Financial Holding Company Act Article 26

After obtaining the competent authority’s approval, a financial institution may be converted into a subsidiary of a financial holding company by share exchange.The term "share exchange" referred to in the preceding paragraph shall mean the transfer, upon the resolution of a shareholders' meeting, of all outstanding shares of the financial institution to a financial holding company to be established, as the financial institution shareholders’ payment for subscribing the newly issued shares of the financial holding company or establishing the financial holding company as a promotor. The following shall apply:1.The adoption of the resolution at a shareholders' meeting shall require the concurrence of shareholders representing more than one half of all shares held by such financial institution's shareholders present at a meeting attended by shareholders representing at least two-thirds of all outstanding shares. The above shall also apply if the financial holding company to be established is an existing company;2.Article 317, the latter part of Paragraph 1 and Paragraph 2 of the Company Act shall apply, mutatis mutandis, to the shareholder appraisal right; and3.Article 156, Paragraph 1, Paragraph 2 and Paragraph 6, Article 163, Paragraph 2, Article 197, Paragraph 1, Article 227, Article 267, Paragraph 1 through 3 and Article 272 of the Company Act and Article 22-1, Paragraph 1, Article 22-2 and Article 26 of the Securities Exchange Law shall not apply.If the relevant other company is a newly established company, the shareholders' meeting of the financial institution shall be deemed the promoters' meeting of the financial holding company to be established. Directors and supervisors of such financial holding company may also be elected at such shareholders' meeting and articles 128 through 139, Articles 141 through 155 and Article 163, Paragraph 2, of the Company Act shall not apply.The preceding paragraph shall also apply to a shareholders' meeting which has been convened by a financial institution prior to the date of enforcement of this Act.If the shareholders' meeting is a shareholders meeting of a public company and the shareholders attending such shareholders' meeting represent less than the minimum number of shares prescribed in Paragraph 2, Subparagraph 1 of this Article, the resolution may be adopted by the concurrence of shareholders representing at least two-thirds of all shares present at the meeting attended by shareholders representing more than one half of the total outstanding shares. However, where stricter criteria are specified in the articles of incorporation of such company, the stricter criteria shall apply.If, after a financial holding company has been established with the competent authority’s approval, the aggregate number of shares held by its directors or supervisor(s) at the time of election is less than the percentage required to be held by the directors or supervisors as prescribed by the Securities and Futures Commission in accordance with Article 26, Paragraph 2, of the Securities and Exchange Act, the directors or supervisor(s) shall collectively make up the deficiency within one (1) month after taking office.If a financial institution does not re-sell the shares it buys back in accordance with Paragraph 2, Subparagraph 2 of this Article, within six (6) months after the date of buy-back, it may, with the concurrence of more than one half of directors present at a meeting attended by at least two-thirds of all directors, amend its articles of incorporation and cancel the registration of the [unsold] shares and article 277 of the Company Act shall not apply.