LU HAI — AGM Information 2019

May 31, 2019

(This English translation is provided for reference only and might not exactly reflect the true meaning and full text of the Chinese version. In case of any discrepancy between the the Chinese version and this translation, the Chinese version shall prevail.)

Stock Code ： 2115

==> picture [99 x 105] intentionally omitted <==

LU HAI HOLDING CORP.

2019 Annual General Shareholders’ Meeting

Meeting Handbook

【 Translation 】

Time: 10:00 am, Wednesday, May 29, 2019 Place: Conference Room, 1F., No.64, Shing-Kong 5th Rd., Tianzhong Township, Changhua County 520, Taiwan (R.O.C.)

Table of Contents

Meeting Procedure ................................................................................................ 1 Meeting Agenda ..................................................................................................... 2 Reports Items ...................................................................................................... 3 Items for Ratification .......................................................................................... 3 Items for Discussion ............................................................................................ 4 Extempore Motion ............................................................................................... 6 Adjournment ....................................................................................................... 6

Attachment

1. 2018 Business Report ...................................................................................... 7

2. Audit Committee’s Review Report ................................................................. 10

3. Comparison Table on Amendments to the Regulations Governing Procedure for Board of Directors Meetings

4. Accountant’s Audit Report, Financial Statements........................................... 11

5. Earnings Distribution Table ........................................................................... 21

6. Comparison Table on Amendments to the Regulations Governing the Acquisition and Disposal of Assets

7. Comparison Table on Amendments to the Articles of Incorporation ............... 22

8. Comparison Table on Amendments to the Rules of Procedure for Shareholders’ Meetings

Appendix

(Note:Attachment 3,6,8 and Appendix 1~7, please refer to the Chinese version of the Handbook for details.)

LU HAI HOLDING CORP.

2019 Annual General Shareholders’ Meeting Procedure

• I. Opening Address

• II. Chairman Address

• III. Reports Items

• IV. Items for Ratification

• V. Items for Discussion

• VI. Extempore Motion

VII. Adjournment

1

LU HAI HOLDING CORP.

2019 Annual General Shareholders’ Meeting Agenda

Time: 10:00 am, Wednesday, May 29, 2019 Place: Conference Room on 1F, No.64, Shing-kong 5th Rd, Tien-chung Town, Chang-hua County

Agenda:

• I. Opening Address (report the attending number of shares)

• II. Chairman Address

• III. Reports Items

• 2018 Business Report.

• Audit Committee’s review report on the 2018 financial statements.

• Report on employees’ and directors’ compensation in 2018.

• Amendments to the “Regulations Governing Procedure for Board of Directors Meetings” of the Company.

IV. Items for Ratification

1. Ratification of the 2018 business report and financial statements.

2. Ratification of 2018 earnings distribution.

3. V. Items for Discussion

4. The Company’s planning to transfer surplus to capital increase by issuing new shares.

5. Amendments to the “Regulations Governing the Acquisition and Disposal of Assets” of the Company.

6. Amendments to the “Articles of Incorporation” of the Company.

7. Amendments to the “Rules of Procedure for Shareholders’ Meetings” of the Company.

8. VI. Extempore Motion

9. VII.Adjournment

2

Reports Items

Item 1: 2018 Business Report. Explanation: Please refer to Attachment 1 for the 2018 business report of the Company.

Item 2: Audit Committee’s review report on the 2018 financial statements. Explanation: Please refer to Attachment 2 for the Audit Committee’s Review Report

• Item 3: Report on employees’ and directors’ compensation in 2018. Explanation: 1. It is planned to issue NTD3,223,656 as Director’s compensation and NTD 3,223,656 as employee’s compensation according to the provisions of Articles of Incorporation.

• All employee’s compensation will be issued in cash.

• This case has been passed by the Remuneration Committee and resolution of Board of Directors on March 13, 2019.

Item 4: Amendments to the “Regulations Governing Procedure for Board of Directors Meetings” of the Company.

• Explanation: 1. Make amendments according to Article 206 of the Company Act of Taiwan, explicitly stipulates that, when the spouse or relatives within second degree of the director, or the company with which the director has controlling subordination relationship has individual interest relationship with the matters deliberated in Board of Directors Meeting, it will be deemed as the director has individual interest relationship with such matters; it is hereby amended the Procedures of the Company as well.

• Please refer to Attachment 3 of Chinese version of the handbook for the Comparison Table on Amendments to the “Regulations Governing Procedure for Board of Directors Meetings”.

Items for Ratification

(Proposed by the Board of Directors)

Item 1: Ratification of the 2018 business report and Financial statements.

• Explanation: 1. 2018 financial statements of the Company have been audited by accountants LIN, MING-SHOU and HUANG, SU-CHUAN from Crowe Horwath (TW) CPAs, and audit report has been issued, and it has been submitted together with the business report to Audit Committee and has been audited.

• Please refer to Attachment 1 and Attachment 4 for the 2018 business report, accountant’s audit report and financial statements of the Company.

Resolution:

3

(Proposed by the Board of Directors)

• Item 2: Ratification of 2018 earnings distribution. Explanation: 1. The net profit after tax of the Company in 2018 is NTD208,463,060, 10% of them, namely NTD20,846,306, is allocated as statutory surplus reserve according to the Articles of Incorporation, and NTD54,097,425 is allocated as special surplus reserve pursuant to law, minus “Other comprehensive income - Remeasurement of defined benefit obligation”, namely NTD1,207,771, and plus “Beginning undistributed earnings”, namely NTD671,359,233, then total earnings available for distribution is NTD803,670,791; it is planned to distribute stock dividend to shareholders at NTD0.49999996 per share (namely free allotment of 49.99999573 shares per thousand shares) and cash dividend at NTD1.00000004 per share this time, the total distribution of dividend to shareholders is NTD1.50 per share, and total distribution of dividends to shareholders is NTD122,947,450. The distribution of cash dividend to shareholders this time is calculated up to one New Taiwan Dollar (digits after the decimal point to be ignored), the fractional amount less than one New Taiwan Dollar is listed into other income of the company.

• Regarding the distribution of shares and cash dividend to shareholders, after it is proposed and passed in General Meeting, Board of Directors is authorized to determine the record date of allotment of shares and dividend, distribution date and other relevant matters.

• In case of the Company’s cash capital increase, shares buyback, transfer or cancellation of treasury share, transfer of convertible corporate bonds or exercise of employee’s stock warrant etc., and thereby affects the amount of outstanding shares of the Company, and causes changes in shares allotment ratio and dividend payout ratio, hence it is planned to authorize the Chairman to make adjustment.

• Please refer to Attachment 5 for 2018 Earnings Distribution Table.

Resolution:

Items for Discussion

(Proposed by the Board of Directors)

Item 1: The Company’s planning to transfer surplus to capital increase by issuing new shares.

• Explanation: 1. In consideration of the needs of future business development, the Company plans to issue 4,098,248 new shares with the shock dividend shall be distributed to shareholders in 2018, namely NTD40,982,480, and the aforesaid new shares issued for capital increase are the ordinary shares with nominal amount of NTD10 per share.

• The distribution of stock dividend to shareholders is calculated based on the 81,964,967 outstanding shares on March 1, 2019, free allotment of

4

49.99999573 new shares per thousand shares, totally 4,098,248 shares, and the rights and obligations of the new shares are the same as the original shares. Regarding the distribution of stock dividend to shareholders, after it is proposed and passed in General Meeting, Board of Directors is authorized to determine the record date for allotment of shares and other relevant matters. In case of the Company’s cash capital increase, shares buyback, transfer or cancellation of treasury share, transfer of convertible corporate bonds or exercise of employee’s stock warrant etc., and thereby affects the amount of outstanding shares of the Company, and causes changes in shares allotment ratio, hence it is planned to authorize the Chairman to make adjustment. For the distribution of fractional share less than one share, within five days after book closure day, shareholders shall voluntarily make up to one share for registration, and the insufficient part thereof shall be calculated into one New Taiwan Dollar (digits after the decimal point to be ignored) according to cash in denomination; for the fractional share less than one share thereof, the Chairman is authorized to consult with the specific person for subscription according to denomination.

1. When relevant matters of this capital increase case must be changed due to the changes in laws and decrees or the instruction of competent authority, it is planned to authorize the Chairman for handling.

Resolution:

(Proposed by the Board of Directors)

• Item 2: Amendments to the “Regulations Governing the Acquisition and Disposal of Assets” of the Company.

• Explanation: 1. In order to keep in line with No. 16 lease of International Financial Reporting Standards applicable in Taiwan, and improve the quality of disclosing information on acquisition and disposal of assets by the public listed company, specify the responsibilities of external experts and cooperate with the actual operating needs of the Company, it is planned to amend the “Regulations Governing the Acquisition and Disposal of Assets” of the Company.

• The 9th version “Regulations Governing the Acquisition and Disposal of Assets” of the Company has been passed by the resolution of the Board of Directors on August 8, 2018, since it has not been proposed to General Meeting for resolution, it is planned to combine with the previous amendments and propose to Board of Directors for resolution of amendment, please refer to Attachment 6 of Chinese version of the handbook for the Comparison Table on Amendments to the “Regulations Governing the Acquisition and Disposal of Assets”.

Resolution:

5

(Proposed by the Board of Directors)

Item 3: Amendments to the “Articles of Incorporation”.

• Explanation: 1. According to the Tai-Zheng-Shang-Er-Zi No. 1071703794 Letter issued by Stock Exchange on November 30, 2018, and to keep in line with the “Checklist for Matters of Protecting Shareholders’ Equity of Foreign issuers in the Country of Registration”, articles conforming to the regulations of Company Act are newly added.

• Please refer to Attachment 7 for the Comparison Table on Amendments to the “Articles of Incorporation”.

Resolution:

(Proposed by the Board of Directors)

• Item 4: Amendments to the “Rules of Procedure for Shareholders’ Meetings”.

• Explanation: 1. According to the Tai-Zheng-Shang-Er-Zi No. 1071703794 Letter issued by Stock Exchange on November 30, 2018, and to keep in line with the “Checklist for Matters of Protecting Shareholders’ Equity of Foreign issuers in the Country of Registration”, it is planned to amend the “Rules of Procedure for Shareholders' Meetings” of the Company.

• Please refer to Attachment 8 of Chinese version of the handbook for the Comparison Table on Amendments to the “Rules of Procedure for Shareholders’ Meetings”.

Resolution:

Extempore Motion

Adjournment

6

【Attachment 1】

LU HAI HOLDING CORP.

2018 Business Report

In 2018, the supply of tires exceeded the demand, affected by bicycle sharing, the demand in bicycle industry shrank, the Company’s shipment volume of valves for bicycles reduced; with gradual increasing awareness of environmental protection, energy saving and carbon reduction, as well as continuous growth of demand in electric vehicle in Europe, the Company’s shipment volume of valves for electric vehicles increased; various countries successively legislated to promote the Tire Pressure Monitoring System (TPMS) to become standard configuration for automobiles and the Company had been actively developing customers for TPMS valve, the customer order increased, the shipment volume of TPMS valves grew stably; the overall sales volume of valves of the Company in 2018 was reduced by 7.04% year-on-year, and the operating revenue slightly reduced by 0.69% from NTD2.647 billion to NTD2.629 billion. In 2018, the Company continued to improve process efficiency, and input automation equipment to satisfy customer order and reduce the impact of rising wages in Mainland, under the impact of rising material procurement cost and exchange rate fluctuation etc., the gross profit rate declined from 25.73% to 21.34%. Due to sound management strategy and effective cost control, the operating expenses didn’t increase dramatically, and the operating profit rate declined from 14.93% to 10.25%. Due to the depreciation of RMB and EUR in 2018, the profit on exchange increased, the non-operating revenue increased in 2018, causing narrowing reduction of profit before income tax. To sum up, the profit ratio declined from 10.36% to 7.93%, and the earnings per share reduced from NTD3.35 to NTD2.54.

The Company will continue to develop new customers and match up with the growth of market demand, improve the market share target and profit making, and continue to input automation equipment and steady financial management for operation, and stick to the operation philosophy of “Quality Oriented, Integrity, Customer First, Continuous Improvement” to face the challenges in the future.

Financial performance

Implementation achievement in the last two years:

Unit: NTD thousand

			Unit: NTD thousand	Unit: NTD thousand
Year Item	2018	2017	Percent Change
Operatingrevenue	2,628,778	2,647,010	(18,232)	-0.69%
Grossprofit	561,055	681,005	(119,950)	-17.61%
Operating profit	269,342	395,201	(125,859)	-31.85%

7

Profit before income tax	297,169	395,530	(98,361)	-24.87%
Profit for the Period	208,463	274,152	(65,689)	-23.96%

Budget implementation

The Company has not disclosed financial forecasting to the public in 2018, hence it is not applicable.

Financial revenue and expenditure and profitability analysis

Item	Year	2018	2017
Financial structure (%)	Debt to asset ratio	34.17	33.05
	Long-term fund to property, plant and equipment ratio	389.66	373.34
Liquidity (%)	Current ratio	423.90	268.74
	Quick ratio	316.68	196.85
	Times interest earned(times)	25.77	34.92
Profitability (%)	Return on assets	6.51	8.94
	Return on equity	9.42	12.93
	Pre-tax income topaid-in capital	36.26	48.26
	Netprofit margin	7.93	10.36
	Earningsper share(NTD)	2.54	3.35

Notes: The financial structures of the Company in these two periods are equivalent.

The Company repaid the due convertible corporate bonds in April 2018, causing the rise of current ratio and quick ratio.

The times interest earned (times) and profitability declined due to the profits shrinking of the Company (see the explanation in Paragraph 1 of Business Report).

Research and development situation

All key projects of research and development in 2018 made progress as scheduled. Mainly focused on the development and input of automation equipment, efficiency improvement, quality improvement and labor saving. Major achievements include: the input of CR202\DB05C\TR1\VFR series full automatic interrupting nailing machine, the input of PVR70 series full automatic valve core assembly machine, TR4 full automatic grinding machine, CR202 automatic sand blasting discharging machine, rotating disc type full automatic bending machine, and the development, input and use of new German machines, among them, including EP2 valve core processor, PD set plastic pipe, C4E body processor, TR13 body processor and AR/L body processor, improving product quality as well as production efficiency.

8

The key research and development of the Company in 2019 is to promote automation project and reduce waste cost of raw materials, and take quality improvement as the target. Launch of the second production department’s TR4 series valve full automatic vulcanization production line project, upgrading the vulcanizing mold design to reduce waste rubber, and simultaneous introduction of turning and milling composite all-in-one machine to upgrade die precision, development of oily fume free technique for hot forging equipment, development of VFR assembled riveting airtight all-in-one machine, high speed burner detection and assembled airtight all-in-one machine, development of automatic marking machine for green products, and upgrading the bottom forming machine of program control into numerical control processing.

Chairman: HSU, LIEN-KAI

General Manager: HSU, LIEN-KAI

Accounting Officer: CHANG, SHENG-HUNG

9

【Attachment 2】

LU HAI HOLDING CORP.

Audit Committee’s Review Report

The Board of Directors has prepared 2018 business report, financial statements and earning distribution proposal etc. of the Company; among them, the financial statements have been audited by accountants LIN, MING-SHOU and HUANG, SU-CHUAN from Crowe (TW) CPAs, and the audit report of unqualified opinion has been issued. The above business report, financial statements and earnings distribution proposal have been reviewed and determined to be correct and accurate by the Audit Committee members of the Company, we hereby submit this report.

To the 2018 General Shareholders’ Meeting

Audit Committee:

YEN, MEI-YING

CHANG, HORNG-YAN HU, TA-HSIANG

March 13, 2019

10

【Attachment 4】

Accountant's Audit Report, Financial Statements

11

==> picture [455 x 648] intentionally omitted <==

12

==> picture [453 x 656] intentionally omitted <==

13

==> picture [458 x 666] intentionally omitted <==

14

==> picture [454 x 662] intentionally omitted <==

15

==> picture [401 x 710] intentionally omitted <==

16

==> picture [457 x 682] intentionally omitted <==

17

==> picture [397 x 694] intentionally omitted <==

18

==> picture [454 x 646] intentionally omitted <==

19

==> picture [456 x 562] intentionally omitted <==

20

【Attachment 5】

LU HAI HOLDING CORP. Earnings Distribution Table 2018

Unit: NTD

2018	Unit: NTD	Unit: NTD
Item	Amount
Netprofit after tax in 2018		208,463,060
Minus:
Allocation of statutorysurplus reserve	20,846,306
Allocation of other equities minus special surplus reserve(Notes 1)	54,097,425
Earnings available for distribution in 2018		133,519,329
Plus:
Beginningundistributed earnings	671,359,233
Minus:
Other comprehensive income – Remeasurement of defined benefit obligation	1,207,771
Accumulated earnings available for distribution as at the end of 2018		803,670,791
Distribution item:
Shareholder Dividend－share(Notes 2)	40,982,480
Shareholder Dividend－cash(Notes 2)	81,964,970
Endingundistributed earnings		680,723,341

• Notes 1: The Company has allocated the balance of NTD54,097,425 between the NTD228,579,045 of special surplus reserve and NTD282,676,470 of recorded other equities minus net amount, hence other equities minus special surplus reserve is allocated.

• Notes 2: It is planned to distribute stock dividend to shareholders at NTD0.49999996 per share (namely free allotment of 49.99999573 shares per thousand shares) and cash dividend at NTD1.00000004 per share this time, the total distribution of dividend to shareholders is NTD1.50 per share, and total distribution of dividends to shareholders is NTD122,947,450.

Chairman: HSU, LIEN-KAI

General Manager: HSU, LIEN-KAI

Accounting Officer: CHANG, SHENG-HUNG

21

【Attachment 7】

LU HAI HOLDING CORP.

Comparison Table on Amendments to the Articles of Incor oration p

Amended and Restated Articles Current Articles （ VII ） Article 42 Article 42 If the Board of Directors does not within fifteen If the Board of Directors does not within fifteen days from the date of the deposit of the days from the date of the deposit of the requisition dispatch the notice of an requisition dispatch the notice of an extraordinary general meeting, the requisitionists extraordinary general meeting, the requisitionists may themselves convene an extraordinary may themselves convene an extraordinary general meeting in accordance with the general meeting in accordance with the Applicable Public Company Rules after applying Applicable Public Company Rules. to the competent authorities and being approved. Article 42-1 (Newly added) Members continuously holding more than 50% of the total number of outstanding shares of the Company for a period of three months or a longer time may convene an extraordinary general meeting, and application to the competent authorities is not required. The calculation of above said holding period and holding number of shares in the preceding sentence shall be based on the Register of Members as of the first date of the book closed period.

Article 44

• (a) At least thirty days’ notice of an annual general meeting shall be given to each Member and at least fifteen days’ notice of any extraordinary general meeting shall be given to each Member. Every notice shall be exclusive of the day on which it is given or deemed to be given and of the day for which it is given and shall specify the place, the day and the hour of the meeting and the general nature of the business. During the period

Article 44

• (a) At least thirty days’ notice of an annual general meeting shall be given to each Member and at least fifteen days’ notice of any extraordinary general meeting shall be given to each Member. Every notice shall be exclusive of the day on which it is given or deemed to be given and of the day for which it is given and shall specify the place, the day and the hour of the meeting and the general nature of the business.

22

Amended and Restated Articles

Current Articles （ VII ）

Amended and Restated Articles	Amended and Restated Articles	Amended and Restated Articles	Current Articles（VII）
		when the Shares are traded on the Designated Stock Market, the notice of the annual and extraordinary general meetings to be given to Members who own less than 1,000 shares of nominal Shares may be given in the form of a public announcement.
	Article 47 The following matters shall be stated in the notice of general meetings, with a summary of the material content to be discussed, and shall not be brought up as an ad hoc motion,and the summary of above said matters may be put on the website(s) designated by the competent authorities or the Company, and address of such website(s) shall be indicated clearly in the notice: (a) election or discharge of Directors; (b) amendment to these Articles; (c) dissolution, Merger, shares swap or Spun-off of the Company (d) entry into, amendment to, or termination of any contract for lease of its business in whole, or the delegation of management of the Company’s business to others or regular joint operation of the Company with others; (e) the transfer of the whole or any material part of its business or assets; (f) taking over another’s whole business or assets, which will have a material effect on the business operation of the Company; (g) ratification of any action of Director(s) who engage(s) in business for him/herself or on behalf of another person that is within the scope of the Company’s business; (h) distribution of the whole or part of the Dividends of the Company in the form of new Shares; distribution of Legal Capital		Article 47 The following matters shall be stated in the notice of general meetings, with a summary of the material content to be discussed, and shall not be brought up as an ad hoc motion: (a) election or discharge of Directors; (b) amendment to these Articles; (c) dissolution, Merger, shares swap or Spun-off of the Company (d) entry into, amendment to, or termination of any contract for lease of its business in whole, or the delegation of management of the Company’s business to others or regular joint operation of the Company with others; (e) the transfer of the whole or any material part of its business or assets; (f) taking over another’s whole business or assets, which will have a material effect on the business operation of the Company; (g) ratification of any action of Director(s) who engage(s) in business for him/herself or on behalf of another person that is within the scope of the Company’s business; (h) distribution of the whole or part of the surplus profit of the Company in the form of new shares or capitalization of statutory reserve and any other amount in accordance with Article 123; (i) the Private Placement of any equity-type securities issued by the Company; and (j) transfer shares to the employees under
	(a) (b) (c) (d) (e) (f) (g) (h)

23

Amended and Restated Articles

Current Articles （ VII ）

• Reserve and Capital Reserve arising from share premium or the income from endowments received by the Company in the form of new Shares to be issued for such purposes or in cash;

Article 20.

(i) the Private Placement of any equity-type securities issued by the Company; (j) transfer shares to the employees under Article 20; and (k) capital deduction; and (l) application to terminate the public offering of the Shares.

Article 49

Article 49

Members holding 1% or more of the total Members holding 1% or more of the total number of outstanding Shares immediately prior number of outstanding Shares immediately prior to the relevant book closed period may propose to the relevant book closed period may propose to the Company a proposal for discussion at a to the Company a proposal for discussion at a general meeting in writing or by way of general meeting in writing to the extent and in electronic transmission to the extent and in accordance with the rules and procedures of accordance with the rules and procedures of general meetings proposed by the Board of general meetings proposed by the Board of Directors and approved by an Ordinary Directors and approved by an Ordinary Resolution. The following procedure shall apply Resolution. The following procedure shall apply for making such proposals: for making such proposals: (a) Proposal shall not be included in the agenda (a) Proposal shall not be included in the agenda where (i) the proposing Member(s) holds less where (i) the proposing Member(s) holds less than 1% of the total number of outstanding than 1% of the total number of outstanding Shares, (ii) where the matter of such proposal Shares, (ii) where the matter of such proposal may not be resolved by a general meeting, may not be resolved by a general meeting, (iii) the proposing Member has proposed (iii) the proposing Member has proposed more than one proposal, or (iv) the proposal more than one proposal, or (iv) the proposal is submitted on a day beyond the deadline is submitted on a day beyond the deadline fixed and announced by the Company for fixed and announced by the Company for accepting Member’s proposal. accepting Member’s proposal. (b) Prior to the relevant book closed period, the (b) Prior to the relevant book closed period, the Company shall, in accordance with the Company shall, in accordance with the Applicable Public Company Rules, provide a Applicable Public Company Rules, provide a public notice announcing the place and the

24

	Amended and Restated Articles	Current Articles（VII）
(c) (d) (e)	public notice announcing the place and the period for Members to submit proposals to be discussed at the general meeting. The period for accepting such proposals shall be at least 10 days. The number of words of a proposal to be submitted by a Member shall be limited to not more than 300 words, and any proposal containing more than 300 words shall not be included in the agenda of the general meeting. The Member who has submitted a proposal shall attend, in person or by a proxy, the general meeting whereat his proposal is to be discussed and shall take part in the discussion of such proposal. If the purpose of the proposal is to urge the Company to promote public interests or fulfill its social responsibilities, the Board may accept such proposal to be discussed in general meeting. The Company shall, prior to preparing and delivering the notice of the general meeting, inform in writing all the Members who have submitted proposals pursuant hereto about the proposal screening results, and shall list in the said notice the proposals confirming to the requirements as provided in this Article. With regard to the proposals submitted by Members but notincludedin the agenda of the general meeting, the cause of exclusion of such proposals and explanation shall be made by the Directors at the general meeting to be convened.	period for Members to submit proposals to be discussed at the general meeting. The period for accepting such proposals shall be at least 10 days. (c) The number of words of a proposal to be submitted by a Member shall be limited to not more than 300 words, and any proposal containing more than 300 words shall not be included in the agenda of the general meeting. The Member who has submitted a proposal shall attend, in person or by a proxy, the general meeting whereat his proposal is to be discussed and shall take part in the discussion of such proposal. (d) The Company shall, prior to preparing and delivering the notice of the general meeting, inform in writing all the Members who have submitted proposals pursuant hereto about the proposal screening results, and shall list in the said notice the proposals confirming to the requirements as provided in this Article. With regard to the proposals submitted by Members but not includd in the agenda of the general meeting, the cause of exclusion of such proposals and explanation shall be made by the Directors at the general meeting to be convened.
Article 64 Subject to the Statute, the Company may from time to time by Special Resolution: (a) change its name;		Article 64 Subject to the Statute, the Company may from time to time by Special Resolution: (a) change its name;

25

	Amended and Restated Articles	Current Articles（VII）
(b) (c) (d)	alter or add to these Articles;	(b) alter or add to these Articles; (c) alter or add to the Memorandum with respect to any objects, powers or other matters specified therein; or (d) reduce its share capital and any capital redemption reserve in any manner authorized by law.
Article 65 Subject to the Statute, the Company may from time to time by Supermajority Resolution: (a) enter into, amend, or terminate any agreement for lease of the Company’s whole business, or for delegation of management of the Company’s business, or for regular joint operation with others; (b) transfer its business or assets, in whole or in any essential part; (c) acquire or assume the whole business or assets of another person, which has a material effect on the Company’s operation; (d) discharge or remove any Director; (e) approve any action by one or more Director(s) who is engaging in business conduct for him/herself or on behalf of another person that is within the scope of the Company’s business; (f) effect any capitalization of distributable dividends and/or bonuses and/or any other amount prescribed under Article 123 hereof; (g) effect any Merger, Spin-off or Private Placement of the Company,provided that		Article 65 Subject to the Statute, the Company may from time to time by Supermajority Resolution: (a) enter into, amend, or terminate any agreement for lease of the Company’s whole business, or for delegation of management of the Company’s business, or for regular joint operation with others; (b) transfer its business or assets, in whole or in any essential part; (c) acquire or assume the whole business or assets of another person, which has a material effect on the Company’s operation; (d) discharge or remove any Director; (e) approve any action by one or more Director(s) who is engaging in business conduct for him/herself or on behalf of another person that is within the scope of the Company’s business; (f) effect any capitalization of distributable dividends and/or bonuses and/or any other amount prescribed under Article 123 hereof; (g) effect any Merger, Spin-off or Private Placement of the Company,provided that

26

	Amended and Restated Articles	Current Articles（VII）
(h) (i)	any Merger which falls within the definition of “merger and/or consolidation” under the Statute shall also be subject to the requirements of the Statute in addition to the requirement of these Articles; issue restricted shares to employees of the Company or of its Subsidiaries; or apply for termination of public offering.	any Merger which falls within the definition of “merger and/or consolidation” under the Statute shall also be subject to the requirements of the Statute in addition to the requirement of these Articles; or (h) issue restricted shares to employees of the Company or of its Subsidiaries.
Article 89 (b) Prior to the expiration of the term of office of existing Directors, in the event a re-election of all Directors is effected, and in the absence of such resolution that the existing Directors will not be discharged until the expiry of their present term of office, all existing Directors shall be deemed discharged in advance.		Article 89 (b) Prior to the expiration of the term of office of existing Directors, in the event a re-election of all Directors is effectedby a resolution adopted by a general meeting,and in the absence of such resolution that the existing Directors will not be discharged until the expiry of their present term of office, all existing Directors shall be deemed discharged in advance.
Article 94 (a) A director who has a personal interest in the matter under discussion at a meeting of Board of Directors shall explain to the Directors the essential contents of such personal interest Where the spouse, a blood relative within the second degree of kinship of a Director, or any company which has a controlling or subordinate relation with a Director has interests in the matters under discussion in the meeting of the preceding paragraph, such Director shall be deemed to have a personal interest in the matter.		Article 94 (a) A director who has a personal interest in the matter under discussion at a meeting of Board of Directors shall explain to the Directors the essential contents of such personal interest
Article 109 The office of a Director shall be vacated: (a) gives notice in writing to the Company that he resigns the office of Director; (b) is removed from office bySupermajority		Article 109 The office of a Director shall be vacated: (a) gives notice in writing to the Company that he resigns the office of Director; (b) is removed from office bySupermajority

27

	Amended and Restated Articles	Current Articles（VII）
(c) (d) (e) (f) (g) (h)	Resolution; having been adjudicated bankrupt or adjudicated of the commencement of liquidation process by a court, and having not been reinstated to his rights and privileges; having no or only limited disposing capacity or been adjudicated of the commencement of assistantship and such assistantship having not been revoked yet. having committed a offence of prevention of organized crimes and subsequently adjudicated guilty by a final judgment, and having not started serving the sentence, having not completed serving the sentence or five years have not elapsed since completion of serving the sentence, expiration of the probation, or pardon; having committed an offence involving fraud, breach of trust or misappropriation and subsequently punished with imprisonment for a term of more than one year,and having not started serving the sentence, having not completed serving the sentence or two years have not elapsed since completion of serving the sentence, expiration of the probation, or pardon; having been adjudicated guilty by a final judgment for misappropriating public funds during the time of his public service, and having not started serving the sentence, having not completed serving the sentence or two years have not elapsed since completion of serving the sentence, expiration of the probation, or pardon; or having been dishonored for unlawful use of credit instruments, and the term of such	Resolution; (c) becomes bankrupt or makes any arrangement or composition with his creditors generally; (d) an order is made by any competent court or official on the grounds that he is or will be suffering from mental disorder or is otherwise incapable of managing his affairs, or his legal capacity is restricted according to the applicable laws; (e) is found a lunatic or becomes of unsound mind; (f) having committed a offence as specified in the R.O.C. statute of prevention of organized crimes and subsequently adjudicated guilty by a final judgment , and the time elapsed after he has served the full term of the sentence is less than five years; (g) having committed an offence involving fraud, breach of trust or misappropriation and subsequently punished with imprisonment for a term of more than one year, and the time elapsed after he has served the full term of such sentence is less than two years; (h) having been adjudicated guilty by a final judgment for misappropriating public funds during the time of his public service, and the time elapsed after he has served the full term of such sentence is less than two years; or (i) having been dishonored for unlawful use of credit instruments, and the term of such sanction has not expired yet. In the event that any of the foregoing events described in clauses (c), (d), (f), (g), (h) and (i) has occurred to a Director elect, such Director elect shall be disqualified from beingelected as a

28

Amended and Restated Articles	Current Articles（VII）
sanction has not expired yet. In the event that any of the foregoing events described in clauses (c), (d),(e), (f), (g),and (h) has occurred to a Director elect, such Director elect shall be disqualified from being elected as a Director. If a Director(excluding Independent Director) whose Shares have transferred, during the term of office as a Director, more than one half of the Shares being held by him/her at the time he/she is elected, he/she shall, ipso facto, be discharged from the office of Director without a resolution adopted at a general meeting. If a Director (excluding Independent Director), after having been elected and before his/her inauguration of the office of Director, has transferred more than one half of the total number of Shares he/she holds at the time of his/her election as such; or had transferred more than one half of the total number of Shares he/she held within the book closed period prior to the convention of a general meeting under the Applicable Public Company Rules, then his/her election as a director shall become invalid without a resolution adopted at a general meeting.	Director. If a Director whose Shares have transferred, during the term of office as a Director, more than one half of the Shares being held by him/her at the time he/she is elected, he/she shall, ipso facto, be discharged from the office of Director without a resolution adopted at a general meeting. If a Director, after having been elected and before his/her inauguration of the office of Director, has transferred more than one half of the total number of Shares he/she holds at the time of his/her election as such; or had transferred more than one half of the total number of Shares he/she held within the book closed period prior to the convention of a general meeting under the Applicable Public Company Rules, then his/her election as a director shall become invalid without a resolution adopted at a general meeting.
Article 115 (b) The Company may distribute profits in accordance with a proposal for distribution of profits prepared by the Directors and approved by the Members by Ordinary Resolution. The Directors shall prepare such proposal as follows: the proposal shall begin with the Company’s Annual Net Income and offset its losses inpreviousyears that have	Article 115 (b) The Company may distribute profits in accordance with a proposal for distribution of profits prepared by the Directors and approved by the Members by Ordinary Resolution. The Directors shall prepare such proposal as follows: the proposal shall begin with the Company’s Annual Net Income and offset its losses inpreviousyears

29

		Amended and Restated Articles	Current Articles（VII）
		not been previously offset; then set aside a Legal Capital Reserve at 10% of the profits left over, until the accumulated Legal Capital Reserve has equaled the total paid-up capital of the Company; then set aside a Special Capital Reserve if one is required in accordance with the Applicable Public Company Rules or as requested by the authorities in charge. If there is net remainder, the Directorsmay prepare the proposal for distribution of Dividends, bonus or other benefits accounted together with undistributed profits accrued in previous yearsand submit to the general meeting for review and approval bya resolution.	that have not been previously offset; then set aside a Legal Capital Reserve at 10% of the profits left over, until the accumulated Legal Capital Reserve has equaled the total paid-up capital of the Company; then set aside a Special Capital Reserve if one is required in accordance with the Applicable Public Company Rules or as requested by the authorities in charge. If there is net remainder, the Directors shall prepare the proposal for distribution of dividends, bonus or other benefits and submit to the general meeting for review and approval by a resolution.
	Article 126-1 Audit Committee shall supervise the execution of business operations of the Company, and may at any time or from time to time investigate the business and financial conditions of the Company, inspect, transcribe or make copies of the accounting books and documents, and request the Board of Directors or managerial personnel to make reports thereon.		(Newly added)
	Article 126-2 Audit Committee shall audit the various statements and records prepared for submission to the general meeting by the Board of Directors, and shall make a report of their findings and opinions at the general meeting.		(Newly added)
	Article 126-3 In conducting investigation and relevant affairs, Audit Committee may appoint, on behalf of the Company, a practicing lawyer and a certified public accountant to conduct the examination.		(Newly added)
	Article 126-4 An Independent Director shall not be concurrently a Director, a managerial officer or		(Newly added)

30

	Amended and Restated Articles	Current Articles（VII）
	other staff/employee of the company.
	Article 134 The Board of Directors shall keep the Articles, all the minutes of general meetings, financial statements, the Register of Members, and the counterfoil of any corporate bonds issued by the Company at the office of the Company’s registrar (if applicable) and the Company’s Shareholders’ Service Agent located in R.O.C. The Members may request, from time to time, by submitting document(s) evidencing his/her interests involved and indicating the designated scope of the inspection, access to inspect, review, make copies of or reproducethe foregoing documents; and the Company shall make the shareholder service agent to provide with the access.	Article 134 The Board of Directors shall keep the Articles, all the minutes of general meetings, financial statements, the Register of Members, and the counterfoil of any corporate bonds issued by the Company at the office of the Company’s registrar (if applicable) and the Company’s Shareholders’ Service Agent located in R.O.C. The Members may request, from time to time, by submitting document(s) evidencing his/her interests involved and indicating the designated scope of the inspection, access to inspect, review or make copies of the foregoing documents.
	Article 134-1 The Board of Directors or other authorized conveners of general meetings may require the Company or the Shareholders’Service Agent to provide with the Register of Members.	(Newly added)
	Article 142 (b) Subject to the laws of Cayman Islands, Members continuously holding1%or more of the total issued Shares forsix monthsor longer may request in writing any Independent Director of the Audit Committee to file a litigation against any Director or Directors on behalf the Company, and the Taiwan Taipei District Court, R.O.C., may be the court of first instance for such matter. If the Independent Director of the Audit Committee who has been requested by such Members in accordance with the previous paragraph fails to file such litigation within	Article 142 (b) Subject to the laws of Cayman Islands, Members continuously holding 3% or more of the total issued Shares for a year or longer may request in writing any Independent Director of the Audit Committee to file a litigation against any Director or Directors on behalf the Company, and the Taiwan Taipei District Court, R.O.C., may be the court of first instance for such matter. If the Independent Director of the Audit Committee who has been requested by such Members in accordance with the previous paragraph fails to file such litigation within

31

		Amended and Restated Articles	Current Articles（VII）
		thirty (30) days after receiving the request by such Members, subject to the laws of Cayman, such Members may file such litigation on behalf of the Company, and the Taiwan Taipei District Court, R.O.C. may be the court of the first instance for such matter. Besides the situations that the Board of Directors does not or is unable to convene a general meeting, the Independent Director of Audit Committee may, for the benefit of the Company, also call a general meeting when it is deemed necessary.	thirty (30) days after receiving the request by such Members, subject to the laws of Cayman, such Members may file such litigation on behalf of the Company, and the Taiwan Taipei District Court, R.O.C. may be the court of the first instance for such matter.
	Article 143 The Company may purchase and maintain insurance for the benefit of any Director or officer against any liability incurred by him in his capacity as a Director or officer or indemnifying such Director or officer in respect of any loss arising or liability attaching to him by virtue of any rule of law in respect of any negligence, default, breach of duty or breach of trust of which the Director or officer may be guilty in relation to the Company or any Subsidiary thereof.		Article 143 To the maximum extent permitted by applicable law (including the Statute and Applicable Public Company Rules), the Company may, upon approval by Ordinary Resolution of a general meeting, purchase liability insurance for the Director(s), the officer(s) or trustee(s).
	Article 147 When conducting its business, the Company shall comply with the laws and regulations as well as business ethics and may take actions which will promote public interests in order to fulfill its social responsibilities.		(Newly added)

32