ARTICLES OF INCORPORATION of EnTie Commercial Bank Chapter I. General Provisions Article 1 The Bank shall be incorporated under the Company Act and the Banking Act of the Republic of China, and shall be named as EnTie Commercial Bank Co., Ltd., (short for EnTie Bank.) Article 2 The Bank shall have its head office in Taipei, the Republic of China, and may set up local and overseas branches at suitable locations depending on business needs upon approval of the Board of Directors and the competent authority. Article 3 Public announcement of the Bank shall be made in accordance with Article 28 of the Company Act. Chapter II. Scope of Businesses Article 4 The Bank s scope of business includes: H101021 Commercial Banking Business (limited to business items approved by the competent authority), H602011 Personal Insurance Broker, and H602021 Property and Liability Insurance Broker. The Bank is also authorized to conduct other banking related businesses that are approved by the Competent Authority. Chapter III. Shares Article 5 This Bank s authorized capital shall be NT$ 47.6 billion, dividing to 4.76 billion shares, each The Chinese version (of the document) should have priority over the English version should there be any inconsistency or contradiction in between. -1-
with a par value of NT$10, which can be issued in tranches. Preferred stocks can be issued. The shares held by same person or same connected person shall comply with Article 25 of the Banking Act. Article 5-1 This Bank may issue 621,890,000 shares of Series 1 Convertible Non-Perpetual Preferred Shares, each with a par value of NT$10 (the Series 1 CPPS ) in one issuance or in tranches. The major terms and conditions are as follows: 1. If the Bank has any profit after every year, losses of the previous years shall first be covered after the payment of taxes and adjustment due to accounting rule changes. If there is any remaining amount, the Bank shall set aside or add reversal of legal and special reserves in accordance with Article 40 of the AOI, and then distribute dividend to the holders of Series 1 CPPS as described herein. 2. Holders of Series 1 CPPS shall be entitled to receive annual cash dividend of a fixed rate of 6.75% ( Annual Dividends ), payable in cash. After the annual financial statements have been ratified in the annual general meeting of shareholders, the Board of Director shall set a record date for distribute Annual Dividends for the preceding fiscal year. Prorata dividend to Series 1 CPPS will be paid in the year of issuance of the Series 1 CPPS based on actual holding period of that year from the date of issuance which shall be the record date for the capital increase. Pro-rata dividend will also be paid to Series 1 CPPS in the year of redemption of the Series 1 CPPS based on actual holding period of that year. 3. If there are no earnings or the earnings are not sufficient for the full payment of the Annual Dividends of Series 1 CPPS in any fiscal year, the insufficient amount will not be accumulated to the years thereafter. 4. Holders of Series 1 CPPS shall be entitled, in addition to the Annual Dividends distributable under Item 2 of this Article, if so resolved by the Board of Directors, to participate in the dividends declared on Common Share at a ratio of every 2 shares of Series 1 CPPS for each Common Share dividend; provided that such participation right shall be available only if, after the distributions of cash dividends for Common Share at an amount equal to the cash dividends distributed for Series 1 CPPS per share, there is any remaining balance. 5. The Series 1 CPPS will have a liquidation preference per share over the Common Share - 2 -
up to the Purchase Price of Series 1 CPPS. 6. Voting Rights: Holder of Series 1 CPPS shall be entitled to vote and the right to elect and being elected together with the Common Shares on an as-converted basis. Holder of Series 1 CPPS shall be entitled to vote in preferred shareholders meeting. 7. Holder of Series 1 CPPS will have same preemptive rights as Common Shares holders with respect to subscription of new share issuance 8. Except for the closed period in which the share registrar is closed or the conversion of any convertible securities is suspended according to laws and regulations, at the option of the holders, the Series 1 CPPS are convertible into Common Shares on a one-to-one basis, at any time after one month of the date of the issuance and the Common Shares issued upon such conversion shall have the same rights and obligations as other outstanding Common Shares. In addition, the Series 1 CPPS shareholders have the following rights and obligations: (A) As of November 7, 2017, the remaining shares of the Series 1 CPPS after the conversion shall not exceed 222,586,035 shares. For the Series 1 CPPS exceeding 222,586,035 shares, each Series 1 CPPS shareholder of such shares will be deemed to agree to the conversion of the Series 1 CPPS held by them to common shares pro rata automatically according to the applicable conversion shares as of the conversion date of such year. The Bank may proceed with the conversion in due course and the Series 1 CPPS shareholders may not object. (B) As of November 7, 2018, the remaining shares of the Series 1 CPPS after the conversion shall not exceed 139,116,272 shares. For the Series 1 CPPS exceeding 139,116,272 shares, each Series 1 CPPS shareholder of such shares will be deemed to agree to the conversion of the Series 1 CPPS held by them to common shares pro rata automatically according to the applicable conversion shares as of the conversion date of such year. The Bank may proceed with the conversion in due course and the Series 1 CPPS shareholders may not object. (C) As of November 7, 2019, the conversion of all of the Series 1 CPPS shall be completed. For the shares which have not been converted, each Series 1 CPPS shareholder of such shares will be deemed to agree to the conversion of the Series 1 CPPS to common shares as of the conversion date of such year. The Bank may proceed with the conversion in due course and the Series 1 CPPS shareholders may not object. - 3 -
(D) For the shares which have not been converted to common shares pursuant to Subparagraph 8(2) C of this article, the Bank may redeem all of or part of the unconverted Series 1 CPPS at the actual issued price subject to the applicable law and the approval of the competent authorities. Pro-rata preferred dividend will also be paid in the year when conversion right is exercised based on holding period of that year; provided, however, holders of Series 1 CPPS who convert their Series 1 CPPS into Common Shares before the record date for dividends distribution of that year shall have no rights to participate in the Annual Dividends for Series 1 CPPS in the year of conversion and any year thereafter. The chairman of the Bank is authorized by the Bank to proceed and determine on the conversion date, the execution methods and any other matter not covered herein of the Series 1 CPPS pursuant to the applicable law, the Articles of Corporation of the Bank and the regulations of the competent authorities. 9. The rate of the dividends per annum shall be converted to 5.75% from the second date upon the 10th anniversary from the issue date. Article 5-2 Article 6 All the share certificates of the Bank shall bear the name of the shareholder who owns such shares and shall be issued after they are signed or sealed by the Chairman of the Board and at least two Managing Directors (Directors), affixed with the seal of the Bank, and duly certified per the Regulations Governing Certification of Corporate Stock and Bond Issued by Public Companies. After public issue of the shares, the Bank may be exempted from printing share certificates. Article 7 Shareholders of the Bank shall handle stock-related matters with the Bank or Bank s stock agent in accordance with the Guidelines Governing the Processing of Stock Affairs by Public Company and related laws and regulations. Article 8-4 -
Article 9 Article 10 Article 11 Article 12 Registration for transfer of shares shall be suspended 60 days immediately before the date of each General Shareholders Meeting, or 30 days immediately before each Special Shareholders Meeting, or within 5 days before the record date for distributing dividends, bonuses or other benefits. Article 13 Chapter IV. Shareholders Meeting Article 14 Shareholders Meetings of the Bank are of two types: 1. General Shareholders Meetings: shall be convened by the Board of Directors within six months after the end of each fiscal year. 2. Special Shareholders Meetings: may be convened in accordance with law when necessary. Article 15 The Board of Directors shall prepare the following documents and submit the same to the Audit Committee for audit 15 days prior to the date for the General Shareholders Meeting: 1. Business report; 2. Financial Statements; - 5 -
3. Proposal for distribution of profits or covering of losses Article 16 For any shareholder who is unable to attend a Shareholders Meeting in person, it may be handled in accordance with Article 177 of the Company Act. The attendance of shareholders in a Shareholders Meeting and the relevant Shareholders Meeting affairs shall be processed pursuant to the Regulations Governing Use of Proxies by Public Companies for Attending Shareholders Meetings promulgated by the competent authority and related laws and regulations such as the Company Act. Article 17 Where the Shareholders Meeting is convened by the Board of Directors, the chairman shall be elected per Paragraph 3 of Article 208 of the Company Act. Where the Shareholders Meeting is convened by a person other than the Board of Directors who has such convening power, the convening person shall act as the chairman; where there are two or more convening persons, the convening persons shall elect a chairman from among themselves. Article 18 Resolutions of the shareholders meetings shall be processed in accordance with the Company Act and related laws and regulations. Article 19 The functions and powers of the Shareholders Meetings are as follows: 1. to amend the Articles of Incorporation; 2. to elect Directors 3. to audit documents prepared by the Board of Directors and the Audit Committee 4. to resolve on distribution of profits or covering of losses 5. to resolve on increase or decrease of capital 6. other important matters and resolutions on matters prescribed under the Company Act Article 20-6 -
Article 21 Except otherwise provided in the laws and AOI, the shareholders of the Bank shall be entitled to one vote for each share, and any fractional vote shall not be counted. Article 22 Minutes shall be prepared for all resolutions adopted at a Shareholders Meeting, including the date, place, name of chairman, method for resolution, summary of the resolution process and the result thereof, and shall be duly signed or sealed by the chairman and forwarded to each shareholder within twenty (20) days after the meeting. The making and distribution of the minutes for Shareholders Meetings as required in the preceding Paragraph may be executed in electronic format or by a public notice. The minutes of the preceding paragraph shall be kept together with attendance book (or attendance cards) signed by the shareholders present at the meeting and the proxies at the Bank in accordance with laws and regulations. Chapter V. Board of Directors Article 23 The Bank shall have 9 to 15 Directors to constitute the Board of Directors. The Directors shall serve for a term of three years and may continue to serve if re-elected. Election of Directors shall adopt the candidate nomination system and Directors shall be elected from among the list of candidates for Directors at the shareholders meeting. The Bank shall have at least three Independent Directors, which is not less than one-fifth of the total number of Directors. The professional qualifications, restrictions on shareholdings and concurrent positions, method of nomination and election, and other matters for compliance with respect to Independent Directors shall follow related regulations prescribed by the competent authority. The Bank shall establish the Audit Committee composing of the entire number of independent directors and not fewer than three persons in number, one of whom shall be the convener and at least one of whom shall have accounting or financial expertise. Exercise of powers or conducts of the audit committee shall follow related regulations prescribed by the competent authority. - 7 -
Article 23-1 Article 24 The Board of Directors could have three to five managing directors, who will be elected among directors. One chairman and vice chairman should be elected among managing directors (directors). The chairman will represent the Company externally and the chairman s authority is limited the provisions of laws and regulations and the Articles of Incorporations of the company, and the resolutions adopted by the shareholders' meetings and the meetings of the board of directors. The managing directors shall include no less than one independent director member, and no less than one-fifth of the managing director seats shall be held by independent directors. Article 25 The remuneration of the chairman, the vice chairman, managing directors and directors should accord with their respective participation and contribution to the corporate operation, in addition to be compared with the industrial standard, and then be approved by the meeting of Board of Directors after the Board acquires authorization. Different but reasonable remuneration from that of other directors may be set forth for the independent directors. Article 26 The functions and powers of the Board of Directors are as follows: 1. to prescribe important rules and organizational bylaws; 2. to approve business plans; 3. to propose increase or decrease of capital; 4. to make decision on establishment, close or change local and overseas branches; 5. to review important contracts; 6. to approve budget and closing of books; 7. to make decision on purchase and disposal of material real properties; provided that resolution of the Shareholders Meeting is required in case of assignment of all or the major portion of business or assets to another party or assumption of all or the major portion of business or assets from another party which has material impact on the Bank; - 8 -
8. to propose distribution of profits or covering of losses; 9. to approve important business decisions; 10. to appoint and discharge the General Manager, Vice General Manager, chief auditor, Assistant General Manger, chiefs and deputy chiefs of departments, and branch (regional center) managers; 11. to establish special committees with different kinds of functions and to approve the rules for committees exercise of authority; 12. other functions and powers in accordance with laws and regulations or as authorized by the shareholders meeting. Article 26-1 The Board of Directors could purchase the liability insurance for directors and key staff with respect to their liabilities resulting from exercising their duties during their terms of occupancy. Article 27 The Board of Directors calls one meeting at least quarterly through the convening of the chairman. The chairman can call the meeting at any time upon contingency or the request from more than 50% of directors. In addition to the written notification, the Bank s Board meeting could be convened by the Chairman via mail, fax notices or notices in electronic transmission. If the chairman fails to convene the meeting of directors or the meeting of managing directors, the vice chairman shall act on his behalf. But if the vice chairman fails to convene or exercise his power and authority for any cause within 7 days started at the required day, then the chairman should appoint one managing director (director) as the proxy to convene in advance. Should no proxy be appointed, the convener can be chosen among managing directors (directors). When the board meetings are adjourned, the Managing Directors will exercise their rights on behalf of the board, and meetings can be convened by the Chairman. However any items that concern greater interests of the Company, the board has the final decision. Article 28 At both the meeting of directors and the meeting of managing directors, the chairman of the - 9 -
Company shall act as the chairman of the meeting. In the event that the chairman is on leave or fails to exercise his power and authority for any cause whatsoever, the vice chairman shall act on his behalf. But if the vice chairman is also on leave or fails to exercise his power and authority for any cause, one of managing directors (directors) should be appointed to act on behalf of the chairman. If there is no appointment, a director should be elected among all the directors and act on behalf of the chairman. Article 29 Unless otherwise provided for in the Company Act, the Board meeting shall be attended by a majority of Directors, and resolutions of the Board of Directors shall be adopted by a majority vote of the present Directors. The meeting of Managing Directors shall be attended by a majority of Managing Directors, and resolutions of the meeting of Managing Directors shall be adopted by a majority vote of the present Managing Directors. Minutes shall be prepared for the Board Meeting or meeting of Managing Directors, duly signed or sealed by the chairman, and shall be forwarded to each Director or Executive Director within twenty (20) days after the meeting. Where a Board Meeting is held by videoconference, a Director attending the videoconference shall be deemed as present in person. The Minutes shall include the date, place, name of chairman, method for resolution, summary of the resolution process and the result thereof, and shall be kept together with attendance book (or attendance cards) signed by the present Directors or Managing Directors and the proxies at the Bank. The making and distribution of the Minutes may be executed in electronic format. Article 30 A Director may designate another Director to act as his proxy at that meeting by a proxy form. A Director may act as proxy for only one absent Director. Article 31 Chapter VI. () Article 32-10 -
Article 33 Article 34 Chapter VII. Managers Article 35 The Bank shall have one President to take full charge of business matters of the Bank in accordance with resolutions of the Board of Directors. Furthermore, the Bank should have several Senior Vice Presidents and Vice Presidents to assist processing business matters of the Bank. Appointment and discharge of the President is proposed by the Chairman to the Board of Directors to be approved by a majority of the Directors. Appointment and discharge of the Senior Vice Presidents, Vice Presidents, chiefs of departments, and branch (regional banking center) managers shall be proposed by the Chairman to the Board of Directors to be approved by a majority of the Directors. Appointment of managers shall comply with the qualification requirements set by the competent authority. The Board of Directors is authorized to determine the number of the aforesaid Senior Vice Presidents and Vice Presidents depending on actual need. Article 36 Where the President is for a reason not able to execute business, the Chairman of the Board of Directors shall appoint a Senior Vice President to act as the deputy. Article 37 The Bank due to business necessity may engage consultants, whose appointment and discharge shall be proposed by the Chairman to the Board of Directors for approval. Chapter VIII. Accounting - 11 -
Article 38 The fiscal year of the Bank begins January 1st and ends on December 31st. Upon close of each fiscal year, the board of directors shall prepare the following books and statements and submit the same to the Shareholders Meeting for recognition in accordance with the legal procedure: 1. Business report; 2. Financial Statements; 3. Plan for distribution of profits or covering of losses. The aforesaid closing books and statements shall be filed with the competent authority per the Company Act, the Securities and Exchange Law, the Banking Act of the Republic of China and other related laws and regulations and be publicly announced as required. Article 39 When there is any profit (i.e. the Before-Tax Income prior to the deductions of employees and board members remunerations) at the end of each year, the Bank shall allocate not less than one percent of the said profit as employees remuneration, and no more than one percent as remunerations of directors. However, the Bank s accumulated losses should have been covered beforehand. Article 40 If the Bank has any profit after every year, after the payment of taxes and adjustment due to accounting rule changes, losses of the previous years shall be covered first. If there is any remaining amount, the Bank shall set aside legal reserve based on the Banking Act, and then set aside special reserve or add reversal of special reserve based on relevant regulations or requests by the competent authority or business needs before the distribution of the annual cash dividend of the fixed rate to the holders of Series 1 specified in Article 5-1 of the AOI. If there is any remaining amount, the Board may add it up with the undistributed accumulated profit in the beginning of a fiscal year, and take into consideration the business environmental changes, appropriate capital adequacy ratio, and capital needs for long-term financial planning, and then come up with a profit-allocation plan, which shall be sent to the Shareholders Meeting for approval. As to the allocation of shareholders bonus, pure stock, pure cash or a mix of stock and cash may be adopted, and decided by the Shareholders Meeting. However if Tier 1 capital of the Bank doesn t meet regulatory requirement, stock dividend takes priority. For constraints - 12 -
related to cash dividend, Article 50 of the Banking Act of the Republic of China shall be followed. Article 41 Chapter IX. Supplemental Provisions Article 42 If the financial institution and the Bank s responsible person have been harmed by gossip or ruin its credit, the Bank s responsible person should immediately propose to Adjustment Unit in relation to Article 313 and 314 of the Criminal Law, to make the problem replied and solved earlier. Article 43 Matters not provided for in these Articles of Incorporation shall be dealt with in accordance with the Banking Act, Company Act, Securities and Exchange Act and other pertinent laws. Article 44 The Articles of Incorporations was developed after approval by the entire founders on September 26, 1991. The 1 st amendment was made at the inaugural meeting on December 28, 1992. The 2 nd amendment was made at the 2nd General Shareholders Meeting on May 16, 1994. The 3 rd amendment was made at the 3rd General Shareholders Meeting on April 20, 1995. The 4 th amendment was made at the 4th General Shareholders Meeting on April 12, 1996. The 5 th amendment was made at the 5th General Shareholders Meeting on May 7, 1997. The 6 th amendment was made at the 6th General Shareholders Meeting on April 16, 1998. The 7 th amendment was made at the 7th General Shareholders Meeting on May 18, 1999. The 8 th amendment was made at the 8th General Shareholders Meeting on May 18, 2000. The 9 th amendment was made at the 9th General Shareholders Meeting on May 8, 2001. The 10 th amendment was made at the 10th General Shareholders Meeting on June 17, 2002. The 11 th amendment was made at the Extraordinary Shareholders Meeting on November 21, 2003. The 12 th amendment was made at the 12th General Shareholders Meeting on June 9, 2006. - 13 -
The 13 th amendment was made at the Extraordinary Shareholders Meeting on March 9, 2007. The 14 th amendment was made at the General Shareholders Meeting on June 5, 2007. The 15 th amendment was made at the Extraordinary Shareholders Meeting on August 6, 2007. The 16 th amendment was made at the Extraordinary Shareholders Meeting on December 27, 2007. The 17 th amendment was made at the Extraordinary Shareholders Meeting on February 20, 2008. The 18 th amendment was made at the General Shareholders Meeting on June 19, 2009. The 19 th amendment was made at the General Shareholders Meeting on May 27, 2010. The 20 th amendment was made at the General Shareholders Meeting on June 10, 2011. The 21 st amendment was made at the General Shareholders Meeting on June 22, 2012. The 22 nd amendment was made at the General Shareholders Meeting on March 29, 2013. The 23 rd amendment was made at the General Shareholders Meeting on June 12, 2015. The 24 th amendment was made at the General Meeting of Shareholders on June 8, 2016. The 25 th amendment was made at the General Meeting of Shareholders on June 16, 2017. - 14 -