KINSUS — AGM Information 2018

Jun 6, 2018

KINSUS INTERCONNECT TECHNOLOGY CORP.

Meeting Notice For 2018 Annual Shareholders’ Meeting

(Summary Translation)

Subject: 2018 Annual Shareholders’ Meeting of KINSUS INTERCONNECT TECHNOLOGY CORP. (the “Meeting”) to be convened.

Announcements:

1. Meeting Time: 9:00 a.m., May 29, 2018.

2. Meeting Venue: KINSUS’ Shih-Lei Plant, Staff cafeteria.

    - (No. 1245, ZhongHua Rd., XinWu Dist., Taoyuan City, Taiwan R.O.C.)
   

3. Meeting Agenda:

4. I. Report Items:

   • (1) The Company’s 2017 Business Report.

   • (2) Audit Committee’s Review Report on 2017 Financial Statements.

   • (3) To report the 2017 employees’ and directors’ compensation.

5. II. Items to be approved:

   • (1) To approve the 2017 Business Report, Parent-company-only Financial Statements and Consolidated Financial Statements.

   • (2) To approve the Proposal for 2017 Earnings Distribution.

III. Items to be discussed and resolved:

• (1) Issuance of Restricted Stocks for Employees.

• (2) Re-election of all directors.

• (3) To release the newly by-elected directors from prohibition of non-compete.

• Ⅳ. Other Questions and Motions

• Details of the distribution of 2017 earnings proposed by the meeting of Board of Directors is as follows:

• Ⅰ. Each common shareholder will be entitled to receive a cash dividend of NT$1.5 per share.

• Ⅱ. The measurement date will be decided by the Board of Directors under the authorization by the Shareholders’ Meeting.

• Ⅲ. It is proposed that the Board of Directors is authorized to adjust the cash to be distributed to each share based on the number of shares outstanding on the measurement date for distribution.

• Election Item: To elect nine (9) Directors (include six (6) Directors and three (3) Independent Directors) of the Company. The candidates include 6 Directors, Tong,Zi-Xian, Guo, MingDong, Chen, Ho-Shu, Hua Xu Investment Corp. represented by Su,Yan-Xue, Hua Xu Investment represented by Wu, Xiang-Xiang, Zbeng, Zhong-Ren, and 3 Independent Directors, Chen, Jin-Cai, Huang, Chun-Bao, Wu, Hui-Huang. Please also refer to MOPS system at webside of http://mops.twse.com.tw./Material Information and Pronouncement/Pronouncement inquiry/Background Information related to the nominated candidate for director or supervisor for qualification.

• The item set aside in 3. III. (3) above to release the newly by-elected director from prohibition of non-compete is proposed for shareholders’ approval in accordance with Article 209, the Company Act. For details of other positions that the newly-by-elected directors, please refer to the Handbook of Shareholders’ Meeting.

• For details of the Issuance of Employee Restricted Stocks Awards, please refer to appendix.

• In addition to the announce from M.O.P.S., the Company will mail the official notice of meeting, and one Power of Attorney in hoping that all shareholders could participate in the Meeting. If joining in person, please send back the「Notice of Attendance」 for registration or register in person on the meeting day. If entrusting others to participate in, please read and fill up carefully the notes of Power of Attorney and send back the 「Attendance Power of Attorney」to arrive the Stock Transfer Agency Department of KGI Securities Co. LTD. (5F., No.2, Sec. 1, Chongqing S. Rd., Zhongzheng Dist., Taipei City 100, Taiwan R.O.C.) no later than the 5th day before the meeting starts and use the voucher to attend the meeting.

• In compliance with the Article 26-2 of Securities and Exchange Act stating that the notice of the shareholders meeting to be given by an issuer to shareholders who own less than 1,000 shares of nominal stocks may be given in the form of a public announcement; for a regular shareholders meeting, such public announcements shall be served with thirty days prior notice, the Company will provide only such public announcement to the shareholders who own less than 1,000 shares of nominal stocks.

• Shareholders may exercise their voting rights through STOCKVOTE platform of Taiwan Depository & Clearing Corporation (http://www.stockvote.com.tw) during the period from April 28, 2018 to May 26, 2018.

• Of this Meeting the statistic verification agencies of the Power of Attorney will be KGI Securities Co. Ltd. (Stock Transfer Agency Department).

• If any situation for the case of seeking the Power of Attorney in public, the Company will submit it to S.F.I. (Website: http://free.sfi.org.tw) by April 27, 2018. Please go on the website if requiring any further information. (Stock Code：3189).

• No souvenir will be offered in the Meeting.

Appendix

Resolving an Issuance of Restricted Stock Awards (RSA)

1. Issue price: NT$10 per share

2. Total volume to be issued: 5,500,000 shares. The Company shall ore-file to the authority in one or several times starting one year from the shareholders’ meeting resolving the issuance and may fulfill the issuance in one or several times based on its need within one year from the date the authority’s approval letter arriving the Company. The chairman is authorized by the board to enact the actual issuance date.

3. Release conditions:

4. (1) Vesting conditions:

   • I. Indicator A: employee at level 8

The vested interest is listed below for the qualified employees under indicator A of the RSA Plan in the condition of remaining on job from the grant date to the respective vested dates and no breach on laws and regulations, service agreements, commitments of integrity and confidentiality, ethic of conduct, etc.

A. 20% upon one month from the grant date;

B. 20% on April 25, 2019; C. 15% on September 25, 2019; D. 15% on April 25, 2020; E. 15% on September 25, 2020;

• F. 15% on April 25, 2021.

II. Indicator B: employee at level 4 through level 7

The vested interest is listed below for the qualified employees under indicator B of the RSA Plan in the condition of remaining on job from the grant date to the respective vested dates, compliance with the respective requirements of performance, and no breach on laws and regulations, service agreements, commitments of integrity and confidentiality, ethic of conduct, etc.

A. 20% upon one month from the grant date;

B. 20% on April 25, 2019;

C. 15% on September 25, 2019;

D. 15% on April 25, 2020;

E. 15% on September 25, 2020;

F. 15% on April 25, 2021.

• (2) Unvested employee:

The Company will buy back and cancel all the shares granted to, in accordance with the RSA Plan, the employees who do not meet the vested conditions.

• (3) In cases of employee resign, retire, injury or dereliction of duty, death, transfer to affiliate company or leave without pay:

• I. The Company will buy back in the issuance price all the unvested shares from the employees who be in those situations treated as losing qualification of being vested, including voluntary resignation, being laid-off/dismissal/retirement due to incompetency, non-occupational disaster death.

II. Employees being laid-off due to reasons other than incompetency:

The vested shares for any qualified but laid off employee during a year in accordance with other vested condition from Article 7 of the RSA Plan are computed by the days on duty timing the shares entitled at the vested date in this year. On the other hand, the Company will buy back all the unvested issued shares as the employees will be treated as losing the qualification to be vested.

III. Injury of duty:

Any qualified employee who becomes disabled and unable to work continuously due to injury of duty are treated as completing the vesting period in that year but shall be subject to the limitation regarding vesting period and ratio set forth on article 7 of the RSA Plan. The underlying employee would lose his/her qualification to be vested in the following year of resign and the Company would therefore buy back and cancel all the unvested shares from the employee in the original issuance price except for, in a special approval from the chairman, those who have contributed significantly and/or done the best efforts to fulfill the duty to the Company.

IV. Dereliction of duty:

All unvested shares of any qualified employee who die from duty are treated as vested at the date of death and can be inherited by in accordance with the Inherence Chapter of Civil Law and legally transferred under a trust agreement to the legal heir after the occurrence of the fact. The succession is to process according to related procedures

specified in the “Handling Rule for a public company’s shares.”

• V. Transfer to affiliate company

Any qualified employee who is to transfer to the affiliate companies upon request from the Company due to business needs may be treated as, if meeting with the other vesting conditions specified in article 7 of the RSA Plan in the year of transfer, to achieve the vesting condition with respect to timing, ratio and scope at the approval from the Chairman or authorized person.

• VI. Leave without pay

• For any qualified employee who is permitted for a leave without pay, the retention seniority of unvested issued RSA shares specified in RSA Plan is to postpone by the duration of leave if the effective date of leave meets the other vesting conditions specified in article 7 of the RSA Plan.

VII.The Company shall cancel all the RSA shares brought back according to the RSA Plan.

1. Qualification requirements for employees:

2. (1) The qualified employees are limited to those full-time employees who are formally hired and have been on board at the grant date of RSA shares. Indicator A: employee at level 8

   • Indicator B: employee at level 4 through level 7

3. (2) The proposal of actually granted employees and the granted share volume for those employees shall be reviewed and submitted by the Chairman to the Board for a final approval in consideration of seniority, job position, performance, overall contribution, special merit, or other needs of management.

4. (3) For a single employee, the total of shares granted under Item 1, Article 56-1 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers and the RSA Rule shall not exceed 0.3% of the Company's total issued shares. Furthermore, for a single employee, the total of shares granted under Item 1, Article 56-1 of Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the RSA Rule and Item 1, Article 56 of the Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall not exceed 1% of the Company's total issued shares. However, at a special approval from industrial in-charging governmental authority, the total shares granted to a single employee under both the employee stock option plans and the RSA rule may be exempted from the above-mentioned limitation.

5. The reason why it is necessary to issue restricted stocks for employees:

To retain and recruit professional talent, motivate employees, and enhance employees' teaming and potential for achieving the objective to jointly generate the benefit of employee and shareholders and to ensure the combination of the both parties' benefit.

1. Calculated expense amount, diluted EPS and other factors affecting shareholder’s equity:

2. (1) Calculated expense amount:

The expenses, calculated by using the closing unit trade price of NT$51.3 at 2018/01/15, to be recorded in 2018, 2019, 2020 and 2021 would be NT$104,042K, NT$88,864K, NT$30,292K and NT$3,952K, respectively.

• (2) Diluted EPS and other factors affecting shareholder’s equity:

The dilution effect on EPS, based on the vesting conditions and currently issued and outstanding shares, would be NT$0.23, NT$0.20, NT$0.07 and NT$0.01 for 2018, 2019, 2020 and 2021, respectively.