PSC — AGM Information 2020

Jun 29, 2020

Translation – In case of any discrepancy between the Chinese and English versions, the Chinese version shall prevail.

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Meeting Minutes of 2020 General Shareholders’ Meeting

• Time and Date: 9:00 AM, June 19, 2020.

• Place: B1, No. 8, Dongxing Rd., Taipei City, Taiwan ROC

• Total outstanding shares: 1,372,390,028 shares.Total shares represented by shareholders present in person or by proxy: 951,485,900 shares (of which, 731,015,237 shares voted via electronic transmission). Percentage of shares held by shareholders present in person or by proxy:69.33 % .

•  Chairman: LIN,KUAN-CHEN, the Chairman of the Board of Directors

• Directors present in person: LIN,KUAN-CHEN,TU,LI-YANG, LEE,SHU-FEN, CHEN,GUO-HUI LIU,TSUNG-YI,HSIEHHUNG,HUI-TZU,LU,LI-AN,CHEN,JIN-YI,JUANG,JING-YAU,CHANG MING-CHEN.

• Independent directors present in person: LIANG,YANN-PING, HORNG,YUAN-CHUAN, PAI, CHUN-NAN, SONG, YUN-FENG.

•  Recorder:CHANG,SHAO-PING

A. Chairman's Address (omitted)

• B. Report Items

• (1) 2019 Business Report

  • Explanation: The Company’s Business Report for 2019, please see Appendix I.

• (2) 2019 Audit Committee's Review Report

  • Explanation: For 2019 Audit Committee's Review Report, please see Appendix II.

• (3) 2019 Remuneration of Employees and Directors Explanation:

• 1) Comply with the Ordinance No. 10402413890(June 11, 2015) and the Ordinance No.

• 10402427800(October 15, 2015) issued by the Ministry of Economic Affair.

2) In accordance with Article 23 of the Company’s bylaws , the Company will distribute compensation to employees and the Directors from pre-tax profits. Where the company has pre-tax profits, the total value of funds to be distributed among employees shall not be less than 1.6% of pre-tax profits; while the total value of funds to be distributed among the Directors shall not be more than 2% of pre-tax profits. If the company has losses carried forward, compensation should only be paid to employees and Directors after funds have been set aside as reserve for such losses.

3) The proposal of 2019 Remuneration of Employees and Directors has been approved by the 9th meeting of the 4th Remuneration Committee and the 12th meeting of 11th Board of Directors. It is proposed that a total of NT$52,103,124 (2%) to be distributed to employees and NT$52,103,124 (2%) to be distributed to Directors in accordance with the allocation rules of the 1st meeting of the11th Board of Directors. The above mentioned compensation will be in cash.

Chairman: All the above reports are subject to the satisfaction of the shareholders.

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C.Items to be Adopted

 Motion 1 (proposed by the Board of Directors)

Topic: Adoption of the 2019 business report, consolidated financial statements and financial statements.

Explanation:

(1) The 2019 consolidated financial statements and the financial statements have already been successfully audited by CPA SK, Lin and CPA Chin-Mu, Hsiao of PricewaterhouseCoopers Taiwan.

(2) The business report, the consolidated financial statements and the financial statements have been reviewed by the Audit Committee and approved by the Board of Directors (March 26, 2020).

(3) For the business report, the consolidated financial statements and the financial statements,please see Appendix I and Appendix III .

Chairman:

As shares voted against the proposal via electronic transmission were received, the chairman announced to put the proposal to vote for resolution.

Voting Result: 951,485,900 shares were represented at the time of voting.

• 929,609,674 shares voted for the proposal (of which 709,139,011 shares exercised via electronic transmission);

• 156,969 shares voted against the proposal (of which 156,969 shares exercised via electronic transmission).

21,719,257 shares abstain from voting (of which 21,719,257 shares exercised via electronic transmission).

• 0 shares invalid from voting (of which 0 shares exercised via electronic transmission).

97.7% of the shares were cast in favor of this proposal, which was more than 50% of the shares represented at the time of voting.

RESOLVED, that the above proposal be and hereby were accepted as submitted.

 Motion 2 (proposed by the Board of Directors)

Topic: Adoption of the Proposal for the 2019 earnings distribution. Explanation:

• (1) The proposal for distribution of 2019 earnings are prepared in accordance with regulations and the Company’s Articles of Incorporation. Please refer to the 2019 Earnings Distribution Proposal as Appendix IV .

• (2) After first being decreased by $26,098,951 as a result of remeasurement of defined benefit plans, and then setting aside legal reserve(10%) , special reserve(20%), and reversing special reserve set aside during 2016 to 2018 at the same amount for employee transfer and settlement expenditure, and employees’ transformation training expenditure arising from the development of fintech, securities and futures business, according to Jin-Guan-Zheng-Quan Letter No. 1080321644. The unappropriated earnings available for distribution for 2019 is $1,651,375,270. Proposed cash dividend - 5 - and stock dividend are $1,372,390,028 and $274,478,010, respectively, which is equivalent to $1 and $ 0.2 per share, respectively. The stock dividend is no consideration at the ratio of 20 new shares for every 1,000 shares held by shareholders. Upon the approval of Shareholders' Meeting, it is proposed that the Board of Directors be authorized to resolve the

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ex-dividend date and record date of a capital increase.

• (3) In the event that the shares outstanding changes, it is proposed that the Board of Directors be authorized to adjust the amount per share to be distributed to shareholders based on the number of actual shares outstanding on the record date for distribution. Dividends of less than $1 shall be transferred to the Company's Employee Benefit Council.

Chairman:

As shares voted against the proposal via electronic transmission were received, the chairman announced to put the proposal to vote for resolution.

Voting Result: 951,485,900 shares were represented at the time of voting.

• 931,567,407 shares voted for the proposal (of which 711,096,744 shares exercised via electronic transmission);

• 156,920 shares voted against the proposal (of which 156,920 shares exercised via electronic transmission).

• 19,761,573 shares abstain from voting (of which 19,761,573 shares exercised via electronic transmission).

• 0 shares invalid from voting (of which 0 shares exercised via electronic transmission).

• 97.90% of the shares were cast in favor of this proposal, which was more than 50% of the shares represented at the time of voting.

RESOLVED, that the above proposal be and hereby were accepted as submitted.

D.Items for Discussion

 Motion 1 (Proposed by the Board of Directors)

Topic: Amendment to the Articles of Incorporation. Please proceed to vote. Explanation:

(1) Article 6 is amended according to Letter from the authority and Company Act Article 162.

(2) For chart comparing the changes, please see the table below.

Comparison table of Amendments to” Articles of Incorporation”

Article		Amendment		Original Articles	Amendment instructions
Article 6		The company issuing and printing shares shall assign its share certificates with serial numbers, and the share certificates shall be affixed with the signatures or personal seals of the director representing the company, and shall		The share certificates hereof shall be duly signed and sealed by three directors, affixed with Company seal and duly authenticated by the competent authorities or their authorized organization before issuance.	Amend according to Letter from the authority and Company Act Article 162.

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	be duly certified or authenticated by the bank which is competent to certify shares under the laws before issuance thereof. The company may be exempted from printing any share certificate or it may either print a single share certificate or a consolidated share certificate for the shares issued. The Company shall appoint a centralized securities custody institution to make recordation of the issue of such shares.	The company may be exempted from printing any share certificate or it may either print a single share certificate or a consolidated share certificate for the shares issued. The Company shall appoint a centralized securities custody institution to make recordation of the issue of such shares.
Article 26	These Articles were duly established on November 26, 1988 and the first amendment was approved on December 28, 1988; ------------;the twenty eighth amendment on June 19, 2020.	These Articles were duly established on November 26, 1988 and the first amendment was approved on December 28, 1988; ------------;the twenty seventh amendment on June 18, 2019.	Amendment date.

Chairman:

As shares voted against the proposal via electronic transmission were received, the chairman announced to put the proposal to vote for resolution.

Voting Result: 951,485,900 shares were represented at the time of voting.

931,513,508 shares voted for the proposal (of which 711,042,845 shares exercised via electronic transmission);

166,959 shares voted against the proposal (of which 166,959 shares exercised via electronic transmission).

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• 19,805,433 shares abstain from voting (of which 19,805,433 shares exercised via electronic transmission).

• 0 shares invalid from voting (of which 0 shares exercised via electronic transmission).

• 97.9% of the shares were cast in favor of this proposal, which was more than 50% of the shares represented at the time of voting.

RESOLVED, that the above proposal be and hereby were accepted as submitted.

 Motion 2 (Proposed by the Board of Directors)

Topic: The proposal of issuance of new shares through capitalization of retained earnings, and invites discussion.

Explanation:

• (1) In order to strengthen the Company’s operating capital position, it is proposed to distribute stock dividend $274,478,010, which is equivalent to $0.2 per share with each share to have a par value of NT$10.

• (2) For shareholders receiving less than 1 newly issued share, they should apply to the company’s shareholder services department within 5 days of the capital increase date of record, and shareholders who fail to register before that date will receive a discounted cash payment. Cash payments will be rounded down to the nearest NT$1, with any fractional share being allocated to the Company’s Employee Benefit Council with par value.

• (3) Company share buybacks, treasury share transfers, and cancellation of shares may alter the total number of outstanding company shares and thereby affect the ratio by which earnings are distributed to shareholders. The Chairman of the Board shall be authorized to adjust the distribution ratios approved in the General Shareholder Meeting to accurately reflect the total number of outstanding shares as of the capital increase date of record.

• (4) It is proposed that the Board of Directors be authorized to set distribution events, such as the ex-dividend and capital increase record date, after approval by a shareholders’ meeting and after approval by the competent authority. In case of changes of the regulation or of competent authority’s order, the Board of Directors shall be authorized to handle all the relevant matters.

Chairman:

As shares voted against the proposal via electronic transmission were received, the chairman announced to put the proposal to vote for resolution.

Voting Result: 951,485,900 shares were represented at the time of voting.

• 931,511,564 shares voted for the proposal (of which 711,040,901 shares exercised via electronic transmission);

• 176,907 shares voted against the proposal (of which 176,907 shares exercised via electronic transmission).

• 19,797,429 shares abstain from voting (of which 19,797,429 shares exercised via electronic transmission).

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• 0 shares invalid from voting (of which 0 shares exercised via electronic transmission).

• 97.9% of the shares were cast in favor of this proposal, which was more than 50% of the shares represented at the time of voting.

RESOLVED, that the above proposal be and hereby were accepted as submitted.

 Motion 3 (Proposed by the Board of Directors)

• Topic: Abolition of the procedures for engaging in derivatives trading, and invites discussion. Explanation:

• (1) In accordance with Financial Supervisory Commission R.O.C.(Taiwan) No. 1070341072, amend Article 2 of the "Regulations Governing the Acquisition and Disposal of Assets by Public Companies": When banks, insurance companies, bill finance companies, securities firms, futures commission merchants, leverage transaction merchants, or other financial enterprises whose operation requires special approval, conduct derivatives trading business or engage in derivatives trading, they shall do so in accordance with the provisions of the other laws and regulations that govern their sectors, and are exempt from the provisions of Chapter II, Section IV herein.

• (2) In accordance with Article 4 of the " Taipei Exchange Regulations Governing Over-the-Counter Trading of Financial Derivatives by Securities Firms ", A securities firm conducting financial derivatives business shall formulate a management strategy and operational guidelines as follows, to the board of directors for approval. The Company has formulated the “Operational Guidelines for the Over-the-Counter Trading Derivative Financial Products Business”.

• (3) There are laws and regulations in the financial industry that regulate the conduct of derivatives trading, the company intends to abolish procedures governing derivatives trading.

Chairman:

As shares voted against the proposal via electronic transmission were received, the chairman announced to put the proposal to vote for resolution.

Voting Result: 951,485,900 shares were represented at the time of voting.

• 931,502,232 shares voted for the proposal (of which 711,031,569 shares exercised via electronic transmission); 183,237 shares voted against the proposal (of which 183,237 shares exercised via electronic transmission).

• 19,800,431 shares abstain from voting (of which 19,800,431 shares exercised via electronic transmission).

• 0 shares invalid from voting (of which 0 shares exercised via electronic transmission).

• 97.89% of the shares were cast in favor of this proposal, which was more than 50% of the shares represented at the time of voting.

RESOLVED, that the above proposal be and hereby were accepted as submitted.

• Motion 4 (Proposed by the Board of Directors)

Topic: The amendment of the “Procedures for the Acquisition or Disposal of Assets”

and invites discussion.

Explanation:

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• (1) In accordance with the order issued by FSC(order number Jin Guan Zheng Fa No. 1070341072) and response to repeal the Company’s Procedures for Engaging in Derivatives Trading, the Procedures for Acquisition or Disposal of Assets should be amended.

• (2) For the comparison table of amendments to ” Procedures for Acquisition or Disposal of Assets”, please see the table below.

Comparison Table of Amendments to “Procedures for the Acquisition or Disposal of Assets “

Amended Articles	Existing Articles	Description
Article 2 These Regulations are adopted in accordance with the provision of Regulations Governing the Acquisition and Disposal of Assets by Public Companies.The company shall handle the acquisition or disposal of assets in compliance with these Regulations. However, if financial related laws or regulations provide otherwise, those laws and regulations shall take precedence.	Article 2 These Regulations are adopted in accordance with the provision of Regulations Governing the Acquisition and Disposal of Assets by Public Companies.	In accordance with the order issued by FSC(order number Jin Guan Zheng Fa No. 1070341072)
Article 3 The term "assets" as used in these Regulations includes the following: 1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities. 2. Real property (including land, houses and buildings, and 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).	Article 3 The term "assets" as used in these Regulations includes the following: 1. Investments in stocks, government bonds, corporate bonds, financial bonds, securities representing interest in a fund, depositary receipts, call (put) warrants, beneficial interest securities, and asset-backed securities. 2. Real property (including land, houses and buildings, and 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.	In response to repeal the Company’s Procedures for Engaging in Derivatives Trading, the Procedures for Acquisition or Disposal of Assets should be amended.

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Amended Articles Existing Articles Description

Amended Articles	Existing Articles	Description
7. Derivatives. 8. Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with law. 9. Other major assets. (None)	8. Assets acquired or disposed of in connection with mergers, demergers, acquisitions, or transfer of shares in accordance with law. 9. Other major assets. The Company treats its derivative trading shall follow the ” Procedures for Engagingin Derivatives Trading”.

Chairman:

As shares voted against the proposal via electronic transmission were received, the chairman announced to put the proposal to vote for resolution.

• Voting Result:951,485,900 shares were represented at the time of voting. 931,513,261shares voted for the proposal (of which 711,042,598 shares exercised via electronic transmission);

• 173,862 shares voted against the proposal (of which 173,862 shares exercised via electronic transmission).

• 19,798,777 shares abstain from voting (of which 19,798,777 shares exercised via electronic transmission). 0 shares invalid from voting (of which 0 shares exercised via electronic transmission).

• 97.90% of the shares were cast in favor of this proposal, which was more than 50% of the shares represented at the time of voting.

RESOLVED, that the above proposal be and hereby were accepted as submitted.

 Motion 5 (Proposed by the Board of Directors)

Topic: Discuss to release the directors from non-competing restrictions. Explanation:

• (1) In order to meet the needs of overseas development, Board Chair, Lin,KUAN-CHEN was appointed as the director of the joint venture Jin Yuan President Securities Corporation Limited.

• (2) According to Article 209 of the Company Low, approve the proposal of release the directors from non-competing restrictions.

Chairman:

As shares voted against the proposal via electronic transmission were received, the chairman announced to put the proposal to vote for resolution.

Voting Result: 951,485,900 shares were represented at the time of voting.

• 927,043,692 shares voted for the proposal (of which 706,573,029 shares exercised via electronic transmission);

• 4,641,622 shares voted against the proposal (of which 4,641,622 shares exercised via electronic transmission).

19,800,586 shares abstain from voting (of which 19,800,586 shares exercised via electronic transmission).

• 0 shares invalid from voting (of which 0 shares exercised via electronic transmission).

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97.43% of the shares were cast in favor of this proposal, which was more than 50% of the shares represented at the time of voting.

RESOLVED, that the above proposal be and hereby were accepted as submitted.

E. Extraordinary Motions:None.

F. Meeting Adjourned

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