Ans︰
A. Regulatory Requirements
1. Notes for convening shareholders' meetings:-
(1) Purpose of the Shareholders' Meeting:
The shareholders' meeting is an entity organized for meeting, which executes its authority through meetings participated in by all shareholders. Shareholders' meetings shall be convened by the person(s) having the convening right and in accordance with the legal procedures.
(2) Timing and frequency for convening a shareholders' meeting.
Different timing and frequency are required for the regular shareholders' meeting and the special shareholders' meeting. The regular shareholders' meeting should be convened at least once a year, within six months after the close of each fiscal year. The restriction shall not apply when a regular meeting is required for justified reasons and approved by the competent authorities. The special shareholders meeting shall be convened when deemed necessary. (Article 170 of the Company Act)
(3) Person with the Convening Right
a. Board of Directors:
A shareholders meeting shall, unless otherwise provided for in the Company Act, be convened by the Board of Directors. (Article 171 of the Company Act)
b. Shareholders with minority shareholding (Article 173 of the Company Act)
(i) Shareholder(s) who has (have) continuously held 3% or more of the total number of outstanding shares for a period of one year or a longer time may, by filing a written proposal setting forth therein the subjects for discussion and the reasons, request the board of directors to call a special meeting of shareholders. If the board of directors fails to give a notice for convening a special meeting of shareholders within 15 days after the filing of the request, the proposing shareholder(s) may, after obtaining an approval from the competent authority, convene a special meeting of shareholders on his/their own. Under the circumstances, the convener should prepare the relevant share certificates, written proposal sent to the board of directors for convening the special meeting, as well as the documents explaining the subjects for discussion and the reasons, etc. to ensure the meeting is organized properly and to avoid disputes.
(ii) When the board of directors fails or can not convene a shareholders' meeting on account of share transfer or any other causes, the shareholder(s) holding 3% or more of the total number of outstanding shares of the company may, after obtaining an approval from the competent authority, convene a shareholders' meeting of their own. Consequently, when all the directors and supervisors have been discharged from their duties due to the full transfer of the shares, the shareholders are still entitled to convene the meetings at their own after obtaining the required approval. The right shall not be affected by the discharge of all the directors and supervisors.
c. Supervisors
(i) Subject to the condition that the board of directors does not or is unable to convene a meeting of shareholders, the supervisors may, for the benefit of the company, call a meeting of shareholders when it is deemed necessary. (Article 220 of the Company Act)
(ii) Shareholders who have been continuously holding three per cent of total number of the outstanding shares of a company for a period of one year or longer may apply to the court for appointment of inspector to inspect the business operations, financial accounts and property of the company. When deemed necessary, the court may, based on the report made by the inspector, order the supervisor(s) of the company to convene a meeting of shareholders. (Article 245 I&II of the Company Act)
d. Reorganizers
Reorganizers of a company shall complete the reorganization plan within the implementation schedule specified therein; and upon completion of the reorganization plan, shall apply to the court for a court ruling of recognition of the completion of the reorganization, and shall, after such court ruling became final, convene a meeting of shareholders for election of directors and supervisors. (Article 310 of the Company Act)
e. Liquidators
A liquidator, within the scope of his functions in liquidation, shall have the same rights and obligations as the directors. (Article 324 of the Company Act). The shareholders meeting shall remain existent during the liquidation process. The liquidator, as a result, may convene shareholders' meetings accordingly.
(4) Convening Procedures
a. Timing for the private or public notification of the shareholders' meeting (Article 172 of the Company Act and Article 26-1 of the Securities and Exchange Act):
(i) A notice to convene a regular meeting of shareholders shall be given to each shareholder no later than 20 days prior to the scheduled meeting date; while a public notice shall be given to holders of bearer share certificates no later than 30 days prior to the scheduled meeting date. A notice to convene a special meeting of shareholders shall be given to each shareholder no later than 10 days prior to the scheduled meeting date; while a public notice shall be given to holders of bearer share certificates no later than 15 days prior to the scheduled meeting date.
(ii) For a company offering its shares to the public, a notice to convene a regular meeting of shareholders shall be given to each shareholder no later than 30 days prior to the scheduled meeting date; while a public notice shall be given to holders of bearer share certificates no later than 45 days prior to the scheduled meeting date. A notice to convene a special meeting of shareholders shall be given to each shareholder no later than 15 days prior to the scheduled meeting date; while a public notice shall be given to holders of bearer share certificates no later than 30 days prior to the scheduled meeting date.
(iii) As a result of the continuous capital increase and share distribution over the years, the number of shareholders holding less than 1000 nominal stocks of the public companies is considerably large. Sending the meeting notification to such a large number of shareholders by registered mail would lead to great burden to the company in terms of both manpower and expenses. To reduce the workload of the issuing companies and in accordance with article 26-2 of the Securities and Exchange Act, the notice of the shareholders meeting to shareholders who own less than 1,000 shares of nominal stocks may be given by the issuing companies in the form of a public announcement rather than private notification. For a regular shareholders meeting, such public announcements shall be served with thirty days prior notice; and for a special shareholders meeting, with fifteen days prior notice.
(iv) A company shall be reckoned as having fulfilled the obligation for notification as long as the notifications have been sent to the shareholders in accordance with the name and address recorded in the shareholders name list within the time frame specified above. The period prescribed above, such as "no later than 20 days prior to the scheduled meeting date", shall be calculated from the day preceding to the meeting day and not include the meeting day.
(v) The provisions prescribed in Paragraphs (1) to (3) above shall not apply where a meeting of shareholders resolves to postpone the meeting for not more than, or to reconvene the meeting within, five days. (Article 182 of the Company Act). By definition, "Postpone the meeting" means that, before proceeding with the agenda, the meeting of shareholders resolves to convene the meeting on another day. "Reconvene the meeting" means that, after having proceeded with the agenda, the meeting of shareholders resolves to continue the meeting on another day because of the failure in resolving all the matters during the day for some reasons.
b. Causes and subjects to be described in the private or public notifications (Article 172V of the Company Act and Article 26-1 of the Securities and Exchange Act)
To protect the rights and interests of the shareholders and to draw their attention to participate in the meeting, matters pertaining to re-election of directors and supervisors; alteration of the Articles of Incorporation; dissolution, merger, spin-off, or any matters described in Article 185I of the Company Act; non-competition clause for directors and the relevant approval by the shareholders' meeting (Article 209 of the Company Act)., approval by shareholders meeting on the distribution of dividends and bonuses in the form of new shares (Article 240I of the Company Act), and the approval by shareholders meeting on the capitalization of legal reserve (Article 241I of the Company Act), shall be deemed as important matters and itemized in the causes or subjects to be described in the notice to convene a meeting of shareholders, and shall not be brought up as extemporary motions.
2. Distribution of Surplus Earnings
(1) Restrictions on the appropriation for and usage of reserves
Reserves are made in the forms of legal reserve and special reserve. The purpose of setting aside reserves is to solidify the capital of the company and strengthen its financial structure, so as to provide better protection to its creditors. To enhance the capital structure of the issuing companies, the Securities and Exchange Act (Article 41) imposes stricter restrictions on the appropriation for and usage of reserves than the Company Act:
a. Mandatory requirement for the appropriation of special reserve
To properly control the distribution of surplus earnings and maintain the stability of the stock price, the Financial Supervisory Commission may, where deemed necessary, order an issuer to set aside, in addition to the allocation for legal reserve required by law, a certain proportion of its earnings as special reserve.
b. Restrictions on the usage of reserves
Where an issuer files an application for permission to capitalize its legal reserve or capital reserve, it shall first make up its deficit. With respect to a capitalization of capital reserves by the income derived from the issuance of new shares at a premium (pursuant to Article 8I of the Securities and Exchange Law Enforcement Rules and sub-paragraph 1, Article 241 I of the Company Law), or by the income from endowments received by the company (pursuant to sub-paragraph 2, Article 241 I of the Company Law), the total sum of capital reserves capitalized per annum may not exceed 10 percent of the paid-in capital. Further, the capital reserves realized from a capital increase at a premium (pursuant to Article 8II of the Securities and Exchange Law Enforcement Rules and sub-paragraph 1, Article 241 I of the Company Law) or other sources shall be capitalized only in the following fiscal year after being registered by the company with the competent authority for approval.
(2) Proper announcement of the ex-right and ex-dividend information (Article 10 of the GreTai Securities Market Rules Governing Securities Trading on Over-the-Counter Markets)
a. Where a GTSM-listed company suspends changes to the shareholders roster in accordance with Article 165 of the Company Act, it shall, before the last date the shareholders roster may be changed and within the time period required by the GreTai Securities Market (GTSM), publicly announce on the website reporting system designated by GTSM the reason for the suspension, date of suspension, amount of dividends and bonuses to be distributed, and allocation of rights. However, in special circumstances where the reasons have been informed by letter, the company may firstly report to GTSM the reasons for convening the shareholders meeting and the date of the meeting, and, at least 40 days prior to the date of the shareholders meeting, follow up with a public announcement on the above-mentioned website designated by GTSM of the amount of dividends and bonuses to be distributed or rights to be allocated.
b. If there is subsequently any change in information publicly announced by a GTSM-listed company under the preceding paragraph, or the public announcement is not made by the GTSM-listed company within the time period specified by GTSM, then GTSM-listed company shall bear full liability for any resultant trade dispute or damage suffered by a party to a trade.
c. The above GTSM regulations shall apply mutatis mutandis to the time period during which the shareholders list, the beneficiaries list, and the foreign bond holders list may not be changed due to the distribution of stock dividends, bond interests, profits, or other interests in accordance with the laws of its local jurisdiction, in respect of stocks or bonds issued by foreign issuers and their agents, or foreign securities represented by Taiwan Depositary Receipts that is issued by foreign issuers and their depositary institution.
B. Access to information of shareholders' meetings
Investors may access to the latest and historical information on shareholders meetings of the GTSM-listed companies by visiting the website of the Market Observation Post System (Website:http://mops.tse.com.tw）by clicking the "Consolidated Information on Regular (Special) Shareholders' Meetings (Since year 2006)" and "Consolidated Information on the Distribution of Dividends and Bonus (Since May, 2005)" under the item of "Consolidated Information".
|
WebCall
