The 'Six Major' Rights of Company Shareholders

At the core of shareholders’ rights lies the principle of 'receiving returns, deciding major matters, appointing managers, and safeguarding rights.' The newly enacted Company Law strengthens protections for shareholders—especially minority shareholders—and breaks the previous dominance of controlling shareholders. Classified by 'importance + practicality,' shareholders enjoy six fundamental rights. I. Right to Asset Returns This is the primary motivation behind a shareholder’s initial investment: contributing capital to the company in expectation of financial return—a basic right guaranteed by law. - Dividend Right: After deducting costs, taxes, and statutory reserves, the company’s remaining profits may be distributed to shareholders proportionally to their shareholding (or capital contribution). - Preemptive Subscription Right: When the company increases its registered capital through new share issuance, existing shareholders may subscribe to newly issued shares pro rata to their current holdings—thus preventing dilution of their equity stake. - Residual Property Distribution Right: Upon dissolution and liquidation, after all debts have been settled, any remaining assets are distributed among shareholders according to their shareholding ratios. Example: If you hold 10% of the company’s shares and the company reports RMB 1 million in net profit this year—with no special agreement—you are entitled to RMB 100,000 in dividends. If the company plans to increase its registered capital by RMB 1 million, you may preemptively subscribe to RMB 100,000 worth of new shares to maintain your 10% ownership stake and avoid dilution by external investors. Important Note: A profitable company is not automatically required to distribute dividends. Dividend proposals must first be formulated by the board of directors and then approved by resolution at the shareholders’ meeting. However, if the company consistently generates profits yet refuses to distribute dividends without justifiable cause, shareholders may pursue legal remedies. II. Right to Participate in Major Decision-Making Shareholders are not merely investors—they are co-owners of the company. Major corporate decisions require approval by the shareholders (or shareholders’ meeting), and each shareholder holds voting rights. In plain terms: the following critical matters cannot be decided unilaterally by management without prior consent from the shareholders’ meeting. Every shareholder has the right to vote (generally one vote per share; voting power scales with shareholding): ① Determining the company’s business strategy and investment plans (e.g., pivoting into a new industry or launching a major project); ② Electing and replacing directors and supervisors; ③ Deciding on changes to registered capital, mergers, spin-offs, dissolution, liquidation, or alterations to the company’s legal form; ④ Amending the company’s articles of association. Important Note: Under the new Company Law, shareholders’ meetings and board meetings may be held and resolutions adopted via electronic communication (e.g., online voting), eliminating the necessity of physical attendance—greatly facilitating participation, especially for geographically dispersed shareholders. Moreover, minority shareholders now possess the 'right to submit temporary proposals' to the shareholders’ meeting, enabling them to actively shape corporate decisions rather than being sidelined by controlling shareholders. III. Right to Appoint Managers Senior management—including directors and supervisors—serve as the company’s 'stewards' acting on behalf of shareholders. Shareholders retain the authority to appoint and dismiss these stewards. In plain terms: Shareholders may elect trusted individuals as directors or supervisors through the shareholders’ meeting—and may also remove underperforming or negligent directors or supervisors. Furthermore, remuneration for directors and supervisors is determined by the shareholders’ meeting. In short, if a director fails to perform duties properly or makes reckless decisions harming the company and shareholders’ interests, shareholders may vote to remove him or her at the shareholders’ meeting. Important Note: Directors and supervisors who are employee representatives are elected by company staff and fall outside shareholders’ appointment authority. However, non-employee representative directors and supervisors are appointed solely at the discretion of shareholders.

Practical Guide to Shareholders’ Meetings of Listed Companies (2026)

1. Registration and Identity Verification (30 minutes before the meeting): Shareholders must present valid identification documents and shareholding certificates; authorized agents must provide power-of-attorney documents, shareholding certificates, and identification; legal-entity shareholders must additionally submit copies of their business licenses. Extended Reading: Are You Ready to Attend the Annual General Meeting? 2. Opening Announcement and Attendance Report (on schedule): The chairperson announces the number of attending shareholders and their aggregate shareholding percentage, outlines meeting rules, and the secretary records proceedings (signing the official minutes). 3. Item-by-Item Deliberation of Proposals: Directors or other senior executives read out each proposal sequentially. It is recommended that all proposals be read in full before opening the floor for shareholder questions. 4. Shareholder Q&A Session: Directors, senior executives, and independent directors respond openly and truthfully to shareholder inquiries and challenges. 5. Voting (On-site + Online): - On-site: Named ballots; each proposal voted on individually; cumulative voting applies to director elections. - Online: Trading platform voting windows: 9:15–9:25, 9:30–11:30, and 13:00–15:00. If duplicate votes occur, the first submitted vote prevails in principle. 6. Vote Counting and Oversight: A joint team comprising shareholder representatives and external lawyers oversees vote counting. On-site ballots are verified by scrutineers and counters; online votes are tallied automatically by the stock exchange’s voting platform, and consolidated results are downloaded. 7. Announcement of Voting Results: On-site vote counts and percentages are announced immediately; some announcements also disclose online voting outcomes. For special resolutions, confirmation is required that affirmative votes reach at least two-thirds of attending shareholders; for ordinary resolutions, majority support (>50%) among attending shareholders is required. Voting Thresholds & Corresponding Resolutions: Ordinary Resolution: >50% of attending shareholders 1. Work report of the board of directors 2. Profit distribution plan and loss compensation plan proposed by the board 3. Appointment/removal of board members and determination of their remuneration and payment methods 4. All other matters not requiring special resolution—e.g., annual report-related items, significant transactions (excluding asset purchases/sales or external guarantees exceeding 30% of total assets) Ordinary Resolution: >50% of attending non-related shareholders 1. Related-party guarantees 2. Employee stock ownership plans 3. Management buyouts Special Resolution: ≥2/3 of attending shareholders 1. Matters stipulated in the 'Articles of Association Guidelines': (1) Amendments to the articles of association; adjustments to registered capital (2) Corporate division, spin-off, merger, dissolution, liquidation (3) Change in corporate legal form (4) Purchase or sale of assets amounting to ≥30% of total assets within one year (5) External guarantees totaling ≥30% of total assets within one year 2. Dividends and share repurchases: (1) Cash dividend proposals (2) Share repurchase and cancellation (3) Public offering of preferred shares to finance share repurchase for capital reduction (4) Repurchase of ordinary shares to issue preferred shares under targeted placements 3. Capital operations: (1) Securities issuance (2) Issuance of classified shares and related matters (e.g., pre-IPO differentiated voting rights arrangements; modification of voting rights attached to special voting shares) (3) Adjustment proposals for convertible bond conversion prices (4) Major asset restructurings (5) Introduction of strategic investors 4. Delisting and restructuring: (1) Voluntary delisting (2) Compulsory delisting (including restructuring planning, entry into delisting consolidation period, etc.) (3) Withdrawal of termination-of-listing application (4) Relisting (5) Draft restructuring plan 5. Other matters Special Resolution: ≥2/3 of attending non-related shareholders 1. Equity incentive plans 2. Other matters requiring recusal by related shareholders

5E Advanced Materials Announces Virtual 2026 Annual Meeting with Five Director Seats Up for Election

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5E Advanced Materials Inc. announced a virtual 2026 annual meeting on December 7, 2026, including the election of five directors and auditor ratification. Shareholders can vote remotely via telephone, internet, mail, or webcast.

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