CONVERSION NOTICE (NOTICE TO STOCKHOLDERS TO CONVERT, AT THEIR OPTION, PREFERRED SHARES INTO COMMON SHARES)

Transcription

1 CONVERSION NOTICE (NOTICE TO STOCKHOLDERS TO CONVERT, AT THEIR OPTION, PREFERRED SHARES INTO COMMON SHARES) To All Preferred Stockholders of Aboitiz Transport System (ATSC) Corporation: Please be informed that in a meeting of the Board of Directors of Aboitiz Transport System (ATSC) Corporation (the Corporation or ATS ) on 27 July 2006 the Board approved the call for preferred shareholders of record as of August 10, 2006 to convert, at their option, their preferred shares into common shares at the stipulated conversion ratio of two (2) common shares for every one (1) preferred share (RPS) held. As approved by the Board and the stockholders and disclosed to the Philippine Stock Exchange, the stipulated conversion price of each preferred share is P3.20 per share. The conversion of 1 preferred share into 2 common shares is subject to the stock transaction tax at the rate of ½ of 1% of the conversion price or P3.20 per complying preferred share submitted for conversion. This is for the account of the eligible preferred shareholder upon the preferred shareholder s exercise of his/its option to convert. The original issuance of two (2) common shares for every preferred share submitted for conversion is subject to documentary stamp tax on original issuance of shares that shall be borne by ATS. Other costs such as brokerage commission, value added tax, applicable fees of the Securities Clearing Corporation of the Philippines (SCCP) or Philippine Depository & Trust Company (PDTC) and stock certificates costs pertinent to the conversion shall also be for the account of the eligible shareholders. Eligible preferred shareholders may exercise the conversion option any time from September 1, 2006 to October 13, 2006 (the Conversion Period ). The approval received by ATS from Securities and Exchange Commission (SEC) allows the conversion to be exercised only until October 13, The following are the target listing dates with respect to the issuance of common shares for every preferred share submitted for conversion: Date of Submission by Preferred Shareholders of Complying Conversion Reply Form to ATR KimEng Date of Submission by ATSC of Complying Conversion Notice to PSE Target Listing Date by PSE of the Issuable Common Share Sept 1 to 8, 2006 Sept 15, 2006 Sept 18, 2006 Sept 11 to 22, 2006 Sept 29, 2006 Oct 2, 2006 Sept 25, 2006 to Oct 13, 2006 Oct 20, 2006 Oct 23, 2006 Complying Conversion Reply Forms that are post-marked October 13, 2006 or earlier but received by ATR KimEng after October 13, 2006 will be accepted for conversion. To facilitate conversion, the Corporate Information Officer (CIO), as authorized by the Board, appointed ATR KimEng Securities, Inc. ( ATR KimEng ) as the Broker for the conversion of RPS. Eligible preferred shareholders who decide to convert should submit the requirements below to ATR KimEng Securities, Inc., 17/F Tower One & Exchange Plaza, Ayala Triangle, Ayala Avenue, Makati City 1226, Telephone No. (02) and Fax No. (02) (Contact Person: Nilaida S. Enriquez) or to the following branches of ATR KimEng in Visayas and Mindanao:

2 Conversion Notice Page 2 of 3 ATR KimEng Securities, Inc. Cebu Branch Room 206, Cebu Holdings Center Cebu Business Park, Cebu City Telephone No.: (032) Contact Person: Cheryl Lim Go ATR KimEng Securities, Inc. Davao Branch Dr. # 7 M.T. Aquino Building, Cabaguio Avenue cor. Bolcan St., Davao City Telephone No.: (082) Contact Person: Miguel Luis R. Aquino Requirements: For Corporate Stockholders: 1. Duly accomplished Conversion Reply Form (See Attached) as a written instruction of the shareholder s decision to exercise its option to convert its RPS into new common shares under the terms and conditions provided herein. 2. The RPS stock certificate duly endorsed by the corporate stockholder s authorized signatory/ies. 3. Updated secretary s certificate (see Attachment A as sample) attesting to the board resolution of the corporate stockholder authorizing it to convert its RPS into common shares and enumerating the corporation s authorized signatories for this purpose with their specimen signatures therein inscribed. 4. Certified true copies of Articles of Incorporation and By-laws and latest amendment/s thereof. 5. Updated specimen s signature card in two (2) copies validated by the Corporate Secretary and verified by its broker (the name of the broker and the broker s signatory must be specified) or officer of the bank (name of the bank and bank s officer must be specified) where it is maintaining an account. For Individual Stockholders: 1. Duly accomplished Conversion Reply Form (See Attached) as a written instruction of the shareholder s decision to exercise his/her option to convert his/her RPS into new common shares under the terms and conditions provided herein. 2. The RPS stock certificate duly endorsed by the stockholder himself. 3. Photocopy of two (2) valid identification cards with the stockholder s picture and specimen s signature. 4. Updated specimen s signature card in two (2) copies verified by his broker (the name of the broker and the broker s signatory must be specified) or an officer of the bank (the name of the bank and the bank s officer must be specified) where he is maintaining an account. 5. If the shareholder is acting through an attorney-in-fact, a duly notarized Special Power of Attorney. Eligible preferred shareholders whose shares are lodged with the Philippine Central Depository Nominee Corporation ( PCD) ( Scripless Shareholders ), who opt to convert, will have to uplift their RPS shares. Participating brokers should inform their clients that all ATS Preferred Shareholders are eligible to convert their ATS RPS into ATS common shares. The Scripless Shareholders should issue a formal instruction to the participating broker to uplift their ATS RPS either in the Scripless Shareholders name or the name of the Participating Broker. For conversion, submit the stock assignment signed by the shareholder and duly endorsed by the broker through whom the upliftment was done together with the duly received upliftment request and the documents requirements as outlined above.

3 Conversion Notice Page 3 of 3 Notwithstanding anything to the contrary, all RPS stock certificates surrendered for conversion shall be subject to validation by the Corporation s Transfer Agent, Securities Transfer Services, Inc. (STSI). Any discrepancy will be communicated to the stockholders either in writing or through phone. Hence, shareholders are strongly urged to indicate their current address and telephone numbers properly on the attached reply form so that the shareholder could be informed immediately of any discrepancy. In case of lost, stolen, destroyed, or mutilated preferred stock certificate, STSI, our stock and transfer agent shall strictly comply with the provision of Section 73 of the Corporation Code. Eligible shareholders based in Metro Manila may claim their new common share certificates from the office of ATR KimEng until November 30, When claiming new common share certificates, eligible preferred shareholders shall present the Shareholder s Copy of the Conversion Reply Form as well as proper identification (e.g. driver s license, passport or company I.D. with picture and signature). Duly authorized representatives of eligible preferred shareholders shall be required to present either a duly notarized secretary s certificate for corporate shareholders or a duly notarized special power of attorney for individual shareholders. For shareholders in the Visayas and Mindanao, they may claim until November 30, 2006 their new common share certificates in the specified branch offices of ATR KimEng above where they respectively submitted their Conversion Notice. After November 30, 2006, the certificate will have to be claimed from STSI. We have attached to this Notice a summary of the most frequently asked questions to help you in your decision process whether to convert or not your redeemable preferred shares. If you need assistance in completing the Conversion Reply Form, please contact Ms. Vivien T. Vicente, ATS Investor Relations, 11 th floor Times Plaza Bldg., U.N. Avenue corner Taft Avenue, Ermita, Manila, Telephone Nos. (02) and August 2006, Makati, Philippines. THE BOARD OF DIRECTORS By: Helen G. Tiu Corporate Secretary

4 Stock Transfer Agent s Copy This Form Must be Prepared in Triplicate and Completed in all parts CONVERSION REPLY FORM (CONVERSION OF REDEEMABLE PREFERRED SHARES ( RPS ) INTO COMMON SHARES OF ABOITIZ TRANSPORT SYSTEM (ATSC) CORPORATION) This form has been prepared by Aboitiz Transport System (ATSC) Corporation, the Issuer, and is intended for RPS holders who are surrendering their ATS Redeemable Preferred Shares ( RPS ) for conversion into Common Shares at their option, at a conversion ratio of two (2) common shares for every one (1) RPS in compliance with the call for conversion made by ATS Board last July 27, Inquiries and request for assistance and copies of this Form may be directed to ATS Investor s Relations Dept, Vivien Vicente at telephone numbers and This form can also be downloaded from the ATS website: under Investor Relations web page. This should be submitted by the eligible stockholder to the designated broker for the conversion, ATR KimEng Securities, Inc. ( ATR KimEng ), together with the requirements listed on the conversion notice. RPS holders as of August 10, 2006 (the Record Date ) intending to convert their RPS into new common shares should ensure that this Conversion Reply Form will be submitted to ATR KimEng on or before October 13, 2006 (the Conversion Period ). REPRESENTATIONS, WARRANTIES AND AUTHORIZATION I/We, in executing this Application Form, represent and warrant that all information contained herein and the required documents submitted together with this are true and correct and that the signatures thereon are genuine, properly authorized without use of fraud, coercion or any other vice of consent. I/We am/are aware that once this application is forwarded to ATR KimEng/STSI for further verification, the decision to exercise my conversion right is irrevocable. I/We represent and warrant that the ATS redeemable preferred shares surrendered herewith are solely, legally and beneficially owned by me/us and are free and clear of any claims, liens, encumbrances and I am/we are able to freely and fully exercise all rights and privileges arising from ownership of such redeemable preferred shares. I/We warrant that I/we have read the Conversion Notice and the terms and conditions stated in this form and unconditionally accept said terms and conditions. I/We hereby authorize STSI-Stock Transfer Office to do or cause to be done any and all such acts and things necessary or desirable to effect the conversion of my/our Redeemable Preferred Shares of ATS. Stockholder s Full Name (in print) Stockholder s Address Stockholder s Signature Tel. No.(s) TIN/Passport Nationality SURRENDER OF RPS STOCK CERTIFICATE FOR CONVERSION INTO COMMON SHARES I/We surrender the RPS stock certificate for conversion into common shares as follows: RPS Stock Certificate No. (s) No. of Shares Represented by Each Certificate No. of RPS shares to be Converted into Common Shares Equivalent No. of New Common Shares (Ratio 1RPS: 2CS) New Common Stock Certificate No. (s) for the Converted RPS TOTAL ATR KimEng Securities Inc. s Certification We received the above-specified RPS stock certificates with all the required documents below, at a.m./p.m. on. ACKNOWLEDGMENT Stockholder Acceptance I/We received the new common stock certificates corresponding to the number of RPS converted into common shares of ATS subject to the terms and conditions set forth herein and related disclosures. ATR KimEng Securities Inc. Authorized Signature Stockholder Signature REQUIRED DOCUMENTS TOGETHER WITH THIS FORM 1. ATS RPS stock certificates duly endorsed in blank and validated by Securities Transfer Services, Inc. as the transfer agent of ATS. 2. If the shareholder is a corporation, (a) a notarized Secretary s Certificate attesting to the board resolutions of such corporate shareholder authorizing it to convert its RPS in accordance herewith and in this connection, enumerating the corporate shareholder s Authorized Signatories with their specimen signatures therein inscribed; and (b) certified true copies of its Articles of Incorporation and By-laws and latest amendment/s thereto. 3. If the stockholder is a natural person, photocopy of two (2) valid identification cards with the stockholder s specimen signature. If the shareholder is acting through an attorney-in-fact, a duly notarized Special Power of Attorney. 4. For both corporate and individual shareholders, duly accomplished signature card enclosed together with this form in two (2) copies validated by the Corporate Secretary for corporate shareholders. The specimen s signature card must also be verified by its/his broker (the name of the broker and the broker s signatory must be specified) or officer of the bank (name of the bank and bank s officer must be specified) where it is maintaining an account.

5 Receiving Agent s Copy CONVERSION REPLY FORM (CONVERSION OF REDEEMABLE PREFERRED SHARES ( RPS ) INTO COMMON SHARES OF ABOITIZ TRANSPORT SYSTEM (ATSC) CORPORATION) This Form Must be Prepared in Triplicate and Completed in all parts This form has been prepared by Aboitiz Transport System (ATSC) Corporation, the Issuer, and is intended for RPS holders who are surrendering their ATS Redeemable Preferred Shares ( RPS ) for conversion into Common Shares at their option, at a conversion ratio of two (2) common shares for every one (1) RPS in compliance with the call for conversion made by ATS Board last July 27, Inquiries and request for assistance and copies of this Form may be directed to ATS Investor s Relations Dept, Vivien Vicente at telephone numbers and This form can also be downloaded from the ATS website: under Investor Relations web page. This should be submitted by the eligible stockholder to the designated broker for the conversion, ATR KimEng Securities, Inc. ( ATR KimEng ), together with the requirements listed on the conversion notice. RPS holders as of August 10, 2006 (the Record Date ) intending to convert their RPS into new common shares should ensure that this Conversion Reply Form will be submitted to ATR KimEng on or before October 13, 2006 (the Conversion Period ). REPRESENTATIONS, WARRANTIES AND AUTHORIZATION I/We, in executing this Application Form, represent and warrant that all information contained herein and the required documents submitted together with this are true and correct and that the signatures thereon are genuine, properly authorized without use of fraud, coercion or any other vice of consent. I/We am/are aware that once this application is forwarded to ATR KimEng/STSI for further verification, the decision to exercise my conversion right is irrevocable. I/We represent and warrant that the ATS redeemable preferred shares surrendered herewith are solely, legally and beneficially owned by me/us and are free and clear of any claims, liens, encumbrances and I am/we are able to freely and fully exercise all rights and privileges arising from ownership of such redeemable preferred shares. I/We warrant that I/we have read the Conversion Notice and the terms and conditions stated in this form and unconditionally accept said terms and conditions. I/We hereby authorize STSI-Stock Transfer Office to do or cause to be done any and all such acts and things necessary or desirable to effect the conversion of my/our Redeemable Preferred Shares of ATS. Stockholder s Full Name (in print) Stockholder s Address Stockholder s Signature Tel. No.(s) TIN/Passport Nationality SURRENDER OF RPS STOCK CERTIFICATE FOR CONVERSION INTO COMMON SHARES I/We surrender the RPS stock certificate for conversion into common shares as follows: RPS Stock Certificate No. (s) No. of Shares Represented by Each Certificate No. of RPS shares to be Converted into Common Shares Equivalent No. of New Common Shares (Ratio 1RPS: 2CS) New Common Stock Certificate No. (s) for the Converted RPS TOTAL ATR KimEng Securities Inc. s Certification We received the above-specified RPS stock certificates with all the required documents below, at a.m./p.m. on. ACKNOWLEDGMENT Stockholder Acceptance I/We received the new common stock certificates corresponding to the number of RPS converted into common shares of ATS subject to the terms and conditions set forth herein and related disclosures. ATR KimEng Securities Inc. Authorized Signature Stockholder Signature REQUIRED DOCUMENTS TOGETHER WITH THIS FORM 1. ATS RPS stock certificates duly endorsed in blank and validated by Securities Transfer Services, Inc. as the transfer agent of ATS. 2. If the shareholder is a corporation, (a) a notarized Secretary s Certificate attesting to the board resolutions of such corporate shareholder authorizing it to convert its RPS in accordance herewith and in this connection, enumerating the corporate shareholder s Authorized Signatories with their specimen signatures therein inscribed and (b) certified true copies of its Articles of Incorporation and By-laws and latest amendment/s thereto. 3. If the stockholder is a natural person, photocopy of two (2) valid identification cards with the stockholder s specimen signature. If the shareholder is acting through an attorney-in-fact, a duly notarized Special Power of Attorney. 4. For both corporate and individual shareholders, duly accomplished signature card enclosed together with this form in two (2) copies validated by the Corporate Secretary for corporate shareholders. The specimen s signature card must also be verified by its/his broker (the name of the broker and the broker s signatory must be specified) or officer of the bank (name of the bank and bank s officer must be specified) where it is maintaining an account.

6 Stockholder s Copy CONVERSION REPLY FORM (CONVERSION OF REDEEMABLE PREFERRED SHARES ( RPS ) INTO COMMON SHARES OF ABOITIZ TRANSPORT SYSTEM (ATSC) CORPORATION) This Form Must be Prepared in Triplicate and Completed in all parts This form has been prepared by Aboitiz Transport System (ATSC) Corporation, the Issuer, and is intended for RPS holders who are surrendering their ATS Redeemable Preferred Shares ( RPS ) for conversion into Common Shares at their option, at a conversion ratio of two (2) common shares for every one (1) RPS in compliance with the call for conversion made by ATS Board last July 27, Inquiries and request for assistance and copies of this Form may be directed to ATS Investor s Relations Dept, Vivien Vicente at telephone numbers and This form can also be downloaded from the ATS website: under Investor Relations web page. This should be submitted by the eligible stockholder to the designated broker for the conversion, ATR KimEng Securities, Inc. ( ATR KimEng ), together with the requirements listed on the conversion notice. RPS holders as of August 10, 2006 (the Record Date ) intending to convert their RPS into new common shares should ensure that this Conversion Reply Form will be submitted to ATR KimEng on or before October 13, 2006 (the Conversion Period ). REPRESENTATIONS, WARRANTIES AND AUTHORIZATION I/We, in executing this Application Form, represent and warrant that all information contained herein and the required documents submitted together with this are true and correct and that the signatures thereon are genuine, properly authorized without use of fraud, coercion or any other vice of consent. I/We am/are aware that once this application is forwarded to ATR KimEng/STSI for further verification, the decision to exercise my conversion right is irrevocable. I/We represent and warrant that the ATS redeemable preferred shares surrendered herewith are solely, legally and beneficially owned by me/us and are free and clear of any claims, liens, encumbrances and I am/we are able to freely and fully exercise all rights and privileges arising from ownership of such redeemable preferred shares. I/We warrant that I/we have read the Conversion Notice and the terms and conditions stated in this form and unconditionally accept said terms and conditions. I/We hereby authorize STSI-Stock Transfer Office to do or cause to be done any and all such acts and things necessary or desirable to effect the conversion of my/our Redeemable Preferred Shares of ATS. Stockholder s Full Name (in print) Stockholder s Address Stockholder s Signature Tel. No.(s) TIN/Passport Nationality SURRENDER OF RPS STOCK CERTIFICATE FOR CONVERSION INTO COMMON SHARES I/We surrender the RPS stock certificate for conversion into common shares as follows: RPS Stock Certificate No. (s) No. of Shares Represented by Each Certificate No. of RPS shares to be Converted into Common Shares Equivalent No. of New Common Shares (Ratio 1RPS: 2CS) New Common Stock Certificate No. (s) for the Converted RPS TOTAL ATR KimEng Securities Inc. s Certification We received the above-specified RPS stock certificates with all the required documents below, at a.m./p.m. on. ACKNOWLEDGMENT Stockholder Acceptance I/We received the new common stock certificates corresponding to the number of RPS converted into common shares of ATS subject to the terms and conditions set forth herein and related disclosures. ATR KimEng Securities Inc. Authorized Signature Stockholder Signature REQUIRED DOCUMENTS TOGETHER WITH THIS FORM 1. ATS RPS stock certificates duly endorsed in blank and validated by Securities Transfer Services, Inc. as the transfer agent of ATS. 2. If the shareholder is a corporation, (a) a notarized Secretary s Certificate attesting to the board resolutions of such corporate shareholder authorizing it to convert its RPS in accordance herewith and in this connection, enumerating the corporate shareholder s Authorized Signatories with their specimen signatures therein inscribed and (b) certified true copies of its Articles of Incorporation and By-laws and latest amendment/s thereto. 3. If the stockholder is a natural person, photocopy of two (2) valid identification cards with the stockholder s specimen signature. If the shareholder is acting through an attorney-in-fact, a duly notarized Special Power of Attorney. 4. For both corporate and individual shareholders, duly accomplished signature card enclosed together with this form in two (2) copies validated by the Corporate Secretary for corporate shareholders. The specimen s signature card must also be verified by its/his broker (the name of the broker and the broker s signatory must be specified) or officer of the bank (name of the bank and bank s officer must be specified) where it is maintaining an account

7 Sample Form (For Shareholders which are Corporations) Attachment A REPUBLIC OF THE PHILIPPINES) C I T Y O F ) S.S. S E C R E T A R Y S C E R T I F I C A T E I,, of legal age, Filipino, and with office address at accordance with law, depose and states that: 1. I am the duly elected Corporate Secretary of (the Corporation ), a corporation duly organized and existing under the laws of, with principal office at. 2. At a regular/special meeting of the Board of Directors of the Corporation held, at which meeting a quorum was present, the Board of Directors approved the following resolutions: RESOLVED, that [name of corporate stockholder] (the Corporation ) be authorized, as it is hereby authorized, to convert its ( ) redeemable preferred shares (the RPS Shares ) of Aboitiz Transport System (ATSC) Corporation ( ATS ) registered in the name of the Corporation into common shares of ATS in accordance with the terms and conditions of conversion announced by ATS; RESOLVED FURTHER, that the Corporation authorize, as it hereby authorizes, any [one/ ] of the following (a) to sign any and all documents necessary to implement the foregoing resolution, including to endorse and surrender the stock certificates covering the RPS Shares that the Corporation has decided to convert, (b) to receive the common shares issuable to the Corporation upon the Corporation s exercise of its conversion option, (c) to appoint [ /ATR KimEng Securities, Inc.] as the Corporation s broker for the conversion, and (d) and to do or cause to be done any and all acts and deeds as may be necessary to effect the conversion of the RPS Shares into common shares including to pay for the stock transaction tax, the broker s commissions and all other related fees and expenses: Name Signature 4. The foregoing resolutions have not been revoked, amended or modified and remain valid and binding on the Corporation. 5. The foregoing is in accordance with the records of the Corporation. FURTHER, Affiant Sayeth Naught. Corporate Secretary SUBSCRIBED AND SWORN to before me this day of September 2006 at City, affiant exhibiting to me his/her Community Tax Certificate No. issued on, 2006 at. Doc. No. ; Page No. ; Book No. ; Series of 2006.

8 FREQUENTLY ASKED QUESTIONS ABOUT THE CONVERSION OF REDEEMABLE PREFERRED SHARES ( RPS ) INTO COMMON SHARES 1. WHEN DID THE BOARD OF DIRECTORS, STOCKHOLDERS OF ABOITIZ TRANSPORT SYSTEM (ATSC) CORPORATION (THE CORPORATION OR ATS ) AND THE SECURITIES EXCHANGE COMMISSION ( SEC ) APPROVE THE CONVERTIBILITY FEATURE OF RPS? The Corporation s Board of Directors approved the convertibility feature of preferred shares last 27 April The Corporation s Stockholders were informed of the proposed amendment through the dissemination of information statement and at the annual stockholders meeting on 25 May 2006, they approved the convertibility feature for preferred shares. SEC approved last 15 June 2006 the application of the Corporation to amend the Articles of Incorporation for the addition of the convertibility feature for ATS preferred shares. 2. WHAT IS THE BUSINESS PURPOSE OF GRANTING THE PREFERRED SHAREHOLDERS OF THE CORPORATION AN OPTION TO CONVERT THEIR REDEEMABLE PREFERRED SHARES TO COMMON SHARES? The main objective for adding a convertibility feature to the Corporation s redeemable preferred shares is to give preferred shareholders an additional option in managing their investment. 3. WHAT ARE THE OPTIONS AVAILABLE FOR THE PREFERRED SHAREHOLDERS IN MANAGING THEIR INVESTMENT IN ATSC? The preferred shareholders have two (2) options in handling their redeemable preferred shareholdings: a. To convert their redeemable preferred shares on or before 13 October 2006, at a ratio of two (2) common shares for every one (1) RPS; or b. To hold on to the preferred share and wait for the Corporation to redeem it at P6/share. The redemption period as stipulated in the ATS Articles of Incorporation can be anytime between now and the year HOW IS THE CONVERSION RATIO OF 1 RPS TO 2 COMMON SHARES DERIVED? As of April 27, 2006, which was when the Board approved the conversion, the common share was trading at P 1.60/share while preferred share at its last trading was priced at P3.20 per share, or exactly a 1:2 ratio. As of May 24, 2006, one day prior to the 2006 Annual Stockholders Meeting, the price of the common and the preferred shares were still at the same levels, i.e., a 1:2 ratio.

9 FAQ s Page 2 of 2 5. WHY LIMIT THE CONVERSION PERIOD UP TO FOUR MONTHS AFTER SEC APPROVAL? The reason for the Corporation for limiting the conversion period up to four (4) months after SEC approval is the concern that the prices of both preferred and common shares may change after that. 6. WHAT ARE THE EFFECTS OF CONVERSION TO THE CORPORATION? TO THE EXISTING COMMON SHAREHOLDERS? TO THE PREFERRED SHAREHOLDERS WHO OPT TO CONVERT? To the Corporation, if all preferred shareholders would opt to convert their shares, the Corporation will issue approximately 150 million new common shares. To the existing common stockholders, the change in the ownership percentage (%) will be very insignificant. To the preferred shareholders who opt to convert, he/she will no longer be a RPS holder. There will be an increase in his/her common shareholdings. To illustrate, if the stockholder owns 1,000 RPS, 5,000 common shares and opt to convert his/her RPS at a ratio of 1 RPS to 2 common share, his/her resulting shareholdings as an effect of the conversion will be zero RPS and 7,000 common shares. 7. WILL THE CORPORATION APPLY FOR LISTING WITH THE PHILIPPINE STOCK EXCHANGE ( PSE ) THE UNDERLYING COMMON SHARES? ATS already applied with PSE the listing of the underlying common shares. In fact, PSE approved the application last 12 July However, the actual listing will take effect only after preferred shareholders convert their redeemable preferred shareholders into common shares. As soon as it has been determined by our stock and transfer agent that preferred shareholders have submitted complying Conversion Reply Forms, ATS will notify PSE of such notice. PSE, based on the disclosure, will list the issuable common shares. 8. WHO WILL PAY FOR THE TAX COSTS? Upon conversion, stock transaction tax equivalent to ½ of 1% multiplied by P3.20 for every preferred share submitted for conversion will have to be paid to the government. This tax will have to be borne by the preferred shareholders. Other charges such as Brokerage Commission, Value Added Tax on Commission, including applicable fees of the Securities Clearing Corporation of the Philippines (SCCP) or Philippine Depository & Trust Company (PDTC) and stock certificates costs pertinent to the conversion shall also be for the account of the eligible shareholders. On the other hand, ATS will pay the documentary stamp tax due on the original issuance of common shares.