☐ | REGISTRATION STATEMENT PURSUANT TO SECTION 12(b) OR 12(g) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☒ | ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 2021. |
☐ | TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
☐ | SHELL COMPANY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
Title of each class |
Trading Symbol(s) |
Name of each exchange on which registered | ||
American depositary shares (two American depositary shares representing three Class A ordinary share, par value US$0.000002 per share) |
DDL |
New York Stock Exchange | ||
, par value US$0.000002 per share* |
New York Stock Exchange |
* |
for trading, but only in connection with the listing on the New York Stock Exchange of American depositary shares. |
Large accelerated filer |
☐ |
Accelerated filer |
☐ |
Non-accelerated filer | ☒ | |||||
Emerging growth company |
☐ |
U.S. GAAP ☒ |
International Financial Reporting Standards as issued |
Other ☐ | ||||||
by the International Accounting Standards Board |
☐ |
Page |
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1 |
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2 |
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5 |
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Item 1. |
5 |
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Item 2. |
5 |
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Item 3. |
5 |
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Item 4. |
55 |
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Item 4A. |
87 |
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Item 5. |
87 |
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Item 6. |
106 |
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Item 7. |
116 |
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Item 8. |
116 |
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Item 9. |
117 |
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Item 10. |
118 |
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Item 11. |
136 |
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Item 12. |
136 |
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140 |
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Item 13. |
140 |
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Item 14. |
140 |
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Item 15. |
140 |
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Item 16A. |
141 |
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Item 16B. |
142 |
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Item 16C. |
142 |
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Item 16D. |
142 |
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Item 16E. |
142 |
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Item 16F. |
143 |
|||||
Item 16G. |
143 |
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Item 16H. |
144 |
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Item 16I. |
144 |
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145 |
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Item 17. |
145 |
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Item 18. |
145 |
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Item 19. |
145 |
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147 |
• | “ADRs” refers to the American depositary receipts that evidence the ADSs; |
• | “ADSs” refers to the American depositary shares, each two of which represent three Class A ordinary shares; |
• | “China” or the “PRC” refers to the People’s Republic of China, excluding, for the purposes of this annual report only, Hong Kong, Macau and Taiwan; |
• | “Class A ordinary shares” refers to our Class A ordinary shares with a par value of US$0.000002 per share; |
• | “Class B ordinary shares” refers to our Class B ordinary shares with a par value of US$0.000002 per share; |
• | “Dingdong,” “we,” “us,” “our company” and “our” refer to Dingdong (Cayman) Limited, a Cayman Islands exempted company, and its subsidiaries and their respective subsidiaries, as the context requires; |
• | “GMV” refers to gross merchandise value, which is the total value of all orders placed with us based on listed discounted prices of the ordered products. For the avoidance of doubt, the calculation of GMV does not take into consideration of discounts through coupons, and excludes shipping fees and orders that are returned, not delivered or not sold by all means; |
• | “MAU” refers to monthly active users, which is the sum of accounts that have accessed the Dingdong Fresh |
• | “ordinary shares” or “shares” refers to our Class A ordinary shares and Class B ordinary shares, par value US$0.000002 per share; |
• | “Renminbi” or “RMB” refers to the legal currency of China; |
• | “SEC” refers to the United States Securities and Exchange Commission. |
• | “transacting user” refers to a user account that paid for transactions of products on Dingdong Fresh |
• | “U.S. dollars” or “US$” refers to the legal currency of the United States. |
• | our goals and strategies; |
• | our future business development, financial conditions, and results of operations; |
• | the expected outlook of the fresh grocery e-commerce market in China; |
• | our expectations regarding demand for and market acceptance of our products and services; |
• | our expectations regarding our relationships with our users, clients, business partners, and other stakeholders; |
• | competition in our industry; |
• | our proposed use of proceeds; and |
• | relevant government policies and regulations relating to our industry. |
Item 1. |
Identity of Directors, Senior Management and Advisers |
Item 2. |
Offer Statistics and Expected Timetable |
Item 3. |
Key Information |
• | Our limited operating history makes it difficult to evaluate our business and prospects. We cannot guarantee that we will be able to maintain the growth rate that we have experienced to date. |
• | We have incurred net losses in the past and we may continue to incur losses in the future. |
• | We face intense competition, and if we fail to compete effectively, we may lose market share, users and our business partners. |
• | If we fail to anticipate user needs and provide superior user experience to attract and retain users and increase their purchase with us or fail to adapt our services or business model to evolving user needs or emerging industry standards, our business may be materially and adversely affected. |
• | We rely heavily on sales of perishable products, and ordering errors or product supply disruptions or disruptions to our storage and distribution network may have an adverse impact on the profitability and operating results. |
• | Any harm to our brand or reputation may materially and adversely affect our business and results of operations. |
• | We rely on our suppliers and other business partners to provide quality products and services which are critical to our business. Any changes, interruptions or disruptions of our relationships with them or any interruptions or disruptions of, or negative publicity around, their business may adversely affect our operation. |
• | Our quality control procedures may not be entirely effective. Any failure of or delay in developing and implementing updates in our quality control system may materially and adversely affect our business prospects. |
• | If our expansion into new geographical areas is not successful, our business prospects and results of operations may be materially and adversely affected. |
• | Our expansion into new product offerings or substantial increase in the number of our product offerings may expose us to new and increased challenges and risks. |
• | We face potential liability, expenses for legal claims and harm to our business based on the nature of our business. |
• | Failure to successfully manage our fulfillment infrastructure expansion or any interruption in the operation of the warehouse facilities for an extended period may negatively affect our business, prospects and results of operations. |
• | We may be subject to product liability claims. |
• | If we fail to manage our inventory effectively, our results of operations, financial condition and liquidity may be materially and adversely affected. |
• | There could be adverse legal, tax, and other consequences if delivery riders or workers at our regional processing centers and frontline fulfillment stations were to be classified as our employees or dispatched employees instead of independent contractors. |
• | We engage labor service companies to provide outsourced personnel for a portion of our operations. We have limited control over these personnel and may be subject to liabilities arisen from contracts we enter into with such labor service companies. |
• | Failure to protect confidential information of our users and network against security breaches could damage our reputation and brand and substantially harm our business and results of operations. |
• | Our business is subject to complex and evolving laws and regulations regarding privacy and data protection. Many of these laws and regulations are subject to change and uncertain interpretation, and could result in claims, changes to our business practices, increased cost of operations, or declines in user growth or engagement, or otherwise harm our business. |
• | We are subject to payment processing risk. |
• | Any lack of requisite approvals, licenses, permits or filings or failure to comply with any requirements of PRC laws, regulations and policies may materially and adversely affect our daily operations and hinder our growth. |
• | We may be subject to intellectual property infringement claims, which may be expensive to defend and may disrupt our business and operations. |
• | We may not be able to prevent others from unauthorized use of our intellectual property, which could harm our business and competitive position. |
• | Our business may be subject to seasonal sales fluctuations. |
• | We rely on proper operation and maintenance of our mobile platform and internet infrastructure and telecommunications networks in China. Any malfunction, capacity constraint or operation interruption may have an adverse impact on our business. |
• | We identified material weaknesses in our internal control over financial reporting for the years ended December 31, 2019 and 2020 that have now been remediated. If we fail to maintain an effective system of internal controls, we may not be able to accurately or timely report our financial condition or results of operations, meet our reporting obligations or prevent fraud. |
• | The defects in certain leased property interests and failure to register certain lease agreements may materially and adversely affect our business, financial condition, results of operations, and prospects. |
• | We face risks related to natural disasters, health epidemics and other outbreaks, most notably those related to the outbreak of COVID-19. |
• | The audit report included in this annual report is prepared by an independent registered public accounting firm who is not inspected by the PCAOB and, as such, our investors are deprived of the benefits of such inspection. In addition, the adoption of any rules, legislations or other efforts to increase U.S. regulatory access to audit information could cause uncertainty, and we could be delisted if our auditor is unable to meet the PCAOB inspection requirement in time. |
• | Our ADSs will be prohibited from trading in the United States under the HFCA Act in 2024 if the PCAOB is unable to inspect or fully investigate auditors located in China, or as early as 2023 if proposed changes to the law are enacted. The delisting of our ADSs, or the threat of their being delisted, may materially and adversely affect the value of your investment. |
• | Proceedings instituted by the SEC against PRC-based “big four” accounting firms, including our independent registered public accounting firm, could result in financial statements being determined to not be in compliance with the requirements of the Exchange Act. |
• | Changes in China’s economic, political or social conditions or government policies could materially and adversely affect our business and results of operations. |
• | The PRC government’s significant oversight over our business operation could result in a material adverse change in our operations and the value of our ADSs. |
• | The legal system in China embodies uncertainties which could limit the legal protections available to us or impose additional requirements and obligations on our business, which may materially and adversely affect our business, financial condition, and results of operations. |
• | We may be adversely affected by the complexity, uncertainties and changes in PRC regulation of internet-related businesses and companies, and any lack of requisite approvals, licenses or permits applicable to our business may have a material adverse effect on our business and results of operations. |
• | Restrictions on the remittance of Renminbi into and out of China and governmental control of currency conversion may limit our ability to pay dividends and other obligations, and affect the value of your investment. |
• | offer and maintain a wide selection of high-quality products; |
• | provide a superior shopping experience to users; |
• | maintain the popularity, attractiveness, diversity, quality and authenticity of our product offerings; |
• | maintain the efficiency, reliability and quality of the fulfillment and delivery services to our users; |
• | maintain or improve users’ satisfaction with our after-sale services; |
• | increase brand awareness through marketing and brand promotion activities; and |
• | preserve our reputation and goodwill in the event of any negative publicity on consumer experience, internet and data security, product quality, price or authenticity, or other issues affecting us or other fresh grocery e-commerce businesses in China. |
• | protecting the data in and hosted on our system, including against attacks on our system by outside parties or fraudulent behavior by our employees; |
• | addressing concerns related to privacy and safety, security and other factors; and |
• | complying with applicable laws, rules and regulations relating to the collection, use or security of personal information, including any requests from regulatory and government authorities relating to such data. |
• | actual or anticipated variations in our revenues, earnings, cash flow, and changes or revisions of our expected results; |
• | fluctuations in operating metrics; |
• | announcements of new investments, acquisitions, strategic partnerships, or joint ventures by us or our competitors; |
• | announcements of new products and services and expansions by us or our competitors; |
• | changes in financial estimates by securities analysts; |
• | announcements of studies and reports relating to the quality of our product and service offerings or those of our competitors; |
• | changes in the economic performance or market valuations of other fresh grocery e-commerce companies; |
• | conditions in the fresh grocery e-commerce market; |
• | detrimental negative publicity about us, our competitors, or our industry; |
• | additions or departures of key personnel; |
• | release of lockup or other transfer restrictions on our outstanding equity securities or sales of additional equity securities; |
• | regulatory developments affecting us or our industry; |
• | general economic or political conditions in China or elsewhere in the world; |
• | fluctuations of exchange rates between the RMB and the U.S. dollar; and |
• | potential litigation or regulatory investigations. |
• | we have instructed the depositary that we do not wish a discretionary proxy to be given; |
• | we have informed the depositary that there is substantial opposition as to a matter to be voted on at the meeting; |
• | a matter to be voted on at the meeting would have a material adverse impact on shareholders; or |
• | the voting at the meeting is to be made on a show of hands. |
• | the rules under the Exchange Act requiring the filing with the SEC of the sections of the Exchange Act regulating the solicitation of proxies, consents, or authorizations in respect of a security registered under the Exchange Act; |
• | the sections of the Exchange Act requiring insiders to file public reports of their stock ownership and trading activities and liability for insiders who profit from trades made in a short period of time; and |
• | the selective disclosure rules by issuers of material nonpublic information under Regulation FD. |
Item 4. |
Information on the Company |
A. |
History and Development of the Company |
B. |
Business Overview |
C. |
Corporate Structure |
Major subsidiaries |
Percentage of Ownership |
Date of Incorporation |
Place of Incorporation |
Major Operation |
||||||||||
Dingdong Fresh Holding Limited | 100% | October 30, 2018 | British Virgin Islands | Investment holding | ||||||||||
Dingdong Fresh (Hong Kong) Limited | 100% | January 4, 2019 | Hong Kong | Investment holding | ||||||||||
Baqianlilu (Wuxi) Network Technology Co., Ltd. | 100% | May 9, 2020 | PRC | E-commerce |
||||||||||
Shanghai 100me Internet Technology Co., Ltd. | 100% | March 23, 2014 | PRC | E-commerce |
||||||||||
Yihengyishu (Shanghai) E-Commerce Co., Ltd. |
100% | April 12, 2017 | PRC | E-commerce |
||||||||||
Chizhiyiheng (Shanghai) E-commerce Co., Ltd. |
100% | July 18, 2018 | PRC | E-commerce |
||||||||||
Shilaiyunzhuan (Hangzhou) E-commerce Co., Ltd. |
100% | January 4, 2019 | PRC | E-commerce |
||||||||||
Shishishun (Shenzhen) E-commerce Co., Ltd. |
100% | July 12, 2019 | PRC | E-commerce |
||||||||||
Shishishun (Jiangsu) E-Commerce Co., Ltd. |
100% | September 18, 2019 | PRC | E-commerce |
||||||||||
ChaoLizhi (Jiangsu) E-Commerce Co., Ltd. |
100% | November 14, 2019 | PRC | E-commerce |
||||||||||
Beijing Bujiangjiu E-Commerce Co., Ltd. |
100% | February 28, 2020 | PRC | E-commerce |
||||||||||
Shanghai Yushengbaigu Food Co., Ltd. | 93.05% | October 21, 2020 | PRC | E-commerce |
||||||||||
Chizhiyiheng (Nanjing) Supply Chain Co., Ltd. | 100% | August 30, 2021 | PRC | E-commerce |
D. |
Property, Plant and Equipment |
Item 4A. |
Unresolved Staff Comments |
Item 5. |
Operating and Financial Review and Prospects |
A. |
Operating Results |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Revenues: |
||||||||||||||||
Product revenues |
3,848,094 | 11,207,178 | 19,896,725 | 3,122,230 | ||||||||||||
Service revenues |
32,018 | 128,609 | 224,401 | 35,214 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
3,880,112 |
11,335,787 |
20,121,126 |
3,157,444 |
||||||||||||
Operating costs and expenses: |
||||||||||||||||
Cost of goods sold |
(3,215,175 | ) | (9,105,294 | ) | (16,076,178 | ) | (2,522,703 | ) | ||||||||
Fulfilment expenses |
(1,936,940 | ) | (4,044,230 | ) | (7,272,535 | ) | (1,141,219 | ) | ||||||||
Sales and marketing expenses |
(260,411 | ) | (568,705 | ) | (1,514,504 | ) | (237,659 | ) | ||||||||
Product development expenses |
(91,145 | ) | (321,697 | ) | (905,007 | ) | (142,015 | ) | ||||||||
General and administrative expenses |
(117,776 | ) | (458,041 | ) | (682,922 | ) | (107,166 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating costs and expenses |
(5,621,447 |
) |
(14,497,967 |
) |
(26,451,146 |
) |
(4,150,762 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss from operations |
(1,741,335 |
) |
(3,162,180 |
) |
(6,330,020 |
) |
(993,318 |
) | ||||||||
Interest income |
25,486 | 16,244 | 45,324 | 7,112 | ||||||||||||
Interest expenses |
(58,130 | ) | (38,758 | ) | (85,151 | ) | (13,362 | ) | ||||||||
Other income |
4,414 | 45,026 | 52,403 | 8,223 | ||||||||||||
Other expenses |
(3,146 | ) | (48,696 | ) | (57,785 | ) | (9,068 | ) | ||||||||
Changes in fair value of warrant liabilities |
(100,672 | ) | 11,450 | (44,457 | ) | (6,976 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Loss before income tax |
(1,873,383 |
) |
(3,176,914 |
) |
(6,419,686 |
) |
(1,007,389 |
) | ||||||||
Income tax expenses |
— | — | (9,373 | ) | (1,471 | ) | ||||||||||
Net loss |
(1,873,383 |
) |
(3,176,914 |
) |
(6,429,059 |
) |
(1,008,860 |
) | ||||||||
|
|
|
|
|
|
|
|
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Net loss |
(1,873,383 | ) | (3,176,914 | ) | (6,429,059 | ) | (1,008,860 | ) | ||||||||
Add: share-based compensation expenses |
1,990 | 153,110 | 315,362 | 49,487 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Non-GAAP net loss |
(1,871,393 |
) |
(3,023,804 |
) |
(6,113,697 |
) |
(959,373 |
) | ||||||||
|
|
|
|
|
|
|
|
For the years ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Net loss margin |
(48.3 | %) | (28.0 | %) | (32.0 | %) | ||||||
Add: share-based compensation expenses |
0.1 | % | 1.3 | % | 1.6 | % | ||||||
|
|
|
|
|
|
|||||||
Non-GAAP net loss margin |
(48.2 |
%) |
(26.7 |
%) |
(30.4 |
%) | ||||||
|
|
|
|
|
|
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Revenues: |
||||||||||||||||
Product revenues |
3,848,094 | 11,207,178 | 19,896,725 | 3,122,230 | ||||||||||||
Service revenues |
32,018 | 128,609 | 224,401 | 35,214 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total revenues |
3,880,112 |
11,335,787 |
20,121,126 |
3,157,444 |
||||||||||||
|
|
|
|
|
|
|
|
For the years ended December 31 |
||||||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||||||
RMB |
% |
RMB |
% |
RMB |
US$ |
% |
||||||||||||||||||||||
(in thousands, except for percentage) |
||||||||||||||||||||||||||||
Operating costs and expenses: |
||||||||||||||||||||||||||||
Cost of goods sold |
3,215,175 | 82.9 | % | 9,105,294 | 80.3 | % | 16,076,178 | 2,522,703 | 79.9 | % | ||||||||||||||||||
Fulfilment expenses |
1,936,940 | 49.9 | % | 4,044,230 | 35.7 | % | 7,272,535 | 1,141,219 | 36.1 | % | ||||||||||||||||||
Sales and marketing expenses |
260,411 | 6.7 | % | 568,705 | 5.0 | % | 1,514,504 | 237,659 | 7.5 | % | ||||||||||||||||||
Product development expenses |
91,145 | 2.3 | % | 321,697 | 2.8 | % | 905,007 | 142,015 | 4.5 | % | ||||||||||||||||||
General and administrative expenses |
117,776 | 3.0 | % | 458,041 | 4.0 | % | 682,922 | 107,166 | 3.4 | % | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||
Total operating costs and expenses |
5,621,447 |
144.8 |
% |
14,497,967 |
127.8 |
% |
26,451,146 |
4,150,762 |
131.4 |
% | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
B. |
Liquidity and Capital Resources |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Net cash used in operating activities |
(964,275 | ) | (2,055,697 | ) | (5,666,538 | ) | (889,203 | ) | ||||||||
Net cash used in investing activities |
(185,629 | ) | (1,021,219 | ) | (4,065,340 | ) | (637,941 | ) | ||||||||
Net cash generated from financing activities |
1,676,274 | 3,656,665 | 9,042,640 | 1,418,988 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash |
34,670 | (67,860 | ) | (90,778 | ) | (14,245 | ) | |||||||||
Net increase/(decrease) in cash and cash equivalents and restricted cash |
561,040 | 511,889 | (780,016 | ) | (122,401 | ) | ||||||||||
Cash and cash equivalents and restricted cash at the beginning of the year |
377,519 | 938,559 | 1,450,448 | 227,607 | ||||||||||||
Cash and cash equivalents and restricted cash at the end of the year |
938,559 | 1,450,448 | 670,432 | 105,206 |
Payment Due by Period |
||||||||||||||||||||||||
Total |
2022 |
2023 |
2024 |
2025 |
2026 and thereafter |
|||||||||||||||||||
(RMB in thousands) |
||||||||||||||||||||||||
Long-term loans (1) |
57,875 | 57,875 | — | — | — | — | ||||||||||||||||||
Operating lease commitments (2) |
2,420,255 | 1,080,579 | 711,673 | 379,318 | 188,455 | 60,230 | ||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Total |
2,478,130 |
1,138,454 |
711,673 |
379,318 |
188,455 |
60,230 |
||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
(1) | The long-term loans (including current portion) outstanding as of December 31, 2021 bore a weighted average interest rate of 4.24% per annum. |
(2) | As of December 31, 2021, we were party to additional operating leases of RMB27.8 million primarily to expand our fulfillment infrastructure, which had not yet commenced. |
C. |
Research and Development |
D. |
Trend Information |
E. |
Critical Accounting Estimates |
Item 6. |
Directors, Senior Management and Employees |
A. |
Directors and Senior Management |
Directors and Executive Officers |
Age |
Position/Title | ||
Changlin Liang |
50 | Founder, Director and Chief Executive Officer | ||
Le Yu |
41 | Director and Chief Strategy Officer | ||
Yi Ding |
36 | Director and Vice President | ||
Eric Chi Zhang |
47 | Director | ||
Weili Hong |
52 | Independent Director | ||
Philip Wai Lap Leung |
63 | Independent Director | ||
Xu Jiang |
50 | Chief Technology Officer | ||
Zhijian Xu |
51 | Senior Vice President |
B. |
Compensation |
Name |
Ordinary Shares Underlying Options Awarded |
Weight Average Exercise Price (US$/Share) |
Date of Grant |
Date of Expiration |
||||||||||||
Changlin Liang |
— | — | — | — | ||||||||||||
Le Yu |
* | 3.74 | |
6/30/2016 6/30/2018 10/31/2020 9/30/2021 |
|
|
6/29/2026 6/29/2028 10/30/2030 9/29/2031 |
| ||||||||
Yi Ding |
* | 1.55 | |
6/30/2015 6/30/2016 6/30/2018 10/31/2020 9/30/2021 |
|
|
6/29/2025 6/29/2026 6/29/2028 10/30/2030 9/29/2031 |
| ||||||||
Eric Chi Zhang |
— | — | — | — | ||||||||||||
Weili Hong |
* | 4.66 | 12/31/2021 | 12/30/2031 | ||||||||||||
Philip Wai Lap Leung |
* | 4.66 | 12/31/2021 | 12/30/2031 | ||||||||||||
Xu Jiang |
* | 5.68 | |
4/20/2021 9/30/2021 |
|
|
4/19/2031 9/29/2031 |
| ||||||||
Zhijian Xu |
* | 4.14 | |
6/30/2019 10/31/2020 1/1/2021 9/30/2021 |
|
|
6/29/2029 10/30/2030 12/31/2030 9/29/2031 |
| ||||||||
All directors and executive officers as a group |
3,567,419 |
* | Less than 1% of our total ordinary shares on an as-converted basis outstanding as of the date of this annual report. |
C. |
Board Practices |
• | appointing the independent auditors and pre-approving all auditing and non-auditing services permitted to be performed by the independent auditors; |
• | reviewing with the independent auditors any audit problems or difficulties and management’s response; |
• | discussing the annual audited financial statements with management and the independent auditors; |
• | reviewing the adequacy and effectiveness of our accounting and internal control policies and procedures and any steps taken to monitor and control major financial risk exposures; |
• | overseeing the fairness and appropriateness of our proposed related party transactions; |
• | reviewing and approving all proposed related party transactions; |
• | meeting separately and periodically with management and the independent auditors; and |
• | monitoring compliance with our code of business conduct and ethics, including reviewing the adequacy and effectiveness of our procedures to ensure proper compliance. |
• | reviewing and approving, or recommending to the board for its approval, the compensation for our chief executive officer and other executive officers; |
• | reviewing and recommending to the board for determination with respect to the compensation of our non-employee directors; |
• | reviewing periodically and approving any incentive compensation or equity plans, programs or similar arrangements; and |
• | selecting a compensation consultant, legal counsel or other adviser only after taking into consideration all factors relevant to that person’s independence from management. |
• | selecting and recommending to the board nominees for election by the shareholders or appointment by the board; |
• | reviewing annually with the board the current composition of the board with regards to characteristics such as independence, knowledge, skills, experience and diversity; |
• | making recommendations on the frequency and structure of board meetings and monitoring the functioning of the committees of the board; and |
• | advising the board periodically with regards to significant developments in the law and practice of corporate governance as well as our compliance with applicable laws and regulations, and making recommendations to the board on all matters of corporate governance and on any remedial action to be taken. |
• | convening shareholders’ annual general meetings and reporting its work to shareholders at such meetings; |
• | declaring dividends and distributions; |
• | appointing officers and determining the term of office of the officers; |
• | exercising the borrowing powers of our company and mortgaging the property of our company; and |
• | approving the transfer of shares in our company, including the registration of such shares in our share register. |
D. |
Employees |
Function |
Number of Employees |
Percentage |
||||||
Product development |
1,743 | 43 | % | |||||
Fulfillment |
1,347 | 34 | % | |||||
General and administrative |
474 | 12 | % | |||||
Sales and marketing |
441 | 11 | % | |||||
|
|
|
|
|||||
Total |
4,005 |
100 |
% | |||||
|
|
|
|
E. |
Share Ownership |
• | each of our directors and executive officers; and |
• | each person known to us to own beneficially more than 5% of our ordinary shares. |
Class A Ordinary Shares |
Class B Ordinary Shares |
% of Beneficial Ownership† |
||||||||||
Directors and Executive Officers*: |
||||||||||||
Changlin Liang (1) |
50,958,450 | 54,543,800 | 29.8 | % | ||||||||
Le Yu |
— | — | — | |||||||||
Yi Ding |
— | — | — | |||||||||
Eric Chi Zhang |
— | — | — | |||||||||
Philip Wai Lap Leung |
— | — | — | |||||||||
Weili Hong |
— | — | — | |||||||||
Xu Jiang |
— | — | — | |||||||||
Zhijian Xu |
— | — | — | |||||||||
All Directors and Executive Officers as a Group |
50,958,450 | 54,543,800 | 29.8 | % | ||||||||
Principal Shareholders: |
||||||||||||
DDL Group Limited (2) |
— | 54,543,800 | 15.4 | % | ||||||||
EatBetter Holding Limited (3) |
40,181,400 | — | 11.3 | % | ||||||||
Internet Fund V Pte. Ltd. (4) |
21,324,750 | — | 6.0 | % | ||||||||
General Atlantic Singapore DD Pte. Ltd. (5) |
19,514,350 | — | 5.5 | % | ||||||||
SVF II Cortex Subco (DE) LLC (6) |
20,906,600 | — | 5.9 | % | ||||||||
CMC Entities (7) |
18,399,900 | — | 5.2 | % | ||||||||
CTG Evergreen Investment C Limited (8) |
17,819,000 | — | 5.0 | % |
* | Except as otherwise indicated below, the business address of our directors and executive officers is 4th Floor, Building 6, 500 Shengxia Road, Pudong New Area, Shanghai, 200125, People’s Republic of China. |
† | For each person and group included in this column, percentage ownership is calculated by dividing the number of shares beneficially owned by such person or group by the sum of the total number of shares outstanding and the number of shares such person or group has the right to acquire upon exercise of option, warrant or other right within 60 days of April 22, 2022, including through the exercise of any option, warrant or other right or the conversion of any other security. The total number of ordinary shares outstanding as of April 22, 2022 is 354,341,528. |
(1) | Represents (i) 54,543,800 Class B ordinary shares directly held by DDL Group Limited that may be deemed to be beneficially owned by Mr. Changlin Liang, (ii) 10,777,050 Class A ordinary shares directly held by EatTogether Holding Limited, that may be deemed to be beneficially owned by Mr. Changlin Liang, as the sole shareholder of EatTogether Holding Limited, and (iii) 40,181,400 Class A ordinary shares directly held by EatBetter Holding Limited, that may be deemed to be beneficially owned by Mr. Changlin Liang who has the sole dispositive power and sole voting power over shares held by EatBetter Holding Limited, as reported in the Schedule 13G filed by the relevant reporting persons with the SEC on February 15, 2022. DDL Group Limited is a British Virgin Islands business company limited by shares beneficially owned by Mr. Changlin Liang. DDL Group Limited is ultimately held by LX Family Trust, a trust established under the laws of British Virgin Islands and managed by TMF (Cayman) Ltd., as the trustee. Under the terms of this trust, Mr. Changlin Liang has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by DDL Group Limited in our company. EatTogether Holding Limited is a company incorporated in the British Virgin Islands and is wholly owned by Mr. Changlin Liang. EatBetter Holding Limited is a company incorporated in the British Virgin Islands, which holds ordinary shares allocated to award our employees under our A&R 2020 Plan. Mr. Changlin Liang has sole dispositive and sole voting power over shares held by EatBetter Holding Limited. The registered office of DDL Group Limited is ICS Corporate Services (BVI) Limited, Sea Meadow House, P.O. Box 116, Road Town, Tort, British Virgin Islands. The registered address of EatTogether Holding Limited is ICS Corporate Services (BVI) Limited, Sea Meadow House, P.O. Box 116, Road Town, Tortola, British Virgin Islands. The registered address of EatBetter Holding Limited is ICS Corporate Services (BVI) Limited, Sea Meadow House, P.O. Box 116, Road Town, Tortola, British Virgin Islands. |
(2) | Represents 54,543,800 Class B ordinary shares held by DDL Group Limited. DDL Group Limited is a British Virgin Islands business company limited by shares beneficially owned by Mr. Changlin Liang. DDL Group Limited is ultimately held by LX Family Trust, a trust established under the laws of British Virgin Islands and managed by TMF (Cayman) Ltd., as the trustee. Under the terms of this trust, Mr. Changlin Liang has the power to direct the trustee with respect to the retention or disposal of, and the exercise of any voting and other rights attached to, the shares held by DDL Group Limited in our company. The registered office of DDL Group Limited is ICS Corporate Services (BVI) Limited, Sea Meadow House, P.O. Box 116, Road Town, Tort, British Virgin Islands. |
(3) | Represents 40,181,400 Class A ordinary shares held by EatBetter Holding Limited, which holds Class A shares allocated to award our employees under our A&R 2020 Plan. EatBetter Holding Limited is a limited liability company incorporated in the British Virgin Islands. Mr. Changlin Liang has sole dispositive power and sole voting power over shares held by EatBetter Holding Limited. Its registered address is ICS Corporate Services (BVI) Limited, Sea Meadow House, P.O. Box 116, Road Town, Tortola, British Virgin Islands. |
(4) | Represents (i) 19,749,750 Class A shares held by Internet Fund V Pte. Ltd., a private limited company incorporated in Singapore and (ii) 1,575,000 Class A ordinary shares represented by 1,050,000 ADSs held by Tiger Global Management, LLC, an affiliate of Internet Fund V Pte. Ltd., based on the information contained in the Form 13F-HR filed by Tiger Global Management, LLC with SEC on February 14, 2022. Internet Fund V Pte. Ltd. is beneficially owned by each of Charles P. Coleman III, Scott L. Shleifer and Tiger Global Singapore Pte. Ltd. Tiger Global Singapore Pte. Ltd. is the investment advisor of Internet Fund V Pte. Ltd. and is controlled by Charles P. Coleman III and Scott L. Shleifer, who exercise control over Internet Fund V Pte. Ltd. as its directors. The registered address of Internet Fund V Pte. Ltd. is 8 Temasek Boulevard, #32-02 Suntec Tower Three, Singapore 038988. |
(5) | Represents 19,514,350 Class A ordinary shares held by General Atlantic Singapore DD Pte. Ltd., a private company limited by shares incorporated in Singapore. Its registered address is 80 Robinson Road #02-00, Singapore, 068898. General Atlantic Singapore DD Pte. Ltd. is wholly owned by General Atlantic Singapore Fund Pte. Ltd. (“GASF”). The major shareholder of GASF is General Atlantic Singapore Interholdco Ltd. (“GASF Interholdco”). The members of GASF Interholdco that share beneficial ownership of the ADSs held of record by General Atlantic Singapore DD Pte. Ltd. are the following General Atlantic investment funds (the “GA Funds”): General Atlantic Partners (Bermuda) IV, L.P. (“GAP Bermuda IV”), General Atlantic Partners (Bermuda) EU, L.P. (“GAP Bermuda EU”), General Atlantic Partners (Lux) SCSP (“GAP Lux”), GAP Coinvestments III, LLC (“GAPCO III”), GAPCO Coinvestments IV, LLC (“GAPCO IV”), GAPCO Coinvestments V, LLC (“GAPCO V”) and GAP Coinvestments CDA, L.P. (“GAPCO CDA”). The general partner of GAP Lux is General Atlantic GenPar (Lux) ScSp (“GA GenPar Lux”) and the general partner of GA GenPar Lux is General Atlantic (Lux) S.à. r.l. (“GA Lux”). The general partner of GAP Bermuda EU and GAP Bermuda IV and the sole shareholder of GA Lux is General Atlantic GenPar (Bermuda), L.P. (“GenPar Bermuda”). GAP (Bermuda) L.P. (“GAP (Bermuda) LP”), which is controlled by the GA Management Committee of GASC MGP, LLC (the “GA Management Committee”), is the general partner of GenPar Bermuda. General Atlantic, L.P. (“GA LP”), which is also controlled by the GA Management Committee, is the managing member of GAPCO III, GAPCO IV and GAPCO V and the general partner of GAPCO CDA. There are nine members of the GA Management Committee of GA LP. Each of the members of the GA Management Committee disclaims ownership of the ADSs and the underlying Class A ordinary shares except to the extent that he has a pecuniary interest therein. |
(6) | Represents 19,331,600 Class A ordinary shares and 1,575,000 Class A ordinary shares represented by 1,050,000 ADSs held by SVF II Cortex Subco (DE) LLC based on the information contained in the Schedule 13G filed by the relevant reporting persons with the SEC on July 12, 2021. SVF II Cortex Subco (DE) LLC is indirectly controlled by SoftBank Vision Fund II-2, L.P. (“SVF II-2”). SB Investment Advisers (UK) Limited (“SBIA UK”) has been appointed as alternative investment fund manager (“AIFM”) and is exclusively responsible for managing SVF II-2 in accordance with the Alternative Investment Fund Managers Directive and is authorized and regulated by the UK Financial Conduct Authority accordingly. As AIFM of SVF II-2, SBIA UK is exclusively responsible for making all decisions related to the acquisition, structuring, financing and disposal of SVF II-2’s investments. The registered address of SVF II Cortex Subco (DE) LLC is 251 Little Falls Drive, Wilmington, DE, 19808, United States. |
(7) | Represents an aggregate of 18,399,900 Class A ordinary shares owned by CMC Dynamite Holdings Limited (“CMC Dynamite I”), CMC Dynamite Holdings II Limited (“CMC Dynamite II”), CMC Dynamite Holdings III Limited (“CMC Dynamite III”), CMC Dynamite Holdings IV Limited (“CMC Dynamite IV”) and Alpha Yasai Holdings Limited (“Alpha Yasai”) based on the information contained in the Schedule 13G filed by the relevant reporting persons with the SEC on February 14, 2022. Each of CMC Dynamite I, CMC Dynamite II, CMC Dynamite III and CMC Dynamite IV is an exempted company with limited liability incorporated under the law of the Cayman Islands. CMC Dynamite I, CMC Dynamite II, CMC Dynamite III and CMC Dynamite IV are respectively wholly owned by CMC Dynamite, L.P., CMC Dynamite II, L.P., CMC Dynamite III, L.P. and CMC Dynamite IV, L.P. The general partners of CMC Dynamite, L.P., CMC Dynamite II, L.P., CMC Dynamite III, L.P. and CMC Dynamite IV, L.P. is CMC Dynamite GP, L.P, whose general partner is CMC Capital Partners GP II, Ltd. Alpha Yasai is an exempted company with limited liability incorporated under the law of the Cayman Islands and is wholly owned by Alpha Plus Fund, L.P., whose general partner is Alpha Plus Fund GP, Ltd. CMC Capital Partners GP II, Ltd. and Alpha Plus Fund GP, Ltd. are ultimately wholly-owned by Mr. Li Ruigang. The registered address of CMC Dynamite I, CMC Dynamite II, CMC Dynamite III, CMC Dynamite IV and Alpha Yasai is Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands. |
(8) | Represents 17,819,000 Class A ordinary shares held by CTG Evergreen Investment C Limited based on the information contained in the Schedule 13G filed by the relevant reporting persons with the SEC on February 9, 2022. The registered address of CTG Evergreen Investment C Limited is CCS Trustees Limited, 263 Main Street, Road Town, Tortola, British Virgin Islands. CTG Evergreen Investment C Limited is owned by Capital Today Evergreen Fund, L.P., a limited partnership incorporated in the Cayman Islands. The general partner of Capital Today Evergreen Fund, L.P. is Capital Today Evergreen GenPar LTD., a Cayman Islands company, and is controlled by Ms. Xin Xu. |
Item 7. |
Major Shareholders and Related Party Transactions |
A. |
Major Shareholders |
B. |
Related Party Transactions |
C. |
Interests of Experts and Counsel |
Item 8. |
Financial Information |
A. |
Consolidated Statements and Other Financial Information |
B. |
Significant Changes |
Item 9. |
The Offer and Listing |
A. |
Offering and Listing Details |
B. |
Plan of Distribution |
C. |
Markets |
D. |
Selling Shareholders |
E. |
Dilution |
F. |
Expenses of the Issue |
Item 10. |
Additional Information |
A. |
Share Capital |
B. |
Memorandum and Articles of Association |
• | the instrument of transfer is lodged with us, accompanied by the certificate for the ordinary shares to which it relates and such other evidence as our board of directors may reasonably require to show the right of the transferor to make the transfer; |
• | the instrument of transfer is in respect of only one class of ordinary shares; |
• | the instrument of transfer is properly stamped, if required; |
• | in the case of a transfer to joint holders, the number of joint holders to whom the ordinary share is to be transferred does not exceed four; and |
• | a fee of such maximum sum as the New York Stock Exchange may determine to be payable or such lesser sum as our directors may from time to time require is paid to us in respect thereof. |
• | the designation of the series; |
• | the number of shares of the series; |
• | the dividend rights, dividend rates, conversion rights, voting rights; and |
• | the rights and terms of redemption and liquidation preferences. |
• | authorize our board of directors to issue preference shares in one or more series and to designate the price, rights, preferences, privileges and restrictions of such preference shares without any further vote or action by our shareholders; and |
• | limit the ability of shareholders to requisition and convene general meetings of shareholders. |
• | does not have to file an annual return of its shareholders with the Registrar of Companies; |
• | is not required to open its register of members for inspection; |
• | does not have to hold an annual general meeting; |
• | may issue negotiable or bearer shares or shares with no par value; |
• | may obtain an undertaking against the imposition of any future taxation (such undertakings are usually given for 20 years in the first instance); |
• | may register by way of continuation in another jurisdiction and be deregistered in the Cayman Islands; |
• | may register as a limited duration company; and |
• | may register as a segregated portfolio company. |
• | the statutory provisions as to the required majority vote have been met; |
• | the shareholders have been fairly represented at the meeting in question and the statutory majority are acting bona fide without coercion of the minority to promote interests adverse to those of the class; |
• | the arrangement is such that may be reasonably approved by an intelligent and honest man of that class acting in respect of his interest; and |
• | the arrangement is not one that would more properly be sanctioned under some other provision of the Companies Act. |
• | a company acts or proposes to act illegally or ultra vires; |
• | the act complained of, although not ultra vires, could only be effected duly if authorized by more than a simple majority vote that has not been obtained; and |
• | those who control the company are perpetrating a “fraud on the minority.” |
C. |
Material Contract s |
D. |
Exchange Controls |
E. |
Taxation |
• | banks and other financial institutions; |
• | insurance companies; |
• | pension plans; |
• | cooperatives; |
• | regulated investment companies; |
• | real estate investment trusts; |
• | broker-dealers in stocks and securities, or currencies; |
• | traders that elect to use a mark-to-market |
• | certain former U.S. citizens or long-term residents; |
• | tax-exempt entities (including private foundations); |
• | persons who acquire their ADSs or Class A ordinary shares pursuant to any employee share option or otherwise as compensation; |
• | persons that will hold their ADSs or Class A ordinary shares as part of a straddle, hedge, conversion, constructive sale, or other integrated transaction for U.S. federal income tax purposes; |
• | persons that have a functional currency other than the U.S. dollar; |
• | persons required to accelerate the recognition of any item of gross income with respect to our ADSs or Class A ordinary shares as a result of such income being recognized on an applicable financial statement; |
• | persons that actually or constructively own 10% or more of our stock (by vote or value); or |
• | partnerships or other entities taxable as partnerships for U.S. federal income tax purposes, or persons holding ADSs or Class A ordinary shares through such entities, |
• | an individual who is a citizen or resident of the United States; |
• | a corporation created in, or organized under the law of the United States or any state thereof or the District of Columbia; |
• | an estate the income of which is includible in gross income for U.S. federal income tax purposes regardless of its source; or |
• | a trust (A) the administration of which is subject to the primary supervision of a U.S. court and which has one or more U.S. persons who have the authority to control all substantial decisions of the trust or (B) that has otherwise validly elected to be treated as a U.S. person under the Code. |
• | the excess distribution or gain will be allocated ratably over the U.S. Holder’s holding period for the ADSs or Class A ordinary shares; |
• | the amount allocated to the current taxable year and any taxable years in the U.S. Holder’s holding period prior to the first taxable year in which we are classified as a PFIC (each, a “pre-PFIC year”), will be taxable as ordinary income; |
• | the amount allocated to each prior taxable year, other than a pre-PFIC year, will be subject to tax at the highest tax rate in effect for individuals or corporations, as appropriate, for that year; and |
• | an additional tax equal to the interest charge generally applicable to underpayments of tax will be imposed on the tax attributable to each prior taxable year, other than a pre-PFIC year. |
F. |
Dividends and Paying Agents |
G. |
Statement by Experts |
H. |
Documents on Display |
I. |
Subsidiary Information |
Item 11. |
Quantitative and Qualitative Disclosures about Market Risk |
Item 12. |
Description of Securities Other than Equity Securities |
A. |
Debt Securities |
B. |
Warrants and Rights |
C. |
Other Securities |
D. |
American Depositary Shares |
Service |
Fees | |
• To any person to which ADSs are issued or to any person to which a distribution is made in respect of ADS distributions pursuant to stock dividends or other free distributions of stock, bonus distributions, stock splits or other distributions (except where converted to cash) |
Up to US$0.05 per ADS issued | |
• Cancellation of ADSs, including the case of termination of the deposit agreement |
Up to US$0.05 per ADS cancelled | |
• Distribution of cash dividends |
Up to US$0.05 per ADS held | |
• Distribution of cash entitlements (other than cash dividends) and/or cash proceeds from the sale of rights, securities and other entitlements |
Up to US$0.05 per ADS held | |
• Distribution of ADSs pursuant to exercise of rights. |
Up to US$0.05 per ADS held | |
• Distribution of securities other than ADSs or rights to purchase additional ADSs |
Up to US$0.05 per ADS held | |
• Depositary services |
Up to US$0.05 per ADS held on the applicable record date(s) established by the depositary bank |
• | Fees for the transfer and registration of ordinary shares charged by the registrar and transfer agent for the ordinary shares in the Cayman Islands (i.e., upon deposit and withdrawal of ordinary shares). |
• | Expenses incurred for converting foreign currency into U.S. dollars. |
• | Expenses for cable, telex and fax transmissions and for delivery of securities. |
• | Taxes and duties upon the transfer of securities, including any applicable stamp duties, any stock transfer charges or withholding taxes (i.e., when ordinary shares are deposited or withdrawn from deposit). |
• | Fees and expenses incurred in connection with the delivery or servicing of ordinary shares on deposit. |
• | Fees and expenses incurred in connection with complying with exchange control regulations and other regulatory requirements applicable to ordinary shares, deposited securities, ADSs and ADRs. |
• | Any applicable fees and penalties thereon. |
Payment |
of Taxes |
Item 13. |
Defaults, Dividend Arrearages and Delinquencies |
Item 14. |
Material Modifications to the Rights of Security Holders and Use of Proceeds |
Item 15. |
Controls and Procedures |
Item 16A. |
Audit Committee Financial Expert |
Item 16B. |
Code of Ethics |
Item 16C. |
Principal Accountant Fees and Services |
2020 |
2021 |
|||||||||||||||
(in thousands) |
||||||||||||||||
Audit fees(1) |
US$ | 1,539 | US$ | 769 | ||||||||||||
Audit-related fees (2) |
US$ | 110 | US$ | 392 | ||||||||||||
Tax fees (3) |
US$ | 17 | US$ | 23 | ||||||||||||
All other fees(4) |
US$ | — | US$ | — |
(1) | “Audit fees” means the aggregate fees billed for each of the fiscal years listed for professional services rendered by our principal accountant for the audit of our annual financial statements and assistance with and review of documents filed with the SEC and other statutory and regulatory filings. |
(2) | “Audit-related fees” means the aggregate fees billed for each of the fiscal years listed for professional services rendered by our principal accountant reasonably related to the performance of the audit or review of our financial statements and are not included under Audit Fees. |
(3) | “Tax Fees” means the aggregate fees billed for each of the fiscal years listed for professional services rendered by our principal accountant for tax compliance, tax advice and tax planning. |
(4) | “All Other Fees” represents the aggregate fees billed for each of the fiscal years listed for products or professional services rendered by our principal accountant not included in Audit Fees, Audit-Related Fees or Tax Fees. |
Item 16D. |
Exemptions from the Listing Standards for Audit Committees |
Item 16E. |
Purchases of Equity Securities by the Issuer and Affiliated Purchasers |
Period |
Total Number of ADSs Purchased |
Average Price Paid per ADS(1) |
Total Number of ADSs Purchased as Part of Publicly Announced Plans or Programs(2) |
Approximate Dollar Value of ADSs that May Yet Be Purchased Under the Program(2) |
||||||||||||
December 20, 2021 through March 31, 2022 |
242,210 | US$ | 10.99 | 242,210 | US$ | 27.3 million | ||||||||||
Total |
242,210 |
US$ |
10.99 |
242,210 |
US$ |
27.3 million |
Item 16F. |
Change in Registrant’s Certifying Accountant |
Item 16G. |
Corporate Governance |
Item 16H. |
Mine Safety Disclosure |
Item 16I. |
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections |
Item 17. |
Financial Statements |
Item 18. |
Financial Statements |
Item 19. |
Exhibits |
12.1* | Certification by Principal Executive Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
12.2* | Certification by Principal Financial and Accounting Officer Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 | |
13.1** | Certification by Principal Executive Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
13.2** | Certification by Principal Financial and Accounting Officer Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 | |
101.INS* | Inline XBRL Instance Document—this instance document does not appear on the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | |
101.SCH* | Inline XBRL Taxonomy Extension Schema Document | |
101.CAL* | Inline XBRL Taxonomy Extension Calculation Linkbase Document | |
101.DEF* | Inline XBRL Taxonomy Extension Definition Linkbase Document | |
101.LAB* | Inline XBRL Taxonomy Extension Label Linkbase Document | |
101.PRE* | Inline XBRL Taxonomy Extension Presentation Linkbase Document | |
104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
* | Filed herewith. |
** | Furnished herewith. |
Dingdong (Cayman) Limited | ||
By: | /s/ Changlin Liang | |
Name: Changlin Liang | ||
Title: Director and Chief Executive Officer |
F-2 |
||||
F-4 |
||||
F-7 |
||||
F-8 |
||||
F-9 |
||||
F-11 |
Valuation of 2021 Senior Management Awards | ||
Description of the Matter |
As disclosed in Note 14 to the consolidated financial statements, ordinary shares were issued to a director and executive officer of the Company in 2021 with no associated performance or service based vesting conditions at nil consideration (“2021 Senior Management Awards”). The fair value of the 2021 Senior Management Awards were immediately recognized as share-based compensation expense of RMB197.2 million (US$30.6 million) for the year ended December 31, 2021. As the Company’s ordinary shares were not publicly traded on the date the 2021 Senior Management Awards were granted, with the assistance of an independent third-party valuation firm, management estimated the fair value of the Company’s ordinary shares using a discounted cash flow approach to determine the enterprise value of the Company, which was then allocated to various classes of equity. Auditing the fair value of the Company’s 2021 Senior Management Awards was complex and required the application of significant auditor judgment to evaluate the significant assumptions, which included, among others, forecasted revenues, gross margins and operating expenses, weighted average cost of capital and discount for lack of marketability. These assumptions are forward-looking and include assumptions about economic and market conditions with uncertain future outcomes. | |
How We Addressed the Matter in Our Audit |
To test the valuation of the 2021 Senior Management Awards, our audit procedures included, among others, evaluating the valuation methodology used by the Company and testing the assumptions with the assistance of our valuation specialists. For example, when assessing the fair value of the ordinary shares, we tested the completeness and accuracy of the underlying data used by the Company in the discounted cash flow model to estimate the business enterprise value and the subsequent allocation of the business enterprise value to various classes of equity. We assessed the reasonableness of forecasted revenues, gross margins and operating expenses by comparing them to historical trends, current market trends and industry data. We evaluated the Company’s estimates of weighted average cost of capital by comparing it against a range of estimates that were independently developed. We also independently recalculated the discount for lack of marketability and weighted average cost of capital. |
As of December 31, |
||||||||||||||||
2020 |
2021 |
2021 |
||||||||||||||
RMB |
RMB |
US$ |
||||||||||||||
Notes |
||||||||||||||||
LIABILITIES, MEZZANINE EQUITY AND SHAREHOLDERS’ (DEFICIT)/EQUITY (CONTINUED) |
||||||||||||||||
Mezzanine Equity: |
||||||||||||||||
Series Angel redeemable convertible preferred shares (US$0.000002 par value; 5,910,100 and nil shares authorized, issued and outstanding as of December 31, 2020 and 2021, respectively) |
17 | 12,400 | — | — | ||||||||||||
Series Angel+ redeemable convertible preferred shares (US$0.000002 par value; 8,268,950 and nil shares authorized, issued and outstanding as of December 31, 2020 and 2021, respectively) |
17 | 40,686 | — | — | ||||||||||||
Series Pre-A redeemable convertible preferred shares (US$0.000002 par value; 8,985,050 and nil shares authorized, issued and outstanding as of December 31, 2020 and 2021, respectively) |
17 | 54,796 | — | — | ||||||||||||
Series A redeemable convertible preferred shares (US$0.000002 par value; 22,096,550 and nil shares authorized, issued and outstanding as of December 31, 2020 and 2021, respectively) |
17 | 142,337 | — | — | ||||||||||||
Series A+ redeemable convertible preferred shares (US$0.000002 par value; 1,060,200 and nil shares authorized, issued and outstanding as of December 31, 2020 and 2021, respectively) |
17 | 14,308 | — | — | ||||||||||||
Series B redeemable convertible preferred shares (US$0.000002 par value; 19,473,100 and nil shares authorized, issued and outstanding as of December 31, 2020 and 2021, respectively) |
17 | 364,419 | — | — | ||||||||||||
Series B2 redeemable convertible preferred shares (US$0.000002 par value; 11,072,800 and nil shares authorized, issued and outstanding as of December 31, 2020 and 2021, respectively) |
17 | 236,139 | — | — | ||||||||||||
Series B3 redeemable convertible preferred shares (US$0.000002 par value; 28,013,200 and nil shares authorized, issued and outstanding as of December 31, 2020 and 2021, respectively) |
17 | 841,145 | — | — | ||||||||||||
Series B4-1 redeemable convertible preferred shares (US$0.000002 par value; 7,269,600 and nil shares authorized, issued and outstanding as of December 31, 2020 and 2021, respectively) |
17 | 284,085 | — | — | ||||||||||||
Series B4 redeemable convertible preferred shares (US$0.000002 par value; 13,979,450 and nil shares authorized as of December 31, 2020 and 2021, respectively, 6,989,700 and nil issued and outstanding as of December 31, 2020 and 2021, respectively) |
17 | 220,491 | — | — |
For the year ended December 31, |
||||||||||||||||||||
Notes |
2019 |
2020 |
2021 |
2021 |
||||||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||||||
Revenues: |
||||||||||||||||||||
Product revenues |
3 | 3,848,094 | 11,207,178 | 19,896,725 | 3,122,230 | |||||||||||||||
Service revenues |
3 | 32,018 | 128,609 | 224,401 | 35,214 | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total revenues |
3,880,112 |
11,335,787 |
20,121,126 |
3,157,444 |
||||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Operating costs and expenses: |
||||||||||||||||||||
Cost of goods sold |
(3,215,175 | ) | (9,105,294 | ) | (16,076,178 | ) | (2,522,703 | ) | ||||||||||||
Fulfilment expenses |
(1,936,940 | ) | (4,044,230 | ) | (7,272,535 | ) | (1,141,219 | ) | ||||||||||||
Sales and marketing expenses |
(260,411 | ) | (568,705 | ) | (1,514,504 | ) | (237,659 | ) | ||||||||||||
Product development expenses |
(91,145 | ) | (321,697 | ) | (905,007 | ) | (142,015 | ) | ||||||||||||
General and administrative expenses |
(117,776 | ) | (458,041 | ) | (682,922 | ) | (107,166 | ) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Total operating costs and expenses |
(5,621,447 |
) |
(14,497,967 |
) |
(26,451,146 |
) |
(4,150,762 |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loss from operations |
(1,741,335 |
) |
(3,162,180 |
) |
(6,330,020 |
) |
(993,318 |
) | ||||||||||||
Interest income |
25,486 | 16,244 | 45,324 | 7,112 | ||||||||||||||||
Interest expenses |
(58,130 | ) | (38,758 | ) | (85,151 | ) | (13,362 | ) | ||||||||||||
Other income |
4,414 | 45,026 | 52,403 | 8,223 | ||||||||||||||||
Other expenses |
(3,146 | ) | (48,696 | ) | (57,785 | ) | (9,068 | ) | ||||||||||||
Changes in fair value of warrant liabilities |
(100,672 | ) | 11,450 | (44,457 | ) | (6,976 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Loss before income tax |
(1,873,383 |
) |
(3,176,914 |
) |
(6,419,686 |
) |
(1,007,389 |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Income tax expenses |
15 | — | — | (9,373 | ) | (1,471 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net loss |
(1,873,383 |
) |
(3,176,914 |
) |
(6,429,059 |
) |
(1,008,860 |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Accretion of redeemable convertible preferred shares |
(74,558 | ) | (320,301 | ) | (288,380 | ) | (45,253 | ) | ||||||||||||
Deemed dividend |
(46,168 | ) | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net loss attributable to ordinary shareholders |
(1,994,109 |
) |
(3,497,215 |
) |
(6,717,439 |
) |
(1,054,113 |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Net loss per ordinary share: |
||||||||||||||||||||
Basic and diluted |
19 | (32.45 | ) | (54.91 | ) | |||||||||||||||
Net loss per Class A and Class B ordinary share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
19 | |
|
|
|
|
|
|
|
|
|
|
(34.50 |
) |
|
|
(5.41 |
) |
Shares used in net loss per ordinary share computation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
|
|
19 | |
|
|
61,446,250 |
|
|
|
63,690,000 |
|
|
|
|
|
|
|
|
|
Shares used in net loss per Class A and Class B ordinary share computation: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic and diluted |
19 | 194,713,891 | 194,713,891 | |||||||||||||||||
Other comprehensive income/(loss), net of tax of nil: |
||||||||||||||||||||
Foreign currency translation adjustments |
30,409 | (53,370 | ) | (161,281 | ) | (25,308 | ) | |||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Comprehensive loss |
(1,842,974 |
) |
(3,230,284 |
) |
(6,590,340 |
) |
(1,034,168 |
) | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Accretion of redeemable convertible preferred shares |
(74,558 | ) | (320,301 | ) | (288,380 | ) | (45,253 | ) | ||||||||||||
Deemed dividend |
(46,168 | ) | — | — | — | |||||||||||||||
|
|
|
|
|
|
|
|
|||||||||||||
Comprehensive loss attributable to ordinary shareholders |
(1,963,700 |
) |
(3,550,585 |
) |
(6,878,720 |
) |
(1,079,421 |
) | ||||||||||||
|
|
|
|
|
|
|
|
Ordinary Shares |
Treasury Stock |
Additional Paid-in Capital |
Accumulated Other Comprehensive Income/(Loss) |
Accumulated Deficit |
Total Shareholders’ (Deficit)/Equity |
|||||||||||||||||||||||||||
Shares* |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||
RMB |
RMB |
RMB |
RMB |
RMB |
RMB |
|||||||||||||||||||||||||||
Balance at January 1, 2019 |
67,966,900 |
1 |
— |
— |
47,546 |
— |
(556,950 |
) |
(509,403 |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Deemed dividend from re-designation of ordinary shares to Series Angel+ preferred shares |
(7,803,400 | ) | — |
— |
— |
(18,577 | ) | — |
(46,168 | ) | (64,745 | ) | ||||||||||||||||||||
Accretion of redeemable convertible preferred shares |
— |
— |
— |
— |
— |
— |
(74,558 | ) | (74,558 | ) | ||||||||||||||||||||||
Share-based compensation |
— |
— |
— |
— |
1,990 | — |
— |
1,990 | ||||||||||||||||||||||||
Net loss |
— |
— |
— |
— |
— |
— |
(1,873,383 | ) | (1,873,383 | ) | ||||||||||||||||||||||
Other comprehensive income |
— |
— |
— |
— |
— |
30,409 | — |
30,409 | ||||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2019 |
60,163,500 |
1 |
— |
— |
30,959 |
30,409 |
(2,551,059 |
) |
(2,489,690 |
) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Accretion of redeemable convertible preferred shares |
— | — | (320,301 | ) | (320,301 | ) | ||||||||||||||||||||||||||
Share-based compensation |
4,745,200 | — | — | — | 120,698 | — | — | 120,698 | ||||||||||||||||||||||||
Net loss |
— | — | — | — | — | — | (3,176,914 | ) | (3,176,914 | ) | ||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | (53,370 | ) | — | (53,370 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2020 |
64,908,700 |
1 |
— |
— |
151,657 |
(22,961 |
) |
(6,048,274 |
) |
(5,919,577 |
) | |||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Accretion of redeemable convertible preferred shares |
— | — | — | — | — | — | (288,380 | ) | (288,380 | ) | ||||||||||||||||||||||
Issuance of ordinary shares in connection with initial public offering |
6,372,528 | — | — | — | 589,959 | — | — | 589,959 | ||||||||||||||||||||||||
Automatic conversion of redeemable convertible preferred shares to ordinary shares upon initial public offering |
250,826,100 | 3 | — | — | 12,628,084 | — | — | 12,628,087 | ||||||||||||||||||||||||
Share-based compensation |
2,601,000 | — | — | — | 315,362 | — | — | 315,362 | ||||||||||||||||||||||||
Repurchase of ordinary shares |
— | — | (109,944 | ) | (7,042 | ) | — | — | — | (7,042 | ) | |||||||||||||||||||||
Net los s |
— | — | — | — | — | — | (6,429,059 | ) | (6,429,059 | ) | ||||||||||||||||||||||
Other comprehensive loss |
— | — | — | — | — | (161,281 | ) | — | (161,281 | ) | ||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2021 |
324,708,328 |
4 |
(109,944 |
) |
(7,042 |
) |
13,685,062 |
(184,242 |
) |
(12,765,713 |
) |
728,069 |
||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||
Balance at December 31, 2021 (US$) |
1 |
(1,105 |
) |
2,147,485 |
(28,912 |
) |
(2,003,219 |
) |
114,250 |
|||||||||||||||||||||||
|
|
|
|
|
|
|
|
|
|
|
|
* |
As of December 31, 2019, 2020 and 2021, nil, nil and 29,633,200 ordinary shares were held by EatBetter Holding Limited related to the Amended and Restated 2020 Share Incentive Plan (Note 14), respectively. These shares are considered legally issued but not outstanding. |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Operating activities: |
||||||||||||||||
Net loss |
(1,873,383 | ) | (3,176,914 | ) | (6,429,059 | ) | (1,008,860 | ) | ||||||||
Adjustments to reconcile net income to net cash provided by operating activities: |
||||||||||||||||
Depreciation and amortization |
34,734 | 115,354 | 213,082 | 33,437 | ||||||||||||
Accretion related to convertible notes |
39,477 | 21,334 | — | — | ||||||||||||
Foreign exchange loss/(gain) |
4,026 | 35,049 | (7,689 | ) | (1,207 | ) | ||||||||||
Share-based compensation |
1,990 | 153,110 | 315,362 | 49,487 | ||||||||||||
Loss on disposal of property and equipment |
— | 16,481 | 35,483 | 5,568 | ||||||||||||
Extinguishment losses |
— | 29,141 | — | — | ||||||||||||
Changes in fair value of warrant liabilities |
100,672 | (11,450 | ) | 44,457 | 6,976 | |||||||||||
Changes in operating assets and liabilities: |
||||||||||||||||
Accounts receivable |
(11,836 | ) | (26,508 | ) | (152,714 | ) | (23,964 | ) | ||||||||
Inventories |
(131,712 | ) | (224,983 | ) | (151,041 | ) | (23,702 | ) | ||||||||
Advance to suppliers |
(1,115 | ) | (14,580 | ) | (49,578 | ) | (7,780 | ) | ||||||||
Prepayments and other current assets |
(55,657 | ) | (18,345 | ) | (363,965 | ) | (57,111 | ) | ||||||||
Operating lease right-of-use |
(353,240 | ) | (1,015,534 | ) | (742,349 | ) | (116,491 | ) | ||||||||
Other non-current assets |
(29,250 | ) | (80,029 | ) | (49,175 | ) | (7,717 | ) | ||||||||
Accounts payable |
640,895 | 804,769 | 478,676 | 75,115 | ||||||||||||
Salary and welfare payable |
30,375 | 93,921 | 107,780 | 16,913 | ||||||||||||
Advances from customers and deferred revenue |
66,663 | 70,111 | 103,076 | 16,175 | ||||||||||||
Accrued expenses and other current liabilities |
222,760 | 182,376 | 164,625 | 25,833 | ||||||||||||
Operating lease liabilities |
350,326 | 991,000 | 747,118 | 117,239 | ||||||||||||
Other non-current liabilities |
— | — | 69,373 | 10,886 | ||||||||||||
Net cash used in operating activities |
(964,275 |
) |
(2,055,697 |
) |
(5,666,538 |
) |
(889,203 |
) | ||||||||
Investing activities: |
||||||||||||||||
Purchases of property and equipment |
(124,812 | ) | (248,476 | ) | (451,608 | ) | (70,867 | ) | ||||||||
Proceeds from disposal of property and equipment |
— | 1,165 | 547 | 86 | ||||||||||||
Purchases of short-term investments |
(1,053,459 | ) | (1,306,245 | ) | (9,078,466 | ) | (1,424,609 | ) | ||||||||
Maturities of short-term investments |
992,642 | 542,437 | 5,454,087 | 855,864 | ||||||||||||
Loans to related parties |
— | (10,100 | ) | (2,500 | ) | (392 | ) | |||||||||
Repayment of loans from related parties |
— | — | 12,600 | 1,977 | ||||||||||||
Net cash used in investing activities |
(185,629 |
) |
(1,021,219 |
) |
(4,065,340 |
) |
(637,941 |
) | ||||||||
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Financing activities: |
||||||||||||||||
Proceeds from short-term borrowings |
845,583 | 1,444,638 | 9,558,649 | 1,499,962 | ||||||||||||
Repayment of short-term borrowings |
(906,582 | ) | (210,117 | ) | (7,672,124 | ) | (1,203,924 | ) | ||||||||
Proceeds from long-term borrowings |
60,000 | 128,000 | — | — | ||||||||||||
Repayment of long-term borrowings |
(7,500 | ) | (35,625 | ) | (87,000 | ) | (13,652 | ) | ||||||||
Issuance of redeemable convertible preferred shares, net of issuance costs |
961,095 | 2,171,263 | 6,646,458 | 1,042,974 | ||||||||||||
Issuance of convertible notes, net of issuance costs |
516,999 | — | — | — | ||||||||||||
Issuance of redeemable noncontrolling interests |
— | — | 30,000 | 4,708 | ||||||||||||
Proceeds from initial public offering, net of issuance costs |
— | — | 589,959 | 92,577 | ||||||||||||
Repurchase of ordinary shares |
— | — | (2,912 | ) | (457 | ) | ||||||||||
Advance from shareholders |
206,679 | 158,506 | — | — | ||||||||||||
Repayment of advance from shareholders |
— | — | (20,390 | ) | (3,200 | ) | ||||||||||
Net cash generated from financing activities |
1,676,274 |
3,656,665 |
9,042,640 |
1,418,988 |
||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash |
34,670 | (67,860 | ) | (90,778 | ) | (14,245 | ) | |||||||||
Net increase/(decrease) in cash and cash equivalents and restricted cash |
561,040 |
511,889 |
(780,016 |
) |
(122,401 |
) | ||||||||||
Cash and cash equivalents and restricted cash at the beginning of the year |
377,519 | 938,559 | 1,450,448 | 227,607 | ||||||||||||
Cash and cash equivalents and restricted cash at the end of the year |
938,559 |
1,450,448 |
670,432 |
105,206 |
||||||||||||
Supplemental disclosure of cash flow information: |
||||||||||||||||
Interest paid |
18,653 | 13,037 | 77,100 | 12,099 | ||||||||||||
Non-cash investing and financing activities: |
||||||||||||||||
Purchase of property and equipment included in accrued expenses and other liabilities |
1,512 | 29,489 | 12,341 | 1,937 | ||||||||||||
Extinguishment of convertible loans provided by the Founder in exchange for warrants |
190,500 | — | — | — | ||||||||||||
Issuance of Series B4-1 redeemable convertible preferred shares upon exercise of warrants held by the Founder |
— | 203,771 | — | — | ||||||||||||
Issuance of Series C1 redeemable convertible preferred shares upon conversion of convertible notes |
— | 628,709 | — | — | ||||||||||||
Issuance of Series B4 redeemable convertible preferred shares upon exercise of warrants |
— | — | 359,832 | 56,465 | ||||||||||||
Issuance of Series C1 redeemable convertible preferred shares upon the extinguishment of advance from shareholders |
— | — | 158,506 | 24,873 | ||||||||||||
Reconciliation of cash and cash equivalents and restricted cash: |
||||||||||||||||
Cash and cash equivalents |
938,559 | 1,376,153 | 662,768 | 104,003 | ||||||||||||
Restricted cash |
— | 74,295 | 7,664 | 1,203 | ||||||||||||
Total cash and cash equivalents and restricted cash shown in the statements of cash flows |
938,559 |
1,450,448 |
670,432 |
105,206 |
1. |
ORGANIZATION AND PRINCIPAL ACTIVITIES |
Major subsidiaries |
Percentage of Ownership |
Date of Incorporation |
Place of Incorporation |
Major Operation |
||||||||||||
Dingdong Fresh Holding Limited (“Dingdong Fresh BVI”) |
100 | % | October 30, 2018 | Islands (“BVI”) |
|
Investment holding | | |||||||||
Dingdong Fresh (Hong Kong) Limited (“Dingdong HK”) |
100 | % | January 4, 2019 | Hong Kong | Investment holding | | ||||||||||
Baqianlilu (Wuxi) Network Technology Co., Ltd. |
100 | % | May 9, 2020 | P | E-commerce | |||||||||||
Shanghai 100me Internet Technology Co., Ltd. (“Shanghai 100me”) |
100 | % | March 23, 2014 | P | E-commerce | |||||||||||
Yihengyishu (Shanghai) E-Commerce Co., Ltd. |
100 | % | April 12, 2017 | P | E-commerce | |||||||||||
Chizhiyiheng (Shanghai) E-commerce Co., Ltd.(“Chizhiyiheng Shanghai”) |
100 | % | July 18, 2018 | P | E-commerce | |||||||||||
Shilaiyunzhuan (Hangzhou) E-commerce Co., Ltd. |
100 | % | January 4, 2019 | P | E-commerce | |||||||||||
Shishishun (Shenzhen) E-commerce Co., Ltd. |
100 | % | July 12, 2019 | P | E-commerce | |||||||||||
Shishishun (Jiangsu) E-Commerce Co., Ltd. |
100 | % | September 18, 2019 | P | E-commerce | |||||||||||
Chao Lizhi (Jiangsu) E-Commerce Co., Ltd. |
100 | % | November 14, 2019 | P | E-commerce | |||||||||||
Beijing Bujiangjiu E-Commerce Co., Ltd. |
100 | % | February 28, 2020 | P | E-commerce | |||||||||||
Shanghai Yushengbaigu Food Co., Ltd. |
93.05 | % | October 21, 2020 | P | E-commerce | |||||||||||
Chizhiyiheng (Nanjing) Supply Chain Co., Ltd. |
|
|
100 |
% |
|
|
August 30, 2021 |
|
|
|
P |
|
|
|
E-commerce | |
1. |
ORGANIZATION AND PRINCIPAL ACTIVITIES (CONTINUED) |
2. |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (CONTINUED) |
2. |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (CONTINUED) |
2. |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (CONTINUED) |
Category |
Estimated useful life | |
Furniture, fixtures and equipment | 4-5 years | |
Electronic office equipment | 3-5 years | |
Leasehold improvements | Over the shorter of the lease term or estimated useful life |
2. |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (CONTINUED) |
2. |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (CONTINUED) |
2. |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (CONTINUED) |
2. |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (CONTINUED) |
2. |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (CONTINUED) |
2. |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (CONTINUED) |
2. |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (CONTINUED) |
2. |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (CONTINUED) |
2. |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (CONTINUED) |
2. |
SUMMARY OF PRINCIPAL ACCOUNTING POLICIES (CONTINUED) |
3. |
REVENUE FROM CONTRACTS WITH CUSTOMERS |
As of December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(in thousands) |
||||||||||||
Customer advances and prepaid cards |
57,081 | 96,785 | 15,188 | |||||||||
Deferred revenue related to loyalty points |
16,558 | 2,852 | 448 | |||||||||
Deferred membership service revenue |
66,765 | 143,843 | 22,571 | |||||||||
Total |
140,404 |
243,480 |
38,207 |
|||||||||
3. |
REVENUE FROM CONTRACTS WITH CUSTOMERS (CONTINUED) |
4. |
FAIR VALUE MEASUREMENTS |
Fair Value Measurements at Reporting Date Using |
||||||||||||||||
As of December 31, 2020 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|||||||||||||
( RMB in thousands) |
||||||||||||||||
Short-term investments |
1,006,245 | — | 1,006,245 | — |
||||||||||||
1,006,245 |
— |
1,006,245 |
— |
|||||||||||||
Fair Value Measurements at Reporting Date Using |
||||||||||||||||
As of December 31, 2021 |
Quoted Prices in Active Markets for Identical Assets (Level 1) |
Significant Other Observable Inputs (Level 2) |
Significant Unobservable Inputs (Level 3) |
|||||||||||||
( RMB in thousands) |
||||||||||||||||
Short-term investments |
4,568,346 | — | 4,568,346 | — |
||||||||||||
4,568,346 |
— |
4,568,346 |
— |
|||||||||||||
4. |
FAIR VALUE MEASUREMENTS (CONTINUED) |
As of December 31, 2020 |
||||
Series B4 Warrant | ||||
Expected volatility |
51.35 | % | ||
Risk-free interest rate |
0.09 | % | ||
Remaining contractual life |
0.62 | |||
Fair value of the underlying preferred shares |
US$6.50 | |||
Warrant fair value |
US$118.58 |
4. |
FAIR VALUE MEASUREMENTS (CONTINUED) |
5. |
INVENTORIES |
As of December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(in thousands) |
||||||||||||
Products |
329,065 | 487,066 | 76,431 | |||||||||
Packing materials and others |
57,366 | 50,406 | 7,910 | |||||||||
Total |
386,431 |
537,472 |
84,341 |
|||||||||
6. |
PREPAYMENTS AND OTHER CURRENT ASSETS |
As of December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(in thousands) |
||||||||||||
Deductible VAT |
45,285 | 359,915 | 56,478 | |||||||||
Others |
52,593 | 101,928 | 15,994 | |||||||||
Total |
97,878 |
461,843 |
72,472 |
|||||||||
7. |
PROPERTY AND EQUIPMENT, NET |
As of December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(in thousands) |
||||||||||||
Electronic office equipment |
29,720 | 58,463 | 9,174 | |||||||||
Leasehold improvements |
250,745 | 555,941 | 87,239 | |||||||||
Furniture, fixtures and equipment |
110,778 | 177,621 | 27,873 | |||||||||
Total |
391,243 | 792,025 | 124,286 | |||||||||
Less: |
||||||||||||
Accumulated depreciation |
(133,098 | ) | (328,367 | ) | (51,528 | ) | ||||||
Construction in progress |
14,546 | 8,713 | 1,367 | |||||||||
Total |
272,691 |
472,371 |
74,125 |
|||||||||
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Fulfillment expenses |
31,988 | 107,333 | 195,022 | 30,603 | ||||||||||||
Sales and marketing expenses |
865 | 2,018 | 2,666 | 419 | ||||||||||||
General and administrative expenses |
1,520 | 4,731 | 7,395 | 1,160 | ||||||||||||
Product development expenses |
361 | 1,272 | 7,999 | 1,255 | ||||||||||||
Total |
34,734 |
115,354 |
213,082 |
33,437 |
||||||||||||
8. |
OTHER NON-CURRENT ASSETS |
As of December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(in thousands) |
||||||||||||
Rental deposits |
111,521 | 167,282 | 26,250 | |||||||||
Others |
9,938 | 18,511 | 2,906 | |||||||||
Total |
121,459 | 185,793 | 29,156 | |||||||||
9. |
SHORT-TERM BORROWINGS |
As of December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(in thousands) |
||||||||||||
Short-term bank loans |
449,649 | 630,000 | 98,861 | |||||||||
Reversed factoring arrangements |
784,873 | 2,491,046 | 390,899 | |||||||||
Total |
1,234,522 |
3,121,046 |
489,760 |
|||||||||
9. |
SHORT-TERM BORROWINGS (CONTINUED) |
10. |
LONG-TERM BORROWINGS |
As of December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(in thousands) |
||||||||||||
Long-term borrowings |
144,875 | 57,875 | 9,082 | |||||||||
|
|
|
|
|
|
|||||||
Less: Current portion of long-term borrowings |
(86,500 | ) | (57,875 | ) | (9,082 | ) | ||||||
|
|
|
|
|
|
|||||||
Total |
58,375 | — |
— |
|||||||||
|
|
|
|
|
|
As of December 31, 2021 |
||||||||
RMB |
US$ |
|||||||
(in thousands) |
||||||||
2022 |
57,875 | 9,082 | ||||||
|
|
|
|
|||||
Total |
57,875 | 9,082 | ||||||
|
|
|
|
11. |
LEASES |
As of December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(in thousands) |
||||||||||||
Operating lease right-of-use |
1,503,222 |
2,245,571 |
352,379 |
|||||||||
|
|
|
|
|
|
|||||||
Operating lease liabilities, current |
594,787 | 969,494 | 152,135 | |||||||||
Operating lease liabilities, non-current |
871,685 | 1,244,096 | 195,226 | |||||||||
|
|
|
|
|
|
|||||||
Total operating lease liabilities |
1,466,472 |
2,213,590 |
347,361 |
|||||||||
|
|
|
|
|
|
|||||||
Weighted average remaining lease term |
2.85 years |
2.79 years |
2.79 years |
|||||||||
|
|
|
|
|
|
|||||||
Weighted average discount rate |
6.4 | % |
6.8 | % |
6.8 | % | ||||||
|
|
|
|
|
|
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Operating lease cost |
165,733 | 475,064 | 953,325 | 149,597 | ||||||||||||
Short-term lease cost |
1,859 | 7,391 | 12,227 | 1,919 | ||||||||||||
Variable lease cost |
— | — | 8,247 | 1,294 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Total |
167,592 | 482,455 | 973,799 | 152,810 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash paid for operating leases |
168,787 | 500,458 | 1,002,511 | 157,316 | ||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Right-of-use |
499,615 | 1,489,367 | 1,671,666 | 262,321 | ||||||||||||
|
|
|
|
|
|
|
|
11. |
LEASES (CONTINUED) |
As of December 31, 2021 |
||||||||
RMB |
US$ |
|||||||
(in thousands) |
||||||||
2022 |
1,080,579 | 169,566 | ||||||
2023 |
711,673 | 111,677 | ||||||
2024 |
379,318 | 59,523 | ||||||
2025 |
188,455 | 29,573 | ||||||
2026 |
59,163 | 9,284 | ||||||
Thereafter |
1,067 | 168 | ||||||
Total future lease payments |
2,420,255 | 379,791 | ||||||
Less: imputed interest |
(206,665 | ) |
(32,430 | ) | ||||
Total operating lease liabilities |
2,213,590 | 347,361 | ||||||
12. |
ACCRUED EXPENSES AND OTHER CURRENT LIABILITIES |
As of December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(in thousands) |
||||||||||||
Advance from shareholders |
385,575 | — | — | |||||||||
Accrued outsourcing expenses |
343,681 | 385,305 | 60,463 | |||||||||
Accrued transportation and logistic expenses |
51,549 | 43,759 | 6,867 | |||||||||
VAT and other tax payable |
15,965 | 30,081 | 4,720 | |||||||||
Deposit from suppliers |
9,965 | 29,437 | 4,619 | |||||||||
Interest payable |
4,386 | 14,749 | 2,314 | |||||||||
Accrued advertising expenses |
9,925 | 43,916 | 6,892 | |||||||||
Accrued utilities and other expenses |
36,692 | 106,014 | 16,636 | |||||||||
Total |
857,738 | 653,261 | 102,511 | |||||||||
13. |
ORDINARY SHARES |
14. |
SHARE-BASED COMPENSATION |
14. |
SHARE-BASED COMPENSATION (CONTINUED) |
14. |
SHARE-BASED COMPENSATION (CONTINUED) |
Number of Options |
Weighted Average Exercise Price Per option |
Weighted Average grant date fair value per option |
Weighted Average Remaining Contractual Life |
Aggregate Intrinsic Value |
||||||||||||||||
US$ |
US$ |
Years |
US$ (in thousands) |
|||||||||||||||||
Share options outstanding as of December 31, 2020 |
224,295,105 | 0.2160 | 0.0496 | 9.55 | 20,468 | |||||||||||||||
Granted |
200,923,883 | 0.2767 | 0.5092 | |||||||||||||||||
Forfeited |
(40,751,365 | ) | 0.2793 | 0.2594 | ||||||||||||||||
|
|
|||||||||||||||||||
Share options outstanding as of December 31, 2021 |
384,467,623 | 0.2099 | 0.2676 | 8.28 | 126,484 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
|||||||||||
Exercisable as of December 31, 2021 |
104,626,808 | 0.0746 | 0.0510 | 5.58 | 48,593 | |||||||||||||||
|
|
|
|
|
|
|
|
|
|
14. |
SHARE-BASED COMPENSATION (CONTINUED) |
For the years ended December 31, |
||||||||||||
2019 |
2020 |
2021 |
||||||||||
Fair value of ordinary shares (US$) |
2.78 | 4.78 | 4.78-15.78 |
|||||||||
Risk-free interest rate (%) |
0.88-2.00 |
0.66-0.88 |
0.93-1.71 |
|||||||||
Expected volatility (%) |
47-48 |
47-48 | 48 | |||||||||
Expected dividend yield |
— | — | — | |||||||||
Life of option |
10 | 10 | 10 | |||||||||
Exercise multiple |
2.5 | 2.5 | 2.5 | |||||||||
Post-vesting forfeiture rate |
— | — | — |
14. |
SHARE-BASED COMPENSATION (CONTINUED) |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Fulfillment expenses |
258 | 1,974 | 32,673 | 5,127 | ||||||||||||
Sales and marketing expenses |
174 | 532 | 6,927 | 1,087 | ||||||||||||
Product development expenses |
1,043 | 4,370 | 42,666 | 6,695 | ||||||||||||
General and administrative expenses |
515 | 146,234 | 233,096 | 36,578 | ||||||||||||
Total |
1,990 |
153,110 |
315,362 |
49,487 |
||||||||||||
15. |
INCOME TAXES |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Current tax |
— | — | 9,373 | 1,471 | ||||||||||||
Deferred tax |
— | — | — | — | ||||||||||||
Total |
— |
— |
9,373 | 1,471 | ||||||||||||
15. |
INCOME TAXES (CONTINUED) |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Non-PRC |
(114,137 | ) | (178,916 | ) | 20,929 | 3,284 | ||||||||||
PRC |
(1,759,246 | ) | (2,997,998 | ) | (6,440,615 | ) | (1,010,673 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Tota l |
(1,873,383 |
) |
(3,176,914 |
) |
(6,419,686 |
) |
(1,007,389 |
) | ||||||||
|
|
|
|
|
|
|
|
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
(in thousands) |
||||||||||||||||
Loss before income tax expense |
(1,873,383 | ) | (3,176,914 | ) | (6,419,686 | ) | (1,007,389 | ) | ||||||||
PRC statutory tax rate |
25 | % | 25 | % | 25 | % | 25 | % | ||||||||
Income tax benefit computed at the statutory income tax rate |
(468,346 | ) | (794,228 | ) | (1,604,922 | ) | (251,847 | ) | ||||||||
Non-deductible expenses |
17,455 | 6,368 | (8,320 | ) | (1,306 | ) | ||||||||||
Transfer pricing adjustment |
|
|
— |
|
|
|
— |
|
|
|
102,468 |
|
|
|
16,079 |
|
Non-taxable income |
— | (126 | ) | (1,561 | ) | (245 | ) | |||||||||
Research and development super-deduction |
(5,831 | ) | (55,306 | ) | 64,806 | 10,170 | ||||||||||
Statutory income/(expense) |
80,846 | 7,298 | (5,244 | ) | (823 | ) | ||||||||||
Effect of preferential tax |
137,154 | 22,992 | 5,022 | 788 | ||||||||||||
Changes in valuation allowances |
353,871 | 784,611 | 1,465,818 | 230,019 | ||||||||||||
Impact of changes in tax rate on deferred tax |
(143,683 | ) | (16,464 | ) | (5,023 | ) | (788 | ) | ||||||||
Effect of income tax rate difference in other jurisdictions |
28,534 | 44,855 | (3,671 | ) | (576 | ) | ||||||||||
|
|
|
|
|
|
|
|
|||||||||
Income tax expenses |
— | — | 9,373 | 1,471 | ||||||||||||
|
|
|
|
|
|
|
|
15. |
INCOME TAXES (CONTINUED) |
As of December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(in thousands) |
||||||||||||
Deferred tax assets: |
||||||||||||
Operating lease liabilities |
366,618 | 553,397 | 86,840 | |||||||||
Accrued expenses and other current liabilities |
6,139 | 4,134 | 649 | |||||||||
Government subsidies |
— | 15,000 | 2,354 | |||||||||
Tax losses carried forward |
1,235,164 | 2,700,304 | 423,736 | |||||||||
Less: valuation allowances * |
(1,253,620 | ) | (2,719,438 | ) | (426,739 | ) | ||||||
|
|
|
|
|
|
|||||||
Total deferred tax assets, net. |
354,301 |
553,397 |
86,840 |
|||||||||
|
|
|
|
|
|
|||||||
Deferred tax liabilities: |
||||||||||||
Operating lease right-of-use |
(354,301 | ) | (553,397 | ) | (86,840 | ) | ||||||
Total deferred tax liabilities, net. |
(354,301 |
) |
(553,397 |
) | (86,840 |
) | ||||||
|
|
|
|
|
|
|||||||
Deferred tax assets/liabilities, net |
— |
— |
— |
|||||||||
|
|
|
|
|
|
* |
The Company operates through its PRC subsidiaries and evaluates the potential realization of deferred tax assets on an entity basis. The Group recorded valuation allowances against deferred tax assets of those PRC subsidiaries that are in a three-year cumulative financial loss or had incurred losses since inception as of December 31, 2020 and 2021. In making such determination, the Group also evaluates a variety of factors including the Group’s operating history, accumulated deficit, existence of taxable temporary differences and reversal periods. |
As of December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(in thousands) |
||||||||||||
Balance at beginning of the year |
593 | 593 | 93 | |||||||||
Additions |
— | 117,468 | 18,433 | |||||||||
Decreases |
— | — | — | |||||||||
Settlement |
— | (593 | ) | (93 | ) | |||||||
|
|
|
|
|
|
|||||||
Balance at end of the year |
593 |
117,468 |
18,433 |
|||||||||
|
|
|
|
|
|
16. |
RELATED PARTY TRANSACTIONS AND BALANCES |
Related Party |
Relationship with the Group | |
Mr. Liang Changlin |
Founder and CEO of the Company | |
Shanghai Tiejun Enterprise Consulting Center (Limited Partnership) (“Tiejun”) |
Controlled by Mr. Liang Changlin | |
EatTogether Holding Limited (“EatTogether”) |
Controlled by Mr. Liang Changlin |
16. |
RELATED PARTY TRANSACTIONS AND BALANCES (CONTINUED) |
As of December 31, |
||||||||||||
2020 |
2021 |
2021 |
||||||||||
RMB |
RMB |
US$ |
||||||||||
(in thousands) |
||||||||||||
Current: |
||||||||||||
Loan to Mr. Liang Changlin |
9,000 | — | — | |||||||||
Loan to Tiejun |
1,100 | — | — | |||||||||
Total |
10,100 | — |
— |
|||||||||
17. |
REDEEMABLE CONVERTIBLE PREFERRED SHARES |
• | 5,910,100 Series Angel preferred shares for a total cash consideration of RMB10.0 million issued in April 2014; |
• | 8,985,050 Series Pre-A preferred shares at US$0.72 per share for a total cash consideration of US$6.5 million issued in May 2018; |
• | 22,096,550 Series A preferred shares at US$0.79 per share for a total cash consideration of US$17.4 million issued in September 2018; |
• | 1,060,200 Series A+ preferred shares at US$1.65 per share for a total cash consideration of US$1.8 million in October 2018; |
• | 17,140,700 Series B preferred shares at US$2.36 per share for a total cash consideration of US$40.4 million in November 2018; |
• | 11,072,800 Series B2 preferred shares at US$2.71 per share for a total cash consideration of US$30.0 million in January 2019; |
• | 2,332,400 Series B preferred shares at US$2.36 per share for a total cash consideration of US$5.5 million in March 2019; |
• | 7,803,400 ordinary shares held by the Founder were re-designated as Series Angel+ preferred shares in May 2019(Note 13); |
• | 28,013,200 Series B3 preferred shares at US$3.93 per share for a total cash consideration of US$110.0 million in May 2019; and |
• | 6,989,700 Series B4 preferred shares at US$4.29 per share for a total cash consideration of US$30.0 million in June 2019 |
17. |
REDEEMABLE CONVERTIBLE PREFERRED SHARES (CONTINUED) |
17. |
REDEEMABLE CONVERTIBLE PREFERRED SHARES (CONTINUED) |
17. |
REDEEMABLE CONVERTIBLE PREFERRED SHARES (CONTINUED) |
17. |
REDEEMABLE CONVERTIBLE PREFERRED SHARES (CONTINUED) |
17. |
REDEEMABLE CONVERTIBLE PREFERRED SHARES (CONTINUED) |
Series Angel Preferred Shares |
Series Angel+ Preferred Shares |
Series Pre-A Preferred Shares |
Series A Preferred Shares |
Series A+ Preferred Shares |
Series B Preferred Shares |
|||||||||||||||||||||||||||||||||||||||||||
(in thousands of RMB and US$, except for number of shares) | ||||||||||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2018 |
5,910,100 |
10,800 |
— |
— |
8,985,050 |
47,004 |
22,096,550 |
122,088 |
1,060,200 |
12,272 |
17,140,700 |
277,706 |
||||||||||||||||||||||||||||||||||||
Issuance of Preferred Shares |
— |
— |
— |
— | — | — | — | — | — | — | 2,332,400 | 37,159 | ||||||||||||||||||||||||||||||||||||
Re-designation from ordinary shares to Series Angel+ preferred shares |
— |
— |
7,803,400 | 18,577 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Accretion of Preferred Shares |
— |
864 | — |
(37,233 | ) | — | 3,760 | — | 9,767 | — | 982 | — | 25,369 | |||||||||||||||||||||||||||||||||||
Deemed dividend |
— |
— |
— |
46,168 | — |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 |
5,910,100 |
11,664 |
7,803,400 |
27,512 |
8,985,050 |
50,764 |
22,096,550 |
131,855 |
1,060,200 |
13,254 |
19,473,100 |
340,234 |
||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 |
5,910,100 |
11,664 |
7,803,400 |
27,512 |
8,985,050 |
50,764 |
22,096,550 |
131,855 |
1,060,200 |
13,254 |
19,473,100 |
340,234 |
||||||||||||||||||||||||||||||||||||
Issuance of Preferred Shares |
— | — | 465,550 | 10,967 | — | — | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||
Accretion of Preferred Shares |
— | 736 | — | 2,207 | — | 4,032 | — | 10,482 | — | 1,054 | — | 24,185 | ||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 |
5,910,100 |
12,400 |
8,268,950 |
40,686 |
8,985,050 |
54,796 |
22,096,550 |
142,337 |
1,060,200 |
14,308 |
19,473,100 |
364,419 |
||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 |
5,910,100 |
12,400 |
8,268,950 |
40,686 |
8,985,050 |
54,796 |
22,096,550 |
142,337 |
1,060,200 |
14,308 |
19,473,100 |
364,419 |
||||||||||||||||||||||||||||||||||||
Issuance of Preferred Shares |
||||||||||||||||||||||||||||||||||||||||||||||||
Accretion of Preferred Shares |
— |
396 |
— |
1,151 |
— |
2,126 |
— |
5,521 |
— |
555 |
— |
17,949 |
||||||||||||||||||||||||||||||||||||
Automatic conversion of preferred shares to ordinary shares upon IPO |
(5,910,100 |
) |
(12,796 |
) |
(8,268,950 |
) |
(41,837 |
) |
(8,985,050 |
) |
(56,922 |
) |
(22,096,550 |
) |
(147,858 |
) |
(1,060,200 |
) |
(14,863 |
) |
(19,473,100 |
) |
(382,368 |
) | ||||||||||||||||||||||||
Balance as of December 31, 2021 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 (US$) |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||
17. |
REDEEMABLE CONVERTIBLE PREFERRED SHARES (CONTINUED) |
Series B2 Preferred Shares |
Series B3 Preferred Shares |
Series B4-1 Preferred Shares |
Series B4 Preferred Shares |
Series C1 Preferred Shares |
Series D Preferred Shares |
Series D+ Preferred Shares |
||||||||||||||||||||||||||||||||||||||||||||||||||
(in thousands of RMB and US$, except for number of shares) |
||||||||||||||||||||||||||||||||||||||||||||||||||||||||
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
Shares |
Amount |
|||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2018 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||
Issuance of Preferred Shares |
11,072,800 | 203,707 | 28,013,200 | 737,920 | — |
— |
6,989,700 | 195,952 | — |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||
Accretion of Preferred Shares |
— | 16,323 | — | 45,884 | — |
— |
— | 8,842 | — |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 |
11,072,800 |
220,030 |
28,013,200 |
783,804 |
— |
— |
6,989,700 |
204,794 |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2019 |
11,072,800 |
220,030 |
28,013,200 |
783,804 |
— |
— |
6,989,700 |
204,794 |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||
Issuance of Preferred Shares |
— | — | — | — | 7,269,600 | 259,914 | — | — | 51,329,600 | 2,799,817 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Accretion of Preferred Shares |
— | 16,109 | — | 57,341 | — | 24,171 | — | 15,697 | — | 164,287 | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 |
11,072,800 |
236,139 |
28,013,200 |
841,145 |
7,269,600 |
284,085 |
6,989,700 |
220,491 |
51,329,600 |
2,964,104 |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2020 |
11,072,800 |
236,139 |
28,013,200 |
841,145 |
7,269,600 |
284,085 |
6,989,700 |
220,491 |
51,329,600 |
2,964,104 |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||
Issuance of Preferred Shares |
— | — | — | — | — | — | 6,989,750 | 359,832 | 2,895,100 | 158,507 | 49,207,650 | 4,547,263 | 21,264,750 | 2,099,195 | ||||||||||||||||||||||||||||||||||||||||||
Accretion of Preferred Shares |
— | 11,702 | — | 39,479 | — | 3,871 | — | (99,577 | ) | — | 133,863 | — | 128,382 | — | 42,962 | |||||||||||||||||||||||||||||||||||||||||
Automatic conversion of preferred shares to ordinary shares upon IPO |
(11,072,800 | ) | (247,841 | ) | (28,013,200 | ) | (880,624 | ) | (7,269,600 | ) | (287,956 | ) | (13,979,450 | ) | (480,746 | ) | (54,224,700 | ) | (3,256,474 | ) | (49,207,650 | ) | (4,675,645 | ) | (21,264,750 | ) | (2,142,157 | ) | ||||||||||||||||||||||||||||
Balance as of December 31, 2021 |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
— |
||||||||||||||||||||||||||||||||||||||||||
Balance as of December 31, 2021 (US$) |
— |
— |
— |
— |
— |
— |
— |
|||||||||||||||||||||||||||||||||||||||||||||||||
18. |
REDEEMABLE NONCONTROLLING INTERESTS |
For the years ended December 31, |
||||||||
2021 |
2021 |
|||||||
RMB |
US$ |
|||||||
(in thousands) |
||||||||
Balance as of December 31, 2020 |
— |
— |
||||||
Issuance of subsidiary shares |
30,000 | 4,708 | ||||||
Accretion of redeemable noncontrolling interests |
— | — | ||||||
Balance as of December 31, 2021 |
30,000 |
4,708 |
||||||
19. |
NET LOSS PER SHARE |
For the years ended December 31, |
||||||||||||||||||||||||
2019 |
2020 |
2021 |
||||||||||||||||||||||
Ordinary shares |
Ordinary shares |
Class A |
Class B |
|||||||||||||||||||||
RMB |
RMB |
RMB |
US$ |
RMB |
US$ |
|||||||||||||||||||
(in thousands, except for number of shares) |
||||||||||||||||||||||||
Numerator: |
||||||||||||||||||||||||
Net loss |
(1,873,383 |
) |
(3,176,914 |
) |
(4,628,133 |
) |
(726,255 |
) |
(1,800,926 |
) |
(282,605 |
) | ||||||||||||
Accretion of redeemable convertible preferred shares |
(74,558 |
) |
(320,301 |
) |
(207,598 |
) |
(32,577 |
) |
(80,782 |
) |
(12,676 |
) | ||||||||||||
Deemed dividend |
(46,168 |
) |
— |
— |
— |
— |
— |
|||||||||||||||||
Numerator for computing basic and diluted net loss per share |
(1,994,109 |
) |
(3,497,215 |
) |
(4,835,731 |
) |
(758,832 |
) |
(1,881,708 |
) |
(295,281 |
) | ||||||||||||
Denominator: |
||||||||||||||||||||||||
Weighted average number of ordinary shares outstanding |
61,446,250 |
63,690,000 |
140,170,091 |
140,170,091 |
54,543,800 |
54,543,800 |
||||||||||||||||||
Loss p er s hare (RMB): |
||||||||||||||||||||||||
Basic and diluted net loss per share: |
(32.45 |
) |
(54.91 |
) |
(34.50 |
) |
(5.41 |
) |
(34.50 |
) |
(5.41 |
) | ||||||||||||
20. |
STATUTORY RESERVES |
21. |
RESTRICTED NET ASSETS |
22. |
COMMITMENTS AND CONTINGENCIES |
23. |
SUBSEQUENT EVENTS |
24. |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION |
24. |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (CONTINUED) |
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Operating expenses: |
||||||||||||||||
General and administrative expenses |
375 | (142,186 | ) | (271,436 | ) | (42,594 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Total operating expenses |
375 |
(142,186 |
) |
(271,436 |
) |
(42,594 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Income/(loss) from operations |
375 |
(142,186 |
) |
(271,436 |
) |
(42,594 |
) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Interest income |
24,423 | 7,699 | 8,611 | 1,351 | ||||||||||||
Interest expenses |
(39,477 | ) | (21,334 | ) | — | — | ||||||||||
Other expenses |
— | (29,141 | ) | — | — | |||||||||||
Changes in fair value of warrant liabilities |
(100,672 | ) | 11,450 | (44,457 | ) | (6,976 | ) | |||||||||
Share of losses in subsidiarie s |
(1,758,032 | ) | (3,003,402 | ) | (6,121,777 | ) | (960,641 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss |
(1,873,383 |
) |
(3,176,914 |
) |
(6,429,059 |
) |
(1,008,860 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Accretions of redeemable convertible preferred shares |
(74,558 | ) | (320,301 | ) | (288,380 | ) | (45,253 | ) | ||||||||
Deemed dividend |
(46,168 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Net loss attributable to ordinary shareholders |
(1,994,109 |
) |
(3,497,215 |
) |
(6,717,439 |
) |
(1,054,113 |
) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Other comprehensive income/(loss), net of tax of nil: |
||||||||||||||||
Foreign currency translation adjustments |
30,409 | (53,370 | ) | (161,281 | ) | (25,308 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss |
(1,842,974 | ) |
(3,230,284 | ) |
(6,590,340 | ) |
(1,034,168 | ) | ||||||||
|
|
|
|
|
|
|
|
|||||||||
Accretions of redeemable convertible preferred shares |
(74,558 | ) | (320,301 | ) | (288,380 | ) | (45,253 | ) | ||||||||
Deemed dividend |
(46,168 | ) | — | — | — | |||||||||||
|
|
|
|
|
|
|
|
|||||||||
Comprehensive loss attributable to ordinary shareholders |
(1,963,700 |
) |
(3,550,585 |
) |
(6,878,720 |
) |
(1,079,421 |
) | ||||||||
|
|
|
|
|
|
|
|
For the years ended December 31, |
||||||||||||||||
2019 |
2020 |
2021 |
2021 |
|||||||||||||
RMB |
RMB |
RMB |
US$ |
|||||||||||||
Net cash provided by/(used in) operating activities |
24,414 | 7,564 | (4,066 | ) | (638 | ) | ||||||||||
Net cash used in investing activities |
(1,663,826 | ) | (1,957,689 | ) | (7,713,202 | ) | (1,210,370 | ) | ||||||||
Net cash generated from financing activities |
1,340,157 | 2,281,673 | 7,215,688 | 1,132,299 | ||||||||||||
Effect of exchange rate changes on cash and cash equivalents and restricted cash |
20,632 | (41,844 | ) | (25,625 | ) | (4,021 | ) | |||||||||
|
|
|
|
|
|
|
|
|||||||||
Net (decrease)/increase in cash and cash equivalents |
(278,623 |
) |
289,704 |
(527,205 |
) |
(82,730 |
) | |||||||||
Cash and cash equivalents at beginning of the year |
540,624 |
262,001 |
551,705 |
86,575 |
||||||||||||
|
|
|
|
|
|
|
|
|||||||||
Cash and cash equivalents at end of the year |
262,001 |
551,705 |
24,500 |
3,845 |
||||||||||||
|
|
|
|
|
|
|
|
24. |
PARENT COMPANY ONLY CONDENSED FINANCIAL INFORMATION (CONTINUED) |
Exhibit 2.3
DEPOSIT AGREEMENT
by and among
DINGDONG (CAYMAN) LIMITED
as Issuer,
DEUTSCHE BANK TRUST COMPANY AMERICAS
as Depositary,
AND
THE HOLDERS AND BENEFICIAL OWNERS
OF AMERICAN DEPOSITARY SHARES EVIDENCED BY
AMERICAN DEPOSITARY RECEIPTS ISSUED HEREUNDER
Dated as of June 29, 2021
DEPOSIT AGREEMENT
DEPOSIT AGREEMENT, dated as of June 29, 2021, by and among (i) Dingdong (Cayman) Limited, a company incorporated in the Cayman Islands, with its principal executive office at Building 6, 500 Shengxia Road, Shanghai, 200125, Peoples Republic of China and its registered office at Maples Corporate Services Limited, PO Box 309, Ugland House, Grand Cayman, KY1-1104, Cayman Islands, Cayman Islands (together with its successors, the Company), (ii) Deutsche Bank Trust Company Americas, an indirect wholly owned subsidiary of Deutsche Bank A.G., acting in its capacity as depositary, with its principal office at 60 Wall Street, New York, NY 10005, United States of America (the Depositary, which term shall include any successor depositary hereunder) and (iii) all Holders and Beneficial Owners of American Depositary Shares evidenced by American Depositary Receipts issued hereunder (all such capitalized terms as hereinafter defined).
W I T N E S S E T H T H A T:
WHEREAS, the Company desires to establish an ADR facility with the Depositary to provide for the deposit of the Shares and the creation of American Depositary Shares representing the Shares so deposited;
WHEREAS, the Depositary is willing to act as the depositary for such ADR facility upon the terms set forth in this Deposit Agreement;
WHEREAS, the American Depositary Receipts evidencing the American Depositary Shares issued pursuant to the terms of this Deposit Agreement are to be substantially in the form of Exhibit A and Exhibit B annexed hereto, with appropriate insertions, modifications and omissions, as hereinafter provided in this Deposit Agreement;
WHEREAS, the American Depositary Shares to be issued pursuant to the terms of this Deposit Agreement are accepted for trading on the New York Stock Exchange; and
WHEREAS, the Board of Directors of the Company (or an authorized committee thereof) has duly approved the establishment of an ADR facility upon the terms set forth in this Deposit Agreement, the execution and delivery of this Deposit Agreement on behalf of the Company, and the actions of the Company and the transactions contemplated herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
All capitalized terms used, but not otherwise defined, herein shall have the meanings set forth below, unless otherwise clearly indicated:
SECTION 1.1 Affiliate shall have the meaning assigned to such term by the Commission under Regulation C promulgated under the Securities Act.
SECTION 1.2 Agent shall mean such entity or entities as the Depositary may appoint under Section 7.8 hereof, including the Custodian or any successor or addition thereto.
1
SECTION 1.3 American Depositary Share(s) and ADS(s) shall mean the securities represented by the rights and interests in the Deposited Securities granted to the Holders and Beneficial Owners pursuant to this Deposit Agreement and evidenced by the American Depositary Receipts issued hereunder. Each two American Depositary Shares shall represent the right to receive three Shares, until there shall occur a distribution upon Deposited Securities referred to in Section 4.2 hereof or a change in Deposited Securities referred to in Section 4.9 hereof with respect to which additional American Depositary Receipts are not executed and delivered and thereafter each American Depositary Share shall represent the Shares or Deposited Securities specified in such Sections.
SECTION 1.4 Article shall refer to an article of the American Depositary Receipts as set forth in the Form of Face of Receipt and Form of Reverse of Receipt in Exhibit A and Exhibit B annexed hereto.
SECTION 1.5 Articles of Association shall mean the articles of association of the Company, as amended from time to time.
SECTION 1.6 ADS Record Date shall have the meaning given to such term in Section 4.7 hereof.
SECTION 1.7 Beneficial Owner shall mean as to any ADS, any person or entity having a beneficial interest in such ADS. A Beneficial Owner need not be the Holder of the ADR evidencing such ADSs. A Beneficial Owner may exercise any rights or receive any benefits hereunder solely through the Holder of the ADR(s) evidencing the ADSs in which such Beneficial Owner has an interest.
SECTION 1.8 Business Day shall mean each Monday, Tuesday, Wednesday, Thursday and Friday which is not (a) a day on which banking institutions in the Borough of Manhattan, The City of New York are authorized or obligated by law or executive order to close and (b) a day on which the market(s) in which ADSs are traded are closed.
SECTION 1.9 Commission shall mean the Securities and Exchange Commission of the United States or any successor governmental agency in the United States.
SECTION 1.10 Company shall mean Dingdong (Cayman) Limited, a company incorporated and existing under the laws of the Cayman Islands, and its successors.
SECTION 1.11 Corporate Trust Office when used with respect to the Depositary, shall mean the corporate trust office of the Depositary at which at any particular time its depositary receipts business shall be administered, which, at the date of this Deposit Agreement, is located at 60 Wall Street, New York, New York 10005, U.S.A.
SECTION 1.12 Custodian shall mean, as of the date hereof, Deutsche Bank AG, Hong Kong Branch, having its principal office at 57/F International Commerce Centre, 1 Austin Road West, Kowloon, Hong Kong S.A.R., Peoples Republic of China, as the custodian for the purposes of this Deposit Agreement, and any other firm or corporation which may hereinafter be appointed by the Depositary pursuant to the terms of Section 5.5 hereof as a successor or an additional custodian or custodians hereunder, as the context shall require. The term Custodian shall mean all custodians, collectively.
2
SECTION 1.13 Deliver, Deliverable and Delivery shall mean, when used in respect of American Depositary Shares, Receipts, Deposited Securities and Shares, the physical delivery of the certificate representing such security, or the electronic delivery of such security by means of book-entry transfer, as appropriate, including, without limitation, through DRS/Profile. With respect to DRS/Profile ADRs, the terms execute, issue, register, surrender, transfer or cancel refer to applicable entries or movements to or within DRS/Profile.
SECTION 1.14 Deposit Agreement shall mean this Deposit Agreement and all exhibits annexed hereto, as the same may from time to time be amended and supplemented in accordance with the terms hereof.
SECTION 1.15 Depositary shall mean Deutsche Bank Trust Company Americas, an indirect wholly owned subsidiary of Deutsche Bank AG, in its capacity as depositary under the terms of this Deposit Agreement, and any successor depositary hereunder.
SECTION 1.16 Deposited Securities as of any time shall mean Shares at such time deposited or deemed to be deposited under this Deposit Agreement and any and all other securities, property and cash received or deemed to be received by the Depositary or the Custodian in respect thereof and held hereunder, subject, in the case of cash, to the provisions of Section 4.6.
SECTION 1.17 Dollars and $ shall mean the lawful currency of the United States.
SECTION 1.18 DRS/Profile shall mean the system for the uncertificated registration of ownership of securities pursuant to which ownership of ADSs is maintained on the books of the Depositary without the issuance of a physical certificate and transfer instructions may be given to allow for the automated transfer of ownership between the books of DTC and the Depositary. Ownership of ADSs held in DRS/Profile is evidenced by periodic statements issued by the Depositary to the Holders entitled thereto.
SECTION 1.19 DTC shall mean The Depository Trust Company, the central book-entry clearinghouse and settlement system for securities traded in the United States, and any successor thereto.
SECTION 1.20 DTC Participants shall mean participants within DTC.
SECTION 1.21 Exchange Act shall mean the U.S. Securities Exchange Act of 1934, as from time to time amended.
SECTION 1.22 Foreign Currency shall mean any currency other than Dollars.
SECTION 1.23 Foreign Registrar shall mean the entity, if any, that carries out the duties of registrar for the Shares or any successor as registrar for the Shares and any other appointed agent of the Company for the transfer and registration of Shares or, if no such agent is so appointed and acting, the Company.
SECTION 1.24 Holder shall mean the person in whose name a Receipt is registered on the books of the Depositary (or the Registrar, if any) maintained for such purpose. A Holder may or may not be a Beneficial Owner. A Holder shall be deemed to have all requisite authority to act on behalf of those Beneficial Owners of the ADRs registered in such Holders name.
3
SECTION 1.25 Indemnified Person and Indemnifying Person shall have the respective meanings set forth in Section 5.8 hereof.
SECTION 1.26 Losses shall have the meaning set forth in Section 5.8 hereof.
SECTION 1.27 Memorandum shall mean the memorandum of association of the Company.
SECTION 1.28 Opinion of Counsel shall mean a written opinion from legal counsel to the Company who is acceptable to the Depositary.
SECTION 1.29 Receipt(s); American Depositary Receipt(s); and ADR(s) shall mean the certificate(s) or statement(s) issued by the Depositary evidencing the American Depositary Shares issued under the terms of this Deposit Agreement, as such Receipts may be amended from time to time in accordance with the provisions of this Deposit Agreement. References to Receipts shall include physical certificated Receipts as well as ADSs issued through any book-entry system, including, without limitation, DRS/Profile, unless the context otherwise requires.
SECTION 1.30 Registrar shall mean the Depositary or any bank or trust company having an office in the Borough of Manhattan, The City of New York, which shall be appointed by the Depositary to register ownership of Receipts and transfer of Receipts 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.
SECTION 1.31 Restricted ADRs shall have the meaning set forth in Section 2.11 hereof.
SECTION 1.32 Restricted ADSs shall have the meaning set forth in Section 2.11 hereof.
SECTION 1.33 Restricted Securities shall mean Shares 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 subject to resale limitations under the Securities Act or the rules issued thereunder, or (ii) are held 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 the laws of the United States or the Cayman Islands, under a shareholders agreement, shareholders lock-up agreement or the Articles of Association or under the regulations of an applicable securities exchange unless, in each case, such Shares are being sold to persons other than an Affiliate of the Company in a transaction (x) covered by an effective resale registration statement or (y) exempt from the registration requirements of the Securities Act (as hereafter defined) and the Shares are not, when held by such person, Restricted Securities.
SECTION 1.34 Restricted Shares shall have the meaning set forth in Section 2.11 hereof.
SECTION 1.35 Securities Act shall mean the United States Securities Act of 1933, as from time to time amended.
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SECTION 1.36 Shares shall mean Class A ordinary shares in registered form of the Company, par value $0.000002 each, heretofore or hereafter validly issued and outstanding and fully paid. References to Shares shall include evidence of rights to receive Shares, whether or not stated in the particular instance; provided, however, that in no event shall Shares include evidence of rights to receive Shares with respect to which the full purchase price has not been paid or Shares as to which pre-emptive rights have theretofore not been validly waived or exercised; provided further, however, that, if there shall occur any change in par value, split-up, consolidation, reclassification, exchange, conversion or any other event described in Section 4.9 hereof in respect of the Shares, the term Shares shall thereafter, to the extent permitted by law, represent the successor securities resulting from such change in par value, split-up, consolidation, reclassification, exchange, conversion or event.
SECTION 1.37 United States or U.S. shall mean the United States of America.
ARTICLE II.
APPOINTMENT OF DEPOSITARY; FORM OF RECEIPT; DEPOSIT OF SHARES;
EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS
SECTION 2.1 Appointment of Depositary. The Company hereby appoints the Depositary as exclusive 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 ADSs (or any interest therein) issued in accordance with the terms of this Deposit Agreement, shall be deemed for all purposes to (a) be a party to and bound by the terms of this Deposit Agreement and the applicable ADR(s) 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 and the applicable ADR(s), 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 and the applicable ADR(s) (the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof).
SECTION 2.2 Form and Transferability of Receipts.
(a) Form. Receipts in certificated form shall be substantially in the form set forth in Exhibit A and Exhibit B annexed to this Deposit Agreement, with appropriate insertions, modifications and omissions, as hereinafter provided. Receipts may be issued in denominations of any number of American Depositary Shares. No Receipt in certificated form shall be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose, unless such Receipt shall have been dated and signed by the manual or facsimile signature of a duly authorized signatory of the Depositary. The Depositary shall maintain books on which each Receipt so executed and Delivered, in the case of Receipts in certificated form, and each Receipt issued through any book-entry system, including, without limitation, DRS/Profile, in either case as hereinafter provided, and the transfer of each such Receipt shall be registered. Receipts in certificated form bearing the manual or facsimile signature of a duly authorized signatory of the Depositary who was at any time a proper signatory of the Depositary shall bind the Depositary, notwithstanding the fact that such signatory has ceased to hold such office prior to the execution and Delivery of such Receipts by the Registrar or did not hold such office on the date of issuance of such Receipts.
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Notwithstanding anything in this Deposit Agreement or in the form of Receipt to the contrary, to the extent available by the Depositary, ADSs shall be evidenced by Receipts issued through any book-entry system, including, without limitation, DRS/Profile, unless certificated Receipts are specifically requested by the Holder. Holders and Beneficial Owners shall be bound by the terms and conditions of this Deposit Agreement and of the form of Receipt, regardless of whether their Receipts are in certificated form or are issued through any book-entry system, including, without limitation, DRS/Profile.
(b) Legends. In addition to the foregoing, the Receipts may, and upon the written request of the Company shall, be endorsed with, or have incorporated in the text thereof, such legends or recitals or modifications not inconsistent with the provisions of this Deposit Agreement as may be (i) necessary to enable the Depositary and the Company to perform their respective obligations hereunder, (ii) required to comply with any applicable laws or regulations, or with the rules and regulations of any securities exchange or market upon which ADSs may be traded, listed or quoted, or to conform with any usage with respect thereto, (iii) necessary to indicate any special limitations or restrictions to which any particular ADRs or ADSs are subject by reason of the date of issuance of the Deposited Securities or otherwise or (iv) required by any book-entry system in which the ADSs are held. Holders and Beneficial Owners shall be deemed, for all purposes, to have notice of, and to be bound by, the terms and conditions of the legends set forth, in the case of Holders, on the ADR registered in the name of the applicable Holders or, in the case of Beneficial Owners, on the ADR representing the ADSs owned by such Beneficial Owners.
(c) Title. Subject to the limitations contained herein and in the form of Receipt, title to a Receipt (and to the ADSs evidenced thereby), when properly endorsed (in the case of certificated Receipts) or upon delivery to the Depositary of proper instruments of transfer, shall be transferable by delivery with the same effect as in the case of a negotiable instrument under the laws of the State of New York; provided, however, that the Depositary, notwithstanding any notice to the contrary, may treat the Holder thereof as the absolute owner thereof for 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 for all other purposes and neither the Depositary nor the Company will have any obligation or be subject to any liability under the Deposit Agreement to any holder of a Receipt, unless such holder is the Holder thereof.
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SECTION 2.3 Deposits.
(a) Subject to the terms and conditions of this Deposit Agreement and applicable law, Shares or evidence of rights to receive Shares may be deposited by any person (including the Depositary in its individual capacity but subject, however, in the case of the Company or any Affiliate of the Company, to Section 5.7 hereof) at any time beginning on the 181st day after the date of the prospectus contained in the registration statement on Form F-1 under which the ADSs are first sold or on such earlier date as the Company (with the approval of the underwriters referred to in the said prospectus) may specify in writing to the Depositary, whether or not the transfer books of the Company or the Foreign Registrar, if any, are closed, by Delivery of the Shares to the Custodian. Except for Shares deposited by the Company in connection with the initial sale of ADSs under the registration statement on Form F-1, no deposit of Shares shall be accepted under this Deposit Agreement prior to such date. Every deposit of Shares shall be accompanied by the following: (A)(i) in the case of Shares represented by certificates issued in registered form, appropriate instruments of transfer or endorsement, in a form satisfactory to the Custodian, (ii) in the case of Shares represented by certificates issued in bearer form, such Shares or the certificates representing such Shares and (iii) in the case of Shares Delivered by book-entry transfer, confirmation of such book-entry transfer to the Custodian or that irrevocable instructions have been given to cause such Shares to be so transferred, (B) such certifications and payments (including, without limitation, the Depositarys fees and related charges) and evidence of such payments (including, without limitation, stamping or otherwise marking such Shares by way of receipt) as may be required by the Depositary or the Custodian in accordance with the provisions of this Deposit Agreement or as may be deemed by them to be reasonably necessary and appropriate in the circumstances, (C) if the Depositary so requires, a written order directing the Depositary to execute and Deliver to, or upon the written order of, the person or persons stated in such order a Receipt or Receipts for the number of American Depositary Shares representing the Shares so deposited, (D) evidence satisfactory to the Depositary (which may include an opinion of counsel reasonably satisfactory to the Depositary provided at the cost of the person seeking to deposit Shares) that all conditions to such deposit have been met and all necessary approvals have been granted by, and there has been compliance with the rules and regulations of, any applicable governmental agency and (E) if the Depositary so requires, (i) an agreement, assignment or instrument satisfactory to the Depositary or the Custodian which provides for the prompt transfer by any person in whose name the Shares are or have been recorded to the Custodian of any distribution, or right to subscribe for additional Shares or to receive other property in respect of any such deposited Shares or, in lieu thereof, such indemnity or other agreement as shall be satisfactory to the Depositary or the Custodian and (ii) if the Shares are registered in the name of the person on whose behalf they are presented for deposit, a proxy or proxies entitling the Custodian to exercise voting rights in respect of the Shares for any and all purposes until the Shares so deposited are registered in the name of the Depositary, the Custodian or any nominee. No Share shall be accepted for deposit unless accompanied by confirmation or such additional evidence, if any is required by the Depositary, that is reasonably satisfactory to the Depositary or the Custodian that all conditions to such deposit have been satisfied by the person depositing such Shares under the laws and regulations of the Cayman Islands and any necessary approval has been granted by any governmental body in the Cayman Islands, if any, which is then performing the function of the regulator of currency exchange. The Depositary may issue Receipts against evidence of rights to receive Shares from the Company, any agent of the Company or any custodian, registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Shares. Without limitation of the foregoing, the Depositary shall not knowingly accept for deposit under this Deposit Agreement any Shares or other Deposited Securities required to be registered under the provisions of the Securities Act, unless a registration statement is in effect as to such Shares or other Deposited Securities, or any Shares or other Deposited Securities the deposit of which would violate any provisions of the Memorandum and Articles of Association. The Depositary shall use commercially reasonable efforts to comply with reasonable written instructions of the Company that the Depositary shall not accept for deposit hereunder any Shares specifically identified in such instructions at such times and under such circumstances as may reasonably be specified in such instructions in order to facilitate the Companys compliance with the securities laws in the United States and other jurisdictions, provided that the Company shall indemnify the Depositary and the Custodian for any claims and losses arising from not accepting the deposit of any Shares identified in the Companys instructions.
(b) As soon as practicable after receipt of any permitted deposit hereunder and compliance with the provisions of this Deposit Agreement, the Custodian shall present the Shares so deposited, together with the appropriate instrument or instruments of transfer or endorsement, duly stamped, to the Foreign Registrar for transfer and registration of the Shares (as soon as transfer and registration can be accomplished and at the expense of the person for whom the deposit is made) in the name of the Depositary, the Custodian or a nominee of either. Deposited Securities shall be held by the Depositary or by a Custodian for the account and to the order of the Depositary or a nominee, in each case for the account of the Holders and Beneficial Owners, at such place or places as the Depositary or the Custodian shall determine.
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(c) In the event any Shares are deposited which entitle the holders thereof to receive a per-share distribution or other entitlement in an amount different from the Shares then on deposit, the Depositary is authorized to take any and all actions as may be necessary (including, without limitation, making the necessary notations on Receipts) to give effect to the issuance of such ADSs and to ensure that such ADSs are not fungible with other ADSs issued hereunder until such time as the entitlement of the Shares represented by such non-fungible ADSs equals that of the Shares represented by ADSs prior to such deposit. The Company agrees to give timely written notice to the Depositary if any Shares issued or to be issued contain rights different from those of any other Shares theretofore issued and shall assist the Depositary with the establishment of procedures enabling the identification of such non-fungible Shares upon Delivery to the Custodian.
SECTION 2.4 Execution and Delivery of Receipts. After the deposit of any Shares pursuant to Section 2.3 hereof, the Custodian shall notify the Depositary of such deposit and the person or persons to whom or upon whose written order a Receipt or Receipts are Deliverable in respect thereof and the number of American Depositary Shares to be evidenced thereby. Such notification shall be made by letter, first class airmail postage prepaid, or, at the request, risk and expense of the person making the deposit, by cable, telex, SWIFT, facsimile or electronic transmission. After receiving such notice from the Custodian, the Depositary, subject to this Deposit Agreement (including, without limitation, the payment of the fees, expenses, taxes and/or other charges owing hereunder), shall issue the ADSs representing the Shares so deposited to or upon the order of the person or persons named in the notice delivered to the Depositary and shall execute and Deliver a Receipt registered in the name or names requested by such person or persons evidencing in the aggregate the number of American Depositary Shares to which such person or persons are entitled.
SECTION 2.5 Transfer of Receipts; Combination and Split-up of Receipts.
(a) Transfer. The Depositary, or, if a Registrar (other than the Depositary) for the Receipts shall have been appointed, the Registrar, subject to the terms and conditions of this Deposit Agreement, shall register transfers of Receipts on its books, upon surrender at the Corporate Trust Office of the Depositary of a Receipt by the Holder thereof in person or by duly authorized attorney, properly endorsed in the case of a certificated Receipt or accompanied by, or in the case of Receipts issued through any book-entry system, including, without limitation, DRS/Profile, receipt by the Depositary of, proper instruments of transfer (including signature guarantees in accordance with standard industry practice) and duly stamped as may be required by the laws of the State of New York, of the United States, of the Cayman Islands and of any other applicable jurisdiction. Subject to the terms and conditions of this Deposit Agreement, including payment of the applicable fees and charges of the Depositary set forth in Section 5.9 hereof and Article (9) of the Receipt, the Depositary shall execute a new Receipt or Receipts and Deliver the same to or upon the order of the person entitled thereto evidencing the same aggregate number of American Depositary Shares as those evidenced by the Receipts surrendered.
(b) Combination and Split Up. The Depositary, subject to the terms and conditions of this Deposit Agreement shall, upon surrender of a Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts and upon payment to the Depositary of the applicable fees and charges set forth in Section 5.9 hereof and Article (9) of the Receipt, execute and Deliver a new Receipt or Receipts for any authorized number of American Depositary Shares requested, evidencing the same aggregate number of American Depositary Shares as the Receipt or Receipts surrendered.
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(c) Co-Transfer Agents. The Depositary may appoint one or more co-transfer agents for the purpose of effecting transfers, combinations and split-ups of Receipts 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 such Receipts and will be entitled to protection and indemnity, in each case to the same extent as the Depositary. Such co-transfer agents may be removed and substitutes appointed by the Depositary. Each co-transfer agent appointed under this Section 2.5 (other than the Depositary) shall give notice in writing to the Depositary accepting such appointment and agreeing to be bound by the applicable terms of this Deposit Agreement.
(d) Substitution of Receipts. At the request of a Holder, the Depositary shall, for the purpose of substituting a certificated Receipt with a Receipt issued through any book-entry system, including, without limitation, DRS/Profile, or vice versa, execute and Deliver a certificated Receipt or deliver a statement, as the case may be, for any authorized number of ADSs requested, evidencing the same aggregate number of ADSs as those evidenced by the relevant Receipt.
SECTION 2.6 Surrender of Receipts and Withdrawal of Deposited Securities. Upon surrender, at the Corporate Trust Office of the Depositary, of American Depositary Shares for the purpose of withdrawal of the Deposited Securities represented thereby, and upon payment of (i) the fees and charges of the Depositary for the making of withdrawals of Deposited Securities and cancellation of Receipts (as set forth in Section 5.9 hereof and Article (9) of the Receipt) and (ii) all fees, taxes and/or governmental charges payable in connection with such surrender and withdrawal, and subject to the terms and conditions of this Deposit Agreement, the Memorandum and Articles of Association, Section 7.11 hereof and any other provisions of or governing the Deposited Securities and other applicable laws, the Holder of such American Depositary Shares shall be entitled to Delivery, to him or upon his order, of the Deposited Securities at the time represented by the American Depositary Shares so surrendered. American Depositary Shares may be surrendered for the purpose of withdrawing Deposited Securities by Delivery of a Receipt evidencing such American Depositary Shares (if held in certificated form) or by book-entry Delivery of such American Depositary Shares to the Depositary.
A Receipt surrendered for such purposes shall, if so required by the Depositary, be properly endorsed in blank or accompanied by proper instruments of transfer in blank, and if the Depositary so requires, the Holder thereof shall execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be Delivered to or upon the written order of a person or persons designated in such order. Thereupon, the Depositary shall direct the Custodian to Deliver (without unreasonable delay) at the designated office of the Custodian or through a book-entry delivery of the Shares (in either case, subject to Sections 2.7, 3.1, 3.2, 5.9, hereof and to the other terms and conditions of this Deposit Agreement, to the Memorandum and Articles of Association, and to the provisions of or governing the Deposited Securities and applicable laws, now or hereafter in effect) to or upon the written order of the person or persons designated in the order delivered to the Depositary as provided above, the Deposited Securities represented by such American Depositary Shares, together with any certificate or other proper documents of or relating to title of the Deposited Securities as may be legally required, as the case may be, to or for the account of such person.
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The Depositary may refuse to accept for surrender American Depositary Shares only in the circumstances described in Article (4) of the Receipt. Subject thereto, in the case of surrender of a Receipt evidencing a number of American Depositary Shares representing other than a whole number of Shares, the Depositary shall cause ownership of the appropriate whole number of Shares to be Delivered in accordance with the terms hereof, and shall, at the discretion of the Depositary, either (i) issue and Deliver to the person surrendering such Receipt a new Receipt evidencing American Depositary Shares representing any remaining fractional Share, or (ii) sell or cause to be sold the fractional Shares represented by the Receipt surrendered and remit the proceeds of such sale (net of (a) applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and (b) taxes and/or governmental charges) to the person surrendering the Receipt.
At the request, risk and expense of any Holder so surrendering a Receipt, and for the account of such Holder, the Depositary shall direct the Custodian to forward (to the extent permitted by law) any cash or other property (other than securities) held in respect of, and any certificate or certificates and other proper documents of or relating to title to, the Deposited Securities represented by such Receipt to the Depositary for delivery at the Corporate Trust Office of the Depositary, and for further Delivery to such Holder. Such direction shall be given by letter or, at the request, risk and expense of such Holder, by cable, telex or facsimile transmission. Upon receipt by the Depositary of such direction, the Depositary may make delivery to such person or persons entitled thereto at the Corporate Trust Office of the Depositary of any dividends or cash distributions with respect to the Deposited Securities represented by such American Depositary Shares, or of any proceeds of sale of any dividends, distributions or rights, which may at the time be held by the Depositary.
SECTION 2.7 Limitations on Execution and Delivery, Transfer, etc. of Receipts; Suspension of Delivery, Transfer, etc.
(a) Additional Requirements. As a condition precedent to the execution and Delivery, registration, registration of transfer, split-up, subdivision, combination or surrender of any Receipt, the Delivery of any distribution thereon (whether in cash or shares) or withdrawal of any Deposited Securities, the Depositary or the Custodian may require (i) payment from the depositor of Shares or presenter of the Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees and charges of the Depositary as provided in Section 5.9 hereof and Article (9) of the Receipt hereto, (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature or any other matter contemplated by Section 3.1 hereof and (iii) compliance with (A) any laws or governmental regulations relating to the execution and Delivery of Receipts or American Depositary Shares or to the withdrawal or Delivery of Deposited Securities and (B) such reasonable regulations and procedures as the Depositary may establish consistent with the provisions of this Deposit Agreement and applicable law.
(b) Additional Limitations. The issuance of ADSs against deposits of Shares generally or against deposits of particular Shares may be suspended, or the issuance of ADSs against the deposit of particular Shares may be withheld, or the registration of transfer of Receipts in particular instances may be refused, or the registration of transfers of Receipts generally may be suspended, during any period when the transfer books of the Depositary are closed or if any such action is deemed necessary or advisable by the Depositary or the Company, in good faith, at any time or from time to time because of any requirement of law, any government or governmental body or commission or any securities exchange on which the Receipts or Shares are listed, or under any provision of this Deposit Agreement or provisions of, or governing, the Deposited Securities, or any meeting of shareholders of the Company or for any other reason, subject, in all cases, to Section 7.11 hereof.
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(c) The Depositary shall not issue ADSs prior to the receipt of Shares or deliver Shares prior to the receipt and cancellation of ADSs.
SECTION 2.8 Lost Receipts, etc. To the extent the Depositary has issued Receipts in physical certificated form, in case any Receipt shall be mutilated, destroyed, lost or stolen, unless the Depositary has notice that such ADR has been acquired by a bona fide purchaser, subject to Section 5.9 hereof, the Depositary shall execute and Deliver a new Receipt (which, in the discretion of the Depositary may be issued through any book-entry system, including, without limitation, DRS/Profile, unless specifically requested otherwise) in exchange and substitution for such mutilated Receipt upon cancellation thereof, or in lieu of and in substitution for such destroyed, lost or stolen Receipt. Before the Depositary shall execute and Deliver a new Receipt in substitution for a destroyed, lost or stolen Receipt, the Holder thereof shall have (a) filed with the Depositary (i) a request for such execution and Delivery before the Depositary has notice that the Receipt has been acquired by a bona fide purchaser and (ii) a sufficient indemnity bond in form and amount acceptable to the Depositary and (b) satisfied any other reasonable requirements imposed by the Depositary.
SECTION 2.9 Cancellation and Destruction of Surrendered Receipts . All Receipts surrendered to the Depositary shall be cancelled by the Depositary. The Depositary is authorized to destroy Receipts so cancelled in accordance with its customary practices. Cancelled Receipts shall not be entitled to any benefits under this Deposit Agreement or be valid or obligatory for any purpose.
SECTION 2.10 Maintenance of Records. The Depositary agrees to maintain records of all Receipts surrendered and Deposited Securities withdrawn under Section 2.6, substitute Receipts Delivered under Section 2.8 and cancelled or destroyed Receipts under Section 2.9, in keeping with the procedures ordinarily followed by stock transfer agents located in the United States.
SECTION 2.11 Restricted ADSs. At the request and expense of the Company, or at the request and expense of a holder of Shares and with the written consent of the Company, and notwithstanding anything to the contrary in this Deposit Agreement, the Depositary may establish procedures permitting a deposit of Shares that are or may be Restricted Securities (Restricted Shares) and the Delivery of restricted American Depositary Shares (Restricted ADSs, the ADRs evidencing such Restricted ADSs being the Restricted ADRs) representing those Restricted Shares as provided in this Section 2.11. Such procedures shall also govern the removal of the Restrictive Legend (as defined below) from Restricted ADRs, the transfer of Restricted ADRs and the Restricted ADSs evidenced thereby, and the cancellation of Restricted ADRs and withdrawal of Deposited Securities (including Restricted Shares).
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(a) The Company shall assist the Depositary in the establishment of such procedures and agrees that it shall take all steps necessary and reasonably satisfactory to the Depositary to ensure that deposits of Restricted Shares, issuances and transfers of Restricted ADRs and the Restricted ADSs evidenced thereby, and cancellations of Restricted ADRs and withdrawals of Deposited Securities (including Restricted Shares) pursuant to such procedures do not violate the provisions of the Securities Act or any other applicable laws. Depositors of Restricted Shares, holders and transferees of Restricted ADRs and the Restricted ADSs evidenced thereby, and the Company may be required to provide such written certifications and instructions as the Depositary or the Company deem necessary, as well as an appropriate Opinion of Counsel in the Cayman Islands and the United States.
(b) The Restricted ADSs shall not be eligible for inclusion in any book-entry settlement system, including, without limitation, DTC, and shall be segregated on the Depositarys register as a class of securities separate from, and not fungible with, outstanding American Depositary Shares that are not Restricted ADSs so that Restricted ADSs shall represent interests only in the corresponding Restricted Shares.
(c) Prior to the deposit of Restricted Shares, the depositor shall deliver to the Depositary a delivery order that (i) discloses or acknowledges all restrictions on transferability of the Restricted Shares (and to that extent need not represent and warrant that the deposited Shares are not Restricted Securities), and (ii) provides that the depositor agrees that the Restricted ADSs will be subject to a specified legend in a form provided by the Company and satisfactory to the Depositary (the Restrictive Legend) that describes those restrictions and agrees to comply with those restrictions.
(d) Except as otherwise provided in this Section 2.11 and except as required by applicable law, the Restricted ADRs and the Restricted ADSs evidenced thereby shall be treated as ADRs and ADSs issued outstanding under the terms of the Deposit Agreement, all provisions of this Deposit Agreement shall apply to Restricted ADSs. In the event that, in determining the rights and obligations of parties hereto with respect to any Restricted ADSs, any conflict arises between (i) the terms of this Deposit Agreement (other than this Section 2.11) and (ii) the terms of this Section 2.11 or of the applicable Restricted ADR, the terms and conditions set forth in this Section 2.11 and of the Restricted ADR shall be controlling and shall govern the rights and obligations of the parties to this Deposit Agreement pertaining to the deposited Restricted Shares, the Restricted ADSs and Restricted ADRs.
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ARTICLE III.
CERTAIN OBLIGATIONS OF HOLDERS
AND BENEFICIAL OWNERS OF RECEIPTS
SECTION 3.1 Proofs, Certificates and Other Information. Any person presenting Shares for deposit shall provide, any Holder and any Beneficial Owner may be required to provide, and every Holder and Beneficial Owner agrees, from time to time to provide to the Depositary or the Custodian such proof of citizenship or residence, taxpayer status, payment of all applicable taxes or other governmental charges, exchange control approval, legal or beneficial ownership of ADSs and Deposited Securities, compliance with applicable laws and the terms of this Deposit Agreement and the provisions of, or governing, the Deposited Securities or other information, to execute such certifications and to make such representations and warranties and to provide such other information and documentation 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 withhold the execution or Delivery or registration of transfer of any Receipt or the distribution or sale of any dividend or other distribution of rights or of the proceeds thereof, or to the extent not limited by the terms of Section 7.11 hereof, the Delivery of any Deposited Securities, until such proof or other information is filed or such certifications are executed, or such representations and warranties are made, or such other documentation or information provided, in each case to the Depositarys and the Companys satisfaction. The Depositary shall from time to time on the written request of the Company advise the Company of the availability of any such proofs, certificates or other information and shall, at the Companys sole expense, provide or otherwise make available copies thereof to the Company upon written request therefor by the Company, unless such disclosure is prohibited by law. Each Holder and Beneficial Owner agrees to provide, any information requested by the Company or the Depositary pursuant to this Section 3.1. Nothing herein shall obligate the Depositary to (i) obtain any information for the Company if not provided by the Holders or Beneficial Owners or (ii) verify or vouch for the accuracy of the information so provided by the Holders or Beneficial Owners.
Every Holder and Beneficial Owner agrees to indemnify the Depositary, the Company, the Custodian, the Agents and each of their respective directors, officers, employees, agents and Affiliates against, and to hold each of them harmless from, any Losses which any of them may incur or which may be made against any of them as a result of or in connection with any inaccuracy in or omission from any such proof, certificate, representation, warranty, information or document furnished by or on behalf of such Holder and/or Beneficial Owner or as a result of any such failure to furnish any of the foregoing.
The obligations of Holders and Beneficial Owners under Section 3.1 shall survive any transfer of Receipts, any surrender of Receipts or withdrawal of Deposited Securities or the termination of the Deposit Agreement.
SECTION 3.2 Liability for Taxes and Other Charges. If any present or future tax or other governmental charge shall become payable by the Depositary or the Custodian with respect to any ADR or any Deposited Securities or American Depositary Shares, such tax or other governmental charge shall be payable by the Holders and Beneficial Owners to the Depositary and such Holders and Beneficial Owners shall be deemed liable therefor. The Company, the Custodian and/or the Depositary may withhold or deduct from any distributions made in respect of Deposited Securities and may sell for the account of a Holder and/or Beneficial Owner any or all of the Deposited Securities and apply such distributions and sale proceeds in payment of such taxes (including applicable interest and penalties) and charges, with the Holder and the Beneficial Owner remaining fully liable for any deficiency. In addition to any other remedies available to it, the Depositary and the Custodian may refuse the deposit of Shares, and the Depositary may refuse to issue ADSs, to Deliver ADRs, to register the transfer, split-up or combination of ADRs and (subject to Section 7.11 hereof) the withdrawal of Deposited Securities, until payment in full of such tax, charge, penalty or interest is received. The liability of Holders and Beneficial Owners under this Section 3.2 shall survive any transfer of Receipts, any surrender of Receipts and withdrawal of Deposited Securities or the termination of this Deposit Agreement.
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SECTION 3.3 Representations and Warranties on Deposit of Shares. Each person depositing Shares under this Deposit Agreement shall be deemed thereby to represent and warrant that (i) such Shares and the certificates therefor are duly authorized, validly issued, fully paid, non-assessable and were legally obtained by such person, (ii) all preemptive (and similar) rights, if any, with respect to such Shares have been validly waived or exercised, (iii) the person making such deposit is duly authorized so to do, (iv) the Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim and are not, and the American Depositary Shares issuable upon such deposit will not be, Restricted Securities (except as contemplated by Section 2.11 of the Deposit Agreement), (v) the Shares presented for deposit have not been stripped of any rights or entitlements and (vi) the Shares are not subject to any lock-up agreement with the Company or other party, or the Shares are subject to a lock-up agreement but such lock-up agreement has terminated or the lock-up restrictions imposed thereunder have expired. Such representations and warranties shall survive the deposit and withdrawal of Shares, the issuance and cancellation of American Depositary Shares in respect thereof and the transfer of such American Depositary Shares. If any such representations or warranties are false in any way, the Company and the Depositary shall be authorized, at the cost and expense of the person depositing Shares, to take any and all actions necessary to correct the consequences thereof.
SECTION 3.4 Compliance with Information Requests. Notwithstanding any other provision of the Deposit Agreement, the Articles of Association and applicable law, each Holder and Beneficial Owner agrees to (a) provide such information as the Company or the Depositary may request pursuant to law (including, without limitation, relevant Cayman Islands law, any applicable law of the United States, the Memorandum and Articles of Association, any resolutions of the Companys Board of Directors adopted pursuant to the Memorandum and Articles of Association, the requirements of any markets or exchanges upon which the Shares, ADSs or Receipts are listed or traded, or to any requirements of any electronic book-entry system by which the ADSs or Receipts may be transferred), (b) be bound by and subject to applicable provisions of the laws of the Cayman Islands, the Memorandum and Articles of Association and the requirements of any markets or exchanges upon which the ADSs, Receipts or Shares are listed or traded, or pursuant to any requirements of any electronic book-entry system by which the ADSs, Receipts or Shares may be transferred, to the same extent as if such Holder and Beneficial Owner held Shares directly, in each case irrespective of whether or not they are Holders or Beneficial Owners at the time such request is made and, without limiting the generality of the foregoing, (c) comply with all applicable provisions of Cayman Islands law, the rules and requirements of any stock exchange on which the Shares are, or will be registered, traded or listed and the Articles of Association regarding any such Holder or Beneficial Owners interest in Shares (including the aggregate of ADSs and Shares held by each such Holder or Beneficial Owner) and/or the disclosure of interests therein, whether or not the same may be enforceable against such Holder or Beneficial Owner. The Depositary agrees to use its reasonable efforts to forward upon the request of the Company, and at the Companys expense, any such request from the Company to the Holders and to forward to the Company any such responses to such requests received by the Depositary.
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ARTICLE IV.
THE DEPOSITED SECURITIES
SECTION 4.1 Cash Distributions. Whenever the Depositary receives confirmation from the Custodian of receipt of any cash dividend or other cash distribution on any Deposited Securities, or receives proceeds from the sale of any Shares, rights, securities or other entitlements under the terms hereof, the Depositary will, if at the time of receipt thereof any amounts received in a Foreign Currency can in the judgment of the Depositary (pursuant to Section 4.6 hereof) be converted on a practicable basis into Dollars transferable to the United States, promptly convert or cause to be converted such cash dividend, distribution or proceeds into Dollars (on the terms described in Section 4.6 hereof) and will distribute promptly the amount thus received (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and (b) taxes and/or governmental charges) to the Holders of record as of the ADS Record Date in proportion to the number of American Depositary Shares held by such Holders respectively as of the ADS Record Date. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Holder a fraction of one cent. Any such fractional amounts shall be rounded down to the nearest whole cent and so distributed to Holders entitled thereto. Holders and Beneficial Owners understand that in converting Foreign Currency, amounts received on conversion are calculated at a rate which exceeds the number of decimal places used by the Depositary to report distribution rates. The excess amount may be retained by the Depositary as an additional cost of conversion, irrespective of any other fees and expenses payable or owing hereunder and shall not be subject to escheatment. If the Company, the Custodian or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes, duties or other governmental charges, the amount distributed to Holders of the ADSs representing such Deposited Securities shall be reduced accordingly. Such withheld amounts shall be forwarded by the Company, the Custodian or the Depositary to the relevant governmental authority. Evidence of payment thereof by the Company shall be forwarded by the Company to the Depositary upon request. The Depositary shall forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file with governmental agencies such reports as are necessary to obtain benefits under the applicable tax treaties for the Holders and Beneficial Owners of Receipts.
SECTION 4.2 Distribution in Shares. If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, Shares, the Company shall cause such Shares to be deposited with the Custodian and registered, as the case may be, in the name of the Depositary, the Custodian or any of their nominees. Upon receipt of confirmation of such deposit from the Custodian, the Depositary shall establish the ADS Record Date upon the terms described in Section 4.7 hereof and shall, subject to Section 5.9 hereof, either (i) distribute to the Holders as of the ADS Record Date in proportion to the number of ADSs held as of the ADS Record Date, additional ADSs, which represent in the aggregate the number of Shares received as such dividend, or free distribution, subject to the other terms of this Deposit Agreement (including, without limitation, (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes and/or governmental charges), or (ii) if additional ADSs are not so distributed, each ADS issued and outstanding after the ADS Record Date shall, to the extent permissible by law, thenceforth also represent rights and interests in the additional Shares distributed upon the Deposited Securities represented thereby (net of (a) the applicable fees and charges of, and expenses incurred by, the Depositary and (b) taxes and/or governmental charges). In lieu of Delivering fractional ADSs, the Depositary shall sell the number of Shares represented by the aggregate of such fractions and distribute the proceeds upon the terms described in Section 4.1 hereof. The Depositary may withhold any such distribution of Receipts if it has not received satisfactory assurances from the Company (including an Opinion of Counsel furnished at the expense of the Company) that such distribution does not require registration under the Securities Act or is exempt from registration under the provisions of the Securities Act. To the extent such distribution may be withheld, the Depositary may dispose of all or a portion of such distribution in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable, and the Depositary shall distribute the net proceeds of any such sale (after deduction of applicable taxes and/or governmental charges and fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary) to Holders entitled thereto upon the terms described in Section 4.1 hereof.
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SECTION 4.3 Elective Distributions in Cash or Shares. Whenever the Company intends to distribute a dividend payable at the election of the holders of Shares in cash or in additional Shares, the Company shall give notice thereof to the Depositary at least 30 days prior to the proposed distribution stating whether or not it wishes such elective distribution to be made available to Holders of ADSs. Upon receipt of notice indicating that the Company wishes such elective distribution 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 elective distribution available to the Holders of ADSs. The Depositary shall make such elective distribution available to Holders only if (i) the Company shall have timely requested that the elective distribution is available to Holders of ADRs, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7 hereof (including, without limitation, any legal opinions of counsel in any applicable jurisdiction that the Depositary in its reasonable discretion may request, at the expense of the Company) and (iii) the Depositary shall have determined that such distribution is lawful and reasonably practicable. If the above conditions are not satisfied, the Depositary shall, to the extent permitted by law, distribute to the Holders, on the basis of the same determination as is made in the local market in respect of the Shares for which no election is made, either cash upon the terms described in Section 4.1 hereof or additional ADSs representing such additional Shares upon the terms described in Section 4.2 hereof. If the above conditions are satisfied, the Depositary shall establish an ADS Record Date (on the terms described in Section 4.7 hereof) and establish procedures to enable Holders to elect the receipt of the proposed dividend in cash or in additional ADSs. The Company shall assist the Depositary in establishing such procedures to the extent necessary. Subject to Section 5.9 hereof, if a Holder elects to receive the proposed dividend in cash, the dividend shall be distributed upon the terms described in Section 4.1 hereof or in ADSs, the dividend shall be distributed upon the terms described in Section 4.2 hereof. Nothing herein shall obligate the Depositary to make available to Holders a method to receive the elective dividend in Shares (rather than ADSs). There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of Shares.
SECTION 4.4 Distribution of Rights to Purchase Shares.
(a) Distribution to ADS Holders. Whenever the Company intends to distribute to the holders of the Deposited Securities rights to subscribe for additional Shares, the Company shall give notice thereof to the Depositary at least 60 days prior to the proposed distribution stating whether or not it wishes such rights to be made available to Holders of ADSs. Upon timely 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 determine, whether it is lawful and reasonably practicable to make such rights available to the Holders. 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 satisfactory documentation within the terms of Section 5.7 hereof and (iii) the Depositary shall have determined that such distribution of rights is lawful and reasonably practicable. In the event any of the conditions set forth above are not satisfied, the Depositary shall proceed with the sale of the rights as contemplated in Section 4.4(b) below or, if timing or market conditions may not permit, do nothing thereby allowing such rights to lapse. In the event all conditions set forth above are satisfied, the Depositary shall establish an ADS Record Date (upon the terms described in Section 4.7 hereof) and establish procedures to distribute such rights (by means of warrants or otherwise) and to enable the Holders to exercise the rights (upon payment of applicable fees and charges of, and expenses incurred by, the Depositary and taxes and/or other governmental charges). Nothing herein shall obligate the Depositary to make available to the Holders a method to exercise such rights to subscribe for Shares (rather than ADSs).
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(b) Sale of Rights. If (i) the Company does not timely request the Depositary to make the rights available to Holders or requests that the rights not be made available to Holders, (ii) the Depositary fails to receive satisfactory documentation within the terms of Section 5.7 hereof or determines it is not lawful or reasonably practicable to make the rights available to Holders or (iii) any rights made available are not exercised and appear to be about to lapse, the Depositary shall determine whether it is lawful and reasonably practicable to sell such rights, and if it so determines that it is lawful and reasonably practicable, endeavour to sell such rights in a riskless principal capacity or otherwise, at such place and upon such terms (including public or private sale) as it may deem proper. The Company shall assist the Depositary to the extent necessary to determine such legality and practicability. The Depositary shall, upon such sale, convert and distribute proceeds of such sale (net of applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) upon the terms set forth in Section 4.1 hereof.
(c) Lapse of Rights. If the Depositary is unable to make any rights available to Holders upon the terms described in Section 4.4(a) hereof or to arrange for the sale of the rights upon the terms described in Section 4.4(b) hereof, the Depositary shall allow such rights to lapse.
The Depositary shall not be responsible for (i) any failure to determine that it may be lawful or practicable to make such rights available to Holders in general or any Holders in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale or exercise or (iii) the content of any materials forwarded to the Holders on behalf of the Company in connection with the rights distribution.
Notwithstanding anything to the contrary in this Section 4.4, if registration (under the Securities Act or any other applicable law) of the rights or the securities to which any rights relate may be required in order for the Company to offer such rights or such securities to Holders and to sell the securities represented by such rights, the Depositary will not distribute such rights to the Holders (i) unless and until a registration statement under the Securities Act covering such offering is in effect or (ii) unless the Company furnishes at its expense the Depositary with opinion(s) of counsel for the Company in the United States and counsel to the Company in any other applicable country in which rights would be distributed, in each case satisfactory to the Depositary, to the effect that the offering and sale of such securities to Holders and Beneficial Owners are exempt from, or do not require registration under, the provisions of the Securities Act or any other applicable laws. In the event that the Company, the Depositary or the Custodian shall be required to withhold and does withhold from any distribution of property (including rights) an amount on account of taxes and/or other governmental charges, the amount distributed to the Holders shall be reduced accordingly. In the event that the Depositary determines that any distribution in property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable to pay any such taxes and/or charges.
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There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to exercise rights on the same terms and conditions as the holders of Shares or be able to exercise such rights. Nothing herein shall obligate the Company to file any registration statement in respect of any rights or Shares or other securities to be acquired upon the exercise of such rights or otherwise to register or qualify the offer or sale of such rights or securities under the applicable law of any other jurisdiction for any purpose.
SECTION 4.5 Distributions Other Than Cash, Shares or Rights to Purchase Shares.
(a) Whenever the Company intends to distribute to the holders of Deposited Securities property other than cash, Shares or rights to purchase additional Shares, the Company shall give notice thereof to the Depositary at least 30 days prior to the proposed distribution and shall indicate whether or not it wishes such distribution to be made to Holders of ADSs. Upon receipt of a notice indicating that the Company wishes such distribution be made to Holders of ADSs, the Depositary shall determine whether such distribution to Holders is lawful and practicable. The Depositary shall not make such distribution unless (i) the Company shall have timely requested the Depositary to make such distribution to Holders, (ii) the Depositary shall have received satisfactory documentation within the terms of Section 5.7 hereof and (iii) the Depositary shall have determined that such distribution is lawful and reasonably practicable.
(b) Upon receipt of satisfactory documentation and the request of the Company to distribute property to Holders of ADSs and after making the requisite determinations set forth in (a) above, the Depositary may distribute the property so received to the Holders of record as of the ADS Record Date, in proportion to the number of ADSs held by such Holders respectively and in such manner as the Depositary may deem practicable for accomplishing such distribution (i) upon receipt of payment or net of the applicable fees and charges of, and expenses incurred by, the Depositary and (ii) net of any taxes and/or other governmental charges. The Depositary may dispose of all or a portion of the property so distributed and deposited, in such amounts and in such manner (including public or private sale) as the Depositary may deem practicable or necessary to satisfy any taxes (including applicable interest and penalties) and other governmental charges applicable to the distribution.
(c) If (i) the Company does not request the Depositary to make such distribution to Holders or requests the Depositary not to make such distribution to Holders, (ii) the Depositary does not receive satisfactory documentation within the terms of Section 5.7 hereof or (iii) the Depositary determines that all or a portion of such distribution is not reasonably practicable or feasible, the Depositary shall endeavor to sell or cause such property to be sold in a public or private sale, at such place or places and upon such terms as it may deem proper and shall distribute the net proceeds, if any, of such sale received by the Depositary (net of applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) to the Holders as of the ADS Record Date upon the terms of Section 4.1 hereof. If the Depositary is unable to sell such property, the Depositary may dispose of such property in any way it deems reasonably practicable under the circumstances for nominal or no consideration and Holders and Beneficial Owners shall have no rights thereto or arising therefrom.
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SECTION 4.6 Conversion of Foreign Currency. Whenever the Depositary or the Custodian shall receive Foreign Currency, by way of dividends or other distributions or the net proceeds from the sale of securities, property or rights, and in the judgment of the Depositary such Foreign Currency can at such time be converted on a practicable basis (by sale or in any other manner that it may determine in accordance with applicable law) into Dollars transferable to the United States and distributable to the Holders entitled thereto, the Depositary shall convert or cause to be converted, by sale or in any other manner that it may determine, such Foreign Currency into Dollars, and shall distribute such Dollars (net of any fees, expenses, taxes and/or other governmental charges incurred in the process of such conversion) in accordance with the terms of the applicable sections of this Deposit Agreement. If the Depositary shall have distributed warrants or other instruments that entitle the holders thereof to such Dollars, the Depositary shall distribute such Dollars to the holders of such warrants and/or instruments upon surrender thereof for cancellation, in either case without liability for interest thereon. Such distribution may be made upon an averaged or other practicable basis without regard to any distinctions among Holders on account of exchange restrictions, the date of delivery of any Receipt or otherwise.
In converting Foreign Currency, amounts received on conversion may be calculated at a rate which exceeds the number of decimal places used by the Depositary to report distribution rates (which in any case will not be less than two decimal places). Any excess amount may be retained by the Depositary as an additional cost of conversion, irrespective of any other fees and expenses payable or owing hereunder and shall not be subject to escheatment.
If such conversion or distribution can be effected only with the approval or license of any government or agency thereof, the Depositary may file such application for approval or license, if any, as it may deem necessary, practicable and at nominal cost and expense. Nothing herein shall obligate the Depositary to file or cause to be filed, or to seek effectiveness of any such application or license.
If at any time the Depositary shall determine that in its judgment the conversion of any Foreign Currency and the transfer and distribution of proceeds of such conversion received by the Depositary is not practical or lawful, or if any approval or license of any governmental authority or agency thereof that is required for such conversion, transfer and distribution is denied, or not obtainable at a reasonable cost, within a reasonable period or otherwise sought, the Depositary shall, in its sole discretion but subject to applicable laws and regulations, either (i) distribute the Foreign Currency (or an appropriate document evidencing the right to receive such Foreign Currency) received by the Depositary to the Holders entitled to receive such Foreign Currency or (ii) hold such Foreign Currency uninvested and without liability for interest thereon for the respective accounts of the Holders entitled to receive the same.
Holders and Beneficial Owners are directed to refer to Section 7.9 hereof for certain disclosure related to conversion of Foreign Currency.
SECTION 4.7 Fixing of Record Date. Whenever necessary in connection with any distribution (whether in cash, Shares, rights, or other distribution), or whenever for any reason the Depositary causes a change in the number of Shares that are represented by each American Depositary Share, or whenever the Depositary shall receive notice of any meeting of or solicitation of holders of Shares or other Deposited Securities, or whenever the Depositary shall find it necessary or convenient, the Depositary shall fix a record date (the ADS Record Date), as close as practicable to the record date fixed by the Company with respect to the Shares (if applicable), for the determination of the Holders who shall be entitled to receive such distribution, to give instructions for the exercise of voting rights at any such meeting, to give or withhold such consent, to receive such notice or solicitation or to otherwise take action or to exercise the rights of Holders with respect to such changed number of Shares represented by each American Depositary Share or for any other reason. Subject to applicable law and the provisions of Sections 4.1 through 4.6 hereof and to the other terms and conditions of this Deposit Agreement, only the Holders of record at the close of business in New York on such ADS Record Date shall be entitled to receive such distribution, to give such voting instructions, to receive such notice or solicitation, or otherwise take action.
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SECTION 4.8 Voting of Deposited Securities. Subject to the next sentence, as soon as practicable after receipt of notice of any meeting at which the holders of Deposited Securities are entitled to vote, or of solicitation of consents or proxies from holders of Deposited Securities, the Depositary shall fix the ADS Record Date in respect of such meeting or such solicitation of consents or proxies. The Depositary shall, if requested by the Company in writing in a timely manner (the Depositary having no obligation to take any further action if the request shall not have been received by the Depositary at least 30 Business Days prior to the date of such vote or meeting) and at the Companys expense, and provided no U.S. legal prohibitions exist, mail by regular, ordinary mail delivery (or by electronic mail or as otherwise may be agreed between the Company and the Depositary in writing from time to time) or otherwise distribute as soon as practicable after receipt thereof to Holders as of the ADS Record Date: (a) such notice of meeting or solicitation of consent or proxy; (b) a statement that the Holders at the close of business on the ADS Record Date will be entitled, subject to any applicable law, the provisions of this Deposit Agreement, the Companys Memorandum and Articles of Association and the provisions of or governing the Deposited Securities (which provisions, if any, shall be summarized in pertinent part by the Company), to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by such Holders American Depositary Shares; and (c) a brief statement as to the manner in which such voting instructions may be given to the Depositary, or in which instructions may be deemed to have been given in accordance with this Section 4.8, including an express indication that instructions may be given (or be deemed to have been given in accordance with the immediately following paragraph of this section if no instruction is received) to the Depositary to give a discretionary proxy to a person or persons designated by the Company. Voting instructions may be given only in respect of a number of American Depositary Shares representing an integral number of Deposited Securities. Upon the timely receipt of voting instructions of a Holder on the ADS Record Date in the manner specified by the Depositary, the Depositary shall endeavor, insofar as practicable and permitted under applicable law, the provisions of this Deposit Agreement, the Companys Memorandum and Articles of Association and the provisions of or governing the Deposited Securities, to vote or cause the Custodian to vote the Deposited Securities (in person or by proxy) represented by American Depositary Shares evidenced by such Receipt in accordance with such voting instructions.
In the event that (i) the Depositary timely receives voting instructions from a Holder which fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holders ADSs or (ii) no timely instructions are received by the Depositary from a Holder with respect to any of the Deposited Securities represented by the ADSs held by such Holder on the ADS Record Date, the Depositary shall (unless otherwise specified in the notice distributed to Holders) deem such Holder to have instructed the Depositary to give a discretionary proxy to a person designated by the Company with respect to such Deposited Securities and the Depositary shall give a discretionary proxy to a person designated by the Company to vote such Deposited Securities, provided, however, that no such instruction shall be deemed to have been given and no such discretionary proxy shall be given with respect to any matter as to which the Company informs the Depositary (and the Company agrees to provide such information as promptly as practicable in writing, if applicable) that (x) the Company does not wish to give such proxy, (y) the Company is aware or should reasonably be aware that substantial opposition exists from Holders against the outcome for which the person designated by the Company would otherwise vote or (z) the outcome for which the person designated by the Company would otherwise vote would materially and adversely affect the rights of holders of Deposited Securities, provided, further, that the Company will have no liability to any Holder or Beneficial Owner resulting from such notification.
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In the event that voting on any resolution or matter is conducted on a show of hands basis in accordance with the Memorandum and Articles of Association, the Depositary will refrain from voting and the voting instructions (or the deemed voting instructions, as set out above) received by the Depositary from Holders shall lapse. The Depositary will have no obligation to demand voting on a poll basis with respect to any resolution and shall have no liability to any Holder or Beneficial Owner for not having demanded voting on a poll basis.
Neither the Depositary nor the Custodian shall, under any circumstances exercise any discretion as to voting, and neither the Depositary nor the Custodian shall vote, attempt to exercise the right to vote, or in any way make use of for purposes of establishing a quorum or otherwise, the Deposited Securities represented by ADSs except pursuant to and in accordance with such written instructions from Holders, including the deemed instruction to the Depositary to give a discretionary proxy to a person designated by the Company. Deposited Securities represented by ADSs for which (i) no timely voting instructions are received by the Depositary from the Holder, or (ii) timely voting instructions are received by the Depositary from the Holder but such voting instructions fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holders ADSs, shall be voted in the manner provided in this Section 4.8. Notwithstanding anything else contained herein, and subject to applicable law, regulation and the Memorandum and Articles of Association, the Depositary shall, if so requested in writing by the Company, represent all Deposited Securities (whether or not voting instructions have been received in respect of such Deposited Securities from Holders as of the ADS Record Date) for the purpose of establishing quorum at a meeting of shareholders.
There can be no assurance that Holders or Beneficial Owners generally or any Holder or Beneficial Owner in particular will receive the notice described above with sufficient time to enable the Holder to return voting instructions to the Depositary in a timely manner.
Notwithstanding the above, save for applicable provisions of the law of the Cayman Islands, and in accordance with the terms of Section 5.3 hereof, the Depositary shall not be liable for any failure to carry out any instructions to vote any of the Deposited Securities or the manner in which such vote is cast or the effect of such vote.
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SECTION 4.9 Changes Affecting Deposited Securities. Upon any change in par value, split-up, subdivision, cancellation, consolidation or any other reclassification of Deposited Securities or upon any recapitalization, reorganization, amalgamation, merger or consolidation or sale of assets affecting the Company or to which it is otherwise a party, any securities which shall be received by the Depositary or the Custodian in exchange for, or in conversion of or replacement or otherwise in respect of, such Deposited Securities shall, to the extent permitted by law, be treated as new Deposited Securities under this Deposit Agreement and the Receipts shall, subject to the provisions of this Deposit Agreement and applicable law, evidence American Depositary Shares representing the right to receive such additional securities. Alternatively, the Depositary may, with the Companys approval, and shall, if the Company shall so request, subject to the terms of this Deposit Agreement and receipt of an Opinion of Counsel furnished at the Companys expense satisfactory to the Depositary (stating that such distributions are not in violation of any applicable laws or regulations), execute and deliver additional Receipts, as in the case of a stock dividend on the Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts. In either case, as well as in the event of newly deposited Shares, necessary modifications to the form of Receipt contained in Exhibit A and Exhibit B hereto, specifically describing such new Deposited Securities and/or corporate change, shall also be made. The Company agrees that it will, jointly with the Depositary, amend the Registration Statement on Form F-6 as filed with the Commission to permit the issuance of such new form of Receipt. Notwithstanding the foregoing, in the event that any security so received may not be lawfully distributed to some or all Holders, the Depositary may, with the Companys approval, and shall, if the Company requests, subject to receipt of an Opinion of Counsel (furnished at the Companys expense) satisfactory to the Depositary that such action is not in violation of any applicable laws or regulations, sell such securities at public or private sale, at such place or places and upon such terms as it may deem proper and may allocate the net proceeds of such sales (net of fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) 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 4.1 hereof. The Depositary shall not be responsible for (i) any failure to determine that it may be lawful or feasible to make such securities available to Holders in general or to any Holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale or (iii) any liability to the purchaser of such securities.
SECTION 4.10 Available Information. The Company is subject to the periodic reporting requirements of the Exchange Act applicable to foreign private issuers (as defined in Rule 405 of the Securities Act) and accordingly files certain information with the Commission. These reports and documents can be inspected and copied at the Commissions website at www.sec.gov or at the public reference facilities maintained by the Commission located at 100 F Street, N.E., Washington D.C. 20549, U.S.A.
SECTION 4.11 Reports. The Depositary shall make available during normal business hours on any Business Day for inspection by Holders at its Corporate Trust Office any reports and communications, including any proxy soliciting materials, received from the Company which are both received by the Depositary, the Custodian, or the nominee of either of them as the holder of the Deposited Securities and made generally available to the holders of such Deposited Securities by the Company. The Company agrees to provide to the Depositary, at the Companys expense, all such documents that it provides to the Custodian. Unless otherwise agreed in writing by the Company and the Depositary, the Depositary shall, at the expense of the Company and in accordance with Section 5.6 hereof, also mail to Holders by regular, ordinary mail delivery or by electronic transmission (if agreed by the Company and the Depositary) copies of notices and reports when furnished by the Company pursuant to Section 5.6 hereof.
SECTION 4.12 List of Holders. Promptly upon written request by the Company, the Depositary shall, at the expense of the Company, furnish to it a list, as of a recent date, of the names, addresses and holdings of American Depositary Shares by all persons in whose names Receipts are registered on the books of the Depositary.
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SECTION 4.13 Taxation; Withholding. The Depositary will, and will instruct the Custodian to, forward to the Company or its agents such information from its records as the Company may request to enable the Company or its agents to file necessary tax reports with governmental authorities or agencies. The Depositary, the Custodian or the Company and its agents may, but shall not be obligated to, file such reports as are necessary to reduce or eliminate applicable taxes on dividends and on other distributions in respect of Deposited Securities under applicable tax treaties or laws for the Holders and Beneficial Owners. Holders and Beneficial Owners of American Depositary Shares may be required from time to time, and in a timely manner to provide and/or file such proof of taxpayer status, residence and beneficial ownership (as applicable), to execute such certificates and to make such representations and warranties, or to provide any other information or documents, as the Depositary or the Custodian may deem necessary or proper to fulfill the Depositarys or the Custodians obligations under applicable law. The Holders and Beneficial Owners shall indemnify the Depositary, the Company, the Custodian, the Agents and their respective directors, officers, 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 by the Beneficial Owner or Holder or out of or in connection with any inaccuracy in or omission from any such proof, certificate, representation, warranty, information or document furnished by or on behalf of such Holder or Beneficial Owner. The obligations of Holders and Beneficial Owners under this Section 4.13 shall survive any transfer of Receipts, any surrender of Receipts and withdrawal of Deposited Securities or the termination of this Deposit Agreement.
The Company shall remit to the appropriate governmental authority or agency any amounts required to be withheld by the Company and owing to such governmental authority or agency. Upon any such withholding, the Company shall remit to the Depositary information, in a form reasonably satisfactory to the Depositary, about such taxes and/or governmental charges withheld or paid, and, if so requested, the tax receipt (or other proof of payment to the applicable governmental authority) therefor. The Depositary shall, to the extent required by U.S. law, report to Holders (i) any taxes withheld by it; (ii) any taxes withheld by the Custodian, subject to information being provided to the Depositary by the Custodian and (iii) any taxes withheld by the Company, subject to information being provided to the Depositary by the Company. The Depositary and the Custodian shall not be required to provide the Holders with any evidence of the remittance by the Company (or its agents) of any taxes withheld, or of the payment of taxes by the Company, except to the extent the evidence is provided by the Company to the Depositary. None of the Depositary, the Custodian or the Company shall be liable for the failure by any Holder or Beneficial Owner to obtain the benefits of credits on the basis of non-U.S. tax paid against such Holders or Beneficial Owners income tax liability.
In the event that the Depositary determines that any distribution in property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charge which the Depositary is obligated to withhold, the Depositary shall withhold the amount required to be withheld and may by public or private sale dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner as the Depositary deems necessary and practicable to pay such taxes and/or charges and the Depositary shall distribute the net proceeds of any such sale after deduction of such taxes and/or charges to the Holders entitled thereto in proportion to the number of American Depositary Shares held by them respectively.
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The Depositary is under no obligation to provide the Holders and Beneficial Owners with any information about the tax status of the Company. The Depositary shall not incur any liability for any tax consequences that may be incurred by Holders and Beneficial Owners on account of their ownership of the American Depositary Shares, including without limitation, tax consequences resulting from the Company (or any of its subsidiaries) being treated as a Passive Foreign Investment Company (as defined in the U.S. Internal Revenue Code of 1986, as amended and the regulations issued thereunder) or otherwise.
ARTICLE V.
THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY
SECTION 5.1 Maintenance of Office and Transfer Books by the Registrar. Until termination of this Deposit Agreement in accordance with its terms, the Depositary or if a Registrar for the Receipts shall have been appointed, the Registrar shall maintain in the Borough of Manhattan, the City of New York, an office and facilities for the execution and delivery, registration, registration of transfers, combination and split-up of Receipts, the surrender of Receipts and the Delivery and withdrawal of Deposited Securities in accordance with the provisions of this Deposit Agreement.
The Depositary or the Registrar as applicable, shall keep books for the registration of Receipts and transfers of Receipts which at all reasonable times shall be open for inspection by the Company and by the Holders of such Receipts, provided that such inspection shall not be, to the Depositarys or the Registrars knowledge, for the purpose of communicating with Holders of such Receipts in the interest of a business or object other than the business of the Company or other than a matter related to this Deposit Agreement or the Receipts.
The Depositary or the Registrar, as applicable, may close the transfer books with respect to the Receipts, at any time and from time to time, when deemed necessary or advisable by it in connection with the performance of its duties hereunder, or at the reasonable written request of the Company.
If any Receipts or the American Depositary Shares evidenced thereby are listed on one or more stock exchanges or automated quotation systems in the United States, the Depositary shall act as Registrar or appoint a Registrar or one or more co-registrars for registration of Receipts and transfers, combinations and split-ups, and to countersign such Receipts in accordance with any requirements of such exchanges or systems. Such Registrar or co-registrars may be removed and a substitute or substitutes appointed by the Depositary.
If any Receipts or the American Depositary Shares evidenced thereby are listed on one or more securities exchanges, markets or automated quotation systems, (i) the Depositary shall be entitled to, and shall, take or refrain from taking such action(s) as it may deem necessary or appropriate to comply with the requirements of such securities exchange(s), market(s) or automated quotation system(s) applicable to it, notwithstanding any other provision of this Deposit Agreement; and (ii) upon the reasonable request of the Depositary, the Company shall provide the Depositary such information and assistance as may be reasonably necessary for the Depositary to comply with such requirements, to the extent that the Company may lawfully do so.
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Each Registrar and co-registrar appointed under this Section 5.1 shall give notice in writing to the Depositary accepting such appointment and agreeing to be bound by the applicable terms of the Deposit Agreement.
SECTION 5.2 Exoneration. None of the Depositary, the Custodian or the Company shall be obligated to do or perform any act which is inconsistent with the provisions of this Deposit Agreement or shall incur any liability to Holders, Beneficial Owners or any third parties (i) if the Depositary, the Custodian or the Company or their respective controlling persons or agents (including without limitation, the Agents) shall be prevented or forbidden from, or delayed in, doing or performing any act or thing required by the terms of this Deposit Agreement, by reason of any provision of any present or future law or regulation of the United States or any state thereof, the Cayman Islands or any other country, or of any other governmental authority or regulatory authority or stock exchange, or on account of the possible criminal or civil penalties or restraint, or by reason of any provision, present or future, of the Memorandum and Articles of Association or any provision of or governing any Deposited Securities, or by reason of any act of God or war or other circumstances beyond its control (including, without limitation, nationalization, expropriation, currency restrictions, work stoppage, strikes, civil unrest, revolutions, rebellions, explosions and computer failure), (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in this Deposit Agreement or in the Memorandum and Articles of Association or provisions of or governing Deposited Securities, (iii) for any action or inaction of the Depositary, the Custodian or the Company or their respective controlling persons or agents (including without limitation, the Agents) in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, any Beneficial Owner or authorized representative thereof, or any other person believed by it in good faith to be competent to give such advice or information, (iv) for the inability by a Holder or Beneficial Owner to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of this Deposit Agreement, made available to Holders of American Depositary Shares or (v) for any special, consequential, indirect or punitive damages for any breach of the terms of this Deposit Agreement or otherwise.
The Depositary, its controlling persons, its agents (including without limitation, the Agents), the Custodian and the Company, its controlling persons and its agents may rely and shall be protected in acting upon any written notice, request, opinion or other document believed by it to be genuine and to have been signed or presented by the proper party or parties.
No disclaimer of liability under the Securities Act or the Exchange Act is intended by any provision of this Deposit Agreement.
SECTION 5.3 Standard of Care. The Company and the Depositary and their respective directors, officers, Affiliates, employees and agents (including without limitation, the Agents) assume no obligation and shall not be subject to any liability under this Deposit Agreement or any Receipts to any Holder(s) or Beneficial Owner(s) or other persons, except in accordance with Section 5.8 hereof, provided, that the Company and the Depositary and their respective directors, officers, Affiliates, employees and agents (including without limitation, the Agents) agree to perform their respective obligations specifically set forth in this Deposit Agreement or the applicable ADRs without gross negligence or willful misconduct.
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Without limitation of the foregoing, neither the Depositary, nor the Company, nor any of their respective controlling persons, directors, officers, affiliates, employees or agents (including without limitation, the Agents), shall be under any obligation to appear in, prosecute or defend any action, suit or other proceeding in respect of any Deposited Securities or in respect of the Receipts, which in its opinion may involve it in expense or liability, unless indemnity satisfactory to it against all expenses (including fees and disbursements of counsel) and liabilities be furnished as often as may be required (and no Custodian shall be under any obligation whatsoever with respect to such proceedings, the responsibility of the Custodian being solely to the Depositary).
The Depositary and its directors, officers, affiliates, employees and agents (including without limitation, the 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 effects of any vote. The Depositary shall not incur any liability for any failure to determine that any distribution or action may be lawful or reasonably practicable, for the content of any information submitted to it by the Company for distribution to the Holders or for any inaccuracy of any translation thereof, for any investment risk associated with acquiring an interest in the Deposited Securities, for the validity or worth of the Deposited Securities or for any tax consequences that may result from the ownership of ADSs, Shares or Deposited Securities, for the credit-worthiness of any third party, for allowing any rights to lapse upon the terms of this Deposit Agreement or for the failure or timeliness of any notice from the Company, or for any action or non action by it in reliance upon the opinion, advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder or any other person believed by it in good faith to be competent to give such advice or information. The Depositary and its agents (including without limitation, the Agents) shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without gross negligence or willful misconduct while it acted as Depositary.
SECTION 5.4 Resignation and Removal of the Depositary; Appointment of Successor Depositary. The Depositary may at any time resign as Depositary hereunder by written notice of resignation delivered to the Company, such resignation to be effective on the earlier of (i) the 90th day after delivery thereof to the Company (whereupon the Depositary shall, in the event no successor depositary has been appointed by the Company, be entitled to take the actions contemplated in Section 6.2 hereof) and (ii) the appointment by the Company of a successor depositary and its acceptance of such appointment as hereinafter provided, save that, any amounts, fees, costs or expenses owed to the Depositary hereunder or in accordance with any other agreements otherwise agreed in writing between the Company and the Depositary from time to time shall be paid to the Depositary prior to such resignation.
The Company shall use reasonable efforts to appoint such successor depositary, and give notice to the Depositary of such appointment, not more than 90 days after delivery by the Depositary of written notice of resignation as provided in this Section 5.4. In the event that notice of the appointment of a successor depositary is not provided by the Company in accordance with the preceding sentence, the Depositary shall be entitled to take the actions contemplated in Section 6.2 hereof.
The Depositary may at any time be removed by the Company by written notice of such removal, which removal shall be effective on the later of (i) the 90th day after delivery thereof to the Depositary (whereupon the Depositary shall be entitled to take the actions contemplated in Section 6.2 hereof if a successor depositary has not been appointed), and (ii) the appointment by the Company of a successor depositary and its acceptance of such appointment as hereinafter provided, save that, any amounts, fees, costs or expenses owed to the Depositary hereunder or in accordance with any other agreements otherwise agreed in writing between the Company and the Depositary from time to time shall be paid to the Depositary prior to such removal.
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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 be required by the Company to execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed (except as required by applicable law), shall become fully vested with all the rights, powers, duties and obligations of its predecessor. The predecessor depositary, upon payment of all sums due to it and on the written request of the Company, shall (i) execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder (other than as contemplated in Sections 5.8 and 5.9 hereof), (ii) duly assign, transfer and deliver all right, title and interest to the Deposited Securities to such successor, and (iii) deliver to such successor a list of the Holders of all outstanding Receipts and such other information relating to Receipts and Holders thereof as the successor may reasonably request. Any such successor depositary shall promptly mail notice of its appointment to such Holders.
Any corporation into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act and, notwithstanding anything to the contrary in this Deposit Agreement, the Depositary may assign or otherwise transfer all or any of its rights and benefits under this Deposit Agreement (including any cause of action arising in connection with it) to Deutsche Bank AG or any branch thereof or any entity which is a direct or indirect subsidiary or other affiliate of Deutsche Bank AG.
SECTION 5.5 The Custodian. The Custodian or its successors in acting hereunder shall be subject at all times and in all respects to the direction of the Depositary for the Deposited Securities for which the Custodian acts as custodian and shall be responsible solely to it. If any Custodian resigns or is discharged from its duties hereunder with respect to any Deposited Securities and no other Custodian has previously been appointed hereunder, the Depositary shall promptly appoint a substitute custodian. The Depositary shall require such resigning or discharged Custodian to deliver the Deposited Securities held by it, together with all such records maintained by it as Custodian with respect to such Deposited Securities as the Depositary may request, to the Custodian designated by the Depositary. Whenever the Depositary determines, in its discretion, that it is appropriate to do so, it may appoint an additional entity to act as Custodian with respect to any Deposited Securities, or discharge the Custodian with respect to any Deposited Securities and appoint a substitute custodian, which shall thereafter be Custodian hereunder with respect to the Deposited Securities. After any such change, the Depositary shall give notice thereof in writing to all Holders.
Upon the appointment of any successor depositary, any Custodian then acting hereunder shall, unless otherwise instructed by the Depositary, continue to be the Custodian of the Deposited Securities without any further act or writing and shall be subject to the direction of the successor depositary. The successor depositary so appointed shall, nevertheless, on the written request of any Custodian, execute and deliver to such Custodian all such instruments as may be proper to give to such Custodian full and complete power and authority to act on the direction of such successor depositary.
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SECTION 5.6 Notices and Reports. On or before the first date on which the Company gives notice, by publication or otherwise, of any meeting of holders of Shares or other Deposited Securities, or of any adjourned meeting of such holders, or of the taking of any action by such holders other than at a meeting, or of the taking of any action in respect of any cash or other distributions or the offering of any rights in respect of Deposited Securities, the Company shall transmit to the Depositary and the Custodian a copy of the notice thereof in English but otherwise in the form given or to be given to holders of Shares or other Deposited Securities. The Company shall also furnish to the Custodian and the Depositary a summary, in English, of any applicable provisions or proposed provisions of the Memorandum and Articles of Association that may be relevant or pertain to such notice of meeting or be the subject of a vote thereat.
The Company will also transmit to the Depositary (a) English language versions of the other notices, reports and communications which are made generally available by the Company to holders of its Shares or other Deposited Securities and (b) English language versions of the Companys annual and other reports prepared in accordance with the applicable requirements of the Commission. The Depositary shall arrange, at the request of the Company and at the Companys expense, for the mailing of copies thereof to all Holders, or by any other means as agreed between the Company and the Depositary (at the Companys expense) or make such notices, reports and other communications available for inspection by all Holders, provided, that, the Depositary shall have received evidence sufficiently satisfactory to it, including in the form of an Opinion of Counsel regarding U.S. law or of any other applicable jurisdiction, furnished at the expense of the Company, as the Depositary reasonably requests, that the distribution of such notices, reports and any such other communications to Holders from time to time is valid and does not or will not infringe any local, U.S. or other applicable jurisdiction regulatory restrictions or requirements if so distributed and made available to Holders. The Company will timely provide the Depositary with the quantity of such notices, reports, and communications, as requested by the Depositary from time to time, in order for the Depositary to effect such mailings. The Company has delivered to the Depositary and the Custodian a copy of the Memorandum and Articles of Association along with the provisions of or governing the Shares and any other Deposited Securities issued by the Company or any Affiliate of the Company, in connection with the Shares, in each case, to the extent not in English, along with a certified English translation thereof, and promptly upon any amendment thereto or change therein, the Company shall deliver to the Depositary and the Custodian a copy of such amendment thereto or change therein, to the extent not in English, along with a certified English translation thereof. The Depositary may rely upon such copy for all purposes of this Deposit Agreement.
The Depositary will make available, at the expense of the Company, a copy of any such notices, reports or communications issued by the Company and delivered to the Depositary for inspection by the Holders of the Receipts evidencing the American Depositary Shares representing such Shares governed by such provisions at the Depositarys Corporate Trust Office, at the office of the Custodian and at any other designated transfer office.
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SECTION 5.7 Issuance of Additional Shares, ADSs etc. The Company agrees that in the event it or any of its Affiliates proposes (i) an issuance, sale or distribution of additional Shares, (ii) an offering of rights to subscribe for Shares or other Deposited Securities, (iii) an issuance of securities convertible into or exchangeable for Shares, (iv) an issuance of rights to subscribe for securities convertible into or exchangeable for Shares, (v) an elective dividend of cash or Shares, (vi) a redemption of Deposited Securities, (vii) a meeting of holders of Deposited Securities, or solicitation of consents or proxies, relating to any reclassification of securities, merger, subdivision, amalgamation or consolidation or transfer of assets, (viii) any reclassification, recapitalization, reorganization, merger, amalgamation, consolidation or sale of assets which affects the Deposited Securities or (ix) a distribution of property other than cash, Shares or rights to purchase additional Shares it will obtain U.S. legal advice and take all steps necessary to ensure that the application of the proposed transaction to Holders and Beneficial Owners does not violate the registration provisions of the Securities Act, or any other applicable laws (including, without limitation, the Investment Company Act of 1940, as amended, the Exchange Act or the securities laws of the states of the United States). In support of the foregoing, the Company will furnish to the Depositary at its request, at the Companys expense, (a) a written opinion of U.S. counsel (satisfactory to the Depositary) stating whether or not application of such transaction to Holders and Beneficial Owners (1) requires a registration statement under the Securities Act to be in effect or (2) is exempt from the registration requirements of the Securities Act and/or (3) dealing with such other issues requested by the Depositary; (b) a written opinion of Cayman Islands counsel (satisfactory to the Depositary) stating that (1) making the transaction available to Holders and Beneficial Owners does not violate the laws or regulations of the Cayman Islands and (2) all requisite regulatory and corporate consents and approvals have been obtained in the Cayman Islands; and (c) as the Depositary may request, a written Opinion of Counsel in any other jurisdiction in which Holders or Beneficial Owners reside to the effect that making the transaction available to such Holders or Beneficial Owners does not violate the laws or regulations of such jurisdiction as well as certificates of the Company as to such matters as the Depositary may deem necessary or appropriate in the circumstances. If the filing of a registration statement is required, the Depositary shall not have any obligation to proceed with the transaction unless it shall have received evidence reasonably satisfactory to it that such registration statement has been declared effective and that such distribution is in accordance with all applicable laws or regulations. If, being advised by counsel, the Company determines that a transaction is required to be registered under the Securities Act, the Company will either (i) register such transaction to the extent necessary, (ii) alter the terms of the transaction to avoid the registration requirements of the Securities Act or (iii) direct the Depositary to take specific measures, in each case as contemplated in this Deposit Agreement, to prevent such transaction from violating 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 Shares or other Deposited Securities, either upon original issuance or upon a sale of Shares or other Deposited Securities previously issued and reacquired by the Company or by any such Affiliate, or (ii) issue additional Shares, rights to subscribe for such Shares, securities convertible into or exchangeable for Shares or rights to subscribe for such securities, unless such transaction and the securities issuable in such transaction are exempt from registration under the Securities Act or have been registered under the Securities Act (and such registration statement has been declared effective).
Notwithstanding anything else contained in this Deposit Agreement, nothing in this Deposit Agreement shall be deemed to obligate the Company to file any registration statement in respect of any proposed transaction.
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SECTION 5.8 Indemnification. The Company agrees to indemnify the Depositary, any Custodian and each of their respective directors, officers, employees, agents (including without limitation, the Agents) and Affiliates against, and hold each of them harmless from, any losses, liabilities, taxes, costs, claims, judgments, proceedings, actions, demands and any charges or expenses of any kind whatsoever (including, but not limited to, reasonable fees and expenses of counsel together with, in each case, value added tax and any similar tax charged or otherwise imposed in respect thereof) (collectively referred to as Losses) which the Depositary or any agent (including without limitation, the Agents) thereof may incur or which may be made against it as a result of or in connection with its appointment or the exercise of its powers and duties under this Agreement or that may arise (a) out of or in connection with any offer, issuance, sale, resale, transfer, deposit or withdrawal of Receipts, American Depositary Shares, the Shares, or other Deposited Securities, as the case may be, (b) out of or in connection with any offering documents in respect thereof or (c) out of or in connection with 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 American Depositary Shares, the Shares, or any Deposited Securities, in any such case (i) by the Depositary, the Custodian or any of their respective directors, officers, employees, agents (including without limitation, the Agents) and Affiliates, except to the extent any such Losses arise out of the gross negligence or wilful misconduct of any of them, or (ii) by the Company or any of its directors, officers, employees, agents and Affiliates.
The Depositary agrees to indemnify the Company and hold it harmless from any Losses which may arise out of acts performed or omitted to be performed by the Depositary arising out of its gross negligence or wilful misconduct. Notwithstanding the above, in no event shall the Depositary or any of its directors, officers, employees, agents (including without limitation, the Agents) and/or Affiliates be liable for any special, consequential, indirect or punitive damages to the Company, Holders, Beneficial Owners or any other person.
Any person seeking indemnification hereunder (an Indemnified Person) shall notify the person from whom it is seeking indemnification (the Indemnifying Person) of the commencement of any indemnifiable action or claim promptly after such Indemnified Person becomes aware of such commencement (provided that the failure to make such notification shall not affect such Indemnified Persons rights to indemnification except to the extent the Indemnifying Person is materially prejudiced by such failure) and shall consult in good faith with the Indemnifying Person as to the conduct of the defense of such action or claim that may give rise to an indemnity hereunder, which defense shall be reasonable under the circumstances. No Indemnified Person shall compromise or settle any action or claim that may give rise to an indemnity hereunder without the consent of the Indemnifying Person, which consent shall not be unreasonably withheld.
The obligations set forth in this Section shall survive the termination of this Deposit Agreement and the succession or substitution of any party hereto.
SECTION 5.9 Fees and Charges of Depositary. The Company, the Holders, the Beneficial Owners, and persons depositing Shares or surrendering ADSs for cancellation and withdrawal of Deposited Securities shall be required to pay to the Depositary the Depositarys fees and related charges identified as payable by them respectively as provided for under Article (9) of the Receipt. All fees and charges so payable may, at any time and from time to time, be changed by agreement between the Depositary and the Company, but, in the case of fees and charges payable by Holders and Beneficial Owners, only in the manner contemplated in Section 6.1 hereof. The Depositary shall provide, without charge, a copy of its latest fee schedule to anyone upon request.
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The Depositary and the Company may reach separate agreement in relation to the payment of any additional remuneration to the Depositary in respect of any exceptional duties which the Depositary finds necessary or desirable and agreed by both parties in the performance of its obligations hereunder and in respect of the actual costs and expenses of the Depositary in respect of any notices required to be given to the Holders in accordance with Article (20) of the Receipt.
In connection with any payment by the Company to the Depositary:
(i) | all fees, taxes, duties, charges, costs and expenses which are payable by the Company shall be paid or be procured to be paid by the Company (and any such amounts which are paid by the Depositary shall be reimbursed to the Depositary by the Company upon demand therefor); |
(ii) | such payment shall be subject to all necessary applicable exchange control and other consents and approvals having been obtained. The Company undertakes to use its reasonable endeavours to obtain all necessary approvals that are required to be obtained by it in this connection; and |
(iii) | the Depositary may request, in its sole but reasonable discretion after reasonable consultation with the Company, an Opinion of Counsel regarding U.S. law, the laws of the Cayman Islands or of any other relevant jurisdiction, to be furnished at the expense of the Company, if at any time it deems it necessary to seek such an Opinion of Counsel regarding the validity of any action to be taken or instructed to be taken under this Agreement. |
The Company agrees to promptly pay to the Depositary such other fees, charges and expenses and to reimburse the Depositary for such out-of-pocket expenses as the Depositary and the Company may agree to in writing from time to time. Responsibility for payment of such charges may at any time and from time to time be changed by agreement between the Company and the Depositary.
All payments by the Company to the Depositary under this Section 5.9 shall be paid without set-off or counterclaim, and free and clear of and without deduction or withholding for or on account of, any present or future taxes, levies, imports, duties, fees, assessments or other charges of whatever nature, imposed by the Cayman Islands or by any department, agency or other political subdivision or taxing authority thereof or therein, and all interest, penalties or similar liabilities with respect thereto.
The right of the Depositary to receive payment of fees, charges and expenses as provided above shall survive the termination of this Deposit Agreement. As to any Depositary, upon the resignation or removal of such Depositary as described in Section 5.4 hereof, such right shall extend for those fees, charges and expenses incurred prior to the effectiveness of such resignation or removal.
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SECTION 5.10 Restricted Securities Owners/Ownership Restrictions. From time to time or upon request of the Depositary, the Company shall provide to the Depositary a list setting forth, to the actual knowledge of the Company, those persons or entities who beneficially own Restricted Securities and the Company shall update such list on a regular basis. The Depositary may rely on such list or update but shall not be liable for any action or omission made in reliance thereon. The Company agrees to advise in writing each of the persons or entities who, to the knowledge of the Company, holds Restricted Securities that such Restricted Securities are ineligible for deposit hereunder (except under the circumstances contemplated in Section 2.11) and, to the extent practicable, shall require each of such persons to represent in writing that such person will not deposit Restricted Securities hereunder (except under the circumstances contemplated in Section 2.11). Holders and Beneficial Owners shall comply with any limitations on ownership of Shares under the Memorandum and Articles of Association or applicable Cayman Islands law as if they held the number of Shares their ADSs represent. The Company shall, in accordance with Article (24) of the Receipt, inform Holders and Beneficial Owners and the Depositary of any other limitations on ownership of Shares that the Holders and Beneficial Owners may be subject to by reason of the number of ADSs held under the Articles of Association or applicable Cayman Islands law, as such restrictions may be in force from time to time.
The Company may, in its sole discretion, but subject to applicable law, instruct the Depositary to take action with respect to the ownership interest of any Holder or Beneficial Owner pursuant to the Memorandum and Articles of Association, including but not limited to, the removal or limitation of voting rights or the mandatory sale or disposition on behalf of a Holder or Beneficial Owner of the Shares represented by the ADRs held by such Holder or Beneficial Owner in excess of such limitations, if and to the extent such disposition is permitted by applicable law and the Memorandum and Articles of Association; provided that any such measures are practicable and legal and can be undertaken without undue burden or expense, and provided further the Depositarys agreement to the foregoing is conditional upon it being advised of any applicable changes in the Memorandum and Articles of Association. The Depositary shall have no liability for any actions taken in accordance with such instructions.
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ARTICLE VI.
AMENDMENT AND TERMINATION
SECTION 6.1 Amendment/Supplement. Subject to the terms and conditions of this Section 6.1 and applicable law, the Receipts outstanding at any time, the provisions of this Deposit Agreement and the form of Receipt attached hereto and to be issued under the terms hereof may at any time and from time to time be amended or supplemented by written agreement between the Company and the Depositary in any respect which they may deem necessary or desirable and not materially prejudicial to the Holders without the consent of the Holders or Beneficial Owners. Any amendment or supplement which shall impose or increase any fees or charges (other than charges in connection with foreign exchange control regulations, and taxes and/or other governmental charges, delivery and other such expenses payable by Holders or Beneficial Owners), or which shall otherwise materially prejudice any substantial existing right of Holders or Beneficial Owners, shall not, however, become effective as to outstanding Receipts until 30 days after notice of such amendment or supplement shall have been given to the Holders of outstanding Receipts. Notice of any amendment to the Deposit Agreement or form of Receipts shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders and Beneficial Owners to retrieve or receive the text of such amendment (i.e., upon retrieval from the Commissions, the Depositarys or the Companys website or upon request from the Depositary).The parties hereto agree that any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the American Depositary Shares to be registered on Form F-6 under the Securities Act or (b) the American Depositary Shares or the Shares to be traded solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to materially prejudice any substantial rights of Holders or Beneficial Owners. Every Holder and Beneficial Owner at the time any amendment or supplement so becomes effective shall be deemed, by continuing to hold such American Depositary Share or Shares, to consent and agree to such amendment or supplement and to be bound by the Deposit Agreement as amended and supplemented thereby. In no event shall any amendment or supplement impair the right of the Holder to surrender such Receipt and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Notwithstanding the foregoing, if any governmental body should adopt new laws, rules or regulations which would require amendment or supplement of the Deposit Agreement to ensure compliance therewith, the Company and the Depositary may amend or supplement the Deposit Agreement and the Receipt at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the Deposit Agreement in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance with such laws, rules or regulations.
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SECTION 6.2 Termination. The Depositary shall, at any time at the written direction of the Company, terminate this Deposit Agreement by mailing notice of such termination to the Holders of all Receipts then outstanding at least 90 days prior to the date fixed in such notice for such termination, provided that, the Depositary shall be reimbursed for any amounts, fees, costs or expenses owed to it in accordance with the terms of this Deposit Agreement and in accordance with any other agreements as otherwise agreed in writing between the Company and the Depositary from time to time, prior to such termination shall take effect. If 90 days shall have expired after (i) the Depositary shall have delivered to the Company a written notice of its election to resign, or (ii) the Company shall have delivered to the Depositary a written notice of the removal of the Depositary, and in either case a successor depositary shall not have been appointed and accepted its appointment as provided in Section 5.4 hereof, the Depositary may terminate this Deposit Agreement by mailing notice of such termination to the Holders of all Receipts then outstanding at least 30 days prior to the date fixed for such termination. On and after the date of termination of this Deposit Agreement, each Holder will, upon surrender of such Receipt at the Corporate Trust Office of the Depositary, upon the payment of the charges of the Depositary for the surrender of Receipts referred to in Section 2.6 hereof and subject to the conditions and restrictions therein set forth, and upon payment of any applicable taxes and/or governmental charges, be entitled to Delivery, to him or upon his order, of the amount of Deposited Securities represented by such Receipt. If any Receipts shall remain outstanding after the date of termination of this Deposit Agreement, the Registrar thereafter shall discontinue the registration of transfers of Receipts, and the Depositary shall suspend the distribution of dividends to the Holders thereof, and shall not give any further notices or perform any further acts under this Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights or other property as provided in this Deposit Agreement, and shall continue to Deliver Deposited Securities, subject to the conditions and restrictions set forth in Section 2.6 hereof, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary (after deducting, or charging, as the case may be, in each case, the charges of the Depositary for the surrender of a Receipt, any expenses for the account of the Holder in accordance with the terms and conditions of this Deposit Agreement and any applicable taxes and/or governmental charges or assessments). At any time after the expiration of six months from the date of termination of this Deposit Agreement, the Depositary may sell the Deposited Securities then held hereunder and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it hereunder, in an unsegregated account, without liability for interest for the pro rata benefit of the Holders of Receipts whose Receipts have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under this Deposit Agreement with respect to the Receipts and the Shares, Deposited Securities and American Depositary Shares, except to account for such net proceeds and other cash (after deducting, or charging, as the case may be, in each case, the charges of the Depositary for the surrender of a Receipt, any expenses for the account of the Holder in accordance with the terms and conditions of this Deposit Agreement and any applicable taxes and/or governmental charges or assessments). Upon the termination of this Deposit Agreement, the Company shall be discharged from all obligations under this Deposit Agreement except for its obligations to the Depositary hereunder. The obligations under the terms of the Deposit Agreement and Receipts of Holders and Beneficial Owners of ADSs outstanding as of the effective date of any termination shall survive such effective date of termination and shall be discharged only when the applicable ADSs are presented by their Holders to the Depositary for cancellation under the terms of the Deposit Agreement and the Holders have each satisfied any and all of their obligations hereunder (including, but not limited to, any payment and/or reimbursement obligations which relate to prior to the effective date of termination but which payment and/or reimbursement is claimed after such effective date of termination).
Notwithstanding anything contained in the Deposit Agreement or any ADR, in connection with the termination of the Deposit Agreement, the Depositary may, independently and without the need for any action by the Company, make available to Holders of ADSs a means to withdraw the Deposited Securities represented by their ADSs and to direct the deposit of such Deposited Securities into an unsponsored American depositary shares program established by the Depositary, upon such terms and conditions as the Depositary may deem reasonably appropriate, subject however, in each case, to satisfaction of the applicable registration requirements by the unsponsored American depositary shares program under the Securities Act, and to receipt by the Depositary of payment of the applicable fees and charges of, and reimbursement of the applicable expenses incurred by, the Depositary.
ARTICLE VII.
MISCELLANEOUS
SECTION 7.1 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 together shall constitute one and the same agreement. Copies of this Deposit Agreement shall be maintained with the Depositary and shall be open to inspection by any Holder during business hours.
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SECTION 7.2 No Third-Party Beneficiaries. This Deposit Agreement is for the exclusive benefit of the parties hereto (and their successors) and shall not be deemed to give any legal or equitable right, remedy or claim whatsoever to any other person, except to the extent specifically set forth in this Deposit Agreement. Nothing in this Deposit Agreement shall be deemed to give rise to a partnership or joint venture among the parties hereto nor establish a fiduciary or similar relationship among the parties. The parties hereto acknowledge and agree that (i) the Depositary and its Affiliates may at any time have multiple banking relationships with the Company and its Affiliates, (ii) the Depositary and its Affiliates may be engaged at any time in transactions in which parties adverse to the Company or the Holders or Beneficial Owners may have interests and (iii) nothing contained in this Agreement shall (a) preclude the Depositary or any of its Affiliates from engaging in such transactions or establishing or maintaining such relationships, or (b) obligate the Depositary or any of its Affiliates to disclose such transactions or relationships or to account for any profit made or payment received in such transactions or relationships.
SECTION 7.3 Severability. In case any one or more of the provisions contained in this Deposit Agreement or in the Receipts should be or become invalid, illegal or unenforceable in any respect, the validity, legality and enforceability of the remaining provisions contained herein or therein shall in no way be affected, prejudiced or disturbed thereby.
SECTION 7.4 Holders and Beneficial Owners as Parties; Binding Effect. The Holders and Beneficial Owners from time to time of American Depositary Shares shall be parties to the Deposit Agreement and shall be bound by all of the terms and conditions hereof and of any Receipt by acceptance hereof or any beneficial interest therein.
SECTION 7.5 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 first-class mail, air courier or cable, telex, facsimile transmission or electronic transmission, confirmed by letter, addressed to 6/F, No.6 Building, No.500 Shengxia Road, Pudong New Area District, Shanghai, Peoples Republic of China , Attention: Chief Executive Officer or to any other address which the Company may specify in writing to the Depositary or at which it may be effectively given such notice in accordance with applicable law.
Any and all notices to be given to the Depositary shall be deemed to have been duly given if personally delivered or sent by first-class mail, air courier or cable, telex, facsimile transmission or by electronic transmission (if agreed by the Company and the Depositary), at the Companys expense, unless otherwise agreed in writing between the Company and the Depositary, confirmed by letter, addressed to Deutsche Bank Trust Company Americas, 60 Wall Street, New York, New York 10005, USA, Attention: ADR Department, telephone: +1 212 250-9100, facsimile: + 1 212 797 0327 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 first-class mail or cable, telex, facsimile transmission or by electronic transmission (if agreed by the Company and the Depositary), at the Companys expense, unless otherwise agreed in writing between the Company and the Depositary, addressed to such Holder at the address of such Holder as it appears on the transfer books for Receipts of the Depositary, or, if such Holder shall have filed with the Depositary a written request that notices intended for such Holder be mailed to some other address, at the address specified in such request. Notice to Holders shall be deemed to be notice to Beneficial Owners for all purposes of this Deposit Agreement.
Delivery of a notice sent by mail, air courier or cable, telex, facsimile or electronic transmission shall be deemed to be effective at the time when a duly addressed letter containing the same (or a confirmation thereof in the case of a cable, telex, facsimile or electronic transmission) is deposited, postage prepaid, in a post-office letter box or delivered to an air courier service. The Depositary or the Company may, however, act upon any cable, telex, facsimile or electronic transmission received by it from the other or from any Holder, notwithstanding that such cable, telex, facsimile or electronic transmission shall not subsequently be confirmed by letter as aforesaid, as the case may be.
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SECTION 7.6 Governing Law and Jurisdiction. This Deposit Agreement and the Receipts shall be interpreted in accordance with, and all rights hereunder and thereunder and provisions hereof and thereof shall be governed by, the laws of the State of New York without reference to the principles of choice of law thereof. Subject to the Depositarys rights under the third paragraph of this Section 7.6, the Company and the Depositary agree that the federal or state courts in the City of New York shall have exclusive jurisdiction to hear and determine any suit, action or proceeding and to settle any dispute between them that may arise out of or in connection with this Deposit Agreement and, for such purposes, each irrevocably submits to the exclusive jurisdiction of such courts. Notwithstanding the above, the parties hereto agree that any judgment and/or order from any such New York court can be enforced in any court having jurisdiction thereof. The Company hereby irrevocably designates, appoints and empowers Cogency Global Inc., (the Process Agent), now at 122 East 42nd Street, 18th Floor New York, NY 10168, United States, as its authorized agent to receive and accept for and on its behalf, and on behalf of its properties, assets and revenues, service by mail 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 federal or state court as described in the preceding sentence or in the next paragraph of this Section 7.6. If for any reason the Process Agent shall cease to be available to act as such, the Company agrees to designate a new agent in the City of New York on the terms and for the purposes of this Section 7.6 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 suit, action or proceeding against the Company, by service by mail of a copy thereof upon the Process Agent (whether or not the appointment of such Process Agent shall for any reason prove to be ineffective or such Process Agent shall fail to 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 7.5 hereof. The Company agrees that the failure of the Process 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 actions, suits or proceedings brought in any court as provided in this Section 7.6, 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.
The Company, the Depositary and by holding an American Depositary Share (or interest therein) Holders and Beneficial Owners each agree that, notwithstanding the foregoing, with regard to any claim or dispute or difference of whatever nature between or involving the parties hereto arising directly or indirectly from the relationship created by this Deposit Agreement, the Depositary, in its sole discretion, shall be entitled to refer such dispute or difference for final settlement by arbitration (Arbitration) in accordance with the Commercial Arbitration Rules of the American Arbitration Association (the Rules) then in force. The arbitration shall be conducted by three arbitrators, one nominated by the Depositary, one nominated by the Company, and one nominated by the two party-appointed arbitrators within 30 calendar days of the confirmation of the nomination of the second arbitrator. If any arbitrator has not been nominated within the time limits specified herein and in the Rules, then such arbitrator shall be appointed by the American Arbitration Association in accordance with the Rules. Judgment upon the award rendered by the arbitrators may be enforced in any court having jurisdiction thereof. The seat and place of any reference to arbitration shall be New York City, New York, and the procedural law of such arbitration shall be New York law. The language to be used in the arbitration shall be English. The fees of the arbitrator and other costs incurred by the parties in connection with such Arbitration shall be paid by the party or parties that is (are) unsuccessful in such Arbitration. For the avoidance of doubt this paragraph does not preclude Holders and Beneficial Owners from pursuing claims under the Securities Act or the Exchange Act in federal courts.
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Holders and Beneficial Owners understand, and by holding an American Depositary Share or an interest therein, such Holders and Beneficial Owners each irrevocably agree that any legal suit, action or proceeding against or involving the Company or the Depositary, arising out of or based upon the Deposit Agreement, the American Depositary Shares or Receipts, or the transactions contemplated hereby or thereby or by virtue of ownership thereof, may only be instituted in a state or federal court in New York, New York, and by holding an American Depositary Share or an interest therein each irrevocably waives any objection which it may now or hereafter have to the laying of venue of any such proceeding, and irrevocably submits to the exclusive jurisdiction of such courts in any such suit, action or proceeding. Holders and Beneficial Owners agree that the provisions of this paragraph shall survive such Holders and Beneficial Owners ownership of American Depositary Shares or interests therein.
EACH PARTY TO THE DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH HOLDER AND BENEFICIAL OWNER AND/OR HOLDER OF INTERESTS IN ANY ADRs) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE DEPOSITARY AND/OR THE COMPANY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE ADSs OR THE ADRs, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR ANY OTHER THEORY).
The provisions of this Section 7.6 shall survive any termination of this Deposit Agreement, in whole or in part.
SECTION 7.7 Assignment. Subject to the provisions and exceptions set forth in Section 5.4 hereof, this Deposit Agreement may not be assigned by either the Company or the Depositary.
SECTION 7.8 Agents. The Depositary shall be entitled, in its sole but reasonable discretion, to appoint one or more agents (the Agents) of which it shall have control for the purpose, inter alia, of making distributions to the Holders or otherwise carrying out its obligations under this Agreement.
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SECTION 7.9 Affiliates etc. The Depositary reserves the right to utilize and retain a division or Affiliate(s) of the Depositary to direct, manage and/or execute any public and/or private sale of Shares, rights, securities, property or other entitlements hereunder and to engage in the conversion of Foreign Currency hereunder. It is anticipated that such division and/or Affiliate(s) will charge the Depositary a fee and/or commission in connection with each such transaction, and seek reimbursement of its costs and expenses related thereto. Such fees/commissions, costs and expenses, shall be deducted from amounts distributed hereunder and shall not be deemed to be fees of the Depositary under Article (9) of the Receipt or otherwise. Persons are advised that in converting foreign currency into U.S. dollars the Depositary may utilize Deutsche Bank AG or its affiliates (collectively, DBAG) to effect such conversion by seeking to enter into a foreign exchange (FX) transaction with DBAG. When converting currency, the Depositary is not acting as a fiduciary for the holders or beneficial owners of depositary receipts or any other person. Moreover, in executing FX transactions, DBAG will be acting in a principal capacity, and not as agent, fiduciary or broker, and may hold positions for its own account that are the same, similar, different or opposite to the positions of its customers, including the Depositary. When the Depositary seeks to execute an FX transaction to accomplish such conversion, customers should be aware that DBAG is a global dealer in FX for a full range of FX products and, as a result, the rate obtained in connection with any requested foreign currency conversion may be impacted by DBAG executing FX transactions for its own account or with another customer. In addition, in order to source liquidity for any FX transaction relating to any foreign currency conversion, DBAG may internally share economic terms relating to the relevant FX transaction with persons acting in a sales or trading capacity for DBAG or one of its agents. DBAG may charge fees and/or commissions to the Depositary or add a mark-up in connection with such conversions, which are reflected in the rate at which the foreign currency will be converted into U.S. dollars. The Depositary, its Affiliates and their agents, on their own behalf, may own and deal in any class of securities of the Company and its Affiliates and in ADSs.
SECTION 7.10 Exclusivity. The Company agrees not to appoint any other depositary for the issuance or administration of depositary receipts evidencing any class of stock of the Company so long as Deutsche Bank Trust Company Americas is acting as Depositary hereunder.
SECTION 7.11 Compliance with U.S. Securities Laws. Notwithstanding anything in this Deposit Agreement to the contrary, the withdrawal or Delivery of Deposited Securities will not be suspended by the Company or the Depositary except as would be permitted by Instruction I.A.(1) of the General Instructions to Form F-6 Registration Statement, as amended from time to time, under the Securities Act.
SECTION 7.12 Titles. All references in this Deposit Agreement to exhibits, Articles, sections, subsections, and other subdivisions refer to the exhibits, Articles, sections, subsections and other subdivisions of this Deposit Agreement unless expressly provided otherwise. The words this Deposit Agreement, herein, hereof, hereby, hereunder, and words of similar import refer to the Deposit Agreement as a whole as in effect between the Company, the Depositary and the Holders and Beneficial Owners of ADSs and not to any particular subdivision unless expressly so limited. Pronouns in masculine, feminine and neuter gender shall be construed to include any other gender, and words in the singular form shall be construed to include the plural and vice versa unless the context otherwise requires. Titles to sections of this Deposit Agreement are included for convenience only and shall be disregarded in construing the language contained in this Deposit Agreement.
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IN WITNESS WHEREOF, DINGDONG (CAYMAN) LIMITED and DEUTSCHE BANK TRUST COMPANY AMERICAS have duly executed this Deposit Agreement as of the day and year first above set forth and all Holders and Beneficial Owners shall become parties hereto upon acceptance by them of American Depositary Shares evidenced by Receipts issued in accordance with the terms hereof.
DINGDONG (CAYMAN) LIMITED | ||
By: | /s/ Changlin Liang | |
Name: Changlin Liang | ||
Title: Director and Chief Executive Officer | ||
DEUTSCHE BANK TRUST COMPANY AMERICAS | ||
By: | /s/ Michael Fitzpatrick | |
Name: Michael Fitzpatrick | ||
Title: Vice President | ||
By: | /s/ Michael Curran | |
Name: Michael Curran | ||
Title: Vice President |
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EXHIBIT A
CUSIP________
ISIN________
American Depositary Shares (Each two American Depositary Shares representing three Fully Paid Class A Ordinary Shares) |
[FORM OF FACE OF RECEIPT]
AMERICAN DEPOSITARY RECEIPT
for
AMERICAN DEPOSITARY SHARES
representing
DEPOSITED CLASS A ORDINARY SHARES
Of
DINGDONG (CAYMAN) LIMITED
(Incorporated under the laws of the Cayman Islands)
DEUTSCHE BANK TRUST COMPANY AMERICAS, as depositary (herein called the Depositary), hereby certifies that ________________ is the owner of ______________ American Depositary Shares (hereinafter ADS), representing deposited Class A ordinary shares, each of Par Value of U.S. $0.000002 including evidence of rights to receive such Class A ordinary shares (the Shares) of Dingdong (Cayman) Limited, a company incorporated under the laws of the Cayman Islands (the Company). As of the date of the Deposit Agreement (hereinafter referred to), each two ADS represents three Shares deposited under the Deposit Agreement with the Custodian which at the date of execution of the Deposit Agreement is Deutsche Bank AG, Hong Kong Branch (the Custodian). The ratio of Depositary Shares to shares of stock is subject to subsequent amendment as provided in Article IV of the Deposit Agreement. The Depositarys Corporate Trust Office is located at 60 Wall Street, New York, New York 10005, U.S.A.
(1) The Deposit Agreement. This American Depositary Receipt is one of an issue of American Depositary Receipts (Receipts), all issued or to be issued upon the terms and conditions set forth in the Deposit Agreement, dated as of June 29, 2021 (as amended from time to time, the Deposit Agreement), by and among the Company, the Depositary, and all Holders and Beneficial Owners from time to time of Receipts issued thereunder, each of whom by accepting a Receipt agrees to become a party thereto and becomes bound by all the terms and conditions thereof. The Deposit Agreement sets forth the rights and obligations of Holders and Beneficial Owners of Receipts and the rights and duties of the Depositary in respect of the Shares deposited thereunder and any and all other securities, property and cash from time to time, received in respect of such Shares and held thereunder (such Shares, other securities, property and cash are herein called Deposited Securities). Copies of the Deposit Agreement are on file at the Corporate Trust Office of the Depositary and the Custodian.
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Each owner and each Beneficial Owner, upon acceptance of any ADSs (or any interest therein) issued in accordance with the terms and conditions of the Deposit Agreement, shall be deemed for all purposes to (a) be a party to and bound by the terms of the Deposit Agreement and applicable ADR(s), 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 the Deposit Agreement and the applicable ADR(s), 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 the Deposit Agreement and the applicable ADR(s) (the taking of such actions to be the conclusive determinant of the necessity and appropriateness thereof).
The statements made on the face and reverse of this Receipt are summaries of certain provisions of the Deposit Agreement and the Memorandum and Articles of Association (as in effect on the date of the Deposit Agreement) and are qualified by and subject to the detailed provisions of the Deposit Agreement, to which reference is hereby made. All capitalized terms used herein which are not otherwise defined herein shall have the meanings ascribed thereto in the Deposit Agreement. To the extent there is any inconsistency between the terms of this Receipt and the terms of the Deposit Agreement, the terms of the Deposit Agreement shall prevail. Prospective and actual Holders and Beneficial Owners are encouraged to read the terms of the Deposit Agreement. The Depositary makes no representation or warranty as to the validity or worth of the Deposited Securities. The Depositary has made arrangements for the acceptance of the American Depositary Shares into DTC. Each Beneficial Owner of American Depositary Shares held through DTC must rely on the procedures of DTC and the DTC Participants to exercise and be entitled to any rights attributable to such American Depositary Shares. The Receipt evidencing the American Depositary Shares held through DTC will be registered in the name of a nominee of DTC. So long as the American Depositary Shares are held through DTC or unless otherwise required by law, ownership of beneficial interests in the Receipt registered in the name of DTC (or its nominee) will be shown on, and transfers of such ownership will be effected only through, records maintained by (i) DTC (or its nominee), or (ii) DTC Participants (or their nominees).
(2) Surrender of Receipts and Withdrawal of Deposited Securities. Upon surrender, at the Corporate Trust Office of the Depositary, of ADSs evidenced by this Receipt for the purpose of withdrawal of the Deposited Securities represented thereby, and upon payment of (i) the fees and charges of the Depositary for the making of withdrawals of Deposited Securities and cancellation of Receipts (as set forth in Section 5.9 of the Deposit Agreement and Article (9) hereof) and (ii) all fees, taxes and/or governmental charges payable in connection with such surrender and withdrawal, and, subject to the terms and conditions of the Deposit Agreement, the Memorandum and Articles of Association, Section 7.11 of the Deposit Agreement, Article (22) hereof and the provisions of or governing the Deposited Securities and other applicable laws, the Holder of the American Depositary Shares evidenced hereby is entitled to Delivery, to him or upon his order, of the Deposited Securities represented by the ADS so surrendered. ADS may be surrendered for the purpose of withdrawing Deposited Securities by Delivery of a Receipt evidencing such ADS (if held in registered form) or by book-entry delivery of such ADS to the Depositary.
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A Receipt surrendered for such purposes shall, if so required by the Depositary, be properly endorsed in blank or accompanied by proper instruments of transfer in blank, and if the Depositary so requires, the Holder thereof shall execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be Delivered to or upon the written order of a person or persons designated in such order. Thereupon, the Depositary shall direct the Custodian to Deliver (without unreasonable delay) at the designated office of the Custodian or through a book-entry delivery of the Shares (in either case subject to the terms and conditions of the Deposit Agreement, to the Memorandum and Articles of Association, and to the provisions of or governing the Deposited Securities and applicable laws, now or hereafter in effect), to or upon the written order of the person or persons designated in the order delivered to the Depositary as provided above, the Deposited Securities represented by such ADSs, together with any certificate or other proper documents of or relating to title for the Deposited Securities or evidence of the electronic transfer thereof (if available) as the case may be to or for the account of such person. Subject to Article (4) hereof, in the case of surrender of a Receipt evidencing a number of ADSs representing other than a whole number of Shares, the Depositary shall cause ownership of the appropriate whole number of Shares to be Delivered in accordance with the terms hereof, and shall, at the discretion of the Depositary, either (i) issue and Deliver to the person surrendering such Receipt a new Receipt evidencing American Depositary Shares representing any remaining fractional Share, or (ii) sell or cause to be sold the fractional Shares represented by the Receipt so surrendered and remit the proceeds thereof (net of (a) applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and (b) taxes and/or governmental charges) to the person surrendering the Receipt. At the request, risk and expense of any Holder so surrendering a Receipt, and for the account of such Holder, the Depositary shall direct the Custodian to forward (to the extent permitted by law) any cash or other property (other than securities) held in respect of, and any certificate or certificates and other proper documents of or relating to title to, the Deposited Securities represented by such Receipt to the Depositary for Delivery at the Corporate Trust Office of the Depositary, and for further Delivery to such Holder. Such direction shall be given by letter or, at the request, risk and expense of such Holder, by cable, telex or facsimile transmission. Upon receipt of such direction by the Depositary, the Depositary may make delivery to such person or persons entitled thereto at the Corporate Trust Office of the Depositary of any dividends or cash distributions with respect to the Deposited Securities represented by such Receipt, or of any proceeds of sale of any dividends, distributions or rights, which may at the time be held by the Depositary.
(3) Transfers, Split-Ups and Combinations of Receipts. Subject to the terms and conditions of the Deposit Agreement, the Registrar shall register transfers of Receipts on its books, upon surrender at the Corporate Trust Office of the Depositary of a Receipt by the Holder thereof in person or by duly authorized attorney, properly endorsed in the case of a certificated Receipt or accompanied by, or in the case of Receipts issued through any book-entry system, including, without limitation, DRS/Profile, receipt by the Depositary of proper instruments of transfer (including signature guarantees in accordance with standard industry practice) and duly stamped as may be required by the laws of the State of New York, of the United States, of the Cayman Islands and of any other applicable jurisdiction. Subject to the terms and conditions of the Deposit Agreement, including payment of the applicable fees and expenses incurred by, and charges of, the Depositary, the Depositary shall execute and Deliver a new Receipt(s) (and if necessary, cause the Registrar to countersign such Receipt(s)) and deliver same to or upon the order of the person entitled to such Receipts evidencing the same aggregate number of ADSs as those evidenced by the Receipts surrendered. Upon surrender of a Receipt or Receipts for the purpose of effecting a split-up or combination of such Receipt or Receipts upon payment of the applicable fees and charges of the Depositary, and subject to the terms and conditions of the Deposit Agreement, the Depositary shall execute and deliver a new Receipt or Receipts for any authorized number of ADSs requested, evidencing the same aggregate number of ADSs as the Receipt or Receipts surrendered.
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(4) Pre-Conditions to Registration, Transfer, Etc. As a condition precedent to the execution and Delivery, registration, registration of transfer, split-up, subdivision, combination or surrender of any Receipt, the delivery of any distribution thereon (whether in cash or shares) or withdrawal of any Deposited Securities, the Depositary or the Custodian may require (i) payment from the depositor of Shares or presenter of the Receipt of a sum sufficient to reimburse it for any tax or other governmental charge and any stock transfer or registration fee with respect thereto (including any such tax or charge and fee with respect to Shares being deposited or withdrawn) and payment of any applicable fees and charges of the Depositary as provided in the Deposit Agreement and in this Receipt, (ii) the production of proof satisfactory to it as to the identity and genuineness of any signature or any other matter and (iii) compliance with (A) any laws or governmental regulations relating to the execution and Delivery of Receipts and ADSs or to the withdrawal of Deposited Securities and (B) such reasonable regulations of the Depositary or the Company consistent with the Deposit Agreement and applicable law.
The issuance of ADSs against deposits of Shares generally or against deposits of particular Shares may be suspended, or the issuance of ADSs against the deposit of particular Shares may be withheld, or the registration of transfer of Receipts in particular instances may be refused, or the registration of transfer of Receipts generally may be suspended, during any period when the transfer books of the Depositary are closed or if any such action is deemed necessary or advisable by the Depositary or the Company, in good faith, at any time or from time to time because of any requirement of law, any government or governmental body or commission or any securities exchange upon which the Receipts or Share are listed, or under any provision of the Deposit Agreement or provisions of, or governing, the Deposited Securities or any meeting of shareholders of the Company or for any other reason, subject in all cases to Article (22) hereof.
The Depositary shall not issue ADSs prior to the receipt of Shares or deliver Shares prior to the receipt and cancellation of ADSs.
(5) Compliance With Information Requests. Notwithstanding any other provision of the Deposit Agreement or this Receipt, each Holder and Beneficial Owner of the ADSs represented hereby agrees to comply with requests from the Company pursuant to the laws of the Cayman Islands, the rules and requirements of the New York Stock Exchange and any other stock exchange on which the Shares are, or will be registered, traded or listed, the Memorandum and Articles of Association, which are made to provide information as to the capacity in which such Holder or Beneficial Owner owns ADSs and regarding the identity of any other person interested in such ADSs and the nature of such interest and various other matters whether or not they are Holders and/or Beneficial Owner at the time of such request. The Depositary agrees to use reasonable efforts to forward any such requests to the Holders and to forward to the Company any such responses to such requests received by the Depositary.
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(6) Liability of Holder for Taxes, Duties and Other Charges. If any tax or other governmental charge shall become payable by the Depositary or the Custodian with respect to any Receipt or any Deposited Securities or ADSs, such tax or other governmental charge shall be payable by the Holders and Beneficial Owners to the Depositary. The Company, the Custodian and/or the Depositary may withhold or deduct from any distributions made in respect of Deposited Securities and may sell for the account of the Holder and/or Beneficial Owner any or all of the Deposited Securities and apply such distributions and sale proceeds in payment of such taxes (including applicable interest and penalties) or charges, with the Holder and the Beneficial Owner hereof remaining fully liable for any deficiency. The Custodian may refuse the deposit of Shares, and the Depositary may refuse to issue ADSs, to deliver Receipts, register the transfer, split-up or combination of ADRs and (subject to Article (22) hereof) the withdrawal of Deposited Securities, until payment in full of such tax, charge, penalty or interest is received.
The liability of Holders and Beneficial Owners under the Deposit Agreement shall survive any transfer of Receipts, any surrender of Receipts and withdrawal of Deposited Securities or the termination of the Deposit Agreement.
Holders understand that in converting Foreign Currency, amounts received on conversion are calculated at a rate which may exceed the number of decimal places used by the Depositary to report distribution rates (which in any case will not be less than two decimal places). Any excess amount may be retained by the Depositary as an additional cost of conversion, irrespective of any other fees and expenses payable or owing hereunder and shall not be subject to escheatment.
(7) Representations and Warranties of Depositors. Each person depositing Shares under the Deposit Agreement shall be deemed thereby to represent and warrant that (i) such Shares (and the certificates therefor) are duly authorized, validly issued, fully paid, non-assessable and were legally obtained by such person, (ii) all preemptive (and similar) rights, if any, with respect to such Shares, have been validly waived or exercised, (iii) the person making such deposit is duly authorized so to do, (iv) the Shares presented for deposit are free and clear of any lien, encumbrance, security interest, charge, mortgage or adverse claim, and are not, and the ADSs issuable upon such deposit will not be, Restricted Securities (except as contemplated by Section 2.11 of the Deposit Agreement), (v) the Shares presented for deposit have not been stripped of any rights or entitlements and (vi) the Shares are not subject to any lock-up agreement with the Company or other party, or the Shares are subject to a lock-up agreement but such lock-up agreement has terminated or the lock-up restrictions imposed thereunder have expired or been validly waived. Such representations and warranties shall survive the deposit and withdrawal of Shares and the issuance, cancellation and transfer of ADSs. If any such representations or warranties are false in any way, the Company and Depositary shall be authorized, at the cost and expense of the person depositing Shares, to take any and all actions necessary to correct the consequences thereof.
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(8) Filing Proofs, Certificates and Other Information. Any person presenting Shares for deposit shall provide, any Holder and any Beneficial Owner may be required to provide, and every Holder and Beneficial Owner agrees, from time to time to provide to the Depositary such proof of citizenship or residence, taxpayer status, payment of all applicable taxes and/or other governmental charges, exchange control approval, legal or beneficial ownership of ADSs and Deposited Securities, compliance with applicable laws and the terms of the Deposit Agreement and the provisions of, or governing, the Deposited Securities or other information as the Depositary deems necessary or proper or as the Company may reasonably require by written request to the Depositary consistent with its obligations under the Deposit Agreement. Pursuant to the Deposit Agreement, the Depositary and the Registrar, as applicable, may withhold the execution or Delivery or registration of transfer of any Receipt or the distribution or sale of any dividend or other distribution of rights or of the proceeds thereof, or to the extent not limited by the terms of Article (22) hereof or the terms of the Deposit Agreement, the Delivery of any Deposited Securities until such proof or other information is filed or such certifications are executed, or such representations and warranties are made, or such other documentation or information provided, in each case to the Depositarys and the Companys satisfaction. The Depositary shall from time to time on the written request of the Company advise the Company of the availability of any such proofs, certificates or other information and shall, at the Companys sole expense, provide or otherwise make available copies thereof to the Company upon written request therefor by the Company, unless such disclosure is prohibited by law. Each Holder and Beneficial Owner agrees to provide any information requested by the Company or the Depositary pursuant to this paragraph. Nothing herein shall obligate the Depositary to (i) obtain any information for the Company if not provided by the Holders or Beneficial Owners or (ii) verify or vouch for the accuracy of the information so provided by the Holders or Beneficial Owners.
Every Holder and Beneficial Owner agrees to indemnify the Depositary, the Company, the Custodian, the Agents and each of their respective directors, officers, employees, agents and Affiliates against, and to hold each of them harmless from, any Losses which any of them may incur or which may be made against any of them as a result of or in connection with any inaccuracy in or omission from any such proof, certificate, representation, warranty, information or document furnished by or on behalf of such Holder and/or Beneficial Owner or as a result of any such failure to furnish any of the foregoing.
The obligations of Holders and Beneficial Owners under the Deposit Agreement shall survive any transfer of Receipts, any surrender of Receipts and withdrawal of Deposited Securities or the termination of this Deposit Agreement.
(9) Charges of Depositary. The Depositary reserves the right to charge the following fees for the services performed under the terms of the Deposit Agreement, provided, however, that no fees shall be payable upon distribution of cash dividends so long as the charging of such fee is prohibited by the exchange, if any, upon which the ADSs are listed:
(i) to any person to whom ADSs are issued or to any person to whom a distribution is made in respect of ADS distributions pursuant to stock dividends or other free distributions of stock, bonus distributions, stock splits or other distributions (except where converted to cash), a fee not in excess of U.S. $ 5.00 per 100 ADSs (or fraction thereof) so issued under the terms of the Deposit Agreement to be determined by the Depositary;
(ii) to any person surrendering ADSs for withdrawal of Deposited Securities or whose ADSs are cancelled or reduced for any other reason including, inter alia, cash distributions made pursuant to a cancellation or withdrawal, a fee not in excess of U.S. $ 5.00 per 100 ADSs reduced, cancelled or surrendered (as the case may be);
(iii) to any holder of ADSs (including, without limitation, Holders), a fee not in excess of U.S. $ 5.00 per 100 ADSs held for the distribution of cash dividends;
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(iv) to any holder of ADSs (including, without limitation, Holders), a fee not in excess of U.S. $ 5.00 per 100 ADSs held for the distribution of cash entitlements (other than cash dividends) and/or cash proceeds, including proceeds from the sale of rights, securities and other entitlements;
(v) to any holder of ADSs (including, without limitation, Holders), a fee not in excess of U.S. $ 5.00 per 100 ADSs (or portion thereof) issued upon the exercise of rights; and
(vi) for the operation and maintenance costs in administering the ADSs an annual fee of U.S. $ 5.00 per 100 ADSs, such fee to be assessed against Holders of record as of the date or dates set by the Depositary as it sees fit and collected at the sole discretion of the Depositary by billing such Holders for such fee or by deducting such fee from one or more cash dividends or other cash distributions.
In addition, Holders, Beneficial Owners, any person depositing Shares for deposit and any person surrendering ADSs for cancellation and withdrawal of Deposited Securities will be required to pay the following charges:
(i) taxes (including applicable interest and penalties) and other governmental charges;
(ii) such registration fees as may from time to time be in effect for the registration of Shares or other Deposited Securities with the Foreign Registrar and applicable to transfers of Shares or other Deposited Securities to or from the name of the Custodian, the Depositary or any nominees upon the making of deposits and withdrawals, respectively;
(iii) such cable, telex, facsimile and electronic transmission and delivery expenses as are expressly provided in the Deposit Agreement to be at the expense of the depositor depositing or person withdrawing Shares or Holders and Beneficial Owners of ADSs;
(iv) the expenses and charges incurred by the Depositary and/or a division or Affiliate(s) of the Depositary in the conversion of Foreign Currency;
(v) such fees and expenses as are incurred by the Depositary in connection with compliance with exchange control regulations and other regulatory requirements applicable to Shares, Deposited Securities, ADSs and ADRs;
(vi) the fees and expenses incurred by the Depositary in connection with the delivery of Deposited Securities, including any fees of a central depository for securities in the local market, where applicable;
(vii) any additional fees, charges, costs or expenses that may be incurred by the Depositary or a division or Affiliate(s) of the Depositary from time to time.
Any other fees and charges of, and expenses incurred by, the Depositary or the Custodian under the Deposit Agreement shall be for the account of the Company unless otherwise agreed in writing between the Company and the Depositary from time to time. All fees and charges may, at any time and from time to time, be changed by agreement between the Depositary and Company but, in the case of fees and charges payable by Holders or Beneficial Owners, only in the manner contemplated by Article (20) hereof.
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The Depositary may make payments to the Company and/or may share revenue with the Company derived from fees collected from Holders and Beneficial Owners, upon such terms and conditions as the Company and the Depositary may agree from time to time.
(10) Title to Receipts. It is a condition of this Receipt, and every successive Holder of this Receipt by accepting or holding the same consents and agrees, that title to this Receipt (and to each ADS evidenced hereby) is transferable by delivery of the Receipt, provided it has been properly endorsed or accompanied by proper instruments of transfer, such Receipt being a certificated security under the laws of the State of New York. Notwithstanding any notice to the contrary, the Depositary may deem and treat the Holder of this Receipt (that is, the person in whose name this Receipt is registered on the books of the Depositary) as the absolute owner hereof for all purposes. The Depositary shall have no obligation or be subject to any liability under the Deposit Agreement or this Receipt to any holder of this Receipt or any Beneficial Owner unless such holder is the Holder of this Receipt registered on the books of the Depositary or, in the case of a Beneficial Owner, such Beneficial Owner or the Beneficial Owners representative is the Holder registered on the books of the Depositary.
(11) Validity of Receipt. This Receipt shall not be entitled to any benefits under the Deposit Agreement or be valid or enforceable for any purpose, unless this Receipt has been (i) dated, (ii) signed by the manual or facsimile signature of a duly authorized signatory of the Depositary, (iii) if a Registrar for the Receipts shall have been appointed, countersigned by the manual or facsimile signature of a duly authorized signatory of the Registrar and (iv) registered in the books maintained by the Depositary or the Registrar, as applicable, for the issuance and transfer of Receipts. Receipts bearing the facsimile signature of a duly-authorized signatory of the Depositary or the Registrar, who at the time of signature was a duly-authorized signatory of the Depositary or the Registrar, as the case may be, shall bind the Depositary, notwithstanding the fact that such signatory has ceased to be so authorized prior to the execution and delivery of such Receipt by the Depositary or did not hold such office on the date of issuance of such Receipts.
(12) Available Information; Reports; Inspection of Transfer Books. The Company is subject to the periodic reporting requirements of the Exchange Act applicable to foreign private issuers (as defined in Rule 405 of the Securities Act) and accordingly files certain information with the Commission. These reports and documents can be inspected and copied at the public reference facilities maintained by the Commission located at 100 F Street, N.E., Washington D.C. 20549, U.S.A. The Depositary shall make available during normal business hours on any Business Day for inspection by Holders at its Corporate Trust Office any reports and communications, including any proxy soliciting materials, received from the Company which are both (a) received by the Depositary, the Custodian, or the nominee of either of them as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company.
The Depositary or the Registrar, as applicable, shall keep books for the registration of Receipts and transfers of Receipts which at all reasonable times shall be open for inspection by the Company and by the Holders of such Receipts, provided that such inspection shall not be, to the Depositarys or the Registrars knowledge, for the purpose of communicating with Holders of such Receipts in the interest of a business or object other than the business of the Company or other than a matter related to the Deposit Agreement or the Receipts.
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The Depositary or the Registrar, as applicable, may close the transfer books with respect to the Receipts, at any time or from time to time, when deemed necessary or advisable by it in good faith in connection with the performance of its duties hereunder, or at the reasonable written request of the Company subject, in all cases, to Article (22) hereof.
Dated: | DEUTSCHE BANK TRUST | |||||
COMPANY AMERICAS, as Depositary | ||||||
By: |
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By: |
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The address of the Corporate Trust Office of the Depositary is 60 Wall Street, New York, New York 10005, U.S.A.
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EXHIBIT B
[FORM OF REVERSE OF RECEIPT]
SUMMARY OF CERTAIN ADDITIONAL PROVISIONS
OF THE DEPOSIT AGREEMENT
(13) Dividends and Distributions in Cash, Shares, etc. Whenever the Depositary receives confirmation from the Custodian of receipt of any cash dividend or other cash distribution on any Deposited Securities, or receives proceeds from the sale of any Shares, rights securities or other entitlements under the Deposit Agreement, the Depositary will, if at the time of receipt thereof any amounts received in a Foreign Currency can, in the judgment of the Depositary (upon the terms of the Deposit Agreement), be converted on a practicable basis, into Dollars transferable to the United States, promptly convert or cause to be converted such dividend, distribution or proceeds into Dollars and will distribute promptly the amount thus received (net of applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) to the Holders of record as of the ADS Record Date in proportion to the number of ADSs representing such Deposited Securities held by such Holders respectively as of the ADS Record Date. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Holder a fraction of one cent. Any such fractional amounts shall be rounded down to the nearest whole cent and so distributed to Holders entitled thereto. Holders and Beneficial Owners understand that in converting Foreign Currency, amounts received on conversion are calculated at a rate which exceeds the number of decimal places used by the Depositary to report distribution rates. The excess amount may be retained by the Depositary as an additional cost of conversion, irrespective of any other fees and expenses payable or owing hereunder and shall not be subject to escheatment. If the Company, the Custodian or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes, duties or other governmental charges, the amount distributed to Holders on the ADSs representing such Deposited Securities shall be reduced accordingly. Such withheld amounts shall be forwarded by the Company, the Custodian or the Depositary to the relevant governmental authority. Evidence of payment thereof by the Company shall be forwarded by the Company to the Depositary upon request. The Depositary shall forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file with governmental agencies such reports as are necessary to obtain benefits under the applicable tax treaties for the Holders and Beneficial Owners of Receipts.
If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, Shares, the Company shall cause such Shares to be deposited with the Custodian and registered, as the case may be, in the name of the Depositary, the Custodian or their nominees. Upon receipt of confirmation of such deposit, the Depositary shall, subject to and in accordance with the Deposit Agreement, establish the ADS Record Date and either (i) distribute to the Holders as of the ADS Record Date in proportion to the number of ADSs held by such Holders as of the ADS Record Date, additional ADSs, which represent in aggregate the number of Shares received as such dividend, or free distribution, subject to the terms of the Deposit Agreement (including, without limitation, the applicable fees and charges of, and expenses incurred by, the Depositary, and taxes and/or governmental charges), or (ii) if additional ADSs are not so distributed, each ADS issued and outstanding after the ADS Record Date shall, to the extent permissible by law, thenceforth also represent rights and interests in the additional Shares distributed upon the Deposited Securities represented thereby (net of the applicable fees and charges of, and the expenses incurred by, the Depositary, and taxes and/or governmental charges). In lieu of delivering fractional ADSs, the Depositary shall sell the number of Shares represented by the aggregate of such fractions and distribute the proceeds upon the terms set forth in the Deposit Agreement.
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In the event that (x) the Depositary determines that any distribution in property (including Shares) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, or, (y) if the Company, in the fulfillment of its obligations under the Deposit Agreement, has either (a) furnished an opinion of U.S. counsel determining that Shares must be registered under the Securities Act or other laws in order to be distributed to Holders (and no such registration statement has been declared effective), or (b) fails to timely deliver the documentation contemplated in the Deposit Agreement, the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable, and the Depositary shall distribute the net proceeds of any such sale (after deduction of taxes and/or governmental charges, and fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary) to Holders entitled thereto upon the terms of the Deposit Agreement. The Depositary shall hold and/or distribute any unsold balance of such property in accordance with the provisions of the Deposit Agreement.
Upon timely receipt of a notice indicating that the Company wishes an elective distribution to be made available to Holders upon the terms described in the Deposit Agreement, the Depositary shall, upon provision of all documentation required under the Deposit Agreement, (including, without limitation, any legal opinions the Depositary may request under the Deposit Agreement) determine whether such distribution is lawful and reasonably practicable. If so, the Depositary shall, subject to the terms and conditions of the Deposit Agreement, establish an ADS Record Date according to Article (14) hereof and establish procedures to enable the Holder hereof to elect to receive the proposed distribution in cash or in additional ADSs. If a Holder elects to receive the distribution in cash, the dividend shall be distributed as in the case of a distribution in cash. If the Holder hereof elects to receive the distribution in additional ADSs, the distribution shall be distributed as in the case of a distribution in Shares upon the terms described in the Deposit Agreement. If such elective distribution is not lawful or reasonably practicable or if the Depositary did not receive satisfactory documentation set forth in the Deposit Agreement, the Depositary shall, to the extent permitted by law, distribute to Holders, on the basis of the same determination as is made in the Cayman Islands, in respect of the Shares for which no election is made, either (x) cash or (y) additional ADSs representing such additional Shares, in each case, upon the terms described in the Deposit Agreement. Nothing herein shall obligate the Depositary to make available to the Holder hereof a method to receive the elective dividend in Shares (rather than ADSs). There can be no assurance that the Holder hereof will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of Shares.
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Whenever the Company intends to distribute to the holders of the Deposited Securities rights to subscribe for additional Shares, the Company shall give notice thereof to the Depositary at least 60 days prior to the proposed distribution stating whether or not it wishes such rights to be made available to Holders of ADSs. Upon timely receipt by the Depositary of a notice indicating that the Company wishes such rights to be made available to Holders of ADSs, the Company shall determine whether it is lawful and reasonably practicable to make such rights available to the Holders. The Depositary shall make such rights available to any Holders only if the Company shall have timely requested that such rights be made available to Holders, the Depositary shall have received the documentation required by the Deposit Agreement, and the Depositary shall have determined that such distribution of rights is lawful and reasonably practicable. If such conditions are not satisfied, the Depositary shall sell the rights as described below. In the event all conditions set forth above are satisfied, the Depositary shall establish an ADS Record Date and establish procedures (x) to distribute such rights (by means of warrants or otherwise) and (y) to enable the Holders to exercise the rights (upon payment of the applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges). Nothing herein or in the Deposit Agreement shall obligate the Depositary to make available to the Holders a method to exercise such rights to subscribe for Shares (rather than ADSs). If (i) the Company does not timely request the Depositary to make the rights available to Holders or if the Company requests that the rights not be made available to Holders, (ii) the Depositary fails to receive the documentation required by the Deposit Agreement or determines it is not lawful or reasonably practicable to make the rights available to Holders, or (iii) any rights made available are not exercised and appear to be about to lapse, the Depositary shall determine whether it is lawful and reasonably practicable to sell such rights, and if it so determines that it is lawful and reasonably practicable, endeavour to sell such rights in a riskless principal capacity or otherwise, at such place and upon such terms (including public and/or private sale) as it may deem proper. The Depositary shall, upon such sale, convert and distribute proceeds of such sale (net of applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) upon the terms hereof and in the Deposit Agreement. If the Depositary is unable to make any rights available to Holders or to arrange for the sale of the rights upon the terms described above, the Depositary shall allow such rights to lapse. The Depositary shall not be responsible for (i) any failure to determine that it may be lawful or practicable to make such rights available to Holders in general or any Holders in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or exercise, or (iii) the content of any materials forwarded to the Holders on behalf of the Company in connection with the rights distribution.
Notwithstanding anything herein to the contrary, if registration (under the Securities Act and/or any other applicable law) of the rights or the securities to which any rights relate may be required in order for the Company to offer such rights or such securities to Holders and to sell the securities represented by such rights, the Depositary will not distribute such rights to the Holders (i) unless and until a registration statement under the Securities Act covering such offering is in effect or (ii) unless the Company furnishes to the Depositary opinion(s) of counsel for the Company in the United States and counsel to the Company in any other applicable country in which rights would be distributed, in each case satisfactorily to the Depositary, to the effect that the offering and sale of such securities to Holders and Beneficial Owners are exempt from, or do not require registration under, the provisions of the Securities Act or any other applicable laws. In the event that the Company, the Depositary or the Custodian shall be required to withhold and does withhold from any distribution of property (including rights) an amount on account of taxes and/or other governmental charges, the amount distributed to the Holders shall be reduced accordingly. In the event that the Depositary determines that any distribution in property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable to pay any such taxes and/or charges.
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There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to exercise rights on the same terms and conditions as the holders of Shares or to exercise such rights. Nothing herein shall obligate the Company to file any registration statement in respect of any rights or Shares or other securities to be acquired upon the exercise of such rights or otherwise to register or qualify the offer or sale of such rights or securities under the applicable law of any other jurisdiction for any purpose.
Upon receipt of a notice regarding property other than cash, Shares or rights to purchase additional Shares, to be made to Holders of ADSs, the Depositary shall determine, after consultation with the Company, whether such distribution to Holders is lawful and reasonably practicable. The Depositary shall not make such distribution unless (i) the Company shall have timely requested the Depositary to make such distribution to Holders, (ii) the Depositary shall have received the documentation required by the Deposit Agreement, and (iii) the Depositary shall have determined that such distribution is lawful and reasonably practicable. Upon satisfaction of such conditions, the Depositary shall distribute the property so received to the Holders of record as of the ADS Record Date, in proportion to the number of ADSs held by such Holders respectively and in such manner as the Depositary may deem practicable for accomplishing such distribution (i) upon receipt of payment or net of the applicable fees and charges of, and expenses incurred by, the Depositary, and (ii) net of any taxes and/or governmental charges. The Depositary may dispose of all or a portion of the property so distributed and deposited, in such amounts and in such manner (including public or private sale) as the Depositary may deem practicable or necessary to satisfy any taxes (including applicable interest and penalties) or other governmental charges applicable to the distribution.
If the conditions above are not satisfied, the Depositary shall sell or cause such property to be sold in a public or private sale, at such place or places and upon such terms as it may deem proper and shall distribute the proceeds of such sale received by the Depositary (net of (a) applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and (b) taxes and/or governmental charges) to the Holders upon the terms hereof and of the Deposit Agreement. If the Depositary is unable to sell such property, the Depositary may dispose of such property in any way it deems reasonably practicable under the circumstances.
(14) Fixing of Record Date. Whenever necessary in connection with any distribution (whether in cash, Shares, rights or other distribution), or whenever for any reason the Depositary causes a change in the number of Shares that are represented by each ADS, or whenever the Depositary shall receive notice of any meeting of or solicitation of holders of Shares or other Deposited Securities, or whenever the Depositary shall find it necessary or convenient in connection with the giving of any notice, or any other matter, the Depositary shall fix a record date (the ADS Record Date), as close as practicable to the record date fixed by the Company with respect to the Shares (if applicable), for the determination of the Holders who shall be entitled to receive such distribution, to give instructions for the exercise of voting rights at any such meeting, or to give or withhold such consent, or to receive such notice or solicitation or to otherwise take action, or to exercise the rights of Holders with respect to such changed number of Shares represented by each ADS or for any other reason. Subject to applicable law and the terms and conditions of this Receipt and the Deposit Agreement, only the Holders of record at the close of business in New York on such ADS Record Date shall be entitled to receive such distributions, to give such voting instructions, to receive such notice or solicitation, or otherwise take action.
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(15) Voting of Deposited Securities. Subject to the next sentence, as soon as practicable after receipt of notice of any meeting at which the holders of Deposited Securities are entitled to vote, or of solicitation of consents or proxies from holders of Deposited Securities, the Depositary shall fix the ADS Record Date in respect of such meeting or such solicitation of consents or proxies. The Depositary shall, if requested by the Company in writing in a timely manner (the Depositary having no obligation to take any further action if the request shall not have been received by the Depositary at least 30 Business Days prior to the date of such vote or meeting) and at the Companys expense, and provided no U.S. legal prohibitions exist, mail by regular, ordinary mail delivery (or by electronic mail or as otherwise may be agreed between the Company and the Depositary in writing from time to time) or otherwise distribute as soon as practicable after receipt thereof to Holders as of the ADS Record Date: (a) such notice of meeting or solicitation of consent or proxy; (b) a statement that the Holders at the close of business on the ADS Record Date will be entitled, subject to any applicable law, the provisions of this Deposit Agreement, the Companys Memorandum and Articles of Association and the provisions of or governing the Deposited Securities (which provisions, if any, shall be summarized in pertinent part by the Company), to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by such Holders American Depositary Shares; and (c) a brief statement as to the manner in which such voting instructions may be given to the Depositary, or in which instructions may be deemed to have been given in accordance with this Article (15), including an express indication that instructions may be given (or be deemed to have been given in accordance with the immediately following paragraph of this section if no instruction is received) to the Depositary to give a discretionary proxy to a person or persons designated by the Company. Voting instructions may be given only in respect of a number of American Depositary Shares representing an integral number of Deposited Securities. Upon the timely receipt of voting instructions of a Holder on the ADS Record Date in the manner specified by the Depositary, the Depositary shall endeavor, insofar as practicable and permitted under applicable law, the provisions of this Deposit Agreement, the Companys Memorandum and Articles of Association and the provisions of or governing the Deposited Securities, to vote or cause the Custodian to vote the Deposited Securities (in person or by proxy) represented by American Depositary Shares evidenced by such Receipt in accordance with such voting instructions.
In the event that (i) the Depositary timely receives voting instructions from a Holder which fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holders ADSs or (ii) no timely instructions are received by the Depositary from a Holder with respect to any of the Deposited Securities represented by the ADSs held by such Holder on the ADS Record Date, the Depositary shall (unless otherwise specified in the notice distributed to Holders) deem such Holder to have instructed the Depositary to give a discretionary proxy to a person designated by the Company with respect to such Deposited Securities and the Depositary shall give a discretionary proxy to a person designated by the Company to vote such Deposited Securities, provided, however, that no such instruction shall be deemed to have been given and no such discretionary proxy shall be given with respect to any matter as to which the Company informs the Depositary (and the Company agrees to provide such information as promptly as practicable in writing, if applicable) that (x) the Company does not wish to give such proxy, (y) the Company is aware or should reasonably be aware that substantial opposition exists from Holders against the outcome for which the person designated by the Company would otherwise vote or (z) the outcome for which the person designated by the Company would otherwise vote would materially and adversely affect the rights of holders of Deposited Securities, provided, further, that the Company will have no liability to any Holder or Beneficial Owner resulting from such notification.
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In the event that voting on any resolution or matter is conducted on a show of hands basis in accordance with the Memorandum and Articles of Association, the Depositary will refrain from voting and the voting instructions (or the deemed voting instructions, as set out above) received by the Depositary from Holders shall lapse. The Depositary will have no obligation to demand voting on a poll basis with respect to any resolution and shall have no liability to any Holder or Beneficial Owner for not having demanded voting on a poll basis.
Neither the Depositary nor the Custodian shall, under any circumstances exercise any discretion as to voting, and neither the Depositary nor the Custodian shall vote, attempt to exercise the right to vote, or in any way make use of for purposes of establishing a quorum or otherwise, Deposited Securities represented by ADSs except pursuant to and in accordance with such written instructions from Holders, including the deemed instruction to the Depositary to give a discretionary proxy to a person designated by the Company. Deposited Securities represented by ADSs for which (i) no timely voting instructions are received by the Depositary from the Holder, or (ii) timely voting instructions are received by the Depositary from the Holder but such voting instructions fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holders ADSs, shall be voted in the manner provided in this Article (15). Notwithstanding anything else contained herein, and subject to applicable law, regulation and the Memorandum and Articles of Association, the Depositary shall, if so requested in writing by the Company, represent all Deposited Securities (whether or not voting instructions have been received in respect of such Deposited Securities from Holders as of the ADS Record Date) for the purpose of establishing quorum at a meeting of shareholders.
There can be no assurance that Holders or Beneficial Owners generally or any Holder or Beneficial Owner in particular will receive the notice described above with sufficient time to enable the Holder to return voting instructions to the Depositary in a timely manner.
Notwithstanding the above, save for applicable provisions of the law of the Cayman Islands, and in accordance with the terms of Section 5.3 of the Deposit Agreement, the Depositary shall not be liable for any failure to carry out any instructions to vote any of the Deposited Securities or the manner in which such vote is cast or the effect of such vote.
(16) Changes Affecting Deposited Securities. Upon any change in par value, split-up, subdivision, cancellation, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger, amalgamation or consolidation or sale of assets affecting the Company or to which it otherwise is a party, any securities which shall be received by the Depositary or a Custodian in exchange for, or in conversion of or replacement or otherwise in respect of, such Deposited Securities shall, to the extent permitted by law, be treated as new Deposited Securities under the Deposit Agreement, and the Receipts shall, subject to the provisions of the Deposit Agreement and applicable law, evidence ADSs representing the right to receive such additional securities. Alternatively, the Depositary may, with the Companys approval, and shall, if the Company shall so requests, subject to the terms of the Deposit Agreement and receipt of satisfactory documentation contemplated by the Deposit Agreement, execute and deliver additional Receipts as in the case of a stock dividend on the Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts, in either case, as well as in the event of newly deposited Shares, with necessary modifications to this form of Receipt specifically describing such new Deposited Securities and/or corporate change. Notwithstanding the foregoing, in the event that any security so received may not be lawfully distributed to some or all Holders, the Depositary may, with the Companys approval, and shall if the Company requests, subject to receipt of satisfactory legal documentation contemplated in the Deposit Agreement, sell such securities at public or private sale, at such place or places and upon such terms as it may deem proper and may allocate the net proceeds of such sales (net of fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) for the account of the Holders otherwise entitled to such securities and distribute the net proceeds so allocated to the extent practicable as in the case of a distribution received in cash pursuant to the Deposit Agreement. The Depositary shall not be responsible for (i) any failure to determine that it may be lawful or feasible to make such securities available to Holders in general or any Holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or (iii) any liability to the purchaser of such securities.
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(17) Exoneration. None of the Depositary, the Custodian or the Company shall be obligated to do or perform any act which is inconsistent with the provisions of the Deposit Agreement or shall incur any liability to Holders, Beneficial Owners or any third parties (i) if the Depositary, the Custodian or the Company or their respective controlling persons or agents shall be prevented or forbidden from, or subjected to any civil or criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the Deposit Agreement and this Receipt, by reason of any provision of any present or future law or regulation of the United States, the Cayman Islands or any other country, or of any other governmental authority or regulatory authority or stock exchange, or by reason of any provision, present or future of the Memorandum and Articles of Association or any provision of or governing any Deposited Securities, or by reason of any act of God or war or other circumstances beyond its control, (including, without limitation, nationalization, expropriation, currency restrictions, work stoppage, strikes, civil unrest, revolutions, rebellions, explosions and computer failure), (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement or in the Memorandum and Articles of Association or provisions of or governing Deposited Securities, (iii) for any action or inaction of the Depositary, the Custodian or the Company or their respective controlling persons or agents in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, any Beneficial Owner or authorized representative thereof, or any other person believed by it in good faith to be competent to give such advice or information, (iv) for any inability by a Holder or Beneficial Owner to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Holders of ADS or (v) for any special, consequential, indirect or punitive damages for any breach of the terms of the Deposit Agreement or otherwise. The Depositary, its controlling persons, its agents (including without limitation, the Agents), any Custodian and the Company, its controlling persons and its agents may rely and shall be protected in acting upon any written notice, request, opinion or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. No disclaimer of liability under the Securities Act or the Exchange Act is intended by any provision of the Deposit Agreement.
(18) Standard of Care. The Company and the Depositary and their respective directors, officers, Affiliates, employees and agents (including without limitation, the Agents) assume no obligation and shall not be subject to any liability under the Deposit Agreement or the Receipts to Holders or Beneficial Owners or other persons, except in accordance with Section 5.8 of the Deposit Agreement, provided, that the Company and the Depositary and their respective directors, officers, Affiliates, employees and agents (including without limitation, the Agents) agree to perform their respective obligations specifically set forth in the Deposit Agreement without gross negligence or wilful misconduct. The Depositary and its directors, officers, Affiliates, employees and agents (including without limitation, the 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. The Depositary shall not incur any liability for any failure to determine that any distribution or action may be lawful or reasonably practicable, for the content of any information submitted to it by the Company for distribution to the Holders or for any inaccuracy of any translation thereof, for any investment risk associated with acquiring an interest in the Deposited Securities, for the validity or worth of the Deposited Securities or for any tax consequences that may result from the ownership of ADSs, Shares or Deposited Securities, for the credit-worthiness of any third party, for allowing any rights to lapse upon the terms of the Deposit Agreement or for the failure or timeliness of any notice from the Company or for any action or non action by it in reliance upon the opinion, advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder or any other person believed by it in good faith to be competent to give such advice or information. The Depositary and its agents (including without limitation, the Agents) shall not be liable for any acts or omissions made by a successor depositary whether in connection with a previous act or omission of the Depositary or in connection with any matter arising wholly after the removal or resignation of the Depositary, provided that in connection with the issue out of which such potential liability arises the Depositary performed its obligations without gross negligence or willful misconduct while it acted as Depositary.
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(19) Resignation and Removal of the Depositary; Appointment of Successor Depositary. The Depositary may at any time resign as Depositary under the Deposit Agreement by written notice of resignation delivered to the Company, such resignation to be effective on the earlier of (i) the 90th day after delivery thereof to the Company (whereupon the Depositary shall, in the event no successor depositary has been appointed by the Company, be entitled to take the actions contemplated in the Deposit Agreement), or (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement, save that, any amounts, fees, costs or expenses owed to the Depositary under the Deposit Agreement or in accordance with any other agreements otherwise agreed in writing between the Company and the Depositary from time to time shall be paid to the Depositary prior to such resignation. The Company shall use reasonable efforts to appoint such successor depositary, and give notice to the Depositary of such appointment, not more than 90 days after delivery by the Depositary of written notice of resignation as provided in the Deposit Agreement. The Depositary may at any time be removed by the Company by written notice of such removal which notice shall be effective on the later of (i) the 90th day after delivery thereof to the Depositary (whereupon the Depositary shall be entitled to take the actions contemplated in the Deposit Agreement if a successor depositary has not been appointed), or (ii) the appointment of a successor depositary and its acceptance of such appointment as provided in the Deposit Agreement save that, any amounts, fees, costs or expenses owed to the Depositary under the Deposit Agreement or in accordance with any other agreements otherwise agreed in writing between the Company and the Depositary from time to time shall be paid to the Depositary prior to such removal. 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 and if it shall have not appointed a successor depositary the provisions referred to in Article (21) hereof and correspondingly in the Deposit Agreement shall apply. Every successor depositary shall be required by the Company to execute and deliver to its predecessor and to the Company an instrument in writing accepting its appointment hereunder, and thereupon such successor depositary, without any further act or deed, shall become fully vested with all the rights, powers, duties and obligations of its predecessor. The predecessor depositary, upon payment of all sums due to it and on the written request of the Company, shall (i) execute and deliver an instrument transferring to such successor all rights and powers of such predecessor hereunder (other than as contemplated in the Deposit Agreement), (ii) duly assign, transfer and deliver all right, title and interest to the Deposited Securities to such successor, and (iii) deliver to such successor a list of the Holders of all outstanding Receipts and such other information relating to Receipts and Holders thereof as the successor may reasonably request. Any such successor depositary shall promptly mail notice of its appointment to such Holders. Any corporation into or with which the Depositary may be merged or consolidated shall be the successor of the Depositary without the execution or filing of any document or any further act and, notwithstanding anything to the contrary in the Deposit Agreement, the Depositary may assign or otherwise transfer all or any of its rights and benefits under the Deposit Agreement (including any cause of action arising in connection with it) to Deutsche Bank AG or any branch thereof or any entity which is a direct or indirect subsidiary or other affiliate of Deutsche Bank AG.
(20) Amendment/Supplement. Subject to the terms and conditions of this Article (20), and applicable law, this Receipt and any provisions of the Deposit Agreement may at any time and from time to time be amended or supplemented by written agreement between the Company and the Depositary in any respect which they may deem necessary or desirable without the consent of the Holders or Beneficial Owners. Any amendment or supplement which shall impose or increase any fees or charges (other than the charges of the Depositary in connection with foreign exchange control regulations, and taxes and/or other governmental charges, delivery and other such expenses), or which shall otherwise materially prejudice any substantial existing right of Holders or Beneficial Owners, shall not, however, become effective as to outstanding Receipts until 30 days after notice of such amendment or supplement shall have been given to the Holders of outstanding Receipts. Notice of any amendment to the Deposit Agreement or form of Receipts shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders and Beneficial Owners to retrieve or receive the text of such amendment (i.e., upon retrieval from the Commissions, the Depositarys or the Companys website or upon request from the Depositary). The parties hereto agree that any amendments or supplements which (i) are reasonably necessary (as agreed by the Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act or (b) the ADSs or Shares to be traded solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to materially prejudice any substantial rights of Holders or Beneficial Owners. Every Holder and Beneficial Owner at the time any amendment or supplement so becomes effective shall be deemed, by continuing to hold such ADS, to consent and agree to such amendment or supplement and to be bound by the Deposit Agreement as amended or supplemented thereby. In no event shall any amendment or supplement impair the right of the Holder to surrender such Receipt and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Notwithstanding the foregoing, if any governmental body should adopt new laws, rules or regulations which would require amendment or supplement of the Deposit Agreement to ensure compliance therewith, the Company and the Depositary may amend or supplement the Deposit Agreement and the Receipt at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the Deposit Agreement in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance with such laws, or rules or regulations.
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(21) Termination. The Depositary shall, at any time at the written direction of the Company, terminate the Deposit Agreement by mailing notice of such termination to the Holders of all Receipts then outstanding at least 90 days prior to the date fixed in such notice for such termination provided that, the Depositary shall be reimbursed for any amounts, fees, costs or expenses owed to it in accordance with the terms of the Deposit Agreement and in accordance with any other agreements as otherwise agreed in writing between the Company and the Depositary from time to time, prior to such termination shall take effect. If 90 days shall have expired after (i) the Depositary shall have delivered to the Company a written notice of its election to resign, or (ii) the Company shall have delivered to the Depositary a written notice of the removal of the Depositary, and in either case a successor depositary shall not have been appointed and accepted its appointment as provided herein and in the Deposit Agreement, the Depositary may terminate the Deposit Agreement by mailing notice of such termination to the Holders of all Receipts then outstanding at least 30 days prior to the date fixed for such termination. On and after the date of termination of the Deposit Agreement, each Holder will, upon surrender of such Holders Receipt at the Corporate Trust Office of the Depositary, upon the payment of the charges of the Depositary for the surrender of Receipts referred to in Article (2) hereof and in the Deposit Agreement and subject to the conditions and restrictions therein set forth, and upon payment of any applicable taxes and/or governmental charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by such Receipt. If any Receipts shall remain outstanding after the date of termination of the Deposit Agreement, the Registrar thereafter shall discontinue the registration of transfers of Receipts, and the Depositary shall suspend the distribution of dividends to the Holders thereof, and shall not give any further notices or perform any further acts under the Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights or other property as provided in the Deposit Agreement, and shall continue to deliver Deposited Securities, subject to the conditions and restrictions set forth in the Deposit Agreement, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary (after deducting, or charging, as the case may be, in each case the charges of the Depositary for the surrender of a Receipt, any expenses for the account of the Holder in accordance with the terms and conditions of the Deposit Agreement and any applicable taxes and/or governmental charges or assessments). At any time after the expiration of six months from the date of termination of the Deposit Agreement, the Depositary may sell the Deposited Securities then held hereunder and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it hereunder, in an unsegregated account, without liability for interest for the pro rata benefit of the Holders of Receipts whose Receipts have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement with respect to the Receipts and the Shares, Deposited Securities and ADSs, except to account for such net proceeds and other cash (after deducting, or charging, as the case may be, in each case the charges of the Depositary for the surrender of a Receipt, any expenses for the account of the Holder in accordance with the terms and conditions of the Deposit Agreement and any applicable taxes and/or governmental charges or assessments) and except as set forth in the Deposit Agreement. Upon the termination of the Deposit Agreement, the Company shall be discharged from all obligations under the Deposit Agreement except as set forth in the Deposit Agreement. The obligations under the terms of the Deposit Agreement and Receipts of Holders and Beneficial Owners of ADSs outstanding as of the effective date of any termination shall survive such effective date of termination and shall be discharged only when the applicable ADSs are presented by their Holders to the Depositary for cancellation under the terms of the Deposit Agreement and the Holders have each satisfied any and all of their obligations hereunder (including, but not limited to, any payment and/or reimbursement obligations which relate to prior to the effective date of termination but which payment and/or reimbursement is claimed after such effective date of termination).
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Notwithstanding anything contained in the Deposit Agreement or any ADR, in connection with the termination of the Deposit Agreement, the Depositary may, independently and without the need for any action by the Company, make available to Holders of ADSs a means to withdraw the Deposited Securities represented by their ADSs and to direct the deposit of such Deposited Securities into an unsponsored American depositary shares program established by the Depositary, upon such terms and conditions as the Depositary may deem reasonably appropriate, subject however, in each case, to satisfaction of the applicable registration requirements by the unsponsored American depositary shares program under the Securities Act, and to receipt by the Depositary of payment of the applicable fees and charges of, and reimbursement of the applicable expenses incurred by, the Depositary.
(22) Compliance with U.S. Securities Laws; Regulatory Compliance. Notwithstanding any provisions in this Receipt or the Deposit Agreement to the contrary, the withdrawal or Delivery of Deposited Securities will not be suspended by the Company or the Depositary except as would be permitted by Section I.A.(1) of the General Instructions to Form F-6 Registration Statement, as amended from time to time, under the Securities Act.
(23) Certain Rights of the Depositary. The Depositary, its Affiliates and their agents, on their own behalf, may own and deal in any class of securities of the Company and its Affiliates and in ADSs. The Depositary may issue ADSs against evidence of rights to receive Shares from the Company, any agent of the Company or any custodian, registrar, transfer agent, clearing agency or other entity involved in ownership or transaction records in respect of the Shares.
(24) Ownership Restrictions. Owners and Beneficial Owners shall comply with any limitations on ownership of Shares under the Memorandum and Articles of Association or applicable Cayman Islands law as if they held the number of Shares their American Depositary Shares represent. The Company shall inform the Owners, Beneficial Owners and the Depositary of any such ownership restrictions in place from time to time.
(25) Waiver. EACH PARTY TO THE DEPOSIT AGREEMENT (INCLUDING, FOR AVOIDANCE OF DOUBT, EACH HOLDER AND BENEFICIAL OWNER AND/OR HOLDER OF INTERESTS IN ANY ADRs) HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY SUIT, ACTION OR PROCEEDING AGAINST THE DEPOSITARY AND/OR THE COMPANY DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THE SHARES OR OTHER DEPOSITED SECURITIES, THE ADSs OR THE ADRs, THE DEPOSIT AGREEMENT OR ANY TRANSACTION CONTEMPLATED HEREIN OR THEREIN, OR THE BREACH HEREOF OR THEREOF (WHETHER BASED ON CONTRACT, TORT, COMMON LAW OR ANY OTHER THEORY).
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(ASSIGNMENT AND TRANSFER SIGNATURE LINES)
FOR VALUE RECEIVED, the undersigned Holder hereby sell(s), assign(s) and transfer(s) unto ______________________________ whose taxpayer identification number is _______________________ and whose address including postal zip code is ____________________________, the within Receipt and all rights thereunder, hereby irrevocably constituting and appointing ________________________ attorney-in-fact to transfer said Receipt on the books of the Depositary with full power of substitution in the premises.
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ARTICLE I. DEFINITIONS |
1 | |||||
SECTION 1.1 |
Affiliate | 1 | ||||
SECTION 1.2 |
Agent | 1 | ||||
SECTION 1.3 |
American Depositary Share(s) and ADS(s) | 2 | ||||
SECTION 1.4 |
Article | 2 | ||||
SECTION 1.5 |
Articles of Association | 2 | ||||
SECTION 1.6 |
ADS Record Date | 2 | ||||
SECTION 1.7 |
Beneficial Owner | 2 | ||||
SECTION 1.8 |
Business Day | 2 | ||||
SECTION 1.9 |
Commission | 2 | ||||
SECTION 1.10 |
Company | 2 | ||||
SECTION 1.11 |
Corporate Trust Office | 2 | ||||
SECTION 1.12 |
Custodian | 2 | ||||
SECTION 1.13 |
Deliver, Deliverable and Delivery | 3 | ||||
SECTION 1.14 |
Deposit Agreement | 3 | ||||
SECTION 1.15 |
Depositary | 3 | ||||
SECTION 1.16 |
Deposited Securities | 3 | ||||
SECTION 1.17 |
Dollars and $ | 3 | ||||
SECTION 1.18 |
DRS/Profile | 3 | ||||
SECTION 1.19 |
DTC | 3 | ||||
SECTION 1.20 |
DTC Participants | 3 | ||||
SECTION 1.21 |
Exchange Act | 3 | ||||
SECTION 1.22 |
Foreign Currency | 3 | ||||
SECTION 1.23 |
Foreign Registrar | 3 | ||||
SECTION 1.24 |
Holder | 3 | ||||
SECTION 1.25 |
Indemnified Person and Indemnifying Person | 4 | ||||
SECTION 1.26 |
Losses | 4 | ||||
SECTION 1.27 |
Memorandum | 4 | ||||
SECTION 1.28 |
Opinion of Counsel | 4 | ||||
SECTION 1.29 |
Receipt(s); American Depositary Receipt(s); and ADR(s) | 4 | ||||
SECTION 1.30 |
Registrar | 4 | ||||
SECTION 1.31 |
Restricted ADRs | 4 | ||||
SECTION 1.32 |
Restricted ADSs | 4 | ||||
SECTION 1.33 |
Restricted Securities | 4 | ||||
SECTION 1.34 |
Restricted Shares | 4 | ||||
SECTION 1.35 |
Securities Act | 4 | ||||
SECTION 1.36 |
Share(s) | 5 | ||||
SECTION 1.37 |
United States or U.S. | 5 | ||||
ARTICLE II. APPOINTMENT OF DEPOSITARY; FORM OF RECEIPT; DEPOSIT OF SHARES; EXECUTION AND DELIVERY, TRANSFER AND SURRENDER OF RECEIPTS |
5 | |||||
SECTION 2.1 |
Appointment of Depositary | 5 | ||||
SECTION 2.2 |
Form and Transferability of Receipts | 5 | ||||
SECTION 2.3 |
Deposits | 7 | ||||
SECTION 2.4 |
Execution and Delivery of Receipts | 8 | ||||
SECTION 2.5 |
Transfer of Receipts; Combination and Split-up of Receipts | 8 |
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SECTION 2.6 |
Surrender of Receipts and Withdrawal of Deposited Securities | 9 | ||||
SECTION 2.7 |
Limitations on Execution and Delivery, Transfer, etc. of Receipts; Suspension of Delivery, Transfer, etc. | 10 | ||||
SECTION 2.8 |
Lost Receipts, etc. | 11 | ||||
SECTION 2.9 |
Cancellation and Destruction of Surrendered Receipts | 11 | ||||
SECTION 2.10 |
Maintenance of Records | 11 | ||||
SECTION 2.10 |
Maintenance of Records | 11 | ||||
ARTICLE III. CERTAIN OBLIGATIONS OF HOLDERS AND BENEFICIAL OWNERS OF RECEIPTS |
13 | |||||
SECTION 3.1 |
Proofs, Certificates and Other Information | 13 | ||||
SECTION 3.2 |
Liability for Taxes and Other Charges | 13 | ||||
SECTION 3.3 |
Representations and Warranties on Deposit of Shares | 14 | ||||
SECTION 3.4 |
Compliance with Information Requests | 14 | ||||
ARTICLE IV THE DEPOSITED SECURITIES. |
15 | |||||
SECTION 4.1 |
Cash Distributions | 15 | ||||
SECTION 4.2 |
Distribution in Shares | 15 | ||||
SECTION 4.3 |
Elective Distributions in Cash or Shares | 16 | ||||
SECTION 4.4 |
Distribution of Rights to Purchase Shares | 16 | ||||
SECTION 4.5 |
Distributions Other Than Cash, Shares or Rights to Purchase Shares | 18 | ||||
SECTION 4.6 |
Conversion of Foreign Currency | 19 | ||||
SECTION 4.7 |
Fixing of Record Date | 19 | ||||
SECTION 4.8 |
Voting of Deposited Securities | 20 | ||||
SECTION 4.9 |
Changes Affecting Deposited Securities | 22 | ||||
SECTION 4.10 |
Available Information | 22 | ||||
SECTION 4.11 |
Reports | 22 | ||||
SECTION 4.12 |
List of Holders | 22 | ||||
SECTION 4.13 |
Taxation; Withholding | 23 | ||||
ARTICLE V. THE DEPOSITARY, THE CUSTODIAN AND THE COMPANY |
24 | |||||
SECTION 5.1 |
Maintenance of Office and Transfer Books by the Registrar | 24 | ||||
SECTION 5.2 |
Exoneration | 25 | ||||
SECTION 5.3 |
Standard of Care | 25 | ||||
SECTION 5.4 |
Resignation and Removal of the Depositary; Appointment of Successor Depositary | 26 | ||||
SECTION 5.5 |
The Custodian | 27 | ||||
SECTION 5.6 |
Notices and Reports | 28 | ||||
SECTION 5.7 |
Issuance of Additional Shares, ADSs etc. | 29 | ||||
SECTION 5.8 |
Indemnification | 30 | ||||
SECTION 5.9 |
Fees and Charges of Depositary | 30 | ||||
SECTION 5.10 |
Restricted Securities Owners/Ownership Restrictions | 32 | ||||
ARTICLE VI. AMENDMENT AND TERMINATION |
33 | |||||
SECTION 6.1 |
Amendment/Supplement | 33 | ||||
SECTION 6.2 |
Termination | 34 | ||||
ARTICLE VII. MISCELLANEOUS |
34 | |||||
SECTION 7.1 |
Counterparts | 34 | ||||
SECTION 7.2 |
No Third-Party Beneficiaries | 35 |
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SECTION 7.3 |
Severability | 35 | ||||
SECTION 7.4 |
Holders and Beneficial Owners as Parties; Binding Effect | 35 | ||||
SECTION 7.5 |
Notices | 35 | ||||
SECTION 7.6 |
Governing Law and Jurisdiction | 36 | ||||
SECTION 7.7 |
Assignment | 37 | ||||
SECTION 7.8 |
Agents | 37 | ||||
SECTION 7.9 |
Affiliates etc. | 38 | ||||
SECTION 7.10 |
Exclusivity | 38 | ||||
SECTION 7.11 |
Compliance with U.S. Securities Laws | 38 | ||||
SECTION 7.12 |
Titles | 38 | ||||
EXHIBIT A |
40 | |||||
EXHIBIT B |
49 |
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Exhibit 4.1
Amended Share Incentive Plan
DINGDONG (CAYMAN) LIMITED
2020 Share Incentive Plan
1. | Introduction |
1.1 | This Plan is the share incentive plan (the Plan) of Dingdong (Cayman) Limited, an exempted company duly incorporated and validly existing under the laws of the Cayman Islands, with its registered number SI-343779, (the Company). The Plan is the successor to that certain version thereof that became effective on September 5, 2020, and any predecessor versions thereof (collectively, the Prior Plan), it being understood that the provisions of the Prior Plan shall no longer remain in effect upon the Effective Date. |
1.2 | The purpose of this Plan is to promote the success of the Company by enhancing the Companys value of going hand in hand towards the same goal to achieve success and building a strivers-oriented culture, combining the development of the Company with the personal development of employees, and linking the interests of the Company to those of employees. |
2. | Definitions |
2.1 | The following terms used in this Plan shall have the meanings specified below: |
Administrator shall mean the entity that conducts the general administration of the Plan as provided in Article 3. With reference to the duties of the Committee under the Plan which have been delegated to one or more persons pursuant to Section 3.6, or as to which the Board has assumed, the term Administrator shall refer to such person(s) unless the Committee or the Board has revoked such delegation or the Board has terminated the assumption of such duties;
Applicable Laws means the legal requirements relating to the Plan and the Options under applicable provisions of the corporate, securities, tax and other laws, rules, regulations and government orders, and the rules of any applicable stock exchange or national market system, of any jurisdiction where Options are granted under the Plan;
Award Agreement shall mean the Notice of Grant, Notice of Exercise, and any other written notice, agreement, terms and conditions, contract or other instrument or document evidencing an Option granted, including through electronic medium, which shall contain such terms and conditions with respect to an Option as the Administrator shall determine their consistency with the Plan;
Board shall mean the board of directors of the Company;
Committee shall have the meaning set forth in Section 3.2;
Effective Date shall have the meaning set forth in Section 15.1;
Founding Shareholder shall mean Mr. Changlin Liang;
Group shall mean the Company and its subsidiaries;
Incentive Recipient shall have the meaning set forth in Section 5.1;
Notice of Exercise shall have the meaning set forth in Section 9.3;
Notice of Grant shall have the meaning set forth in Section 5.2;
Option shall mean a right granted under this Plan to purchase the Shares;
Performance Eligibility Standards shall mean, with respect to any Incentive Recipient, the Company considers that such Incentive Recipient has achieved Level A (or its equivalent level under the Groups future updated or adjusted performance or assessment standards) or above under the standards set by the Group with respect to such Incentive Recipient (such as the standards for the company value assessment and annual performance assessment);
Plan Period shall have the meaning set forth in Section 3.1;
Share shall mean an ordinary share in the share capital of the ESOP Platform (or the ordinary share with a different par value generated as a result of split, consolidation, reclassification or recapitalization of such Shares from time to time);
Exercise Price shall mean the price per Share determined pursuant to Section 10.1 and at which an Incentive Recipient purchases the Shares by exercising the Option;
Fair Market Value shall mean, as of a particular date, the closing sales price for such Shares of the Company (or the closing bid, if no sales were reported) as quoted on the principal exchange or system on which the Shares are listed (as determined by the Administrator) on the date of determination (or, if no closing sales price or closing bid was reported on that date, as applicable, on the last trading date such closing sales price or closing bid was reported), as reported on the website maintained by such exchange or market system or such other source as the Administrator deems reliable.
The headings of the Articles in this Plan are for convenience of reference only and shall be disregarded in construing this Plan. References to an Article is to an Article of this Plan.
3. | Term and Administration |
3.1 | Term of Plan. This Plan shall come into effect from the Effective Date, and shall remain in full force and effect thereafter for indefinite period in all aspects, provided, however, that the Administrator, in its sole discretion, may suspend or terminate the Plan at any earlier date pursuant to Article 12 hereof. Notwithstanding the foregoing, the administration of this Plan shall survive such termination, until all payment and exercise issues in connection with the Options granted prior to such termination have been completed. |
3.2 | Administrator. The Plan shall be administered by the Board or a committee of one or more members of the Board (the Committee) to whom the Board shall delegate the authority to grant or amend Options to Incentive Recipient other than any of the Committee members. Any grant or amendment of Options to any Committee member shall then require an affirmative vote of a majority of the Board members who are not on the Committee. |
3.3 | Action by the Committee. A majority of the Committee shall constitute a quorum. The acts of a majority of the members of the Committee present at any meeting at which a quorum is present, and acts approved in writing by a majority of the Committee in lieu of a meeting, shall be deemed the acts of the Committee. Each member of the Committee is entitled to, in good faith, rely or act upon any report or other information furnished to that member by any officer or other employee of the Company, the Companys independent certified public accountants, or any executive compensation consultant or other professional retained by the Company to assist in the administration of the Plan. |
3.4 | Authority of Administrator. Subject to Applicable Laws and any specific designation in the Plan and each Award Agreement, and except as otherwise provided by the Board, the Administrator has the authority, in its discretion to: |
(1) | designate eligible Incentive Recipient; |
(2) | determine the number of Options to be granted and the number of Shares to which an Option will relate; |
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(3) | determine the terms and conditions of any Option granted pursuant to the Plan, including, but not limited to, the exercise price, manner of exercise, any restrictions or limitations on the Options, any schedule for vesting, lapse or cancellation of Options, or restrictions on the exercisability of an Option, and accelerations or waivers thereof, based in each case on such considerations as the Administrator in its sole discretion determines; |
(4) | prescribe and approve the form of each Award Agreement, which need not be identical for each Incentive Recipient; |
(5) | decide all other matters that must be determined in connection with an Option; |
(6) | establish, adopt, or revise any rules and regulations as it may deem necessary or advisable to administer the Plan; |
(7) | interpret the terms of, and any matter arising pursuant to, the Plan or any Award Agreement; |
(8) | adjust the Exercise Price per Share subject to an Option; and |
(9) | make all other decisions and determinations that may be required pursuant to the Plan or as the Administrator deems necessary or advisable to administer the Plan. |
3.5 | Decisions Binding. The Administrators interpretation of the Plan, any Options granted pursuant to the Plan, any Award Agreement and all decisions and determinations by the Administrator with respect to the Plan are final, binding, and conclusive on all parties. |
3.6 | Delegation of Authority. To the extent permitted by Applicable Laws, the Board or Committee may from time to time delegate to a committee of one or more members of the Board or one or more officers of the Company the authority to grant or amend Options or to take other administrative actions pursuant to Article 3; provided, however, that in no event shall an officer of the Company or a member of the Board be delegated the authority to grant Options to or amend Options held by such officer or member of Board to whom authority to grant or amend Options has been delegated hereunder. Any delegation hereunder shall be subject to the restrictions and limits that the Board or Committee specifies at the time of such delegation, and the Board may at any time rescind the authority so delegated or appoint a new delegatee. At all times, the delegatee appointed under this Section 3.6 shall serve in such capacity at the pleasure of the Board and the Committee. |
4. | Options |
4.1 | For the purpose of this Plan, the Founding Shareholder voluntarily contributes the ordinary shares of the Company indirectly held by him through EatBetter Holding Limited (the ESOP Platform) indirectly controlled by him to the Options under this Plan. Options may be granted to Incentive Recipients from time to time as determined by the Administrator. Unless otherwise agreed in this Plan, the Options granted to an Incentive Recipient or the Shares with respect to which the Options have been exercised shall not be transferred, pledged, mortgaged, hypothecated, exchanged or used for debt repayment. The Options may be exercised by the Incentive Recipients pursuant to the conditions and procedures set forth in this Plan, and transferred to the Shares held by the Incentive Recipients in the ESOP Platform. |
4.2 | Subject to Section 15.3, the maximum aggregate number of Shares which may be issued pursuant to the Plan is 40,181,400 Class A ordinary shares of the Company. |
5. | Incentive Recipients |
5.1 | An incentive recipient (the Incentive Recipient) shall be an employee who has made an important contribution to the Group and met certain criteria, which criteria shall be determined solely by the Administrator. |
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5.2 | With respect to the selection of Incentive Recipients under this Plan, the Administrator shall have the right to determine whether an employee is eligible to be an Incentive Recipient based on the Companys overall business needs, and the employees value and performance. With respect to a selected Incentive Recipient, the ESOP Platform will issue a Notice of Grant of Options, substantially in the form attached hereto as Appendix 1 (the Notice of Grant) to the Incentive Recipient. The content in the Notice of Grant shall be confidential, and the Incentive Recipient shall perform confidentiality obligations. |
5.3 | The Administrator shall have the right to adjust the number and the manner of any Options to be granted in a year based on the actual situation, and the Administrator shall have the right to adjust the years in which the Options will be granted based on the Companys actual situation, and the time and frequency to grant the Options in that specific year. |
6. | Grant of Options |
6.1 | The Administrator shall have the right to grant the Options to any Incentive Recipient at any time or from time to time during the Plan Period based on conditions that it considers proper in accordance with the provisions of this Plan, which Options can be exercised by the Incentive Recipient to purchase the Shares in an amount as determined by the Administrator at the Exercise Price. |
6.2 | The ESOP Platform shall notify the Incentive Recipient in writing by a Notice of Grant of the number of the Options to be granted, exercise eligibility, Vesting Conditions and Exercise Price. Such notice shall come into effect after the ESOP Platform delivers, and the Incentive Recipient signs, the same. |
6.3 | An Incentive Recipient shall confirm his/her acceptance of such Option granting arrangement by signing the Notice of Grant and delivering the signed copy to the Company within 30 days of receipt of the Notice of Grant, otherwise such offer shall be deemed irrevocably rejected. The Options shall be deemed to be granted and accepted if relevant Notice of Grant signed by the Incentive Recipient is received by the Company on or prior to the acceptance deadline, and the Incentive Recipient shall exercise the Options pursuant to the method and rules set forth in this Plan. |
7. | Option Pre-vesting Period |
7.1 | Unless otherwise agreed in this Plan, the option Pre-vesting Period shall be no longer than two years from the date on which the Options are granted to an Incentive Recipient pursuant to this Plan (the Pre-vesting Period), which means after the Incentive Recipients Pre-vesting Period begins, if the Incentive Recipient satisfies the following preconditions, he/she can enter vesting period. The Pre-vesting Period is set forth in the Notice of Grant issued by the ESOP Platform to the Incentive Recipient: |
(1) | the employment relationship between the Incentive Recipient and the Group is not suspended or terminated, and the employment contract in effect has not been or will not possibly be subject to material changes as the Administrator reasonably determines, and the Incentive Recipient is serving the Group effectively with a position and responsibilities equal to or higher than those set for him/her when the Notice of Grant was issued; |
(2) | during the Pre-vesting Period, the Incentive Recipient is not in violation of any laws, regulations, bylaws, policies of the Group (including the Companys integrity policy and other relevant anti-corruption policies) and requirements or provisions in the employment contract; |
(3) | such Incentive Recipient has met the Performance Eligibility Standards; and |
(4) | the Incentive Recipient has met other conditions that the Administrator believes he/she should meet (the conditions from (1) to (4), the Vesting Conditions). |
7.2 | Acceleration of the Pre-vesting Period. An Incentive Recipients Pre-vesting Period shall accelerate and his/her vesting period can start, if: |
(1) | during the Pre-vesting Period, the Incentive Recipient makes critical contributions to the Group (including obtaining material patents in relation to his or her employment, recovering material losses or achieving material economic interests), and the Administrator approves that his/her vesting period can start early; or |
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(2) | the Company or the ESOP Platform amends the Plan in its entirety and notifies the Incentive Recipient of the early start of his/her vesting period in writing. |
7.3 | Termination of the Pre-vesting Period. An Incentive Recipients Pre-vesting Period shall terminate early, if: |
(1) | the employment contract between the Incentive Recipient and the Group is or will be rescinded or terminated; |
(2) | the Incentive Recipient is in violation of any laws, regulations or administrative rules, and the Group considers such violation will affect the Companys interests or the Incentive Recipients work; |
(3) | the Incentive Recipient is or is possibly in violation of the anti-commercial bribery agreement entered into by and between the Incentive Recipient and the Group or the Companys integrity policy and/or other relevant anti-corruption policies, regardless of whether the Company has substantive evidence of legal significance, the amount involved, or whether it constitutes a violation of any laws and regulations; |
(4) | the Incentive Recipient is in violation of this Plan and confidentiality obligations under the Notice of Grant; |
(5) | the Incentive Recipient is in violation of bylaws or polices of the Company and requirements or provisions in the employment contract; or |
(6) | the Company considers that such Incentive Recipient is at Level C (or its equivalent level under the Groups future updated or adjusted performance or assessment standards) or below under the standards set by the Group with respect to such Incentive Recipient (such as the standards for the company value assessment and annual performance assessment); |
in each case of the above paragraphs (1) to (6), the Notice of Grant issued by the ESOP Platform to the Incentive Recipient shall be automatically revoked and become null and void immediately, and all outstanding Options of the Incentive Recipient shall automatically lapse, where no written notice is required from the ESOP Platform and such Incentive Recipient is not required to sign any written document or make any confirmation. |
7.4 | Extension of the Pre-vesting Period. If any of the following events occurs (the period in which such event exists is the suspension period of the Pre-vesting Period), an Incentive Recipients Pre-vesting Period shall be extended accordingly. |
(1) | The Company considers that such Incentive Recipient is at Level B (or its equivalent level under the Groups future updated or adjusted performance or assessment standards) under the standards set by the Group with respect to such Incentive Recipient (such as the standards for the company value assessment and annual performance assessment), and the Administrator decides to suspend to implement and calculate the Pre-vesting Period set forth in the Notice of Grant issued to such Incentive Recipient, and designates an extra year as the observation period (the Observation Period). (x) Upon the completion of the Observation Period, if the Incentive Recipient achieves the Performance Eligibility Standards, the calculation of the Pre-vesting Period set forth in the Notice of Grant shall be restarted, and such Incentive Recipient may, at the expiration date of such Observation Period, have the exercise eligibility of the first tranche of Options with respect to number of Options receivable after the expiration of the Pre-vesting Period, and his/her subsequent exercise eligibility shall be considered from the expiration date of such Observation Period; (y) upon the completion of the Observation Period, if the Incentive Recipient fails to achieve the Performance Eligibility Standards, effective from the expiration date of the Observation Period, the Pre-vesting Period shall terminate, and the Notice of Grant issued by the ESOP Platform to the Incentive Recipient shall be automatically revoked and become null and void immediately, and all outstanding Options of the Incentive Recipient shall automatically lapse, where no written notice is required from the ESOP Platform and such Incentive Recipient is not required to sign any written document or make any confirmation. |
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(2) | The Incentive Recipient is in violation of bylaws or policies of the Group (other than the anti-commercial bribery agreement entered into by and between the Incentive Recipient and the Group or the Companys integrity policy and/or other relevant anti-corruption policies) and requirements or provisions in the employment contract, as a result of which the Administrator decides to suspend to implement relevant provisions set forth in the Notice of Grant, and designates one extra year as the Observation Period. Upon the completion of the Observation Period, if the Incentive Recipient has corrected violations and no new violations occur, the calculation of the Pre-vesting Period set forth in the Notice of Grant shall be resumed. |
(3) | The Company is in a period of acquisition, merger, listing, or other transactions that may lead to change of control, or the Shares shall be locked as required by investors or other third parties or the provisions of laws, regulations, rules and policies, as a result of which the exercise of the rights is temporarily impossible. |
8. | Conditions of Entering Vesting Period |
8.1 | The following conditions shall be satisfied for an Incentive Recipient to enter the vesting period: |
(1) | the Pre-vesting Period has expired and applicable Vesting Conditions have been satisfied; |
(2) | the Incentive Recipient shall continuously meet the Performance Eligibility Standards, otherwise, the entering into vesting period shall be postponed for one year. If the Incentive Recipient still cannot meet the Performance Eligibility Standards one year later, the Administrator shall have the right to immediately cancel or continue to postpone the entering into vesting period; |
(3) | the Incentive Recipient has met other conditions that the Administrator believes he/she should meet. |
9. | Vesting |
9.1 | Vesting Schedule. |
(1) | The first tranche of Options as provided under the Notice of Grant shall vest and become exercisable after an Incentive Recipient meets the conditions set forth in Section 8.1. |
(2) | After one year anniversary from the last day of the Pre-vesting Period specified in the Notice of Grant issued by the ESOP Platform to the Incentive Recipient, if (i) all the conditions set forth in Section 8.1 are met, (ii) all the prior tranches of Options are vested, and (iii) he or she remains within the Group continuously for more than one year after the vesting of the last tranche of Options, the remaining tranche of Options shall vest and become exercisable in accordance with the schedule as provided under the Notice of Grant. |
9.2 | Time and Conditions of Exercise. The Administrator shall determine the time or times at which an Option may be exercised in whole or in part, including exercise prior to vesting and that a partial exercise must be with respect to a minimum number of Shares. The Administrator shall also determine any conditions, if any, that must be satisfied before all or part of an Option may be exercised. |
9.3 | Exercise procedures. When exercising Options in accordance with this Plan, the Incentive Recipient shall confirm with the Company the number of Options to be exercised by issuing a Notice of Exercise of Options, substantially in the form attached hereto as Appendix 2 (the Notice of Exercise), and the exercise shall be deemed to be completed upon confirmation by the Administrator, provided that all the expenses in connection with the exercise of the Options or delivery of Shares shall be borne by the Incentive Recipient. If agreed by the Company, (i) where the Incentive Recipient requests the ESOP Platform to redeem his/her exercised Shares pursuant to Section 10.6 hereof, the ESOP Platform shall have the right to deduct all the reasonable expenses actually incurred in connection with such redemption before paying the redemption proceeds to the Incentive Recipient; or (ii) where the Incentive Recipient sells or transfers his/her exercised Shares on the secondary market pursuant to Section 10.5 hereof, the ESOP Platform shall have the right to deduct all the reasonable expenses actually incurred in connection with such sale or transfer before paying the sale/transfer proceeds to the Incentive Recipient. The Administrator may, in its sole discretion, also take whatever additional actions it deems appropriate to effect such compliance including, without limitation, placing legends on share certificates and issuing stop transfer notices to agents and registrars. |
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9.4 | The Incentive Recipient expressly acknowledges that the Shares obtained by exercising Options in accordance with this Plan shall be restricted Shares. Unless agreed by the Administrator, such Shares will be held by the ESOP Platform on behalf of the Incentive Recipient, which will not result in any change of the shareholder register of the Company or other subsidiaries of the ESOP Platform with the competent registration authority, nor any change of partners or shareholders of the ESOP Platform or other entities holding the Shares on behalf of the Incentive Recipient with the competent registration authority, nor mean that the Incentive Recipient has the right to vote on any matter of the Company or the ESOP Platform. |
9.5 | During the process of exercise, the Incentive Recipient shall execute the documents as required by the Administrator or the ESOP Platform. Otherwise, all outstanding Options of the Incentive Recipient shall automatically lapse. |
10. | Other Terms and Conditions of Options |
10.1 | Exercise Price. The Exercise Price shall be determined by the Administrator and set forth in the Notice of Grant which may be a fixed price or a variable price related to the Fair Market Value. The Exercise Price may be amended or adjusted in the absolute discretion of the Administrator, the determination of which shall be final, binding and conclusive. For the avoidance of doubt, to the extent not prohibited by Applicable Laws or any exchange rule, a downward adjustment of the Exercise Price mentioned in the preceding sentence shall be effective without the approval of the Companys shareholders or the approval of the affected participants. |
10.2 | The grant and receipt of Options under this Plan shall be evidenced by a Notice of Grant. No person shall be entitled to any rights related to the ownership of any Shares until receiving such Shares upon exercise of the Options under this Plan. |
10.3 | Payment. The Administrator shall determine the methods by which the Exercise Price may be paid, the form of payment. |
10.4 | Market Standoff. The Incentive Recipient agrees in connection with any registration of the Companys securities, that, upon request of the Company or the underwriters managing any public offering of the Companys securities, the Incentive Recipient will not sell or otherwise dispose of any Shares without the prior written consent of the Company or such underwriters, as the case may be, for such period of time after the effective date of such registration requested by such managing underwriters and subject to all restrictions as the Company or the underwriters may specify (the Lock-up Period). |
10.5 | Restricted Transfer |
(1) | Disposition of Shares. The Incentive Recipient shall make no disposition of the Shares (other than as permitted by this Plan) unless and until: |
(a) the Incentive Recipient shall have notified the Company of the proposed disposition and provided a written summary of the terms and conditions of the proposed disposition;
(b) the Incentive Recipient shall have complied with all requirements of this Plan applicable to the disposition of the Shares (including the restrictions set forth in the Plan and the Notice of Grant); and
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(c) the Incentive Recipient shall have provided the Company with written assurances, in form and substance satisfactory to counsel for the Company, that (i) the proposed disposition does not require registration of the Shares under any applicable securities laws or (ii) all appropriate action necessary for compliance with the registration requirements of any applicable securities laws or any exemption from registration or other restrictions available thereunder has been taken.
(2) | Notwithstanding any other provisions of this Plan, if the service of the Incentive Recipient is terminated by the Group other than for Cause (as defined below) during the Lock-up Period, from the date of such termination, the outstanding Options shall be automatically cancelled and lapse; the Incentive Recipient shall sell the exercised Shares within 30 days from the expiration of the Lock-up Period. Subject to Section 15.6, the exercised Shares that have not been sold within such period shall be redeemed by the ESOP Platform at a consideration equal to the Exercise Price of such Shares. |
(3) | In the event of enforcement by a judicial agency against the Shares of the Incentive Recipient, the ESOP Platform shall have the right of first refusal with respect to such Shares. If the ESOP Platform waives its right of first refusal, the other shareholders of the Company shall have the right of first refusal. |
10.6 | Right of redemption |
(1) | In the following circumstances, the exercised Shares (if any) shall be redeemed in the manner stated below subject to Section 15.6. The proportion and price of redemption shall be determined by the Administrator, and the Incentive Recipients Options that have not become vested and exercisable shall lapse immediately: |
(i) | Subject to Section 10.5, if the service of the Incentive Recipient is terminated by the Group other than for Cause or his or her death or disability and such Incentive Recipient is not subject to any lock-up obligations as provided under Section 10.4, the Options that have not yet become exercisable shall automatically lapse and shall have no further force and effect, and, at the time when the Incentive Recipient departs, the Incentive Recipient may choose to transfer the exercised Shares as provided under Section 10.5. If the Incentive Recipient cannot transfer all the exercised Shares by two weeks before the termination of service, the Incentive Recipient shall request the ESOP Platform or other person or entity designated by the Administrator to redeem all or the remaining exercised Shares after the transfer. The proportion and price of redemption shall be negotiated by the Incentive Recipient and the ESOP Platform or the Administrator. In the event that consensus cannot be reached, the ESOP Platform or other person or entity designated by the Administrator shall have the discretion to redeem, at the full Exercise Price, all the exercised Shares held by the Incentive Recipient; |
(ii) | If the service of the Incentive Recipient is terminated by the Group due to his or her death or disability, the Options that have not yet become exercisable shall automatically lapse and shall have no further force and effect, and the exercised Shares will continue to be valid. The exercised Shares may be transferred pursuant to Section 10.5 of this Plan or redeemed by the ESOP Platform or other person or entity designated by the Administrator. The proportion of transfer and/or redemption of exercised Shares according to this Plan shall be negotiated by the Incentive Recipient or his/her legal guardian or heir and the ESOP Platform or the Administrator. In the event that consensus cannot be reached, the ESOP Platform or other person or entity designated by the Administrator shall have the right to redeem, at the Exercise Price, 100% of the exercised Shares held by the Incentive Recipient. |
(2) | Redemption method. In case of redemption by the ESOP Platform, if consensus is reached, the ESOP Platform or other person or entity designated by the Administrator shall have the right to purchase such exercised Shares at the negotiated price, and if consensus on the redemption price cannot be reached, the redemption price of the ESOP Platform or other person or entity designated by the Administrator shall be the Exercise Price provided under the Notice of Grant. The Incentive Recipient expressly acknowledges that redemption is a right rather than obligation of the ESOP Platform or other person or entity designated by the Administrator. |
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(3) | Before redemption, the Incentive Recipient shall cooperate unconditionally with the transferee or the redeeming person to complete all formalities to exit from the Shares, and unconditionally sign all relevant legal documents and cause the same complete. Otherwise, the Incentive Recipient shall be liable for breach of contract and shall indemnify the transferee or the redeeming person on the basis of the market value of such Shares. In the event that the said indemnification is not adequate to compensate all losses incurred by the Company and/or the ESOP Platform and/or the Administrator therefrom, the Company and/or the ESOP Platform and/or the Administrator shall have the right to seek recovery. |
(4) | During the Lock-up Period, the Lock-up Period-related provisions under Applicable Laws, regulations, rules and policies shall be applicable. If no such provisions are available, specific requirements by the Administrator shall be applicable. |
11. | Lapse of Options |
(1) | Notwithstanding any other provisions herein, all Options that are granted by the ESOP Platform to an Incentive Recipient and have become vested and exercisable and the exercised Shares shall immediately lapse or be cancelled, if: |
(i) | the service of the Incentive Recipient is terminated for Cause; or |
(ii) | the Incentive Recipient creates mortgage, pledge or security over the Companys shares or Options in any way, or use the same for exchange or debt repayment without the prior written consent of the Administrator. |
For purpose of this Plan, Cause means (i) the commission of any act by the Incentive Recipient constituting (x) a felony or (y) financial dishonesty against the Company or its Subsidiaries (which act would be chargeable as a crime under Applicable Laws); (ii) an Incentive Recipients engaging in any other act of dishonesty, fraud, intentional misrepresentation, moral turpitude, illegality or harassment which, as determined in good faith by the Administrator, would or would reasonably be expected to: (A) adversely affect the business, the reputation or competitiveness of the Group with any of their current or prospective customers, suppliers, lenders and/or other third parties with whom such entity does or might do business; or (B) expose the Group to a risk of civil or criminal legal damages, liabilities or penalties; (iii) the repeated failure by an Incentive Recipient to follow the lawful directives of the chief executive officer of the Group or the Board; (iv) a violation by the Incentive Recipient of Applicable Laws, which at the discretion of the Administrator, would or would reasonably be expected to have an adverse effect on the Group; or (v) any violation of the Groups integrity policy and/or other relevant anti-corruption policies or any material violation of any confidentiality obligations under the Plan or other binding agreements, and non-competition obligations (whether required by law or under any agreement entered into between the Incentive Recipient and the Group), holding any position or any interest in, or providing any service to, a competing enterprise, or soliciting business from customers, agents and/or contractors of the Group for the interests of a competing enterprise, or abetting customers, agents and/or contractors of the Group in terminating their cooperation with the Group, or willful and deliberate non-performance of duty or gross negligence by the Incentive Recipient in connection with the business affairs of the Group.
(2) | In the following circumstances, all Options that are granted by the ESOP Platform to an Incentive Recipient and have become vested and exercisable shall immediately lapse or be cancelled as follows: |
(i) | if the Incentive Recipient is in violation of confidentiality obligations under this Plan or bylaws of the Group (including the employee manual, but excluding the Groups integrity policy or other anti-corruption policies) or provisions under employment contract, or engaged in willful misconduct deemed to be material by the Administrator, the ESOP Platform and the Administrator shall have the right to cancel the Incentive Recipients Options that have become vested and exercisable for exercise in the most recent year; |
(ii) | if, as a result of any change in the Incentive Recipients position and responsibilities, he/she makes less contribution to the Company, the ESOP Platform and the Administrator shall have the right to cancel such Incentive Recipients Options that have become vested and exercisable in the most recent year; |
9
(iii) | if the Company determines that the Incentive Recipient is directly responsible for the Companys loss, decline in business performance, or lagging behind rivals in respect of technological competence, the ESOP Platform and the Administrator shall have the right to cancel such Incentive Recipients Options that have become vested and exercisable in the most recent tranche. |
(3) | If an Incentive Recipient ceases to be a director, officer or employee of, or to otherwise perform services for, the Group for any reason other than for Cause or his or her death or disability and such Incentive Recipient is not subject to any lock-up obligations as provided under Section 10.4, (A) all of the Incentive Recipients options that have vested and were exercisable on the date of such cessation shall remain exercisable for, and shall otherwise be terminated and thereafter be forfeited at the end of, a period of 90 days after the date of such cessation, but in no event after the expiration date of the options as indicated in the Notice of Grant, and (B) all of the Participants Options that were not fully vested or exercisable on the date of such cessation shall be forfeited immediately upon such cessation. |
12. | Amendment and Termination |
This Plan may be amended and supplemented as determined by the Administrator, which shall become effective as of the date of notice or announcement thereof. The Administrator may amend, revise, suspend or terminate this Plan as the Companys business needs change.
13. | Compliance with Laws |
This Plan, the granting and unlocking of Options under this Plan and the provision, issuance and delivery of Shares, and the acceptance of promissory notes, and/or the payment of monies under this Plan or Options must comply with all Applicable Laws of Hong Kong of the Peoples Republic of China and laws, regulations and rules of any related jurisdiction, and are subject to such filing, registration and/or approval formalities with any listing, regulatory or governmental authority as may, in the opinion of the Companys counsel, be necessary or reasonable in connection therewith. A person receiving any Option or Share under this Plan shall, upon the request of the Company, provide such warranties and representations to the Company and take such actions as the Administrator may deem necessary or reasonable to ensure the compliance with all applicable legal and accounting requirements.
The Incentive Recipient understands that the China Securities Regulatory Commission (the CSRC) of the Peoples Republic of China (the PRC) has yet to determine if Chinese citizens shall be accorded full rights to hold securities of foreign privately-held or publicly-listed entities outside China or any options or other rights to acquire such securities. Accordingly, the Incentive Recipient agrees that should the CSRC, or any other governmental or regulatory authority in China materially restrict the rights or obligations of the Company or of the Incentive Recipient hereunder (including in relation to a Change of Control or IPO), in the sole opinion of the Administrator, the Company shall be entitled to amend or terminate the Plan, or any term or provision thereof, as appropriate and necessary in the Administrators sole discretion, so as to comply with such governmental or regulatory requirements. This right to amend or terminate includes but is not limited to (i) the right to terminate the Incentive Recipients rights hereunder in full, as well as (ii) the right to repurchase any Shares that may have been sold hereunder (which repurchase shall be effective and recorded in the Companys security registers upon the Company refunding to the Incentive Recipient the Exercise Price paid for such Shares, including where such refund is recorded in the Companys accounting records as reserved for such purpose), in each case without obtaining the Incentive Recipients consent or the consent of any other person or entity for the purposes of this Section 13, provided that the Board, in good faith, determines that commercially reasonable efforts have been made to (i) achieve compliance with the terms of the Plan, and (ii) otherwise, make available to Incentive Recipients aggregate economic consideration which is no less favorable (on a gross pre-tax basis) than otherwise available had the Plan been complied with notwithstanding this Section 13. Further, the Incentive Recipients rights under this Plan shall be subject to his or her compliance with Applicable Laws including but not limited to any registrations that may be required by any competent governmental authority.
10
14. | Tax Withholding; Payment of Expenses |
The Incentive Recipient may be required to pay to the Company or any of its subsidiary, and the Company or any of its subsidiary shall have the right and is hereby authorized to deduct from any Share or other property deliverable under any Option or any remuneration or other payment (including salary or bonus) otherwise payable to any Incentive Recipient, any withholding tax, supplementary tax (if any) and all applicable expenses that may be required under Applicable Laws relating to any Option or its exercise, any payment, transfer or redemption of the Options or Shares under this Plan (which amount may be deducted in the form of cash, stock or other properties). The Company or any of its subsidiary may also take other actions deemed necessary by the Company to fulfill all obligations to pay such taxes. |
15. | General Provisions |
15.1 | Effective Date. The Plan shall become effective on the date of its adoption by the Board (the Effective Date). |
15.2 | This Plan is a trade secret of the Company, and in no way shall the Incentive Recipient leak it, or otherwise it shall be liable for indemnifying against all losses incurred by the Company therefrom and no longer enjoy any right under this Plan and Option-related documents. |
15.3 | Adjustments. In the event of any dividend, share split, combination or exchange of Shares, amalgamation, arrangement or consolidation, spin-off, recapitalization or other distribution (other than normal cash dividends) of Company assets to its shareholders, or any other change affecting the shares of Shares or the share price of a Share, the Administrator shall make such proportionate adjustments, if any, as the Administrator in its discretion may deem appropriate to reflect such change with respect to (a) the aggregate number and type of shares that may be issued under the Plan; (b) the terms and conditions of any outstanding Options (including, without limitation, any applicable performance targets or criteria with respect thereto); and (c) the grant and exercise of Options under the Plan. |
15.4 | This Plan shall prevail over other related legal documents, and all other legal documents, including the Notice of Grant, shall be construed in accordance with this Plan. The Administrator shall have the right of final interpretation of this Plan. In the event that this Plan has any conflict with any Applicable Laws, regulations, or rules, the latter shall prevail. If the Incentive Recipient cannot exercise any Options in such case, none of the Company, the ESOP Platform or the Administrator shall be held liable therefor, and the Incentive Recipient shall bear the consequences on his/her own. |
15.5 | The Incentive Recipient shall be solely responsible for obtaining any governmental or other official approval in any state or jurisdiction required for the granting or exercise of any Option, and for completing any necessary filing and registration formality required by any government or other authority. The Company shall have no responsibility if such person fails to obtain any of such approvals or may need to pay any tax or bear any other responsibility due to his/her participation in this Plan. |
15.6 | The Administrator may, in his sole discretion, determine the time or times at which Options eligible for exercise and/or exercised Shares (if any) shall be transferred pursuant to Section 10.5 or redeemed pursuant to Section 10.6, for reasons related to Applicable Laws, regulations, rules and policies or other reasonable considerations of the Company. |
15.7 | This Plan and all Options granted hereunder shall be governed by, and construed in accordance with, laws of Hong Kong of the Peoples Republic of China. |
15.8 | This Plan shall be written in Chinese and English. Both versions are equally authentic. In the event of any discrepancy between the two versions, the Chinese version shall prevail. |
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- End -
12
Appendix 1
Dingdong (Cayman) Limited
2020 Share Incentive Plan - [Option ID ${option_id}]
Notice of Grant of Options
To: ${name}
ID Code: ${id_code}
Purpose of Grant of Options
You are receiving this Notice of Grant of Options (this Notice) from EatBetter Holding Limited, as the ESOP platform (the ESOP Platform), for the grant of a certain number of Options as award to you. This award is made under the 2020 Share Incentive Plan, as amended, (the Plan) of Dingdong (Cayman) Limited (the Company) and this Notice constitutes the Notice of Grant pursuant to Sections 5.2 of the Plan. This Notice shall completely supersede any and all prior agreements, arrangements and understandings, both written and oral, between you and the Company any of its subsidiary or the ESOP Platform, with respect to the subject matter hereof and thereof. Capitalized terms used herein without definition shall have the respective meanings assigned to them in the Plan.
Number of Options
The Options you are entitled to receive are ${grant_amount} Options (Total Number of Options). Each Option that has been vested and exercised is equivalent to 0.05 Class A Ordinary Shares of the Company.
Eligibility for Exercise
Subject to the conditions set forth in the Plan, the Pre-vesting period shall be from [] to []. On {vest_day_1}, 25% of the Total Number of Options will become eligible for exercise; on {vest_day_2}, 25% of the Total Number of Options will become eligible for exercise[; and on {vest_day_3}, 25% of the Total Number of Options will become eligible for exercise; and on {vest_day_4}, 25% of the Total Number of Options will become eligible for exercise].
Exercise Price
The Exercise Price shall be $ ${Exercise_Price}/Share.
Specific Rules of Grant and Exercise of Options
No Option shall be exercisable in whole or in part more than ten years from the date of this Notice. Please refer to the Plan recognized by you for specific rules of grant and exercise of Options, which the Administrator shall have the sole discretion to interpret. This Notice is confidential, and you shall have a confidentiality obligation with respect to it. Any violation of this confidentiality obligation shall be addressed in accordance with the Plan.
Tax Consequences; Independent Advice. YOU UNDERSTAND THAT YOU MAY UNDERTAKE CERTAIN ADVERSE TAX LIABILITIES AS A RESULT OF THE GRANT OF OPTIONS AND ANY SUBSEQUENT PURCHASE AND DISPOSITION OF THE SHARES. YOU REPRESENT THAT YOU HAVE CONSULTED WITH ALL ADVISERS WHICH YOU DEEM ADVISABLE IN CONNECTION WITH THE RECEIPT OF THE OPTIONS AND THE PURCHASE AND DISPOSITION OF THE SHARES AND THAT YOU ARE NOT RELYING ON THE COMPANY, ANY INVESTOR OR ANY ADVISOR TO ANY OF THE FOREGOING FOR ANY TAX, LEGAL OR OTHER ADVICE.
Acceptance. You hereby acknowledge receipt of a copy of the Plan, this Notice and the Notice of Exercise of Options. You have read and understand the terms and provisions hereof and thereof, and accept the Options subject to all terms and conditions of the Plan, this Notice and the Notice of Exercise of Options.
13
Incentive Recipient (signature): ${emp@lo#y}
Date: ${employee_sign_date}
EatBetter Holding Limited
[This page is retained by the Company]
14
Dingdong (Cayman) Limited
2020 Share Incentive Plan - [Option ID ${option_id}]
Notice of Grant of Options
To: ${name}
ID Code: ${id_code}
Purpose of Grant of Options
You are receiving this Notice of Grant of Options (this Notice) from EatBetter Holding Limited, as the ESOP platform (the ESOP Platform), for the grant of a certain number of Options as award to you. This award is made under the 2020 Share Incentive Plan, as amended, (the Plan) of Dingdong (Cayman) Limited (the Company) and this Notice constitutes the Notice of Grant pursuant to Sections 5.2 of the Plan. This Notice shall completely supersede any and all prior agreements, arrangements and understandings, both written and oral, between you and the Company any of its subsidiary or the ESOP Platform, with respect to the subject matter hereof and thereof. Capitalized terms used herein without definition shall have the respective meanings assigned to them in the Plan.
Number of Options
The Options you are entitled to receive are ${grant_amount} Options (Total Number of Options). Each Option that has been vested and exercised is equivalent to 0.05 Class A Ordinary Shares of the Company.
Eligibility for Exercise
Subject to the conditions set forth in the Plan, the Pre-vesting period shall be from [] to []. On {vest_day_1}, 25% of the Total Number of Options will become eligible for exercise; on {vest_day_2}, 25% of the Total Number of Options will become eligible for exercise[; and on {vest_day_3}, 25% of the Total Number of Options will become eligible for exercise; and on {vest_day_4}, 25% of the Total Number of Options will become eligible for exercise].
Exercise Price
The Exercise Price shall be $ ${Exercise_Price}/Share.
Specific Rules of Grant and Exercise of Options
No Option shall be exercisable in whole or in part more than ten years from the date of this Notice. Please refer to the Plan recognized by you for specific rules of grant and exercise of Options, which the Administrator shall have the sole discretion to interpret. This Notice is confidential, and you shall have a confidentiality obligation with respect to it. Any violation of this confidentiality obligation shall be addressed in accordance with the Plan.
Tax Consequences; Independent Advice. YOU UNDERSTAND THAT YOU MAY UNDERTAKE CERTAIN ADVERSE TAX LIABILITIES AS A RESULT OF THE GRANT OF OPTIONS AND ANY SUBSEQUENT PURCHASE AND DISPOSITION OF THE SHARES. YOU REPRESENT THAT YOU HAVE CONSULTED WITH ALL ADVISERS WHICH YOU DEEM ADVISABLE IN CONNECTION WITH THE RECEIPT OF THE OPTIONS AND THE PURCHASE AND DISPOSITION OF THE SHARES AND THAT YOU ARE NOT RELYING ON THE COMPANY, ANY INVESTOR OR ANY ADVISOR TO ANY OF THE FOREGOING FOR ANY TAX, LEGAL OR OTHER ADVICE.
Acceptance. You hereby acknowledge receipt of a copy of the Plan, this Notice and the Notice of Exercise of Options. You have read and understand the terms and provisions hereof and thereof, and accept the Options subject to all terms and conditions of the Plan, this Notice and the Notice of Exercise of Options.
15
Incentive Recipient (signature): ${emp@lo#y}
Date: ${employee_sign_date}
EatBetter Holding Limited
[This page is retained by the Incentive Recipient]
16
Appendix 2
Dingdong (Cayman) Limited
2020 Share Incentive Plan - [Option ID ${option_id}]
Notice of Exercise of Options
To: EatBetter Holding Limited
I hereby exercise my right with respect to all/${vest_amount_1} Shares underlying the Options that have been exercised, and request the allotment or transfer of such Shares to me in accordance with this Plan and the Memorandum of Association and Articles of Association of the Company.
I hereby deliver payment of the Exercise Price in the manner permitted in the 2020 Share Incentive Plan by, to the extent permitted or required by applicable laws, a deduction by the Company at an amount equal to $________ (as confirmed by the Administrator) from any payment of any kind (including salary or bonus) otherwise due to me.
I understand and agree that the Company will place the legends set forth below or similar legends on any stock certificate(s) evidencing the Shares, together with any other legends that may be required by Applicable Laws, the Companys certificate of incorporation or bylaws, any other agreement between the Purchaser and the Company or any agreement between the Purchaser and any third party:
THE SECURITIES REPRESENTED HEREBY HAVE NOT BEEN REGISTERED UNDER APPLICABLE SECURITIES LAWS. THESE SECURITIES ARE SUBJECT TO RESTRICTIONS ON TRANSFERABILITY AND RESALE AND MAY NOT BE TRANSFERRED OR RESOLD EXCEPT AS PERMITTED UNDER THE SECURITIES ACT AND APPLICABLE STATE SECURITIES LAWS, PURSUANT TO REGISTRATION OR EXEMPTION THEREFROM INVESTORS SHOULD BE AWARE THAT THEY MAY BE REQUIRED TO BEAR THE FINANCIAL RISKS OF THIS INVESTMENT FOR AN INDEFINITE PERIOD OF TIME. THE ISSUER OF THESE SECURITIES MAY REQUIRE AN OPINION OF COUNSEL IN FORM AND SUBSTANCE SATISFACTORY TO THE ISSUER TO THE EFFECT THAT ANY PROPOSED TRANSFER OR RESALE IS IN COMPLIANCE WITH THE SECURITIES ACT AND ANY APPLICABLE STATE SECURITIES LAWS.
THE SHARES REPRESENTED BY THIS CERTIFICATE ARE SUBJECT TO CERTAIN RESTRICTIONS ON RESALE AND TRANSFER AND, IF APPLICABLE, A RIGHT OF FIRST REFUSAL OPTION HELD BY THE ISSUER AND/OR ITS ASSIGNEE(S), AS SET FORTH IN AN OPTION AGREEMENT BETWEEN THE ISSUER AND THE ORIGINAL HOLDER OF THESE SHARES. SUCH SALE AND TRANSFER RESTRICTIONS, AND IF APPLICABLE, THE RIGHT OF FIRST REFUSAL ARE BINDING ON TRANSFEREES OF THESE SHARES.
Name:
_${name}_
ID Code:
_${id_code}_
Date: ${employee_sign_date}
17
EXHIBIT 8.1
List of Principal Subsidiaries
Principal Subsidiaries |
Place of Incorporation | |
Dingdong Fresh Holding Limited | British Virgin Islands | |
Dingdong Fresh (Hong Kong) Limited | Hong Kong | |
Shanghai 100me Internet Technology Co., Ltd. | PRC | |
Baqianlilu (Wuxi) Network Technology Co., Ltd. | PRC | |
Yihengyishu (Shanghai) E-Commerce Co., Ltd. | PRC | |
Chizhiyiheng (Shanghai) E-commerce Co., Ltd. | PRC | |
Shilaiyunzhuan (Hangzhou) E-commerce Co., Ltd. | PRC | |
Shishishun (Shenzhen) E-commerce Co., Ltd. | PRC | |
Shishishun (Jiangsu) E-Commerce Co., Ltd. | PRC | |
Chaolizhi (Jiangsu) E-Commerce Co., Ltd. | PRC | |
Beijing Bujiangjiu E-Commerce Co., Ltd. | PRC | |
Shanghai Yushengbaigu Food Co., Ltd. | PRC | |
Chizhiyiheng (Nanjing) Supply Chain Co., Ltd. | PRC |
Exhibit 12.1
Certification by the Principal Executive Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Changlin Liang, certify that:
1. I have reviewed this annual report on Form 20-F of Dingdong (Cayman) Limited;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The companys other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) [reserved];
(c) Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and
5. The companys other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting.
Date: May 2, 2022 | ||
By: | /s/ Changlin Liang | |
Name: | Changlin Liang | |
Title: | Director and Chief Executive Officer |
Exhibit 12.2
Certification by the Principal Financial Officer
Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
I, Le Yu, certify that:
1. I have reviewed this annual report on Form 20-F of Dingdong (Cayman) Limited;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the company as of, and for, the periods presented in this report;
4. The companys other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) for the company and have:
(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the company, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
(b) [reserved];
(c) Evaluated the effectiveness of the companys disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
(d) Disclosed in this report any change in the companys internal control over financial reporting that occurred during the period covered by the annual report that has materially affected, or is reasonably likely to materially affect, the companys internal control over financial reporting; and
5. The companys other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the companys auditors and the audit committee of the companys board of directors (or persons performing the equivalent functions):
(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the companys ability to record, process, summarize and report financial information; and
(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the companys internal control over financial reporting.
Date: May 2, 2022 | ||
By: | /s/ Le Yu | |
Name: | Le Yu | |
Title: | Director and Chief Strategy Officer |
Exhibit 13.1
Certification by the Principal Executive Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report of Dingdong (Cayman) Limited (the Company) on Form 20-F for the year ended December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Changlin Liang, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 2, 2022 | ||
By: | /s/ Changlin Liang | |
Name: | Changlin Liang | |
Title: | Director and Chief Executive Officer |
Exhibit 13.2
Certification by the Principal Financial Officer
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
In connection with the Annual Report of Dingdong (Cayman) Limited (the Company) on Form 20-F for the year ended December 31, 2021 as filed with the Securities and Exchange Commission on the date hereof (the Report), I, Le Yu, Chief Strategy Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that to my knowledge:
(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
Date: May 2, 2022 | ||
By: | /s/ Le Yu | |
Name: | Le Yu | |
Title: | Director and Chief Strategy Officer |