Exhibit 3(8)
Sino-foreign Joint Venture
Yangzhou Tongsheng Container Co. Ltd.
(TSC)
Articles of Association
Chapter 1 General Provisions
Article 1
Jiangsu Tongyun Group Co. Ltd. ("Party A"), China Auto Industry Import
& Export Company ("Party B"), Benxi Steel and Iron Company ("Party C") and China
Container Holdings Ltd. ("Party D") entered into the Contract of Joint Venture
Yangzhou Tongsheng Container Co. Ltd. (the "Contract") in Yangzhou City, Jiangsu
Province, People's Republic of China on April 1, 1996. In order to have the
joint venture company run successfully, the parties to the joint venture (the
"Parties") hereby formulate this Articles of Association.
Article 2
The name of the joint venture company is:
Yangzhou Tongsheng Jizhuangxiang Xxxxxxx Xxxxxx.
Its English name is:
Yangzhou Tongsheng Container Co. Ltd. (TSC) (the "Company")
Article 3
The legal addresses of the Parties to the Company are as follows:
Party A: Qionghua Building Floor 16th Site A, Xxxxxxxxx
Xxxx, Xxxxxxxx Xxxx, Xxxxxxx Xxxxxxxx, Xxxxx;
Party B: 0 Xxxx Xxxxxx Xxxx, Xxxxxxx, Xxxxx;
Party C: 0 Xxxxxx Xxxx, Xxxxxxxx Xxxxxxxx, Xxxxx, Xxxxxxxx
Xxxxxxxx, Xxxxx;
Party D: British Virgin Islands.
Article 4
The Company is a limited liability company.
Article 5
The Company has a status of the Chinese legal person and is subject to
the jurisdiction and protection of the Chinese law. All its activities shall be
in Compliance with the Chinese laws, decrees and other pertinent rules and
regulations.
Chapter 2 Purpose and Scope of Business
Article 6
The purpose of the Company is to utilize foreign funds, to catch up
with and exceed the international advanced standards, to earn more foreign
exchange profits for China and to obtain satisfactory economic results for the
parties to the Company.
Article 7
The business scope of the Company is to manufacture and sell 20 feet,
40 feet and 45 feet standard containers for international sea transportation,
non-standard customized containers and parts and components thereof, and to
provide container maintenance and repairs and related services.
Article 8
The scale of production of the Company is as follows:
20,000 of 20 feet international standard dry van containers for sea
transportation within the second year after receiving the Company's industrial
and commercial business license;
The third year: 20,000 containers;
The fourth year: 20,000 containers;
And in each year thereafter normally: 20,000 to 30,000
containers.
Article 9
The Company shall sell all of its products on the international market.
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Chapter 3 The Total Investment and the Registered Capital
Article 10
The total amount of investment of the Company is US$9.6 million. Its
registered capital is US$4.8 million, equivalent to 50% of the total investment.
Article 11
The investment contributed by each party is as follows:
Party A: Investment subscribed is US$240,000, equivalent
to 5% of the registered capital;
Party B: Investment subscribed is US$240,000, equivalent
to 5% of the registered capital;
Party C: Investment subscribed is US$480,000, equivalent
to 10% of the registered capital;
Party D: Investment subscribed is US$3,840,000, equivalent
to 80% of the registered capital;
Article 12
The Parties to the Company shall make their respective subscribed
capital contributions in accordance with the time limit provided for in the
Contract. After the capital contributions have been made by the Parties, a
Chinese registered accountant shall be invited by the Company to verify such
capital contributions and provide a certificate of verification, upon which the
Company shall issue each party an investment certificate indicating the
following items: name of the Company; date of the establishment of the Company;
names of the party and the investment contributed; date of the contribution of
the investment, and the date of issuance of the investment certificate.
Article 13
Within the term of the joint venture, the Company shall not reduce its
registered capital.
Article 14
Any increase of the Company's registered capital shall be agreed
unanimously by all Parties to the Company and submitted to and approved by the
original approving authority.
Article 15
Should one party assign all or part of its investment subscribed,
consent shall be obtained from all of other parties of the joint venture. When
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one party assigns its investment, the other parties shall have the right of
first refusal.
Article 16
Any increase or assignment of the registered capital of the Company
shall be approved unanimously by the board of directors and submitted to and
approved by the original examination and approval authority. The registration
procedures for such changes shall be effectuated at the relevant department
authorized by the State Administration of Industry and Commerce.
Chapter 4 The Board of Directors
Article 17
The Company shall establish the board of directors (the "Board") which
is the highest authority of the Company.
Article 18
The Board shall decide all major issues concerning the Company. Its
duties and powers are as follows:
____ deciding and approving the important reports submitted by the general
manager (such as production plan, annual business report, funds, loans,
etc);
____ approving annual financial reports, budget of receipts and
expenditures, annual profit distribution plan;
____ adopting major rules and regulations of the company;
____ deciding to set up branches;
____ amending the articles of association of the Company;
____ discussing and deciding the termination of production, the
termination of the company or the merger with another
economic organization;
____ deciding the engagement of high-rank officials such as general manager,
chief engineer, chief accountant, auditor etc.
____ being in charge of liquidation in case of termination of the
Company and the expiration of the Company;
____ other major issues which shall be decided by the Board.
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Article 19
The Board shall consist of 11 directors and the number of directors
that each of the Parties may appoint shall be in proportion to their respective
capital contributions, that is, one director shall be appointed by Party A, two
directors by Party C and eight directors by Party D, among which one Director
appointed by Party D shall have two(2) votes, one of which shall be on behalf of
Party B. The term of office for the directors is four years and may be renewed
upon the appointment by the original appointing party.
Article 20
Chairman of the board shall be appointed by the party who is the
largest shareholder.
Article 21
If any party is to appoint or replace a director, a written notice
shall be submitted to the board.
Article 22
The Board shall convene a Board meeting annually. If necessary, an
interim meeting of the Board may be held upon a proposal made by at least
one-third of the total directors.
Article 23
The Board meeting will be held in principle on the location of the
Company, or elsewhere if agreed by all of directors.
Article 24
The Board meeting shall be called and presided by the Chairman. Should
the Chairman be absent, the Chairman shall authorize a vice chairman to call and
preside the board meeting.
Article 25
The Chairman shall give each director a written notice 30 days before
the date of the Board meeting. The notice shall cover the agenda, time and place
of the meeting.
Article 26
Should a director be unable to attend the Board meeting, he may
authorize in writing a proxy to attend the Board meeting. In case the director
neither attends nor authorizes other to attend the meeting, it shall be regarded
as a waiver.
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Article 27
The Board meeting requires a quorum of two-thirds of the total number
of directors. When the quorum is not satisfied, the decisions adopted by the
Board meeting are invalid.
Article 28
Detailed written minutes shall be made for each Board meeting and
signed by all of the attended directors and the attended proxy. The minutes
shall be made in Chinese and shall be filed with the company.
Article 29
The following issues shall be unanimously agreed upon by the Board:
1. amendment of the Contract and Articles of Association
of the Company;
2. cooperation, coalition and merger with other economic
organizations;
3. increase of registered capital, adjustment of
investment proportions, transfer or mortgage of
capital;
4. termination or dissolution of the Company.
Article 30
The following issues shall be passed by over two thirds of the total
number of directors or by over half of the total number:
1. decision on the annual production plans, sales plans,
and development plans;
2. approval of the annual financial budget, settlement,
estimation and financial statement;
3. decision on the maximum limit of floating capital and
borrowing loan for the portion exceeding the limit;
4. decision on the annual profit distribution plan;
5. review and approval of the annual business report
submitted by general manager;
6. approval the Company's labor contracts and important
rules and regulations;
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7. appointment or dismissal of general manager, deputy
general manager, chief engineer, chief accountant and
other high rank staff recommended by general manager
and engaged by the board, and decision on invitation of
auditor;
8. decision on salaries and benefit of general manager and
deputy general manager, and decision on plans of wages
and welfare of the Company's employees in accordance
with the stipulation of the labor administrative
department of China;
9. decision on the department organizations of the
Company;
10. other major matters to be decided by the board.
Chapter 5 Business Management Organization
Article 31
The Company shall establish a management system that the general
manager is authorized with full power and assumes full responsibility to be in
charge of the Company's business management under the supervision of the board
or directors.
The Company shall have one(1) general manager to be engaged upon
approval of the Board; three(3) deputy general manager to be recommended by the
general manager (or recommended by the Parties to the general manager) and
engaged upon the approval of the Board.
Article 32
The general manager is directly responsible to the Board. He shall
carry out the Contract, the Articles of Association and decisions of the Board,
organize and conduct the daily production, technology and operation and
management of the Company. The deputy general managers shall assist the general
manager in his work and act as the agent of the general manager upon the general
manager's authorization during his absence and exercise the duties of the
general manager.
Article 33
Decision on the major issues concerning the daily work of the Company
shall come into effective upon signature jointly by the general manager and
deputy general managers. Issues which need cosignatories shall be specified by
the Board.
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Article 34
The term of office for the general manager and deputy general managers
shall be 4 years, and may be renewed at the invitation of the Board.
Article 35
At the invitation of the Board, the chairman, vice-chairman or
directors of the board may concurrently assume the position of the general
manager, deputy general manager or other high-ranking personnel of the Company.
Article 36
The general manager or deputy general managers shall not hold posts
concurrently as general manager or deputy general managers of other economic
organizations or participate in such other organization's commercial competition
with the Company.
Article 37
The Company shall engage one treasurer, one chief engineer, one chief
accountant and one auditor upon approval of the Board.
Article 38
General engineer, chief accountant and auditor shall be under the
leadership of the general manager.
The treasurer shall be in charge of the Company's transactions,
production and financial management, and carry out economic responsibility
system.
The chief engineer shall be in charge of the Company's productive and
technical matters and the development of new products.
The chief accountant shall be in charge of the Company's financial and
accounting affairs, organize to carry out overall economic result calculation
within the Company, work out financial analysis and regularly report to the
general manager on the financial condition of the Company..
The auditor shall be in charge of the auditing work of the Company,
check and verify the financial receipts and expenditure and the accounts, and
submit written reports to the general manager and the Board.
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Article 39
The general manager, deputy general manager, chief engineer, chief
accountant, auditor and other high-ranking personnel who ask for resignation
shall submit a written application to the Board three months in advance and the
Board shall make a decision on it.
In case any of the above mentioned persons provides poor performance of
his work and is not able to achieve the business target set up by the board or
conducts graft or serious dereliction of duty, such person may be dismissed at
any time upon the decision of the Board.
Chapter 6 Finance and Accounting
Article 40
The finance and accounting of the Company shall be handled in
accordance with the "Regulations of the People's Republic of China on the
Finance and Accounting System of the Sino-foreign Equity Joint Ventures".
Article 41
The fiscal year of the Company shall coincide with the calendar year,
i.e., from January 1 to December 31 of the Gregorian calendar year.
Article 42
All vouchers, account books, statistic statements and reports of the
Company shall be written in Chinese.
Article 43
The Company adopts RMB as its accounts keeping unit. The conversion of
RMB into other currency shall be in accordance with the exchange rate published
on the converting day by the State Administration of Exchange Control of the
People's republic of China. In addition to RMB, the Company's accounting items
in respect of cash, bank deposits, income and payment, debts, expenses, earnings
in currencies other than RMB shall also be recorded in to the account books with
other currencies actually used in payment and receipt.
Article 44
The Company shall open accounts in RMB and foreign currency with the
Bank of China or other banks agreed by the State Administration of Exchange
Control.
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Article 45
The Company shall adopt the internationally accepted accrual basis and
debit and credit accounting system in its accounting work.
Article 46
Following items shall be included in the financial and account books:
1. the amount of total cash receipts and expense of the
Company;
2. all material purchases and sales of the Company;
3. the registered capital and debts of the Company;
4. the time of payment, increase and assignment of the
registered capital of the Company.
Article 47
The Company's accounting office shall, under the supervision of the
general manager, work out the balance sheet and the profit and loss statement of
the past year in the first four months of each fiscal year which shall be
submitted to the general manager and the Board meeting for approval after
examined and signed by the auditor and the accountant registered in China.
Article 48
Each party to the joint venture shall have the right to invite an
auditor to review and examine the account book of the Company at its own
expense. The Company shall provide convenience for the checking and examination.
Article 49
The depreciation period for the fixed assets of the Company shall be
decided by the Board in accordance with the "Rules for the Implementation of the
Income Tax Law of the People's Republic of China Concerning Joint Ventures with
Chinese and Foreign Investment".
Article 50
All matters concerning foreign exchange shall be handled in accordance
with the "Provisional Regulations for Exchange Control of the People's Republic
of China" and other pertaining regulations as well as the Contract.
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Chapter 7 Profits Sharing
Article 51
The Company shall allocate from after-tax profit the reserve funds, the
enterprise development funds and the employee bonus and welfare funds. The
proportion of allocation shall be decided by the Board.
Article 52
After paying taxes and allocating the above mentioned funds in
accordance with law, the remaining profits of the Company shall be distributed
to the Parties according to the proportion of each party's investment in the
registered capital.
Article 53
The Company shall distribute its profits once a year. The profit
distribution plan and the amount of profit distributed to each party shall be
published within the four months after the end of each fiscal year.
Article 54
The Company shall not distribute profits unless the losses of previous
fiscal year have been made up. Remaining profit from previous fiscal year can be
distributed together with that of the current year.
Chapter 8 Staff and Workers
Article 55
The employment, recruitment, dismissal and resignation of the staff and
workers of the Company and their salary, welfare benefits, labor insurance,
labor protection, labor discipline and other matters shall be handled according
to the "Regulations of the People's Republic of China on Labor Management in
Joint Ventures Using Chinese and Foreign Investment" and the implementation
rules thereof.
Article 56
The required staff and workers will be recruited by the Company in
public and priority shall be given to employees of Party A. Examination which
full marks are 100 marks will be adopted in all recruit without any exception
and anyone who obtains higher marks will be employed in order. Any person of the
recruiting department who is recommended by the Board, the general manager
office and all related department and workshop shall be recruited in priority if
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his/her marks obtained in such examination are 5 to 20 marks lower than those of
others. All recruited employees shall sign employment contract.
Article 57
The Company has the right to take disciplinary actions, record a
demerit and reduce salary against those staff and workers who violate the
Company's rules and regulations, labor contract and labor disciplines. Those
involved in serious cases may be dismissed. Dismissal of workers shall be filed
with the labor administrative department.
Article 58
The salaries of the staff and workers shall be set by the Board
according to the actual situation of the Company and with reference to
pertaining stipulations of China, and shall be specified in the labor contract.
The salaries of the staff and workers shall be appropriately increased
along with the development of business and production, the improvement of
economic results and the enhancement of the work ability and technical ability
of the staff and workers.
Article 59
Matters concerning the welfare, bonuses, labor protection, labor
insurance and the Housing funds, etc. shall be stipulated respectively in
various rules and regulations by the Company in accordance with the State's
relevant policies, so as to ensure that the staff and workers work under normal
conditions.
Chapter 9 The Trade Union Organization
Article 60
The staff and workers of the Company have the right to establish trade
union organization and carry out trade union activities in accordance with the
stipulations of the "Trade Union Law of the People's Republic of China".
Article 61
The trade union in the Company is representative of the interests of
the staff and workers. The tasks of the trade union are: to protect the
democratic rights and material interests of the staff and workers pursuant to
the law; to assist the Company to arrange and make rational use of welfare and
bonus funds; to organize staff and workers to participate in political,
professional, scientific and technical studies and literary, art and sports
activities; and to educate staff and workers to observe labor discipline and
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rules and regulations so as to complete production tasks of the Company and
achieve higher economic results.
Article 62
The trade union of the Company may sign labor contracts with the
Company on behalf of the staff and workers, and supervise the implementation of
the contracts.
Article 63
Person(s) in charge of the trade union of the Company shall have the
right to attend, as nonvoting members, meetings of the Board scheduled to
discuss issues such as development plans, production and operational activities,
and interests of staff and workers of the Company, and to report the opinions
and demands of staff and workers at meetings of the Board.
Article 64
The trade union shall have the right and duty to take part in the
mediation of disputes arising between the staff and workers and the Company.
Article 65
The Company shall allot an amount of money totalling 2% of all the
salaries of the staff and workers of the Company as trade union's funds, which
shall be used by the trade union in accordance with the "Managerial Rules for
the Trade Union Funds" formulated by the All China Federation of Trade Unions.
Chapter 10 Duration, Termination and Liquidation
Article 66
The duration of the Company shall be 15 years, beginning from the date
when business license is issued.
Article 67
Upon agreement and decision by all Parties, an application for the
extension of duration may be submitted to the original examination and approval
authority six months prior to the expiry date of the joint venture. Only upon
the approval shall the duration be extended, and the Company shall effectuate
registration alteration at the department authorized by the State Administration
of Industry and Commerce of P.R. China.
Article 68
The Contract may be terminated before its expiration in case the
Parties to the joint venture agree unanimously that the termination of the
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joint venture is for the best interests of the Parties.
A decision to terminate the joint venture before expiry of the term
shall be made by the Board through a plenary meeting, and such decision shall be
submitted to the original examination and approval authority for approval.
Article 69
Upon the expiration of the joint venture or termination of the Contract
prior to its expiry, the Board shall work out procedures and principles for the
liquidation, nominate candidates for the liquidation committee, and set up the
liquidation committee to liquidate the Company's assets.
Article 70
The tasks of the liquidation committee are: (1) to conduct thorough
check of the financial affairs and credits of the Company, (2) to work out the
balance sheet and the property inventory, and (3) to formulate a liquidation
plan. All these shall be carried out upon the approval of the Board.
Article 71
During the process of liquidation, the liquidation committee shall
represent the Company to sue and be sued.
Article 72
The liquidation expenses and the compensation of the members of the
liquidation committee shall be paid in priority from the existing assets of the
Company.
Article 73
After the full clearance of debts of the Company, the remaining
property and credits shall be distributed among the Parties to the joint venture
in accordance with their respective proportions of investment in the registered
capital.
Article 74
Upon completion of the liquidation, the Company shall submit a
liquidation report to the original examination and approval authority,
effectuate cancellation of registration with the administrative department of
industry and commerce, hand in its business license and, at the same time, make
an announcement to the public.
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Article 75
After winding up of the Company, its account books shall be left in the
care of Party A.
Chapter 11 Rules and Regulations
Article 76
The following are the rules and regulations formulated by the Board of
the Company.
1. Management regulations, including the powers and
functions of the managerial branches and their
respective working procedures;
2. Rules for the staff and workers;
3. System of labor and salary;
4. System of work attendance record, promotion and awards
and penalty for the staff and workers;
5. Rules of staff and worker's welfare;
6. Financial system;
7. Liquidation procedures upon the dissolution of the
Company;
8. Other necessary rules and regulations.
Chapter 12 Supplementary Articles
Article 77
The amendments to the Articles of Association shall be unanimously
agreed and decided by the Board and submitted to the original examination and
approval authority for approval.
Article 78
The Articles of Association is written in Chinese language.
Article 79
The Articles of Association shall come into effect upon the approval by
the examination and approval department authorized by the Ministry of Foreign
Trade and Economic Cooperation of the People's Republic of China.
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Article 80
These Articles of Association are the revised version based on the
original version of the Articles of Association formally signed in Yangzhou,
Jiangsu, China on July 5, 1995 in order to meet the latest needs of the
construction of container project and have been hereby formally executed in
Yangzhou, Jiangsu, China on April 1, 1996. Should any other agreements,
contracts and articles of association, etc. signed by and between Parties prior
to the date hereof conflict with these Articles of Association, these Articles
of Association shall prevail.
Party A Party B
by: Xxxxx Xxxxxxxx by: Xxx Xxxxxx
(Signature) (Signature)
Party C Party D
by: Xxxx Xxxx by: Xxxxx Xxxxxxxx
(Signature) (Signature)
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