PSC — Proxy Solicitation & Information Statement 2018

Jun 27, 2018

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

Meeting Notice of

2018 General Shareholders’ Meeting

• Time and Date: 9:00 AM, June 21, 2018.
• Place: (Audio-Visual Classroom) B1, No. 8, Dongxing Rd., Taipei City, Taiwan ROC
• Total outstanding PSC shares: 1,390,428,028 shares.

Total shares represented by shareholders present in person or by proxy: 980,368,738 shares (of which, 710,734,403 shares voted via electronic transmission). Percentage of shares held by shareholders present in person or by proxy: 70.51%.

• Chairman: Chung-Shen Lin, the Chairman of the Board of Directors
• Directors present in person: Chung-Shen Lin, Kuan-Chen Lin, Li-Yang Tu, Shu-Fen Lee, Tsung-Yi Liu, Hui-Tzu Hsieh Hung, KUO-HUI CHEN,MING-Chen CHANG.
• Independent directors present present in person: Yann Ping Liang.

• Recorder:Shao-Ping Chang

• Chairman's Address (omitted)

• Report Items

(1) 2017 Business Report

Explanation: The Company’s Business Report for 2017, please see

Appendix I.

(2) 2017 Audit Committee's Review Report

Explanatory: For 2017 Audit Committee's Review Report, please see Appendix II.

(3) 2017 Remuneration of Employees and Directors

Explanation:

1. To 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 approved by the resolution of shareholder’s meeting, 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 2017 Remuneration of Employees and Directors has been approved by the the 8th meeting of the 3th Remuneration Committee and the 17th meeting of 10th Board of Directors. It is proposed that a total of NT$56,440,689 to be distributed to employees and NT$56,440,689 to be distributed to Directors in accordance with the allocation rules of the 1st meeting of the 10th Board of Directors. The above mentioned compensation will be in cash.

C.Items to be Adopted

• Motion 1 (proposed by the Board of Directors)

Topic: Adoption of the 2017 business report, consolidated financial statements and financial statements

Explanation:

(1) The 2017 consolidated financial statements and the financial statements have already been successfully audited by CPA Hsiao, Chin-Mu and CPA Chang, Ming-Hui 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, 2018)

(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: 980,368,738 shares were represented at the time of voting. 968,659,039 shares voted for the proposal (of which 699,080,653 shares exercised via electronic transmission); 177,043 shares voted against the proposal (of which 177,043 shares exercised via electronic transmission). 11,532,656 shares abstain from voting (of which 11,476,707 shares exercised via electronic transmission). 0 shares invalid from voting (of which 0 shares exercised via electronic transmission).

98.8056% 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 2017 earnings distribution

Explanation:

(1) The proposal for distribution of 2017 earnings are prepared in accordance with regulations and the Company’s Articles of Incorporation. Please refer to the 2017 Earnings Distribution Proposal as Appendix IV .

(2) After first being decreased by $106,387,716 as a result of actuarial losses on remeasurement of defined benefit plans, and then setting aside legal reserve(10%) , special reserve(20%) and 0.5% as special reserve for employees' training in response to development in financial technology, in compliance with Jing-Guang-Zheng-Chuan Letter No.10500278285 and Zheng-Chi (Chuan) Letter No.1060005703, and reversing special reserve in line with relevant letters, unappropriated earnings available for distribution for 2017 is $1,695,854,812. Proposed cash dividend is $1,668,513,634, which is equivalent to $1.2 per share. Upon the approval of Shareholders' Meeting, it is proposed that the Board of Directors be authorized to resolve the ex-dividend date.

(3) In the event that the shares outstanding changes, it is proposed that the 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.

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: 980,368,738 shares were represented at the time of voting. 968,668,318 shares voted for the proposal (of which 699,089,932 shares exercised via electronic transmission); 167,769 shares voted against the proposal (of which 167,769 shares exercised via electronic transmission). 11,532,651 shares abstain from voting (of which 11,476,702 shares exercised via electronic transmission). 0 shares invalid from voting (of which 0 shares exercised via electronic transmission).

98.8065% 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.

1. Election item

Topic: To elect the 11th board of Directors of the company (Proposed by the Board of Directors).

Explanation: The term of the Company’s tenth board of directors shall expire on June 21, 2018. The eleventh board of directors shall be elected during the general shareholders meeting of this year.

1. In accordance with Article 13 of the Company’s bylaws, the Company shall have 19 directors, of which 4 shall be independent, 15 shall be non-independent. They shall serve a 3-year term (from their appointment at the shareholders’ meeting to be held on June 21, 2018, to June 20, 2021) and are eligible for reelection. Directors shall be elected from among the nominees listed in the roster of candidates by adopting candidate nomination system.
2. The list of director candidates, as vetted and approved by the board, is as the attachment:
3. The election of independent and non-independent shall be held together but the votes shall be calculated separately.
4. Election-related matters shall be handled in accordance with the Company’s Rules Governing the Election of Directors.(refer to Appendix V)
5. Please cast your vote.

Directors Election Result

	SHAREHOLDER’S ACCOUNT NUMBER OR ID	NAME	VOTES RECEIVED
DIRECTOR	42740	KAI NAN INVESTMENT CO.,LTD LIN,KUAN-CHEN	930,964,629
DIRECTOR	1840	KAO, SHIOW-LING	908,411,558
DIRECTOR	42740	KAI NAN INVESTMENT CO.,LTD LIN, CHUNG-SHEN	895,043,041
DIRECTOR	42740	KAI NAN INVESTMENT CO.,LTD LIU, TSUNG-YI	893,772,972
DIRECTOR	42740	KAI NAN INVESTMENT CO.,LTD CHEN, KUO-HUI	893,895,765
DIRECTOR	42740	KAI NAN INVESTMENT CO.,LTD HSIEHHUNG, HUI-TZU	895,116,184
DIRECTOR	42740	KAI NAN INVESTMENT CO.,LTD LU, LI-AN	893,748,986
DIRECTOR	30	CANKING INVESTMENT CORP. TENE, WEN-HWI	895,483,860
DIRECTOR	3126	HUI TUNG INVESTMENT CO.,LTD. LEE , CHE-MING	893,840,522
DIRECTOR	83	LEG HORN INVESTMENT CO.,LTD. CHANG , MING-CHEN	893,802,324
DIRECTOR	9142	TA LEH INVESTMENT HOLDING CO.,LTD TU, LI-YANG	893,840,542
DIRECTOR	93	CHINA F.R.P. CORPORATION LEE, SHU-FEN	893,928,581
DIRECTOR	72	DUH, BOR-TSANG	893,809,728
DIRECTOR	76	LEE, SHY-LOU	893,761,368
DIRECTOR	123653	JUANG, JING-YAU	893,760,690
INDEPENDENT DIRECTOR	M22015XXXX	LIANG, YANN-PING	893,655,313
INDEPENDENT DIRECTOR	F10380XXXX	PAI , CHUN-NAN	891,742,726
INDEPENDENT DIRECTOR	A12113XXXX	SONG, YUNG-FONG	892,905,333
INDEPENDENT DIRECTOR	D10070XXXX	HORNG , YUAN-CHUAN	893,153,028

D. Extraordinary Motions

E. Meeting Adjourned