|
Report on Amendments to the Rules of Procedure for the Shareholders’ Meeting
Dear Shareholders:
In accordance with the new Company Law of the People’s Republic of China, the Securities Law of the People’s Republic of China, the Guidelines for the Articles of Association of Listed Companies (Revised in 2006), and the Company’s amended Articles of Association, all effective as of January 1, 2006, the following amendments are hereby made to the Rules of Procedure for the General Meeting of Shareholders:
1. Article 3 of the original regulations stipulated: “(14) To review proposals submitted by shareholders holding more than five percent of the company’s outstanding voting shares;”
Now amended to read: “(14) To review proposals submitted by shareholders who hold more than three percent of the company’s outstanding voting shares;”
In addition, the following items are added: “(15) To review and approve matters related to guarantees as stipulated in Article 1.8 of the Company Charter; (16) To review matters concerning the Company’s acquisition or disposal of material assets within one year that exceed 30% of the Company’s total audited assets as of the most recent period; (17) To review and approve any changes to the intended use of raised funds; (18) To review and approve the equity incentive plan.”
2. Add the following provision to Article 4: “The shareholders’ meeting shall be held in person at a designated venue. Where, in accordance with applicable regulations, an online voting or participation option is required, the Company shall promptly provide such option. Shareholders who participate in the shareholders’ meeting through any of the aforementioned methods shall be deemed to be present. The in-person session of the shareholders’ meeting shall not conclude prior to the online session. The shareholders’ meeting shall be held at the Company’s registered office.”
3. Article 6 is amended as follows: “Where the Supervisory Board or the shareholders decide to convene a general meeting of shareholders on their own, they shall notify the board of directors in writing and simultaneously file a record with the local branch of the China Securities Regulatory Commission and the stock exchange where the company is located. Prior to the announcement of the resolution of the general meeting, the aggregate shareholding proportion of the convening shareholders shall not be less than 10%. The convening shareholders shall, upon issuance of the notice of the general meeting and upon announcement of the resolution of the general meeting, submit the relevant supporting documents to the local branch of the China Securities Regulatory Commission and the stock exchange where the company is located.”
4. Article 7 is amended to read: “The Board of Directors and the Company Secretary shall cooperate with shareholders’ meetings convened by the Supervisory Board or by shareholders on their own initiative. The Board of Directors shall provide the register of shareholders as of the record date. The expenses necessary for such shareholders’ meetings convened by the Supervisory Board or by shareholders on their own initiative shall be borne by the Company.”
5. Article 8 previously provided: “The board of directors shall notify the company’s shareholders thirty days prior to the holding of a meeting.”
It is now amended to read: “When convening an annual general meeting of shareholders, the convener shall notify each shareholder twenty days prior to the meeting; when convening an extraordinary general meeting of shareholders, the convener shall notify each shareholder fifteen days prior to the meeting.”
6. Article 12 of the original regulations stipulated: “If a company must postpone the convening of a general meeting of shareholders for special reasons, it shall issue a notice of postponement at least five business days prior to the originally scheduled date of the meeting.”
It is now amended to read: “If the Company must postpone the convening of the General Meeting of Shareholders due to special circumstances, it shall issue a notice of postponement at least two business days prior to the originally scheduled date of the General Meeting.”
7. Articles 13 through 16 are amended as follows:
Article 13: With respect to a proposal by an independent director to convene an extraordinary general meeting of shareholders, the board of directors shall, in accordance with laws, administrative regulations, and the company’s articles of association, provide a written response—either approving or rejecting the convening of such a meeting—within ten days of receipt of the proposal. If the board approves the convening of the extraordinary general meeting, it shall issue the notice of the meeting within five days after adopting the relevant board resolution; if the board rejects the convening of the extraordinary general meeting, it shall state the reasons therefor and make a public announcement.
Article 14: With respect to a proposal by the Supervisory Board to convene an extraordinary general meeting of shareholders, the Board of Directors shall, in accordance with laws, administrative regulations, and the Articles of Association, provide a written response—either approving or rejecting the convening of such an extraordinary general meeting—within ten days of receipt of the proposal. If the Board of Directors approves the convening of the extraordinary general meeting, it shall issue a notice of the meeting within five days after adopting the relevant board resolution; any changes to the original proposal contained in such notice must be approved by the Supervisory Board. If the Board of Directors does not approve the convening of the extraordinary general meeting, or fails to provide a response within ten days of receiving the proposal, such failure shall be deemed as the Board’s inability or refusal to perform its duty to convene the general meeting, in which case the Supervisory Board may independently convene and preside over the meeting.
Article 15: With respect to a proposal by a shareholder or shareholders who, individually or collectively, hold more than 10% of the company’s shares to convene an extraordinary general meeting, the board of directors shall, in accordance with laws, administrative regulations, and the company’s articles of association, provide a written response—either approving or rejecting the convening of such an extraordinary general meeting—within ten days of receipt of the request. If the board of directors approves the convening of an extraordinary general meeting, it shall issue a notice of the meeting within five days after adopting the relevant board resolution; any amendment to the original request contained in the notice shall be subject to the consent of the relevant shareholder(s). If the board of directors rejects the convening of an extraordinary general meeting, or fails to provide a response within ten days of receiving the request, the shareholder or shareholders who, individually or collectively, hold more than 10% of the company’s shares shall have the right to propose to the supervisory board that an extraordinary general meeting be convened, and shall submit such a request in writing to the supervisory board.
Article 16: If the Board of Supervisors agrees to convene an extraordinary general meeting of shareholders, it shall issue a notice of the meeting within five days of receiving the request; any amendment to the original proposal contained in the notice shall be subject to the consent of the relevant shareholders. If the Board of Supervisors fails to issue the notice of the general meeting within the prescribed time limit, it shall be deemed that the Board has neither convened nor presided over the meeting, and shareholders who, individually or collectively, hold more than 10% of the company’s shares for a continuous period of at least 90 days may convene and preside over the meeting on their own.
8. Article 20 of the original regulations stipulated: “At the annual general meeting, any shareholder who individually or collectively holds more than five percent of the company’s total voting shares, or the board of supervisors, may submit ad hoc proposals.”
It is now amended to read: “At the annual general meeting, any shareholder who individually or collectively holds more than three percent of the company’s total voting shares, or the board of supervisors, may submit a special proposal.”
9. Article 29 of the original regulations stipulated: “Outside of the regular meeting period, if the Board of Directors, for legitimate reasons, dismisses an accounting firm, it may temporarily engage another accounting firm; however, such appointment must be subsequently ratified at the next shareholders’ meeting.”
It is now amended to read: “The Board of Directors shall not appoint an accounting firm prior to a decision by the Shareholders’ Meeting.”
10. Article 30 of the original regulations stipulated: “Shareholders holding more than ten percent of the company’s total voting shares shall have the right to submit a list of candidates for directors and supervisors.”
It is now amended to read: “Shareholders holding more than three percent of the company’s total voting shares shall have the right to submit a list of candidates for directors and supervisors.”
11. Articles 40 through 42 are amended as follows:
Article 40 The shareholders’ meeting shall be chaired by the chairman of the board. If the chairman is unable or unwilling to perform his or her duties, the vice chairman shall chair the meeting; if the vice chairman is unable or unwilling to perform his or her duties, a director nominated by a majority of the directors shall chair the meeting.
Article 41. At a general meeting of shareholders convened by the Board of Supervisors on its own initiative, the chairperson of the Board of Supervisors shall preside. If the chairperson is unable or unwilling to perform his or her duties, a supervisor nominated by more than half of the supervisors shall preside. At a general meeting of shareholders convened by the shareholders themselves, a representative nominated by the convener shall preside.
Article 42: If, during the convening of a general meeting of shareholders, the chairperson of the meeting violates the rules of procedure in such a way that the meeting cannot continue, the general meeting may, with the consent of more than half of the voting shareholders present at the meeting, elect one person to serve as the chairperson and resume the meeting.
12. Add the following provision to Article 52: “Shares of the Company held by the Company shall carry no voting rights.”
13. Add the following provisions to Article 63: “(6) Where the Company, within a single year, purchases or sells significant assets, or provides guarantees in an amount exceeding 30% of the Company’s total audited assets as of the most recent period; (7) Equity incentive plans.”
Please review the above report.
May 30, 2006
|
