The 2^nd Extraordinary Shareholders’ Meeting of the Bank in 2008 was convened at Beijing Friendship Hotel on November 20, 2008. The meeting was called by the Board of Directors and was presided by Chairman Dong Wenbiao. 17 shareholders and shareholder proxies presented at the meeting, representing 6,303,926,656 shares carrying effective voting rights, or 33.49% of the total capital stocks of the Bank. The meeting complied with the provisions of the Company Law and the Articles of Association.

 

The meeting voted, by open ballot, and passed the following resolutions:

 

Ⅰ. Resolution on Issuing Hybrid Capital Bonds and the Issuing Plan

The meeting reviewed and passed the Proposal on Issuing Hybrid Capital Bonds and the Issuing Plan of the Bank, with the main contents of the Plan as the following: 

 

1. Total issuing amount

The total issuing amount should be no more than RMB 5 billion.

 

2. Characters of the bonds

The hybrid capital bonds are unsecured bonds with the following characters: 

(1) The issuer has the right to choose or must make deferred payment of interest in case of what deferred interest has defined occurs before the maturity of the bonds; (2) The bond holders should suspend their rights to claim and the issuer has the right to make deferred payment of principals and interest payable in case of what suspended right to claim has defined occurs before the maturity of the bonds.

 

3. Repayment order

The repayment order of principal and interest to the bond holders should be after the issuer’s long-term subordinated bonds and prior to the issuer’s capital stock; all bond holders are in the same repayment order.

 

4. Term of bonds

The bonds will be 15-year-term bonds with set one-time redemption right. 

 

5. Early redemption   

One-time early redemption right is set for the issuer, which refers to during the period commencing from the date of 10-year issuance of the bonds to the date of maturity, as approved by the CBRC, the issuer has the right to make one-time redemption of all or partial of the bonds according to the par-value. The issuer’s execution of early redemption right is not subject to consent of bond holders.

 

6. Interest rate

Both fixed and floating interest rates are adapted to the bonds in agreement between the issuer and subscribers. The interest will be paid once a year. 

 

The initial interest rate per annum of fixed rate bonds from year 1 to 10 was based on the book building. If the issuer does not exercise the call option, the interest rate will be increased each year commencing from the 11th year.

 

The initial rate per annum of floating rate bonds is benchmark rate plus a basic spread, where the benchmark rate is the interest rate for one-year lump-sum time deposit set by the PBOC. The basic spread of floating rate bonds from year 1 to 10 was based on book building. If the issuer does not exercise the call option, the basic spread will be increased each year commencing from the 11th year.

 

7. Deferred interest

Before the maturity of the bonds, the issuer may choose to make deferred interest payment on the basis of a core CAR less than 4% calculated in the latest audited financial report, the issuer must make deferred interest payment when the total of surplus reserves plus retained earnings appears to be minus in the latest audited balance sheet, and cash dividends haven’t been distributed to common share holders in the last 12 months (the distribution date of cash dividend to common share holders is subject to the date approved in the relevant resolution by the shareholders meeting of the issuer). The interest paid in the deferred payment by the issuer becomes overdue interest, which will be calculated on the basis of the interest rate for the bonds as mentioned above.

 

The deferred interest payment made by the issuer should be approved by the CBRC in advance. When the issuer is not qualified with the conditions to defer interest, the overdue interest and interest incurred for the overdue interest should be immediately due and be paid off.

 

8. Suspension of claim rights

Upon maturity of the bonds, if (a) the issuer is incapable of paying the debts of repayment order prior to the bonds, or (b) the issuer’s repayment of the bonds will cause its incapability in paying the debts of repayment order prior to the bonds, the bond holders should suspend their rights to claim. Under this circumstance, the issuer has the right to make deferred payment of the principals and all interests payable.

 

If the bond holder suspend its claim right at the time of maturity of the bonds, the principals and all interests payable will be aggregated as a new principal, the interest of which will be calculated on the basis of the interest rate for the bonds as mentioned above.

 

When the above mentioned (a) (b) are no longer prevail, the issuer should immediately repay the new principal and its interest.
 
The issuer’s deferred payment of principal and all interests payable upon maturity of the bonds should be approved by the CBRC in advance.

 

9. Format of the bonds

The bonds adopt real-name book entry policy, and are under custody of China Government Securities Depository Trust & Cleaning Co. Ltd.

 

10. Par-value of the bonds

The par-value of the bonds is RMB 100, e.g. the corresponding principal of bonds for each unit of account amounts to RMB 100.

 

11. Issuing price

The bonds will be issued at par value.

 

12. Minimum subscription amount

The minimum subscription amount is RMB 5 million, and all subscription amounts should be integral multiple of the minimum subscription amount. 

 

13. Target

The targets of the issuance are all members of the national inter-bank bonds market. 

 

14. Format of issuance 

The issuer will set up the underwriting group and issue the bonds in the inter-bank bonds market.

 

15. Payment of interest and principal

Interest will be paid once in an interest bearing period within the 2nd working day of the same day each year as the value date recorded in the placement brochure. For public holidays, the date of payment will be the following working day, and no additional interest will be calculated. The last interest payment date is the date of maturity of the bonds, or the corresponding interest payment date before the execution of redemption right.

 

If the issuer doesn’t execute its redemption right in compliance with the regulations under the placement brochure, the redemption date will be the date contracted in the placement brochure. If the issuer executes its redemption right, the redemption date will be the date defined in the redemption announcement. 
 
If the bonds are due or the issuer chooses to execute redemption right, the issuer will repay all debts at 100% price of the principal. The repayment upon maturity or the execution of redemption right is subject to the approval of the CBRC.

 

16. Usage of proceeds

The proceeds of the bonds issuance will be used as supplementary capital of the Bank upon the approval of the CBRC.

 

17. Validity period of the resolutions concerning the bond issuance

The validity period of the resolutions concerning the bond issuance is 12 months commencing the date of approval of the issuance plan by the shareholders’ meeting.

 

18. Authorization of the bond issuance

It is submitted to the shareholders’ meeting that the Board is authorized to proceed with relevant matters concerning the hybrid bonds issuance, and to make appropriate adjustments, within the scope permitted by the CBRC, to the issuing terms in compliance with the requirements of related governmental organs and regulatory authorities. The term of authorization is 12 months commencing the date of approval of the issuance plan by the shareholders’ meeting.

 

Ⅱ. Resolution on the Bank’s Issuance of Hybrid Capital Bonds and Authorization within Limit

The meeting reviewed the Proposal on the Bank’s Issuance of Hybrid Capital Bonds and

Authorization within Limit, and consented to pass following authorizations:

 

1.  Authorization on issuance

To authorize the Board to proceed with relevant matters concerning the hybrid bonds issuance, and to make appropriate adjustments, within the scope permitted by the CBRC, to the issuing terms in compliance with the requirements of related governmental organs and regulatory authorities. The term of authorization is 12 months commencing the date of approval of the issuance plan by the shareholders’ meeting.

 

2. Special authorization within the issuance limit

To authorize Vice President Hong Qi and Vice President Zhao Pinzhang, as representatives of the Bank, to handle relevant matters concerning the bonds issuance, and to make appropriate adjustments, within the scope permitted by the CBRC, to the issuing terms in compliance with the requirements of related governmental organs and regulatory authorities (included but not limited to determining issuing amount, term of bonds, interest rate and format of issuance); and to authorize Vice President Hong Qi and Vice President Zhao Pinzhang to make other actions in an aim to accomplish this issuance (included but not limited to engaging financial advisor, legal consultant, rating firm, accreditation agency or other professionals when necessary). The term of authorization is 12 months commencing the date of approval of the issuance plan by the shareholders’ meeting.

 

Ⅲ. Resolution on Usage of Proceeds and Feasibility Analysis
The meeting reviewed and passed the Proposal on Usage of Proceeds and Analysis on Feasibility of the Issuance. The proceeds of this issuance will be used to increase the Bank’s supplementary capital, improve the Bank’s capital adequacy ratio. In addition, the issuance will enhance the Bank’s operational strength, improve risk-resistant capability, and support consistent business development to realize the Bank’s strategic goals. The proceeds will mainly be used to make long-term bonds investment that is reliable in terms of safety and liquidity. 

 

Ⅳ. Resolution on Extending the Validity Period of Relevant Resolutions Concerning the Bank’s Issuance of Convertible Corporate Bonds with Separated Transaction of Warrants

The meeting reviewed and passed the Proposal on Extending the Validity Period of Relevant Resolutions Concerning the Bank’s Issuance of Convertible Corporate Bonds with Separated Transaction of Warrants, and consented to submit it to the shareholders’ meeting, so that the meeting would extend the validity period of the related issues to 12 months, and extend the term of authorization to handle the corporate bonds issuance by the Board to 12 months commencing the due date of the original validity, and accordingly consent that Mr. Hong Qi and Zhao Pinzhang continue to be the authorized executives to proceed with the matters concerning the issuance.  

 

During the extended period, the detailed contents of the relevant resolutions, issuing plans and authorizations by the Board, as well as authorities obtained by the authorized executives, are consistent with what are included in the Proposal on Issuing Convertible Corporate Bonds with Separated Transaction of Warrants and the Issuing Plan, and Proposal on Submitting to the Shareholders’ Meeting to Authorize the Board and Executives Authorized by the Board to Handle Matters Concerning the Bonds Issuance.
 

Ⅴ. Resolution on Continuing to Hire Audit Firms in 2008 and Their Remuneration

The meeting reviewed and passed the Proposal on continuing to hire PricewaterhouseCoopers Zhong Tian CPAs Limited Company as the auditor of annual financial statements of the Bank. The term will be one year, and the total service fees (including but not limited to all the miscellaneous costs such as service charges, other related expenses in proving services and relevant business taxes) amounted to RMB 4 million.

 

Ⅵ. Resolution on the Administrative Measures on Related-party Transaction of the Bank

The meeting reviewed and passed the Proposal on the Administrative Measures on Related-party Transaction of the Bank (Draft).

 

Ⅶ. Resolution on the Disposal Plan of the Equities of Haitong Securities Held by the Bank

The meeting reviewed and passed the Proposal on the Disposal Plan of the Equities of Haitong Securities Held by the Bank. The main contents of the plan are as the following:

 

1. Target: 380,914,014 shares (4.63% of total capital stock) of Haitong Securities held by the Bank;

2. Method: Market transaction method permitted by the regulatory authorities;
3. Authorization: It is submitted to the shareholders meeting to authorize the Board to proceed with items concerning the disposal. After obtaining the authorization from the shareholders meeting, the Board will give authorizations to the management for execution, which include but not limited to:

(1) Proceed with market transactions permitted by the regulatory authorities;

(2) Go through relevant procedures and enter into relevant legal documents;

(3) Report the plan and result to the regulatory authorities.

(4) Validity period of the authorization: one year commencing the date of approval of the shareholders' meeting.

 

Ⅷ. Resolution on Increasing Budget for the Writing-off of Dead Loans of the Bank

The meeting reviewed and passed the Proposal on Increasing Budget for the Writing-off of Dead Debts in 2008. In accordance with the implementation of the Bank’s writing-off of dead loans in 2008, tendency of quality changes of the Bank’s credit assets and relevant rules under the newly promulgated Administrative Measures on Dead Loan Writing-offs of Financial Institutions (2008 Revised), adding an additional RMB 400 million to the budget for the writing-off of the Bank’s dead Loans would be supportive to effectively reduce the outstanding NPL and safeguard the stability of the Bank’s NPL ratio, which was in line with the Bank’s actual status of business operation. The meeting consented to pass this proposal.

 

Ⅸ. Resolution on Establishing the Public Welfare Donation Fund of China Minsheng Bank

The meeting reviewed and passed the Proposal on Establishing the Public Welfare Donation Fund of China Minsheng Bank and relevant plan.

Funded by the Bank, the Fund’s first operation period will be 2008 to 2013. In 2008, the expenditure will be listed by 1% of the pretax profit, and during 2009-2013, the expenditure will be listed by 0.8-1.2% of the pretax profit per annum. 
The capital for the Fund will be appropriated according to the annual budget commencing the date of approval of the shareholders’ meeting. 

 

To ensure normative operation of the Public Welfare Donation Fund of China Minsheng Bank, a decision-making committee for donation programs that consists of directors, supervisors, functional departments and experts should be established, and authorization should be given by the Board to stipulate relevant administrative measures and implementation rules. 

 

Ⅹ. Resolution on Changing the Registered Capital of the Bank

The meeting reviewed and passed the Proposal on Changing the Registered Capital of the Bank. In accordance with the relevant regulations of the Enterprise Registration Bureau of the State Administration for Industry & Commerce on the change of registered capital, the meeting confirmed to change the registered capital of the Bank from RMB 14,479,080,428 to RMB 18,823,001,989, and proceeded with the procedures for industry & commerce change accordingly.

 

Ⅺ. Resolution on Revising Certain Items of the Articles of Association of the Bank

According to the changes in total capital stock after implementing the 2007 profit distribution and capital reserve transferring into capital stock plan and conversion of convertible bonds to shares, the meeting decided to make relevant revision on certain articles of the Articles of Association accordingly as the following:

 

1. Article 3 is revised as follows:

Article 3   On November 27, 2000, as approved by the CSRC with its document of Zhengjian Faxing Zi [2000] No.146, the Bank launched an IPO of 350,000,000 common shares in RMB and was listed at Shanghai Stock Exchange on December 19, 2000.

 

On February 27, 2003, as approved by the CSRC with its document of Zhengjian Faxing Zi [2003] No.13, the Bank issued RMB 4 billion of convertible corporate bonds with the par value of RMB 100 each. The convertible corporate bonds were due on February 26, 2008 and the accumulated number of shares converted amounted to 1,616,729,400 (including bonus shares and new share issues from capita reserve).

 

On June 22, 2007, as approved by the CSRC with its document of Zhengjian Faxing Zi [2007] No.7, the Bank issued 2,380,000,000 common shares in RMB by private placement to 8 domestic corporate investors.

 

2. Article 6 is revised as follows:

Article 6    Registered capital of the Bank: RMB 18,823,001,989.

 

3. Article 24 is revised as follows:

Article 24   Total number shares of the Bank amounts to 18,823,001,989, which are all common stocks.

 

For details of the Articles of Association of the Bank, please refer to the website of Shanghai Stock Exchange at www.sse.com.cn.

 

The voting results for the proposals are as the following: