Articles of Incorporation

In the event of any dispute or misunderstanding as to the interpretation of the language or terms of these Articles, the Chinese version shall prevail.

Chapter One General Provisions

Article 1:

The Company is incorporated according to The Company Act, and has been named PEGAVISION CORPORATION.

Article 2:

Business activities of the Company are as follows:

  • CF01011   Medical Materials and Equipment Manufacturing
  • F108031   Wholesale of Drugs, Medical Goods
  • F208031   Retail Sale of Medical Equipments
  • CE01030   Photographic and Optical Equipment Manufacturing
  • CE01010   Precision Instruments Manufacturing
  • F113030   Wholesale of Precision Instruments
  • F213040   Retail Sale of Precision Instruments
  • CC01040   Lighting Facilities Manufacturing.
  • F113020   Wholesale of Household Appliance
  • F213010   Retail Sale of Household Appliance
  • F401010   International Trade
  • IG01010    Biotechnology Services
  • C802041   Drugs and Medicines Manufacturing
  • F108021   Wholesale of Drugs and Medicines
  • F208021   Retail Sale of Drugs and Medicines
  • JZ99060   Spectacles Shops
  • F110020   Wholesale of Spectacles
  • F210020   Retail Sale of Spectacles
  • F206020   Retail Sale of Articles for Daily Use
  • F106020   Wholesale of Articles for Daily Use
  • F208040   Retail Sale of Cosmetics
  • F108040   Wholesale of Cosmetics
  • F399990   Retail sale of Others
  • F203010   Retail sale of Food and Grocery
  • F102170   Wholesale of Food and Grocery
  • I401010    General Advertising Services
  • F399010   Convenience Stores
  • F301010   Department Stores
  • F301020   Supermarkets
  • I301010    Software Design Services
  • ZZ99999   All business items that are not prohibited or restricted by law, except those that are subject to special approval

Article 3:

The Company is headquartered in Taoyuan City, and may establish domestic or foreign branches subject to board of directors' approval.

Article 4:

Public announcements of the Company shall be duly made in accordance with Article 28 of The Company Act.

Chapter Two Share Capital

Article 5:

The Company has an authorized capital of Eight Hundred Million New Taiwan Dollars, at a par value of NTD 10 per share, which can be offered in multiple issues. Unissued shares may be offered over multiple issues, subject to board of directors' resolution. The Company shall reserve four million shares of its authorized capital to meet exercise of warrants, preferred shares with warrant and corporate bonds with warrant, which can be offered over multiple issues with board of directors' resolution.

Article 5-1:

Any transfer of shares to employees below the average buyback price or issuance of employee warrants with exercise price below the level stipulated in "Regulations Governing the Offering and Issuance of Securities by Securities Issuers" shall be resolved in a shareholder meeting with the presence of shareholders representing more than half of outstanding shares, and voted in favor by more than two-thirds of votes present in the meeting.

Article 5-2:

The Company may use a variety of compensation instruments including: treasury stocks purchased according to The Company Act and Securities and Exchange Act, employee warrants, new shares and issuance of restricted shares, which can be transferred to, granted to or subscribed by employees of controlling or controlled entities who satisfy certain criteria. The board of directors is authorized to set these criteria at its discretion.

Article 6:

The sum of investments in other business entities is not subject to the restrictions imposed under Article 13 of The Company Act (i.e. 40% of paid-up capital).

Article 7:

The Company issues owner-registered shares only. Every share certificate shall be issued with the signatures or seals of at least 3 directors. Shares of the Company may be issued in non-tangible form, subject to registration with the centralized securities depository.

Article 8:

No changes can be made to the shareholders registry within the 60 days prior to annual general meeting, or within 30 days prior to extraordinary shareholder meeting, or within 5 days before the baseline date for dividends or other gains distributed by the Company. The above periods shall date back from the date of meeting or from the baseline date.

Article 9:

Unless otherwise specified by law or securities regulation, all share administration-related affairs and matters concerning exercising of shareholders' rights shall proceed according to "Regulations Governing the Administration of Shareholder Services of Public Companies."

Article 10:

Shareholders of the Company are required to complete a seal specimen card and provide a signature or seal pattern at the time of account opening. Seal specimen cards shall be retained by the Company's shareholder service department or stock transfer agent for future reference, and the same requirement applies to subsequent changes.

Chapter Three Shareholder Meetings

Article 11

The Company holds two types of shareholder meeting: annual general meeting and extraordinary shareholder meeting. Annual general meetings are convened at least once a year at a time no later than six months after the end of a financial year, whereas extraordinary shareholder meetings can be convened at any time deemed necessary.
Convention of annual general meeting shall be notified 30 days in advance, whereas extraordinary shareholder meetings are to be notified 15 days in advance. Details such as the meeting date, venue and proposals shall be communicated to each shareholder in writing or using electronic form; however, shareholders with less than 1,000 shares can be communicated by way of public announcement instead.

Article 12

Shareholder meetings that are convened by the board of directors are to be chaired by the Chairman. If the Chairman is on leave or unable to perform duty for any reason, a person of acting duty shall be appointed according to Article 208 of The Company Act. For shareholder meetings that are convened by any authorized party other than the board of directors, the convener shall chair the meeting. If two or more parties are equally eligible to serve as convener, one shall be elected among themselves to serve as convener.

Article 13

If a shareholder is unable to attend shareholder meeting in person, a proxy can be appointed by presenting a properly signed/sealed proxy form printed in the Company's prescribed format, while specifying the scope of delegated authority.

Article 14

Shareholders are entitled to one voting right for every share held, except for shares that are subject to voting restrictions outlined in The Company Act.
Shareholders shall be given the option to exercise voting rights in writing or electronically during shareholder meetings, as the laws may require.
Shareholders who opt to exercise voting rights using electronic method mentioned in the preceding Paragraph are considered to have participated shareholder meeting in person, but waived their rights to participate in any special motion or any amendment to original motions that may arise during the shareholder meeting.

Article 15

Except otherwise regulated by The Company Act, a shareholder meeting resolution is passed when more than 50% of all outstanding shares are represented in the meeting, and that the motion is voted in favor by more than 50% of all voting rights represented at the meeting.

Article 16

If the Company is solely owned by a single corporate shareholder, the board of directors shall be authorized to exercise shareholders' authorities on behalf; in which case, rules pertaining to shareholder meeting stipulated in the Articles of Incorporation are no longer applicable.

Chapter Four Directors, Audit Committee and Managers

Article 17

The Company has 5 to 9 directors, who shall be elected by shareholders using the nomination system stipulated in The Company Act from capable candidates to serve a term of 3 years. Term of service can be extended if re-elected. The Company may purchase liability insurance policies to insure itself against liabilities of its directors over the course of service.
The director seats mentioned above may include independent directors, which shall be no fewer than 3 and account for no less than one-fifth of the board. Restrictions concerning independent directors' eligibility, shareholding, concurrent employment, nomination and other compliance issues are governed by relevant laws of the securities authority.

Article 17-1

The Company shall comply with Article 14-4 of the Securities and Exchange Act by assembling an Audit Committee that consists entirely of independent directors.

Article 17-2

Functional committees of various purposes may be assembled under the board of directors. Each functional committee shall establish a separate foundation principle, and implement once approved by the board of directors.

Article 18

The board of directors shall consist entirely of directors, whose authority includes the following matters:

  • Proposal of business plans.
  • Proposal of earnings appropriation or loss reimbursement plans.
  • Proposal of capital-raising and capital reduction plans.
  • Making of key policies and organizational rules within the Company.
  • Appointment and dismissal of the Company's managers.
  • Branch establishment and removal.
  • Budgeting and year-end account closure.
  • Any other authorities vested under The Company Act or shareholders' resolutions.

Article 19

The board of directors shall appoint one Chairman during a board meeting where more than two-thirds of directors are present with the support of more than half of all attending directors. A Vice Chairman may be appointed as needed. The Chairman serves as the Company's representative to the outside world.

Article 20

Unless otherwise specified in The Company Act, board of directors meetings are to be convened by the Chairman. Unless otherwise regulated by The Company Act, board resolutions are passed only if more than half of total board members are present in a meeting, and with more than half of attending directors voting in favor.

Article 21

The Chairman serves as the chairperson for board meetings. If the Chairman is unable to perform duties due to leave of absence or any reason, a delegate shall be appointed in accordance with Article 208 of The Company Act. Directors are expected to attend board meetings in person; directors who are unable to attend in person may appoint another director as proxy to attend on behalf. For board meetings that proceed by way of video conferencing, all directors who participate in the video conference are considered to have attended the meeting in person. Directors seeking proxy attendance from another director are required to issue a separate proxy letter for every board meeting, and specify the extent of delegated authority for each motion. Each proxy attendant may only represent the presence of one absent director.

Article 22

Convention of board meeting can be notified to each director through writing, fax or e-mail according to Article 204 of The Company Act. Meetings may also be convened at any time in the case of emergency.

Article 23

Matters concerning Audit Committee, including composition, duties and authority, are governed by Securities and Exchange Act and related laws.

Article 24

The Company may compensate its directors for the services rendered based on directors’ involvements and contributions to the Company’s operations, in reference to local and foreign peer levels. Directors who concurrently assume duties within the Company are entitled to receive remuneration according to Article 27 of the Articles of Incorporation, and can be paid monthly salaries at managers' standard.
The Company may create managerial positions. Appointment, dismissal and remuneration of whom shall comply with Article 29 of The Company Act.

Chapter Five Accounting

Article 25

The Company's accounting period starts from January 1 and ends December 31 each year. Account closure is performed at the end of each year.

Article 26

At the end of each financial year, the Company shall prepare the following reports according to Article 228 of The Company Act and present them for review by the Audit Committee and resolution by the board of directors before seeking acknowledgment in an annual general meeting.

  • Business report.
  • Financial statements.
  • Earnings appropriation or loss reimbursement proposals.

Article 27

When it is determined that the company has profit for a fiscal year, the company shall appropriate the employee’s and directors remuneration according to following sequence; however, in the case that the company still has retained losses, profits shall first be reserved to offset cumulative losses and then appropriate according to following sequence:

  • Employee remuneration - No less than 10%, which can be paid in cash or in shares to employees of controlling or controlled entities who satisfy certain criteria. The board of directors is authorized to set this criteria at its discretion.
  • Director remuneration - No more than 1%.

Article 27-1

When it is determined that the company has earnings for a fiscal year, the earnings shall firstly to be appropriated to profit-seeking business income tax and reimbursement of previous losses as required by law, followed by a 10% provision for legal reserve. However, no further provision of legal reserve is required if the Company has accumulated legal reserve to an amount equal to share capital. Next, provisions for special reserve are to be made according to laws or instructions of the authority. The remainder plus undistributed earnings accumulated in previous years can then be distributed or retained, for which the board of directors is required to propose an earnings appropriation plan and seek resolution in a shareholder meeting.
Cash distribution of the above surplus to shareholders shall be resolved in a board meeting with more than two-thirds of the board present, voted in favor by more than half of attending directors, and reported in the upcoming shareholder meeting.

Article 28

The distribution of the dividends of the company will coordinate with the surplus of that year based on the principal of stabilization. The Company operates in a rapidly changing industry and has therefore adopted a balanced dividend policy to cater for future capital requirements and long-term operations. As a result, the Company shall pay out no less than 10% of current year's distributable earnings as dividends under Article 27-1, with cash portion accounting for no less than 10% of total dividends.

Article 29

Dividends are distributed only to the shareholders listed on the shareholders registry five days before the cash/stock dividend baseline date.

Chapter Six Additional Rules

Article 30

The Company’s organizational rules and administrative principles shall be established separately by the board of directors.

Article 31

The Company may offer guarantees and endorsements to external parties as needed to facilitate business activities.

Article 32

Any matters that are not addressed in the Articles of Incorporation shall be governed by The Company Act and the relevant regulations.

Article 33

This Articles of Incorporation was approved unanimously by all founders on August 12, 2009. The 1st amendment was made on April 29, 2014.

The 2nd amendment was made on June 16, 2015.

The 3rd amendment was made on June 14, 2016.

The 4th amendment was made on June 14, 2018.

The 5th amendment was made on June 14, 2019.

PEGAVISION Corporation
Chairman: T.H. Tung

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