DAVICOM — AGM Information 2019

Jun 19, 2019

DAVICOM Semiconductor, Inc.

Year 2019

Annual Shareholders’ Meeting Minutes

Time: 9:00 a.m., Jun 12, 2019 (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 53,744,898 shares, accounting for 64.64% of the Company’s total outstanding shares.

Chairman: Mr. Ting Hao

Recorder: Ms. Chu-Mei, Lin

Others present:

Independent Director Wen-Hui Wan, Director Nien-Tai Chen, Director Cheng- Feng Chiu, PWC CPA Hsien-Cheng, Chen

1. Call Meeting to Order:

The aggregate shareholding of the shareholders present constituted a quorum. The Chairman called the meeting to order.

2. Chairman’s Address: Omitted.

3. Report Items

1. To report the business of 2018 and operating plan of 2019

Explanatory Notes: Please refer to the Chinese version on Page7-8.

2. Audit Committee’s review report of 2018

Explanatory Notes: Please refer to the Chinese version on Page 9.

3. To report 2018 employees’ bonus and directors’ compensation

Explanatory Notes:

• (1) The pre-tax profits of 2018 is NT$47,978,170 and according to the Company’s Articles of Incorporation, the Board has adopted a proposal for distribution of 2018 profit as follows: directors’ compensation is NT$959,563 and the profit to employees is NT$ 4,582,868; both shall be paid in cash.

• (2) The implementation of the distribution will be conducted after being approved by the shareholders’ meeting.

4. 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. (FinancialSupervisory-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.

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

Explanatory Notes:

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.

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4. Approval and Discussion Item

Proposal 1

Proposed by the Board of Directors

Subject: To accept 2018 Business Report and Financial Statements

Explanatory Notes:

• (1) DAVICOM’s 2018 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) 2018 Business Report, Independent Auditors’ Report, and the aforementioned Financial Statements are attached hereto as Attachments. Please refer to the Chinese version on Page 7-8 and Page 10-30.

Resolution: The result is as follows:

Approval votes: 52,906,635., 98.44% of total votes 53,744,898. Disapproval votes: 952., 0.00% of total votes 53,744,898. Abstention votes: 837,311., 1.56% of total votes 53,744,898.

The proposal was approved.

Proposal 2

Proposed by the Board of Directors

Subject: To approve the proposal for distribution of 2018 earnings

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Explanatory Notes:

• (1) 2018 net profit after tax is NT$ 37,635,199. 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$32,256,036. Each shareholder will be entitled to receive a cash dividend of NT$0.4 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 2018 Annual Profit Distribution Table. Please refer to attachment.

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Attachment

DAVICOM ANNUAL PROFIT DISTRIBUTION TABLE Year 2019

Year 2019
Items	Total(NTD)
Beginning unappropriated retained earnings	$ 216,283
_Add:_retained earnings---Actuarial present value of	588,894
promised retirement benefits
_Add:_net profit after tax of 2018	37,635,199
_Less:_retained earnings---Difference between equity	(609,952)
purchase price and carrying amount arising from actual
acquisition of subsidiaries
Distributable net profit	37,830,424
Less:
10% legal reserve	(3,844,038)
Distributable items:
Dividend to shareholders--- NT$0.4 per share	(33,256,036)
Unappropriated retained earnings	$730,350

Chairman: Hao Ting President: Chen Nien Tai Accounting Supervisor: Chiu Kuei Feng

Resolution: The result is as follows:

Approval votes: 52,906,629., 98.44% of total votes 53,744,898. Disapproval votes: 957., 0.00% of total votes 53,744,898. Abstention votes: 837,312., 1.56% of total votes 53,744,898.

The proposal was approved.

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Proposal 3

Proposed by the Board of Directors

Subject: To approve the proposal for additional cash distribution of 2018 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$33,256,036 at NT$0.4 per share from its distributable reserved surplus earnings for the year 2018.

• (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: 52,905,584., 98.44% of total votes 53,744,898. Disapproval votes: 1,033., 0.00% of total votes 53,744,898. Abstention votes: 838,281., 1.56% of total votes 53,744,898.

The proposal was approved

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Proposal 4

Proposed by the Board of Directors

Subject: To amend the Proposal for Issuance of 2017 Restricted Stock Awards.( “RSA”)

Explanatory Notes: Please refer to the Chinese version on page 32 for comparison table for Amendment to the Proposal for Issuance of 2017 Restricted Stock Awards (“RSA”).

Resolution: The result is as follows:

Approval votes: 52,438,180., 97.57% of total votes 53,744,898. Disapproval votes: 468,383., 0.87% of total votes 53,744,898. Abstention votes: 838,335., 1.56% of total votes 53,744,898.

The proposal was approved.

Proposal 5

Proposed by the Board of Directors

Subject: To amend the Procedures for Acquisition or Disposal of Assets

Explanatory Notes: According to Financial Supervisory Commission R.O.C. (Financial-Supervisory-Securities Document No.1070341072) and this proposal has been approved since 2019/01/01, the Company hereby to amend the Procedures for Acquisition or Disposal of Assets. Please refer to the Chinese version on page 32.

Resolution: The result is as follows:

Approval votes: 52,905,575., 98.44% of total votes 53,744,898. Disapproval votes: 990., 0.00% of total votes 53,744,898. Abstention votes: 838,333., 1.56% of total votes 53,744,898.

The proposal was approved.

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5. Eleciton Matters

Proposed by the Board of Directors

Subject: To elect 7 Directors (including 3 independent directors) of the Ninth Board

Explanatory Notes:

• (1) The term of current Board of Directors (including independent directors) will be ended on June 5, 2019 and will be fully reelected in accordance with the law in the shareholders’ meeting on June 12, 2019.

• (2) 7 directors including 3 independent directors of the Ninth Board will be elected in the shareholders’ meeting. The term of the new board of directors will started from June 12, 2019 to June 11, 2022. The nominated candidates were approved by the Board of Directors in accordance with the Article 192-1 of the Company Act. More details information of nominated candidates, please refer to attachment 6.

Resolution: The result is as follows:

Type	Shareholder No. / ID	Name	Votes
Director	2	Ting Hao	61,988,174
Director	1770	Goodyeasrs Investments Ltd.	58,224,159
Director	37760	Tzay Hua Ltd.	56,365,093
Director	32654	Lin ,Yun-Ping	52,853,437
Independent Director	1752	Ueng, Chang-Yue	48,872,026
Independent Director	E10175XXXX	Hwang, Jen-Jyh	47,009,847
Independent Director	286	Wei ,Niang-Shou	43,788,389

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6.Other Matters

Proposed by the Board of Directors Subject: To release Non-Competition Restriction on Newly-Elected Directors of the Ninth Board.

Explanatory Notes:

• (1) To release Non-Competition Restriction on Newly-Elected Directors of the Ninth Board.

• (2) Name and title of the director with permission to engage in competitive conduct:

• Director: Ting Hao, Independent Director of United Integrated Services Co., Ltd.

• Director: Goodyears Investments Ltd.

• Director: Tzay Hua Ltd.

• Director: Lin, Yun-Ping, Owner of Sane Way Enterprise Co., Ltd., and Owner of Crown Star International Investment Co., Ltd.

• Independent Director: Ueng, Chang-Yue, Controller of Sonavox Electronic Co., Ltd.

• Independent Director: Hwang, Jen-Jyh, Adjunct Associate Professor of National Sun-Yatsen University.

• Independent Director: Wei, Hiang-Shou

Resolution: The result is as follows:

Approval votes: 52,411,902., 97.52% of total votes 53,744,898. Disapproval votes: 493,749., 0.92% of total votes 53,744,898. Abstention votes: 839,247., 1.56% of total votes 53,744,898.

The proposal was approved.

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7.Motions

None

8.Adjournment

Time: 09:40 a.m.

Please refer to the Chinese Version for further information.

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

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