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Sample Business ContractsHome: Sample Business Contracts:
Articles of Association of
China Petroleum & Chemical Corporation
(Approved by the extraordinary shareholders' meeting on April 22, 2003;
approved by the State-owned Assets Administration Commission on June 5, 2003)
CHAPTER 1 GENERAL PROVISIONS
Article 1 These Articles of Association are drawn up in accordance with
the "Company Law of the People's Republic of China" (the
"Company Law"), "Special regulations of the State Council
regarding the issue of shares overseas and the listing of
shares overseas by companies limited by share" (the "Special
Regulations"), "Mandatory provisions for the Articles of
Association of the Company to be Listed Overseas" ("Mandatory
Provisions"), "Guidelines for Articles of Association of
Listed Companies", "Standards for the Governance of Listed
Companies" and other relevant laws and regulations to maintain
the legitimate interests of China Petroleum & Chemical
Corporation (the "Company") and its shareholders and
creditors, and to regulate the organization and conducts of
the Company.
Article 2 These Articles of Association of the Company are effective
on the date of incorporation of the Company. Any amendment to
these Articles of Association involving the Mandatory
Provisions shall be effective upon being passed by the
shareholders in a general meeting and examined and approved by
the company authorized by the State Council.
From the date on which the Company's Articles of Association
come into effect, the Company's Articles of Association shall
constitute a legally binding document regulating the Company's
organization and activities, and the rights and obligations
between the Company and its shareholders and among the
shareholders inter se.
Article 3 These Articles of Association are binding on the Company, its
shareholders and directors, supervisors, president,
vice-president, Chief Financial Officer and secretary of the
board of directors; all of whom are entitled, according to
these Articles of Association, to make claims concerning the
affairs of the Company. A shareholder may take action against
the Company and the Company may take action against a
shareholder or a director, a supervisor, the president, the
vice-president, the Chief Financial Officer or the secretary
of the board of directors pursuant to these Articles of
Association. A shareholder may also take action against
another shareholder or directors, supervisors, president,
vice-president, Chief Financial Officer and the secretary of
the board of directors of the Company pursuant to these
Articles of Association.
The actions referred to in the preceding paragraph include
court proceedings and arbitration proceedings.
Article 4 The Company is a joint stock limited company established in
accordance with the Company Law, the Special Regulations and
other relevant laws and administrative regulations of the
State.
The Company was established by way of promotion with the
approval of the State Economic and Trade Commission of the
People's Republic of China ("PRC"), as evidenced by approval
document Guo Jing Mao Qi Gai [2000] No. 154. It is registered
with and has obtained a business licence from China's State
Administration Bureau of Industry and Commerce on 25 February
2000. The Company's business licence number is: 1000001003298.
The promoter of the Company is: China Petrochemical
Corporation.
<TABLE>
<CAPTION>
Article 5 The registered name of the Company:
<S> <C> <C>
In Chinese: [omitted]
Abbreviation: [omitted]
In English: China Petroleum & Chemical Corporation
Abbreviation: SINOPEC Corp.
Article 6 The address of the Company: A6, Huixindong Street, Chaoyang District, Beijing,China.
Zip: 100029
Tel: (010) 64999295
Fax: (010) 64999294
Website: www.sinopec.com.cn
</TABLE>
Article 7 The Company's legal representative is the Chairman of the
board of directors of the Company.
Article 8 The Company is a joint stock limited company which has
perpetual existence. The capital of the Company is divided
into shares of equal value. The rights and responsibilities of
the Company's shareholders shall only be limited to the
proportion of the shares as held by them; the Company shall be
responsible for the Company's debts by all of its assets.
The Company is an independent legal person, subject to the
jurisdiction and under the protection of the laws and
administrative rules of the PRC.
Article 9 The Company may set up wholly-owned or holding branch
organizations such as subsidiaries, branches, representative
offices and offices according to its business development
needs. The wholly-owned or holding subsidiary may be named
with China Petroleum & Chemical Corporation's abbreviation
"SINOPEC". The branches, representative offices and offices
are non-legal person branch organizations and shall be named
with the full name of China Petroleum & Chemical Corporation.
The Company may set up branch organizations (whether or not
wholly-owned) outside the PRC and in the Hong Kong SAR, Macau
SAR and Taiwan according to its business development needs and
upon the approval of the relevant government body.
Article 10 The Company may invest in other limited liability companies
or joint stock limited companies. The Company's liabilities to
an invested company shall be limited to the amount of its
capital contribution to the invested company. The Company
shall not become the unlimited liability shareholder of other
profit-making organizations.
Upon approval of the companies approving department authorized
by the State Council, the Company may, according to its
operating and management needs, operate as a holding company
as prescribed in Article 12(2) of the Company Law.
CHAPTER 2 THE COMPANY'S OBJECTIVES AND SCOPE OF BUSINESS
Article 11 The operation objectives of the Company are: maximization of
the Company's profits, maximization of shareholders' return.
Article 12 The Company's scope of business shall be consistent with and
subject to the scope of business approved by the authority
responsible for the registration of the Company. The Company's
scope of business includes: the exploration, exploitation and
sales of oil and natural gas; pipeline transportation of oil
and natural gas; oil refining; the production, sales and
storage of oil, petrochemical products, chemical fiber
products and other chemical products; wholesaling, retailing
and storage of oil and other oil products; operation of
24-hour stores; power generation; manufacturing and
installation of machinery; purchase and sales of raw
materials, charcoal, equipment and parts; supervision of
manufacturing of equipment; research, development and
application of technology and information; import and export;
and provision of technology and labour.
CHAPTER 3 SHARES AND REGISTERED CAPITAL
Article 13 There must, at all times, be ordinary shares in the Company,
which include the "domestic-invested shares" and the
"foreign-invested shares". Subject to the approval of the
companies approving department authorized by the State
Council, the Company may, according to its requirements,
create different classes of shares.
Article 14 The shares issued by the Company shall each have a par value
of Renminbi one yuan. "Renminbi" as mentioned above means the
legal currency of the PRC.
Article 15 Shares of the Company are in the form of share certificates.
Subject to the approval of the securities authority of the
State Council, the Company may issue shares to Domestic
Investors and Foreign Investors. The issue of shares by the
Company shall adhere to the principle of openness and
fairness.
"Foreign Investors" means those investors who subscribe for
the Company's shares and who are located in foreign countries
and in the regions of Hong Kong, Macau and Taiwan. "Domestic
Investors" means those investors who subscribe for the
Company's shares and who are located within the territory of
the PRC (except the areas referred to above).
Article 16 Shares which the Company issues to domestic investors for
subscription in Renminbi are called "Domestic-Invested
Shares". Domestic-invested shares listed domestically are
called "Domestic-Listed Domestic-Invested shares" whilst other
kinds of domestic-invested shares are called "Non-Listed
Domestic-Invested Shares".
Shares which the Company issues to foreign investors for
subscription in foreign currencies are called
"Foreign-Invested Shares". Foreign-invested shares which are
listed overseas are called "Overseas-Listed Foreign-Invested
Shares".
"Foreign currencies" means the legal currencies of countries
or districts outside the PRC which are recognized by the
foreign exchange authority of the State and which can be used
to pay the share price to the Company.
The shareholders of "Domestic-Invested Shares" and the
shareholders of "Overseas-Listed Foreign-Invested Shares"
shall be shareholders of ordinary shares, possessing the same
rights and undertaking the same obligations.
Article 17 Foreign-Invested Shares issued by the Company and which are
listed in Hong Kong shall be referred to as "H Shares". "H
Shares" means the shares which have been admitted for listing
on The Stock Exchange of Hong Kong Limited (the "Stock
Exchange"), the par value of which is denominated in Renminbi
and which are subscribed for and traded in Hong Kong dollars.
Article 18 The Company's domestic-invested shares are held on trust by
the Shanghai branch of the China Securities Registration and
Clearing Company Limited. The Company's H shares are mainly
held by the Hong Kong Securities Clearing Company Limited.
Article 19 The Company has at the time of its establishment issued to the
promoter, China Petrochemical Corporation, 6,880,000 ordinary
shares, representing 100% of the issued ordinary shares of the
Company at that time.
Article 20 After the establishment of the Company and upon the approval
of the companies approving department authorized by the State
Council, the promoter, China Petrochemical Corporation,
transferred 19,379,390,000 domestic-invested shares to holders
of other non-listed domestic-invested shares; the Company
issued 16,780,488,000 H shares (out of these, 15,102,439,000
shares are new issue shares of the Company and 1,678,049,000
shares are stock shares sold by the promoter, China
Petrochemical Corporation). Upon completion of the H share
issuance, the Company issued 2,800,000,000 domestic-listed
domestic-invested shares.
The existing structure of the Company's share capital is as
follows: the total number of issued ordinary shares of the
Company is 86,702,439,000 shares, out of these, 47,742,561,000
shares representing 55.07% of the total number of issued
ordinary shares of the Company are held by the promoter, China
Petrochemical Corporation; 19,379,390,000 shares representing
22.35% are held by other non-listed domestic-invested
shareholders; 2,800,000,000 shares representing 3.23% are held
by domestic-listed domestic-invested shareholders; and
16,780,488,000 shares representing 19.35% are held by
foreign-listed foreign-invested shareholders.
Article 21 The Company's board of directors may take all necessary action
for the respective issuance of the Overseas-Listed
Foreign-Invested Shares and Domestic-Invested Shares after the
proposals for issuance of the same have been approved by the
securities authority of the State Council.
The Company may implement its proposal to issue
Overseas-Listed Foreign-Invested Shares and Domestic-Invested
Shares pursuant to the preceding paragraph within fifteen (15)
months from the date of approval by the securities regulatory
organ of the State Council.
Article 22 Where the total number of shares stated in the proposal for
the issuance of shares include Overseas-Listed
Foreign-Invested Shares and Domestic-Invested Shares, such
shares should be fully subscribed for at their respective
offerings. If the shares cannot be fully subscribed for all at
once due to special circumstances, the shares may, subject to
the approval of the securities regulatory organ of the State
Council, be issued on separate occasions.
Article 23 The registered capital of the Company is RMB86,702,439,000.
Article 24 The Company may, based on its operating and development needs,
authorize the increase of its capital pursuant to the
Company's Articles of Association.
The Company may increase its capital in the following ways:
(1) by offering new shares for subscription by unspecified
investors;
(2) by placing new shares to its existing shareholders;
(3) by allotting bonus shares to its existing shareholders;
(4) to increase the share capital with common reserve fund;
(5) by any other means which is permitted by the laws,
administrative regulations and the competent department
under the securities authority of the State Council.
After the Company's increase of share capital by means of the
issuance of new shares has been approved in accordance with
the provisions of the Company's Articles of Association, the
issuance thereof should be made in accordance with the
procedures set out in the relevant laws and administrative
regulations of the State.
Article 25 Unless otherwise stipulated in the relevant laws or
administrative regulations, shares in the Company shall be
freely transferable and are not subject to any lien.
CHAPTER 4 REDUCTION OF CAPITAL AND REPURCHASE OF SHARES
Article 26 According to the provisions of the Company's Articles of
Association, the Company may reduce its registered capital. In
so doing, it shall act according to the Company Law, other
relevant provisions and these Articles of Association.
Article 27 The Company must prepare a balance sheet and an inventory of
assets when it reduces its registered capital.
The Company shall notify its creditors within ten (10) days of
the date of the Company's resolution for reduction of capital
and shall publish an announcement in a newspaper at least
three (3) times within thirty (30) days of the date of such
resolution. A creditor has the right within thirty (30) days
of receipt of the notice from the Company or, in the case of a
creditor who does not receive such notice, within ninety (90)
days of the date of the first public announcement, to require
the Company to repay its debts or to provide a corresponding
guarantee for such debt. The Company's registered capital may
not, after the reduction in capital, be less than the minimum
amount prescribed by law.
Article 28 The Company may, in accordance with the procedures set out in
the Company's Articles of Association and with the approval of
the relevant governing authority of the State, repurchase its
outstanding shares under the following circumstances:
(1) cancellation of shares for the purposes of reducing its
capital;
(2) merging with another company that holds shares in the
Company;
(3) other circumstances permitted by laws and administrative
regulations.
The Company shall repurchase its outstanding shares in
accordance with the stipulations of Article 29 to Article 32.
Article 29 The Company may repurchase shares in one of the following
ways, with the approval of the relevant governing authority of
the State:
(1) by making an offer for the repurchase of shares to all
its shareholders on a pro rata basis;
(2) by repurchasing shares through public dealing on a stock
exchange;
(3) by repurchasing shares outside of the stock exchange
by means of an off-market agreement;
(4) by any other means which is permitted by the laws,
administrative regulations and the securities regulatory
organ of the State Council.
Article 30 The Company must obtain the prior approval of the shareholders
in a general meeting in the manner stipulated in the Company's
Articles of Association before it can repurchase shares
outside the stock exchange by means of an off-market
agreement. The Company may, by obtaining the prior approval of
the shareholders in a general meeting (in the same manner),
rescind or vary any contract which has been so entered into or
waive any right thereof.
A contract for the repurchase of shares referred to in the
preceding paragraph includes (without limitation) an agreement
to become liable to repurchase shares or an agreement to have
the right to repurchase shares.
The Company may not assign any contract for the repurchase of
its shares or any right contained in such contract.
Article 31 Shares which have been legally repurchased by the Company
shall be cancelled within 10 days of completion of the
repurchase (or such other shorter period as required by law or
administrative regulations), and the Company shall apply to
the original companies registration authority for registration
of the change in its registered capital. The aggregate par
value of the cancelled shares shall be deducted from the
Company's registered share capital.
Article 32 Unless the Company is in the course of liquidation, it must
comply with the following provisions in relation to repurchase
of its outstanding shares:
(1) where the Company repurchases shares at par value,
payment shall be made out of book surplus distributable
profits of the Company or out of proceeds of a new issue
of shares made for that purpose;
(2) where the Company repurchases shares of the Company at a
premium to its par value, payment up to the par value
may be made out of the book surplus of distributable
profits of the Company or out of the proceeds of a new
issue of shares made for that purpose. Payment of the
portion in excess of the par value shall be effected as
follows:
1. if the shares being repurchased were issued at par
value, payment shall be made out of the book
surplus of distributable profits of the Company;
2. if the shares being repurchased were issued at a
premium to its par value, payment shall be made out
of the book surplus of distributable profits of the
Company or out of the proceeds of a new issue of
shares made for that purpose, provided that the
amount paid out of the proceeds of the new issue
shall not exceed the aggregate amount of premiums
received by the Company on the issue of the shares
repurchased nor shall it exceed the book value of
the Company's capital common reserve fund account
(including the premiums on the new issue) at the
time of the repurchase;
(3) the Company shall make the following payments out of the
Company's distributable profits:
1. payment for the acquisition of the right to
repurchase its own shares;
2. payment for variation of any contract for the
repurchase of its shares;
3. payment for the release of its obligation(s) under
any contract for the repurchase of shares;
(4) after the Company's registered capital has been reduced
by the aggregate par value of the cancelled shares in
accordance with the relevant provisions, the amount
deducted from the distributable profits of the Company
for payment of the par value of shares which have been
repurchased shall be transferred to the Company's
capital common reserve fund account.
CHAPTER 5 FINANCIAL ASSISTANCE FOR ACQUISITION OF SHARES
Article 33 The Company and its subsidiaries shall not, at any time,
provide any form of financial assistance to a person who is
acquiring or is proposing to acquire shares in the Company.
This includes any person who directly or indirectly incurs any
obligations as a result of the acquisition of shares in the
Company.
The Company and its subsidiaries shall not, at any time,
provide any form of financial assistance to the Obligor for
the purposes of reducing or discharging the obligations
assumed by such person.
This Article shall not apply to the circumstances specified in
Article 35 of this Chapter.
Article 34 For the purposes of this Chapter, "financial assistance"
includes (without limitation) the following:
(1) gift;
(2) guarantee (including the assumption of liability by the
guarantor or the provision of assets by the guarantor to
secure the performance of obligations by the Obligor),
compensation (other than compensation in respect of the
Company's own default) or release or waiver of any
rights;
(3) provision of loan or the making of any other agreement
under which the obligations of the Company are to be
fulfilled before the obligations of another party, or
the change in parties to, or the assignment of rights
under, such loan or contract;
(4) any other form of financial assistance given by the
Company when the Company is insolvent or has no net
assets or when its net assets would thereby be reduced
to a material extent.
For the purposes of this Chapter, "assumption of obligations"
includes the assumption of obligations by way of contract or
by way of arrangement (irrespective of whether such contract
or arrangement is enforceable or not and irrespective of
whether such obligation is to be borne solely by the Obligor
or jointly with other persons) or by any other means which
results in a change in his financial position.
Article 35 The following acts shall not be deemed to be acts prohibited
by Article 33 of this Chapter:
(1) the provision of financial assistance by the Company
where the financial assistance is given in good faith in
the interests of the Company, and the principal purpose
of which is not for the acquisition of shares in the
Company, or the giving of the financial assistance is an
incidental part of a master plan of the Company;
(2) the lawful distribution of the Company's assets as
dividend;
(3) the distribution of dividends in the form of shares;
(4) a reduction of registered capital, a repurchase of
shares of the Company or a reorganization of the share
holding structure of the Company effected in accordance
with the Company's Articles of Association;
(5) the provision of loans by the Company within its scope
of business and in the ordinary course of its business,
where the provision of loans falls within part of the
scope of business of the Company (provided that the net
assets of the Company are not thereby reduced or that,
to the extent that the assets are thereby reduced, the
financial assistance is provided out of distributable
profits);
(6) contributions made by the Company to the employee share
ownership schemes (provided that the net assets of the
Company are not thereby reduced or that, to the extent
that the assets are thereby reduced, the financial
assistance is provided out of distributable profits).
CHAPTER 6 SHARE CERTIFICATES AND REGISTER OF SHAREHOLDERS
Article 36 Share certificates of the Company shall be in registered form.
The shares of the Company shall bear the following main items:
(1) Name of the Company;
(2) Date of registration and establishment of the Company;
(3) Type of shares, par value and the number of shares it
represents;
(4) Code of share certificates;
(5) Other matters as required by the Company Law, Special
Regulations and the stock exchange on which the shares
of the Company are listed.
Article 37 The shares of the Company may be transferred, donated,
inherited and pledged in accordance with the relevant laws,
administrative rules, regulations of the competent
department(s) as well as these Articles of Association.
The transfer of shares shall be registered with the share
registration organisation appointed by the Company.
Article 38 The Company does not accept the pledging of its shares.
Article 39 The directors, supervisors, president, vice-president, Chief
Financial Officer and secretary of the board of directors of
the Company shall, during their term of office, declare to the
Company regularly the Company's shares held by them. During
their term of office and within 6 months of their leaving,
they may not transfer the Company's shares held by them.
Article 40 If a shareholder who holds 5% or above of voting shares sells
his shares in the Company within 6 months of his purchase or
purchases again within 6 months of the sale, the profits thus
made shall belong to the Company.
The preceding provision shall apply to senior officers
prescribed in the articles of association of a legal person
shareholder holding 5% or above of the voting shares in the
Company, including but without limitation to its directors,
supervisors and the president.
Article 41 Share certificates of H-shares of the Company shall be signed
by the Chairman of the Company's board of directors. Where the
stock exchange(s) on which the Company's shares are listed
require other directors and/or supervisors, president,
vice-president, Chief Financial Officer and the secretary of
the board of directors of the Company to sign on the share
certificates, the share certificates shall also be signed by
such officer(s). The share certificates shall take effect
after being sealed or imprinted with the seal of the Company
(or the Company chop for securities). The share certificate
shall only be sealed with the Company's seal or securities
chop under the authorization of the board of directors. The
signatures of the Chairman of the board of directors or other
officer(s) of the Company may be printed in printed form.
Article 42 The Company shall keep a register of shareholders which shall
contain the following particulars:
(1) the name (title) and address (residence), the occupation
or nature of each shareholder;
(2) the class and quantity of shares held by each
shareholder;
(3) the amount paid-up on or agreed to be paid-up on the
shares held by each shareholder;
(4) the share certificate number(s) of the shares held by
each shareholder;
(5) the date on which each person was registered as a
shareholder;
(6) the date on which any shareholder ceased to be a
shareholder. Unless there is evidence to the contrary,
the register of shareholders shall be sufficient
evidence of the shareholders' shareholdings in the
Company.
Article 43 The Company may, in accordance with the mutual understanding
and agreements made between the securities regulatory organ of
the State Council and overseas securities regulatory
organizations, maintain the register of shareholders of
Overseas-Listed Foreign-Invested Shares overseas and appoint
overseas agent(s) to manage such register of shareholders. The
original register of shareholders for holders of H Shares
shall be maintained in Hong Kong.
A duplicate register of shareholders for the holders of
Overseas-Listed Foreign-Invested Shares shall be maintained at
the Company's residence. The appointed overseas agent(s) shall
ensure consistency between the original and the duplicate
register of shareholders at all times.
If there is any inconsistency between the original and the
duplicate register of shareholders for the holders of
Overseas-Listed Foreign-Invested Shares, the original register
of shareholders shall prevail.
Article 44 The Company shall have a complete register of shareholders
which shall comprise the following parts:
(1) the register of shareholders which is maintained at the
Company's residence (other than those share registers
which are described in sub-paragraphs (2) and (3) of
this Article);
(2) the register of shareholders in respect of the holders
of Overseas-Listed Foreign-Invested Shares of the
Company which is maintained in the same place as the
overseas stock exchange on which the shares are listed;
and
(3) the register of shareholders which is maintained in such
other place as the board of directors may consider
necessary for the purposes of the listing of the
Company's shares.
Article 45 Different parts of the register of shareholders shall not
overlap. No transfer of any shares registered in any part of
the register shall, during the continuance of that
registration, be registered in any other part of the register.
All Overseas-Listed Foreign-Invested Shares listed in Hong
Kong which have been fully paid-up may be freely transferred
in accordance with the Company's Articles of Association.
However, unless such transfer complies with the following
requirements, the board of directors may refuse to recognize
any instrument of transfer and would not need to provide any
reason therefor:
(1) a fee of HK$2.50 per instrument of transfer or such
higher amount agreed by the Stock Exchange has been paid
to the Company for registration of the instrument of
transfer and other documents relating to or which will
affect the right of ownership of the shares;
(2) the instrument of transfer only relates to
Overseas-Listed Foreign-Invested Shares listed in Hong
Kong;
(3) the stamp duty which is chargeable on the instrument of
transfer has already been paid;
(4) the relevant share certificate(s) and any other evidence
which the board of directors may reasonably require to
show that the transferor has the right to transfer the
shares have been provided;
(5) if it is intended that the shares be transferred to
joint owners, the maximum number of joint owners shall
not be more than four (4); and
(6) the Company does not have any lien on the relevant
shares.
All Overseas-Listed Foreign-Invested Shares listed in Hong
Kong shall be transferred by an instrument in writing in any
usual or common form or any other form which the directors may
approve. The instrument of transfer of any share may only be
executed by hand without seal, or if the assignor or the
assignee is the recognized clearing house or its nominee, the
share transfer form may be executed by hand or in
mechanically-printed form. All instruments of transfer must be
placed at the legal address of the Company or in other places
as the Board of Directors may be specified at any time.
Amendments or rectification of the register of shareholders
shall be made in accordance with the laws of the place where
the register of shareholders is maintained.
Article 46 No change may be made in the register of shareholders as a
result of a transfer of shares within thirty (30) days prior
to the date of a shareholders' general meeting or within five
(5) days before the determination date for the Company's
distribution of dividends.
Article 47 When the Company needs to convene a shareholders' meeting
for the purposes of determination, dividend distribution, for
liquidation or for any other purpose which need to determine
shareholdings, the board of directors shall determine a record
date for the determination of shareholdings. The shareholders
of the Company shall be such persons who appear in the
register of shareholders at the close of such record date.
Article 48 Any person who disputes the register of shareholders and
asks for inclusion of his name in or removal of his name from
the register of shareholders may apply to a court of competent
jurisdiction for rectification of the register.
Article 49 For any person who is a registered shareholder or who
claims to be entitled to have his name (title) entered in the
register of shareholders in respect of shares in the Company
may, if his share certificate (the "original certificate")
relating to the shares is lost, he may apply to the Company
for a replacement share certificate in respect of such shares
(the "Relevant Shares").
Application by a holder of Domestic-Invested Shares, who has
lost his share certificate, for a replacement share
certificate shall be dealt with in accordance with Article 150
of the Company Law.
Application by a holder of Overseas-Listed Foreign-Invested
Shares, who has lost his share certificate, for a replacement
share certificate may be dealt with in accordance with the law
of the place where the original register of shareholders of
holders of Overseas-Listed Foreign-Invested Shares is
maintained, the rules of the stock exchange or other relevant
regulations.
The issue of a replacement share certificate to a holder of H
Shares, who has lost his share certificate, shall comply with
the following requirements:
(1) The applicant shall submit an application to the Company
in a prescribed form accompanied by a notarial
certificate or a statutory declaration, of which the
contents shall include the grounds upon which the
application is made and the circumstances and evidence
of the loss, and the declaration showing that no other
person is entitled to have his name entered in the
register of shareholders in respect of the Relevant
Shares.
(2) The Company has not received any declaration made by any
person other than the applicant declaring that his name
shall be entered in the register of shareholders in
respect of such shares before it decides to issue a
replacement share certificate to the applicant.
(3) The Company shall, if it intends to issue a replacement
share certificate, publish a notice of its intention to
do so at least once every thirty (30) days within a
period of ninety (90) consecutive days in such
newspapers as may be prescribed by the board of
directors.
(4) The Company shall, prior to publication of its intention
to issue a replacement share certificate, deliver to the
stock exchange on which its shares are listed, a copy of
the notice to be published and may publish the notice
upon receipt of confirmation from such stock exchange
that the notice has been exhibited in the premises of
the stock exchange. Such notice shall be exhibited in
the premises of the stock exchange for a period of
ninety (90) days. In the case of an application which is
made without the consent of the registered holder of the
Relevant Shares, the Company shall deliver by mail to
such registered shareholder a copy of the notice to be
published.
(5) If, by the expiration of the 90-day period referred to
in paragraphs (3) and (4) of this Article, the Company
has not received any objection from any person in
respect of the issuance of the replacement share
certificate, it may issue a replacement share
certificate to the applicant pursuant to his
application.
(6) Where the Company issues a replacement share certificate
pursuant to this Article, it shall forthwith cancel the
original share certificate and document the cancellation
of the original share certificate and issuance of a
replacement share certificate in the register of
shareholders accordingly.
(7) All expenses relating to the cancellation of an original
share certificate and the issuance of a replacement
share certificate shall be borne by the applicant and
the Company is entitled to refuse to take any action
until reasonable guarantee is provided by the applicant
therefor.
Article 50 Where the Company issues a replacement share certificate
pursuant to the Company's Articles of Association, as for a
bona fide purchaser obtaining new share certificates referred
to above or a shareholder registered as a owner of the shares
(in case of a bona fide purchaser), his name (title) shall not
be removed from the register of shareholders.
Article 51 The Company shall not be liable for any damages sustained
by any person by reason of the cancellation of the original
share certificate or the issuance of the replacement share
certificate unless the claimant is able to prove that the
Company has acted in a deceitful manner.
CHAPTER 7 SHAREHOLDERS' RIGHTS AND OBLIGATIONS
Article 52 A shareholder of the Company is a person who lawfully holds
shares in the Company and whose name (title) is entered in the
register of shareholders. A shareholder shall enjoy rights and
assume obligations according to the class and amount of shares
held by him; shareholders who hold shares of the same class
shall enjoy the same rights and assume the same obligations.
For the joint shareholders, if one of the joint shareholders
has passed away, the surviving shareholder shall be deemed by
the Company to have the ownership of the related shares, but
the Board of Directors is entitled to ask for the provision of
the suitable death certificate for the purpose of revision of
the shareholders' register. For the joint shareholders, only
the first named shareholder in the shareholders' register has
the right to receive the share certificates of the related
shares, receive the notice of the Company, attend the
shareholders' general meeting and exercise his voting right;
while, any notice delivered to the said shareholder shall be
deemed as if the notice has been delivered to all of the joint
shareholder of the related shares.
Article 53 The shareholders of ordinary shares of the Company shall enjoy
the following rights:
(1) the right to receive dividends and other distributions
in proportion to their shareholdings;
(2) the right to attend or appoint a proxy to attend
shareholders' general meetings and to vote thereat
according to their shareholdings;
(3) the right to supervise the Company's business
operations, the right to present proposals or to raise
queries;
(4) the right to transfer, donate and pledge shares in
accordance with laws, administrative regulations and
provisions of the Company's Articles of Association;
(5) subject to production of the relevant proofs of the type
and quantity of shares that they are holding to the
Company and verification of their identities of
shareholders by the Company, the right to obtain
relevant information in accordance with laws,
administrative regulations and provisions of these
Articles of Association, which information includes:
i. the right to obtain a copy of the Company's
Articles of Association, subject to payment of
costs;
ii. the right to inspect and copy, subject to payment
of a reasonable fee:
(i) all parts of the register of shareholders;
(ii) personal particulars of each of the Company's
directors, supervisors, president,
vice-president, Chief Financial Officer and
secretary of the board of directors,
including:
(a) present and former name and alias;
(b) principal address (place of residence);
(c) nationality;
(d) primary and all other part-time
occupations and duties;
(e) identification documents and the numbers
thereof;
(iii) report on the state of the Company's share
capital;
(iv) reports showing the aggregate par value, quantity,
highest and lowest price paid in respect of each
class of shares repurchased by the Company since
the last accounting year and the aggregate amount
paid by the Company for this purpose;
(v) minutes of shareholders' general meetings;
(vi) regular reports and interim reports of the
Company.
(6) in the event of the termination or liquidation of the
Company, the right to participate in the distribution of
remaining assets of the Company in accordance with the
number of shares held;
(7) in the event that the resolution of a shareholders'
general meeting or board meeting is against the law or
administrative rules and has infringed the legitimate
interest of a shareholder, the shareholder shall have
the right to commence legal proceedings to stop the
illegal or infringing act and to ask the Company to
bring a claim for compensation;
(8) other rights conferred by laws, administrative
regulations and these Articles of Association.
Article 54 The shareholders of ordinary shares of the Company shall
assume the following obligations:
(1) to comply with these Articles of Association;
(2) to pay subscription money according to the number of
shares subscribed and the method of subscription;
(3) not to retire from being a shareholder unless required
by law or administrative regulations;
(4) other obligations imposed by laws, administrative
regulations and these Articles of Association.
Shareholders are not liable to make any further contribution
to the share capital other than according to the terms which
were agreed by the subscriber of the relevant shares at the
time of subscription.
Article 55 In addition to the obligations imposed by laws and
administrative regulations or required by the listing rules of
the stock exchange on which the Company's shares are listed, a
controlling shareholder shall not exercise his voting rights
in respect of the following matters in a manner prejudicial to
the interests of all or part of the shareholders of the
Company:
(1) act honestly in the best interests of the Company in
removing a director or supervisor;
(2) to approve the expropriation by a director or supervisor
(for his own benefit or for the benefit of another
person) of the Company's assets in any way, including
(without limitation to) opportunities which are
beneficial to the Company;
(3) to approve the expropriation by a director or supervisor
(for his own benefit or for the benefit of another
person) of the individual interest of other
shareholders, including (but without limitation to)
rights to distributions and voting rights (excluding a
restructuring which has been submitted for approval by
the shareholders in a general meeting in accordance with
the Company's Articles of Association).
Article 56 For the purpose of the foregoing Article, a "controlling
shareholder" means a person who satisfies any one of the
following conditions:
(1) a person who, acting alone or in concert with others,
has the power to elect more than half of the board of
directors;
(2) a person who, acting alone or in concert with others,
has the power to exercise 30% or more or has power to
control the exercise of 30% or more of the voting rights
in the Company;
(3) a person who, acting alone or in concert with others,
holds 30% or more of the issued and outstanding shares
of the Company;
(4) a person who, acting alone or in concert with others,
has de facto control of the Company in any other way.
"Acting in concert" referred to above means the acting of two
or more persons by agreement (whether verbal or in writing) so
as to gain or strengthen the control of the Company through
the acquisition of voting rights in the Company by either of
them.
CHAPTER 8 SHAREHOLDERS' GENERAL MEETINGS
Article 57 The shareholders' general meeting is the organ of authority
of the Company and shall exercise its functions and powers in
accordance with law.
The Company shall draw up "Rules and Procedures for the
Shareholders' General Meetings" for implementation after being
approved by the shareholders in a general meeting. The Rules
and Procedures for the Shareholders' General Meetings shall
include the followings:
(1) functions and powers of the shareholders general
meetings;
(2) authorities given by the shareholders' general meetings
to the board of directors;
(3) procedures for the convening of a shareholders' general
meeting, which include the putting forward, collection
and approval of motions and notices of meetings and any
change thereto, registration of the meeting, convening
of, voting and resolutions made in the meeting,
adjournments, past-session matters and announcements,
etc.;
(4) other matters deemed necessary by the shareholders'
general meeting. The Rules and Procedures for the
Shareholders' General Meetings is an integral part of
and has the same legal effect as these Articles of
Association.
Article 58 The shareholders' general meeting shall have the following
functions and powers:
(1) to decide on the Company's operational policies and
investment plans;
(2) to elect and replace directors and to decide on matters
relating to the remuneration and liability insurance of
directors;
(3) to elect and replace supervisors who are shareholder
representatives and to decide on matters relating to the
remuneration and liability insurance of supervisors;
(4) to examine and approve the board of directors' reports;
(5) to examine and approve the supervisory committee's
reports;
(6) to examine and approve the Company's profit distribution
plans and loss recovery plans;
(7) to examine and approve the Company's proposed annual
preliminary and final financial budgets;
(8) to pass resolutions on the increase or reduction of the
Company's registered capital;
(9) to pass resolutions on matters such as merger, division,
dissolution and liquidation of the Company;
(10) to pass resolutions on the issue of debentures by the
Company;
(11) to pass resolutions on the appointment, dismissal and
non-reappointment of the accountants of the Company;
(12) to amend the Company's Articles of Association and its
appendices (including the Rules and Procedures for the
Shareholders' General Meetings, Rules and Procedures for
the Board of Directors' Meetings and Rules and
Procedures for the Supervisors' Meetings);
(13) to consider motions raised by the supervisory committee
or shareholders who represent 5% or more of the total
number of voting shares of the Company at annual general
meetings;
(14) to decide on other matters which, according to laws,
administrative regulations, regulations of the competent
department(s) or these Articles of Association, need to
be approved by shareholders in general meetings;
Article 59 Matters which shall be determined by the shareholders in a
general meeting according to the laws, administrative
regulations, regulations of the competent departments or these
Articles of Association must be discussed by the shareholders
in a general meeting in order to protect the shareholders'
right of decision on those matters. Where necessary and
reasonable, the board of directors or its secretary may be
appointed in a shareholders' general meeting to determine (if
so authorized in the general meeting) specific matters which
are related to the matters to be resolved and are not possible
or not necessary to be determined in that general meeting.
Please see the Rules and Procedures for the Shareholders'
General Meetings for the form of authorization by shareholders
to the board of directors in a shareholders' general meeting
to determine major matters of the Company.
If the shareholders authorize the board of directors or its
secretary in a general meeting to determine matters which
shall be determined by ordinary resolutions, the matter should
be resolved by more than one-half of the attending
shareholders (including their proxy) who have voting rights;
if the authorization relates to matters which shall be
determined by special resolutions, the matter should be
resolved by more than two-thirds of the attending shareholders
(including their proxy) who have voting rights. The
authorization should be clear and specific.
Article 60 Unless prior approval of shareholders in the form of a
special resolution is obtained in a general meeting, the
Company shall not enter into any contract with any person
other than the directors, supervisors, president,
vice-president, Chief Financial Officer and secretary of the
board of directors of the Company pursuant to which such
person shall be responsible for the management and
administration of the whole or any substantial part of the
Company's business.
Article 61 Shareholders' general meetings are divided into annual
general meetings ("AGM") and extraordinary general meetings
("EGM"). Unless otherwise provided in these Articles of
Association and the Rules and Procedures for the Shareholders'
General Meetings, shareholders' general meetings shall be
convened by the board of directors.
Article 62 AGMs are held once every year and within six (6) months from
the end of the preceding accounting year. At least the
following matters should be resolved in an AGM:
(1) examination of the board of directors' annual report;
(2) examination of the supervisory committee's annual
report;
(3) examination of the Company's profit distribution
proposal;
(4) examination of the Company's audited final budgets for
the preceding year;
(5) engagement, removal or non-renewal of the appointment of
the accounting firm by the Company and determination of
the remuneration of the accounting firm so engaged.
Matters to be considered in an AGM including but without
limitation to the above matters, and any matter that could be
considered in a general meeting may be considered in an AGM.
In an AGM, the supervisory committee and shareholders who
individually or jointly hold 5% or more of the Company's
voting shares shall have the right to put forward provisional
motions.
Article 63 The board of directors shall convene an EGM within two (2)
months after the occurrence of any one of the following
events:
(1) where the number of directors is less than the number
stipulated in the Company Law or two-thirds of the
number specified in the Company's Articles of
Association;
(2) where the unrecovered losses of the Company amount to
one-third of the total amount of its share capital;
(3) where shareholder(s) who individually or jointly hold
10% or more of the Company's issued and outstanding
voting shares (not including voting by proxy) request(s)
in writing for the convening of an EGM;
(4) whenever the board of directors deems necessary or the
supervisory committee so requests;
(5) other circumstances provided by these Articles of
Association. The shareholdings referred to in item (3)
above shall be calculated as at the date of written
request of the shareholders.
Article 64 Any request for the board of directors to hold an AGM or class
meeting made by the supervisory committee or shareholders who
individually or jointly hold 10% of the Company's voting
shares entitling them to vote in that proposed meeting shall
be dealt with according to the provisions of the Rules and
Procedures for the Shareholders' General Meetings.
If a meeting is convened by the shareholders themselves where
the board of directors has not given the required consent
under the Rules and Procedures for the Shareholders' General
Meetings to the same, the reasonable expenses thus incurred
shall be borne by the Company and paid out of the money
payable by the Company to the negligent director(s).
Article 65 If the number of members of the board of directors falls short
of the number prescribed by the Company Law or is less than
two-thirds of the number prescribed in these Articles of
Association, or if the Company's non-recovered loss has
amounted to one third of the share capital and the board of
directors has failed to call for an EGM in the prescribed
time, shareholders may call for an EGM on their own according
to the prescribed procedures of the Rules and Procedures for
the Shareholders' General Meetings.
Article 66 Any shareholders who individually or jointly hold 10% or
more of the voting shares entitling them to vote in the
proposed meeting have any dispute as to the board of
directors' non-inclusion of their motion into the agenda may,
according to the prescribed procedures of the Rules and
Procedures for the Shareholders' General Meetings, ask for the
convening of an EGM.
Article 67 A motion of a shareholders' general meeting is a discussion
paper of a matter which should be discussed in a general
meeting and shareholders should resolve on the specific motion
in a general meeting. The contents, form and issuing
procedures of a motion shall comply with the requirements of
the Rules and Procedures for the Shareholders' General
Meetings.
Article 68 When the Company convenes a shareholders' general meeting,
written notice of the meeting shall be given forty-five (45)
days (including the date of the meeting) before the date of
the meeting to notify all of the shareholders whose names
appear in the share register of the matters to be considered
and the date and place of the meeting. The contents, form and
issuing procedures of the notice shall comply with the
requirements of the Rules and Procedures for the Shareholders'
General Meetings.
Article 69 Any shareholder who is entitled to attend and vote at a
general meeting of the Company shall be entitled to appoint
one (1) or more persons (whether such person is a shareholder
or not) as his proxy or proxies to attend and vote on his
behalf, and a proxy so appointed shall be entitled to exercise
the following rights pursuant to the authorization from that
shareholder:
(1) the shareholders' right to speak at the meeting;
(2) the right to demand or join in demanding a poll;
(3) the right to vote by hand or on a poll, but a proxy of a
shareholder who has appointed more than one (1) proxy
may only vote on a poll.
If the said shareholder is a recognized clearing house as
defined by Securities and Futures (Clearing House) Ordinance
(Chapter 420 of Hong Kong Law) or the Securities and Futures
Ordinance, the shareholder may authorize one or more suitable
person to act as its representative at any shareholders'
general meeting or any kinds of shareholders' general meeting;
however, if more than one person are authorized, the power of
attorney shall clearly indicate the number and types of the
stocks involved by way of the said authorization. The persons
after such authorization may represent the recognized clearing
house (or its "proxy") to exercise the rights, as if they were
the individual shareholders of the Company.
Article 70 The instrument appointing a proxy to attend the general
meeting shall be in writing clearly indicating the number of
shares of the appointor represented by the proxy and shall be
under the hand of the appointor or his attorney duly
authorized in writing, or if the appointor is a legal person,
either under seal or under the hand of a director or a duly
authorized attorney. If several proxies are appointed, such
written instrument shall clearly indicate the number of shares
of the appointor represented by each proxy. The remaining
contents and form of the instrument shall comply with the
requirements of the Rules and Procedures for the Shareholders'
General Meetings.
Article 71 Any form given to a shareholder by the directors for use by
such shareholder for the appointment of a proxy to attend and
vote at meetings of the Company shall be such as to enable the
shareholder to freely instruct the proxy to vote in favour of
or against the motions, such instructions being given in
respect of each individual matter to be voted on at the
meeting. Such a form shall contain a statement that, in the
absence of specific instructions from the shareholder, the
proxy may vote as he thinks fit.
Article 72 A vote made in accordance with the terms of a proxy shall
be valid notwithstanding the death or loss of capacity of the
appointor or revocation of the proxy or the authority under
which the proxy was executed, or the transfer of the shares in
respect of which the proxy is given, provided that the Company
did not receive any written notice in respect of such matters
before the commencement of the relevant meeting.
Article 73 Apart from the independent directors, the Company's board
of directors and shareholders who meet the relevant
requirements may also collect from other shareholders of the
Company the rights to vote in a shareholders' general meeting.
The collection of voting rights shall be without consideration
with sufficient disclosure of information to the shareholders
from whom voting rights are being collected.
Article 74 When a connected transaction is discussed in a
shareholders' general meeting, the connected shareholders
shall not take part in the voting and the number of voting
shares represented by him will not be counted in.
Announcements of resolutions made in the shareholders in a
general meeting shall make full disclosure of the votes cast
by non-connected shareholders.
Article 75 A shareholder (including a proxy), when voting at a
shareholders' general meeting, may exercise such voting rights
as are attached to the number of voting shares which he
represents except when the accumulated voting system under
Article 103 hereof regarding election of directors is adopted
in which case one (1) vote is attached to each share. Please
refer to the Rules and Procedures for the Shareholders'
General Meetings for the implementation of the accumulated
voting system.
Article 76 At any shareholders' general meeting, a resolution shall be
decided on a show of hands unless a poll is demanded:
(1) by the chairman of the meeting;
(2) by at least two (2) shareholders present in person or by
proxy entitled to vote thereat;
(3) by one (1) or more shareholders present in person or by
proxy and representing 10 % or more of all shares
carrying the right to vote at the meeting singly or in
aggregate, before or after a vote is carried out by a
show of hands.
Unless a poll is demanded, a declaration by the chairman that
a resolution has been passed on a show of hands and the record
of such in the minutes of the meeting shall be conclusive
evidence of the fact that such resolution has been passed.
There is no need to provide evidence of the number or
proportion of votes in favour of or against such resolution.
The demand for a poll may be withdrawn by the person who
demands the same.
Article 77 A poll demanded on the election of the chairman of the
meeting, or on a question of adjournment of the meeting, shall
be taken forthwith. A poll demanded on any other question
shall be taken at such time as the chairman of the meeting
directs, and any business other than that upon which a poll
has been demanded may be proceeded with, pending the taking of
the poll. The result of the poll shall be deemed to be a
resolution of the meeting at which the poll was demanded.
Article 78 On a poll taken at a meeting, a shareholder (including a
proxy) entitled to two (2) or more votes need not cast all his
votes in the same way.
Article 79 In the case of an equality of votes, whether on a show of
hands or on a poll, the chairman of the meeting at which the
show of hands takes place or at which the poll is demanded
shall have a casting vote.
Article 80 Resolutions of shareholders' general meetings shall be
divided into ordinary resolutions and special resolutions. An
ordinary resolution must be passed by votes representing more
than one-half of the voting rights represented by the
shareholders (including their proxy) present at the meeting.
A special resolution must be passed by votes representing more
than two-thirds of the voting rights represented by the
shareholders (including their proxy) present at the meeting.
The shareholders (including their proxy) attending the meeting
shall clearly show approval or objection to every matter to be
voted on. As for the unpolled vote or abstention, the Company
will not treat it as the vote with voting right when
calculating the voting result of this matter.
Article 81 The following matters shall be resolved by an ordinary
resolution at a shareholders' general meeting:
(1) work reports of the board of directors and the
supervisory committee;
(2) profit distribution plans and loss recovery plans
formulated by the board of directors;
(3) removal of members of the board of directors and members
of the supervisory committee who are shareholders'
representatives, their remuneration and manner of
payment and their liability insurance;
(4) annual preliminary and final budgets, balance sheets and
profit and loss accounts and other financial statements
of the Company;
(5) matters other than those which are required by the laws
and administrative regulations or by the Company's
Articles of Association to be adopted by special
resolution.
Article 82 The following matters shall be resolved by a special
resolution at a shareholders' general meeting:
(1) the increase or reduction in share capital and the issue
of shares of any class, warrants and other similar
securities;
(2) the issue of debentures of the Company;
(3) the division, merger, dissolution and liquidation of the
Company;
(4) amendment of the Company's Articles of Association;
(5) repurchase of the Company's shares;
(6) any other matters considered by the shareholders in
general meeting, and resolved by way of an ordinary
resolution, to be of a nature which may have a material
impact on the Company and should be adopted by special
resolutions.
Article 83 The chairman of the meeting shall be responsible for
determining whether a resolution has been passed. His
decision, which shall be final and conclusive, shall be
announced at the meeting and recorded in the minutes.
Article 84 If the chairman of the meeting has any doubt as to the
result of a resolution which has been put to vote at a
shareholders' meeting, he may have the votes counted. If the
chairman of the meeting has not counted the votes, any
shareholder who is present in person or by proxy and who
objects to the result announced by the chairman of the meeting
may, immediately after the declaration of the result, demand
that the votes be counted and the chairman of the meeting
shall have the votes counted immediately.
Article 85 If votes are counted at a shareholders' general meeting,
the result of the count shall be recorded in the minutes.
Article 86 Records of Meetings shall be prepared for shareholders'
general meetings and signed by attending directors and the
recording person. If there is no director attending in the
general meeting, the records of meeting shall be signed by the
shareholder or proxy of shareholder chairing the meeting and
the recording person. The contents and form of the records of
meeting shall comply with the requirements of the Rules and
Procedures for the Shareholders' General Meetings.
The minutes of meeting shall be prepared for all resolutions
adopted at shareholders' general meetings. The records and
minutes of the meeting shall be made in Chinese. The minutes,
together with the shareholders' attendance lists and proxy
forms shall be treated as a Company file and kept by the
secretary of the board of directors at the Company's place of
residence.
Article 87 Copies of the minutes of proceedings of any shareholders'
meeting shall, during business hours of the Company, be open
for inspection by any shareholder without charge. If a
shareholder requests for a copy of such minutes from the
Company, the Company shall send a copy of such minutes to him
within seven (7) days after receipt of reasonable fees
therefor.
CHAPTER 9 SPECIAL PROCEDURES FOR VOTING BY A CLASS OF SHAREHOLDERS
Article 88 Those shareholders who hold different classes of shares are
class shareholders. Class shareholders shall enjoy rights and
assume obligations in accordance with laws, administrative
regulations and the Company's Articles of Association.
Article 89 Rights conferred on any class of shareholders ("class
rights") may not be varied or abrogated save with the approval
of a special resolution of shareholders in a general meeting
and by holders of shares of that class at a separate meeting
conducted in accordance with Articles 91 to 95 hereof.
Article 90 The following circumstances shall be deemed to be variation
or abrogation of the rights attaching to a particular class of
shares:
(1) to increase or decrease the number of shares of that
class, or to increase or decrease the number of shares
of a class having voting or equity rights or privileges
distribution or superior to those of shares of that
class;
(2) to exchange all or part of the shares of that class for
shares of another class or to exchange or to create a
right to exchange all or part of the shares of another
class for shares of that class;
(3) to remove or reduce rights to accrued dividends or
rights to cumulative dividends attached to shares of
that class;
(4) to reduce or remove preferential rights attached to
shares of that class to receive dividends or to the
distribution of assets in the event that the Company is
liquidated;
(5) to add, remove or reduce conversion privileges, options,
voting rights, transfer or pre-emptive rights, or rights
to acquire securities of the Company attached to shares
of that class;
(6) to remove or reduce rights to receive payment payable by
the Company in specific currencies attached to shares of
that class;
(7) to create a new class of shares having voting or
distribution rights or privileges equal or superior to
those of the shares of that class;
(8) to restrict the transfer or ownership of shares of that
class or to increase the types of restrictions attaching
thereto;
(9) to issue rights to subscribe for, or to convert the
existing shares into, shares in the Company of that
class or another class;
(10) to increase the rights or privileges of shares of
another class;
(11) to restructure the Company in such a way so as to result
in the disproportionate distribution of obligations
between the various classes of shareholders;
(12) to vary or abrogate the provisions of this Chapter.
Article 91 Affected class shareholders, whether or not otherwise having
the right to vote at shareholders' general meetings, have the
right to vote at class meetings in respect of matters
concerning sub-paragraphs (2) to (8), (11) and (12) of Article
90 hereof, but interested shareholder(s) shall not be entitled
to vote at such class meetings. "(An) interested
shareholder(s)", as such term is used in the preceding
paragraph, means:
(1) in the case of a repurchase of shares by way of a
general offer to all shareholders of the Company or by
way of public dealing on a stock exchange pursuant to
Article 29 hereof, an interested shareholder is a
"controlling shareholder" within the meaning of Article
56 hereof;
(2) in the case of a repurchase of shares by an off-market
agreement pursuant to Article 29 hereof, a holder of the
shares to which the proposed agreement relates;
(3) in the case of a restructuring of the Company, a
shareholder who assumes a relatively lower proportion of
obligation than the obligations imposed on shareholders
of that class under the proposed restructuring or who
has an interest in the proposed restructuring different
from the general interests of the shareholders of that
class.
Article 92 Resolutions of a class of shareholders shall be passed by
votes representing more than two-thirds of the voting rights
of shareholders of that class represented at the relevant
meeting who, according to Article 91, are entitled to vote
thereat.
Article 93 A written notice of a class meeting shall be given to all
shareholders who are registered as holders of that class in
the register of shareholders forty-five (45) days before the
date of the class meeting (not including the date of meeting).
Such notice shall give such shareholders notice of the matters
to be considered at such meeting, the date and the place of
the class meeting. A shareholder who intends to attend the
class meeting shall deliver his written reply in respect
thereof to the Company twenty (20) days before the date of the
class meeting.
If the shareholders who intend to attend such class meeting
represent more than half of the total number of shares of that
class which have the right to vote at such meeting, the
Company may hold the class meeting; if not, the Company shall
within five (5) days give the shareholders further notice of
the matters to be considered, the date and the place of the
class meeting by way of public announcement. The Company may
then hold the class meeting after such public announcement has
been made.
Article 94 Notice of class meetings need only be served on
shareholders entitled to vote thereat. Class meetings shall be
conducted in a manner which is as similar as possible to that
of shareholders' general meetings. The provisions of the
Company's Articles of Association relating to the manner for
the conduct of shareholders' general meetings are also
applicable to class meetings.
Article 95 Apart from the holders of other classes of shares, the
holders of the Domestic-Invested Shares and holders of
Overseas-Listed Foreign-Invested Shares shall be deemed to be
holders of different classes of shares.
The special procedures for approval by a class of shareholders
shall not apply in the following circumstances:
(1) where the Company issues, upon the approval by special
resolution of its shareholders in a general meeting,
either separately or concurrently once every twelve (12)
months, not more than 20% of each of its existing issued
Domestic-Invested Shares and Overseas-Listed
Foreign-Invested Shares; or
(2) where the Company's plan to issue Domestic-Invested
Shares and Overseas-Listed Foreign-Invested Shares at
the time of its establishment is carried out within
fifteen (15) months from the date of approval of the
securities regulatory organ of the State Council.
CHAPTER 10 BOARD OF DIRECTORS
Article 96 The Company shall have a board of directors which is
accountable to shareholders. The Company shall draw up Rules
and Procedures for the Board of Directors' Meetings for
implementation after being approved by the shareholders in a
general meeting. The Rules and Procedures for the Board of
Directors' Meetings shall include the following items:
(1) functions and powers and authorizations of the board of
directors;
(2) establishment of the board of directors and its
subordinated offices;
(3) secretary of the board of directors;
(4) discussion system of a board meeting;
(5) discussion procedures of a board meeting;
(6) disclosure of information of a board meeting;
(7) implementation and feedback of resolutions of a board
meeting;
(8) other matters deemed necessary by the shareholders'
general meeting. The Rules and Procedures for the Board
of Directors' Meetings is an integral part of and shall
have the same legal effect as these Articles of
Association.
Article 97 The board of directors shall consist of thirteen (13)
directors and there shall be one (1) Chairman and one (1)
Vice-chairman.
Article 98 Directors of the Company shall be natural persons and they are
not required to hold any shares in the Company.
Directors shall be elected at the shareholders' general
meeting each for a term of three (3) years. The term of office
of a director shall be calculated from the date of the passing
of the resolution approving the appointment of such director
at the shareholders' general meeting until the expiry of the
term of the present session of the board of directors. At the
expiry of the term of office of a director, the term is
renewable upon re-election. A director may not be removed by
the shareholders in a general meeting without any reason
before his term of office expires. The term of office of any
independent director may not be renewed for more than 6 years.
Article 99 The list of candidates for directors shall be submitted to
the shareholders' general meeting in the form of motion for
approval. Candidates other than those for independent
directors shall be nominated by the board of directors, the
supervisory committee or shareholders who individually or
jointly hold 5% or more of the Company's voting shares and be
elected by the shareholders in a general meeting.
Candidates for independent directors of the Company shall be
nominated by the Company's board of directors, the supervisory
committee or shareholders who individually or jointly hold 1%
or more of the Company's voting shares and be elected by the
shareholders in a general meeting.
Article 100 Independent directors shall be elected in the following manner:
(1) the nominator of a candidate for independent director
shall seek the consent of the nominee, find out the
occupation, academic qualification, rank and detailed
working experience including all part-time jobs of the
nominee and provide written proofs of the same to the
Company before making the nomination. The candidate
shall give a written undertaking to the Company agreeing
to be nominated, undertaking the truthfulness and
completeness of his particulars disclosed and
guaranteeing the performance of a director's duties
after being elected.
(2) the nominator of an independent director shall give
opinion on the qualification and independence of the
nominee to act as an independent director. The nominee
shall make an open announcement as to the absence of any
relation between the Company and him which would affect
his independent and objective judgment.
(3) if the nomination of candidates for independent
directors is made before the Company's convening of a
board meeting, the written proofs of the nominee
referred to in sub-paragraphs (1) and (2) above shall be
disclosed together with the board resolution.
(4) if the shareholders who individually or jointly hold 5%
or more of the Company's voting shares or the
supervisory committee puts forward a provisional motion
in an AGM of the Company for election of independent
directors, a written notice stating their intention to
nominate a candidate for directors and the nominee's
consent to be nominated together with the written proofs
and undertaking of the nominee referred to in
sub-paragraphs (1) and (2) above shall be delivered to
the Company seven (7) days before the AGM.
(5) before the shareholders' general meeting for election of
independent directors is convened, the Company shall
submit the relevant information of all nominees to the
securities regulatory authority of the State Council,
the organ appointed by the securities regulatory
authority of the State Council in the place of residence
of the Company and the stock exchange on which the
Company's shares are listed. The written opinions of the
board of directors shall also be submitted in case the
Company's board has any dispute as to the particulars of
the nominee. If the securities regulatory authority of
the State Council opposes to the nomination of any
nominee, this nominee may not be included as a candidate
for independent directors. In convening a general
meeting to elect independent directors, the Company's
board shall specify if the securities regulatory
authority of the State Council has any dispute as to the
candidates for independent directors.
Article 101 Non-independent directors shall be elected in the following
manner:
(1) the nominator of a candidate for non-independent
director shall seek the consent of the nominee, find out
the occupation, academic qualification, rank and
detailed working experience including all part-time jobs
of the nominee and provide written proofs of the same to
the Company before making the nomination. The candidate
shall give a written undertaking to the Company agreeing
to be nominated, undertaking the truthfulness and
completeness of his particulars disclosed and
guaranteeing the performance of a director's duties
after being elected.
(2) if the nomination of candidates for non-independent
directors is made before the Company's convening of a
board meeting, the written proofs of the nominee
referred to in sub-paragraph (1) above shall be
disclosed together with the board resolution.
(3) if the shareholders who individually or jointly hold 5%
or more of the Company's voting shares or the
supervisory committee puts forward a provisional motion
in an AGM of the Company for election of non-independent
directors, a written notice stating their intention to
nominate a candidate for directors and the nominee's
consent to be nominated together with the written proofs
and undertaking of the nominee referred to in
sub-paragraph (1) above shall be delivered to the
Company seven (7) days before the AGM.
Article 102 The following basic requirements shall be met in order to be
an independent director:
(1) qualified to be a director of a listed company under the
laws, administrative regulations and other relevant
provisions;
(2) has the independence required by these Articles of
Association;
(3) has basic knowledge of the operation of a listed
company, familiar with the relevant laws, administrative
rules, regulations and rules;
(4) has 5 years or more of legal or financial experience or
other experience in performing the duties of an
independent director;
(5) other requirements stipulated in these Articles of
Association. Article 103 If the controlling shareholders
of the Company control 30% or more of the Company's
shares, the accumulative voting system shall be adopted
when voting on the election of directors in a
shareholders' general meeting, that is, in electing two
or more directors in a shareholders' general meeting,
the number of votes attached to each share held by a
participating shareholder shall be equal to the number
of candidates, in which case the shareholder may cast
his votes for one candidate or for several candidates.
Please refer to the Rules and Procedures for the
Shareholders' General Meetings for details of
implementation of the accumulative voting system.
Article 104 Provided that the relevant laws and administrative rules
are observed, a director whose term of office has not yet been
expired may be removed in a general meeting by way of ordinary
resolution (but the right to lodge a claim under a contract is
not affected).
If a director has failed to attend a board meeting personally
nor appoint a proxy to attend on his behalf on two consecutive
occasions, it shall be treated as a failure to discharge his
duties. The board of directors shall propose in a
shareholders' general meeting to remove and replace this
director.
If an independent director has failed to attend a board
meeting personally on three consecutive occasions, the board
of directors shall propose in a shareholders' general meeting
to remove and replace this director. Unless in the above
circumstances and in circumstances as provided in the Company
Law where a person is prohibited from acting as a director, no
independent director may be removed before his term of office
expires. In case of early removal, the Company shall disclose
it by way of special disclosure. If the removed independent
director considers that he is removed by the Company
improperly, he may make an open declaration.
Article 105 A director may resign before his term of office expires.
In resigning his duties, a director shall tender a resignation
to the board in writing and in the case of an independent
director, he shall also specify any matter which is related to
his resignation or which he considers necessary to bring to
the attention of the Company's shareholders and creditors.
Article 106 If the resignation of a director causes the board members of
the Company to fall below the minimum number of members to
form a quorum, the resignation of this director shall be
effective only after the succeeding director has filled his
vacancy. The board shall call an EGM as soon as possible to
elect a director to fill the vacancy caused by his
resignation. Before a resolution is made in a shareholders'
general meeting in relation to the election of directors, the
functions and powers of this resigning director and other
remaining directors shall be subject to reasonable
restrictions. If the resignation of an independent director
causes the proportion of independent directors in the board of
the Company to fall below the minimum requirements of the
relevant regulatory authorities, the resignation of this
independent director shall be effective only after the
succeeding independent director has filled his vacancy.
Article 107 The board of directors shall exercise the following functions
and powers:
(1) to be responsible for the convening of the shareholders'
general meeting and to report on its work to the
shareholders in general meetings;
(2) to implement the resolutions passed by the shareholders
in general meetings;
(3) to determine the Company's business plans and investment
proposals;
(4) to formulate the Company's annual preliminary and final
financial budgets;
(5) to formulate the Company's profit distribution proposal
and loss recovery proposal;
(6) to formulate proposals for the credit and financial
policies of the Company, the increase or reduction of
the Company's registered capital and for the issue of
any kind of securities of the Company's (including but
without limitation to the Company's debentures) and
proposals for listing and repurchase of the Company's
shares;
(7) to draw up plans for significant acquisition or disposal
proposals, the merger, division or dissolution of the
Company;
(8) to determine the risks investment and security
(including pledging of assets) of the Company according
to the authority given in the shareholders' general
meeting;
(9) to decide on the Company's internal management
structure;
(10) to appoint or remove the Company's president and to
appoint or remove the vice-president and Chief Financial
Officer of the Company according to the recommendations
of the president; to appoint or remove the secretary of
the board of directors and to decide on their
remuneration;
(11) to appoint or replace the members of the board of
directors and the supervisory committee of its
wholly-owned subsidiary, appoint, replace or recommend
the shareholders' proxies, directors (candidates) and
supervisors (candidates) of its subsidiary(ies) which
are controlled or invested by the Company.
(12) to determine the establishment of Company's branch
offices;
(13) to formulate proposals for any amendment of the
Company's Articles of Association and its appendices;
(14) to formulate the Company's basic management system; (15)
to manage the disclosure of information of the Company;
(16) to propose in a shareholders' general meeting to engage
or replace the accounting firm which undertakes auditing
work of the Company;
(17) to listen to the president's work report and check the
president's work;
(18) to determine important matters and administrative
matters of the Company other than those which should be
determined by resolution of a shareholders' general
meeting of the Company except for the matters as
specified by law, administrative rules, regulations of
the competent department(s) and these Articles of
Association, and to sign other important agreements;
(19) to exercise any other powers stipulated by laws,
administrative rules, regulations of the competent
department(s) or these Articles of Association and
conferred by the shareholders in a general meeting.
Other than the board of directors' resolutions in respect of
the matters specified in sub-paragraphs (6), (7) and (13) of
this Article which shall be passed by the affirmative vote of
more than two-thirds of all the directors, the board of
directors' resolutions in respect of all other matters may be
passed by the affirmative vote of a simple majority of the
directors.
Article 108 The above functions and powers of board meetings may be
authorized to one or more directors upon the agreement of all
directors, but matters concerning material interests of the
Company shall be determined by the board collectively. The
authorization of the board shall be clear and specific.
Article 109 An independent director shall have the following special
functions and powers in addition to those conferred by the
Company Law, other relevant laws, administrative rules and
these Articles of Association:
(1) material connected transactions (determined according to
the standards issued from time to time by the relevant
regulatory authorities in the place where the Company's
shares are listed) which should be approved by the board
of directors or the shareholders' general meeting
according to law shall, upon the recognition of
independent directors, be submitted to the board of
directors for discussion. Any resolution made by the
board of directors regarding the Company's connected
transactions must only be effective after it has been
signed by the independent directors. The independent
directors may, before making a judgment, engage an
intermediary to issue an independent financial report
for them to rely upon in making the judgment;
(2) to propose to the board of directors to engage or remove
an accounting firm;
(3) two or more than one-half of the independent directors
may propose to the board of directors to convene an EGM;
(4) to propose the calling of a board meeting;
(5) to engage an external auditing or advisory organ
independently;
(6) to collect voting rights from shareholders prior to the
convening of a shareholders' general meeting;
(7) to report directly to the shareholders' general
meetings, securities regulatory organ under the State
Council and other relevant departments.
The independent directors shall seek the consent of more than
half of the independent directors in exercising their
functions and powers other than sub-paragraphs (1) and (3)
above.
If the above proposal is not accepted or the above functions
and powers are not exercised properly, the Company shall
disclose the same.
Article 110 When the board of directors make the decisions in respect of
market development, mergers and acquisitions and the
investment in new areas etc., in case the investment amount or
the asset value thus merged and acquired exceeds more than 10
(ten) percent of total assets of the Company, the board of
directors shall invite the consulting organizations for their
professional opinions, these opinions shall serve as the
important basis for decision-making by the board of directors.
The board of directors shall lay down strict procedures to
inspect and decide on risks investments. For major investment
projects in excess of the approval limit of the board of
directors, the board of directors shall organize the relevant
experts and professional officers to conduct assessment for
approval of the shareholders in a general meeting. Matters
regarding risks investments have been provided explicitly in
the Rules and Procedures for the Board of Directors' Meetings.
Article 111 The Chairman and the Vice-Chairman shall be directors of
the Company and be appointed and removed by affirmative vote
of a simple majority of all directors. The term of office of
the Chairman or the Vice-Chairman shall be three (3) years
which term is renewable upon re-election.
Article 112 The Chairman of the board of directors shall exercise the
following functions and powers:
(1) to preside over shareholders' general meetings and to
convene and preside over meetings of the board of
directors;
(2) to co-ordinate and perform the responsibilities of the
board of directors and review on the implementation of
resolutions passed by the board of directors at
directors' meetings;
(3) to sign the certificates of shares, debentures and other
valuable securities issued by the Company;
(4) to sign important documents of the board and other
documents which should be signed by the Company's legal
representative;
(5) to exercise the functions and powers of a legal
representative;
(6) where it is lawful and in the interest of the Company,
to exercise the special right to deal with the Company's
affairs during emergency such as the occurrence of
natural disasters, and to report to the Company's board
of directors and general meetings thereafter;
(7) to exercise other powers conferred by the board of
directors. Whenever the Chairman is unable to exercise
his powers, such powers shall be exercised by the
Vice-Chairman or other directors who have been
designated by the Chairman to exercise such powers on
his behalf.
Article 113 Board meetings shall be convened regularly at least four
times a year. An EGM shall be called for on occurrence of any
of the events set out in the Rules and Procedures for the
Board of Directors' Meetings.
In convening a regular board meeting or an EGM, a notice shall
be given to all directors 10 days before the meeting. The
calling for a board meeting, and the contents and form of a
notice of meeting shall comply with the requirements of the
Rules and Procedures for the Board of Directors' Meetings.
Article 114 Meetings of the board of directors shall be held only if
more than half of the directors (including any alternate
director appointed) are present. Each director shall have one
(1) vote. Where there is an equality of votes cast both for
and against a resolution, the Chairman of the board of
directors shall have an additional vote.
Article 115 Directors shall attend the meetings of the board of
directors in person. Where a director is unable to attend a
meeting for any reason, he may by a written power of attorney
appoint another director to attend the meeting on his behalf.
The power of attorney shall set out the scope of
authorization.
A director appointed as a representative of another director
to attend the meeting shall exercise the rights of a director
within the scope of authority conferred by the appointing
director. Where a director is unable to attend a meeting of
the board of directors and has not appointed a representative
to attend the meeting on his behalf, he shall be deemed to
have waived his right to vote at the meeting. All expenses
incurred by the directors for attending the board meeting
shall be borne by the Company, including the traffic expense
from the place where the director is located to the place
where the meeting is convened, as well as the board and
lodging expenses during the term of meeting. The miscellaneous
expenses such as the rental of meeting room and the local
traffic expenses etc. shall also be borne by the Company.
Article 116 The board of directors may accept the preparation of a
written resolution instead of convening a board meeting
provided that the contents and form of the written resolution
are in compliance with the Rules and Procedures for the Board
of Directors' Meetings.
Article 117 Matters determined in a board meeting shall be recorded in
Chinese in the form of Records of Meeting. The contents and
form of Records of Board Meetings shall comply with the Rules
and Procedures for the Board of Directors' Meetings.
Article 118 If a written motion of a board meeting is not prepared in
accordance with the stipulated procedures, it will not have
the effect of a board resolution even if each director has
expressed his view thereto. Directors shall be liable for
board resolutions. If a board resolution is against the law,
administrative rules or these Articles of Association and thus
causes the Company to suffer any loss, the directors who cast
an affirmative vote for the motion shall assume direct
liability (including the liability to compensate); directors
who are proved to have cast a dissenting vote against the
motion during the voting as recorded in the records of meeting
shall be exempted from liability; directors who abstained from
voting or failed to attend nor appoint a proxy to attend the
board meeting shall not be exempted from liability; and
directors who opposed to the motion but did not cast a
dissenting vote against it in the voting shall not be exempted
from liability either.
CHAPTER 11 SECRETARY OF THE BOARD OF DIRECTORS
Article 119 The Company shall have one (1) secretary of the board of
directors. The secretary shall be a senior officer of the
Company accountable to the Company. The Company shall draw up
"Work Regulations for the Secretary of the Board" to promote
the management of the Company and make provisions for
disclosure of information. The Work Regulations for the
Secretary of the Board shall be effective upon the approval of
the board of directors.
The board of directors may establish its secretarial
department when necessary.
Article 120 A director or the president, vice-president, Chief Financial
Officer of the Company may concurrently act as the secretary
of the Company's board of directors. No accountant of the
accounting firm or solicitor of the solicitors' firm engaged
by the Company may concurrently act as the secretary of the
Company's board of directors.
The secretary of the Company's board of directors shall be a
natural person who has the requisite professional knowledge
and experience, and shall be nominated by the Chairman of the
Board and appointed or removed by the board of directors. In
the case of a director acting concurrently as the secretary of
the board, if an act has to be performed by a director and the
secretary of the board respectively, this director acting
concurrently as the secretary of the board may not act in both
identities.
Article 121 The main duties of the secretary of the board of directors
include:
(1) to assist directors to deal with the daily matters of
the board of directors, continuously provide, remind and
ensure directors and the president, etc. to be well
informed of the laws, regulations, policies and
requirements of both domestic and overseas regulatory
organizations concerning the operation of the Company,
and assist directors and managers to practically
implement the domestic and foreign laws, regulations,
Company's Articles of Association and other regulations
when performing their duties and powers;
(2) to be responsible for the organization and preparation
of the documents of the boa |
