Hisense Kelon Electrical Holdings Company Limited Procedures for nomination of director candidates by shareholders

Transcription

1 Hisense Kelon Electrical Holdings Company Limited Procedures for nomination of director candidates by shareholders (Considered and passed at the 2012 third interim meeting of the seventh session of the board of directors held on March 16,2012) Chapter One General provisions Article 1 To enhance the standard operation of Hisense Kelon Electrical Holdings Company Limited (hereafter abbreviated as the Company ), actively facilitate the exercise of nomination rights by the shareholders of the Company, effectively protect the legitimate rights of the Company s shareholders (in particular, the medium and minority shareholders), the Company has formulated the procedures for nomination of director candidates by shareholders of the Company (hereafter abbreviated as the Procedures ) pursuant to the relevant laws and regulations such as The Company Law of the People's Republic of China, the Guidelines of the Shenzhen Stock Exchange for the Standardized Operation of Companies Listed on the Main Board, normative documents and relevant provisions of the Articles of Associations. Chapter Two Qualifications of the nominator and the nominee Article 2 Shareholders individually or in aggregate holding three percent or more of the total issued voting shares of the Company are entitled to propose for the nomination of director candidates at a shareholders general meeting. However, in nominating director candidates, the maximum number of candidates to be nominated shall be determined at a ratio of one director candidate for every three percent of the total issued voting shares held, disregarding any balance less than three percent. Article 3 Shareholders individually or in aggregate holding one percent or more of the total issued voting shares of the Company are entitled to propose for the nomination of independent non-executive director candidates at a shareholders general meeting. Prior to the nomination of independent non-executive director candidates by nominators, the nominees shall have obtained the independent director qualification certificate recognized by China Securities Regulatory Commission. Article 4 In nominating director (including independent non-executive director) candidates, the qualifications, professional experience and professional conduct of the candidates shall be examined as a whole to ensure the duty of faith and duty of care of 1

2 the director to the Company. In nominating director (including independent nonexecutive director) candidates, the relevant laws, administrative regulations, department rules, normative documents, Articles of Association, rules governing the listing of securities on the stock exchanges, relevant guidelines and provisions shall be complied with. Article 5 A person shall not be nominated as a director candidate of the Company under any of the following circumstances: (1) A person who does not have or who has limited capacity for civil conduct; (2) A person who has been sentenced for corruption, bribery, infringement of property or misappropriation of property or the breaking of order in the socialist market economy, where less than a term of five (5) years has lapsed since the sentence was served, or a person who has been deprived of his political rights and not more than five years have lapsed since the sentence was served; (3) A person who was a director, factory manager or manager of a company or enterprise which has been put into insolvent liquidation and who was personally liable for the insolvency of such company or enterprise, where less than three years have elapsed since the date of completion of the insolvent liquidation of the company or enterprise; (4) A person who was the legal representative of a company or enterprise that has its business licence revoked or was ordered to close down due to violation of law and who was personally liable therefor, where less than three years have elapsed since the date of the revocation of the business licence of such company or enterprise; (5) A person who has a relatively large amount of debts which have become overdue; (6) A person who is under investigation by judicial organ for suspected commission of offence and the same has not been concluded; 2

3 (7) A person who is not a natural person; (8) A person who has been prohibited from entering into the securities market by China Securities Regulatory Commission and such prohibition is still valid; (9) A person who has been declared by stock exchanges as being not suitable for holding the position of director, supervisor and senior management of listed companies; (10) A person who is considered as being not suitable for holding the position of director or there is any matter of particular concern under other circumstances stipulated by China Securities Regulatory Commission or the stock exchanges. Article 6 In addition to the non-occurrence of the circumstances set out in Article 5 above, a person shall not be nominated as an independent non-executive director candidate of the Company under any of the following circumstances: (1) A person who works in the Company or its subsidiaries, their lineal relatives and major social relations; (2) A shareholder (who is a natural person) who directly or indirectly holds 1% or more of the issued shares of the Company, or who is one of the 10 largest shareholders of the Company, and the lineal relatives of such shareholder; (3) A person who works in an entity being a shareholder which directly or indirectly holds 5% or more of the issued shares of the Company or which is one of the 5 largest shareholders of the Company, and the lineal relatives of such person; (4) A person who works in the controlling shareholder, person in actual control and their subsidiaries, and the lineal relatives of such person; 3

4 (5) A person providing financial, legal, consulting and other services to the Company, its controlling shareholder or their respective subsidiaries; including but not limited to all personnel of the project team in the intermediaries who provide services, audit personnel of various levels, personnel signing on reports, partners and major person-in-charge. (6) A person who works in a unit that has material business transactions with the Company, its controlling shareholder, person in actual control or their respective subsidiaries, or who works in the controlling shareholder s unit with which there are material business transactions; (7) A person who fell within any of the above six circumstances in the preceding year; (8) A person who has acquired working experience in law, economics or other experience necessary for the purpose of performing his duties as an independent director for less than five years; (9) A person who is independent directors of five listed companies concurrently before the nomination; (10) A person who has been an independent director of the Company for a continuous period of six years; (11) A person who has been subject to administrative penalty by China Securities Regulatory Commission during the three preceding years; (12) A person who has been publicly criticized, or criticized by way of circulated notices for two or more times, by the stock exchanges; (13) A person who is considered as being not suitable for holding the position of independent director or there is any matter of particular concern under other circumstances stipulated by China Securities Regulatory Commission or the stock exchanges. 4

5 The period referred to above commences from the time when the resolution in relation to the appointment of the director is considered at the shareholders general meeting for election and appointment of the director. Article 7 Any election and appointment of director by the Company in violation of the aforesaid Article shall be invalid. Chapter Three Nomination and election procedures of director candidates Article 8 A nominator shall obtain the consent of the nominee prior to any nomination. The nominator shall fully understand the circumstances of his nominee and submit the Nomination Letter for Director Candidates by Shareholders in the form of Appendix One to the board of directors of the Company. The nominee shall submit a written undertaking in the form of Appendix Two Letter of Undertaking of Director Candidates Nominated by Shareholders to the board of directors of the Company to consent to the nomination and undertake that the information of the director candidate publicly disclosed and those set out in the Nomination Letter for Director Candidates by Shareholders is true and complete, and to warrant the effective performance of the duties of director after being elected. Article 9 Apart from obtaining the consent of the nominee prior to any nomination of independent non-executive director, the nominator shall fully understand the circumstances of his nominee and submit the Nomination Letter for Director Candidates by Shareholders in the form of Appendix One to the board of directors of the Company along with other written materials such as the Declaration by Nominator of Independent Director in the form as required by the Shenzhen Stock Exchange. The nominee shall submit a written undertaking in the form of Appendix Two Letter of Undertaking of Director Candidates Nominated by Shareholders to the board of directors of the Company to consent to the nomination, and submit the Declaration by Independent Director Candidate in the form as required by the Shenzhen Stock Exchange, Resume of Independent Director Candidate and Qualification Certificate of Independent Director Candidate, and undertake that the information of the director candidate publicly disclosed and those set out in the Nomination Letter for Director Candidates by Shareholders is true and complete, and to warrant the effective performance of the duties of director after being elected. 5

6 Article 10 The written notice stating the intention to nominate a director candidate and the candidate s consent to be nominated shall be delivered to the board of director of the Company no earlier than the date following the dispatch of the notice of shareholders general meeting for the election of director, and no later than seven days before the shareholders general meeting is held. The nomination committee of the board of directors of the Company and the board of directors of the Company shall review if the director candidate is qualified for directorship. If the candidate is qualified, a resolution shall be submitted for consideration at the shareholders general meeting. If the candidate is found to be unqualified, the nominator shall be required to revoke the nomination of the director candidate. Article 11 The directors of the Company shall be elected at the shareholders general meetings. The director candidate shall attend in person the shareholders general meeting when the proposal concerning his appointment is considered to testify on the issues of qualifications, professional capacity, experience in the industry, incidents of unlawful acts and non-compliance, conflict of interests with the listed company and the relation with the controlling shareholder, person in actual control and other directors, supervisors and senior management of the Company. Article 12 The cumulative voting system shall be adopted for the election of directors of the Company. That is, for the election of directors at the shareholders general meeting of the Company, each voting share held by the shareholders carries votes equivalent to the total number of directors to be elected at the shareholders general meeting, and the number of votes which a shareholder is entitled to cast is equal to the number of shares held multiplied by the total number of directors to be elected. The votes of a shareholder may be cast on one director candidate or may be cast on different director candidates, provided that the number of votes cast by each shareholder for the election of directors shall not exceed the highest number of cumulative votes. Chapter Four Supplementary Provisions Article 13 Matters not covered by these Procedures shall be governed in accordance with the relevant laws and regulations of the State and the Articles of Associations. Article 14 These Procedures shall be effective from the date on which the board of 6

7 directors of the Company considers and approves the same. Article 15 The right to interpret these Procedures shall be vested in the board of directors the Company. The English version of these Procedures is for reference only and if there is any conflict between the English and the Chinese versions, the Chinese version shall prevail. The Board of Directors of Hisense Kelon Electrical Holdings Company Limited March 16,

8 Appendix One Hisense Kelon Electrical Holdings Company Limited Nomination Letter for Director Candidates by Shareholders for the Session of Board of Directors Name Number of shares of the Company held ID number Directorship nominated Basic Information of Nominator Contact phone number Shareholding percentage Shareholder account number Director Non-executive independent director Basic Informaiton of Nominee Name Ethnicity Date of birth ID number Holding shares of the Yes No Company or not Education background Gender Origin Education Shareholder account number Number of shares of the Company held Working experience during the last five years Part-time jobs Connected relationship with the Company or its controlling shareholder and person in actual control Punishment imposed by China Securities Regulatory Commission and other relevant departments and sanctions imposed by stock exchanges Information discloseable under Rule 13.51(2) of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited Signature of nominator (chop): 8 Date:

9 Appendix Two Hisense Kelon Electrical Holdings Company Limited Letter of Undertaking of Director Candidates Nominated by Shareholders for the Session of Board of Directors I,, consent to being nominated as a director nominee of the th session of the board of directors of Hisense Kelon Electrical Holdings Company Limited, and undertake that the information of the director candidate publicly disclosed and those set out in the Nomination Letter for Director Candidates by Shareholders is true and complete, and warrant the effective performance of the duties of director after being elected. Signature of nominee: Date: 9