agents may
rely and shall be protected from acting upon any written notice, request,
direction or other document believed by it to be genuine and to have been signed
or presented by the proper party or parties.
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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, or for the failure of the
Company to exchange any Certificate of Payment into any Scripless Shares
represented by the Master Certificate or any Master Certificate into Shares in
physical certificated form, or for any action of or failure to act by, or any
information provided or not provided by, DTC or any DTC Participant, provided
that any such action or omission is in good faith and in accordance with the
terms of this Deposit Agreement. The Depositary shall not be obligated in any
way to monitor or enforce the obligations of the Company, including, without
limitation, in respect of any Certificate of Payment, the conversion of such
Certificate of Payment into any Scripless Shares represented by the Master
Certificate or any Master Certificate into Shares in physical certificated form.
Section 5.04. Prevention or Delay in Performance by the Depositary or the
Company. Neither the Depositary nor the Company nor any of their respective
directors, employees, agents or Affiliates will be liable to any Holder or other
person or entity, if by reason of any provision of any present or future law or
regulation of the United States, the ROC or any other country, or of any other
governmental or regulatory authority or stock exchange or by reason of any
provision, present or future, of the Articles of Incorporation of the Company,
or by reason of any provision of any securities issued or distributed by the
Company, or any offering or distribution thereof, or by reason of any act of God
or war or other circumstance beyond its control, the Depositary or the Company
or any of their respective directors, employees, agents, or Affiliates shall be
prevented, delayed or forbidden from, or be subject to any civil or criminal
penalty on account of, doing or performing any act or thing which by the terms
of this Deposit Agreement or the Deposited Securities it is provided will be
done or performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for under this Deposit Agreement. Where, by the terms of a
distribution pursuant to Section 4.01, 4.02, or 4.03 of this Deposit Agreement,
or an offering or distribution pursuant to Section 4.04, 4.10 or 5.09 of this
Deposit Agreement, or for any reason, such distribution or offering may not be
lawfully made available to Holders, and the Depositary may not lawfully dispose
of such distribution or offering on behalf of such Holders and make the net
proceeds available to such Holders, then the Depositary will not make such
distribution or offering, and will allow the rights, if applicable, to lapse.
Section 5.05. Resignation and Removal of the Depositary, Appointment of
Successor Depositary. The Depositary may at any time resign as Depositary
hereunder by sixty (60) days' written notice of its election so to do to the
Company, such resignation to take effect upon the earlier of (i) the appointment
of a successor depositary and its acceptance of such appointment as hereinafter
provided and (ii) the expiration of sixty (60) days after delivery to the
Company of such notice.
The Depositary may at any time be removed by the Company by sixty (60)
days' written notice of such removal which shall become effective upon the
earlier of (i) the sixtieth (60th) day after delivery thereof to the Depositary
and (ii) the appointment of a successor depositary and its acceptance of such
appointment as hereinafter provided.
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In case at any time the Depositary acting hereunder shall resign or be
removed, the Company shall use its best efforts to appoint a successor
depositary, which shall be a bank or trust company having an office in the
Borough of Manhattan, The City of New York. Every successor depositary shall
execute and deliver to its predecessor and to the Company an instrument in
writing accepting its appointment hereunder, and thereupon such successor
depositary, without any further act or deed, shall become fully vested with all
the rights, powers, duties and obligations of its predecessor; but such
predecessor, nevertheless, upon payment of all sums due to it and on the written
request of the Company, shall execute and deliver an instrument transferring to
such successor all rights and powers of such predecessor hereunder, shall duly
assign, transfer and deliver all right, title and interest in the Deposited
Securities to such successor, and shall deliver to such successor a list of the
Holders of all outstanding ADSs and such other books and records maintained by
such predecessor and its agents with respect to its function as Depositary
hereunder. Any such successor depositary shall promptly mail notice of its
appointment to the Holders.
Any corporation into or with which the Depositary may be merged or
consolidated shall be the successor of the Depositary without the execution or
filing of any document or any further act.
Section 5.06. Charges of Depositary. The Depositary will charge any party
(i) who makes a deposit of Eligible Securities or to whom ADSs are issued, (ii)
who surrenders an ADS for the purpose of delivery or withdrawal of deposited
Eligible Securities or other Deposited Securities and (iii) to whom a
distribution of Eligible Securities pursuant to an exercise of rights or other
free distributions of Eligible Securities (other than with respect to stock
splits or dividends) is made, a fee of up to $0.05 for each ADS (or fraction
thereof) issued or surrendered, and a fee of up to $0.02 for each ADS (or
fraction thereof) held for any cash distribution (other than with respect to
dividends) made pursuant to this Deposit Agreement. The Company will pay such
expenses, fees or charges of the Depositary and those of the Registrar, if any,
as are agreed to in a written agreement between the Company and the Depositary,
except for taxes and other governmental charges, any applicable share transfer,
custody and registration fees on deposit, withdrawal, or transfer of Eligible
Securities, certain cable, telex, facsimile transmission and delivery charges
and such expenses as are incurred by the Depositary in the conversion of foreign
currency into U.S. dollars, and in connection with compliance with foreign
exchange control regulations, which shall be payable by Holders.
The Depositary may own and deal in any class of securities of the Company
and its Affiliates and in ADSs. The right of the Depositary to receive payment
of fees, charges and expenses as provided in this Section 5.06 shall survive the
termination of this Deposit Agreement and, as to any Depositary, the resignation
or removal of such Depositary pursuant to Section 5.05.
Section 5.07. The Custodian. The Depositary has initially appointed
Citibank, N.A., Taipei Branch, as custodian and agent of the Depositary for the
purpose of this Deposit Agreement. The Custodian in acting hereunder shall be
subject at all times and in all respects to the direction of the Depositary and
shall be responsible solely to it. The Custodian may resign and be discharged
from its duties hereunder by notice of such resignation delivered to the
Depositary at least sixty (60) days prior to the date on which such resignation
- 43 -
is to become effective. If upon such notice of resignation there shall be no
Custodian acting hereunder, the Depositary shall, promptly after receiving such
notice, after consultation with the Company, appoint a substitute custodian that
is organized under the laws of the ROC which shall thereafter be the Custodian
hereunder. The Depositary may discharge any Custodian at any time upon notice to
the Custodian being discharged and, after consultation with the Company, appoint
a substitute or an additional custodian, who shall thereafter be a Custodian
hereunder. Forthwith upon its appointment, each such substitute or additional
custodian shall deliver to the Depositary and the Company an acceptance of such
appointment satisfactory in form and substance to the Depositary and the
Company. Any Custodian ceasing to act hereunder as Custodian shall deliver all
Deposited Securities held by it to a Custodian continuing to act upon the
instruction of the Depositary. The Depositary shall give notice in writing to
all registered Holders of the name, location and the appointment of any
successor Custodian. Upon the appointment of any successor depositary hereunder,
any Custodian then acting hereunder shall forthwith become, without any further
act or writing, the agent hereunder of such successor depositary and the
appointment of such successor depositary shall in no way impair the authority of
any Custodian hereunder; but the successor depositary so appointed shall,
nevertheless, on the written request of any Custodian, execute and deliver to
such Custodian all such instruments as may be proper to give to the Custodian
full and complete power and authority as agent hereunder of such successor
depositary.
Section 5.08. Notices and Reports. On or before the first date on which
the Company gives notice, by publication or otherwise, of any meeting of holders
of any Deposited Securities, or of any adjourned meeting of such holders, or of
the taking of any action by such holders of any Deposited Securities other than
at a meeting, or of the taking of any action in respect of any cash or other
distributions or the offering of any rights in respect of any Deposited
Securities, the Company agrees to transmit to the Depositary a copy of the
notice thereof in the English language but otherwise in the form given or to be
given to holders of Eligible Securities or other Deposited Securities. The
Company shall also furnish at such time to the Depositary a summary, in English,
of any applicable provisions or proposed provisions of the Articles of
Incorporation of the Company that may be relevant or pertain to such notice of
meeting or be the subject of a vote thereat.
The Depositary will arrange for the prompt transmittal by the Custodian to
the Depositary of such notices and any other reports and communications that are
generally provided by the Company to holders of its Eligible Securities or other
Deposited Securities (including English language summaries or translations
thereof provided to the Depositary by the Company). The Depositary shall arrange
to provide copies thereof to all Holders or to otherwise make such notices,
reports and other communications available to all Holders on a basis similar to
that for holders of Eligible Securities or other Deposited Securities, or on
such other basis as the Company may advise the Depositary or as may be required
by any applicable law, regulation or stock exchange requirement. The Company
will also provide to the Depositary an English language translation of such
reports or communications reasonably concurrently with the receipt (by
publication or otherwise) by holders of Eligible Securities of such reports or
communications. The Depositary shall not be required to obtain English
translations or English summaries of any notices, reports or communications
which are not initially furnished to the Depositary in English text.
- 44 -
Section 5.09. Issuance of Additional Eligible Securities, ADSs Etc. The
Company agrees that in the event that the Deposit Agreement is amended to permit
the deposit of Eligible Securities generally without the provision of opinions
of counsel as to whether such Eligible Securities are Restricted Securities and
the Company issues (a) additional Eligible Securities, (b) rights to subscribe
for Eligible Securities or other Deposited Securities, (c) securities
convertible or exchangeable into Eligible Securities, or (d) rights to subscribe
for securities convertible or exchangeable into Eligible Securities, the Company
will, at the request of the Depositary, promptly furnish to the Depositary a
written opinion from United States counsel for the Company, which counsel shall
be reasonably satisfactory to the Depositary, stating whether or not the
circumstances of such issue require a registration statement under the
Securities Act to be in effect prior to the delivery of the ADSs to be issued in
connection with such securities or the issuance of such rights to the Holders
entitled thereto; provided, however, that no such opinion shall be required in
the event of an issuance of Eligible Securities as a bonus, share split or
similar event. If in the opinion of such counsel a registration statement is
required, such counsel shall furnish to the Depositary a written opinion as to
whether such registration statement is in effect. If, being so advised by
counsel, the Company determines that an issuance of such securities is required
to be registered under the Securities Act, the company will register such
issuance to the extent necessary, alter the terms of the issuance to avoid the
registration requirements of the Securities Act or direct the Depositary to take
specific measures with respect to the acceptance for deposit of Eligible
Securities to prevent such issuance from being made in violation of the
registration requirements of the Securities Act.
The Company agrees with the Depositary that neither the Company nor any of
its Affiliates will at any time (i) deposit any Eligible Securities or other
Deposited Securities, either upon original issuance or upon a sale of Eligible
Securities or other Deposited Securities previously issued and reacquired by the
Company or by any such Affiliate, unless such transaction is registered under
the Securities Act, or is exempt from registration under the Securities Act as
confirmed by a written opinion from counsel for the Company in the United
States, which counsel shall be reasonably satisfactory to the Depositary, or
(ii) issue additional Eligible Securities, rights to subscribe for such Eligible
Securities, securities convertible into or exchangeable for Eligible Securities
or rights to subscribe for such securities except under circumstances complying
in all respects with the Securities Art.
Section 5.10. Indemnification. The Company agrees to indemnify the
Depositary, the Custodian and any of their respective directors, employees,
agents and Affiliates against, and hold each of them harmless from, any loss,
liability, tax, charge or expense of any kind whatsoever (including, but not
limited to, the reasonable fees and expenses of counsel) incurred by them that
may arise (a) out of or in connection with any offer, issuance, sale, resale,
transfer, deposit or withdrawal of Receipts, ADSs, or other Deposited
Securities, as the case may be, or any offering documents in respect thereof or
(b) out of acts performed or omitted, including but not limited to any delivery
by the Depositary on behalf of the Company of information regarding the Company,
in connection with this Deposit Agreement, the Receipts, the ADSs or any
Deposited Securities, as the same may be amended, modified or supplemented from
time to time, in any such case (i) by the Depositary, the Custodian or any of
their respective directors, employees, agents and Affiliates, except to the
extent such loss, liability, tax, charge or expense is due to negligence or bad
faith of any of them, or (ii) by the Company or any of its directors, employees,
agents and Affiliates.
- 45 -
The Depositary agrees to indemnify the Company and its directors,
employees, agents and Affiliates, and hold them harmless from any loss,
liability, tax, charge or expense of any kind whatsoever (including, without
limitation, reasonable fees and expenses of counsel) incurred by them which may
arise out of acts performed or omitted by the Depositary due to the negligence
or bad faith of the Depositary.
The obligations set forth in this Section 5.10 shall survive the
termination of this Deposit Agreement and the succession or substitution of any
party hereto.
Any person seeking indemnification hereunder (an "indemnified person")
shall notify the person from whom it is seeking indemnification (the
"indemnifying person") of the commencement of any identifiable action or claim
promptly after such indemnified person becomes aware of such commencement
(provided that the failure to make such notification shall not affect such
indemnified person's rights otherwise than under this Section 5.10) and shall
consult in good faith with the indemnifying person as to the conduct of the
defense of such action or claim, which defense shall be reasonable in the
circumstances. No indemnified person shall compromise or settle any action or
claim without the consent of the indemnifying person, which consent shall not be
unreasonably withheld.
Section 5.11. Certain Rights of the Depositary; Limitations. Subject to
the further terms and provisions of this Section 5.11, Citibank, N.A. and its
agents may own and deal in any class of securities of the Company and its
Affiliates and in ADSs. The Depositary may issue ADSs against evidence of rights
to receive Eligible Securities from the Company, or any custodian, registrar,
transfer agent, clearing agency or other entity involved in ownership or
transaction records in respect of the Eligible Securities. Such evidence of
rights shall consist of written blanket or specific guarantees of ownership of
Eligible Securities furnished on behalf of the holder thereof. In its capacity
as Depositary, the Depositary shall not lend Eligible Securities or ADSs;
provided, however, that the Depositary may, to the extent permitted by
applicable laws, (i) issue ADSs prior to the receipt of Eligible Securities
pursuant to Section 2.03 and (ii) deliver Eligible Securities prior to the
receipt and cancellation of ADSs pursuant to Section 2.06, including ADSs which
were issued under (i) above but for which Eligible Securities may not have been
received (each such transaction a "Pre-Release Transaction"). The Depositary may
receive ADSs in lieu of Eligible Securities in satisfaction of a Pre-Release
Transaction; provided that the Depositary may not execute any Pre-Release
Transaction prior to receipt of any required ROC regulatory approval or if such
release would violate applicable law. Each Pre-Release Transaction must be (i)
preceded or accompanied by a written representation by the person or entity (the
"Applicant") to whom the ADSs or Eligible Securities are to be delivered that
such Applicant, or its customer, owns the Eligible Securities or ADSs to be
remitted, as the case may be, and assigns all right, title and interest therein
to the Depositary for the benefit of the Holders, and such other representations
and agreements as are set forth in this Deposit Agreement, (ii) at all times
fully collateralized with cash or such other collateral as the Depositary deems
appropriate, (iii) terminable by the Depositary on not more than five business
days notice and (iv) subject to the further indemnities and credit regulations
as the Depositary deems appropriate. The number of ADSs that are outstanding at
any time as a result of Pre-Release Transactions will not normally exceed 30% of
the Eligible Securities deposited hereunder, provided, however, that the
Depositary reserves the right to change or disregard such limit from time to
time as it deems appropriate, after consultation with the Company. The
Depositary may also set limits with respect to the number of ADSs and Eligible
Securities involved in Pre-Release Transactions with any one Applicant on a case
by case basis as it deems appropriate. Neither Temporary ADSs nor any interest
in any Certificate of Payment shall be eligible for Pre-Release Transactions
hereunder.
- 46 -
The Depositary may retain for its own account any compensation received by
it in conjunction with the foregoing. Collateral provided pursuant to (ii)
above, but not the earnings thereon, shall be held for the benefit of the
Holders (other than the Applicant).
Section 5.12. Undertakings of the Company. So long as any ADSs are
outstanding, the Company shall:
(a) inform the Depositary of the total number of the Company's
issued and outstanding Eligible Securities upon request by the Depositary
to the Company and provide forthwith upon request such additional
information, facilities and assistance as may reasonably be requested by
the Depositary to enable it to discharge the powers, rights and duties
vested in it hereunder;
(b) file with the appropriate governmental and regulatory
authorities in the ROC all required information including the outstanding
number of ADSs and underlying Eligible Securities represented by such ADSs
pursuant to ROC Guidelines for Handling Issuance and Offer of Overseas
Securities by Issuers as amended on April 4, 2006 and from time to time
thereafter (the "Overseas Offering Rules"); and
(c) in the event that the Company increases its capital for cash or
distributes stock dividends and the Depositary issues additional ADSs
pursuant to the ROC Overseas Offering Rules, within two days after issue
of the additional ADSs announce to the public and file with the
appropriate governmental and regulatory authorities in the ROC, all
necessary and required information regarding issuance of the additional
ADSs pursuant to the ROC Overseas Offering Rules.
ARTICLE VI
AMENDMENT AND TERMINATION
Section 6.01. Amendment. The form of ADRs and any provisions of this
Deposit Agreement may at any time and from time to time be amended by agreement
between the Company and the Depositary without the consent of the Holders or
Beneficial Owners of ADSs, provided, however, that any amendment that imposes or
increases any fees or charges (other than taxes and other governmental charges,
registration fees, cable, telex or facsimile transmission costs, delivery costs
or other such expenses), or which otherwise prejudices any substantial existing
right of Holders, will not take effect as to outstanding ADSs until the
expiration of thirty (30) days after notice of any amendment has been given to
the Holders of outstanding ADSs, and in any case, to the extent necessary to
comply with applicable laws or regulations. Every Holder of an ADS or beneficial
interest therein, at the time any amendment so becomes effective, will be
deemed, by continuing to hold such ADS or beneficial interest therein, to
consent and agree to such amendment and to be bound by this Deposit Agreement as
amended thereby. In no event will any amendment impair the right of the Holder
or Beneficial Owner of any ADS to surrender such ADS or beneficial interest
therein and to receive therefor the Deposited Securities represented thereby,
except to comply with mandatory provisions of applicable law.
- 47 -
Section 6.02. Termination. The Depositary will at any time at the
direction of the Company terminate this Deposit Agreement by mailing notice of
such termination to the Holders at least sixty (60) days prior to the date fixed
in such notice for such termination. The Depositary may likewise terminate this
Deposit Agreement by mailing notice of such termination to the Company and the
Holders then outstanding at least sixty (60) days prior to the date fixed in
such notice of termination if, any time after sixty (60) days have expired after
the Depositary will have delivered to the Company a written notice of its
election to resign, a successor depositary will not have been appointed and
accepted its appointment, in accordance with the terms of this Deposit
Agreement.
On and after the date of termination, the Holder of an ADS will, upon (a)
surrender of such ADS at the Principal Office, (b) payment of the fee of the
Depositary for the surrender of ADSs referred to in this Deposit Agreement, and
(c) 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 ADSs. If any ADSs remain outstanding after the date of
termination of this Deposit Agreement, the Depositary thereafter will
discontinue the registration of transfers of ADSs, will suspend the distribution
of dividends to the Holder thereof and will not give any further notices or
perform any further acts under this Deposit Agreement, except the collection of
dividends and other distributions pertaining to the Deposited Securities, the
sale of rights and other property and the delivery of underlying Eligible
Securities together with any dividends or other distributions received with
respect thereto and the net proceeds of the sale of any rights or other
property, in exchange for surrendered ADSs (after deducting, in each case, the
fees of the Depositary for the surrender of an ADS and other expenses set forth
in this Deposit Agreement and any applicable taxes or governmental charges).
At any time after the expiration of six months from the date of
termination, the Depositary may sell the Deposited Securities then held
hereunder and may hold uninvested the net proceeds of such sale, together with
any other cash, unsegregated and without liability for interest, for the pro
rata benefit of the Holders of ADSs that have not theretofore surrendered their
ADSs, 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 this Deposit Agreement except to account
for net proceeds and other cash (after deducting, in each case, the fee of the
Depositary and other expenses set forth herein for the surrender of an ADS and
any applicable taxes or other governmental charges). The Company will not
appoint any other depositary for issuance of ADSs so long as Citibank, N.A. is
acting as Depositary under this Deposit Agreement. Upon termination of this
Deposit Agreement, the Company will also be discharged from all obligations
under this Deposit Agreement except for its obligations to the Depositary under
Sections 5.06 and 5.10 hereof.
- 48 -
ARTICLE VII
MISCELLANEOUS
Section 7.01. Counterparts. This Deposit Agreement may be executed in any
number of counterparts, each of which shall be deemed an original and all of
such counterparts shall constitute one and the same instrument.
Section 7.02. No Third Party Beneficiaries. This Deposit Agreement is for
the exclusive benefit of the parties hereto (including the Holders) and shall
not be deemed to give any legal or equitable right, remedy or claim whatsoever
to any other person.
Section 7.03. Severability. In case anyone or more, of the provisions
contained in this Deposit Agreement or in any Receipt should be or become
invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein or therein shall in
no way be affected, prejudiced or disturbed thereby.
Section 7.04. Holders as Parties, Binding Effect. The Holders and
Beneficial Owners from time to time shall be parties to this Deposit Agreement
and shall be bound by all of the terms and conditions hereof and of any Receipt
by acceptance thereof or any beneficial interest therein. Holders and Beneficial
Owners of Original ADSs issued under the Original Deposit Agreement as
heretofore in effect shall, from and after the date hereof, have all the rights
and be subject to all the obligations of Holders and Beneficial Owners of ADSs
hereunder.
Section 7.05. Notices. Any and all notices to be given to the Company
shall be deemed to have been duly given if personally delivered, or sent by
mail, first class airmail postage prepaid, or air courier, or by cable, telex or
facsimile transmission confirmed by letter sent by mail or air courier,
addressed to Taiwan Semiconductor Manufacturing Company Limited, No. 8, Li-Hsin
Rd. 6, Hsinchu Science Park, Hsinchu Taiwan, Attention: Finance Department;
facsimile number: (8863) 579-0893, or to any other address which the Company may
specify in writing to the Depositary.
Any and, all notices to be given to the Depositary shall be deemed to have
been duly given if personally delivered, or sent by mail, first class, if
overseas, airmail postage prepaid or air courier, or by cable, telex or
facsimile transmission confirmed by letter sent by mail or air courier,
addressed to Citibank, N.A., 388 Greenwich Street, New York, New York 10013,
Attention: Depositary Receipts Department, or to any other address which the
Depositary may specify in writing to the Company.
Any and all notices to be given to any Holder shall be deemed to have been
duly given if personally delivered, or sent by mail, first class airmail postage
prepaid, or air courier, or by cable, telex or facsimile transmission confirmed
by letter sent by mail or air courier, addressed to such Holder at the address
of such Holder as it appears on the transfer books for ADSs of the Depositary,
or, if such Holder shall have filed with the Depositary a written request that
notices intended for such Holder be mailed to some other address, at the address
designated in such request.
Notice given as aforesaid (i) to the Company or the Depositary shall be
deemed to be effected when received, and (ii) to a Holder by mail or by cable,
- 49 -
telex or facsimile transmission shall be deemed to be effected at the time when
a duly addressed letter containing the same (or a confirmation of in the case of
a cable, telex or facsimile transmission) is deposited, first class airmail
postage prepaid, in a post-office letter box. The Depositary or the Company may
act upon any cable, telex or facsimile transmission received by it from the
other or from any Holder, notwithstanding that such cable, telex or facsimile
transmission shall not subsequently be confirmed as aforesaid.
Section 7.06. Governing Law and Jurisdiction; Appointment of Agent; Waiver
of Immunities. This Deposit Agreement and any Receipt shall be interpreted and
all rights hereunder and thereunder and provisions hereof and thereof shall be
governed by the law of the State of New York applicable to agreements made and
to be performed in such State. With respect to the authorization of this Deposit
Agreement by the Company, such authorization shall be governed by the laws of
the ROC. Except as set forth in the following sentence, the Company and the
Depositary agree that the federal courts in the State of New York shall have
jurisdiction to hear and determine any suit, action or proceeding and to settle
any dispute between them that may arise out of or in connection with this
Agreement and, for such purposes, each irrevocably submits to the non-exclusive
jurisdiction of such courts. In addition, the Company and the Depositary hereby
agree that in the event that a Holder brings a suit, action or proceeding
against (a) the Depositary in its capacity as Depositary under this Deposit
Agreement or (b) against both the Company and the Depositary, in either case, in
any state or federal court of the United States, and the Depositary has any
claim, for indemnification or otherwise, against the Company arising out of the
subject matter of such suit, action or proceeding, then the Depositary may
pursue such claim against the Company in the state or federal court in the
United States in which such suit, action or proceeding is pending and, for such
purposes, the Company irrevocably submits to the non-exclusive jurisdiction of
such courts.
The Company irrevocably designates, appoints, and empowers TSMC North
America, with offices currently at 2585 Junction Avenue, San Jose, California
95134, as its authorized agent to receive and accept for and on its behalf, and
its properties, assets and revenues, service of any and all legal process,
summons, notices and documents that may be served in any suit, action or
proceeding brought against the Company in any such federal or state court as
described in the preceding paragraph. If for any reason such agent hereunder
shall cease to be available to act as such, the Company agrees to designate a
new agent in the United States of America on the terms and for the purposes of
this Section 7.06 reasonably satisfactory to the Depositary. The Company further
hereby irrevocably consents and agrees to the service of any and all legal
process, summons, notices and documents in any such suit, action or proceeding
against the Company, by serving a copy thereof upon the relevant agent for
service of process referred to in this Section 7.06 (whether or not the
appointment of such agent shall for any reason prove to be ineffective or such
agent shall accept or acknowledge such service) with a copy mailed to the
Company by registered or certified air mail, postage prepaid, to its address
provided in Section 7.05. The Company agrees that the failure of any such agent
to give any notice of such service to it shall not impair or affect in any way
the validity of such service or any judgment rendered in any action or
proceeding based thereon. The Company irrevocably and unconditionally waives, to
the fullest extent permitted by law, any objection that it may now or hereafter
have to the laying of venue of any of the aforesaid actions, suits or
proceedings brought in any court as provided in the preceding paragraph and
hereby further irrevocably and unconditionally waives and agrees not to plead or
claim in any such court that any such action, suit or proceeding brought in any
such court has been brought in an inconvenient forum.
- 50 -
To the extent that the Company or any of its properties, assets or
revenues may have or may hereafter become entitled to, or have attributed to the
Company, any right of immunity, on the grounds of sovereignty or otherwise, from
any legal action, suit or proceeding, from the giving of any relief in any such
legal action, suit or proceeding, from setoff or counterclaim, from the
jurisdiction of any ROC court or any court as provided in the first paragraph of
this Section, from service of process, from attachment upon or prior to
judgment, from attachment in aid of execution of judgment, or from execution of
judgment, or other legal process or proceeding for the giving of any relief or
for the enforcement of any judgment, in any such court in which proceedings may
at any time be commenced, with respect to the obligations and liabilities of the
Company, or any other matter under or arising out of or in connection with this
Deposit Agreement to the extent provided in the first paragraph of this Section,
the Company hereby irrevocably and unconditionally waives or will waive such
right to the extent permitted by law, and agrees not to plead or claim, any such
immunity and consents to such relief and enforcement.
The provisions of this Section 7.06 shall survive any termination of this
Deposit Agreement, in whole or in part.
Section 7.07. Compliance with U.S. Securities Laws. Notwithstanding
anything in this Deposit Agreement or any Receipt to the contrary, the Company
and the Depositary each agrees that it will not exercise any rights it has under
this Deposit Agreement to prevent the withdrawal or delivery of Deposited
Securities in a manner which would violate the U.S. securities laws, including,
but not limited to, Instruction I.A.(1) of the General Instructions to Form F-6,
as amended from time to time, under the Securities Act.
Section 7.08. Assignment. This Deposit Agreement may not be assigned by
either the Company or the Depositary.
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IN WITNESS WHEREOF, TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED and
CITIBANK, N.A. have duly executed this Deposit Agreement as of the day and year
first above set forth and all Holders shall become parties hereto upon
acceptance by them of ADSs issued in accordance with the terms hereof or upon
acquisition of any interest in such ADSs.
TAIWAN SEMICONDUCTOR
MANUFACTURING COMPANY LIMITED
By:
-----------------------------------------
Name: Lora Ho
Title: Vice President and Chief Financial
Officer
CITIBANK, N.A.
By:
-----------------------------------------
Name:
Title:
- S-1 -
EXHIBIT A
Number (CUSIP Number _____________________)
American Depositary Shares (One American
Depositary Share Representing, or Evidencing
the Right to Receive, Five (5) Fully Paid
Common Shares, Par Value NT$10 Per Share)
[FORM OF FACE OF]
AMERICAN DEPOSITARY RECEIPT
evidencing
AMERICAN DEPOSITARY SHARES
representing, or evidencing the right to receive,
COMMON SHARES, PAR VALUE NT$10 PER SHARE
(Par Value NT$10 Per Share)
of
TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY LIMITED
(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 [ ], or registered assigns, is the record
owner of [ ] American Depositary Shares representing deposited, validly issued
and fully paid common shares, par value NT$10 per share ("Shares"), or evidence
of rights to receive such Shares, of TAIWAN SEMICONDUCTOR MANUFACTURING COMPANY
LIMITED, a corporation organized under the laws of the Republic of China (the
"Company"). At the date hereof, each American Depositary Share represents, or
evidences the right to receive, five (5) Shares deposited under the Deposit
Agreement (as hereafter defined) with the Custodian, which at the date of
execution of the Deposit Agreement is Citibank, N.A. Taipei Branch (the
"Custodian"). The address of the Principal Office of the Depositary is 388
Greenwich Street, 14th Floor, New York, New York 10013.
(1) "The Deposit Agreement". This American Depositary Receipt is one of
the receipts (the "Receipts") executed and delivered pursuant to the Amended and
Restated Deposit Agreement dated as of [DATE], 2007 (as amended from time to
time, the "Deposit Agreement"), by and among the Company, the Depositary and all
Holders and Beneficial Owners of ADSs, from time to time, each of whom by
A-1
accepting an ADS or acquiring any beneficial interest therein, agrees to become
a party thereto and becomes bound by all terms and provisions thereof and
hereof. The Deposit Agreement sets forth the rights of Holders 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, collectively, the "Deposited
Securities"). Copies of the Deposit Agreement are on file at the Depositary's
Principal Office, at the principal office of the Custodian and at any other
designated transfer office. The statements made in this Receipt are summaries of
certain provisions of the Deposit Agreement and are qualified by and subject to
the detailed provisions of the Deposit Agreement, to which reference is hereby
made. The Depositary makes no representation or warranty as to the validity or
worth of the Deposited Securities. The Depositary may issue Uncertificated ADSs
subject, however, to the terms and conditions of Section 2.13 of the Deposit
Agreement. Capitalized terms defined in the Deposit Agreement and not otherwise
defined herein have the same defined meanings set forth in the Deposit
Agreement.
(2) "Withdrawal of Deposited Securities". Upon (i) surrender of ADSs at
the Principal Office (and, in the case of Certificated ADSs, a Receipt
evidencing such ADSs) for the purpose of withdrawal of the Deposited Securities
represented by such ADSs, (ii) payment of the fees of the Depositary for the
surrender of ADSs, including the charges of the Depositary for the making of
withdrawals and cancellation of ADSs and, in the case of Certificated ADSs,
Receipts (as set forth in Exhibit B hereto), governmental charges and taxes
payable in connection with such surrender and withdrawal, (iii) delivery to the
Depositary of written instructions of the Holder for delivery of the Deposited
Securities represented thereby and (iv) delivery by the Holder to the Depositary
any and all certifications necessary to allow the Company to comply with
applicable ROC law reporting requirements, 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 subject to the terms and
conditions of the Deposit Agreement, the clearing procedures of the Registrar
and the Articles of Incorporation of the Company and to the provisions of or
governing the Deposited Securities, the Holder such ADSs will be entitled to
delivery to him or to his order of the amount of Deposited Securities at the
time represented by the ADS or ADSs surrendered, subject to temporary delays
caused by the closing of the transfer books of the Depositary or the Company in
connection with voting at a shareholders' meeting or the payment of dividends or
rights offering. Such delivery of Deposited Securities shall be made, as
hereinafter provided, without unreasonable delay. Any Holder or other person
requesting withdrawal of Deposited Securities against delivery of ADSs must
deliver to the Depositary a written order containing delivery instructions to
such effect. The forwarding of share certificates, other securities, property,
cash and other documents of title for such delivery will be at the risk and
expense of the Holder.
The Depositary and the Company have been advised that under current ROC
law, a Holder wishing to withdraw Deposited Securities from the ADR Facilities
is required to appoint an eligible agent in the ROC to open a (i) securities
trading account with a local brokerage firm after receiving an approval from the
TSE and (ii) a bank account (the securities trading account and the bank
account, collectively, the "Accounts"), to pay ROC taxes, remit funds, exercise
shareholders' rights and perform such other functions as may be designated by
such withdrawing Holder. In addition, such withdrawing Holder is also required
A-2
to appoint a custodian bank to hold the securities in safe-keeping, make
confirmations and settle trades and report all relevant information. Without
making such appointment and the opening of such Accounts, the withdrawing Holder
would be unable to hold or subsequently sell the Deposited Securities withdrawn
from the ADR Facility on the TSE or otherwise.
The laws of the Republic of China applicable to the withdrawal of
Deposited Securities may change from time to time. There can be no assurances
that current law will remain in effect or that future changes of the Republic of
China law will not adversely affect the ability of Holders to withdraw Deposited
Securities hereunder.
Notwithstanding anything to the contrary herein, no Deposited Securities
deposited in connection with a Primary Issue Deposit may be withdrawn or sold
upon surrender of ADSs until the Certificate of Payment has been replaced by
Shares in physical certificated form or represented by the Master Certificate.
Subject to the receipt by the Company of the requisite approval from the TSE and
the relevant provisions hereof, on and after the fourth business day in the ROC
following the Primary Issue Deposit, and upon receipt by the Depositary of
notice of the credit of such number of Scripless Shares represented by the
Master Certificate, the Depositary shall give notice thereof to the applicable
Holders of Temporary ADSs and thereafter Temporary ADSs shall be eligible for
exchange into Share ADSs. Interests in Temporary ADSs in DTC will be
automatically exchanged for beneficial interests in Share ADSs as follows: with
no further action by Holders, the Depositary shall instruct DTC to automatically
transfer any position held by a DTC Participant under the CUSIP number assigned
to the Temporary ADSs to the CUSIP number assigned to the Share ADSs. Holders
and Beneficial Owners of such Temporary ADSs shall thereafter be Holders and
Beneficial Owners of Share ADSs issued hereunder and shall have all the rights
and obligations specified in the Deposit Agreement and, in the case of
Certificated ADSs, any Receipt pertaining to Share ADSs, and a Holder may
withdraw and hold the Scripless Shares or the Shares in physical certificated
form, as applicable, or request the Depositary to sell or cause to be sold on
behalf of such Holder the Scripless Shares or Shares in physical certificated
form, as applicable. For the avoidance of doubt, Shares shall include the
Scripless Shares, which are without physical form and traded through book-entry
settlement systems and carry the same rights as those attaching to the
certificated Shares in respect of dividends and are eligible for trading on the
TSE in the same manner as the certificated Shares.
Holders will be entitled to withdraw the Deposited Securities at any time
subject only to (i) temporary delays caused by the closing of the transfer books
of the Depositary or the register of shareholders of the Company in connection
with voting at a shareholders meeting or the payment of dividends or rights
offering, (ii) the payment of fees, taxes and similar charges and (iii)
compliance with any laws or governmental regulations relating to ADSs or to the
withdrawal of Deposited Securities. The Depositary and the Company have been
advised that under current ROC law, only Shares represented by the ADSs may be
withdrawn by Holders. Upon surrender of ADSs and, in the case of Certificated
ADSs, Receipts at the Principal Office and upon payment of any fees, expenses,
taxes or other governmental charges as provided hereunder, subject to the terms
of the Deposit Agreement, and the transfer restrictions applicable to the
Deposited Securities, if any, Holders may request that the Deposited Securities
represented by such Holder's ADSs be sold on such Holder's behalf.
A-3
Any Holder requesting a sale of Deposited Securities as set forth above
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.
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, 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, 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, of any, and will be
subject to a securities transaction tax. The ROC currently does not impose tax
on capital gains arising from ROC securities transactions, but there can be no
assurance that a capital gains tax on ROC securities transactions will not be
imposed in the future or as to the mariner in which any ROC capital gains tax in
respect of a sale of Deposited Securities would be imposed or calculated.
Any Receipt surrendered or written instructions received for such purpose
may be required by the Depositary to be properly endorsed in blank or
accompanied by properly executed instruments of transfer in blank. Any Holder or
other person requesting withdrawal of Deposited Securities against delivery of
ADSs must deliver to the Depositary a written order containing delivery
instructions directing the Depositary to cause the Deposited Securities being
withdrawn to be either electronically delivered or physically delivered, if
available, to or upon the written order of a person or persons designated in
such instructions. Prior to the Share Listing Date, there can be no assurance
that there will be sufficient numbers of certificated Shares available to give
effect to all written orders of Holders for the physical delivery of
certificated Shares upon the surrender of ADSs.
Upon the receipt of such instructions and compliance with the terms of
Section 2.06 of the Deposit Agreement, the Depositary shall direct the Custodian
to deliver to the principal office of such Custodian or electronically transfer,
as described above, in each case, subject to Sections 2.07, 3.01 and 3.02 and to
the other terms and conditions of the Deposit Agreement, the clearing procedures
of the Registrar and the Articles of Incorporation of the Company, and to the
provisions of or governing the Deposited Securities and other applicable laws,
now or hereafter in effect, to or upon the written order of the person or
persons designated in such written instructions, the Deposited Securities except
that the Depositary may make delivery to such person or persons at the Principal
Office of the Depositary of any cash dividends or distributions with respect to
the Deposited Securities or of any proceeds of sale of any dividends,
distributions or rights with respect to the Deposited Securities, which may at
the time be held by the Depositary.
If permitted by ROC law, at the request, risk and expense of any Holder so
surrendering ADSs or submitting such written instruction for delivery, and for
the account of such Holder, provided that payment of any applicable tax or other
governmental charge shall have been made in accordance with Section 3.02 of the
Deposit Agreement, the Depositary shall direct the Custodian to forward any cash
A-4
or other property or securities, and forward a certificate or certificates and
other proper documents of title, if any, for the Deposited Securities
represented by such ADSs to the Depositary for delivery at the Principal Office.
Such direction shall be given by letter or, at the request, risk and expense of
such Holder, by air courier, cable, telex or facsimile transmission.
The Depositary will only honor requests for withdrawal of whole numbers of
Shares or other Deposited Securities. In the case of a surrender of ADSs
representing other than a whole number of Shares or Deposited Securities, the
Depositary shall cause ownership of the appropriate whole number of Shares or
Deposited 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
Deposited Securities or (ii) sell or cause to be sold the Deposited Securities
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. Trading
restrictions on the TSE may result in the price per Share or any lot of Shares
other than in an integral multiple of 1,000 Shares being lower than the price of
Shares in lots of integral multiples of 1,000 Shares.
(3) "Temporary ADSs". Whenever the Company proposes to issue any
Certificate of Payment eligible for deposit under the terms of the Deposit
Agreement (in connection with an Offering or otherwise), the Company shall
timely notify the Depositary thereof and provide the Depositary with written
instructions to the effect that, inter alia, (i) the Certificate of Payment has
been or is to be issued pursuant to a bona fide purchase of Eligible Securities
from the Company, (ii) the Certificate of Payment is not, and shall not be
deemed to be upon its deposit, and the Shares issuable pursuant to the terms of
the Certificate of Payment will not be, Restricted Securities, and such written
instructions shall include (a) a description of the rights (if any) to any
distribution upon Deposited Securities to be made to Holders of Temporary ADSs
representing such Certificates of Payment upon the terms set forth in Article IV
of the Deposit Agreement, and (b) the date established by the Company upon which
the Company shall convert or cause to be converted the Certificate of Payment
into Shares on its records and on the records of the Eligible Securities
Registrar.
Subject always to the laws and regulations of the Republic of China, upon
deposit of any Certificate of Payment under the terms of the Deposit Agreement
and payment to the Depositary of the charges of the Depositary for accepting a
deposit, issuing ADSs and issuing and delivering Receipts (as set forth in
Section 5.06 of the Deposit Agreement and Exhibit B thereto), the Depositary
shall (i) cause the Custodian to hold such Certificate of Payment separate and
distinct from the Shares, any other Certificate(s) of Payment and any other
Deposited Securities and (ii) issue and deliver Temporary ADSs representing
interests in the Certificate of Payment so deposited. The Temporary ADSs so
issued shall be identified and treated separately and distinctly from any other
ADSs representing Deposited Securities hereunder by means, inter alia, of
separate CUSIP numbers and legending (if necessary). The Depositary may issue
Temporary ADSs in one or multiple series as the Depositary in its sole
discretion deems necessary and appropriate. No Temporary ADS shall be fungible
with any other ADSs issued hereunder.
A-5
The Depositary shall deliver Temporary ADSs in book-entry form only. No
certificated Temporary ADRs will be issued except for a balance certificate
evidencing all Temporary ADSs held in DTC, which shall be substantially in the
form of the Temporary ADR set forth in Exhibit A to the Deposit Agreement,
except as may be necessary to identify and treat the Temporary ADSs as separate
and distinct from any other ADSs issued under the terms of the Deposit
Agreement. The Depositary shall make arrangements for the acceptance of such
Temporary ADSs into DTC upon the terms set forth in Section 2.02 of the Deposit
Agreement. The Temporary ADRs and the Temporary ADSs evidenced thereby are
identical to and confer all of the rights and obligations set forth in the
Deposit Agreement relating to Receipts and ADSs represented thereby except that
(i) Holders of Temporary ADSs will have no right to withdraw the Deposited
Securities represented by their Temporary ADSs until the Certificate of Payment
has been replaced by Shares in physical certificated form or represented by the
Master Certificate as described in the next paragraph, (ii) Temporary ADSs shall
bear separate CUSIP numbers that shall be different from any CUSIP number that
was, is or may be assigned to the other ADSs issued hereunder, (iii) neither
Temporary ADSs nor interests in any Certificate of Payment shall be eligible for
any Pre-Release Transactions described in Section 5.11 of the Deposit Agreement
and (iv) in the event that the Company makes any distributions upon Deposited
Securities upon the terms of Article IV of the Deposit Agreement, the Depositary
shall make distributions to Holders of Temporary ADSs on the basis of the
distribution(s) received from the Company in respect of the Certificate(s) of
Payment corresponding to the series of Temporary ADSs held by such Holder.
Nothing herein or the Deposit Agreement shall impose any obligation upon the
Depositary to make any distributions to Holders of any series of Temporary ADSs
on the same basis as Holders of Share ADSs or any other series of Temporary ADSs
issued under the terms of the Deposit Agreement.
In connection with a Primary Issue Deposit, the Company hereby agrees to
file the application with the TSE for listing the Master Certificate on the TSE
and cause the Taiwan Securities Central Depository to credit into the
Custodian's account by book-entry transfer Scripless Shares, as represented by
the Master Certificate on or before the fourth business day in the ROC following
the Primary Issue Deposit, subject to the receipt by the Company of the
requisite approval from the TSE and the relevant provisions hereof and of the
Deposit Agreement. Upon receipt of notice from the Company as to the crediting
of Scripless Shares, the Depositary shall instruct the Custodian to surrender
any Certificate of Payment against the credit of such number of Scripless
Shares, as represented by the Master Certificate into the Custodian's account by
book-entry transfer. The Company further agrees to issue and deliver the Shares
in physical certificated form in respect of the Scripless Shares represented by
the Master Certificate and list such Shares on the TSE on or about 60 to 80
calendar days after the Primary Issue Deposit, subject to obtaining approvals
from relevant government authorities and the TSE. On the same date the Shares
underlying the Master Certificate are listed on the TSE (the "Share Listing
Date"), the Master Certificate will be delisted from the TSE and cancelled. Upon
receipt by the Depositary of notice of the credit of such number of Scripless
Shares, the Depositary shall give notice thereof to the applicable Holders of
Temporary ADSs and thereafter Temporary ADSs shall be eligible for exchange into
Share ADSs. Interests in Temporary ADSs in DTC will be automatically exchanged
for beneficial interests in Share ADSs as follows: with no further action by
Holders, the Depositary shall instruct DTC to automatically transfer any
position held by a DTC Participant under the CUSIP number assigned to the
Temporary ADSs to the CUSIP number assigned to the Share ADSs. Holders and
Beneficial Owners of such Temporary ADSs shall thereafter be Holders and
A-6
Beneficial Owners of Share ADSs issued under the terms of the Deposit Agreement
and shall have all the rights and obligations specified in the Deposit Agreement
and in the Receipts pertaining to Share ADSs, and a Holder may withdraw and hold
the Scripless Shares or the Shares in physical certificated form, as applicable,
or request the Depositary to sell or cause to be sold on behalf of such Holder
the Scripless Shares or the Shares in physical certificated form, as applicable.
The Depositary will charge no fee for the cancellation of the Temporary ADSs and
issuance of Share ADSs in exchange therefor.
Notwithstanding anything in the Deposit Agreement to the contrary, the
Depositary shall have no obligation to any party to exchange Temporary ADSs for
Share ADSs as provided herein unless and until, upon delivery by the Depositary
of the related Certificate of Payment, the Company shall have delivered or
credited into the Custodian's account such number of Shares represented by the
Certificate of Payment.
(4) "Transfers, Split-ups and Combinations". The Depositary, subject to
the terms and conditions of the Deposit Agreement and, in the case of any
Certificated ADSs, any Receipt, shall promptly register, or cause the Registrar
to register, transfers of any such ADSs on its transfer books maintained for
such purpose, upon any surrender thereof by a Holder, with instructions, at the
Principal Office of the Depositary in person or by duly authorized attorney (in
the case of Certificated ADSs, by surrendering the Receipt representing such
Certificated ADSs properly endorsed or accompanied by proper instruments of
transfer, including signature guarantees in accordance with standard industry
practice and the full and accurate completion of any endorsements appearing on
such Receipt relating to compliance with the applicable restrictions on transfer
thereof, and duly stamped as may be required by any applicable law of the State
of New York or of the United States or of the ROC). Upon payment to the
Depositary of the fees and charges set forth in Exhibit B to the Deposit
Agreement, the Depositary shall execute a new Receipt or Receipts (in the case
of Certificated ADSs) and deliver ADSs (and any Receipts in the case of
Certificated ADSs ) to or upon the order of the person entitled thereto, subject
to receipt of any certifications by such person as the Depositary and the
Company may require in order to comply with applicable laws. Holders of
Uncertificated ADSs and Holders of Certificated ADSs shall at all times have the
right to exchange their Uncertificated ADSs for Certificated ADSs, or their
Certificated ADSs for Uncertificated ADSs, as the case may be, subject to and in
accordance with Section 2.13 of the Deposit Agreement. The Depositary may close
the transfer books at any time or from time to time when deemed necessary by it
in connection with the performance of its duties under the Deposit Agreement or
at the written request of the Company.
The Depositary, subject to the terms and conditions of the Deposit
Agreement and any Receipt, shall, upon surrender of a Receipt or Receipts for
the purpose of effecting a split-up or combination of such Receipt or Receipts
and upon payment to the Depositary of the fees and charges set forth in Exhibit
B to the Deposit Agreement, cancel such Receipts and execute and deliver a new
Receipt or Receipts in the name of the same Holder for any authorized number of
ADSs requested, evidencing the same aggregate number of ADSs as the Receipt or
Receipts surrendered. In connection with any split-up or combination of Receipts
pursuant to this paragraph, the Depositary shall not be obligated to obtain any
certification or endorsement otherwise required by the terms of the Deposit
Agreement.
A-7
(5) "Pre-Conditions to Registration, Transfer, Etc." As a condition
precedent to the execution and delivery, registration, registration of transfer,
split-up, combination or surrender of any ADS or ADR or withdrawal of any
Deposited Securities, the Depositary, the Custodian or the Registrar may require
payment from the persons presenting the ADSs or the depositor of Eligible
Securities 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 payable by the
Holders and Beneficial Owners. The Depositary may refuse to deliver ADSs or
ADRs, to register the transfer of any ADS or ADR or to make any distribution on,
or related to, the Eligible Securities until it has received such proof of
citizenship or residence, or other information as it may deem necessary or
proper, or as the Company may require by written request to the Depositary. The
delivery, transfer, registration of transfer of outstanding ADSs or ADRs and
surrender of ADSs or ADRs generally may be suspended or refused during any
period when the transfer books of the Depositary, the Company or the Company's
share registrar are closed or if any such action is deemed necessary or
advisable by the Depositary or the Company, at any time or from time to time.
The delivery of ADSs against, or adjustments in the records of the
Depositary to reflect deposits of Eligible Securities generally or of particular
Eligible Securities may be suspended or withheld, or the registration of
transfer of ADSs or Receipts in particular instances may be refused, or the
registration of transfer generally may be suspended, or the surrender of
outstanding ADSs, or the receipt of written instructions from any person having
a beneficial interest in any ADS for the purpose of withdrawal of Deposited
Securities may be suspended, during any period when the transfer books of the
Depositary or the register of shareholders of the Company are closed, or if any
such action is deemed necessary or advisable by the Company or the Depositary in
good faith at any time or from time to time. Notwithstanding any other provision
of the Deposit Agreement or any Receipts to the contrary, the surrender of
outstanding ADSs and withdrawal of Deposited Securities may not be suspended,
except as permitted in General Instruction I.A.(l) to Form F-6 (as such
instruction may be amended from time to time) under the Securities Act.
In furtherance and not in limitation of the foregoing, the Depositary
shall not, and it shall instruct the Custodian not to (i) accept for deposit
under Section 2.03 of the Deposit Agreement Eligible Securities which the
Depositary, the Custodian or the Company has reason to believe (and in the case
of the Custodian or the Company, such belief shall have been communicated to the
Depositary) are Restricted Securities, or permit such Eligible Securities to be
used to satisfy any person's obligation with respect to transactions
contemplated by Section 5.11 of the Deposit Agreement; or (ii) accept for (w)
deposit under Section 2.03 thereof, (x) transfer or exchange under Section 2.05
thereof, (y) cancellation under Section 2.06 thereof or (z) delivery in
satisfaction of any person's obligation with respect to transactions
contemplated by Section 5.11 thereof, depositary receipts representing Eligible
Securities which are Restricted Securities.
Subject to Section 5.11 of the Deposit Agreement, the Depositary may issue
ADSs against evidence of rights to receive Eligible Securities from the Company,
or any custodian, registrar, transfer agent, clearing agency or other entity
involved in ownership or transaction records in respect of the Eligible
Securities. Such evidence of rights shall consist of written blanket or specific
guarantees of ownership of Eligible Securities furnished on behalf of the holder
thereof, subject to applicable ROC law.
A-8
Without limitation of the foregoing, the Depositary shall not knowingly
accept for deposit under the Deposit Agreement any Eligible Securities or other
Deposited Securities required to be registered pursuant to the provisions of the
Securities Act, unless a registration statement under the Securities Act is in
effect as to such Eligible Securities or other Deposited Securities, or any
Eligible Securities or Deposited Securities the deposit of which would violate
any provisions of the Articles of Incorporation of the Company. Also without
limitation of the foregoing, the Depositary will comply with written
instructions of the Company (received by the Depositary reasonably in advance)
not to accept for deposit under the Deposit Agreement any Eligible Securities
identified in such instructions at such times and under such circumstances as
may reasonably be specified in such instructions in order to facilitate the
Company's compliance with the securities laws of the United States and other
jurisdictions.
(6) "Liability of Holders for Taxes and Other Charges". If any tax, duty
or other governmental charge, shall become payable by the Custodian or the
Depositary with respect to any ADS or ADR or any Deposited Securities
represented by the ADSs, such tax or other governmental charge shall be payable
by the Holder or Beneficial Owner thereof to the Depositary. The Depositary may
refuse to effect any transfer of such ADS or ADR or any withdrawal of Deposited
Securities underlying such ADS until such payment is made, and may withhold any
dividends or other distributions, or may sell for the account of the Holder
thereof any part or all of the Deposited Securities underlying such ADS, and may
apply such dividends or other distributions or the proceeds of any such sale to
pay any such tax or other governmental charge and the Holder or Beneficial Owner
thereof will remain liable for any deficiency.
Although in certain circumstances ROC income tax imposed on certain stock
dividends distributed by the Company may be deferred until the sale or other
disposition of such stock dividends, the Depositary will elect to waive the
deferral of income tax on such stock dividends.
(7) "Representations and Warranties on Deposit, Transfer, Surrender and
Withdrawal". Each person presenting Eligible Securities for deposit under the
Deposit Agreement shall be deemed thereby to represent and warrant that (i) such
Eligible Securities and each certificate therefor, are duly and validly
authorized, issued and outstanding, fully paid and non-assessable and free of
any preemptive rights and (ii) the person making such deposit is duly authorized
so to do. Such representations and warranties shall survive the deposit and
withdrawal of Eligible Securities and the issuance or cancellation of ADSs or
adjustments in the Depositary's records in respect thereof.
Each person depositing Eligible Securities, taking delivery of or
transferring ADSs or any beneficial interest therein, or surrendering ADSs or
any beneficial interest therein and withdrawing Eligible Securities under the
Deposit Agreement shall be deemed thereby to represent and warrant that such
Eligible Securities or ADSs are not Restricted Securities and that any such
deposit, transfer or surrender and withdrawal is not restricted under the
Securities Act and is in accordance with the applicable restrictions and
conditions on transferability set forth in the Deposit Agreement, in each case
in accordance with any applicable securities laws of any State of the United
States. Such representations and warranties shall survive any such deposit,
A-9
transfer or surrender and withdrawal of the Eligible Securities or the ADSs or
beneficial interest therein. If any representation or warranty deemed made
pursuant to this paragraph is false in any way, the Company and the Depositary
shall be authorized, at the cost and expense of the person deemed to have made
such representation or warranty, to take any and all actions necessary to
correct the consequences thereof.
Whenever the Company shall deposit any Certificate of Payment under the
Deposit Agreement, the Company shall be deemed thereby to represent and warrant
that (i) such Certificate of Payment is, and the Shares to be received in
exchange therefor will be, duly authorized, validly issued, fully paid and
non-assessable, (ii) all preemptive (and similar) rights, if any, with respect
to such Certificate of Payment have been, and with respect to the Shares to be
received in exchange therefor will have been, validly waived or exercised, (iii)
the Company has duly authorized the issuance of the Shares to be delivered in
exchange for the Certificate of Payment, so presented for deposit, (iv) the
Certificate of Payment presented for deposit is, and the Shares to be deposited
upon the exchange therefor will be, free and clear of any lien, encumbrance,
security interest, charge, mortgage or adverse claim, and are not, and the
Temporary ADSs issuable upon such deposit in the case of the Certificate of
Payment, will not be, Restricted Securities and (v) the Certificate of Payment
presented for deposit has not been, and the Shares to be deposited upon the
exchange therefor will not have been, stripped of any rights or entitlements.
Such representations and warranties shall survive the deposit of any Certificate
of Payment or Master Certificate, as the case may be, and in connection with the
Certificate of Payment, the issuance and cancellation of Temporary ADSs in
respect thereof and the transfer of such Temporary ADSs.
(8) "Filing Proofs, Certificates and Other Information". Any person
presenting Eligible Securities for deposit or any Holder may be required from
time to time (a) to file with the Depositary or the Custodian such proof of
citizenship, residence, taxpayer status, exchange control approval, payment of
all applicable taxes or other governmental charges, compliance with all
applicable laws, regulations, and provisions of or governing Deposited
Securities, and the terms of the Deposit Agreement, and legal or beneficial
ownership of ADSs, Deposited Securities and other securities, and the nature of
such interest, (b) to provide information to the Depositary or Custodian
relating to the registration on the books of the Company (or the Eligible
Securities Registrar) of the Eligible Securities presented for deposit or other
information, (c) to execute such certificates and (d) to make such
representations and warranties as the Depositary may deem necessary or proper or
as the Company may reasonably require by written request to the Depositary
consistent with its obligations thereunder. The Depositary and the Registrar, as
applicable, may, and at the reasonable request of the Company shall, withhold
the delivery or registration of transfer of all or part of any ADS or Receipt,
or the delivery of any dividend or other distribution or of rights or of the net
proceeds of the sale thereof or the delivery of any Deposited Security, or may
refuse to adjust its records, until the foregoing is accomplished to the
Depositary's and the Company's satisfaction, subject to Section 7.07 of the
Deposit Agreement. The Depositary shall, upon the Company's written request,
provide to the Company in a timely manner copies of any such proofs and
certificates and such written representations and warranties that it receives.
(9) "Charges of Depositary". The Depositary will charge any party (i) who
makes a deposit of the Eligible Securities or to whom ADSs are issued, (ii) who
surrenders an ADS for the purpose of delivery or withdrawal of deposited
A-10
Eligible Securities or other Deposited Securities and (iii) to whom a
distribution of Eligible Securities pursuant to an exercise of rights or other
free distributions of Eligible Securities (other than with respect to stock
splits or dividends) is made, a fee of up to $0.05 for each ADS (or fraction
thereof) issued or surrendered and a fee of up to $0.02 for each ADS (or
fraction thereof) held for any cash distribution (other than with respect to
dividends) made pursuant to the Deposit Agreement. The Company will pay such
expenses, fees or charges of the Depositary and those of the Registrar, if any,
as are agreed to in a written agreement between the Company and the Depositary,
except for taxes and other governmental charges, any applicable share transfer,
custody and registration fees on deposit, withdrawal, or transfer of Eligible
Securities, certain cable, telex, facsimile transmission and delivery charges
and such expenses as are incurred by the Depositary in the conversion of foreign
currency into U.S. dollars, and in connection with compliance with foreign
exchange control regulations, which shall be payable by Holders.
(10) "Title to Receipts". Subject to any limitations set forth in a
Receipt or in the Deposit Agreement, when properly endorsed or accompanied by
properly executed instruments of transfer (including signature guarantees in
accordance with standard industry practice), title to such Receipt (and to the
Certificated ADSs evidenced thereby) shall be transferable by delivery with the
same effect as in the case of a certificated security under the laws of the
State of New York; provided, however, that the Company and the Depositary,
notwithstanding any notice to the contrary, may deem and treat the registered
Holder of a Receipt (and the Certificated ADSs evidenced thereby) as the
absolute owner thereof for any purpose, including but not limited to the purpose
of determining the person entitled to distribution of dividends or other
distributions or to any notice provided for in the Deposit Agreement, and
neither the Depositary nor the Company shall have any obligation or be subject
to any liability under the Deposit Agreement to any Beneficial Owner of a
Receipt (and the Certificated ADSs evidenced thereby) unless such Beneficial
Owner is the registered Holder thereof. ADSs are transferable on the books of
the Depositary, provided that the Depositary may close the transfer books at any
time when deemed necessary by it in connection with the performance of its
duties under the Deposit Agreement or at the written request of the Company.
(11) "Validity of Receipt". This Receipt shall be (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. Neither this Receipt nor any Certificated ADS evidenced hereby shall
be entitled to any benefits under the Deposit Agreement or be valid or
enforceable for any purpose against the Depositary or the Company, unless it
shall have been so dated, signed, countersigned and registered. If this Receipt
bears the manual or facsimile signature of a duly-authorized signatory of the
Depositary or the Registrar, who at the time of signature was a duly authorized
signatory of the Depositary or the Registrar, as the case may be, this Receipt
shall bind the Depositary, notwithstanding the fact that such signatory has
ceased to be so authorized prior to the delivery of this Receipt by the
Depositary.
This Receipt may be endorsed with or have incorporated in the text thereof
such legends or recitals or changes, including requirements with respect to
registration of transfer, not inconsistent with the Deposit Agreement (i) as may
A-11
be necessary to enable the Depositary to perform its obligations thereunder,
(ii) as maybe required to comply with any applicable laws or regulations, in
order for the ADSs to meet any listing requirements or other rules or
regulations of the New York Stock Exchange or any other exchange or stock
quotation system upon which the ADSs may be listed, traded or quoted or to
conform with any usage with respect to such laws, regulations, requirements or
rules, (iii) as may be necessary to indicate any special limitations or
restrictions to which any particular Receipts of ADSs are subject by reason of
the date or manner of issuance or type of the underlying Deposited Securities or
otherwise, or (iv) as may be required by any book-entry system in which the ADSs
are held.
The Share ADSs and the Temporary ADSs shall each bear a separate and
distinct CUSIP number that is different from one another and from any CUSIP
number, that was, is or may be assigned, to any depositary receipts previously
or subsequently issued pursuant to any other arrangement between the Depositary
(or any other depositary) and the Company which are not ADSs issued thereunder
and are Restricted Securities.
(12) "Disclosure of Beneficial Ownership". Notwithstanding any other
provision of the Deposit Agreement, the Company and the Depositary may from time
to time request Holders or former Holders to provide information as to the
capacity in which they own or owned ADSs or own or owned such beneficial
interest and regarding the identity of any other persons then or previously
interested in such ADSs and the nature of such interest and various other
matters. Each such Holder agrees to provide any such information requested by
the Company or the Depositary pursuant to this paragraph whether or not such
person is still a Holder at the time of such request. The Depositary agrees to
use reasonable efforts to comply with the reasonable written instructions from
the Company requesting that the Depositary forward any such requests to
registered Holders or former registered Holders and to forward to the Company
any responses to such requests received by the Depositary; provided, that
nothing herein or in the Deposit Agreement shall be interpreted as obligating
the Depositary to provide or obtain any information not so provided by such
Holders or former Holders. Each Holder further agrees to make such disclosure of
interests in Eligible Securities of the Company as may be required to be made by
such Holder under any laws, regulations or codes of practice applicable in the
ROC or any other jurisdiction whether or not the same may be enforceable against
such Holder.
(13) "Ownership Restrictions". Notwithstanding any other provision of the
Deposit Agreement, the Company may restrict transfers of the Eligible Securities
or securities convertible into Shares where the Company informs the Depositary
that such transfer might result in ownership of Eligible Securities exceeding
the limits imposed by applicable laws of the ROC, regulations and rules of the
FSC or the TSE, or the Company's Articles of Incorporation. The Company may also
restrict in such manner as it deems appropriate, transfers of the ADSs where
such transfer may result in the total number of Deposited Securities, or
securities convertible into Shares represented by the ADSs, beneficially owned
by a single Holder to exceed such limits. The Company may, in its sole
discretion, instruct the Depositary to take action with respect to the ownership
interest of any Holder in excess of the limitation set forth in the preceding
sentence, including but not limited to a mandatory sale or disposition on behalf
of a Holder of the Deposited Securities represented by the ADSs held by such
Holder in excess of such limitations, if and to the extent such disposition is
permitted by any applicable law. The Depositary shall use its reasonable efforts
to comply with the written instructions of the Company as provided in this
paragraph.
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As of the date hereof, there are no such limitations affecting ownership
of Eligible Securities imposed by applicable laws of the ROC, regulations and
rules of the FSC or the TSE, the Articles of Incorporation of the Company or any
provisions of or governing Deposited Securities.
(14) "Compliance with Information Requests". Notwithstanding any other
provision of the Deposit Agreement, each Holder agrees to comply with requests
from the Company pursuant to applicable U.S. and ROC laws or regulations and any
stock exchange on which the Eligible Securities 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 owns
ADSs (and Deposited Securities) and regarding the identity of any other person
interested in such ADSs and the nature of such interest, and the Depositary
agrees to use its reasonable efforts to comply with written instructions
received from the Company requesting that the Depositary forward any such
request from the Company to the Holder and to forward to the Company any such
responses to such requests received by the Depositary.
(15) "Available Information". The Company is currently subject to the
periodic reporting requirements of the Exchange Act and, accordingly, is
required to file or submit certain reports with the Commission. These public
reports and other information can be retrieved from the Commission's website
(www.sec.gov) and can be inspected by Holders and copied at the public reference
facilities maintained by the Commission located at the date of this Deposit
Agreement at 100 F Street, N.E., Room 1580, Washington, D.C. 20549.
Dated: , 200_
CITIBANK, N.A., as Depositary
Countersigned:
By:
----------------------------------
Authorized Signatory
A-13
[FORM OF REVERSE OF RECEIPT]
SUMMARY OF CERTAIN ADDITIONAL
PROVISIONS OF THE DEPOSIT AGREEMENT
(16) "Distributions Upon Deposited Securities". Subject always to
applicable laws, whenever the Custodian or the Depositary receives any cash
dividend or other cash distribution by the Company in respect of any Deposited
Securities, the Depositary shall, subject to the provisions of Section 4.05 of
the Deposit Agreement, promptly convert or cause such dividend or distribution
to be converted into U.S. dollars and shall promptly distribute such amount to
the registered Holders entitled thereto, as of the record date fixed pursuant to
Section 4.06 thereof, in proportion to the number of ADSs representing such
Deposited Securities held by them respectively, after deduction or upon payment
of the fees and expenses of the Depositary (and without liability for interest);
provided, however, that in the event that the Company, the Custodian and the
Depositary shall be required to withhold and does withhold, subject to Section
4.12 thereof, from any cash dividend or other cash distribution in respect of
any Deposited Securities an amount on account of taxes or other governmental
charges, the amount distributed to the Holder in respect of ADSs representing
such Deposited Securities shall be reduced accordingly. The Depositary shall
distribute only such amount, however, as can be distributed without attributing
to any Holder a fraction of one cent, and any balance not so distributable shall
be held by the Depositary (without liability for interest thereon) and shall be
added to and become part of the next sum received by the Depositary for
distribution to Holders of ADSs then outstanding.
Subject always to applicable laws, if the Company declares a dividend in,
or free distribution of, Eligible Securities, the Depositary may, and will if
the Company so requests, distribute to the Holders entitled thereto, in
proportion to the number of ADSs held by them respectively, additional ADSs that
represent the amount of Eligible Securities received as such dividend or free
distribution, subject to the terms and conditions of the Deposit Agreement with
respect to the deposit of Eligible Securities and the issuance of ADSs,
including the withholding of any tax or other governmental charge, the sale of
all or a portion of the Eligible Securities received as such dividend or free
distribution to pay such tax or other governmental charge and the payment of the
fees of the Depositary. In lieu of delivering fractional ADSs in the event of
any such dividend or free distribution, the Depositary will sell the amount of
Eligible Securities represented by the aggregate of such fractions and
distribute the net proceeds in U.S. dollars, all in the manner and subject to
the conditions described in Section 4.01 of the Deposit Agreement. If additional
ADSs are not so distributed (except pursuant to the preceding sentence), or such
change in the records of the Depositary is not made, each American Depositary
Share will thenceforth also represent the additional Eligible Securities
distributed upon the Deposited Securities represented thereby subject to
applicable ROC law. In making any distribution on the Deposited Securities, the
Depositary also may request payment from all Holders and Beneficial Owners in
lieu of withholding any tax, or government charge which may be payable in
connection with such distribution.
Subject always to applicable laws, if the Company offers or causes to be
offered to the holders of any Eligible Securities any rights to subscribe for
additional Eligible Securities or any rights of any other nature, the Company
shall inform the Depositary prior to the proposed distribution stating whether
A-14
or not it wishes such rights to be made available to Holders of ADSs. Upon
receipt of a notice indicating that the Company wishes such rights to be made
available to Holders of ADSs, the Depositary shall consult with the Company to
determine, and the Company shall assist the Depositary in its determination,
whether it is lawful and reasonably practicable to make such rights available to
the Holders. To the extent that any distribution of rights is made to Holders,
such distribution shall be made in proportion to the number of ADSs held by them
respectively. The Depositary shall make such rights available to Holders only if
(i) the Company shall have timely requested that such rights be made available
to Holders, (ii) the Depositary shall have received opinions of ROC and US
Counsel and such other certificates as it may reasonably require to determine
the lawfulness of making the rights available to such Holders, and (iii) the
Depositary shall have determined that such distribution of rights is reasonably
practicable. In the event all conditions set forth above are satisfied, the
Depositary after consultation with the Company, will have discretion as to the
procedure to be followed in making such rights available to any Holders. In the
event the conditions set forth above are not satisfied, the Depositary, after
consultation with the Company, will have the discretion as to the procedure to
be followed in disposing of such rights for the benefit of any Holders and
making the net proceeds available in U.S. dollars to such Holders; provided,
however, that, if by the terms of such rights offering or for any other reason,
the Depositary may not either make such rights available to any Holders or
dispose of such rights and make the net proceeds available to such Holders, then
the Depositary shall allow the rights to lapse; provided, further, that the
Depositary may in its discretion after consultation with the Company, and shall
at the request of the Company, if the Depositary determines (which determination
may be based on opinions of ROC and U.S. counsel that the Company will provide
if requested by the Depositary) that it is lawful and feasible to make available
in proportion to the number of ADSs held by such Holder, warrants or other
instruments therefor in such form as it deems appropriate. If the Depositary
determines in its discretion that it is not lawful and feasible to make such
rights available to all or certain Holders, it may sell the rights, warrants or
other investments in proportion to the number of ADSs held by the Holders to
whom it has determined it may not lawfully or feasibly make such rights
available, and allocate the net proceeds of such sales for the account of such
Holders otherwise entitled to such right, warrants or other instruments, upon an
averaged or other practical basis without regard to any distinctions among such
Holders because of exchange restrictions or the date of delivery of any ADSs, or
otherwise. If the Depositary determines that it is not lawful or feasible to
make any such rights available to ADS holders, or to sell any such rights as
described above, the Depositary will allow such rights to lapse.
In circumstances in which rights would not otherwise be distributed, if a
Holder requests the distribution of warrants of other instruments in order to
exercise the rights allocable to the ADSs of such Holder, the Depositary shall
make such rights available to such Holder upon written notice from the Company
to the Depositary that (a) the Company has elected in its sole discretion to
permit such rights to be exercised, and (b) such Holder has executed such
documents as the Company has determined in its sole discretion are reasonably
required under applicable law. Upon instruction pursuant to such warrants or
other instruments to the Depositary from such Holder to exercise such rights,
upon payment by such Holder to the Depositary for the account of such Holder of
an amount equal to the purchase price of the Eligible Securities to be received
in exercise of the rights, and upon payment of the fees of the Depositary as set
forth in such warrants or other instruments, the Depositary will, on behalf of
such Holder, exercise the rights and purchase the Eligible Securities, and the
Company shall cause the Eligible Securities so purchased to be delivered to the
Depositary on behalf of such Holder. As agent for such Holder, the Depositary
will cause the Eligible Securities so purchased to be deposited and will issue
and deliver ADSs to such Holder, pursuant to the Deposit Agreement.
A-15
Notwithstanding anything to the contrary in Section 4.03 of the Deposit
Agreement, the Depositary will not offer rights to Holders unless both the
rights and the securities to which such rights relate are either exempt from
registration under the Securities Act with respect to a distribution to all
Holders or are registered under the provisions of the Securities Act; provided
that nothing in the Deposit Agreement will create, or be construed to create,
any obligation on the part of the Company to file a registration statement with
respect to such rights or underlying securities or to endeavor to have such a
registration statement declared effective. If a Holder requests the distribution
of warrants or other instruments, notwithstanding that there has been no such
registration under the Securities Act, the Depositary will not effect such
distribution unless it has received an opinion from recognized counsel in the
United States for the Company upon which the Depositary may rely that such
distribution to such Holder is exempt from such registration. The Depositary
will not be responsible for any failure to determine whether it may be lawful or
feasible to make such rights available to Holders in general or any Holder in
particular.
Subject always to applicable laws, whenever the Depositary shall receive
any distribution other than cash, Eligible Securities or rights in respect of
the Deposited Securities, the Depositary will cause the securities or property
received by it to be distributed to the Holders entitled thereto, as of record
date fixed pursuant to Section 4.06 of the Deposit Agreement, after deduction or
upon payment of any fees and expenses of the Depositary or any taxes or other
governmental charges, in proportion to their holdings, respectively, in any
manner that the Depositary may reasonably deem equitable and practicable for
accomplishing such distribution; provided, however, that, if in the opinion of
the Depositary, such distribution cannot be made proportionately among the
Holders entitled thereto, or if for any other reason (including, but not limited
to, any requirement that the Company or the Depositary withholds an amount on
account of taxes or other governmental charges or that such securities must be
registered under the Securities Act or other law in order to be distributed to
Holders) the Depositary deems such distribution not to be feasible, the
Depositary may adopt such method as it may deem equitable and practicable for
the purposes of effecting such distribution, including, but not be limited to,
the public or private sale of the securities or property thus received, or any
part thereof, and the net proceeds of any such sale (net of the fees of the
Depositary) will be distributed by the Depositary to the Holders entitled
thereto as in the case of a distribution received in cash.
If the Depositary determines that any distribution of property (including
Eligible Securities and rights to subscribe therefor) is subject to any taxes or
other governmental charges which the Depositary is obligated to withhold, the
Depositary may, by public or private sale, dispose of all or a portion of such
property in such amount and in such manner as the Depositary deems necessary and
practicable to pay such taxes or charges, and the Depositary will distribute the
net proceeds of any such sale after deduction of taxes or charges to the Holders
entitled thereto in proportion to the number of ADSs held by them, respectively.
A-16
References in this paragraph to "Holders" are to Holders as of the record
date fixed pursuant to Section 4.06 of the Deposit Agreement.
(17) "Record Dates". Whenever any cash dividend or other cash distribution
shall become payable or any distribution other than cash shall be made, or
whenever rights shall be issued with respect to the Deposited Securities, or
whenever for any reason the Depositary causes a change in the number of Eligible
Securities that are represented by each ADS, or whenever the Depositary shall
receive notice of any meeting of holders of Eligible Securities or other
Deposited Securities, or whenever the Depositary shall find it necessary or
convenient, the Depositary will, subject to the requirements of applicable law
and the regulations of any stock exchange on which the ADSs may be listed, fix a
record date which shall be the same date, to the extent practicable, as the
record date for the Eligible Securities or other Deposited Securities, or if
different, to be fixed as soon thereafter as practicable; (a) for the
determination of the Holders who will be (i) entitled to receive such dividend,
distribution or rights, or the net proceeds of the sale thereof, or (ii)
entitled to give instructions for the exercise of voting rights at any such
meeting, or (b) on or after which each ADS will represent the changed number of
Eligible Securities, subject to the provisions contained herein. Subject to the
provisions of Sections 4.01 through 4.05 and 5.09 of the Deposit Agreement and
to the other terms and conditions of the Deposit Agreement, the Holders on such
record date shall be entitled to receive the amount distributable by the
Depositary with respect to such dividend or other distribution or such rights or
the net proceeds of the sale thereof, to give voting instructions for the
Deposited Securities, or to exercise the rights of Holders under the Deposit
Agreement with respect to such changed number of Eligible Securities,
represented by each ADS, in proportion to the number of ADSs held by them
respectively, or with respect to such other matter. The Depositary shall
promptly notify the New York Stock Exchange, Inc. of any action to fix a record
date for the ADSs or to close the transfer books for the ADSs.
(18) "Voting of Deposited Securities". Each Holder of ADSs appoints the
Depositary as its representative to exercise the voting rights with respect to
the Eligible Securities or other Deposited Securities represented by the ADSs.
Holders may exercise voting rights with respect to the Eligible Securities
represented by such ADSs only in accordance with the provisions contained herein
and in the Deposit Agreement. Except as described below, Holders will not be
able to exercise voting rights attaching to the Deposited Securities on an
individual basis. According to ROC Company Law, a shareholder's voting rights
attaching to shareholdings in a ROC company must, as to all matters subject to a
vote of shareholders (other than the election of directors, if such election is
done by means of cumulative voting), be exercised as to all shares held by such
shareholder in the same manner. Accordingly, the voting rights attaching to the
Deposited Securities must be exercised as to all matters subject to a vote of
shareholders by the Depositary, as representative of the Holders, collectively
in the same manner, except in the case of an election of directors, if such
election is done by means of cumulative voting. The election of directors is by
means of cumulative voting unless the Company's Articles of Incorporation
stipulate otherwise.
The Company will provide to the Depositary sufficient copies (including
English translations), as the Depositary may reasonably request, of notices of
meetings of shareholders of the Company and the agenda therefor (containing an
indication of the number of directors to be elected if an election of directors
is to be held at the
A-17
meeting), and, upon the request of the Depositary, a list of the candidates who
have expressed their intentions to run for an election of directors
(collectively, the "Voting Materials") which the Depositary will mail to Holders
as soon as practicable after receipt of the same by the Depositary, together
with instructions (the "Voting Instructions Notice") as to the manner in which
each Holder may give instructions to the Depositary to vote for or against each
resolution specified in the agenda for the meeting and to vote, on a cumulative
basis (if the election is done by means of cumulative voting), for the persons
designated by such Holder as directors. In order for such voting instructions to
be valid, such voting instructions must be returned to the Depositary in the
manner specified by the Depositary for such purposes in the Voting Instructions
Notice by such date as the Depositary may specify, not to be earlier than 10
days after mailing of the Voting Materials and Voting Instructions Notice to the
Holders, and not to be later than five days prior to the date of the
shareholders' meeting. For the benefit of the Holders, the Depositary has agreed
to request the list of candidates who have expressed their intentions to run for
election of directors. In connection with an election for the directors,
additional or different candidates may be nominated at the meeting of the
shareholders than those proposed in the list provided by the Company. In the
event (i) any such additional or different candidates are nominated at the
meeting or (ii) the number of directors to be elected is changed subsequent to
the mailing of the Voting Materials and Voting Instructions Notice to the
Holders by the Depositary, the Depositary may develop procedures to calculate
votes in a manner not inconsistent with the provisions of Section 4.07 of the
Deposit Agreement; provided, however, that, the Depositary shall not exercise
any discretion with regard to any voting rights and if the Depositary elects to
develop such procedures, it shall do so in such a manner so as to give effect,
to the extent practicable, to the instructions received from the Holders.
Subject to the provisions described in the second succeeding paragraph,
which will apply to the election of directors done by means of cumulative
voting, if a Holder or Holders together holding at least 51 % of the ADSs
outstanding at the relevant record date instruct the Depositary to vote in the
same manner in respect of one or more resolutions to be proposed at the meeting
A-18
(other than the election of directors), the Depositary will notify the
instructions to the Chairman of the Board of Directors of the Company (the
"Chairman") or such other person as the Chairman may designate (the
"Representative") and appoint the Representative as the representative of the
Depositary and the Holders to attend such meeting and vote all the Deposited
Securities represented by ADSs to be voted in the manner so instructed by such
Holder or Holders in relation to such resolution or resolutions (the "Voting
Instruction").
If, for any reason, the Depositary has not by the date specified by it
received instructions from a Holder or Holders together holding at least 51 % of
all the ADSs outstanding at the relevant record date to vote in the same manner
in respect of any of the resolutions specified in the agenda for the meeting
(other than the elections of directors), then such Holders will be deemed to
have instructed the Depositary to authorize and appoint the Representative as
representative of the Depositary and the Holders to attend such meeting and vote
all the Deposited Securities represented by ADSs as such Representative deems
appropriate with respect to such resolution or resolutions, which may not be in
the interests of the Holders.
The Depositary will notify the instructions for the election of directors
received from Holders to the Representative and appoint the Representative as
the representative of the Depositary and the Holders to attend such meeting, and
vote the Deposited Securities represented by ADSs as to which the Depositary has
received instructions from Holders for the election of directors in the matter
so instructed to the extent practicable, subject to any restrictions under ROC
law and the Articles of Incorporation of the Company. Such Holders who by the
date specified by the Depositary have not delivered instructions to the
Depositary, will be deemed to have instructed the Depositary to authorize and
appoint the Representative as the representative of the Depositary and the
Holders to attend such meeting and vote all the Deposited Securities represented
by ADSs as to which the Depositary has not received instructions from the
Holders for the election of directors as the Representative deems appropriate
with respect to such resolution or resolutions, which may not be in the best
interests of the Holders. Candidates standing for election as representatives of
a shareholder may be replaced by such shareholder prior to the meeting of
shareholders and the votes cast by the Holder for such candidates shall be
counted as votes for their replacements.
The Depositary's notification of a Voting Instruction or appointment of a
Representative in the manner and circumstances described above shall be subject
to the receipt (at the sole cost and expense of the Depositary) by the
Depositary of a ROC legal opinion (which opinion may be delivered at the time of
entering into the Deposit Agreement) addressed to, and in the form and substance
satisfactory to, the Depositary, to the effect that under ROC law (i) the
Deposit Agreement is valid, binding and enforceable against the Company and the
Holders of ADSs (subject to certain assumptions and qualifications), and (ii)
the Depositary will not be deemed to be authorized to exercise any discretion
when voting in accordance with this paragraph and will not, in the absence of
negligence, bad faith or breach of contract, be subject to any potential
liability under ROC law for losses arising from such voting on the ground that
the voting in accordance with Section 4.07 of the Deposit Agreement is in
violation of ROC law; provided, however, in the event of a change in applicable
ROC law after the date of the Deposit Agreement the Depositary shall be entitled
to an opinion of ROC outside counsel with respect to (i) and (ii) above prior to
the next occurring shareholders' meeting subsequent to such change in applicable
ROC law. The Company and the Depositary shall take such actions, including the
amendment of Section 4.07 of the Deposit Agreement, as they shall deem
appropriate to endeavor to provide for the exercise of voting rights attached to
the Shares at future shareholders' meetings of the Company in a manner
consistent with applicable ROC law.
A-19
By continuing to hold ADSs, all Holders will be deemed to have agreed to
the voting provisions set forth herein as they may be amended from time to time.
As of the date hereof, the ROC Company Law and the Articles of
Incorporation of the Company provide that a holder of Shares (including any
holder of an interest in any Certificate of Payment evidencing the irrevocable
right to receive Shares) has one vote for each Share.
The Depositary will not, and the Depositary will endeavor to ensure that
the Custodian and their respective nominees (including the Representative) do
not (except as described above), exercise any discretion as to voting, nor vote
or attempt to exercise the right to vote that attaches to the Deposited
Securities, other than in accordance with such instructions.
(19) "Right to Submit Proposal at General Meeting of Shareholders".
Beneficial Owners that individually or together with other Beneficial Owners
hold at least 51% of the ADSs outstanding at the Shareholder Record Date are
entitled to submit each year one written proposal (the "Proposal") for voting at
the general meeting of shareholders of the Company; provided, that (i) the
Proposal is in Chinese language and does not exceed 300 Chinese characters in
length, (ii) the Proposal is submitted to the Depositary at least two Business
Days prior to the expiry of the Submission Period, which Submission Period shall
be publicly announced by the Company each year in a report on Form 6-K filed
with the Commission prior to the commencement of the closed period, during which
under the ROC laws the Company shall close its share transfer book, for general
meetings of shareholders of the Company as required by relevant law, during
which under the ROC laws the Company shall close its share transfer book, (iii)
the Proposal is accompanied by a written certificate to the Depositary (the
"First Certificate"), in the form required by the Depositary, certifying that
the Proposal is being submitted by Beneficial Owners ("Submitting Holders") that
individually or together with other Beneficial Owners hold at least 51% of the
ADSs outstanding at the Submission Date and, if the Submission Date is on or
after the Shareholder Record Date, also certifying that the Submitting Holders
held at least 51% of the ADSs outstanding as of the Shareholder Record Date,
(iv) if the Submission Date is prior to the Shareholder Record Date, the
Submitting Holders must also provide, within five Business Days after the
Shareholder Record Date, a second written certificate (the "Second Certificate")
to the Depositary, in the form required by the Depositary, certifying that the
Submitting Holders continued to hold at least 51% of the ADSs outstanding at the
Shareholder 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 Certificate or the Second 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 general meeting of the shareholders
of the Company (including the costs and expenses of the Depositary or its agent
to attend the general meeting of the shareholders of the Company) as such fees
and expenses may be reasonably determined and documented by the Depositary or
the Company, and (vi) the Proposal shall only be voted upon at the general
meeting of shareholders of the Company if the Proposal is accepted by the board
of directors of the Company as eligible in accordance with law for consideration
at a shareholders meeting.
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Any Proposal(s) received by the Depositary which the Depositary reasonably
believes to be in full compliance with the preceding paragraph shall be
submitted by the Depositary to the Company prior to the expiration of the
Submission Period. The Depositary shall withdraw any Proposal so submitted as to
which the Depositary has not received within five Business Days after the
Shareholder Record Date any Second Certificate required under the preceding
paragraph.
This Paragraph (19) shall cease to be applicable whenever the Shares
registered in the name of the Depositary as representative of the Holders
constitute less than one percent (1%) of the total issued and outstanding Shares
of the Company as of the Shareholder Record Date.
(20) "Right to Submit Nomination for Independent Director at Meeting of
Shareholders". The Depositary will, if so requested by Beneficial Owners that
individually or together with other Beneficial Owners own at least 51% of the
ADSs outstanding at the applicable Shareholder Record Date (such Beneficial
Owners, the "Nominating Owners") submit one (1) nomination of a roster of
candidates (a "Nomination") to be considered for nomination as independent
directors to the Company's board of directors for voting at the meeting of
shareholders of the Company; provided, that: (i) the number of independent
director candidates contained in the Nomination shall not exceed the number of
the independent directors to be elected at such meeting, (ii) the Nomination
shall contain the name, educational background and past work experience of each
independent director candidate identified in the Nomination, (iii) the
Nomination shall include (a) a letter of consent issued by each independent
director candidate identified in the Nomination consenting to act as a director
if such independent director candidate is elected as such, (b) a written
statement by each independent director candidate identified in the Nomination
assuring that such independent director candidate complies with relevant ROC
laws and regulations, each as amended, and that the requirements, if any,
required to be fulfilled by the independent director candidate under relevant
ROC law and the Company's Articles of Incorporation are satisfied, and (c) any
other documents as may be required by law or the Company from time to time, (iv)
the Nomination is submitted to the Depositary at least two Business Days prior
to the expiration of the Nomination Submission Period (which Nomination
Submission Period shall be publicly announced by the Company in a report on Form
6-K filed with the Commission prior to the commencement of the closed period,
during which under the ROC laws the Company shall close its share transfer book,
for a general or special meeting of shareholders of the Company as required by
relevant law when the meeting of shareholders of the Company involves the
election of independent directors), (v) the Nomination is accompanied by a
written certificate to the Depositary signed by each Nominating Owner (the
"First Nomination Certificate"), in a form satisfactory to the Depositary and
the Company, certifying that (a) each Nominating Owner has only endorsed the
said Nomination, (b) the Nomination is being submitted by Nominating Owners that
individually or together with other Nominating Owners own at least 51% of the
ADSs outstanding at the Nomination Submission Date and (x) if the Nomination
Submission Date is on or after the applicable Shareholder Record Date, also
certifying that the Nominating Owners
A-21
owned at least 51% of the ADSs outstanding as of such Shareholder Record Date,
or (y) if the Nomination Submission Date is prior to the applicable Shareholder
Record Date, also certifying that the Nominating Owners will continue to own at
least 51% of the ADSs outstanding as of such Shareholder Record Date and will
provide, within five Business Days after such Shareholder Record Date, a second
written certificate to the Depositary signed by each Nominating Owner (the
"Second Nomination Certificate"), in a form satisfactory to the Depositary and
the Company, certifying that the Nominating Owners continued to own at least 51%
of the ADSs outstanding on the applicable Shareholder Record Date (together with
certified evidence of each Nominating Owner's ownership of the applicable ADSs
as of such applicable Shareholder Record Date), and (c) the name(s) and
address(es) of the Nominating Owner(s) and the number of ADSs owned by each
Nominating Owner (together with certified evidence of each Nominating Owner's
ownership of the applicable ADSs as of the Nomination Submission Date, in the
case of (a), and the applicable Shareholder Record Date, in the case of (b)),
(vi) the Nomination is accompanied by a joint and several irrevocable
undertaking of all Nominating Owners (which undertaking may be contained in the
First Nomination Certificate or the Second Nomination Certificate) that each
such Nominating Owner shall pay all fees and expenses incurred in relation to
the submission of the Nomination for voting at the meeting of the shareholders
of the Company (including the costs and expenses of the Depositary or its agent
to attend any meeting of the shareholders of the Company) as such fees and
expenses may be reasonably determined and documented by the Depositary or the
Company, and (vii) the Nomination shall only be voted upon at the meeting of
shareholders of the Company if the Nomination is accepted by the board of
directors of the Company as eligible in accordance with law for consideration at
a shareholders meeting. Each Beneficial Owner hereby agrees and acknowledges
that in no event shall the Depositary or its nominee be nominated by the
Nominating Owner(s) for election as an independent director at a meeting of the
Company's shareholders.
Any Nomination timely received by the Depositary which the Depositary
reasonably believes to be in full compliance with the preceding paragraph shall
be submitted by the Depositary 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
Shareholder Record Date any Second Nomination Certificate required under the
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 Owner, or a group of Nominating Owners,
each of which appears to satisfy the requirements set forth in the preceding
paragraph, the Depositary is hereby authorized and instructed to disregard all
Nominations received from such Nominating Owner(s), except for the first
Nomination received by the Depositary from such Nominating Owner(s) and shall
submit such Nomination to the Company for consideration at a meeting of the
Company's shareholders involving the election of independent 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 Owner(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 independent directors on behalf of the Nominating
Owner(s).
Notwithstanding anything contained herein or in the Deposit Agreement, and
except that the Depositary shall arrange, at the request of the Company and at
A-22
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 Owners, 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.
This Paragraph (20) shall cease to be applicable whenever the Shares
registered in the name of the Depositary as representative of the Holders
constitute less than one percent (1%) of the total issued and outstanding Shares
of the Company as of the Shareholder Record Date or the Company's Articles of
Incorporation no longer provide shareholders of the Company with the right to
nominate candidates for election as independent directors.
(21) "Changes Affecting Deposited Securities". Upon any change in nominal
or par value, split up, consolidation or other reclassification of Deposited
Securities, or upon any capitalization, reorganization, merger or consolidation
or sale of assets affecting the Company or to which it is a party, and upon the
Depositary having obtained specific regulatory approval, if necessary, for the
issuance of additional ADSs from the appropriate governmental entity in the ROC,
any securities which shall be received by the Depositary or the Custodian in
exchange for, in conversion of or in respect of Deposited Securities will be
treated as new Deposited Securities under the Deposit Agreement, and the ADSs
shall thenceforth represent, in addition to the existing Deposited Securities,
the right to receive the new Deposited Securities so received, unless additional
ADSs are delivered pursuant to the following sentence. In any such, case, the
Depositary may, after consulting with the Company, and will, if the Company so
requests, issue and deliver additional ADSs as in the case of a distribution in
Eligible Securities, or call for the surrender of outstanding ADSs to be
exchanged for new ADSs specifically describing such new Deposited Securities.
Furthermore, the Company and the Depositary shall determine whether any
amendments to the terms of the Deposit Agreement are required in any such case.
Notwithstanding the foregoing, in the event that any security or property
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 Company's counsel reasonably 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 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 Section 4.01 of the Deposit Agreement.
(22) "Reports; Inspection of Register". The Depositary shall make
available for inspection by Holders at its Principal Office any reports and
communications received from the Company which are both (a) received by the
Depositary as representative of the holder of record of the Deposited
Securities, and (b) made generally available to the holders of such Deposited
Securities by the Company. The Depositary shall also promptly provide or make
available to the Holders copies of such reports and communications when
A-23
furnished by the Company pursuant to Section 5.08 of the Deposit Agreement. Any
such reports and communications furnished or made available to shareholders
(including any proxy form and agenda) furnished to the Depositary by the Company
will be furnished in English when so required pursuant to any regulations of the
Commission or any stock exchange on which the ADSs are listed.
The Depositary shall keep books at its Principal Office for the
registration and transfer of ADSs, which office shall be open at all reasonable
times for inspection by Holders and the Company, provided that such inspection
shall not be for the purpose of communicating with Holders in the interest of a
business or object other than the business of the Company or a matter related to
the Deposit Agreement, the ADSs or any Receipts.
(23) "Taxation". The Depositary or the Custodian will forward to the
Company or its agents such information from its records as the Company may
reasonably request to enable the Company or its agent to file necessary reports
with governmental authorities or agencies, and the Depositary, the Custodian or
the Company or its agents may file such reports as are necessary to reduce or
eliminate applicable taxes on dividends and on other distributions in respect of
Deposited Securities. In accordance with instructions from the Company and to
the extent practicable and at the expense of the Company, the Depositary will
take, or will cause the Custodian to take, reasonable administrative actions to
obtain tax refunds, reduced withholding of tax at source on dividends and other
benefits under applicable tax treaties with respect to dividends and other
distributions on the Deposited Securities. Holders may be required, from time to
time to file such proof of taxpayer status or residence, to execute such
certificates and to make such representations and warranties, or to provide any
other information or documents as the Depositary may deem necessary or proper to
fulfill the Depositary's obligations under applicable law. Holders shall provide
the Depositary, in a timely manner, with copies, or originals if necessary and
appropriate, of any such proofs of residence, taxpayer status, beneficial
ownership and any other information or documents which the Depositary may
reasonably request. The Holder shall indemnify the Depositary, the Company, the
Custodian and any of their respective directors; employees, agents and
Affiliates against, and hold each of them harmless from any claims by any
governmental authority with respect to taxes, additions to tax, penalties or
interest arising out of any refund of taxes, reduced rate of withholding at
source or other tax benefit obtained for such Holder pursuant to Section 4.12 of
the Deposit Agreement.
Upon the request of any Holder, the Depositary shall provide such Holder
with evidence of foreign taxes withheld to the extent such information is
available, but in no event shall the Depositary be held liable for a Holder's
failure to obtain foreign tax credits against the Holder's United States federal
income tax liability.
If any withholding tax is imposed at source on any amounts paid under the
Deposit Agreement and the Company is required to withhold and pay such tax, the
Company shall promptly surrender to the Depositary the original tax receipt or
other proof of payment in a form reasonably satisfactory to the Depositary,
subject to applicable ROC law. Additionally, if any tax is paid by the Company
(e.g., stamp duty tax or capital gains tax) relating to any amounts paid under
the Deposit Agreement, the Company shall promptly surrender to the Depositary
the original tax receipt or other proof of payment in a form reasonably
satisfactory to the Depositary, subject to applicable ROC law.
A-24
In no event shall the Depositary be held liable if the Company or any
subsidiary thereof constitutes a Foreign Personal Holding Company, Passive
Foreign Investment Company, or any other type of entity that may result in a
Holder's increased tax liability in respect of (i) gain realized on the sale or
other disposition of the ADSs or (ii) dividends. The Depositary is under no
obligation to provide any Holder with any information regarding the tax status
of the Company in the current or any succeeding taxable years.
(24) "Liability of the Company and the Depositary". Neither the Depositary
nor the Company nor any of their respective directors, employees, agents or
Affiliates will be liable to any Holder or other person or entity, if by reason
of any provision of any present or future law or regulation of the United
States, the ROC or any other country, or of any other governmental or regulatory
authority or stock exchange or by reason of any provision, present or future, of
the Articles of Incorporation of the Company, or by reason of any provision of
any securities issued or distributed by the Company, or any offering or
distribution thereof, or by reason of any act of God or war or other
circumstance beyond its control, the Depositary or the Company or any of their
respective directors, employees, agents, or Affiliates shall be prevented,
delayed or forbidden from, or be subject to any civil or criminal penalty on
account of, doing or performing any act or thing which by the terms of the
Deposit Agreement or the Deposited Securities it is provided will be done or
performed, or by reason of any exercise of, or failure to exercise, any
discretion provided for under the Deposit Agreement. Where, by the terms of a
distribution pursuant to Section 4.01, 4.02, or 4.03 of the Deposit Agreement,
or an offering or distribution pursuant to Section 4.04, 4.10 or 5.09 of the
Deposit Agreement, or for any reason, such distribution or offering may not be
lawfully made available to Holders, and the Depositary may not lawfully dispose
of such distribution or offering on behalf of such Holders and make the net
proceeds available to such Holders, then the Depositary will not make such
distribution or offering, and will allow the rights, if applicable, to lapse.
The obligations of the Company and the Depositary and their respective
agents under the Deposit Agreement are expressly limited to performing their
respective duties specified herein and in the Deposit Agreement in good faith
and using their reasonable judgment.
Each of the Depositary and its agents assumes no obligation and shall be
subject to no liability under the Deposit Agreement or the Receipts to Holders
or other persons, except to perform such obligations as are specifically set
forth and undertaken by it to perform in the Deposit Agreement without
negligence and in good faith. The Depositary and the Company undertake to
perform such duties and only such duties as are specifically set forth in the
Deposit Agreement, and no implied covenants or obligations shall be read into
the Deposit Agreement against the Depositary or the Company or their respective
agents. Without limitation of the preceding, none of the Depositary, its
Affiliates nor its agents or the Company, its Affiliates or its 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 ADSs or
Receipts, which in its opinion may involve it in expense or liability, unless an
indemnity satisfactory to it in its sole discretion against all expense
(including fees and disbursements of counsel) and liability shall be furnished
as often as may be required, and no Custodian shall be under any obligation
whatsoever with respect to such proceedings, the Custodian being responsible
solely to the Depositary. Neither the Depositary, its Affiliates, nor its
agents, or the Company, its Affiliates, nor its agents shall be liable for any
action or inaction by it or them in reliance upon the advice of or information
A-25
from legal counsel, accountants, any person presenting Eligible Securities for
deposit, any Holder or any other person believed by it or them in good faith to
be competent to give such advice or information. Each of the Depositary, its
Affiliates and its agents and the Company, its Affiliates and its agents may
rely and shall be protected in acting upon any written notice, request,
direction or other document believed by it to be genuine and to have been signed
or presented by the proper party or parties.
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, or for the failure of the
Company to exchange any Certificate of Payment into any Scripless Shares
represented by the Master Certificate or any Master Certificate into Shares in
physical certificated form, or for any action of or failure to act by, or any
information provided or not provided by, DTC or any DTC Participant, provided
that any such action or omission is in good faith and in accordance with the
terms of the Deposit Agreement. The Depositary shall not be obligated in any way
to monitor or enforce the obligations of the Company, including, without
limitation, in respect of any Certificate of Payment, the conversion of such
Certificate of Payment into any Scripless Shares represented by the Master
Certificate or any Master Certificate into Shares in physical certificated form.
(25) "Resignation and Removal of the Depositary; the Custodian". The
Depositary may at any time resign as Depositary by sixty (60) days' written
notice of its election so to do to the Company, such resignation to take effect
upon the earlier of (i) the appointment of a successor depositary and its
acceptance of such appointment as hereinafter provided and (ii) the expiration
of sixty (60) days after delivery to the Company of such notice.
The Depositary may at any time be removed by the Company by sixty (60)
days' written notice of such removal which shall become effective upon the
earlier of (i) the sixtieth (60th) day after delivery thereof to the Depositary
and (ii) the appointment of a successor depositary and its acceptance of such
appointment as hereinafter provided.
(26) "Amendment of Deposit Agreement and Receipts". The form of ADRs and
any provisions of the Deposit Agreement may at any time and from time to time be
amended by agreement between the Company and the Depositary without the consent
of the Holders or Beneficial Owners of ADSs, provided, however, that any
amendment that imposes or increases any fees or charges (other than taxes and
other governmental charges, registration fees, cable, telex or facsimile
transmission costs, delivery costs or other such expenses), or which otherwise
prejudices any substantial existing right of Holders, will not take effect as to
outstanding ADSs until the expiration of thirty (30) days after notice of any
amendment has been given to the Holders of outstanding ADSs, and in any case, to
the extent necessary to comply with applicable laws or regulations. Every Holder
of an ADS or beneficial interest therein, at the time any amendment so becomes
effective, will be deemed, by continuing to hold such ADS or beneficial interest
therein, to consent and agree to such amendment and to be bound by the Deposit
Agreement as amended thereby. In no event will any amendment impair the right of
the Holder or Beneficial Owner of any ADS to surrender such ADS or beneficial
interest therein and to receive therefor the Deposited Securities represented
thereby, except to comply with mandatory provisions of applicable law.
A-26
(27) "Termination of Deposit Agreement". The Depositary will at any time
at the direction of the Company terminate the Deposit Agreement by mailing
notice of such termination to the Holders at least sixty (60) days prior to the
date fixed in such notice for such termination. The Depositary may likewise
terminate the Deposit Agreement by mailing notice of such termination to the
Company and the Holders then outstanding at least sixty (60) days prior to the
date fixed in such notice of termination if, any time after sixty (60) days have
expired after the Depositary will have delivered to the Company a written notice
of its election to resign, a successor depositary will not have been appointed
and accepted its appointment, in accordance with the terms of the Deposit
Agreement.
On and after the date of termination, the Holder of an ADS will, upon (a)
surrender of such ADS at the Principal Office, (b) payment of the fee of the
Depositary for the surrender of ADSs referred to in the Deposit Agreement, and
(c) 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 ADSs. If any ADSs remain outstanding after the date of
termination of the Deposit Agreement, the Depositary thereafter will discontinue
the registration of transfers of ADSs, will suspend the distribution of
dividends to the Holders thereof and will not give any further notices or
perform any further acts under the Deposit Agreement except the collection of
dividends and other distributions pertaining to the Deposited Securities, the
sale of rights and other property and the delivery of underlying Eligible
Securities, together with any dividends or other distributions received with
respect thereto and the net proceeds of the sale of any rights or other
property, in exchange for surrendered ADSs (after deducting, in each case, the
fees of the Depositary for the surrender of an ADS and other expenses set forth
in, the Deposit Agreement and any applicable taxes or governmental charges).
At any time after the expiration of six months from the date of
termination, the Depositary may sell the Deposited Securities then held under
the Deposit Agreement and may hold uninvested the net proceeds of such sale,
together with any other cash, unsegregated and without liability for interest,
for the pro rata benefit of the Holders of ADSs that have not theretofore
surrendered their ADSs, 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,
except to account for net proceeds and other cash (after deducting, in each
case, the fee of the Depositary and other expenses set forth in the Deposit
Agreement for the surrender of an ADS and any applicable taxes or other
governmental charges). The Company will not appoint any other depositary for
issuance of ADSs so long as Citibank, N.A. is acting as Depositary under the
Deposit Agreement. Upon termination of the Deposit Agreement, the Company will
also be discharged from all obligations under the Deposit Agreement except for
its obligations to the Depositary under Sections 5.06 and 5.10 of the Deposit
Agreement.
(28) "Certain Rights of the Depositary, Limitations". Subject to the
further terms and provisions of Section 5.11 of the Deposit Agreement, Citibank,
N.A. and its agents may own and deal in any class of securities of the Company
and its Affiliates and in ADSs. The Depositary may issue ADSs against evidence
of rights to receive Eligible Securities from the Company, or any custodian,
registrar, transfer agent, clearing agency or other entity involved in ownership
or transaction records in respect of the Eligible Securities. Such evidence of
rights shall consist of written blanket or specific guarantees of ownership of
Eligible Securities furnished on behalf of the holder thereof. In its capacity
A-27
as Depositary, the Depositary shall not lend Eligible 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 2.03 of the Deposit Agreement and (ii) deliver Eligible
Securities prior to the receipt and cancellation of ADSs pursuant to Section
2.06 thereunder, including ADSs which were issued under (i) above but for which
Eligible Securities may not have been received (each such transaction a
"Pre-Release Transaction"). The Depositary may receive ADSs in lieu of Eligible
Securities in satisfaction of a Pre-Release Transaction; provided that the
Depositary may not execute any Pre-Release Transaction (a) prior to receipt of
any required ROC regulatory approval or (b) if such release would violate
applicable law. Each Pre-Release Transaction must be (i) preceded or accompanied
by a written representation by the person or entity (the "Applicant") to whom
the ADSs or Eligible Securities are to be delivered that such Applicant, or its
customer, owns the Eligible Securities or ADSs to be remitted, as the case may
be, and assigns all right, title and interest therein to the Depositary for the
benefit of the Holders, and such other representations and agreements as are set
forth in the Deposit Agreement, (ii) at all times fully collateralized with cash
or such other collateral as the Depositary deems appropriate, (iii) terminable
by the Depositary on not more than five business days notice and (iv) subject to
the further indemnities and credit regulations as the Depositary deems
appropriate. The number of ADSs that are outstanding at any time as a result of
Pre-Release Transactions will not normally exceed 30% of the Eligible Securities
deposited thereunder, provided, however, that the Depositary reserves the right
to change or disregard such limit from time to time as it deems appropriate,
after consultation with the Company. The Depositary may also set limits with
respect to the number of ADSs and Eligible Securities involved in Pre-Release
Transactions with any one Applicant on a case by case basis as it deems
appropriate. Neither Temporary ADSs nor any interest in any Certificate of
Payment shall be eligible for Pre-Release Transactions under the Deposit
Agreement.
The Depositary may retain for its own account any compensation received by
it in conjunction with the foregoing. Collateral provided pursuant to (ii)
above, but not the earnings thereon, shall be held for the benefit of the
Holders (other than the Applicant).
(29) "Compliance with U.S. Securities Laws". Notwithstanding anything in
the Deposit Agreement or any Receipt to the contrary, the Company and the
Depositary each agrees that it will not exercise any rights it has under the
Deposit Agreement to prevent the withdrawal or delivery of Deposited Securities
in a manner which would violate the U.S. securities laws, including, but not
limited to, Instruction I.A.(l) of the General Instructions to Form F-6, as
amended from time to time, under the Securities Act.
(30) "Disclosure of Ownership and Shareholders' Rights". The Company
hereby agrees, for so long as may be required for the benefit of Holders of ADSs
while the Deposit Agreement remains in effect, that it shall register the
Depositary or its nominee in its register of shareholders with respect to all
Eligible Securities or other Deposited Securities deposited with the Custodian
at any time and from time to time for the benefit of Holders of ADSs.
The Company further covenants, for so long as the Deposit Agreement
remains in effect, that, with respect to all Eligible Securities or other
Deposited Securities deposited with the Custodian at any time and from time to
A-28
time for the benefit of Holders of ADSs, it will not suspend (a) the status of
the Depositary or its nominee as registered shareholder of the Company or (b)
the rights of holders of Eligible Securities or other Deposited Securities,
including the right to vote, in or connected to such Eligible Securities or
other Deposited Securities deposited with the Custodian, subject to the
provisions of the Deposit Agreement.
Notwithstanding that the Depositary will act for the Holders of ADSs and
will be unable to make the disclosures or declarations required under the
Company's Articles of Incorporation, the Company shall treat the Depositary,
acting for the Holders of ADSs, equally with any other registered holder of
Eligible Securities or other Deposited Securities with respect to the exercise
of all rights of registered holders of Eligible Securities or other Deposited
Securities, including, but not limited to, the right to vote and to receive
dividends or other distributions, subject to the provisions of the Deposit
Agreement.
If as a result of a change of ROC law, the Depositary acting for the
Holders of ADSs shall no longer be able to exercise the rights of a registered
holder of Eligible Securities as provided in the preceding paragraphs, the
Company agrees to use its reasonable efforts to give the Depositary and the
Holders not less than thirty (30) days prior written notice thereof.
A-29
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: __________________________ Signature: __________________________
NOTE: The signature to any endorsement hereon must correspond with the
name as written upon the face of this Receipt 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 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-30
CHARGES OF THE DEPOSITARY
Service Rate By Whom Paid
------- ---- ------------
(1) Issuance of ADSs; Up to $5.00 per 100 Party for whom deposits are
deposit of Eligible American Depositary made or party receiving
Securities (including Shares (or fractions thereof) ADSs
Distribution of ADSs issued pursuant to exercises of
rights or other free
distributions of stock,
but excluding stock
dividends)
(2) Delivery of Deposited Up to $5.00 per 100 ADSs Party surrendering ADSs
Securities, property and (or fraction thereof) or making withdrawal
cash against surrender of surrendered
ADSs
(3) Distribution of cash Up to $2.00 per 100 ADSs Party to whom distribution
proceeds (i.e. upon sale held is made
of rights and other
entitlements)
The Depositary will charge any party (i) who makes a deposit of Eligible
Securities or to whom ADSs are issued, (ii) who surrenders an ADS for the
purpose of delivery or withdrawal of deposited Eligible Securities or other
Deposited Securities and (iii) to whom a distribution of Eligible Securities
pursuant to an exercise of rights or other free distributions of Eligible
Securities (other than with respect to stock splits or dividends) is made, a fee
of up to $0.05 for each ADS (or fraction thereof) issued or surrendered, and a
fee of up to $0.02 for each ADS (or fraction thereof) for any cash distribution
(other than with respect to dividends) made pursuant to the Deposit Agreement.
The Company will pay such expenses, fees or charges of the Depositary and those
of the Registrar, if any, as are agreed to in a written agreement between the
Company and the Depositary, except for taxes and other governmental charges, any
applicable share transfer, custody and registration fees on deposit, withdrawal,
or transfer of Eligible Securities, certain cable, telex, facsimile transmission
and delivery charges and such expenses as are incurred by the Depositary in the
conversion of foreign currency into U.S. dollars, and in connection with
compliance with foreign exchange control regulations, which shall be payable by
Holders.
B-1