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Article 5
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Except as provided in Article 6, a solicitor of proxies shall be a shareholder holding 50,000 or more of the issued shares of the company; provided that if election of directors or supervisors is proposed in the shareholders meeting, the solicitor shall hold the shares issued by such company, as evidenced by the shareholders list or the certificate deposited in the securities centralized depository as of the date on which transfer of shares is suspended for the shareholders meeting, under one of the following conditions:
1.Where a financial holding company, a bank regulated under the Banking Act, or an insurance company regulated under the Insurance Act convenes a shareholders meeting, the solicitor shall have continuously held for a period of at least one year 800,000 or more of the issued shares of the company, or 0.2% or more of the total number of issued shares of the company; or
2. Where a company other than those specified in the preceding subparagraph convenes a shareholders meeting, the solicitor shall have continuously held for a period of at least 6 months 800,000 or more of the issued shares of the company, or 0.2% or more of the total number of issued shares of the company.
A shareholder qualified under the preceding paragraph or a trust enterprise or agent for stock affairs under Article 6, or a responsible person thereof, to which any of the following circumstances applies shall not serve as a solicitor:
1. Has previously been convicted by a conclusive judgment of a crime under the Organized Crime Prevention Act, where less than five years has elapsed since completion of the term of sentence.
2. Has been convicted by a conclusive judgment of violating, in connection with solicitation of proxies, provisions of the Criminal Code addressing forgery of documents, where less than three years has elapsed since completion of the term of sentence.
3. Has previously been sentenced to imprisonment for six months or more for fraud, breach of trust, or misappropriation, where less than three years has elapsed since completion of the term of imprisonment.
4. Has previously been sentenced to imprisonment for six months or more for violating the Securities and Exchange Act, Futures Trading Act, Banking Act, Trust Enterprise Act, Financial Holding Company Act, or other financial administration act, where less than three years has elapsed since completion of the term of imprisonment.
5. Has previously been found by a conclusive judgment to have solicited proxies in violation of these Regulations and the represented votes were not counted, where less than two years have passed since such conclusive judgment.
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Article 6
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A shareholder who for one year or more has continuously held issued shares of a company in conformance with one of the following conditions may mandate a trust enterprise or agent for stock affairs to act as the solicitor, and the number of shares to be represented by it shall not be subject to the restriction under Article 20:
1. Where a financial holding company, a bank regulated under the Banking Act, or an insurance company regulated under the Insurance Act convenes a shareholders meeting, the shareholder shall hold 10% or more of the total issued shares of the company, provided that when election of directors or supervisors is proposed on the shareholders meeting agenda, the shareholder shall hold 12% or more of the total issued shares of the company;
2. Where a company other than those specified in the preceding subparagraph convenes a shareholders meeting, the shareholder shall hold issued shares of the company in conformance with one of the following conditions:
(1) Has held 10 percent or more of the total number of issued shares of the company.
2. Has held 8 percent or more of the total number of issued shares of the company and, when election of directors or supervisors is on the shareholders meeting agenda, one of the candidates it intends to support meets the qualifications for independent director.
3. Where the consolidated number of shares of the shareholders sharing the same opinion on a proposal in a shareholders meeting meets the number of shares required to be held under the preceding two subparagraphs, such shareholders may jointly make a mandate.
When assigning election votes under proxies obtained through solicitation by a trust enterprise or agent for stock affairs mandated by a shareholder to act as a solicitor in accordance with the preceding paragraph, the number of votes assigned to any independent director candidate the shareholder intends to support shall be greater than those assigned to any non-independent director candidate.
A trust enterprise or agent for stock affairs, under any of the following circumstances, when election of directors or supervisors is on the shareholders meeting agenda, shall not act as a solicitor for a shareholder under paragraph 1:
1. where it is itself an agent for stock affairs of the public company calling the shareholders meeting.
2. where it is itself a subsidiary of the financial holding company calling the shareholders meeting.
“Subsidiary” in subparagraph 2 of the preceding paragraph means a subsidiary as defined in Article 4 of the Financial Holding Company Act.
A shareholder under paragraph 1 or the responsible person thereof to which any of the circumstances specified in Paragraph 2 of the preceding article applies shall not mandate a trust enterprise or agent for stock affairs to act as the solicitor.
After a shareholder mandates a trust enterprise or agent for stock affairs to act as the solicitor, no further solicitation shall be made by such shareholder.
Where there is a proposal for election of directors or supervisors in a shareholders meeting, at least one of the shareholders mandating solicitation referred to in Paragraph 1 above shall be the candidate for the directorship or supervisorship; provided this restriction shall not apply if the candidate supported meets the qualifications for independent director.
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