EXHIBIT 3.1
[Translation]
Articles of Incorporation of Chunghwa Telecom Co., Ltd.
1. All 26 articles adopted by Promoters Meeting on June 11, 1996.
2. Article 15 amended by General Shareholders Meeting on December 26, 1997.
3. Articles 2 and 22 amended by General Shareholders Meeting on November 25,
1998.
4. Paragraph 1 of Article 21, amended by Special Shareholders Meeting on
July 13, 1999.
5. Articles 2, 3, 6, 7, 10, 12, 13, 19, 21 and 22 amended, and Articles 6-1
and 7-1 inserted by General Shareholders Meeting on June 4, 2001.
6. Articles 2, 7, 8, 9, 10, 19, 21, and 22 amended and Article 5 deleted by
General Shareholders Meeting on June 21, 2002.
7. Articles 2 amended by General Shareholders Meeting on June 17, 2003.
Chapter I - General Provisions
Article 1 - The Company is promoted by the Ministry of Transportation and
Communications ("MOTC") and others and organized under the
Telecommunication Law, the Statute of Chunghwa Telecom Co., Ltd.
(hereinafter referred to as the "Corporation Statute") and the
provisions of the Company Law pertaining to companies limited by
shares and is named "Chunghwa Telecom Co., Ltd.".
The English name of the Company is "Chunghwa Telecom Co., Ltd.".
Article 2 - The scope of business of the Company shall be as follows:
1) Telecommunications Enterprise of Type 1 (G901011);
2) Telecommunications Enterprise of Type 2 (G902011);
3) Installation of the Computer Equipment Business (E605010);
4) Telecommunication Equipment Wholesale Business (F113070);
5) Telecommunication Equipment Retail Business (F213060);
6) Telecommunication Engineering Business (E701010);
7) Installation of the Radio-Frequency Equipment whose
operation is controlled by the Telecommunication Business
(E701030);
8) Information Software Service Business (I301010);
9) Other Designer Businesses [the design of the computer
information hardware] (I599990);
10) Rental Business (I601010);
11) Publishing Business (J304011);
12) Other Wholesale Businesses [telephone card and IC card]
(F199990);
13) Enterprise Management and Consulting Service Business
(I103010);
14) Professional Training Business (J201011);
15) Other Corporation Service Businesses [telephone card, IC
card, the research and development of the telecommunication
facilities and devices, accepting payment on behalf of
businesses and institutions, telecommunication equipment
inspection services, and agency sale of entry tickets and
travel fares] (IZ99990);
16) Other Retail Businesses [telephone card and IC card]
(F299990);
17) Online Certification Service Businesses (IZ13010);
18) Supply of Electronic Information Service Businesses
(I301030);
19) Information Process Service Business (I301020);
20) Telecommunication Account Application Agency Businesses
(IE01010);
21) Management of Overdue Accounts Payable Service Businesses
(IZ11010);
22) Real Estate Rental Businesses (H703100);
23) Vocational Skills Training Businesses (J201030);
24) Waste Disposal Businesses (J101040);
25) Community Common Cable Television Equipment Businesses
(J502020);
26) Exhibition Service Businesses (JB01010);
27) General Advertising Service Businesses (I401010);
28) Department Store Businesses (F301010);
29) Communication Newsletter Businesses (J302010);
30) Credit Investigation Service Businesses (I201010);
31) Public Notarization Businesses (IZ07010);
32) Parking Lot Operation Businesses (G202010);
33) Environmental Assessment Service Businesses (J101050);
34) Engineering Consultancy Businesses (I101061);
35) Information Storage an Process Equipment Manufacturing
Businesses (CC01050);
36) Electronic Component Manufacturing Businesses (CC01080);
37) Other Electrical and Electronic Machinery & Equipment
Manufacturing Businesses [IC or Optical Card Scanners]
(CC01990);
38) Radio-Frequency Equipment Import Business (F401021);
39) Cable System Operator Business (J504011); and
40) Except the permitted business, the Company may engage in
other businesses not prohibited or restricted by laws and
regulations.
The Company may handle endorsement and guaranty affairs in
accordance with the Operation Procedures for the Endorsement and
Guaranty of the Company if there is any business need.
Article 3 - The Company may invest in telecommunication-related business or
other businesses approved by MOTC.
The requirement for approval of MOTC in the preceding paragraph
shall cease to apply as of the time that the Company becomes
privatized.
Total amount of investments engaged by the Company may not be
limited to the amount stipulated in Article 13 of the Company
Law.
"Privatized" as used in these Articles shall refer to the day
that Government holds less than fifty percent (50%) of paid-up
capital of the Company.
Article 4 - The head office of the Company is located in Taipei City and the
Company may establish branch office(s) and liaison office(s) at
appropriate locations within or outside the territory of the
Republic of China.
Article 5 - (Deleted)
Chapter II - Shares
Article 6 - The registered capital of the Company shall be Ninety Six Billion
Four Hundred Seventy Seven Million Two Hundred Forty Nine
Thousand and Twenty New Taiwan Dollars (NT$96,477,249,020),
divided into Nine Billion Six Hundred Forty Seven Million Seven
Hundred Twenty Four Thousand and Nine Hundred (9,647,724,900)
common shares and Two (2) preferred shares with a par value of
Ten New Taiwan Dollars (NT$10) per share. All the common shares
shall be fully issued and the preferred shares shall be issued by
the Board of Directors pursuant to the laws and regulations.
Article 6-1 - The rights, obligations, and other important conditions
regarding the preferred shares issued by the Company are stated
as follows:
1) The rights of the preferred shares with respect to the
distribution of dividends and bonuses, the Company's retained
properties, and the Company's profits and capital reserve in
cash or the appropriated capital, etc. shall be equal to those
of the common shares.
2) The shareholder(s) of the preferred shares has/have the same
right to vote or election with those of the shareholder(s) of
the common shares at a common shareholders' meeting.
3) During the term of the preferred shares, the shareholder(s) of
the preferred share shall be the director(s) and supervisor(s)
and may be re-appointed by MOTC at any time.
4) When the Company issues new shares in cash, the shareholder(s)
of the preferred shares shall have the same preemptive rights
with respect to the new shares as those of the shareholder(s)
of the common shares.
5) The Company shall obtain the consents of the shareholder(s) of
the preferred shares before engaging in the following matters
and, failing so, the action will be deemed void:
(1) To amend the Company's name
(2) To amend the Company's business scope
(3) To transfer all or the essential part of the Company's
business or assets
6) The preferred shares issued by the Company shall not be
transferred. At the end of the third year from the issuance
date of the preferred shares, the Company shall reacquire the
preferred shares by their par value and then cancel them. The
issuance date shall be the record date of the capital increase
of the preferred shares.
Article 7 - The share certificates of the Company shall bear the
shareholders' names, be signed or sealed by the Chairman and at
least two other directors, be serially numbered, affixed with the
corporate seal of the Company, and legalized by the Ministry of
Economic Affairs ("MOEA") (hereinafter referred to as the
"Competent Authority") or its certified issuance registration
agency before they are issued in accordance with the relevant
laws.
When issuing new shares, the Company may print a share
certificate in respect of the full number of shares to be issued
at that time, and shall arrange for the certificate to be kept by
a centralized securities custodian institution, in which case the
preceding requirement for serial numbering of share certificates
shall not apply.
Shares issued by the Company may also be exempt from printing of
share certificates, and the Company shall arrange for such shares
to be recorded by a centralized securities custodian institution,
in which case the preceding 2 paragraphs shall not apply.
Any affair with regard to the shares of the Company shall be
handled in accordance with the Guidelines for Handling Stock
Affairs by a Public Issuing Company.
Article 7-1 - The share certificates issued by the Company may be jointly
exchanged for the share certificates with a larger par value upon
the request of the Taiwan Securities Centralized Depository
Company Limited by Shares.
Chapter III - Shareholders' Meeting
Article 8 - Shareholders' meetings shall be of two types: general
shareholders' meeting and special shareholders' meeting. Except
as otherwise provided in the Company Law, shareholders' meetings
shall be convened by the Board of Directors.
The general shareholders' meeting shall be convened at least once
every year and shall be convened within six (6) months after the
close of each fiscal year except as otherwise approved by the
Competent Authority for good cause shown.
The special shareholders' meeting shall be convened at such time
as may be deemed necessary pursuant to relevant laws and
regulations.
Article 9 - Where a shareholders' meeting is convened by the board of
directors, the chairman of the Company shall act as the chairman
of the shareholders' meeting. In the event that the chairman is
to be on leave of absence or cannot attend the meeting for any
cause whatsoever, the vice-chairman, or where the chairman and
the vice-chairman are both to be on leave of absence or cannot
attend the meeting for any cause whatsoever, one of the directors
appointed by the chairman, or, where there is no appointment, a
director elected among all the directors, may act on behalf of
the chairman.
Where a shareholders' meeting is convened by a person with
authority other than the board of directors, such convener shall
act as the chairman of the shareholders' meeting. Where there are
two (2) or more conveners, the chairman of the meeting shall be
elected amongst such conveners.
Article 10 - Each shareholder of the Company shall be entitled to one vote for
each share held.
Article 11 - The government shareholder(s) may be represented by individuals
appointed by the MOTC; if there are numerous representatives,
they may be each elected as the directors or supervisors.
Chapter IV - Directors and Supervisors
Article 12 - The Company shall have fifteen (15) directors to form the Board
of Directors, one-fifth (1/5) of whom shall be expert
representatives.
The Board of Directors shall have one (1) chairman elected by and
from among the directors with the concurrence of a general
majority of the directors present at a meeting attended by at
least two-thirds (2/3) of the directors and shall have one (1)
vice-chairman elected in the same way.
The Company shall have four (4) supervisors.
During the term of the preferred shares, there shall be at least
one (1) seat of the directors and the supervisors each reserved
for the shareholders of the preferred shares.
Article 13 - The tenure of office of the directors and supervisors will be
three (3) years and they will be eligible for re-election.
The tenure of the directors and supervisors of the shareholders
of the preferred shares appointed without election and who are
not subject to any restriction of the tenure set forth in the
previous paragraph ends upon the termination of the issuance
period of the preferred shares.
In the event that the representative of a government or corporate
body is elected as the director or the supervisor, the government
or corporate body may reappoint such representative at anytime to
supplement the original tenure.
Article 14 - The following items shall be decided by the Board of Directors:
(1) The regulations with regard to the organization of the
Company;
(2) The yearly business policy and budgets;
(3) The establishment, amendment, and abolishment of the branch
and liaison offices within or outside the territory of the
Republic of China;
(4) The appointment or removal of any managerial officers;
(5) The personnel regulations of the Company; and
(6) The administrative regulations of the Company's equipment.
Other matters in relation to the execution of the Company's
business, except for issues that shall be submitted to MOTC for
approval or that are the items which shall be decided at the
shareholders' meeting in accordance with the relevant laws or
this Articles of Incorporation, shall be determined at the Board
of Directors meeting.
Article 15 - The board of directors' meeting shall be convened every two (2)
months. The special board of directors' meeting shall be convened
at such time as may be deemed necessary. Both meetings shall be
convened by the chairman of the Company and such chairman shall
act as the chairman of the meeting. In the event that the
chairman cannot attend the meeting for any cause whatsoever, the
vice-chairman, or where the chairman and the vice-chairman are
both to be on leave of absence or cannot attend the meeting for
any cause whatsoever, one of the directors appointed by the
chairman, or, where there is no appointment, a director elected
among all the directors, may act on behalf of the chairman.
Article 16 - All directors shall attend every board of directors' meeting; in
case any of the directors cannot attend the meeting for any cause
whatsoever, he/she may designate the other directors to act on
his/her behalf and such agent shall present the proxy setting
forth the vested power of the purpose of the meeting each time.
However, each agent shall only accept one appointment from the
directors.
Except as otherwise provided in the relevant laws or this
Articles of Incorporation, any resolution of a board of
directors' meeting shall be adopted at a meeting which at least
general majority of the directors attend and at which meeting a
general majority of the directors present vote in favor of such
resolution.
Minutes of meetings shall be prepared for all resolutions adopted
at a board of directors' meeting.
Article 17 - The supervisors shall perform the following functions:
(1) To investigate the business and financial condition of the
Company;
(2) To inspect the books, records and documents of the Company.
Article 18 - In addition to performing the functions of a supervisor in
accordance with the relevant laws, the supervisors may attend the
board of directors' meeting to express his/her opinion but may
not participate in any voting.
Chapter V - Managerial Officers
Article 19 - The Company shall have one general manager, several deputy
executive general managers and deputy general managers.
The general manager shall be a director who has professional
knowledge in telecommunication management.
Article 20 - The general manager shall take charge of all affairs of the
Company and supervise its personnel in accordance with the
relevant laws, this Articles of Incorporation, and the
resolutions adopted in the board of directors' meeting.
The powers and duties of the board of directors and the general
manager shall be separated in accordance with the Powers and
Duties Chart.
Chapter VI - Accounting
Article 21 - The fiscal year of the Company shall be from January 1 to
December 31 of each year.
At the end of each fiscal year, the board of directors shall
prepare the following statements and reports, and submit the same
to the supervisor(s) for examination thirty (30) days prior to
the annual shareholders' meeting, and then shall submit the same
to the annual shareholders' meeting for adoption.
(1) Report of Operations;
(2) Financial statements;
(3) Resolution governing the distribution of profit or the
making-up of losses.
Article 22 - After the Company has paid all payable taxes at the end of each
fiscal year, the Company shall make up its accumulated losses and
set aside ten percent (10 %) of the net profit as the statutory
revenue reserve before distribution of profits, except when the
accumulated amount of such legal reserve equals to the Company's
total authorized capital. The Company may also set aside special
reserve(s) according to the business need or rules after the
Company. Fifty
percent (50%) of the total amount of the balance plus accumulated
retained profits from the previous year shall be distributed in
the following manner:
1) Employee bonuses not less than one percent (1%);
2) Remuneration for directors and supervisors not higher than
two-thousandth (0.2%);
3) The remainder after deducting amounts in subparagraphs 1)
and 2) shall be shareholders' dividends. Cash dividends
shall not be below ten percent (10%) of the total dividends,
but when the cash dividends fall below NT$0.1 per share,
dividends shall be distributed in the form of stocks.
Subparagraphs 1) and 2) of the preceding paragraph shall apply
after the Company becomes privately owned, in respect of
distribution of profits for the subsequent fiscal year.
As the Company belongs to an industry with concentrated capital
and technology, and parts of its businesses are currently at
developmental and expansion stages, expenditure of capital will
change with technological advancements and market competition. In
light of future capital needs and long-term financial planning,
the percentage of profit distribution stipulated in paragraph 1
may be adjusted based on such relevant factors as actual
profitability for the year, capital budgeting and status of
finances, and shall be executed following resolution by
shareholders' meeting.
Dividends and bonuses shall not be distributed where the Company
has no profits, provided that where the statutory revenues
reserve exceeds fifty percent (50%) of paid-up capital of the
Company, the portion in excess may be distributed as
shareholders' dividends.
Article 23 - In the event that the Company issues new shares for the purpose
of raising funds, the Company shall apply to the MOTC for
approval to reserve not more than ten percent (10%) of the total
newly issued shares for preemptive subscription at a discount by
employees of the Company.
When MOTC sells the government-owned shares of the Company, the
employees of the Company shall have the preemptive rights to
subscribe for such shares at a discount, pursuant to the
subscription amount set forth in the Statute for the
Privatization of Public Enterprises and its relevant regulations.
Chapter VII - Supplementary Provisions
Article 24 - The regulations with regard to the organization of the Board of
Directors and the Company shall be separately adopted.
Article 25 - Matters not provided herein shall be resolved in accordance with
the Corporation Statute and the Company Law.
Article 26 - This Articles of Incorporation was adopted on June 11, 1996.