NPC — AGM Information 2019

Jun 19, 2019

NAN YA PLASTICS CORPORATION

2019 ANNUAL SHAREHOLDERS’ MEETING

MEETING HANDBOOK

(Summary)

(This English translation is prepared in accordance with the Chinese version and is for reference purposes only. If there are any inconsistency between the Chinese original and this translation, the Chinese version shall prevail.)

JUNE 12, 2019

Table of Contents

Meeting Procedure …….……………………………………	Page 1
Meeting Agenda ..………..………………..…………………	Page 2
Report Items …..……………………………………………	Page 4
Ratification Items …………………………………………….	Page 14
Discussion Items (I) .…………………………..……………	Page 16
Election Items ………………………………………………	Page 76
Discussion Items (II) …………………………………………	Page 81
Appendices …………………………………………………	Page 91

1. Independent Auditor’s Report

2. 2.Information regarding the Proposed Employees and Directors’ Compensation approved by the Board of Directors of the Company

3. 3.Effect upon Business Performance and Earnings per Share of the Company by the Stock Dividend Distribution Proposed at the 2019 Annual Shareholders’ Meeting

4. Articles of Incorporation of the Company

5. Rules of Procedure for Shareholders’ Meeting of the Company

6. 6.Procedures for Acquisition and Disposal of Assets of the Company

7. Procedures for Engaging in Derivatives Transactions of the Company

8. 8.Procedures for Loaning Funds to other Parties of the Company

9. 9.Procedures for Providing Endorsements and Guarantees to other Parties of the Company

10. Rules for Election of Directors of the Company

11. Current Shareholdings of Directors of the Company

NAN YA PLASTICS CORPORATION 2019 ANNUAL SHAREHOLDERS’ MEETING PROCEDURE

1. Call Meeting to Order

2. Chairman’s Address

3. Report Items

4. Ratification Items

5. Discussion Items (I)

6. Election Items

7. Discussion Items (II)

8. Extraordinary Motions

9. Meeting Adjourned

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NAN YA PLASTICS CORPORATION 2019 ANNUAL SHAREHOLDERS’ MEETING

AGENDA

Time: 2:00 p.m., Wednesday, June 12, 2019

Venue: 2F, International Ballroom, Sunworld Dynasty Hotel

  - (No. 100 Dun Hua North Road, Taipei, Taiwan)

1. Report Items

2. (1) 2018 Business Report

3. (2) Audit Committee’ Review Report on the 2018 Financial Statements

4. (3) Distribution of 2018 Employees Compensation

5. (4) Issue of 2018 Domestic Unsecured Ordinary Corporate Bonds

6. Ratification Items

7. (1) Please approve the 2018 Business Report and Financial Statements as required by the Company Act.

8. (2) Please approve the Proposal for Distribution of 2018 Profits as required by the Company Act.

9. Discussion Items (I)

10. (1) Amendment to the Procedures for Acquisition and Disposal of Assets of the Company. Please discuss and resolve.

11. (2) Amendment to the Procedures for Engaging in Derivatives Transactions of the Company. Please discuss and resolve.

12. (3) Amendment to the Procedures for Loaning Funds to other Parties of the Company. Please discuss and resolve.

13. (4) Amendment to the Procedures for Providing Endorsements and Guarantees to other Parties of the Company. Please discuss and resolve.

4. Election Items

The Company Directors have their tenure nearly expired. Please elect the Board of Directors to conform to the applicable laws.

1. Discussion Items (II)

2. (1) Appropriateness of releasing the newly elected Directors and the

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person shareholder which appointed their authorized representatives to be elected as directors, from non-competition restrictions. Please discuss and resolve.

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Report Items

1. About the Company’s business operation condition of 2018, please refer to Business Report for further details (on page 6 of the Handbook.) which is hereby reported for record.

2. The Company’s Audit Committee members reviewed the 2018 Business Report and Financial Statements and issued their Review Report according to the applicable laws. Please refer to Audit Committee’s Review Report (on page 13 of the Handbook.)

3. The company has issued the report on compensation distributed to its employees for 2018.

4. The pre-tax profit prior to deducting employees compensation distributable for 2018 is NT$57,878,570,814. The company has no accumulated losses. Adopted by the Board Meeting on March 20, 2019, 0.1% of the profit is allocated as employees’ compensation in accordance with Article 25 of the Articles of Incorporation. The total allocated amount is NT$57,878,571 which shall be distributed in cash. The above is hereby reported for record.

5. Issue of NT$10.5 Billion Domestic Unsecured Ordinary Corporate Bonds in 2018.

To raise long-term funds to build and expand current plant, to replace current plant and equipment, to pay off loans, to fund the working capital, and to invest in domestic or overseas business, the Board of Directors resolved on Mar. 23, 2018 to issue domestic unsecured ordinary corporate bonds of NT$11 Billion in 2018. To consider the market interest rate and the actual need, the Company only issued the bonds of NT$10.5 Billion on Sept. 6, 2018, which was reported to the Board of Directors on Nov. 12, 2018. The rest of unissued bonds of NT$0.5 Billion was not applied for Taipei Exchange.

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A summary of the major terms of the aforementioned bonds are as follows:

Tranche	Size (NT$ billion)	Coupon Rate(%,fixed annual rate)	Tenor (Year)	Principal Repayment Year
A	5.25	0.83	5	Half of the principal shall be repaid upon the end of the fourth year and the fifth year, respective from the date of issue.
B	3.05	0.91	7	Half of the principal shall be repaid upon the end of the sixth year and the seventh year, respective from the date of issue.
C	2.20	1.07	10	Half of the principal shall be repaid upon the end of the ninth year and the tenth year, respective from the date of issue.
Coupon Frequency	Annual. Interest shall be paid as simple interest rate.

The above is hereby reported for record.

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NAN YA PLASTICS CORPORATION

1.2018 Business Report

In 2018, Nan Ya Plastics Corporation (NPC) recorded a consolidated revenue of NT$333.06 billion, an increase of 8.8% over NT$306.14 billion in 2017, and a consolidated pre-tax income of NT$61.53 billion, which declined 2.0% compared with NT$62.78 billion in 2017.

In the first three quarters of 2018, global economic fundamentals were good, while raw material prices rose, driving the revenue growth of various products. Furthermore, NPC's complete industry chain and active development of high-value and differentiated products have also greatly increased our revenue and profit.

However, due to the China-U.S. trade war beginning the fourth quarter of 2018, global economic growth has declined, while oil prices have fallen by 40% from the high point at the beginning of October to the low point at the end of the year. As market demand froze rapidly, customers sat on the fence, dropping sales orders, our overall performance reflected a sharp downturn in the business environment.

Despite the significant change in the fourth quarter of 2018, NPC still managed to post a revenue at a record high, and achieve the third highest net income and earnings per share in our history, thanks to the foundation laid in the previous three quarters.

As far as NPC's scope of business is concerned, there are four major categories of products: plastic processing, petrochemicals, polyester, and electronic materials.

With regard to plastic processing products, NPC continues to engage in transformation due to increasingly mature processing technology in Mainland China and fierce price competition among local peers. Besides, NPC has incorporated automated monitoring to ensure stable quality during production. At the same time, NPC has accelerated the research and development of new applications, new materials, as well as products that meet the trend of environmental protection and unique specifications, in

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order to expand into new niche markets, thereby increasing the proportion of sales and profit of differentiated and high-value products. NPC deploys our production and marketing operations at various plants in Taiwan, Mainland China, the U.S., and Vietnam in a timely manner according to the characteristics of each market, supplemented with the launch of e-commerce and online marketing, to expand into high-end markets such as the U.S. and Japan, as well as emerging markets with high potential, so as to provide customers with satisfactory services. Through various efforts made by NPC, plastic processing products are still able to provide stable profits.

In regards to petrochemical products, in line with vertical integration and division of labor in the Sixth Naphtha Cracking Plant in Mailiao, NPC's products, including ethylene glycol (EG), Bisehnol A (BPA), 1,4-butylene glycol (1,4BG), plasticizers, phthalic anhydride (PA), 2-ethylhexanol (2EH), and epoxy resin (EPOXY), have been vertically integrated with upstream and downstream industries, thereby forming a complete supply chain, which supports the development of downstream industries such as polyester, electronics, and plastic processing, respectively.

In the first three quarters of 2018, prices and volume of petrochemical products increased considerably due to rising international oil prices and market demand. However, oil prices fell sharply starting October. Besides, the China-U.S. trade war and economic slowdown in China led to a decrease in prices of petrochemical products. Yet, NPC continuously promoted the improvement of various process optimizations, and fully comprehended market developments so as to effectively regulate production, sales, and inventory. Besides, NPC also stepped up efforts to expand into sales regions outside Mainland China in order to actively diversify our target market. By adjusting our production and sales strategies, NPC recorded a higher revenue and profit in 2018 than those in 2017.

In terms of polyester products, their prices and volume increased considerably due to significant increase in market demand and rising raw

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material costs in 2018, with polyester bottle chips showing the most obvious growth. Among differentiated and high-value products, polyester cotton and silk have achieved better performances. Shortage of passive components among downstream customers led to a considerable increase in demand for polyester release film products, thus demonstrating significant profit growth.

In the future, NPC will actively develop and promote products related to environmental protection, recycling and green energy, and collaborate with well-known brands to expand the application range of polyester products. In addition, NPC will also develop high-value products to segment the market and expand sales territory, while controlling product quality to enhance customers' recognition in order to open up new markets, so that sales will continue to increase, thereby maintaining stable profits.

Regarding electronic materials, various electronic product application devices continued to develop since the fourth quarter of 2016. Rising demand for electronic materials, along with a lag in the expansion of production capacity by manufacturers, has brought about a period of prosperity for this industry. With the gradual resumption of newly expanded production capacity in 2018, tensions in supply and demand began to slow down. In the first half of the year, market demand was stable; however, affected by the China-U.S. trade war in the fourth quarter of 2018, orders and demand for home appliances and other consumer electronics products dropped due to increasing market uncertainty, thus forcing end customers to reduce inventory and response to urgent orders, and make orders conservatively.

In the future, NPC will use our advantage from complete vertical integration involving upstream and downstream industries to accelerate the adjustment of production and sales strategies, as well as transformation in response to market developments. Moreover, NPC will actively launch and promote differentiated products and increase the sales proportion of high-value and highly functional niche products, while striving for full-scale production and sales; flexibly deploying production and sales operations in manufacturing plants located in both Mainland China and Taiwan, thereby driving revenue and profit increase.

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Nan Ya Printed Circuit Board Corp., which is reinvested by NPC, has long been focusing on the development and production of circuit boards and IC package substrates. In 2018, it had been committed to product transformation to reduce its reliance on personal computer application products, and had expanded into niche markets such as automobile electronics, network communications and system-in-package, and had been out of the red in the third quarter of 2018. In response to the future development trend of semiconductors, Nan Ya Printed Circuit Board Corp. has actively strengthened its research and development capabilities, while reorganizing the processing procedures and production conditions in the process area, replacing old machines, and incorporating advanced equipment including automated machines, in order to enhance process capability, product yield, and production efficiency, strengthening the operating performance. In the future, the company is expected to strive for more production orders of niche products, and acquire new customers while continuously advancing its production technology, improving yield and reducing costs, so as to improve its operating performance.

Nan Ya Technology Corp., another company reinvested by NPC, is committed to the development, manufacture and sale of dynamic random-access memory (DRAM) products. In 2018, it completed the development and sale of 20nm 8Gb DDR4, 4Gb DDR4 and 2Gb DDR3 etc., and reactivated the development of the server product market. In 2019, it plans to introduce a series of low-power products, with a view to enhancing the diversification of product applications and increasing competitiveness. Due to the healthy environment of the overall DRAM industry in 2018, its operating profit continued to rise, thereby generating profit at record high once more. In the future, DRAM is expected to be an indispensable key component in emerging applications, including 5G, artificial intelligence (AI), electric vehicles, and big data. Hence, Nan Ya Technology Corp. will continue to enhance its capabilities, including process technology, product design, and customer service in response to market demand, so as to provide customers with the best memory solutions.

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2.2018 Operating Status

The consolidated operating revenue was NT$333.06 billion in 2018, an increase of NT$26.92 billion, 8.8% over NT$306.14 billion in 2017. Deducted operating costs NT$284.00 billion and selling expenses and administrative expenses NT$19.64 billion the operating income was NT$29.42 billion in 2018 which declined 1.4% compared with NT$29.85 billion in 2017. Added up non-operating income and expenses NT$ 32.11billion the pre-tax income of 2018 was NT$61.53 billion and the pre-tax income margin was 18.5% a decrease of 2.0% over NT$62.78 billion in 2017.

3.2019 Business Outlook

Looking forward to 2019, the biggest uncertainty in the global economy is the evolution of the China-U.S. trade war. Given that every link of the global industry chain is tightly connected, international trade tensions will affect all economies in the world and inhibit economic growth momentum. With such a concern in the general environment, international research institutions have revised the global economic growth rate downward.

The introduction of tax reform in the U.S. has significantly boosted the investments of American and foreign companies, which drove economic growth, improved the employment market, increased consumption and capital expenditures, thereby stimulating the economy of other countries. However, its trade tension with China is set to continue. Coupled with the diminishing effects of tax cuts, it is generally expected that economic growth in the U.S. will slow down compared to last year.

With Mainland China experiencing a slowdown in gross domestic product (GDP) growth quarter by quarter last year, reduction of domestic investments and consumption, its economy is currently demonstrating a downward trend, and its industries are currently in the restructuring stage. Furthermore, with the China-U.S. trade war expanding into technology control and other non-economic aspects, the international community

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widely expects that economic growth will slow down further this year.

In summary, the global economy will continue to be affected by multiple factors, including the China-U.S. trade war, cross-strait relations, and oil price fluctuations. In the face of a complex international scenario, maintaining stable growth and profit continues to be NPC's most important goal.

NPC was able to achieve the expected results for four operational directions launched in 2018. These operational directions include: � Actively expand and segment the market to increase capacity utilization rate; � Enhance research and development, and develop high-value and differentiated products to increase profitability; � Implement circular economy, as well as reduce the use of resources and implement reuse of resources to realize cost-effectiveness; � Comprehensively promote process optimization and Industry 4.0, and incorporate AI to enhance product competitiveness

Changes in the global economy will be more and more difficult to predict in the future, and a complex and ever-changing international environment will affect global economic development. In the face of such an adversity and challenge, NPC adheres to our philosophy of inquiring into the root of the matter and aiming at the sovereign good, while continuously making improvements and pursuing rationalization. NPC will continue to drive the four operational directions above, where process optimization and AI will become the most important themes this year. NPC will use AI to develop the best process operation methods and conditions in order to enhance product quality and production efficiency.

Our ongoing capital expenditure plans include not only improvements in process optimization to increase production capacity and efficiency, but also continuous increase in domestic and overseas investment. Among our ongoing investment plans, domestic plans cover investments in high-value copper foil, polyester films, and PP synthetic paper, whereas overseas investment plans mainly involve the expansion of EG factory in the U.S. and copper foil substrate and fiberglass cloth factories in Mainland China. After going into production, it is estimated that these factories can generate

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an annual production output of NT$50 billion, which adds new production capacity to NPC, thereby driving continuous performance growth.

Chairman: Chia Chau, Wu President: Ming Jen, Tzou In-charge Accountant: Li Ta, Pai

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NAN YA PLASTICS CORPORATION Audit Committee’ Review Report

The Board of Directors has prepared the Company’s 2018 Business Report, Financial Statements, including Consolidated and Individual Financial Statements, and Proposal for Profits Distribution. The CPA firm of KPMG was retained to audit Nan Ya Plastics Corporation’s Financial Statements and has issued an audit report relating to Financial Statements. The Business Report, Financial Statements, and Proposal for Profits Distribution have been reviewed and determined to be correct and accurate

by the Audit Committee members of Nan Ya Plastics Corporation. According to the Securities and Exchange Act and the Company Act, we hereby submit this report. Please be advised accordingly.

Nan Ya Plastics Corporation

Chairman of the Audit Committee: Chih-Kang, Wang

March 20, 2019

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Ratification Items Proposal 1

Proposal: For approval of the 2018 Business Report and Financial Statements as required by the Company Act.

Proposed by the Board of Directors

Explanation:

1. The preparation of the Company’s 2018 Consolidated and Individual Financial Statements were completed and the same were approved by the Board Meeting on March 20, 2019, and audited by independent auditors, Ms. Hsin-Yi, Kuo and Mr. Chi-Lung, Yu, of KPMG. The aforesaid Financial Statements together with the Business Report were reviewed by the Audit Committee, which the Audit Committee’ Review Report is presented.

2. For the aforementioned Business Report, please refer to page 6 through page 12 of the Meeting Handbook. As for the Financial Statements, please refer to page 82 through page 89 of the Handbook. Please approve the Business Report and the Financial Statements.

Resolution:

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Ratification Items Proposal 2

Proposal: For Approval of the Proposal for Distribution of 2018 Profits as required by the Company Act.

Proposed by the Board of Directors

Attachment:

Please refer to page 90 of the Handbook for the Statement of Profits Distribution, which has been reviewed by the Audit Committee members on of Nan Ya Plastics Corporation and approved by the Board of Directors March 20, 2019.

Resolution:

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Discussion Items (I) Proposal 1

Proposal: Amendment to the Procedures for Acquisition and Disposal of Assets of the Company. Please discuss and resolve.

Proposed by the Board of Directors

Explanation:

To comply with the requirements provided in the order Jin-Guan-Zheng-Fa-Zi No. 1070341072 dated November 26, 2018 by the Financial Supervisory Commission, certain articles of the Procedures for Acquisition and Disposal of Assets provided by the Company have been amended. The comparison table for articles before and after amendment is hereby attached. Please determine whether the amendments are reasonable.

Article	Article before Amendment	Article	Article after Amendment
Article 1:	When acquiring or disposing of the following assets, Formosa Plastics Corporation (hereinafter referred to as the “Company”) and its subsidiaries shall follow the Procedures for Acquisition or Disposal of Assets (hereinafter referred to as the “Procedures”): 1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, asset-backed securities, etc. 2. Realproperty (including	Article 1:	When acquiring or disposing of the following assets, Formosa Plastics Corporation (hereinafter referred to as the “Company”) and its subsidiaries shall follow the Procedures for Acquisition or Disposal of Assets (hereinafter referred to as the “Procedures”): 1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, asset-backed securities, etc. 2. Realproperty (including

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Article	Article before Amendment	Article		Article after Amendment
	land, houses and buildings, investment property, and land use rights) and equipment. 3. Memberships. 4. Patents, copyrights, trademarks, franchise rights, and other intangible assets. 5. Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables). 6. Derivatives. 7. Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law. 8. Other major assets.			land, houses and buildings, investment property) and equipment. 3. Memberships. 4. Patents, copyrights, trademarks, franchise rights, and other intangible assets. 5. Right-of-use assets. 6.Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables). 7.Derivatives. 8.Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law. 9.Other major assets.
Article 2:	The limit amount of investments for non-operating real property or securities (the original investment), by the Company and each subsidiary, shall not exceed 60% of the book value of total assets; for an individual securities investment, the limit amount shall not exceed 50% of the foresaid limit amount, i.e. 30% of the book value of total assets.	Article 2:		The limit amount of investments for non-operating real property and right-of-use assetsor securities (the original investment), by the company and each subsidiary, shall not exceed 60% of the book value of total assets; for an individual securities investment, the limit amount shall not exceed 50% of the foresaid limit amount, i.e. 30% of the book value of

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Article	Article before Amendment	Article	Article after Amendment
			total assets.
Article 3:	Terms used in these Procedures are defined as follows: 1.Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, swap contracts,and compound contracts combining the above products,whose value is derived from assets,interest rates, foreign exchangerates, indexes or other interests. The term "forward contracts" does not include insurance contracts, performance contracts, post-sale service contracts, long-term leasing contract, and long-term procurement (sales)agreements. 2.Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law: Refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial HoldingCompanyAct,	Article 3:	Terms used in these Procedures are defined as follows: 1. Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts, whose value is derived from a specified interest rate, financial instrument price, commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable;or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives. The term "forward contracts" does not include insurance contracts, performance contracts, post-sales service contracts, long-term leasing contracts, or long-term purchase (sales) contracts. 2. Assets acquired or

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Article Article before Amendment Article Article after Amendment Financial Institutions disposed through mergers, Merger Act and other acts, demergers, acquisitions, or to transfer of shares or transfer of shares in from another company accordance with law: through issuance of new Refers to assets acquired shares of its own as the or disposed through consideration therefor mergers, demergers, or (hereinafter "acquisition of acquisitions conducted shares") under Article 156, under the Business paragraph 6 of the Mergers and Acquisitions Company Act. Act, Financial Holding 3. Related party or Company Act, Financial subsidiary: As defined in Institutions Merger Act the Regulations Governing and other acts, or to the Preparation of Financial transfer of shares from Reports by Securities another company through Issuers. issuance of new shares of 4. Professional appraiser: its own as the Refers to a real property consideration therefor appraiser or other person (hereinafter " acquisition duly authorized by law to of shares") under Article engage in the value 156 -3 of the Company Act.

1. Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment.

2. Related party or subsidiary: As defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

3. Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of Board of Directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier;

4. Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in the value

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Article	Article before Amendment	Article	Article after Amendment
	provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply. 6.Mainland China area investment: Refers to investments in the Mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area.		appraisal of real property or equipment. 5. Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of Board of Directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply. 6. Mainland China area investment: Refers to investments in the Mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation

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Article		Article before Amendment	Article		Article after Amendment
					in the Mainland Area.
Article 4:		Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions in relation to the assets acquired or disposed, shallnot be a related party of any party to the transaction.	Article 4:		Professional appraisers and their officers, certified public accounts, attorneys, and securities underwriters that provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions in relation to the assets acquired or disposed, shall meet the following requirements: 1. May not have previously received a final and unappealable sentence to imprisonment for 1 year or longer for a violation of the Act, the Company Act, the Banking Act of The Republic of China, the Insurance Act, the Financial Holding Company Act, or the Business Entity Accounting Act, or for fraud, breach of trust, embezzlement, forgery of documents, or occupational crime. However, this provision does not apply if 3 years have already passed since completion of
					**1. **

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Article	Article before Amendment	Article	Article after Amendment	Article after Amendment
			2. **3. **	service of the sentence, since expiration of the period of a suspended sentence, or since a pardon was received. May not be a related party or de facto related party of the Company. If the company is required to obtain appraisal reports from two or more professional appraisers, the different professional appraisers or appraisal officers may not be related parties or de facto related parties of each other.
Article 6:	Where an acquisition or disposition of assets of the Company shall be approved by the Board of Directors in accordance with the provisions of the Procedures or other relevant laws, the independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. A major asset transaction or	Article 6:	Where an acquisition or disposition of assets of the Company shall be approved by the Board of Directors in accordance with the provisions of the Procedures or other relevant laws, the independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. A major asset transaction or

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Article	Article before Amendment	Article		Article after Amendment
	a derivatives transaction shall be approved by more than half of all audit committee members and submitted to the Board of Directors for a resolution. If approval of more than half of all audit committee members is not obtained, the procedures may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.			a major derivatives transaction shall be approved by more than half of all audit committee members and submitted to the Board of Directors for a resolution. If approval of more than half of all audit committee members is not obtained, the procedures may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.
Article 7:	In acquiring or disposing of real propertyorequipment where the transaction amount reaches 20 percent of the company's paid-in capital or NT$300 million or more, the Company, unless transacting with a government institution, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further	Article 7:		In acquiring or disposing of real property,equipment, or right-of-use assets thereof where the transaction amount reaches 20 percent of the Company's paid-in capital or NT$300 million or more, the Company, unless transacting with a domestic government institution, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment or right-of-use assets thereof for business use, shall obtain an appraisal report prior to the date of occurrence of the

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Article	Article before Amendment	Article	Article after Amendment
	comply with the following provisions: 1. Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the Board of Directors, andthe same procedure shall be followed for anyfuturechanges to the terms and conditions of the transaction. 2. Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained. 3.Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certifiedpublic accountant		event from a professional appraiser and shall further comply with the following provisions: 1. Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the Board of Directors; the same procedure shall alsobe followed for any subsequent change to the terms and conditions of the transaction. 2. Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained. 3. Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount,or

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Article	Article before Amendment	Article	Article after Amendment
	shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the Accounting Research and Development Foundation in Taiwan (ARDF) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price: (1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount. (2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount. 4. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publiclyannounced		all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the Accounting Research and Development Foundation in Taiwan (ARDF) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price: (1)The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the transaction amount. (2)The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount. 4. No more than 3 months mayelapse between the

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Article		Article before Amendment	Article		Article after Amendment
		current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.			date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.
Article8-1:		In acquiring or disposing of membership cards or intangible assets where the transaction amount reaches 20 percent or more of the company's paid-in capital or NT$300 million or more, the Company, unless transacting with a government institution, shall engage a CPA to render an opinion on the reasonableness of the transaction price prior to the date of occurrence of the event. The CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.	Article9:		In acquiring or disposing of intangible assetsor right-of-use assets thereof or memberships where the transaction amount reaches 20 percent or more of the company's paid-in capital or NT$300 million or more, the Company, unless transacting with a domestic government institution, shall engage a CPA to render an opinion on the reasonableness of the transaction price prior to the date of occurrence of the event. The CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published bythe ARDF.
Article8-2:		The calculation of the transaction amounts referred	Article 10:		The calculation of the transaction amounts referred

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Article	Article before Amendment	Article	Article after Amendment
	to in the preceding three articles shall be done in accordance with Article26, paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.		to in the preceding three articles shall be done in accordance with Article 28, paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.
Article9:	Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion.	Article 11:	Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion.
Article10:	Where the Company acquires or disposes of assets shall be conducted by the Chairman delegated by the Board of Directors or in accordance with the authorization limits of the Company.	Article 12:	Where the Company acquires or disposes of assets shall be conducted by the Chairman delegated by the Board of Directors or in accordance with the authorization limits of the Company.
Article11:	When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the	Article 13:	When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the

27

Article	Article before Amendment	Article		Article after Amendment
	reasonableness of the transaction terms is appraised in compliance with the provisions of Chapter 2 and this Chapter, if the transaction amount reaches 10 percent or more of the Company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in compliance with the provisions of Chapter 2. The calculation of the transaction amount referred to in the preceding paragraph shall be made in accordance with Article8-1.			reasonableness of the transaction terms is appraised in compliance with the provisions of Chapter 2 and this Chapter, if the transaction amount reaches 10 percent or more of the Company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in compliance with the provisions of Chapter 2. The calculation of the transaction amount referred to in the preceding paragraph shall be made in accordance with Article 10.
Article12:	When the Company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NT$300 million or more, except in trading of government bonds or bonds under repurchase and resale agreements,or subscription	Article 14:		When the Company intends to acquire or dispose of real property or right-of-use assets thereof from or to a related party, or when it intends to acquire or dispose of assets other than real property or right-of-use assets thereof from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NT$300 million or more, except in tradingof domestic

28

Article	Article before Amendment	Article	Article after Amendment
	or repurchase of money market funds issued by domestic securities investment trust enterprises, the Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the Board of Directors: 1. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets. 2. The reason for choosing the related party as a trading counterparty. 3. With respect to the acquisition of real property from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article13through Article 15. 4. The date and price at which the related party originally acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the Companyand the related		government bonds or bonds under repurchase and resale agreements, or subscription or repurchase of money market funds issued by domestic securities investment trust enterprises, the Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the Board of Directors: 1. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets. 2. The reason for choosing the related party as a transaction counterparty. 3. With respect to the acquisition of real property or right-of-use assets thereof from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article 15through Article 17. 4. The date and price at which the related party originally acquired the real property, the original tradingcounterparty,and

29

Article Article before Amendment Article Article after Amendment party. that trading counterparty's 5. Monthly cash flow relationship to the forecasts for the year Company and the related commencing from the party. anticipated month of 5. Monthly cash flow signing of the contract, and forecasts for the year evaluation of the necessity commencing from the of the transaction, and anticipated month of reasonableness of the funds signing of the contract, and utilization. evaluation of the necessity 6. An appraisal report from a of the transaction, and professional appraiser or a reasonableness of the funds CPA's opinion obtained in utilization. compliance with the 6. An appraisal report from a preceding article. professional appraiser or a 7. Restrictive covenants and CPA's opinion obtained in other important stipulations compliance with the associated with the preceding article. transaction. 7. Restrictive covenants and The calculation of the other important transaction amounts referred stipulations associated with to in the preceding paragraph the transaction. shall be made in accordance The calculation of the with Article 26, paragraph 2 transaction amounts referred herein, and "within the to in the preceding paragraph preceding year" as used shall be made in accordance herein refers to the year with Article 28 , paragraph 2 preceding the date of herein, and "within the occurrence of the current preceding year" as used herein transaction. Items that have refers to the year preceding been approved by the Board the date of occurrence of the of Directors need not be current transaction. Items that counted toward the have been approved by the transaction amount. Board of Directors need not With respect to the be counted toward the

30

Article		Article before Amendment	Article		Article after Amendment
		acquisition or disposal of business-use equipment between the Company and its parent or subsidiaries, the Company's Board of Directors may pursuant to Article10delegate the Chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next Board of Directors meeting. When a matter is submitted for discussion by the Board of Directors pursuant to paragraph 1 of this Article, the independent Directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. The matters which paragraph 1 requires submitting to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter maybe			transaction amount. With respect to thetypes of transactions listed below, when to be conducted between the Company and its parent or subsidiaries, or between its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, the Company's Board of Directors may pursuant to Article 12, delegate the Chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next Board of Directors meeting: 1. Acquisition or disposal of equipment or right-of-use assets thereof held for business use. 2. Acquisition or disposal of real property right-of-use assets held for business use. When a matter is submitted for discussion by the Board of Directors pursuant to paragraph 1 of this Article, the independent Directors'

31

Article	Article before Amendment	Article		Article after Amendment
	implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.			opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. The matters which paragraph 1 requires submitting to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.
Article13:	The Company shall evaluate the reasonableness of the transaction costs by the following means if it intends to acquire real property from a related party: 1. Based upon the related party's transaction price plus necessary interest on funding and the costs to be dulyborne	Article 15:		The Company shall evaluate the reasonableness of the transaction costs by the following means if it intends to acquire real property or right-of-use assets thereof from a related party: 1. Based upon the related party's transaction price plus necessary interest on fundingand the costs to

32

Article	Article before Amendment	Article	Article after Amendment
	by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance. 2. Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties. Where land and structures		be duly borne by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance. 2. Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties. Where land and structures

33

Article		Article before Amendment	Article		Article after Amendment	Article after Amendment
		thereupon are combined as a single property purchased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph. When acquiring real property from a related party, the Company shall evaluate and appraise the cost of the real property in accordance with paragraph 1 and paragraph 2 andshall also engage a CPA to review the appraisal and render a specific opinion.			thereupon are combined as a single property purchased or leasedin one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph. When acquires real property or right-of-use assets thereof
					from a related party, the Company shall evaluate and appraises the cost of the real property or right-of-use assets thereof in accordance withthe preceding two paragraphs shall also engage a CPA to review the appraisal and render a specific opinion.
Article14:		Where the Company acquires real property from a related party and one of the following circumstances exists, the acquisition shall be conducted in accordance with Article12, and Article13does not apply: 1. The related party acquired the real property through inheritance or as a gift. 2. More than 5 years have elapsed from the time the related party signed the contract to obtain the real propertyto the signingdate	Article 16:		Where the Company acquires real property or right-of-use assets thereof from a related party and one of the following circumstances exists, the acquisition shall be conducted in accordance with Article 14, and Article 15 does not apply: 1. The related party acquired the real property or right-of-use assets thereof through inheritance or as a gift. 2. More than 5 years have elapsed from the time the
						through inheritance or as a gift. More than 5 years have elapsed from the time the

34

Article	Article before Amendment	Article	Article after Amendment	Article after Amendment
	for the current transaction. 3. The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land.		3. **4. **	related party signed the contract to obtain the real property or right-of-use assets thereof to the signing date for the current transaction. The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land. The real property right-of-use assets for business use are acquired
				by the Company with its parent or subsidiaries, or
				by its subsidiaries in which it directly or indirectly holds 100 percent of the issued shares or authorized capital.
Article15:	When the results of the Company's appraisal conducted in accordance with Article13, paragraph 1 and paragraph 2 herein are uniformly lower than the transaction price, the matter shall be handled in compliance with Article16.	Article 17:	When the results of the Company's appraisal conducted in accordance with Article 15, paragraph 1 and paragraph 2 herein are uniformly lower than the transaction price, the matter shall be handled in compliance with Article 18.

35

Article	Article before Amendment	Article	Article after Amendment
	However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA, this restriction shall not apply: 1.Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions: (1) Where undeveloped land is appraised in accordance with the means in the preceding two Articles, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division		However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA, this restriction shall not apply: 1. Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions: (1)Where undeveloped land is appraised in accordance with the means in the preceding two Article, and structures according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division

36

Article	Article before Amendment	Article before Amendment	Article before Amendment	Article	Article after Amendment
		(2) (3)	over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower. Completedtransactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market practices. Completed leasing transactions by unrelated parties for other floors of the same property from within the preceding year, where the transaction terms are similar after calculation of		over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower. (2) Transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market sale or leasing practices. 2. Where the Company acquiring real property, or obtaining real property right-of-use assets through leasing, from a related party provides evidence that the terms of the transaction are similar to the terms of

37

Article Article before Amendment Article

reasonable price discrepancies among floors in accordance with standard property leasing market practices. 2. Where the Company acquiring real property from a related party provides evidence that the terms of the transaction are similar to the terms of transactions completed for the acquisition of neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year.

Completed transactions for neighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transaction for similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the

Article after Amendment

transactions for the acquisition of neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year. Transactions for neighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transactions for similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the real property or the right-of-use assets thereof .

38

Article		Article before Amendment	Article		Article after Amendment
		property in the planned transaction; within the preceding year refers to the year preceding the date of occurrence of the acquisition of the realproperty.
Article16:		Where the Company acquires real property from a related party and the results of appraisals conducted in accordance withArticle 13 through Article 15are uniformly lower than the transaction price, the following steps shall be taken: 1. A special reserve shall be set aside in accordance with Article 41, paragraph 1 of the Securities and Exchange Act against the difference between the real property transaction price and the appraised cost, and such difference may not be distributed or used for capital increase or issuance of bonus shares. Where the Company uses the equity method to account for its investment in another company, then the special reserve called for under Article 41, paragraph 1 of the Securities and	Article 18:		Where the Company acquires real property or right-of-use assets thereof from a related party and the results of appraisals conducted in accordance with the preceding three Articles are uniformly lower than the transaction price, the following steps shall be taken: 1. A special reserve shall be set aside in accordance with Article 41, paragraph 1 of the Securities and Exchange Act against the difference between the real property or right-of-use assets thereof transaction price and the appraised cost, and such difference may not be distributed or used for capital increase or issuance of bonus shares. Where the Company uses the equity method to account for its investment in another company, then the special reserve called for under Article 41,

39

Article Article before Amendment Article Article after Amendment Exchange Act shall be set paragraph 1 of the aside pro rata in a Securities and Exchange proportion consistent with Act shall be set aside pro the share of public rata in a proportion company's equity stake in consistent with the share of the other company. public company's equity 2. Audit Committee shall stake in the other company. supervise the Company’s 2. Audit Committee shall execution of the aforesaid supervise the Company’s matter. execution of the aforesaid matter.

1. Actions taken pursuant to subparagraph 1 and subparagraph 2 shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

2. Actions taken pursuant to the preceding two subparagraphs shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

Where the Company has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the securities

Where the Company has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased or leased at a premium, or they have been disposed of , or the leasing contract has been terminated , or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence

40

Article	Article before Amendment	Article		Article after Amendment
	competent authority has given its consent. When the Company obtains real property from a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arm’s length transaction.			confirming that there was nothing unreasonable about the transaction, and the securities competent authority has given its consent. When the Company obtains real property or right-of-use assets thereof from a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arm’s length transaction.
Article 17:	Any derivatives trading of the Company shall be conducted in accordance with the “Procedures for Engaging in Derivatives Transactions” of the Company, moreover, the Company shall pay strict attention to control the risk management and to audit the Internal Control System of the Company.	Article 19:		Any derivatives trading of the Company shall be conducted in accordance with the “Procedures for Engaging in Derivatives Transactions” of the Company, moreover, the Company shall pay strict attention to control the risk management and to audit the Internal Control System of the Company.
Article18:	Where the Company conducts a merger, demerger, acquisition, or transfer of shares, prior to convening the Board of Directors to resolve on the matter, shall engage a CPA, attorney, or securities underwriter to give an opinion on the reasonableness of the	Article 20:		Where the Company conducts a merger, demerger, acquisition, or transfer of shares, prior to convening the Board of Directors to resolve on the matter, shall engage a CPA, attorney, or securities underwriter to give an opinion on the reasonableness of the

41

Article	Article before Amendment	Article	Article after Amendment
	share exchange ratio, acquisition price, or distribution of cash or other property to shareholders, and submit the opinion to the Board of Directors for deliberation and approval. However, the requirement of obtaining an aforesaid opinion on reasonableness issued by an expert may be exempted in the case of a merger by the Company of a subsidiary in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, and in the case of a merger between subsidiaries in which the Company directly or indirectly holds 100 percent of the respective subsidiaries’ issued shares or authorized capital.		share exchange ratio, acquisition price, or distribution of cash or other property to shareholders, and submit the opinion to the Board of Directors for deliberation and approval. However, the requirement of obtaining an aforesaid opinion on reasonableness issued by an expert may be exempted in the case of a merger by the Company of a subsidiary in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, and in the case of a merger between subsidiaries in which the Company directly or indirectly holds 100 percent of the respective subsidiaries’ issued shares or authorized capital.
Article19:	Where the Company participates in a merger, demerger, or acquisition shall prepare a public report to shareholders detailing important contractual content and matters relevant to the merger, demerger, or acquisition prior to the shareholders meeting, together with the expert opinion referred to in Article18when	Article 21:	Where the Company participates in a merger, demerger, or acquisition shall prepare a public report to shareholders detailing important contractual content and matters relevant to the merger, demerger, or acquisition prior to the shareholders meeting, together with the expert opinion referred to in Article 20 when

42

Article	Article before Amendment	Article	Article after Amendment
	sending notification of the shareholders meeting, for reference in deciding whether to approve the merger, demerger, or acquisition. Provided, where a provision of another act exempts a company from convening a shareholders meeting to approve the merger, demerger, or acquisition, this restriction shall not apply. Where the shareholders meeting of any one of the companies participating in a merger, demerger, or acquisition fails to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by the shareholders meeting, the Company shall immediately publicly explain the reason, the follow-up measures, and the preliminary date of the next shareholders meeting.		sending notification of the shareholders meeting, for reference in deciding whether to approve the merger, demerger, or acquisition. Provided, where a provision of another act exempts a company from convening a shareholders meeting to approve the merger, demerger, or acquisition, this restriction shall not apply. Where the shareholders meeting of any one of the companies participating in a merger, demerger, or acquisition fails to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by the shareholders meeting, the Company shall immediately publicly explain the reason, the follow-up measures, and the preliminary date of the next shareholders meeting.
Article20:	Where the Company participates in a merger, demerger, or acquisition shall convene a Board of Directors meeting and shareholders meeting on the date which the other companies participatingin the merger,	Article 22:	Where the Company participates in a merger, demerger, or acquisition shall convene a Board of Directors meeting and shareholders meeting on the date which the other companiesparticipatingin

43

Article	Article before Amendment	Article	Article after Amendment
	demerger, or acquisition convene their Board of Directors and shareholders meeting to resolve matters relevant to the merger, demerger, or acquisition, unless another act provides otherwise or the securities competent authority is notified in advance of extraordinary circumstances and grants consent. Where the Company and the other companies participating in a transfer of shares shall call their respective Board of Directors meeting on the same day, unless another act provides otherwise or the securities competent authority is notified in advance of extraordinary circumstances and grants consent. Where the Company participates in a merger, demerger, acquisition, or transfer of shares shall prepare a full written record of the following information and retain the record for 5 years for reference. In addition, the information set out in the subparagraphs 1 and 2 of the following		the merger, demerger, or acquisition convene their Board of Directors and shareholders meeting to resolve matters relevant to the merger, demerger, or acquisition, unless another act provides otherwise or the securities competent authority is notified in advance of extraordinary circumstances and grants consent. Where the Company and the other companies participating in a transfer of shares shall call their respective Board of Directors meeting on the same day, unless another act provides otherwise or the securities competent authority is notified in advance of extraordinary circumstances and grants consent. Where the Company participates in a merger, demerger, acquisition, or transfer of shares shall prepare a full written record of the following information and retain the record for 5 years for reference. In addition, the information set out in the subparagraphs 1 and 2 of the following

44

Article	Article before Amendment	Article	Article after Amendment
	paragraph shall be reported in the prescribed format and via the Internet-based information system to the securities competent authority for recordation within two days commencing immediately from the date of passage of a resolution by the Board of Directors. 1. Basic identification data for personnel: Including the occupational titles, names, and national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the planning or implementation of any merger, demerger, acquisition, or transfer of shares prior to disclosure of the information. 2. Dates of material events: Including the signing of any letter of intent or memorandum of understanding, the engagement of a financial or legal advisor, the execution of a contract, and the convening of a Board of Directors meeting. 3. Important documents and minutes: Includingmerger,		paragraph shall be reported in the prescribed format and via the Internet-based information system to the securities competent authority for recordation within two days commencing immediately from the date of passage of a resolution by the Board of Directors. 1. Basic identification data for personnel: Including the occupational titles, names, and national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the planning or implementation of any merger, demerger, acquisition, or transfer of shares prior to disclosure of the information. 2. Dates of material events: Including the signing of any letter of intent or memorandum of understanding, the engagement of a financial or legal advisor, the execution of a contract, and the convening of a Board of Directors meeting. 3. Important documents and minutes: Includingmerger,

45

Article	Article before Amendment	Article	Article after Amendment
	demerger, acquisition, and share transfer plans, any letter of intent or memorandum of understanding, material contracts, and minutes of Board of Directors meetings. Where any of the companies participates in a merger, demerger, acquisition, or transfer of shares is neither listed on an exchange nor has its shares traded on an OTC market, the Company shall enter into an agreement with such party and shall comply with the preceding paragraph of this Article.		demerger, acquisition, and share transfer plans, any letter of intent or memorandum of understanding, material contracts, and minutes of Board of Directors meetings. Where any of the companies participates in a merger, demerger, acquisition, or transfer of shares is neither listed on an exchange nor has its shares traded on an OTC market, the Company shall enter into an agreement with such party and shall comply with the preceding paragraph of this Article.
Article21:	Every person participating in or privy to the plan for merger, demerger, acquisition, or transfer of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to public disclosure of the information and may not trade, in their own name or under the name of another person, in any stock or other equity security of any company related to the plan for merger, demerger, acquisition,or transfer of	Article 23:	Every person participating in or privy to the plan for merger, demerger, acquisition, or transfer of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to public disclosure of the information and may not trade, in their own name or under the name of another person, in any stock or other equity security of any company related to the plan for merger, demerger, acquisition,or transfer of

46

Article	Article before Amendment	Article	Article after Amendment
	shares.		shares.
Article22:	Where the Company participates in a merger, demerger, acquisition, or transfer of shares, the Company shall not arbitrarily alter the share exchange ratio or acquisition price unless under the below-listed circumstances, and shall stipulate the circumstances permitting alteration in the contract for the merger, demerger, acquisition, or transfer of shares: 1. Cash capital increase, issuance of convertible corporate bonds, or the issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity based securities. 2. An action, such as a disposal of major assets that affects the Company's financial operations. 3. An event, such as a major disaster or major change in technology that affects shareholder equity or share price. 4. An adjustment where any of the companies	Article 24:	Where the Company participates in a merger, demerger, acquisition, or transfer of shares, the Company shall not arbitrarily alter the share exchange ratio or acquisition price unless under the below-listed circumstances, and shall stipulate the circumstances permitting alteration in the contract for the merger, demerger, acquisition, or transfer of shares: 1. Cash capital increase, issuance of convertible corporate bonds, or the issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity based securities. 2. An action, such as a disposal of major assets that affects the company's financial operations. 3. An event, such as a major disaster or major change in technology that affects shareholder equity or share price. 4. An adjustment where any

47

Article	Article before Amendment	Article	Article after Amendment
	participating in the merger, demerger, acquisition, or transfer of shares buys back treasury stock. 5. An increase or decrease in the number of entities or companies participating in the merger, demerger, acquisition, or transfer of shares. 6. Other terms/conditions that the contract stipulates may be altered and that have been publicly disclosed.		of the companies participating in the merger, demerger, acquisition, or transfer of shares buys back treasury stock. 5. An increase or decrease in the number of entities or companies participating in the merger, demerger, acquisition, or transfer of shares. 6. Other terms/conditions that the contract stipulates may be altered and that have beenpubliclydisclosed.
Article23:	Article 23: The contract for participation by the Company in a merger, demerger, acquisition, or transfer of shares shall record the rights and obligations of the companies participating in the merger, demerger, acquisition, or transfer of shares, and shall also record the following: 1. Handling of breach of contract. 2. Principles for the handling of equity-type securities previously issued or treasury stock previously bought back by any company that is extinguished in a merger or	Article 25:	The contract for participation by the Company in a merger, demerger, acquisition, or transfer of shares shall record the rights and obligations of the companies participating in the merger, demerger, acquisition, or transfer of shares, and shall also record the following: 1. Handling of breach of contract. 2. Principles for the handling of equity-type securities previously issued or treasury stock previously bought back by any company that is extinguished in a merger or that is demerged.

48

Article	Article before Amendment	Article	Article after Amendment
	that is demerged. 3.The amount of treasury stock participating companies are permitted under law to buy back after the record date of calculation of the share exchange ratio, and the principles for handling thereof. 4. The manner of handling changes in the number of participating entities or companies. 5. Preliminary progress schedule for plan execution, and anticipated completion date. 6. Scheduled date for convening the legally mandated shareholders meeting if the plan exceeds the deadline without completion, and relevant procedures.		3.The amount of treasury stock participating companies are permitted under law to buy back after the record date of calculation of the share exchange ratio, and the principles for handling thereof. 4. The manner of handling changes in the number of participating entities or companies. 5. Preliminary progress schedule for plan execution, and anticipated completion date. 6. Scheduled date for convening the legally mandated shareholders meeting if the plan exceeds the deadline without completion, and relevant procedures.
Article24:	After public disclosure of the information, if the Company participates in the merger, demerger, acquisition, or transfer of shares and intends further to carry out a merger, demerger, acquisition, or transfer of shares with another company, all of the participatingcompanies shall	Article 26:	After public disclosure of the information, if the Company participates in the merger, demerger, acquisition, or transfer of shares and intends further to carry out a merger, demerger, acquisition, or transfer of shares with another company, all of the participatingcompanies shall

49

Article	Article before Amendment	Article	Article after Amendment
	carry out anew the procedures or legal actions that had originally been completed toward the merger, demerger, acquisition, or transfer of share ; except that where the number of participating companies is decreased and a participating company's shareholders meeting has adopted a resolution authorizing the Board of Directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.		carry out anew the procedures or legal actions that had originally been completed toward the merger, demerger, acquisition, or transfer of share ; except that where the number of participating companies is decreased and a participating company's shareholders meeting has adopted a resolution authorizing the Board of Directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.
Article25:	Where any of the companies participating in a merger, demerger, acquisition, or transfer of shares is not a public company, the Company shall sign an agreement with the non-public company in accordance with the provisions of Article20, Article21,and Article24.	Article 27:	Where any of the companies participating in a merger, demerger, acquisition, or transfer of shares is not a public company, the Company shall sign an agreement with the non-public company in accordance with the provisions of Article 22, Article 23,and Article 26.
Article26:	Article 26: Under any of the following circumstances, where the Company acquires or disposes of assets shall publicly announce and report the relevant information on	Article 28:	Under any of the following circumstances, the company acquiring or disposing of assets shall publicly announce and report the relevant information on the securities competent authority's

50

Article	Article before Amendment	Article	Article after Amendment	Article after Amendment
	the securities competent authority's designated website in the appropriate format as prescribed by regulations within 2 days commencing immediately from the date of occurrence of the event: 1.Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NT$300 million or more; provided, this shall not apply to trading of government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. 2. Merger, demerger, acquisition, or transfer of shares. 3. Losses from derivatives tradingreachingthe limits		designated website in the appropriate format as prescribed by regulations within 2 days counting inclusively from the date of occurrence of the event: 1. Acquisition or disposal of real property or right-of-use assets thereof from or to a related party, or acquisition or disposal of assets other than real property or right-of-use assets thereoffrom or to a related party where the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NT$300 million or more; provided, this shall not apply to trading of domestic government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. 2. Merger, demerger, acquisition, or transfer of shares. 3. Losses from derivatives
				from or to a related party, or acquisition or disposal of assets other than real property or right-of-use assets thereoffrom or to a related party where the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NT$300 million or more; provided, this shall not apply to trading of domestic government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. Merger, demerger, acquisition, or transfer of shares. Losses from derivatives

51

Article

Article	Article before Amendment	Article	Article after Amendment	Article after Amendment
	on aggregate losses or losses on individual contracts set out in the procedures adopted by the Company. 4. Wherethe type of asset acquired or disposed is equipment/machinery for business use, the trading counterparty is not a related party, and the transaction amount is more than NT$1 billion. 5. Where land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the Company expects to invest in the transaction is more than NT$500 million. 6.Where an asset transaction other than any of those referred to in the preceding five subparagraphs, a disposal of receivables by a financial institution,or an		4. 5.	trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the Company. Where equipment/machinery or right-of-use assets thereof
				for business use are acquired or disposed of, and furthermore the trading counterparty is not a related party, and the transaction amount is more than NT$1 billion. Where land is acquired under an arrangement on engaging others to build on the company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and furthermore the trading counterparty is not a related party,and the amount the Company expects to invest in the transaction reaches NT$500 million.

52

Article	Article before Amendment	Article	Article after Amendment
	investment in the mainland China area where the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million or more, provided this shall not apply to the following circumstances: (1) Trading of government bonds. (2) Trading of bonds under repurchase/resale agreements or the subscription or redemption of money market funds issued by domestic securities investment trust enterprises. The amount of transactions above shall be calculated as follows: 1. The amount of any individual transaction. 2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year. 3. The cumulative transaction amount of real property acquisitions and disposals (cumulative acquisitions and disposals,respectively)		6. Where an asset transaction other than any of those referred to in the preceding five subparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area reaches 20 percent or more of paid-in capital or NT$300 million; provided, this shall not apply to the following circumstances: (1) Trading of domestic government bonds. (2) Trading of bonds under repurchase/resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises. The amount of transactions above shall be calculated as follows: 1. The amount of any individual transaction. 2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterpartywithin the

53

Article	Article before Amendment	Article	Article after Amendment	Article after Amendment
	within the same development project within the preceding year. 4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year. "Within the preceding year" as used in the paragraph 2 refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with these Procedures need not be counted toward the transaction amount.		preceding year. 3. The cumulative transaction amount of real property or right-of-use assets thereof acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within the preceding year. 4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year. "Within the preceding year" as used in the paragraph 2 refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with these Procedures need not be counted toward the transaction amount.	preceding year. The cumulative transaction amount of real property or right-of-use assets thereof
Article27:	When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety	Article 29:	When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety

54

Article	Article before Amendment	Article	Article after Amendment
	within two days counting inclusively from the date when the Company becomes aware of the error or omission.		within two days counting inclusively from the date when the Company becomes aware of the error or omission.
Article28:	Where the Company acquires or disposes of assets shall keep all relevant contracts, meeting minutes, log books, appraisal reports and CPA, attorney, and securities underwriter opinions at the company headquarters, where they shall be retained for 5 years except where another actprovides otherwise.	Article 30:	Where the Company acquires or disposes of assets shall keep all relevant contracts, meeting minutes, log books, appraisal reports and CPA, attorney, and securities underwriter opinions at the company headquarters, where they shall be retained for 5 years except where another actprovides otherwise.
Article29:	Where any of the following circumstances occurs with respect to a transaction that the Company has already publicly announced and reported in accordance with theArticle 26 through 28, a public report of relevant information shall be made on the information reporting website designated by the securities competent authority within 2 days commencing immediately from the date of occurrence of the event: 1. Change, termination, or rescission of a contract signed in regard to the original transaction.	Article 31:	Where any of the following circumstances occurs with respect to a transaction that the Company has already publicly announced and reported in accordance with the preceding three Articles, a public report of relevant information shall be made on the information reporting website designated by the securities competent authority within 2 days commencing immediately from the date of occurrence of the event: 1. Change, termination, or rescission of a contract signed in regard to the original transaction.

55

Article		Article before Amendment	Article		Article after Amendment
		2. The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract. 3. Change to the originally publicly announced and reported information.			2. The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract. 3. Change to the originally publicly announced and reported information.
Article30:		Information required to be publicly announced and reported in accordance with the provisions of Chapter6on acquisitions and disposals of assets by a subsidiary of the Company that is not a public company in Taiwan shall be reported by the Company. The paid-in capital or total assets of the Company shall be the standard for determining whether or not a subsidiary referred to in the preceding paragraph is subject toArticle 26, paragraph 1 requiring a public announcement and regulatory filingin the event the type of transaction specified therein reaches 20 percent of paid-in capital or 10 percent of the total assets.	Article 32:		Information required to be publicly announced and reported in accordance with the provisions of the preceding Chapter on acquisitions and disposals of assets by a subsidiary of the Company that is not a public company in Taiwan shall be reported by the Company. The paid-in capital or total assets of the Company shall be the standard for determining whether or no a subsidiary referred to in the preceding paragraph is subject to the threshold requiring a public announcement and regulatory filing under paragraph 1 of Article 28.
Article31:		The Company’s controlling and monitoring procedures towards the acquisition or disposal of assets byits	Article 33:		The Company’s controlling and monitoring procedures towards the acquisition or disposal of assets byits

56

	Article		Article before Amendment	Article	Article after Amendment
			subsidiaries are as follows: 1. The Company shall urge its subsidiaries to establish and execute their own “Procedures for Acquisition of Disposal of Assets” in accordance with this Procedures. 2. Where any material violation is found by the internal auditors of the subsidiaries, the subsidiaries shall promptly notify the Company in writing of any material violation found. The Company shall know how the subsidiaries deals with the violations, admonish the subsidiary to improve and keep itself informed of the improvementprocess.		subsidiaries are as follows: 1. The Company shall urge its subsidiaries to establish and execute their own “Procedures for Acquisition of Disposal of Assets” in accordance with this Procedures. 2. Where any material violation is found by the internal auditors of the subsidiaries, the subsidiaries shall promptly notify the Company in writing of any material violation found. The Company shall know how the subsidiaries deals with the violations, admonish the subsidiary to improve and keep itself informed of the improvementprocess.
	Article32:		Should there be any violation of the procedures when the persons-in-charge of the Company deal with acquisition or disposal of assets, subsequent penalization is subject to the relevant HR policies of the Company.	Article 34:	Should there be any violation of the procedures when the persons-in-charge of the Company deal with acquisition or disposal of assets, subsequent penalization is subject to the relevant HR policies of the Company.
	Article 33:		(Article Deleted)
	Article34:		For the calculation of 10 percent of total assets under	Article 35:	For the calculation of 10 percent of total assets under

57

Article		Article before Amendment	Article	Article after Amendment
		this Procedures, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparation of Financial Reports by Securities Issuers shall be used.		this Procedures, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparation of Financial Reports by Securities Issuers shall be used.
Article35:		Afterthe Proceduresare approved by the Board of Directors, the Procedures shall besubmitted to the Shareholders Meeting for approval before implementation. Any amendment is subject to the same procedure. The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. The matters which paragraph 1 requires submitting to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the approval by more than half of all audit committee members is not obtained,the	Article 36:	The Procedures shall be approved by the Board of Directors andsubmitted to the Shareholders Meeting for approval before implementation. Any amendment is subject to the same procedure. The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. The matters which paragraph 1 requires submitting to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the approval by more than half of all audit committee members is not obtained,theprocedures may

58

Article	Article before Amendment	Article	Article after Amendment
	procedures may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.		be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

Resolution:

59

Discussion Items (I) Proposal 2

Proposal: Amendment to the Procedures for Engaging in Derivatives Transactions of the Company submitted for discussion.

Proposed by the Board of Directors

Explanation:

To comply with the requirements provided in the order Jin-Guan-Zheng-Fa-Zi No. 1070341072 dated November 26, 2018 by the Financial Supervisory Commission, certain articles of the Procedures for Engaging in Derivatives Transactions of the Company have been amended. The comparison table for articles before and after amendment is hereby attached. Please determine whether the amendments are reasonable.

Article		Article before Amendment	Article		Article after Amendment
Article 1:		The “Procedures for Engaging in Derivatives Transactions” (hereinafter referred to as the “Procedures”) of Nan Ya Plastics Corporation (hereinafter referred to as the “Company”) was established in accordance with Article17 of the “Procedures for Acquisition or Disposal of Assets” of the Company.	Article 1:		The “Procedures for Engaging in Derivatives Transactions” (hereinafter referred to as the “Procedures”) of Nan Ya Plastics Corporation (hereinafter referred to as the “Company”) was established in accordance with Article 19 of the “Procedures for Acquisition or Disposal of Assets” of the Company.
Article 2:		Derivatives referred to herein are defined as forward contracts, options contracts, futures contracts, leverage contracts, swap contracts, and compound contracts combining the above products,whose value is	Article 2:		Derivatives referred to herein are defined as forward contracts, options contracts, futures contracts, leverage contracts, or swap contracts, whose value is derived from a specifiedinterest rate, financial instrument price,

60

Article	Article before Amendment	Article		Article after Amendment
	derived fromassets, interest rates, foreign exchange rates, indexes orother interests.			commodity price, foreign exchange rate, index of prices or rates, credit rating or credit index, or other variable; or hybrid contracts combining the above contracts; or hybrid contracts or structured products containing embedded derivatives.
Article 3:	Forward contracts referred to herein do not include insurance contracts, performance contracts, after-sales service contracts, long-term lease contracts, and long-term purchase (sales) agreements.	Article 3:		Forward contracts referred to herein do not include insurance contracts, performance contracts, after-sales service contracts, long-term lease contracts, and long-term purchase (sales)contracts.
Article 14:	The derivatives trading positions of the Company shall be evaluated at least once a week by the in-charge department, and the hedging transactions made for business purposes shall be evaluated at least twice a month. The manager of the in-charge department shall pay attention to the risk control and supervision of derivatives transactions from time to time, and periodically supervise and evaluate theperformance of	Article 14:		The derivatives trading positions of the Company shall be evaluated at least once a week by the in-charge department, and the hedging transactions made for business purposes shall be evaluated at least twice a month. The manager of the in-charge department shall pay attention to the risk control and supervision of derivatives transactions from time to time, and periodically supervise and evaluate theperformance of

61

Article	Article before Amendment	Article	Article after Amendment
	derivatives transactions to check whether they are conducted in accordance with the related procedures formulated by the Company hereof and whether the attendant risk of these transactions is within the capability of the Company. The foresaid evaluation reports shall be submitted to a high-level manager(s) authorized by the Board of Directorsfor review.If there is any abnormal situation highlighted in the market evaluation reports (e.g. the holding position has reached the maximum loss limit), the Company shall immediately take necessary measures to deal with the situation and report to the Board of Directors. There shall be independent directors attending the Board of Directors meeting and expressingtheir opinions.		derivatives transactions to check whether they are conducted in accordance with the related procedures formulated by the Company hereof and whether the attendant risk of these transactions is within the capability of the Company. The foresaid evaluation reports shall be submitted to a high-level manager(s) authorized by the Board of Directors. If there is any abnormal situation highlighted in the market evaluation reports (e.g. the holding position has reached the maximum loss limit), the Company shall immediately take necessary measures to deal with the situation and report to the Board of Directors. There shall be independent directors attending the Board of Directors meeting and expressingtheir opinions.

Resolution:

62

Discussion Items (I) Proposal 3

Proposal: Amendment to the Procedures for Loaning Funds to other Parties of the Company submitted for discussion.

Proposed by the Board of Directors

Explanation:

To comply with the requirements provided in the order Jin-Guan-Zheng-Shen-Zi No. 1080304826 dated March 7, 2019 by the Financial Supervisory Commission, certain articles of the Procedures for Loaning Funds to other Parties of the Company have been amended. The comparison table for articles before and after amendment is hereby attached. Please determine whether the amendments are reasonable.

	Article		Article before Amendment	Article		Article after Amendment
	Article 6:		The tenor of the loan shall not be longer than one year in the case the borrower does not have business relationship with the Company but has a short-term necessary financing facility. The interest rates of the loans shall not be lower than the then current lowest lending interest rates announced by the general financial institutions.	Article 6:		The tenor of the loan shall not be longer than one year. The interest rates of the loans shall not be lower than the then current lowest lending interest rates announced by the general financial institutions.
	Article 8:		A loan to the borrower may be extended for a certain period, provided the extension of the loan has been approved by the Board of Directors. The total duration of the loan after the			(Article deleted Deleted)

63

Article		Article before Amendment	Article	Article after Amendment
		above-mentioned extension shall meet the requirement of Article 6. If the extension of the loan is not approved by the Board of Directors, the borrower shall repay the principal and the accrued interests in full on the due date. If the borrower fails to perform, the Company shall claim the overdue amount via legal proceedings.
Article9:		The Company shall prepare a memorandum book for its fund-loaning activities and truthfully record the following information: borrower, amount, date of approval by the Board of Directors, lending/borrowing date, and matters to be carefully evaluated.	Article 8:	The Company shall prepare a memorandum book for its fund-loaning activities and truthfully record the following information: borrower, amount, date of approval by the Board of Directors, lending/borrowing date, and matters to be carefully evaluated.
Article10:		The Company's internal auditors shall audit the Procedures for Loaning Funds to other Parties and the implementation thereof no less frequently than quarterly and prepare written records accordingly. During the auditing, the internal auditor shall immediately	Article 9:	The Company's internal auditors shall audit the Procedures for Loaning Funds to other Parties and the implementation thereof no less frequently than quarterly and prepare written records accordingly. During the auditing, the internal auditor shall

64

Article	Article before Amendment	Article	Article after Amendment
	correct violation(s) upon finding any violation. If any material violation is found, in addition to notifying the Audit Committee promptly in writing, the personnel who violate the Procedures shall be penalized in accordance with the related rules of the Company.		immediately correct violation(s) upon finding any violation. If any material violation is found, in addition to notifying the Audit Committee promptly in writing, the personnel who violate the Procedures shall be penalized in accordance with the related rules of the Company.
Article11:	If, as a result of a change in circumstances, an entity for which an endorsement/guarantee is made does not meet the requirements of the Procedures or the loan balance exceeds the limit, the Company shall adopt rectification plans and submit the rectification plans to the Audit Committee for its approval and then to the Board of Directors for a resolution, and shall complete the rectification according to the timeframe set out in the plan.	Article 10:	If, as a result of a change in circumstances, an entity for which an endorsement/guarantee is made does not meet the requirements of the Procedures or the loan balance exceeds the limit, the Company shall adopt rectification plans and submit the rectification plans to the Audit Committee for its approval and then to the Board of Directors for a resolution, and shall complete the rectification according to the timeframe set out in the plan.
Article12:	Procedures for controlling and managing loans of funds to others bysubsidiaries of	Article 11:	Procedures for controlling and managing loans of funds to others by

65

Article	Article before Amendment	Article	Article after Amendment
	the Company are as follows: 1. Where a subsidiary of the Company intends to make loans to others, the Company shall instruct it to formulate its own Procedures for Loaning Funds to other Parties in compliance with Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, and it shall comply with the Procedures when loaning funds. 2. The subsidiaries shall compile and submit the schedule, including the details and status of fund-lending as of the end of the previous month to the Company for review by the fifth day of the current month. 3. If any material violation is found by the internal auditors of the subsidiaries, the subsidiaries shall promptly notify the Company in writing of any material violation found.		subsidiaries of the Company are as follows: 1. Where a subsidiary of the Company intends to make loans to others, the Company shall instruct it to formulate its own Procedures for Loaning Funds to other Parties in compliance with Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, and it shall comply with the Procedures when loaning funds. 2. The subsidiaries shall compile and submit the schedule, including the details and status of fund-lending as of the end of the previous month to the Company for review by the fifth day of the current month. 3. If any material violation is found by the internal auditors of the subsidiaries, the subsidiaries shall promptlynotifythe

66

Article	Article before Amendment	Article	Article after Amendment
	The Company shall know how the subsidiary deals with the violation(s), admonish the subsidiary to improve and keep itself informed of the improvement process.		Company in writing of any material violation found. The Company shall know how the subsidiary deals with the violation(s), admonish the subsidiary to improve and keep itself informed of the improvementprocess.
Article13:	The Company shall announce and report the related information of fund-lending to others in compliance with the following requirements: 1. The Companyshall enter the previous month's loan balances of itselfand its subsidiariesto the information reporting website designated by the securities competent authority by the 10th day of each month. 2.The company whose loans of funds reach one of the following levels shall announce and report such event on the information reporting website designated by the securities competent authority within two days commencing	Article 12:	The Company shall announce and report the related information of fund-lending to others in compliance with the following requirements: 1. The Company and its subsidiaries shall publicly announce and report the information of fund-lending in accordance with the relevant laws, rules and regulations. 2.The Company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and report. The percentage of the aggregate balance of

67

Article		Article before Amendment	Article	Article after Amendment
		immediately from the date of occurrence: (1)The aggregate balance of loans to others by the Company and its subsidiaries reaches 20 percent or more of the Company's net worth as stated in its latest financial statement. (2)The balance of loans by the Company and its subsidiaries to a single enterprise reaches 10 percent or more of the Company's net worth as stated in its latest financial statement. (3)The amount of new loans of funds by the Company or its subsidiaries reaches NT$10 million or more, and reaches 2 percent or more of the Company's net worth as stated in its latest financial statement. 3. The Company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiaryis required		loans to others over net worth of the subsidiary shall be calculated as the subsidiary’s balance of loans to others to the Company’s net worth. 3.The Company shall evaluate the status of its fund-lending and reserve sufficient allowance for bad debts, and shall adequately disclose relevant information in its financial reports and provide certified public accountants with relevant information for implementation of necessary audit procedures.

68

Article	Article before Amendment	Article	Article after Amendment
	to announce and report pursuant to subparagraphs of the preceding paragraph. The percentage of the aggregate balance of loans to others over net worth of theabove-mentioned subsidiary shall be calculated as the subsidiary’s balance of loans to others to the Company’s net worth. 4. The Company shall evaluate the status of its fund-lending and reserve sufficient allowance for bad debts, and shall adequately disclose relevant information in its financial reports and provide certified public accountants with relevant information for implementation of necessaryauditprocedures.
Article14:	After the Procedures are approved by the Board of Directors, the Procedures shall be submitted to the Shareholders’ Meeting for approval before its implementation. Any amendment is subject to the	Article 13:	After the Procedures are approved by the Board of Directors, the Procedures shall be submitted to the Shareholders’ Meeting for approval before its implementation. Any amendment is subject to the

69

Article	Article before Amendment	Article	Article after Amendment
	same procedures. The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. The matters for which paragraph 1 requires submitted to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.		same procedures. The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. The matters for which paragraph 1 requires submitted to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

Resolution:

70

Discussion Items (I) Proposal 4

Proposal: Amendment to the Procedures for Providing Endorsements and Guarantees to other Parties of the Company submitted for discussion.

Proposed by the Board of Directors

Explanation:

To comply with the requirements provided in the order Jin-Guan-Zheng-Shen-Zi No. 1080304826 dated March 7, 2019 by the Financial Supervisory Commission, certain articles of the Procedures for Providing Endorsements and Guarantees to other Parties of the Company have been amended. The comparison table for articles before and after amendment is hereby attached. Please determine whether the amendments are reasonable.

	Article		Article before Amendment	Article		Article after Amendment
	Article 10:		The Companyshall enter the previous month's balance of endorsements/guarantees of itselfand its subsidiariesto the information reporting website designated by the securities competent authority by the 10th day of each month.	Article 10:		The Company and its subsidiaries shall publicly announce and report the information of endorsements/guarantees in accordance with the relevant laws, rules and regulations.
	Article 11:		In addition to announcing and reporting the monthly balance of endorsements/guarantees in compliance with Article 10, in the event that the amount of the Company's endorsements/guarantees reaches one of the following levels, the Company shall announce and report such			(Article deleted Deleted)

71

Article		Article before Amendment	Article	Article after Amendment
		event on the information reporting website designated by the securities competent authority within two days commencing immediately from the date of occurrence: 1. The aggregate amount of endorsements/guarantees by the Company and its subsidiaries reaches 50 percent or more of the Company's net worth as stated in its latest financial statement. 2. The amount of endorsements/guarantees by the Company and its subsidiaries for any single enterprise reaches 20 percent or more of the Company's net worth as stated in its latest financial statement. 3. The amount of endorsements/guarantees by the Company and its subsidiaries for any single enterprise reaches NT$10 million or more and the aggregate amount of all endorsements/guarantees, long-term investment, and loans to that enterprise
		1. 2. 3.

72

Article		Article before Amendment	Article before Amendment	Article	Article after Amendment
		4.	reaches 30 percent or more of the Company's net worth as stated in its latest financial statement. The amount of new endorsements/guarantees made by the Company or its subsidiaries reaches NT$30 million or more, and reaches 5 percent or more of the Company's net worth as stated in its latest financial statement.
Article12:		The Company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and reportpursuant to Article 11. The percentage of the balance of endorsements/guarantees over the net worth of the companyunder the preceding paragraphshall be calculated by the ratio of the subsidiary's balance of endorsements/guarantees to the Company's net worth.		Article 11:	The Company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and report. The percentage of the balance of endorsements/guarantees over the net worth of the company shall be calculated by the ratio of the subsidiary's balance of endorsements/guarantees to the Company's net worth.
Article13:		The Company shall evaluate or record the contingent loss		Article 12:	The Company shall evaluate or record the contingent loss

73

Article	Article before Amendment	Article	Article after Amendment
	for endorsements/guarantees, and shall adequately disclose information on endorsements/guarantees in its financial reports and provide its certified public accountants with relevant information for implementation of necessary auditing procedures to issue proper audit reports.		for endorsements/guarantees, and shall adequately disclose information on endorsements/guarantees in its financial reports and provide its certified public accountants with relevant information for implementation of necessary auditing procedures to issue proper audit reports.
Article14:	After the Procedures are approved by the Board of Directors, the same shall be submitted for approval by the shareholders meeting before its implementation. Any amendment is subject to the same procedures. The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. The matters for which paragraph 1 requires submitted to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the	Article 13:	After the Procedures are approved by the Board of Directors, the same shall be submitted for approval by the shareholders meeting before its implementation. Any amendment is subject to the same procedures. The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. The matters for which paragraph 1 requires submitted to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the

74

Article	Article before Amendment	Article	Article after Amendment
	approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.		approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

Resolution:

75

Election Items

Proposal: The Company’s Directors have their tenure nearly expired. Please elect the Board of Directors to conform to the applicable laws. Proposed by the Board of Directors

Explanation:

1. The Company’s current directors were elected in the Annual Shareholders’ Meeting on June 23, 2016 and have their tenure expired on June 22, 2019. To conform to the applicable Rule, the Company shall elect 15 directors (including 3 independent directors) using the cumulative voting system. The tenure of new session of Directors (including independent directors) shall be three years, starting June 12, 2019 until June 11, 2022.

2. The election of Directors (including independent directors) shall adopt the candidate nomination system in accordance with Article 192-1 of the Company Act and the Article 16 of the Company's Articles of Incorporation. The Company has examined and approved the qualification of 15 Directors Candidates (including independent directors) in the Board of Directors Meeting on April 1, 2019. The related information of the 12 Director Candidates is shown below:

Name	Education	Major Experience	Shareholding (Share)
Chia Chau, Wu	Bachelor in Business Administration, National Chengchi University	Current Appointment: Chairman of NPC Chairman of Nanya Technology Corp. Chairman of Nan Ya PCB Corp. Experiences: President of NPC	79,030
Wen Yuan, Wong	Master in Industrial Engineering, University of Houston	Current Appointment: President of National Federation of Industries Chairman of FCFC, Chairman of Formosa Taffeta Corp., Chairman of Formosa Advanced Technology Corp. Experiences: President of FCFC	38,206,752

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Name	Education	Major Experience	Shareholding (Share)
Wilfred Wang (Representative of Formosa Petrochemical Corporation)	Bachelor in Engineering, University of London	Current Appointment: Chairman of Formosa Plastic Marine Corporation Chairman of Nan Ya Photonics Incorporation Experiences: Chairmanof FPCC	179,214,423
Ruey Yu, Wang	MBA, National Taiwan University	Current Appointment: Chairman of Formosa Biomedical Technology Corporation Chairman of Formosa Technologies Corporation Experiences: Chairman of Nan Ya PCB Corp.	19,052,421
Ming Jen, Tzou	Associate Degree in Department of Chemical Engineering, Provincial Taipei Institute of Technology	Current Appointment: President of NPC Experiences: Executive Vice President of NPC	188,742
Kuei Yung, Wang	Bachelor in Chemistry, University of London	Current Appointment: Senior Vice President of NPC Experiences: Vice President of NPC	11,164,271
Shen Yi, Lee (Representative of Formosa Chemicals & Fibre Corp.)	Ph.D. in Law, Chinese Culture University	Current Appointment: Independent Director of EnTie Commercial Bank Independent Director of WIN Semiconductors Corp. Vice Chairman of Contemporary Taiwan Development Foundation Experiences: Member, Control Yuan, Taiwan Commissioner, Fair Trade	413,327,750

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Name	Education	Major Experience	Shareholding (Share)
Fong Chin, Lin	Master in Accounting , National Chengchi University	Current Appointment: Senior Vice President of NPC Experiences: VicePresident ofNPC	25,458
Zo Chun, Jen (Representative of Formosa Plastics Corp.)	Bachelor in Electrical Engineering, Tatung Institute of Technology	Current Appointment: Advisor of NPC Experiences: Senior Vice President of NPC	783,356,866
Sin Yi, Huang	Associate Degree in Department of Chemical Engineering, Ming Chi Institute of Technology	Current Appointment: Senior Vice President of NPC Experiences: Vice President of NPC	806
Cheng Chung , Lee	Bachelor in Chemical Engineering, National Central University	Current Appointment: Senior Vice President of NPC Experiences: Vice President of NPC	0
Ching Cheng , Chang (Representative of Freedom Internation Enterprise Company)	Bachelor in Business Administration, Tunghai University	Current Appointment: Director of Fu Tak Investment Company Experiences: Sales Administrator of Feng Hsin Steel Section Manager of Taiwan SecuritiesCo.,Ltd.	3,287,472

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The names of the 3 Inde endent Director Candidates are listed below: p

Name	Education	Major Experience	Shareholding (Share)
Chih Kang, Wang	Ph.D. in Business Administration, Texas A&M University, USA Honorary Doctor of Law, Hanyang University, Korea	Current Appointment: Chairman of CTBC Venture Capital Co., Ltd. Chairman of Taiwan Institute of Economic Research Independent Director of Formosa Sumco Technology Corp. Experiences: Minister of Economic Affairs, Taiwan Chairman of TAITRA, Taiwan Chairman of Fuh Hwa Securities Investment Trust Co.,Ltd.	0
Yi Fu, Lin	Bachelor in Accounting and Statistics, National Chengchi University	Current Appointment: Independent Director of Taishin Financial Holding Co., Ltd Independent Director of Swissray Global Healthcare Holding Ltd. Independent Director of Pan German Universal Motors Ltd. Experiences: Minister of Economic Affairs, Minister without Portfolio of Executive Yuan Ambassador ofWTO	0

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Name	Education	Major Experience	Shareholding (Share)
Yun Peng, Chu	Ph.D. in Economics, University of Maryland, USA	Current Appointment: Independent Director of China Petrochemical Development Corp. Independent Director of Taiwan Land Development Co., Ltd. Visiting Professor of Economics, Taipei Medical University Visiting Professor of School of Big Data Management, Soochow University Experiences: Chairman of Taiwan Insurance Guaranty Fund Minister without Portfolio of Executive Yuan Commissioner of Fair Trade Commission Director of Research Center for Humanities and Social Science	1,199

Resolution:

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Discussion Items(II) Proposal 1

Proposal: Appropriateness of releasing the newly elected Directors and the juristic person shareholder whose authorized representatives are elected as Directors, from non-competition restrictions. Please discuss and resolve.

Proposed by the Board of Directors

Explanation:

1. According to Article 209 of the Company Act, any Director conducting business for himself/herself or on another’s behalf, and the scope of which coincides with the Company’s business scope, shall explain at the Shareholders’ Meeting the essential contents of such conduct and obtain approval from shareholders in the Meeting.

2. Meanwhile, according to Explanation Letter No.89206938 on Article 209 of the Company Act, announced by the Ministry of Economic Affairs dated April 24, 2000, where the juristic person shareholder's authorized representatives are elected as directors according to Article 27-2 of the Company Act, both the juristic person shareholder and the authorized representatives shall be subject to the non-competition restrictions under Article 209 of the Company Act.

3. If the newly-elected Directors and the juristic person shareholder whose authorized representatives are elected as directors in this Annual Shareholders’ Meeting conduct competitive businesses that are subject to the non-competition restrictions under Article 209 of the Company Act and the interest of the Company is not impaired, it is proposed to release the Directors and juristic person shareholders whose authorized representatives are elected as directors from such non-competition restrictions after having assumed office.

4. (Proclaim the information of engaging in competitive businesses conducted by the Directors and the juristic person shareholders)

Resolution:

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NAN YA PLASTICS CORPORATION

Statement of Profits Distribution

For the year of 2018

Unit：NT$

For the year of 2018	Unit：NT$
Items	Amount
Available for Distribution: Unappropriated retained earnings of previous years  R  etrospective application effects of IFRS9 Net Income of 2018  Reversal of Special Reserve  Change in retained earnings resulting from  Other Comprehensive Income Total Distribution Items: Appropriation of Legal Reserve (10% of the  Net Income) Appropriation of Special Reserve (unrealized  investing profit under equity method) Distribution of dividends and b  onuses in cash ($5.0 per share) Unappropriated retained earnings  Total	10,955,058,470 507,291,650 52,746,021,387 15,150,477 -498,546,998
	63,724,974,986
	5,274,602,139 6,106,007,861 39,654,107,945 12,690,257,041
	63,724,974,986
Explanation
The proposed distribution is $5.0 per share, including dividend  of $2.234 and bonus of $2.766. The total distribution of dividends and bonuses amount to  $39,654,107,945; all of which are from the net income of 2018. Retrospective application effects of IFRS9 are the effects on retained  earnings arising from the adoption of IFRS9 "Financial Instruments". Reversal of Special Reserve is to revert the Special Reserve formerly  appropriated from the asset revaluation increments as the relevant assets are disposed. Change in retained earnings resulting from Other Co  mprehensive Income is the remeasurement of defined benefit obligation.

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KPMG

台北市11049信義路5段7號68樓(台北101大樓) Telephone 電話 + 886 (2) 8101 6666 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Fax 傳真 + 886 (2) 8101 6667 Xinyi Road, Taipei City 11049, Taiwan (R.O.C.) Internet 網址 kpmg.com/tw

KPMG, a Taiwan partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. 91

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KPMG

台北市11049信義路5段7號68樓(台北101大樓) 68F., TAIPEI 101 TOWER, No. 7, Sec. 5, Xinyi Road, Taipei City 11049, Taiwan (R.O.C.)

Telephone 電話 + 886 (2) 8101 6666 Fax 傳真 + 886 (2) 8101 6667 Internet 網址 kpmg.com/tw

KPMG, a Taiwan partnership and a member firm of the KPMG network of independent member firms affiliated with KPMG International Cooperative ("KPMG International"), a Swiss entity. 96

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Information regarding the Proposed Employees and Directors’ Compensation to Adopted by the Board of Directors of the Company:

Compensation to Adopted by the Board of Directors of the Company:	Compensation to Adopted by the Board of Directors of the Company:
1. Amounts of employees’ cash compensation, stock compensation, and Directors’ compensation:
Employees Cash Compensation	NT$57,878,571
Employees Stock Compensation	NT$0
Directors Compensation	NT$0
2. Share amount of the employees’ stock compensation and the percentage of the share amount to that of all stock dividend:
Share amount of employees’ stock compensation	0 share
percentage of the share amount to that of all stock dividend	0%

The above-listed amount of employees’ cash compensation is consistent with the proposed amount adopted by the Board of Directors of the Company.

Effect upon Business Performance and Earnings Per Share of the Company by the Stock Dividend Distribution Proposed at the 2019 Annual Shareholders’ Meeting:

Not applicable since the Company does not propose the stock dividend distribution at the 2019 Annual Shareholders’ Meeting and does not required to prepare financial forecast information.

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Articles of Incorporation of Nan Ya Plastics Corporation

Amended by the Annual Shareholders’ Meeting on June 19, 2018

Article 1: The Company was originally named Nan Ya Plastics Processing Co., Ltd, incorporated under the Company Act of the Republic of China, and its name was changed to Nan Ya Plastics Corporation upon the resolution of special shareholders’ meeting On August 15, 1967.

Article 2: The scope of business of the Company shall be as follows:

1. C301010 Yarn Spinning Mills

2. C302010 Knit Fabric Mills

3. C303010 Non-woven Fabrics Mills

4. C305010 Printing, Dyeing, and Finishing Mills

5. C601040 Processed Paper Manufacturing

6. C601990 Other Paper Products Manufacturing

7. C801010 Basic Industrial Chemical Manufacturing

8. C801020 Petrochemical Manufacturing

9. C801060 Synthetic Rubber Manufacturing

10. C801100 Synthetic Resin & Plastic Manufacturing

11. C801110 Fertilizer Manufacturing

12. C801120 Manmade Fiber Manufacturing

13. C801990 Other Chemical Materials Manufacturing

14. C802041 Drugs and Medicines Manufacturing

15. C802120 Industrial Catalyst Manufacturing

16. C802170 Poisonous Chemical Material Manufacturing

17. C802200 Paints, Varnishes, Lacquers, Dyeing Mills and Dyestuff Manufacturing

18. C805010 Plastic Sheets, Pipes and Tubes Manufacturing

19. C805020 Plastic Sheets & Bags Manufacturing

20. C805070 Strengthened Plastic Products Manufacturing

21. C805990 Other Plastic Products Manufacturing

22. C901020 Glass and glass made products

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Manufacturing

1. C901060 Refractory Materials Manufacturing

2. CB01010 Machinery and Equipment Manufacturing

3. CB01030 Pollution Controlling Equipment Manufacturing

4. CB01990 Other Machinery Manufacturing Not Elsewhere Classified

5. CC01010 Electric Power Supply, Electric Transmission and Power Distribution Machinery Manufacturing

6. CC01080 Electronic Parts and Components Manufacturing

7. CC01090 Batteries Manufacturing

8. CQ01010 Die Manufacturing

9. CZ99990 Other Industrial Products Manufacturing Not Elsewhere Classified

10. D101050 Steam and Electricity Paragenesis

11. D401010 Heat Energy Supplying

12. E599010 Pipe Lines Construction

13. E601010 Electric Appliance Construction

14. E603050 Cybernation Equipment Construction

15. E604010 Machinery Installation Construction

16. EZ15010 Warming and Cooling Maintenance Construction

17. HHHHH701020 Industrial Factory Buildings Lease Construction and Development

18. H701040 Specialized Field Construction and Development

19. I199990 Other Consultancy

20. ID01010 Metrological Instruments Identify

21. IZ99990 Other Industry and Commerce Services Not Elsewhere Classified

22. J101030 Waste Clearing

23. J101040 Waste Disposing

24. J101050 Sanitary and Pollution Controlling Services

25. J101060 Wastewater (Sewage) Treatment

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1. CE01021 Metrological Instruments Manufacturing

2. ZZ99999 All business items that are not prohibited or restricted by law, except those that are subject to special approval.

3. Article 3: The Company shall have its head office in Kaohsiung City. The Board of Directors may decide to set up subsidiaries, plants and branch offices at various locations within and without the territory of the Republic of China as necessary. Their establishment or change or abolishment shall be managed upon the resolutions of the Board of Directors.

4. Article 4: Public announcements of the Company shall be published in accordance with Article 28 of the Company Act.

5. The Company may provide guarantees for related parties. The total investment amount of the Company may exceed forty percent of the paid-in capital.

6. Article 5: The total capital of the Company shall be in the amount of 79,308,215,890 New Taiwan Dollars, divided into 7,930,821,589 shares, at a par value of 10 New Taiwan Dollars per share, issued in full.

7. Article 6: The Company may be exempted from printing any share certificates in accordance with relevant regulations. However, those shares shall be registered in a centralized securities depository enterprise.

8. Article 7: (deleted) Article 8: (deleted)

9. Article 9: The shareholders shall submit their seal specimen to the Company for record. Afterward, the shareholders shall receive the dividend or exercise their rights in writing against the specimen kept by the Company.

10. Article 10: In the event that the seal specimen is lost or stolen, the shareholders shall fill out the application of lost seal with detailed share certificate numbers and shares and submit the same along with identity documents and copies, new seal specimen and share certificates to the Company for

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registration. The new seal card will be replaced upon approval and will be effective on the next day of completed registration.

When preceding replacement of seal specimen is entrusted to others or managed by communication, the individual shareholder shall also have the seal certificate issued by the Householder Registration Office enclosed; while the application shall be enclosed by the corporate shareholders.

Article 11: No transfer of share certificates shall be permitted within 60 days prior to a regular shareholders’ meeting, 30 days prior to a special shareholders’ meeting, or within 5 days prior to the record day on which a dividend, bonus, or any other benefit is scheduled to be paid by the Company.

Article 12: The shareholders’ meetings of the Company are divided into two types as follows:

Regular meetings: shall be convened by the Board of Directors within 6 months after the close of each fiscal year.

Special meetings: shall be convened pursuant to Company Act as necessary.

The notice and announcement of regular shareholders’ meeting shall be given to shareholders within 30 days in advance, while the notice and announcement of the special shareholders’ meetings shall be given to shareholders within 15 days in advance.

The reasons for convening a shareholders’ meeting shall be specified in the meeting notice and public announcement. With the consent of the addressee, the meeting notice may be given in electronic form.

Article 13: Each share of stock owned by shareholders shall be entitled for one vote, except for those shares without voting rights as set forth in Article 179, paragraph 2 of the Company Act.

If a shareholder is unable to attend a meeting, who may

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sign and show the proxy with extinct scope of authorization issued and appoint a representative to attend it. Except for the trust business or stock affairs agency as approved by the competent securities authority, the voting rights of a shareholder representing two and more shareholders shall not exceed 3% of total shares issued and the voting shares exceeding the percentage will be excluded from the calculation. After the proxy is delivered to the Company, the shareholder shall give written notice of proxy cancellation at least two days before the meeting if the shareholder intends to attend the meeting in person or to exercise voting rights in writing or via electronic method. For cancellation beyond the deadline, the voting rights exercised by the proxy shall prevail.

Article 14: Except otherwise provided in the Company Act, the resolutions of shareholders’ meeting shall be adopted by a majority vote of the shareholders’ present, who represent more than one-half of the total number of voting shares.

Revolutions adopted at a shareholders’ meeting shall be recorded in the minutes of the meeting. The minutes of shareholders' meeting shall record the date and place of the meeting, the name of the chairman, the method of adopting resolutions, and a summary of the essential points of the proceedings and the results of the meeting, which shall be affixed with the signature or seal of the chairman of the meeting. The electronic method may be adopted for the production and distribution of meeting minutes.

The distribution of preceding meeting minutes may be replaced by the announcement made on the MOPS.

Article 15: The Chairman of the Board of Directors shall preside over the shareholders’ meetings. In the Chairman’s absence or in case that the Chairman is unable to exercise rights for causes, the Vice Chairman shall act on his

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behalf. In the absence of in case that the Vice Chairman is unable to exercise rights for causes, the Chairman of the Board of Directors shall designate one Managing Director to act on his behalf. If the Chairman of the Board of Directors does not designate any proxy to preside over the meeting, the Managing Directors shall elect one from among themselves as the chairman.

Article 16:

The Company shall have 11 to 15 directors, to be elected at the shareholders’ meeting from the nominees listed in the roster of candidates under the candidate nomination system. The terms of office of directors shall be three years and they shall be eligible for re-election. The total number of shares held by the directors of the Company shall follow the rules promulgated by the competent securities authority.

The Company shall have three independent directors among the directors above. The matters regarding method of nomination and other matters shall be conducted in accordance with the Company Act and related regulations of competent securities authority.

The Company shall have the Audit Committee organized by all independent directors in accordance with Article 14-4 of the Securities Exchange Act. For matters regarding the competence and related events, the Company shall follow the Securities Exchange Act and other relevant laws and regulations.

The Board of Directors is authorized to determine the compensation of directors according to their degree of participation and contribution with normal standard in the same industry.

The Company may obtain directors liability insurance with respect to liabilities resulting from exercising their duties during their terms of directorship.

Article 17: The directors constitute the Board of Directors and shall elect at least three Managing Directors, which shall not more than one-third of total number of the directors, from

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among themselves by a majority vote at a meeting attended by over two-thirds of the directors. At least one of the Managing Directors shall be an independent director. Meanwhile, the Managing Directors shall elect among them a Chairman and a vice Chairman by way of preceding election. The Chairman shall represent the Company.

Article 18: The Chairman of the Board of Directors shall preside of the meeting of the Board of Directors. In the absence of the Chairman or in case that he is unable to exercise rights for causes, the Vice Chairman of the Board of Directors shall act on his behalf. If the Vice Chairman is absent or in case that he is unable to exercise rights for causes, the Chairman of the Board of Directors shall designate one of the Managing Directors to act on behalf of him. If the Chairman of the Board of Directors does not designate any deputy on his behalf, the Managing Directors or Directors of the Board shall elect one from among themselves as deputy.

Unless there is regulation specified otherwise in the Company Act, the resolutions of the Board of Directors of the Company shall be adopted by a majority vote of the shareholders’ present, who represent more than one-half of the total number of voting shares.

The directors shall attend meeting in person. Except for regulations provided otherwise by the Company Act for directors living abroad, if any Director of the Board of the Company cannot attend the meeting for causes, he may issue a written proxy to other directors for attending the meeting. However, a director may accept the appointment to act as the proxy with extinct extent of authorization of one other director only. In case a meeting of the Board of Directors is proceeded via visual communication network, then the directors taking part in such a visual communication meeting shall be deemed to have attended the meeting in person.

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In calling a meeting of the Board of Directors, the notice with reasons specified shall be given to all directors within 7 days in advance. However, the meeting may be convened anytime for emergency events. The notice of the meeting of the Board of Directors may be made in writing, email or facsimile.

Article 19: The functions and powers of Board of Directors:

1. Review important articles and bylaws of the Company.

2. Review operational guidelines of the Company.

3. Draw up the budget and final account of the Company.

4. Prepare the proposal concerning the appropriation of net profits of the Company.

5. Prepare the capital increment or reduction of the Company.

6. Employ or discharge important personnel of the Company.

7. Review business reports of the Company.

8. Determine the procurement and disposition of important properties of the Company.

9. Other functions empowered by the laws and regulations and shareholders’ meeting.

The Board of the Directors may authorize the Chairman to exercise functions of the Board during the adjourned period. Except for the material interest or related parties transactions involved to be resolved by the Board of Directors pursuant to the laws of related articles, the content of authorization is as follows:

1. Approve all important contracts.

2. Approve the mortgage loan of real estate and other loans.

3. Approve acquisition or disposal of the general assets and real estate.

4. Assign the directors and supervisors of the investee.

5. Approve the record date of capital increment or reduction and divided distribution.

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• Article 20: (deleted) Article 21: The Company may have certain number of managers. Their employment, discharge and compensation shall be managed in accordance with Article 29 of the Company Act.

• Article 22: (deleted) Article 23: The president shall manage the daily operation of the Company pursuant to the order of Chairman and the resolutions of the Board of Directors.

• Article 24: The fiscal year of the Company shall be from January 1 to December 31 every year. After the close of each fiscal year, the Board of Directors shall prepare following statements and records and submit the same to the general meeting of shareholders for ratification:

• 1.The business report;

• 2.The financial statements; and

• 3.The surplus earning distribution or loss off-setting proposals.

• Article 25: When allocating the net profits for each fiscal year, the Company shall set aside 0.05% to 0.5% of the balance of pre-tax profit prior to deducting employees compensation as compensation of employees. However, the Company's accumulated losses shall have been covered.

The resolution of employees compensation pursuant to Article 235-1 of the Company Act.

• Article 26: Where there is surplus of the annual final account, when allocating the net profits for each fiscal year, the Company shall first pay its income tax and offset its prior years’ accumulated losses and set aside 10% legal capital reserve and special earning reserve as necessary followed by the dividend. For remaining surplus incorporated with the accumulated earning in previous years, the Board of Directors shall prepare the proposal concerning the appropriation of net profits and submit the same to the shareholders’ meeting for resolution.

Preceding special earning reserves include:

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• 1.The earning reserved recognized for special purpose

• Investment income recognized under the equity method

• The net assessment income recognized due to financial product transactions, however, when the accumulated amount is reduced, the equal amount of special earning reserve shall be reduced simultaneously and up to the reserved number.

• Other special earning reserve pursuant to laws and regulations

The Company is in matured phase of business cycle with stable profit every year. The dividend policies adopt the combination of cash dividend, capital increment by earning and by capital reserve. At least 50% of distributable earning deducted by the legal and special reserve shall be distributed, and the cash dividend shall be prioritized. Meanwhile, the percentage of capital increment by earning and capital reserve shall not exceed 50% of all dividend in that year.

Article 27: The bylaws and enforcement rules of the Company shall be established otherwise.

Article 28: Matters not provided for in these Articles of Incorporation shall be governed by the Company Act and other relevant laws.

Article 29: These Articles of Incorporation were adopted on July 26, 1958. The 1st Amendment was on July 15, 1960, 2nd Amendment on June 25, 1961, 3rd Amendment on July 15, 1962, 4th Amendment on Sept. 15, 1962, 5th Amendment on Nov. 3, 1962, 6th Amendment on Dec. 16, 1962, 7th Amendment on Jan. 31, 1963, 8th Amendment on Apr. 22, 1963, 9th Amendment on Apr. 15, 1964, 10th Amendment on Oct. 20, 1964, 11th Amendment on Apr. 13, 1965, 12th Amendment on Aug. 3, 1965, 13th Amendment on May 15, 1966, 14th Amendment on Sept. 12, 1966, 15th Amendment on Apr. 1, 1967, 16th Amendment on Aug. 15, 1967, 17th

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Amendment on Mar. 21, 1968, 18th Amendment on Apr. 11, 1969, 19th Amendment on Apr. 11, 1970, 20th Amendment on Apr. 10, 1971, 21st Amendment on Mar. 11, 1972, 22nd Amendment on Mar. 10, 1973, 23rd Amendment on Mar. 11, 1974, 24th Amendment on Mar. 20, 1975, 25th Amendment on Mar. 22, 1976, 26th Amendment on Aug. 27, 1976, 27th Amendment on Mar. 23, 1977, 28th Amendment on Mar. 20, 1978, 29th Amendment on Mar. 19, 1979, 30th Amendment on Mar. 19, 1980, 31st Amendment on Mar. 20, 1981, 32nd Amendment on Apr. 2, 1982, 33rd Amendment on Apr. 1, 1983, 34th Amendment on Apr. 6, 1984, 35th Amendment on Apr. 8, 1985, 36th Amendment on Apr. 7, 1986, 37th Amendment on Mar. 26, 1987, 38th Amendment on Apr. 14, 1988, 39th Amendment on Apr. 14, 1989, 40th Amendment on Apr. 27, 1990, 41st Amendment on Apr. 30, 1991, 42nd Amendment on Apr. 30, 1992, 43rd Amendment on Apr. 30, 1993, 44th Amendment on Apr. 12, 1994, 45th Amendment on Apr. 26, 1995, 46th Amendment on May 8, 1996, 47th Amendment on May 20, 1997, 48th Amendment on May 22, 1998, 49th Amendment on June 10, 1999, 50th Amendment on June 9, 2000, 51st Amendment on May 29, 2001, 52nd Amendment on May 31, 2002, 53rd Amendment on June 6, 2003, 54th Amendment on May 21, 2004, 55th Amendment on June 3, 2005, 56th Amendment on June 23, 2006, 57th Amendment on June 22, 2007, 58th Amendment on June 13, 2008, 59th Amendment on June 11, 2009, 60th Amendment on June 22, 2010, 61st Amendment on June 21, 2011, 62nd Amendment on June 21, 2012, 63rd Amendment on June 24, 2013, 64th Amendment on June 19, 2014, 65th Amendment on June 23, 2015. The articles in related with addition of Audit Committee and deletion of Supervisors will be applied upon the expiry of the term of office of Supervisors selected in the

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shareholders’meeting on June 24, 2013. The 66th Amendment on June 23, 2016, 67th Amendment on June 19, 2018.

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Rules of Procedure for Shareholders’ Meetings of Nan Ya Plastics Corporation

Amended by the Annual Shareholders’ Meeting on June 20, 2017

• Article 1: To establish a strong governance system and sound supervisory capabilities for the Company's shareholders’ meetings, and to strengthen management capabilities, these Rules are adopted pursuant to the Corporate Governance Best Practice Principles for Taiwan Stock Exchange Corp (“TWSE”)/ Taipei Exchange (“TPEx”) Listed Companies.

• Article 2: The rules of procedures for the Company's shareholders’ meetings, except as otherwise provided by law, regulation, or the Articles of Incorporation, shall be as provided in these Rules.

• Article 3: Unless otherwise provided by law or regulation, the Company's Shareholders’ Meetings shall be convened by the Board of Directors.

• A notice to convene an annual shareholders’ meeting shall be given to each shareholder no later than 30 days prior to the scheduled meeting date; while a notice may be given to registered shareholders who own less than 1,000 shares of nominal stocks no later than 30 days prior to the scheduled meeting date in the form of a public announcement on the Market Observation Post System (MOPS) of the TWSE. A notice to convene a special shareholders’ meeting shall be given to each shareholders no later than 15 days prior to the scheduled meeting date. A public notice may be given to registered shareholders who own less than 1,000 shares of nominal stocks no later than 15 days prior to the scheduled meeting date in the form of a public announcement on the MOPS of the TWSE.

To convene a shareholders’ meeting, the Company shall prepare a meeting handbook. The Company shall prepare electronic versions of a shareholders’ meeting notice and proxy forms, and causes of and explanatory materials relating

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to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors, and upload them to the MOPS no later than 30 days prior to the scheduled Annual Shareholders’ Meeting date or no later than 15 days prior to the scheduled Special Shareholders’ Meeting date. The Company shall prepare electronic versions of a shareholders’ meeting handbook and supplemental meeting materials and upload them to the MOPS no later than 21 days prior to the scheduled Annual Shareholders’ Meeting date or no later than 15 days prior to the scheduled Special Shareholders’ Meeting date. In addition, the Company shall also have prepared a shareholders’ meeting handbook and supplemental meeting materials and made them available for review by shareholders at any time no later than 15 days prior to the scheduled Shareholders’ Meeting date. The Meeting Agenda and supplemental materials shall also be displayed at the Company and the professional shareholder services agent engaged by the Company as well as being distributed on-site at the meeting place.

The reasons for convening a shareholders’ meeting shall be specified in the meeting notice and public announcement. With the consent of the addressee, the meeting notice may be given in electronic form.

Election or dismissal of directors, amendments to the Articles of Incorporation, the dissolution, merger, or demerger of the corporation, or any matter under paragraph 1 of Article 185 of the Company Act or Articles 26-1 and 43-6 of the Securities and Exchange Act, Articles 56-1 and 60-2 of Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be set out in the notice of the causes to convene the shareholders’ meeting. None of the above matters may be raised by an extraordinary motion.

A shareholder holding 1 percent or more of the total number of issued shares may submit to the Company a written proposal for discussion at an annual shareholders’ meeting. Such proposals, however, are limited to one item only, and no

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proposal containing more than one item will be included in the Meeting Agenda. In addition, when the circumstances of any subparagraph of paragraph 4 of Article 172-1 of the Company Act apply to a proposal put forward by a shareholder, the Board of Directors may exclude it from the Agenda.

Prior to the book closure date before an annual shareholders’ meeting is held, the Company shall publicly announce that it will receive shareholder proposals, and the location and time period for their submission; the period for submission of shareholder proposals may not be less than 10 days.

Shareholder-submitted proposals are limited to 300 words, and no proposal containing more than 300 words will be included in the meeting agenda. The shareholder making the proposal shall be present in person or by proxy at the Annual Shareholders’ Meeting and take part in discussion of the proposal.

Prior to the date for issuance of notice of a shareholders’ meeting, the Company shall inform the shareholders who submitted proposals of the proposal screening results, and shall list in the meeting notice the proposals that conform to the provisions of this article. At the Shareholders’ Meeting the Board of Directors shall explain the reasons for exclusion of any shareholder proposals not included in the agenda.

Article 4: For each shareholders’ meeting, a shareholder may appoint a proxy to attend the meeting by providing the proxy form issued by the Company and stating the scope of the power authorized to the proxy.

A shareholder may issue only one proxy form and appoint only one proxy for any given shareholders’ meeting, and shall deliver the proxy form to the Company no later than 5 days prior to the Shareholders’ Meeting date. When duplicate proxy forms are delivered, the one received earliest shall prevail unless a declaration is made to revoke the previous proxy appointment.

After a proxy form has been delivered to the Company, if the shareholder intends to attend the meeting in person or to

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exercise voting rights in writing or by way of electronic transmission, a written notice of proxy rescission shall be submitted to the Company no later than 2 days prior to the meeting date. If the rescission notice is submitted after that time, votes cast at the meeting by the proxy shall prevail.

• Article 5: The venue for a shareholders’ meeting shall be the premises of the Company, or a place easily accessible to shareholders and suitable for a shareholders’ meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m.

• Article 6: The Company shall specify in its shareholders’ meeting notices the time during which shareholder attendance registrations will be accepted, the place to register for attendance, and other matters for attention.

• The time during which shareholder attendance registrations will be accepted, as stated in the preceding paragraph, shall be at least 30 minutes prior to the time the meeting commences. The place at which attendance registrations are accepted shall be clearly marked and a sufficient number of suitable personnel assigned to handle the registrations.

The Company shall furnish attending shareholders with the meeting agenda book, annual report, attendance card, speaker's slips, voting slips, and other meeting materials. Where there is an election of directors, pre-printed ballots shall also be furnished.

Shareholders and their proxies (collectively, "shareholders") shall attend shareholders’ meetings based on attendance cards, sign-in cards, or other certificates of attendance. The Company shall not impose arbitrary requirements on shareholders to provide additional evidentiary documents beyond those showing eligibility to attend. Solicitors soliciting proxy forms shall also bring identification documents for verification.

When the government or a juristic person is a shareholder, it may be represented by more than one representative at a shareholders’ meeting. When a juristic person is appointed to attend as proxy, it may designate only one person to represent it in the meeting.

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• Article 7: If a shareholders’ meeting is convened by the Board of Directors, the meeting shall be chaired by the Chairman. When the Chairman is on leave or for any reason unable to exercise the powers of the Chairman, the Vice Chairman shall act in place of the Chairman; if there is no Vice Chairman or the Vice Chairman also is on leave or for any reason unable to exercise the powers of the Vice Chairman, the Chairman shall appoint one of the Managing Director to act as chair, or, if there are no Managing Directors, one of the Directors shall be appointed to act as chair. Where the Chairman does not make such a designation, the Managing Directors or the Directors shall select from among themselves one person to serve as chair.

• When a Managing Director or a Director serves as chair, as referred to in the preceding paragraph, the Managing Director or Director shall be one who has held that position for 6 months or more and who understands the financial and business conditions of the Company. The same shall be true for a representative of a juristic person director that serves as chair.

• It is advisable that shareholders’ meetings convened by the Board of Directors be chaired by the Chairman, that a majority of the Directors attend in person, and that at least one member of each functional committee attend as representative. Attendance details should be recorded in the Shareholders Meeting minutes. If a shareholders’ meeting is convened by a party having the convening right but other than the Board of Directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves.

The Company may appoint its attorneys, certified public accountants, or related persons retained by it to attend a shareholders’ meeting in a non-voting capacity.

Article 8: The Company, beginning from the time it accepts shareholder attendance registrations, shall make an uninterrupted audio and video recording of the registration procedure, the

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proceedings of the shareholders’ meeting, and the voting and vote counting procedures.

The recorded materials of the preceding paragraph shall be retained for at least 1 year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the recording shall be retained until the conclusion of the litigation.

• Article 9: Quorum at shareholders’ meetings shall be calculated based on numbers of shares. The quorum shall be calculated according to the shares indicated by the sign-in cards handed in plus the number of shares whose voting rights are exercised in writing or by way of electronic transmission.

• The Chair shall call the meeting to order at the appointed meeting time. However, when the attending shareholders do not represent a majority of the total number of issued shares, the Chair may announce a postponement, provided that no more than two such postponements, for a combined total of no more than 1 hour, may be made. If the quorum is not met after two postponements and the attending shareholders still represent less than one third of the total number of issued shares, the Chair shall declare the meeting adjourned.

If the quorum is not met after two postponements as referred to in the preceding paragraph, but the attending shareholders represent one third or more of the total number of issued shares, a tentative resolution may be adopted pursuant to paragraph 1 of Article 175 of the Company Act; all shareholders shall be notified of the tentative resolution and another shareholders’ meeting shall be convened within 1 month.

When, prior to conclusion of the meeting, the attending shareholders represent a majority of the total number of issued shares, the Chair may resubmit the tentative resolution for a vote by the shareholders’ meeting pursuant to Article 174 of the Company Act.

Article 10: If a shareholders’ meeting is convened by the Board of Directors, the meeting agenda shall be set by the Board of

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Directors. The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders’ meeting.

The provisions of the preceding paragraph apply mutatis mutandis to a shareholders’ meeting convened by a party having the convening right that is not the Board of Directors. The Chair may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the shareholders’ meeting. If the Chair declares the meeting adjourned in violation of the rules of procedure, the other members of the Board of Directors shall promptly assist the attending shareholders in electing a new chair in accordance with statutory procedures, by a majority of the votes represented by the attending shareholders, and then continue the meeting.

The Chair shall allow ample opportunity during the meeting for explanation and discussion of proposals and of amendments or extraordinary motions put forward by the shareholders; when the Chair is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the Chair may announce the discussion closed and call for a vote.

• Article 11: Before speaking, an attending shareholder must specify on a speaker's slip the subject of the speech, his/her shareholder account number (or attendance card number), and account name. The order in which shareholders speak will be set by the Chair.

A shareholder in attendance who has submitted a speaker's slip but does not actually speak shall be deemed to have not spoken. When the content of the speech does not correspond to the subject given on the speaker's slip, the spoken content shall prevail.

Except with the consent of the Chair, a shareholder may not speak more than twice on the same proposal, and a single speech may not exceed 5 minutes. If the shareholder's speech violates the rules or exceeds the scope of the agenda item, the

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Chair may terminate the speech.

When an attending shareholder is speaking, other shareholders may not speak or interrupt unless they have sought and obtained the consent of the Chair and the shareholder that has the floor; the Chair shall stop any violation.

When a juristic person shareholder appoints two or more representatives to attend a shareholders’ meeting, only one of the representatives so appointed may speak on the same proposal.

After an attending shareholder has spoken, the Chair may respond in person or direct relevant personnel to respond.

Article 12: Voting at a shareholders’ meeting shall be calculated based on the number of shares.

With respect to resolutions of shareholders’ meetings, the number of shares held by a shareholder with no voting rights shall not be calculated as part of the total number of issued shares.

When a shareholder is an interested party in relation to an agenda item, and there is the likelihood that such a relationship would prejudice the interests of the Company, that shareholder may not vote on that item, and may not exercise voting rights as proxy for any other shareholder.

In case a director of the Company has created a pledge on the Company’s shares more than half of the Company’s shares being held by him/her/it at the time he/she/it is elected, the voting power of the excessive portion of shares shall not be exercised.

The number of shares for which voting rights may not be exercised under the preceding two paragraphs shall not be calculated as part of the voting rights represented by attending shareholders.

With the exception of a trust enterprise or a stock agency approved by the competent securities authority, when one person is concurrently appointed as proxy by two or more shareholders, the voting rights represented by that proxy may not exceed 3 percent of the voting rights represented by the

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total number of voting shares, otherwise, the portion of excessive voting rights shall not be counted.

Article 13: A shareholder shall be entitled to one vote for each share held, except when the shares are restricted shares or are deemed non-voting shares under paragraph 2 of Article 179 of the Company Act.

When the Company holds a shareholders’ meeting, it may allow the shareholders to exercise voting rights in writing or by way of electronic transmission. When voting rights are exercised in writing or by way of electronic transmission, the method for exercising the voting rights shall be specified in the shareholders’ meeting notice. A shareholder exercising voting rights in writing or by way of electronic transmission will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting.

A shareholder intending to exercise voting rights in writing or by way of electronic transmission under the preceding paragraph shall deliver a written declaration of intent to the Company no later than 2 days prior to the scheduled shareholders’ meeting date. When duplicate declarations of intent are delivered, the one received earliest by the Company shall prevail, except when a declaration is made to revoke the earlier declaration of intention.

After a shareholder has exercised voting rights in writing or by way of electronic transmission, in the event the shareholder intends to attend the shareholders’ meeting in person, a written declaration of intent to rescind the voting rights already exercised under the preceding paragraph shall be made known to the Company, by the same means by which the voting rights were exercised, no later than 2 days prior to the scheduled shareholders’ meeting date. If the notice of rescission is submitted after that time, the voting rights already exercised in writing or by way of electronic transmission shall prevail. When a shareholder has exercised voting rights both in writing

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or by way of electronic transmission and by appointing a proxy to attend a shareholders’ meeting, the voting rights exercised by the proxy in the meeting shall prevail.

Except as otherwise provided in the Company Act and in the Company's Articles of Incorporation, the adoption of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders. At the time of a vote, for each proposal, the Chair or a person designated by the Chair shall announce the total number of voting rights represented by the attending shareholders, followed by a poll of the shareholders. After the conclusion of the meeting, on the same day it is held, the results for each proposal, based on the numbers of votes for and against and the number of abstentions, shall be entered into the MOPS.

When there is an amendment or an alternative to a proposal, the Chair shall present the amended or alternative proposal together with the original proposal and decide the order in which they will be put to a vote. When any one among them is passed, the other proposals will then be deemed rejected, and no further voting shall be required.

Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the Chair, provided that all monitoring personnel shall be shareholders of the Company. Vote counting for shareholders’ meeting proposals or elections shall be conducted in public at the place of the shareholders’ meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote.

• Article 14: The election of directors at a shareholders’ meeting shall be held in accordance with the applicable election and appointment rules adopted by the Company, and the voting results shall be announced on-site immediately, including the names of those elected as directors and the numbers of votes with which they were elected.

The ballots for the election referred to in the preceding

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• paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least 1 year. If, however, a shareholder files a lawsuit pursuant to Article 189 of the Company Act, the ballots shall be retained until the conclusion of the litigation.

• Article 15: Matters relating to the resolutions of a shareholders’ meeting shall be recorded in the meeting minutes. The meeting minutes shall be signed or sealed by the Chair of the meeting and a copy distributed to each shareholder within 20 days after the conclusion of the meeting. The meeting minutes may be produced and distributed in electronic form.

• The Company may distribute the meeting minutes of the preceding paragraph by means of a public announcement made through the MOPS.

• The meeting minutes shall accurately record the year, month, day, and place of the meeting, the Chair's full name, the methods by which resolutions were adopted, and a summary of the deliberations and their results, and shall be retained for the duration of the existence of the Company.

• Article 16: On the day of a shareholders’ meeting, the Company shall compile in the prescribed format a statistical statement of the number of shares obtained by solicitors through solicitation and the number of shares represented by proxies, and shall make an express disclosure of the same at the place of the shareholders’ meeting.

• If matters put to a resolution at a shareholders’ meeting constitute material information under applicable laws or regulations or under TWSE regulations, the Company shall upload the content of such resolution to the MOPS within the prescribed time period.

• Article 17: Staff handling administrative affairs of a shareholders’ meeting shall wear identification cards or arm bands. The Chair may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help maintain order at the meeting place, they shall

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wear an identification card or armband bearing the word "Proctor."

• At the place of a shareholders’ meeting, if a shareholder attempts to speak through any device other than the public address equipment set up by the Company, the Chair may prevent the shareholder from so doing.

• When a shareholder violates the rules of procedure and defies the Chair's correction, obstructing the proceedings and refusing to heed calls to stop, the Chair may direct the proctors or security personnel to escort the shareholder from the meeting.

• Article 18: When a meeting is in progress, the Chair may announce a break based on time considerations. If a force majeure event occurs, the Chair may rule the meeting temporarily suspended and announce a time when, in view of the circumstances, the meeting will be resumed.

• If the meeting venue is no longer available for continued use and not all of the items (including extraordinary motions) on the meeting agenda have been addressed, the shareholders’ meeting may adopt a resolution to resume the meeting at another venue.

A resolution may be adopted at a shareholders’ meeting to postpone or resume the meeting within 5 days in accordance with Article 182 of the Company Act.

• Article 19: These Rules, and any amendments hereto, shall be implemented after adoption by shareholders’ meetings.

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Procedures for Acquisition or Disposal of Assets of Nan Ya Plastics Corporation

Amended by the Annual Shareholders’ Meeting on June 20, 2017

Chapter 1 General Provisions

• Article 1: When acquiring or disposing of the following assets, Formosa Plastics Corporation (hereinafter referred to as the “Company”) and its subsidiaries shall follow the Procedures for Acquisition or Disposal of Assets (hereinafter referred to as the “Procedures”):

• Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, asset-backed securities, etc.

• Real property (including land, houses and buildings, investment property, and land use rights) and equipment.

• Memberships.

• Patents, copyrights, trademarks, franchise rights, and other intangible assets.

• Claims of financial institutions (including receivables, bills purchased and discounted, loans, and overdue receivables).

• Derivatives.

• Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law.

• Other major assets.

• Article 2: The limit amount of investments for non-operating real property or securities (the original investment), by the Company and each subsidiary, shall not exceed 60% of the book value of total assets; for an individual securities investment, the limit amount shall not exceed 50% of the foresaid limit amount, i.e. 30% of the book value of total assets.

• Article 3: Terms used in these Procedures are defined as follows:

• 1.Derivatives: Forward contracts, options contracts, futures contracts, leverage contracts, swap contracts, and compound contracts combining the above products, whose value is

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derived from assets, interest rates, foreign exchange rates, indexes or other interests. The term "forward contracts" does not include insurance contracts, performance contracts, post-sale service contracts, long-term leasing contract, and long-term procurement (sales) agreements.

• 2.Assets acquired or disposed through mergers, demergers, acquisitions, or transfer of shares in accordance with law: Refers to assets acquired or disposed through mergers, demergers, or acquisitions conducted under the Business Mergers and Acquisitions Act, Financial Holding Company Act, Financial Institutions Merger Act and other acts, or to transfer of shares from another company through issuance of new shares of its own as the consideration therefor (hereinafter "acquisition of shares") under Article 156, paragraph 8 of the Company Act.

• Related party or subsidiary: As defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

• Professional appraiser: Refers to a real property appraiser or other person duly authorized by law to engage in the value appraisal of real property or equipment.

• Date of occurrence: Refers to the date of contract signing, date of payment, date of consignment trade, date of transfer, dates of Board of Directors resolutions, or other date that can confirm the counterpart and monetary amount of the transaction, whichever date is earlier; provided, for investment for which approval of the competent authority is required, the earlier of the above date or the date of receipt of approval by the competent authority shall apply.

• 6.Mainland China area investment: Refers to investments in the Mainland China area approved by the Ministry of Economic Affairs Investment Commission or conducted in accordance with the provisions of the Regulations Governing Permission for Investment or Technical Cooperation in the Mainland Area.

• Article 4: Professional appraisers and their officers, certified public

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accounts, attorneys, and securities underwriters that provide the Company with appraisal reports, certified public accountant's opinions, attorney's opinions, or underwriter's opinions in relation to the assets acquired or disposed, shall not be a related party of any party to the transaction.

• Article 5: The procedures for the assessment, determination of transaction terms and conditions, and price of acquiring or disposing of assets by the Company shall be in accordance with the following requirements:

• 1.Transactions relating to short-term securities investments and derivatives, which are mentioned in Article 1, should be assessed and executed by the financial department; long-term securities investment should be assessed by the Company’s President Office (“President Office”) and executed by the financial department after the approval; except for the foresaid assets, the other asset transactions should be assessed by the Company’s President Office and executed by the related departments after the approval.

• 2.The price of transactions described in the preceding paragraph, except which are traded in the centralized securities exchange market or on over-the-counter markets, shall be determined via public bidding, price bidding, or price negotiation based on reference to the market conditions.

• Article 6: Where an acquisition or disposition of assets of the Company shall be approved by the Board of Directors in accordance with the provisions of the Procedures or other relevant laws, the independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting.

• A major asset transaction or a derivatives transaction shall be approved by more than half of all audit committee members and submitted to the Board of Directors for a resolution. If approval of more than half of all audit committee members is not obtained, the procedures may be implemented if approved by more than two-thirds of all Directors, and the resolution of

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the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

Chapter 2 Acquisition or Disposal of Assets

• Article 7: In acquiring or disposing of real property or equipment where the transaction amount reaches 20 percent of the company's paid-in capital or NT$300 million or more, the Company, unless transacting with a government institution, engaging others to build on its own land, engaging others to build on rented land, or acquiring or disposing of equipment for business use, shall obtain an appraisal report prior to the date of occurrence of the event from a professional appraiser and shall further comply with the following provisions:

• Where due to special circumstances it is necessary to give a limited price, specified price, or special price as a reference basis for the transaction price, the transaction shall be submitted for approval in advance by the Board of Directors, and the same procedure shall be followed for any future changes to the terms and conditions of the transaction.

• Where the transaction amount is NT$1 billion or more, appraisals from two or more professional appraisers shall be obtained.

• 3.Where any one of the following circumstances applies with respect to the professional appraiser's appraisal results, unless all the appraisal results for the assets to be acquired are higher than the transaction amount, or all the appraisal results for the assets to be disposed of are lower than the transaction amount, a certified public accountant shall be engaged to perform the appraisal in accordance with the provisions of Statement of Auditing Standards No. 20 published by the Accounting Research and Development Foundation in Taiwan (ARDF) and render a specific opinion regarding the reason for the discrepancy and the appropriateness of the transaction price:

  • (1) The discrepancy between the appraisal result and the transaction amount is 20 percent or more of the

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transaction amount.

  - (2) The discrepancy between the appraisal results of two or more professional appraisers is 10 percent or more of the transaction amount.

1. No more than 3 months may elapse between the date of the appraisal report issued by a professional appraiser and the contract execution date; provided, where the publicly announced current value for the same period is used and not more than 6 months have elapsed, an opinion may still be issued by the original professional appraiser.

2. Article 8: The Company acquiring or disposing of securities shall, prior to the date of occurrence of the event, obtain financial statements of the issuing company for the most recent period, certified or reviewed by a certified public accountant, for reference in appraising the transaction price, and if the dollar amount of the transaction is 20 percent of the Company's paid-in capital or NT$300 million or more, the Company shall additionally engage a certified public accountant prior to the date of occurrence of the event to provide an opinion regarding the reasonableness of the transaction price. If the CPA needs to use the report of an expert as evidence, the CPA shall do so in accordance with the provisions of Statement of Auditing Standards No. 20 published by the ARDF. This requirement does not apply, however, to publicly quoted prices of securities that have an active market, or where otherwise provided by regulations of the securities competent authority.

3. Article 8-1: In acquiring or disposing of membership cards or intangible assets where the transaction amount reaches 20 percent or more of the company's paid-in capital or NT$300 million or more, the Company, unless transacting with a government institution, shall engage a CPA to render an opinion on the reasonableness of the transaction price prior to the date of occurrence of the event. The CPA shall comply with the provisions of Statement of Auditing Standards No. 20 published by the ARDF.

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• Article 8-2: The calculation of the transaction amounts referred to in the preceding three articles shall be done in accordance with Article 26, paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items for which an appraisal report from a professional appraiser or a CPA's opinion has been obtained need not be counted toward the transaction amount.

• Article 9: Where the Company acquires or disposes of assets through court auction procedures, the evidentiary documentation issued by the court may be substituted for the appraisal report or CPA opinion.

• Article 10: Where the Company acquires or disposes of assets shall be conducted by the Chairman delegated by the Board of Directors or in accordance with the authorization limits of the Company.

Chapter 3 Related Party Transactions

• Article 11: When the Company engages in any acquisition or disposal of assets from or to a related party, in addition to ensuring that the necessary resolutions are adopted and the reasonableness of the transaction terms is appraised in compliance with the provisions of Chapter 2 and this Chapter, if the transaction amount reaches 10 percent or more of the Company's total assets, the Company shall also obtain an appraisal report from a professional appraiser or a CPA's opinion in compliance with the provisions of Chapter 2.

• The calculation of the transaction amount referred to in the preceding paragraph shall be made in accordance with Article 8-2.

• Article 12: When the Company intends to acquire or dispose of real property from or to a related party, or when it intends to acquire or dispose of assets other than real property from or to a related party and the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NT$300 million or more, except in

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trading of government bonds or bonds under repurchase and resale agreements, or subscription or repurchase of money market funds issued by domestic securities investment trust enterprises, the Company may not proceed to enter into a transaction contract or make a payment until the following matters have been approved by the Board of Directors:

1. The purpose, necessity and anticipated benefit of the acquisition or disposal of assets.

2. The reason for choosing the related party as a trading counterparty.

3. With respect to the acquisition of real property from a related party, information regarding appraisal of the reasonableness of the preliminary transaction terms in accordance with Article 13 through Article 15.

4. The date and price at which the related party originally acquired the real property, the original trading counterparty, and that trading counterparty's relationship to the Company and the related party.

5. Monthly cash flow forecasts for the year commencing from the anticipated month of signing of the contract, and evaluation of the necessity of the transaction, and reasonableness of the funds utilization.

6. An appraisal report from a professional appraiser or a CPA's opinion obtained in compliance with the preceding article.

7. Restrictive covenants and other important stipulations associated with the transaction.

The calculation of the transaction amounts referred to in the preceding paragraph shall be made in accordance with Article 26, paragraph 2 herein, and "within the preceding year" as used herein refers to the year preceding the date of occurrence of the current transaction. Items that have been approved by the Board of Directors need not be counted toward the transaction amount.

With respect to the acquisition or disposal of business-use equipment between the Company and its parent or subsidiaries, the Company's Board of Directors may pursuant

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to Article 10 delegate the Chairman to decide such matters when the transaction is within a certain amount and have the decisions subsequently submitted to and ratified by the next Board of Directors meeting.

• When a matter is submitted for discussion by the Board of Directors pursuant to paragraph 1 of this Article, the independent Directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting.

• The matters which paragraph 1 requires submitting to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

• Article 13: The Company shall evaluate the reasonableness of the transaction costs by the following means if it intends to acquire real property from a related party:

• Based upon the related party's transaction price plus necessary interest on funding and the costs to be duly borne by the buyer. "Necessary interest on funding" is imputed as the weighted average interest rate on borrowing in the year the company purchases the property; provided, it may not be higher than the maximum non-financial industry lending rate announced by the Ministry of Finance.

• Total loan value appraisal from a financial institution where the related party has previously created a mortgage on the property as security for a loan; provided, the actual cumulative amount loaned by the financial institution shall have been 70 percent or more of the financial institution's appraised loan value of the property and the period of the loan shall have been 1 year or more. However, this shall not apply where the financial institution is a related party of one of the trading counterparties.

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Where land and structures thereupon are combined as a single property purchased in one transaction, the transaction costs for the land and the structures may be separately appraised in accordance with either of the means listed in the preceding paragraph.

When acquiring real property from a related party, the Company shall evaluate and appraise the cost of the real property in accordance with paragraph 1 and paragraph 2 and shall also engage a CPA to review the appraisal and render a specific opinion.

• Article 14: Where the Company acquires real property from a related party and one of the following circumstances exists, the acquisition shall be conducted in accordance with Article 12, and Article 13 does not apply:

• The related party acquired the real property through inheritance or as a gift.

• More than 5 years have elapsed from the time the related party signed the contract to obtain the real property to the signing date for the current transaction.

• The real property is acquired through signing of a joint development contract with the related party, or through engaging a related party to build real property, either on the company's own land or on rented land.

• Article 15: When the results of the Company's appraisal conducted in accordance with Article 13, paragraph 1 and paragraph 2 herein are uniformly lower than the transaction price, the matter shall be handled in compliance with Article 16. However, where the following circumstances exist, objective evidence has been submitted and specific opinions on reasonableness have been obtained from a professional real property appraiser and a CPA, this restriction shall not apply:

• 1.Where the related party acquired undeveloped land or leased land for development, it may submit proof of compliance with one of the following conditions:

  • (1) Where undeveloped land is appraised in accordance with the means in the preceding two Articles, and structures

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according to the related party's construction cost plus reasonable construction profit are valued in excess of the actual transaction price. The "Reasonable construction profit" shall be deemed the average gross operating profit margin of the related party's construction division over the most recent 3 years or the gross profit margin for the construction industry for the most recent period as announced by the Ministry of Finance, whichever is lower.

• (2) Completed transactions by unrelated parties within the preceding year involving other floors of the same property or neighboring or closely valued parcels of land, where the land area and transaction terms are similar after calculation of reasonable price discrepancies in floor or area land prices in accordance with standard property market practices.

• (3) Completed leasing transactions by unrelated parties for other floors of the same property from within the preceding year, where the transaction terms are similar after calculation of reasonable price discrepancies among floors in accordance with standard property leasing market practices.

• Where the Company acquiring real property from a related party provides evidence that the terms of the transaction are similar to the terms of transactions completed for the acquisition of neighboring or closely valued parcels of land of a similar size by unrelated parties within the preceding year.

Completed transactions for neighboring or closely valued parcels of land in the preceding paragraph in principle refers to parcels on the same or an adjacent block and within a distance of no more than 500 meters or parcels close in publicly announced current value; transaction for similarly sized parcels in principle refers to transactions completed by unrelated parties for parcels with a land area of no less than 50 percent of the property in the planned transaction; within the

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preceding year refers to the year preceding the date of occurrence of the acquisition of the real property.

• Article 16: Where the Company acquires real property from a related party and the results of appraisals conducted in accordance with Article 13 through Article 15 are uniformly lower than the transaction price, the following steps shall be taken:

• A special reserve shall be set aside in accordance with Article 41, paragraph 1 of the Securities and Exchange Act against the difference between the real property transaction price and the appraised cost, and such difference may not be distributed or used for capital increase or issuance of bonus shares. Where the Company uses the equity method to account for its investment in another company, then the special reserve called for under Article 41, paragraph 1 of the Securities and Exchange Act shall be set aside pro rata in a proportion consistent with the share of public company's equity stake in the other company.

• Audit Committee shall supervise the Company’s execution of the aforesaid matter.

• Actions taken pursuant to subparagraph 1 and subparagraph 2 shall be reported to a shareholders meeting, and the details of the transaction shall be disclosed in the annual report and any investment prospectus.

Where the Company has set aside a special reserve under the preceding paragraph may not utilize the special reserve until it has recognized a loss on decline in market value of the assets it purchased at a premium, or they have been disposed of, or adequate compensation has been made, or the status quo ante has been restored, or there is other evidence confirming that there was nothing unreasonable about the transaction, and the securities competent authority has given its consent.

When the Company obtains real property from a related party, it shall also comply with the preceding two paragraphs if there is other evidence indicating that the acquisition was not an arm’s length transaction.

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Chapter 4 Engaging in Derivatives Trading

• Article 17: Any derivatives trading of the Company shall be conducted in accordance with the “Procedures for Engaging in Derivatives Transactions” of the Company, moreover, the Company shall pay strict attention to control the risk management and to audit the Internal Control System of the Company.

Chapter 5 Mergers and Consolidations, Splits, Acquisitions, and Assignment of Shares

• Article 18: Where the Company conducts a merger, demerger, acquisition, or transfer of shares, prior to convening the Board of Directors to resolve on the matter, shall engage a CPA, attorney, or securities underwriter to give an opinion on the reasonableness of the share exchange ratio, acquisition price, or distribution of cash or other property to shareholders, and submit the opinion to the Board of Directors for deliberation and approval. However, the requirement of obtaining an aforesaid opinion on reasonableness issued by an expert may be exempted in the case of a merger by the Company of a subsidiary in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, and in the case of a merger between subsidiaries in which the Company directly or indirectly holds 100 percent of the respective subsidiaries’ issued shares or authorized capital.

• Article 19: Where the Company participates in a merger, demerger, or acquisition shall prepare a public report to shareholders detailing important contractual content and matters relevant to the merger, demerger, or acquisition prior to the shareholders meeting, together with the expert opinion referred to in Article 18 when sending notification of the shareholders meeting, for reference in deciding whether to approve the merger, demerger, or acquisition. Provided, where a provision of another act exempts a company from convening a shareholders meeting to approve the merger, demerger, or acquisition, this restriction shall not apply. Where the shareholders meeting of any one of the companies participating in a merger, demerger,

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or acquisition fails to convene or pass a resolution due to lack of a quorum, insufficient votes, or other legal restriction, or the proposal is rejected by the shareholders meeting, the Company shall immediately publicly explain the reason, the follow-up measures, and the preliminary date of the next shareholders meeting.

• Article 20: Where the Company participates in a merger, demerger, or acquisition shall convene a Board of Directors meeting and shareholders meeting on the date which the other companies participating in the merger, demerger, or acquisition convene their Board of Directors and shareholders meeting to resolve matters relevant to the merger, demerger, or acquisition, unless another act provides otherwise or the securities competent authority is notified in advance of extraordinary circumstances and grants consent. Where the Company and the other companies participating in a transfer of shares shall call their respective Board of Directors meeting on the same day, unless another act provides otherwise or the securities competent authority is notified in advance of extraordinary circumstances and grants consent.

• Where the Company participates in a merger, demerger, acquisition, or transfer of shares shall prepare a full written record of the following information and retain the record for 5 years for reference. In addition, the information set out in the subparagraphs 1 and 2 of the following paragraph shall be reported in the prescribed format and via the Internet-based information system to the securities competent authority for recordation within two days commencing immediately from the date of passage of a resolution by the Board of Directors.

• Basic identification data for personnel: Including the occupational titles, names, and national ID numbers (or passport numbers in the case of foreign nationals) of all persons involved in the planning or implementation of any merger, demerger, acquisition, or transfer of shares prior to disclosure of the information.

• Dates of material events: Including the signing of any letter

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of intent or memorandum of understanding, the engagement of a financial or legal advisor, the execution of a contract, and the convening of a Board of Directors meeting.

1. Important documents and minutes: Including merger, demerger, acquisition, and share transfer plans, any letter of intent or memorandum of understanding, material contracts, and minutes of Board of Directors meetings.

2. Where any of the companies participates in a merger, demerger, acquisition, or transfer of shares is neither listed on an exchange nor has its shares traded on an OTC market, the Company shall enter into an agreement with such party and shall comply with the preceding paragraph of this Article.

3. Article 21: Every person participating in or privy to the plan for merger, demerger, acquisition, or transfer of shares shall issue a written undertaking of confidentiality and may not disclose the content of the plan prior to public disclosure of the information and may not trade, in their own name or under the name of another person, in any stock or other equity security of any company related to the plan for merger, demerger, acquisition, or transfer of shares.

4. Article 22: Where the Company participates in a merger, demerger, acquisition, or transfer of shares, the Company shall not arbitrarily alter the share exchange ratio or acquisition price unless under the below-listed circumstances, and shall stipulate the circumstances permitting alteration in the contract for the merger, demerger, acquisition, or transfer of shares:

5. Cash capital increase, issuance of convertible corporate bonds, or the issuance of bonus shares, issuance of corporate bonds with warrants, preferred shares with warrants, stock warrants, or other equity based securities.

6. An action, such as a disposal of major assets that affects the Company's financial operations.

7. An event, such as a major disaster or major change in technology that affects shareholder equity or share price.

8. An adjustment where any of the companies participating in the merger, demerger, acquisition, or transfer of shares buys

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back treasury stock.

1. An increase or decrease in the number of entities or companies participating in the merger, demerger, acquisition, or transfer of shares.

2. Other terms/conditions that the contract stipulates may be altered and that have been publicly disclosed.

3. Article 23: The contract for participation by the Company in a merger, demerger, acquisition, or transfer of shares shall record the rights and obligations of the companies participating in the merger, demerger, acquisition, or transfer of shares, and shall also record the following:

4. Handling of breach of contract.

5. Principles for the handling of equity-type securities previously issued or treasury stock previously bought back by any company that is extinguished in a merger or that is demerged.

6. 3.The amount of treasury stock participating companies are permitted under law to buy back after the record date of calculation of the share exchange ratio, and the principles for handling thereof.

7. The manner of handling changes in the number of participating entities or companies.

8. Preliminary progress schedule for plan execution, and anticipated completion date.

9. Scheduled date for convening the legally mandated shareholders meeting if the plan exceeds the deadline without completion, and relevant procedures.

10. Article 24: After public disclosure of the information, if the Company participates in the merger, demerger, acquisition, or transfer of shares and intends further to carry out a merger, demerger, acquisition, or transfer of shares with another company, all of the participating companies shall carry out anew the procedures or legal actions that had originally been completed toward the merger, demerger, acquisition, or transfer of share ; except that where the number of participating companies is decreased and a participating company's shareholders meeting

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has adopted a resolution authorizing the Board of Directors to alter the limits of authority, such participating company may be exempted from calling another shareholders meeting to resolve on the matter anew.

• Article 25: Where any of the companies participating in a merger, demerger, acquisition, or transfer of shares is not a public company, the Company shall sign an agreement with the non-public company in accordance with the provisions of Article 20, Article 21, and Article 24.

Chapter 6 Public Disclosure of Information

• Article 26: Under any of the following circumstances, where the Company acquires or disposes of assets shall publicly announce and report the relevant information on the securities competent authority's designated website in the appropriate format as prescribed by regulations within 2 days commencing immediately from the date of occurrence of the event:

• 1.Acquisition or disposal of real property from or to a related party, or acquisition or disposal of assets other than real property from or to a related party where the transaction amount reaches 20 percent or more of paid-in capital, 10 percent or more of the Company's total assets, or NT$300 million or more; provided, this shall not apply to trading of government bonds or bonds under repurchase and resale agreements, or subscription or redemption of money market funds issued by domestic securities investment trust enterprises.

• Merger, demerger, acquisition, or transfer of shares.

• Losses from derivatives trading reaching the limits on aggregate losses or losses on individual contracts set out in the procedures adopted by the Company.

• Where the type of asset acquired or disposed is equipment/machinery for business use, the trading counterparty is not a related party, and the transaction amount is more than NT$1 billion.

• Where land is acquired under an arrangement on engaging

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others to build on the company's own land, engaging others to build on rented land, joint construction and allocation of housing units, joint construction and allocation of ownership percentages, or joint construction and separate sale, and the amount the Company expects to invest in the transaction is more than NT$500 million.

• 6.Where an asset transaction other than any of those referred to in the preceding five subparagraphs, a disposal of receivables by a financial institution, or an investment in the mainland China area where the transaction amount reaches 20 percent or more of paid-in capital or NT$300 million or more, provided this shall not apply to the following circumstances:

• (1) Trading of government bonds.

• (2) Trading of bonds under repurchase/resale agreements or the subscription or redemption of money market funds issued by domestic securities investment trust enterprises.

The amount of transactions above shall be calculated as follows:

1. The amount of any individual transaction.

2. The cumulative transaction amount of acquisitions and disposals of the same type of underlying asset with the same trading counterparty within the preceding year.

3. The cumulative transaction amount of real property acquisitions and disposals (cumulative acquisitions and disposals, respectively) within the same development project within the preceding year.

4. The cumulative transaction amount of acquisitions and disposals (cumulative acquisitions and disposals, respectively) of the same security within the preceding year.

"Within the preceding year" as used in the paragraph 2 refers to the year preceding the date of occurrence of the current transaction. Items duly announced in accordance with these Procedures need not be counted toward the transaction amount.

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• Article 27: When the Company at the time of public announcement makes an error or omission in an item required by regulations to be publicly announced and so is required to correct it, all the items shall be again publicly announced and reported in their entirety within two days counting inclusively from the date when the Company becomes aware of the error or omission.

• Article 28: Where the Company acquires or disposes of assets shall keep all relevant contracts, meeting minutes, log books, appraisal reports and CPA, attorney, and securities underwriter opinions at the company headquarters, where they shall be retained for 5 years except where another act provides otherwise.

• Article 29: Where any of the following circumstances occurs with respect to a transaction that the Company has already publicly announced and reported in accordance with the Article 26 through 28, a public report of relevant information shall be made on the information reporting website designated by the securities competent authority within 2 days commencing immediately from the date of occurrence of the event:

• Change, termination, or rescission of a contract signed in regard to the original transaction.

• The merger, demerger, acquisition, or transfer of shares is not completed by the scheduled date set forth in the contract.

• Change to the originally publicly announced and reported information.

Chapter 7 Additional Provisions

• Article 30: Information required to be publicly announced and reported in accordance with the provisions of Chapter 6 on acquisitions and disposals of assets by a subsidiary of the Company that is not a public company in Taiwan shall be reported by the Company.

The paid-in capital or total assets of the Company shall be the standard for determining whether or not a subsidiary referred to in the preceding paragraph is subject to Article 26, paragraph 1 requiring a public announcement and regulatory filing in the event the type of transaction specified therein

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reaches 20 percent of paid-in capital or 10 percent of the total assets.

• Article 31: The Company’s controlling and monitoring procedures towards the acquisition or disposal of assets by its subsidiaries are as follows:

• The Company shall urge its subsidiaries to establish and execute their own “Procedures for Acquisition of Disposal of Assets” in accordance with this Procedures.

• Where any material violation is found by the internal auditors of the subsidiaries, the subsidiaries shall promptly notify the Company in writing of any material violation found. The Company shall know how the subsidiaries deals with the violations, admonish the subsidiary to improve and keep itself informed of the improvement process.

• Article 32: Should there be any violation of the procedures when the persons-in-charge of the Company deal with acquisition or disposal of assets, subsequent penalization is subject to the relevant HR policies of the Company.

• Article 33: (Deleted)

• Article 34: For the calculation of 10 percent of total assets under this Procedures, the total assets stated in the most recent parent company only financial report or individual financial report prepared under the Regulations Governing the Preparation of Financial Reports by Securities Issuers shall be used.

• Article 35: After the Procedures are approved by the Board of Directors, the Procedures shall be submitted to the Shareholders Meeting for approval before implementation. Any amendment is subject to the same procedure. The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting.

• The matters which paragraph 1 requires submitting to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the approval by more than half of all audit committee members is not obtained, the procedures may be implemented if approved by

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more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

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Procedures for Engaging in Derivatives Transactions of Nan Ya Plastics Corporation

Amended by the Annual Shareholders’ Meeting on June 19, 2018

Chapter 1 General Provision

• Article 1: The “Procedures for Engaging in Derivatives Transactions” (hereinafter referred to as the “Procedures”) of Nan Ya Plastics Corporation (hereinafter referred to as the “Company”) was established in accordance with Article 17 of the “Procedures for Acquisition or Disposal of Assets” of the Company.

• Article 2: Derivatives referred to herein are defined as forward contracts, options contracts, futures contracts, leverage contracts, swap contracts, and compound contracts combining the above products, whose value is derived from assets, interest rates, foreign exchange rates, indexes or other interests.

• Article 3: Forward contracts referred to herein do not include insurance contracts, performance contracts, after-sales service contracts, long-term lease contracts, and long-term purchase (sales) contracts.

• Article 4: The principle of the Company’s derivatives transactions is to hedge against the fluctuation of foreign exchange rates, interest rates, asset price, etc.

Chapter 2 Operation Procedures

• Article 5: The total contract amount of derivatives transactions of the Company shall not exceed 50% of the Company’s net worth, and the maximum loss limit is 10% of the contract amount for all contracts in aggregate or for any individual contract. The content of individual derivatives contract shall be approved by high-level manager(s) authorized by the Board of Directors based on the level of the authorization of the Company.

• Major derivatives transactions of the Company shall be approved by more than half of all audit committee members and submitted to the Board of Directors for a resolution. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if

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• approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting

• Article 6: The transaction personnel of the Department, which is in charge of derivatives transactions, shall follows the trading strategy in accordance with the approved deal terms and conditions of derivatives transactions. Also, the transaction personnel shall execute trades directly with counterparties. After the foresaid trades are done, the transaction personnel shall deliver the relevant transaction receipts to the settlement personnel to conduct the settlement procedures. The settlement personnel shall proceed contracts signing, bank accounts opening, settlement, accounts closing, etc. with counterparties in accordance with the trading conditions.

• Article 7: For the derivatives transactions of the Company, the Company shall establish a comprehensive management information system towards the balance position of the transactions, profit/loss analysis, etc. to control risk properly and to respond to abnormal situations immediately.

Chapter 3 Announcement and Reporting Procedures

• Article 8: The Company shall compile monthly report on the status of derivatives transactions engaged in up to the end of the previous month by itself and fill out the information in the regulated form on the information reporting website designated by the competent securities authority before the tenth day of each month. If derivatives transactions of which maximum loss 10% of contract amount, or any amendment, termination or cancellation of the original contract occurs, the Company shall report and make public announcements accordingly on the information reporting website designated by the competent securities authority within two days from the date of occurrence of the event.

• Article 9: When the Company’s subsidiaries are not public companies of the Republic of China and are participating in derivatives transactions, the Company shall follow the requirements of

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Article 8 hereof to report and make public announcements on behalf of its subsidiaries.

• Article 10: The Company shall report its public announcement on all items if there is any error or omission in the Company’s required public announcement.

• Article 11: The Company shall upload the audit report regarding the derivatives transactions and the implementation status of annual audit plans of internal audits in the regulated form to the information reporting website designated by the competent securities authority before the end of February every year.

• Article 12: The Company shall upload the improvement situation for any abnormal affairs regarding the Procedures to the information reporting website designated by the competent securities authority before the end of May every year.

Chapter 4 Internal Control and Internal Audit

• Article 13: The Company engaging in derivatives transactions shall adopt appropriate risk management practices with regards to credit risk, market price risk, liquidity risk, cash flow risk, operation risk and legal risk. The confirmation personnel and settlement personnel shall not serve concurrently to one another. Regarding the appropriateness assessment towards the risk measurement, supervision and control, and risk management procedures, the President Office of the Company should periodically report to the high-level manager(s) authorized by the Board of Directors.

• Article 14: The derivatives trading positions of the Company shall be evaluated at least once a week by the in-charge department, and the hedging transactions made for business purposes shall be evaluated at least twice a month. The manager of the in-charge department shall pay attention to the risk control and supervision of derivatives transactions from time to time, and periodically supervise and evaluate the performance of derivatives transactions to check whether they are conducted in accordance with the related procedures formulated by the Company hereof and whether the attendant risk of these

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• transactions is within the capability of the Company. The foresaid evaluation reports shall be submitted to a high-level manager(s) authorized by the Board of Directors for review. If there is any abnormal situation highlighted in the market evaluation reports (e.g. the holding position has reached the maximum loss limit), the Company shall immediately take necessary measures to deal with the situation and report to the Board of Directors. There shall be independent directors attending the Board of Directors meeting and expressing their opinions.

• Article 15: The Company shall establish a log book to record all its derivatives transaction information, including types, amounts and relevant information of derivatives transactions, and matters require evaluating cautiously in accordance with Article 14 hereof. The Company's internal audit personnel shall access the appropriateness of the internal control regarding the derivatives transactions periodically, shall conduct monthly audit to evaluate whether the trading department conform to the Procedures, and shall prepare the monthly audit report accordingly. If any material violation is discovered, the Audit Committee shall be notified in writing and the Company should, depending on the status of such material violation, penalize the relevant personnel in accordance with the Human Resources Management Policies of the Company.

• Article 16: The Company’s control and supervision procedures towards the derivatives transactions by the Company’s subsidiaries are as follows:

• If the Company’s subsidiaries intend to conduct derivatives transactions, the Company shall ensure that its subsidiaries establish their own “Procedures for Engaging in Derivatives Transactions”.

• The Company’s subsidiaries shall submit the reference content of the derivatives transactions of the previous month to the Company for review by the fifth date every month.

• If any material violation is found by the internal auditors of

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the subsidiaries, the subsidiaries shall submit a written notice to the Company of such violations. The Company shall closely monitor the violations and the resulting improvements.

Chapter 5 Additional Provision

• Article 17: After the Procedures are approved by the Board of Directors, the Procedures shall be submitted to the Shareholders Meeting for approval before its implementation. Any amendment is subject to the same procedure.

The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting.

The matters which paragraph 1 require submitting to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

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Procedures for Loaning Funds to Other Parties of Nan Ya Plastics Corporation

Amended by the Annual Shareholders’ Meeting on June 20, 2017

• Article 1: Nan Ya Plastics Corporation (hereinafter referred to as the “Company”) shall comply with the “Procedures for Loaning Funds to other Parties” (hereinafter referred to as the “Procedures”) when making loans to others.

• Article 2: The borrower to which the Company may loan funds shall be limited to where an inter-company or inter-firm business transaction calls for a loan arrangement; or where an inter-company or inter-firm has no business transaction but has a short-term necessary financing facility.

• Article 3: When making loans to the company/firm having business relationship with the Company, the Company shall comply with Article 4, subparagraph 2 hereof. As to loaning funds to a company/firm, which has no business relationship with the Company, for short term financing needs, the borrower shall be:

• Affiliates of the Company which a short-term financing facility is necessary to meet their business needs.

• Companies/firms other than affiliates of the Company which need short term financing for materials purchase, working capital, or general business needs.

• Article 4: Limitation on the aggregate amount of loans and the maximum amount to a single borrower:

• The aggregate amount of loans to all borrowers shall not exceed 50% of the net worth of the Company. Moreover, the aggregate amount of loans to companies/firms which do not have business relationship with the Company but are in need of short term financing shall not exceed 40% of the Company’s net worth.

• The aggregate amount of loans to each company/firm, which has a business relationship with the Company, shall not exceed the total transaction amount between the two parties. The foresaid “total transaction amount” shall be the

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total purchasing or selling amount over the latest year, whichever is higher and shall not exceed 25% of the Company’s net worth.

1. The aggregate amount of loans to each company/ firm in need of short term financing, which is an affiliate of the Company, shall not exceed 25% of the Company’s net worth; as to the other borrowers, the aggregate amount of loans to each of them shall not exceed 20% of the Company’s net worth.

2. Whenever making advances in accordance with Article 7 hereof, the authorized maximum limit of loans to one borrower shall not exceed 10% of the Company’s net worth.

3. Article 5: Before the Company makes loans to a funds borrower, the Company shall do an investigation and assessment of the following aspects: the purposes of the borrowing, the terms of the security for the borrowing, and the impact on the Company’s business operations, financial conditions and shareholders’ equity. The limit or maximum amount of lending, tenor and interest calculation terms shall be determined based on these findings, and then submitted to the Board of Directors for approval.

4. The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting.

5. When the Company making major loans to others, it requires approved by more than half of all audit committee members and submitted to the Board of Directors for a resolution. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

6. Article 6: The tenor of the loan shall not be longer than one year in the case the borrower does not have business relationship with the Company but has a short-term necessary financing facility. The interest rates of the loans shall not be lower than the then

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current lowest lending interest rates announced by the general financial institutions.

• Article7: Loans of funds between the Company and its parent company or subsidiaries, or between its subsidiaries, shall be submitted for a resolution by the Board of Directors pursuant to Article 5, and the Chairman may be authorized, for a specific borrowing counterparty, within a certain monetary limit resolved by the Board of Directors, and within a period not to exceed one year, to give loans in installments or to make a revolving credit line available for the counterparty to draw down.

• Article 8: A loan to the borrower may be extended for a certain period, provided the extension of the loan has been approved by the Board of Directors. The total duration of the loan after the above-mentioned extension shall meet the requirement of Article 6. If the extension of the loan is not approved by the Board of Directors, the borrower shall repay the principal and the accrued interests in full on the due date. If the borrower fails to perform, the Company shall claim the overdue amount via legal proceedings.

• Article 9: The Company shall prepare a memorandum book for its fund-loaning activities and truthfully record the following information: borrower, amount, date of approval by the Board of Directors, lending/borrowing date, and matters to be carefully evaluated.

• Article 10: The Company's internal auditors shall audit the Procedures for Loaning Funds to other Parties and the implementation thereof no less frequently than quarterly and prepare written records accordingly. During the auditing, the internal auditor shall immediately correct violation(s) upon finding any violation. If any material violation is found, in addition to notifying the Audit Committee promptly in writing, the personnel who violate the Procedures shall be penalized in accordance with the related rules of the Company.

• Article 11: If, as a result of a change in circumstances, an entity for which an endorsement/guarantee is made does not meet the

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requirements of the Procedures or the loan balance exceeds the limit, the Company shall adopt rectification plans and submit the rectification plans to the Audit Committee for its approval and then to the Board of Directors for a resolution, and shall complete the rectification according to the timeframe set out in the plan.

• Article 12: Procedures for controlling and managing loans of funds to others by subsidiaries of the Company are as follows:

• Where a subsidiary of the Company intends to make loans to others, the Company shall instruct it to formulate its own Procedures for Loaning Funds to other Parties in compliance with Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies, and it shall comply with the Procedures when loaning funds.

• The subsidiaries shall compile and submit the schedule, including the details and status of fund-lending as of the end of the previous month to the Company for review by the fifth day of the current month.

• If any material violation is found by the internal auditors of the subsidiaries, the subsidiaries shall promptly notify the Company in writing of any material violation found. The Company shall know how the subsidiary deals with the violation(s), admonish the subsidiary to improve and keep itself informed of the improvement process.

• Article 13: The Company shall announce and report the related information of fund-lending to others in compliance with the following requirements:

• The Company shall enter the previous month's loan balances of itself and its subsidiaries to the information reporting website designated by the securities competent authority by the 10th day of each month.

• 2.The company whose loans of funds reach one of the following levels shall announce and report such event on the information reporting website designated by the securities competent authority within two days commencing

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immediately from the date of occurrence:

• (1)The aggregate balance of loans to others by the Company and its subsidiaries reaches 20 percent or more of the Company's net worth as stated in its latest financial statement.

• (2)The balance of loans by the Company and its subsidiaries to a single enterprise reaches 10 percent or more of the Company's net worth as stated in its latest financial statement.

• (3)The amount of new loans of funds by the Company or its subsidiaries reaches NT$10 million or more, and reaches 2 percent or more of the Company's net worth as stated in its latest financial statement.

• The Company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and report pursuant to subparagraphs of the preceding paragraph. The percentage of the aggregate balance of loans to others over net worth of the above-mentioned subsidiary shall be calculated as the subsidiary’s balance of loans to others to the Company’s net worth.

• The Company shall evaluate the status of its fund-lending and reserve sufficient allowance for bad debts, and shall adequately disclose relevant information in its financial reports and provide certified public accountants with relevant information for implementation of necessary audit procedures.

• Article 14: After the Procedures are approved by the Board of Directors, the Procedures shall be submitted to the Shareholders’ Meeting for approval before its implementation. Any amendment is subject to the same procedures. The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting.

The matters for which paragraph 1 requires submitted to the

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Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

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Procedures for Providing Endorsements and Guarantees to Other Parties of Nan Ya Plastics Corporation

Amended by the Annual Shareholders’ Meeting on June 20, 2017

Chapter 1 General Provision

• Article 1: Nan Ya Plastics Corporation (hereinafter referred to as the “Company”) shall comply with the “Procedures for Providing Endorsements and Guarantees to other Parties” (hereinafter referred to as the “Procedures”) when making endorsements or guarantees for others.

• Article 2: The term "endorsements/guarantees" as used in the Procedures refers to the following:

• Financing endorsements/guarantees, including: (1)Bill discount financing.

• (2)Endorsement or guarantee made to meet the financing needs of another company, including any creation of a pledge or mortgage on the Company’s chattel or real property as security for the loans of another company.

• (3)Issuance of a separate negotiable instrument to a non-financial enterprise as security to meet the financing needs of the company itself.

• Customs duty endorsement/guarantee, meaning an endorsement or guarantee for the Company itself or another company with respect to customs duty matters.

• Other endorsements/guarantees, meaning endorsements or guarantees beyond the scope of the above two subparagraphs.

Article 3: The Company may make endorsements/guarantees for the following companies：

1. A company with which it does business.

2. A company in which the Company directly and indirectly holds more than 50 percent of the voting shares.

3. A company that directly and indirectly holds more than 50 percent of the voting shares in the Company.

4. Where the Company fulfills its contractual obligations by providing mutual endorsements/guarantees for another

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company in the same industry or for joint builders for purposes of undertaking a construction project.

1. Where all capital contributing shareholders make endorsements/ guarantees for their jointly invested company in proportion to their shareholding percentages. Capital contribution referred to in the paragraph shall mean capital contribution directly by the Company, or through a subsidiary in which the Company holds 100% of the voting shares.

2. Companies in which the Company holds, directly or indirectly, 90% or more of the voting shares may make endorsements/guarantees for each other, and the amount of endorsements/guarantees may not exceed 10% of the net worth of the Company, provided that this restriction shall not apply to endorsements/guarantees made between companies in which the Company holds, directly or indirectly, 100% of the voting shares.

Chapter 2 Formulation of Operation Procedures

• Article 4: The ceiling on the total outstanding amount of making endorsements or guarantees of the Company or the Company and its subsidiaries:

• The aggregate amount of making endorsements or guarantees shall not exceed 1.3 times of the net value of the Company.

• For any one endorsee or guarantee, the amount shall not exceed 50% of the aggregate amount above.

• The total outstanding amount of endorsement to each of the companies, which has a business relationship with the Company, shall not exceed the total transaction amount between the two parties. The foresaid “total transaction amount” shall be the total purchasing or selling amount or contract price, whichever is highest, provided that the highest amount shall in no event exceed the amount set forth in the preceding item.

Where the Company needs to exceed the limits set out in the

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Procedures to satisfy its business needs, it shall obtain approval from the Board of Directors and half or more of the directors shall act as joint guarantors for any loss that may be caused to the Company by the excess endorsement or guarantee. It shall also amend the Procedures accordingly and submit the same to the Shareholders Meeting for ratification. If the shareholders meeting does not give consent, the Company shall adopt a plan to discharge the amount in excess within a given time limit.

Where as a result of changes of condition the entity for which an endorsement/guarantee is made no longer meets the requirements of the Procedures, or the amount of endorsement/guarantee exceeds the limit, the Company shall adopt rectification plans and submit the rectification plans to the Audit Committee and to the Board of Directors for a resolution, and shall complete the rectification according to the timeframe set out in the plan.

• Article 5: Any endorsement/guarantee provided by the Company shall be approved in advance by the Board of Directors, provided that the Board of Directors can authorize the chairman to approve, in advance, any endorsement or guarantee within a certain amount without the approval of the Board of Directors. After that, the chairman needs to submit the results for ratification by the Board of Directors.

The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting.

• Major endorsement/guarantee provided by the Company requires approved by more than half of all audit committee members and submitted to the Board of Directors for a resolution. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

Before making any endorsement/guarantee pursuant to Article

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3, paragraph 2, a subsidiary in which the Company holds, directly or indirectly, 90% or more of the voting shares shall submit the proposed endorsement/guarantee to the Company’s Board of Directors for a resolution, provided that this restriction shall not apply to endorsements/guarantees made between companies in which the Company holds, directly or indirectly, one hundred percent (100%) of their total outstanding shares with voting rights.

Article 6: Before providing endorsement/guarantee to a company, the in-charge department of the Company shall conduct the assessment on the necessity, reasonableness, risk, the financial condition of the Company and the impact on the Company’s shareholders’ rights and interests of providing endorsement/guarantee to that company, and the assessment shall be placed on record. If it is deemed necessary, the Company shall require collateral for the endorsement/guarantee from the endorsed/guaranteed company. The assessment report of providing the endorsement/guarantee to that company, containing the counterparty, kind of endorsement/guarantee, reasons for providing endorsement/guarantee and amount, shall be submitted to the Chairman of the Company for approval. Each month, the finance department shall key in data of each new endorsement/guarantee or the cancellation of each endorsement/guarantee into the ERP system for controlling and shall print out the detailed list hereof in lieu of the memorandum book.

Any endorsement/guarantee provided by the Company to one of the Company’s subsidiaries with a net worth of less than 50% of the subsidiary’s paid-in capital shall be reviewed by the in-charge department of the Company on a quarterly basis.

• Article 7: The Company shall use the corporate chop registered with the Ministry of Economic Affairs as the dedicated chop for endorsements/guarantees. The chop shall be kept in the custody of a designated person approved by the Board of Directors, and the change of a designated person is subject to

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the same procedures. The designated person may use the chop to seal or issue negotiable instruments only when the same is in line with the operational procedure prescribed by the Company. When making a guarantee for a foreign company, the Company shall have the Guarantee Agreement signed by the chairman or president authorized by the Board of Directors.

• Article 8: The Company's internal auditors shall audit the execution of the endorsement/guarantee operation thereof no less frequently than quarterly and prepare written records accordingly. The internal auditor, during the auditing, shall immediately correct violation(s) upon finding of any violation. If any material violation is found, in addition to notifying the Audit Committee promptly in writing, the personnel who violate the Procedures shall be penalized in accordance with the Human Resources Polices of the Company.

• Article 9: The procedures regarding the Company’s control of providing endorsement/guarantee to other companies by the subsidiaries of the Company are as follows.

• When the subsidiaries intend to provide endorsements/guarantees to other companies, the Company shall require its subsidiaries to establish relevant procedures for providing endorsement/guarantee to other companies in accordance with the requirements of “Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies” and to comply with such procedures.

• The subsidiaries shall compile and submit the schedule which includes the details of endorsement/guarantee made in the previous month to the Company for review by the fifth day of each month.

• If any material violation is found by the internal auditors of the subsidiaries, the internal auditors shall deliver a written notice to the Company of this kind of violation. The Company shall know how the subsidiary deals with the violations(s), admonish the subsidiary to improve and keep itself informed of the improvement results.

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Chapter 3 Announcement and Reporting

• Article 10: The Company shall enter the previous month's balance of endorsements/guarantees of itself and its subsidiaries to the information reporting website designated by the securities competent authority by the 10th day of each month.

• Article 11: In addition to announcing and reporting the monthly balance of endorsements/guarantees in compliance with Article 10, in the event that the amount of the Company's endorsements/guarantees reaches one of the following levels, the Company shall announce and report such event on the information reporting website designated by the securities competent authority within two days commencing immediately from the date of occurrence:

• The aggregate amount of endorsements/guarantees by the Company and its subsidiaries reaches 50 percent or more of the Company's net worth as stated in its latest financial statement.

• The amount of endorsements/guarantees by the Company and its subsidiaries for any single enterprise reaches 20 percent or more of the Company's net worth as stated in its latest financial statement.

• 3.The amount of endorsements/guarantees by the Company and its subsidiaries for any single enterprise reaches NT$10 million or more and the aggregate amount of all endorsements/guarantees, long-term investment, and loans to that enterprise reaches 30 percent or more of the Company's net worth as stated in its latest financial statement.

• The amount of new endorsements/guarantees made by the Company or its subsidiaries reaches NT$30 million or more, and reaches 5 percent or more of the Company's net worth as stated in its latest financial statement.

• Article 12: The Company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and report pursuant to Article 11. The percentage of

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• the balance of endorsements/guarantees over the net worth of the subsidiary under the preceding paragraph shall be calculated by the ratio of the subsidiary's balance of endorsements/guarantees to the Company's net worth.

• Article 13: The Company shall evaluate or record the contingent loss for endorsements/guarantees, and shall adequately disclose information on endorsements/guarantees in its financial reports and provide its certified public accountants with relevant information for implementation of necessary auditing procedures to issue proper audit reports.

Chapter 4 Additional Provisions

• Article 14: After the Procedures are approved by the Board of Directors, the same shall be submitted for approval by the shareholders meeting before its implementation. Any amendment is subject to the same procedures. The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting.

• The matters for which paragraph 1 requires submitted to the Board of Directors for a resolution shall first be approved by more than half of all audit committee members. If the approval by more than half of all audit committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

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Rules for Election of Directors of Nan Ya Plastics Corporation

Amended by the Annual Shareholders’ Meeting on June 23, 2015

• Article 1: Except as otherwise provided by law and regulation or by the Company's Articles of Incorporation, elections of directors shall be conducted in accordance with the Rules.

• Article 2: The cumulative voting system shall be used for election of the directors at the Company. Each share will have voting rights in number equal to the directors to be elected, and may be cast for a single candidate or split among multiple candidates. Attendance card numbers printed on the ballots may be used instead of recording the names of voting shareholders

• Article 3: Before the election begins, the Chair shall appoint a number of persons to perform the respective duties of vote monitoring and counting personnel.

• Article 4: The number of directors will be as specified in the Company's Articles of Incorporation. Those receiving ballots representing the highest numbers of voting rights will be elected sequentially according to their respective numbers of votes. When two or more persons receive the same number of votes, thus exceeding the specified number of positions, they shall draw lots to determine the winner, with the Chair drawing lots on behalf of any person not in attendance.

• Article 5: The election of directors shall be elected in accordance with the Company's Articles of Incorporation in that a candidate nomination system shall be adopted and that shareholders shall elect directors from among those listed in the slate of director nominees. Independent and non-independent directors shall elect at the same time, but in separately calculated numbers as stated as Article 4. One of the elected non-independent directors shall have accounting or finance experties.

• The Company shall, prior to the book closure date before the convening of the shareholders' meeting, publish a notice specifying a period for receiving nominations of director

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candidates, the number of directors to be elected, the place for receiving such nominations, and other necessary matters; the period for receiving nominations shall not be less than 10 days.

The Board of Directors and a shareholder holding one percent or more of the total number of issued shares may present a slate of director nominees to the Company; the number of nominees may not exceed the number of directors to be elected.

When providing a recommended slate of director candidates, a shareholder or the Board of Directors shall include in the documentation attached thereto each nominee's name, educational background, work experience, a written undertaking indicating the nominee's consent to serve as a director if elected as such, a written statement that none of the circumstances in Article 30 of the Company Act exists, and other relevant documentary proof. If the candidate is a juristic person shareholder or a juristic person’s representative, a basic registration information of the above-mentioned juristic shareholder and a document the person certifying shareholding of the Company shall be attached.

The Board of Directors, or other person having the authority to call a shareholders' meeting, shall review the qualifications of each director nominee; except under any of the following circumstances, all qualified nominees shall be included in the slate of director candidates:

1. Where the nominating shareholder submits the nomination at a time not within the published period for receiving nominations.

2. Where the shareholding of the nominating shareholder is less than one percent at the time of book closure by the Company under Article 165, paragraph 2 or 3 of the Company Act.

3. Where the number of nominees exceeds the number of directors to be elected.

4. Where the relevant documentary proof required under

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the preceding paragraph is not attached.

• Article 6: The Board of Directors shall prepare ballots and distribute one ballot per voter corresponding to his/her attendance card number. The numbers of ballots distributed to the voters shall be equal to the directors to be elected. As for the number of voting rights associated with each ballot shall be specified on the ballots.

• Article 7: If a candidate is a shareholder, a voter must fill the candidate's account name and shareholder account number in the "candidate" column of the ballot; If a candidate is a non-shareholder, the voter shall fill the candidate's full name and identity card number.

• Article 8: A Ballot shall be deemed void under the following conditions:

  1. The ballot was not prepared as Article 6 stated; or

  2. The ballot has more than one candidate’s name filled; or

  3. Other words or marks are filled in addition to the information Article 7 stated; or

  4. A ballot was not filled, or not completely filled, in compliance with the requirement set forth in Article 7; or

  5. The writing is unclear and indecipherable; or

  6. The candidate whose name is filled in the ballot is a shareholder, but the candidate's account name and shareholder account number do not conform with those given in the shareholder register, or the candidate whose name is filled in the ballot is a non-shareholder, and a cross-check shows that the candidate's name and identity card number do not match.

• Article 9: The voting rights shall be calculated at the end of the poll and the Chair shall announce the voting results on-site immediately, including the names of those elected as directors and the numbers of votes with which they were elected.

• The ballots for the election referred to in the preceding paragraph shall be sealed with the signatures of the monitoring personnel and kept in proper custody for at least 1 year. If, however, a shareholder files a lawsuit pursuant to Article 189

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of the Company Act, the ballots shall be retained until the conclusion of the litigation.

Article 10: The Rules, and any amendments hereto, shall be implemented after approval by a shareholders meeting.

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Nan Ya Plastics Cor oration Shareholdin s of Directors p g

Title	Name	N0.	Shareholding (share)
Chairman	Chia Chau,Wu	016681	79,030
ManagingDirector	Wen Yuan,Wong	273986	38,206,752
Managing Director	Wilfred Wang Representative of Formosa Petrochemical Corporation	260221	179,214,423
ManagingDirector	RueyYu,Wang	073127	19,052,421
Managing Director (Independent Director)	Chih Kang, Wang	-	0
Independent Director	Yi Fu, Lin	-	0
Independent Director	Yun Peng, Chu	055680	1,199
Director	MingJen,Tzou	427610	188,742
Director	Kuei Yung,Wang	445487	11,164,271
Director	Chin Jen, Wu Representative of Formosa Plastics Corporation	005658	783,356,866
Director	Shen Yi, Lee Representative of Formosa Chemicals & Fibre Corporation	006090	413,327,750
Director	FongChin,Lin	253418	25,458
Director	Zo Chun,Jen	445203	303,377
Director	Sin Yi,Huang	026459	806
Director	Ching Cheng , Chang Representative of Freedom Internation Enterprise Company	655362	3,287,472

Note: According to Article 26 of the Securities and Exchange Act, the minimum of the Directors are shareholdings Company’s 126,893,146 shares. As of April 14, 2019, the actual shareholdings of the Company’s Directors are 1,448,208,567 shares.

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