DAVICOM — AGM Information 2020

Jun 16, 2020

DAVICOM Semiconductor, Inc.

Year 2020

Annual Shareholders’ Meeting Minutes

Time: 9:00 a.m., Jun 10, 2020 (Wednesday)

Venue: Auditorium, DAVICOM Semiconductor, Inc.

(3F., No.6, Li-Hsin Rd.6, Science Park, Hsinchu, Taiwan)

The number of shares of attendance:

Attending shareholders and proxy represented 49,876,959shares, accounting

for 60.94%of the Company’s total outstanding shares.

Chairman: Mr. Ting Hao

Recorder: Ms. Chu-Mei, Lin

Others present:

Independent Director: Niang-Shou Wei,

Director: Wen Chen Lin, Cheng- Feng Chiu.

PWC CPA: Se-Kai Lin

1. Call Meeting to Order:

The aggregate shareholding of the shareholders present in person or by

proxy constituted a quorum. The Chairman called the meeting to order.

1. Chairman’s Address: Omitted.

2. Report Items

3. To report the business of 2019 and operating plan of 2020

Explanatory Notes: Please refer to the Chinese version on Page6-7.

1. Audit Committee’s review report of 2019

Explanatory Notes: Please refer to the Chinese version on Page 8.

1. To report 2019 employees’ bonus and directors’ compensation

Explanatory Notes:

1. The pre-tax profits of 2019 is NT$50,510,834 and according to the Company’s Articles of Incorporation, the Board has adopted a proposal for distribution of 2019 profit as follows: directors’ compensation is NT$1,010,217 and the profit to employees is NT$ 4,308,448; both shall be paid in cash.
2. The implementation of the distribution will be conducted after being approved by the shareholders’ meeting.
3. To report the proposal for issuance of 2017 Restricted Stock Awards (“RSA”)

Explanatory Notes:

Based on the resolution of shareholders meeting on 2017/05/26, the Company will issue total 2,000,000 shares of restricted employee shares. The Company has reported to Financial Supervisory Commission R.O.C. (Financial-Supervisory-Securities Document No.1060029187) and this proposal has been approved since 2017/08/08. As the date of publication, 1,400,000 restricted employee shares were issued. The other 600,000 are not issued by Board’s resolutions.

1. To report Implementation Status of the Company’s Share Buyback

Explanatory Notes:

1. Implementation Status of the 2018 Company’s Share Buyback

The Company purchased 1,515,000 shares common stock from Dec. 12, 2018 to Feb. 11, 2019. Total monetary amount of shares buyback was NT$28,127,052. The ratio is 1.79% of cumulative number of own shares held during the buyback period to the total number of the Company’s issued shares.

1. Implementation Status of the 2020 Company’s Share Buyback

The Company purchased 1,400,000 shares common stock from Mar. 02, 2020 to May. 01, 2020. Total monetary amount of shares buyback was NT$ 22,758,483. The ratio is 3.44% of cumulative number of own shares held during the buyback period to the total number of the Company’s issued shares.

1. Approval and Discussion Item

Proposal 1

Proposed by the Board of Directors

Subject : To accept 2019 Business Report and Financial Statements

Explanatory Notes:

1. DAVICOM’s 2019 Business Report, Financial Statements, including Balance Sheets, Statement of Comprehensive Income, Statements of Changes in Equity, and Statements of Cash Flows, were audited by independent auditors, Mr. Lin Se-Kai, and Mrs. Hsiao Chun-Yuan, of PricewaterhouseCoopers, Taiwan.
2. 2019 Business Report, Independent Auditors’ Report, and the aforementioned Financial Statements are attached hereto as Attachments. Please refer to the Chinese version on Page 6-7 and Page 9-28.

Resolution: The result is as follows:

Approval votes: 48,978,688., 98.19% of total votes 49,876,959.

Disapproval votes: 2,029., 0.00% of total votes 49,876,959.

Abstention votes: 896,242., 1.79% of total votes 49,876,959.

The proposal was approved.

Proposal 2

Proposed by the Board of Directors

Subject : To approve the proposal for distribution of 2019 earnings

Explanatory Notes:

1. 2019 net profit after tax is NT$ 41,395,667. To make up the actuarial loss of the pension and to allocate 10% of the statutory surplus reserve, the proposed dividend to shareholders is NT$38,244,441. Each shareholder will be entitled to receive a cash dividend of NT$0.46 per share.
2. In the event of any change in the number of outstanding shares resulting from executing employee stock options or converting treasury stock to its employees, the dividend ratio must be adjusted. It is proposed to fully authorize the Chairman of Board of Directors of DAVICOM to adjust the dividend ratio and to proceed on the relevant matters.
3. Upon the approval of the Annual Meeting of Shareholders, it is proposed that the Board of Directors be authorized to resolve the ex-dividend date and other relevant issues.
4. Please refer to the 2019 Annual Profit Distribution Table. Please refer to attachment.

Attachment

DAVICOM

ANNUAL PROFIT DISTRIBUTION TABLE

Year 2019

Items	Total (NTD)
Beginning unappropriated retained earnings	$ 730,350
Add: retained earnings---Actuarial present value of promised retirement benefits	366,106
Add: net profit after tax of 2019	41,395,667
Distributable net profit	42,492,123
Less: 10% legal reserve	(4,176,177)
Distributable items:
Dividend to shareholders--- NT$0.46 per share	(38,244,441)
Unappropriated retained earnings	$ 71,505

Chairman: Hao Ting President: Hao Ting Accounting Supervisor: Chiu Kuei Feng

Resolution: The result is as follows:

Approval votes: 48,978,702., 98.19% of total votes 49,876,959.

Disapproval votes: 4,069., 0.00% of total votes 49,876,959.

Abstention votes: 894,188., 1.79% of total votes 49,876,959.

The proposal was approved.

Proposal 3

Proposed by the Board of Directors

Subject : To approve the proposal for additional cash distribution of

2019 from its reserved surplus earnings.

Explanatory Notes:

1. Based on the profit allocation proposal, the Company intends to declare cash dividends in the amount of NT$29,099,031 at NT$0.35 per share from its distributable reserved surplus earnings for the year 2019.
2. In the event of any change in the number of outstanding shares resulting from executing employee stock options or converting treasury stock to its employees, the dividend ratio must be adjusted. It is proposed to fully authorize the Chairman of Board of Directors of DAVICOM to adjust the dividend ratio and to proceed on the relevant matters.
3. Upon the approval of the Annual Meeting of Shareholders, it is proposed that the Board of Directors be authorized to resolve the ex-dividend date and other relevant issues.

Resolution: The result is as follows:

Approval votes: 48,980,830., 98.20% of total votes 49,876,959.

Disapproval votes: 2,096., 0.00% of total votes 49,876,959.

Abstention votes: 894,033., 1.79% of total votes 49,876,959.

The proposal was approved

1. Motions

None

1. Adjournment

Time: 09:26 a.m.

Please refer to the Chinese Version for further information.

http://www.davicom.com.tw/pdf/ir/irsbp4s03dl2.pdf