TBB — AGM Information 2013

Jul 19, 2013

Stock Code: 2834

Taiwan Business Bank

2013 Annual Meeting of Shareholders

DATE:	June 21, 2013, Friday, at 9:00 a.m.
VENUE:	17th Floor, No. 30, Ta-Cheng Street, Taipei

Agenda for the 2013 Annual Meeting of Shareholders of Taiwan Business Bank

Date:	June 21, 2013, Friday, at 9:00 a.m.
Venue:	17th Floor, No. 30, Ta-Cheng Street, Taipei Auditorium of the Headquarter, Taiwan Business Bank
Attendees:	(to refer to the register of attendance)
Chairman:	Tsan Chang Liao, Chairman of the Board of Directors, Taiwan Business Bank

Meeting Procedure

1. Welcome/ Introduction

The shareholding of shareholders present has met the quorum requirement.

1. Opening Remarks by Chairman
2. Report Matter
3. Report the business operation of the Bank in 2012
4. Supervisors report the audit process of 2012 financial statements
5. Report the amendments to Rules of Board of Directors’ Meeting of Taiwan Business Bank.
6. Recognition Matter
7. 2012 financial statements are presented
8. 2012 Statement of Surplus Allocation is presented
9. Discussion Matter
10. The proposal for 2012 stock dividend and capital increase by earnings recapitalization.
11. Amendments to Articles of Incorporation of Taiwan Business Bank.
12. Amendments to the Rules of Shareholders’ Meeting of Taiwan Business Bank.
13. Rescind the restraint of non-competition restrictions on Directors.
14. Special Motions
15. Adjournment

Report Matter

1. Report the business operation of the Bank in 2012

Explanation:

Please refer to the Meeting Handbook.

1. Audit committee reports the audit process of 2012 financial statements.

Explanation:

Please refer to the Meeting Handbook.

.

1. Report the amendments to Rules of Board of Directors’ Meeting of Taiwan Business Bank.

Explanation:

1. These Regulations were revised twice in 2012 in line with the Bank’s establishment of an audit committee in lieu of a supervisor, and with the revision of the Regulations Governing Procedures for Board Meetings of Public Companies by the Financial Supervisory Commission.
2. The key revisions approved by the Board of Director Meeting on Aug. 24, 2012 are as follows:
3. Because of the establishment of an audit committee in lieu of a supervisor, the term “supervisor” was deleted from the provisions of Articles 3, 4, 6, 7, 11, and 18 of these Regulations.
4. Since the Bank has established an Audit Committee, Article 6 of these Regulations was revised with the addition of items that should be submitted to the Board of Directors for discussion, and the text of Article 18, Paragraph 2, Sub-paragraph 2 was revised accordingly.
5. Article 17, Paragraph 1 of these Regulations was revised in line with the provisions of Article 206 of the Company Act, to stipulate that directors having relationships of material interest in regard to motions should explain those relationships to the Board of Directors, and Company Act Article 206, Paragraph 2 in the provisions of Paragraph 2 was changed to Paragraph 3.
6. The provisions of Article 21 of these Regulations were revised, in accordance with Article 25, Paragraph 2 of the Company Charter, to stipulate that revisions to these Regulations should be reported to the Shareholders’ Meeting.
7. The key revisions approved by the Board of Director Meeting on Oct. 22, 2012 are as follows:
8. In line with the partial revision of the Regulations Governing Procedures for Board Meetings of Public Companies, Article 3, Paragraph 3 of these Regulations, regarding the method of notification for Board of Directors’ meetings, was revised; Article 6, Paragraph 1, Subparagraph 13 and Paragraphs 3 and 4 were revised with the addition of rules governing donations; Article 11 was revised to add a provision for attending persons; and Article 18, Paragraphs 7 and 8 were revised to add items to be recorded in meeting minutes.
9. In response to the provisions that were added in Paragraph 1, Subparagraph 2 of Article 36 of the Securities Exchange Act, financial reports for the first and third quarters were added to reports required by the latter provisions of Article 5, Paragraph 1, Subparagraph 1, Item 2 of these Regulations.
10. Please refer to the Meeting Handbook.

Recognition Matter

1. 2012 financial statements are presented and respectfully submitted for recognition.

Explanation:

The Bank’s financial statements, which include Business Operations report (see Meeting Handbook), Balance Sheets, Income Statements, Statements of Stockholders’ Equity, Statements of Cash Flow, had been submitted to the 7th Temporary Board of Directors Meeting of the 13th Board of Directors.

To be resolved.

1. 2012 report on surplus allocation is presented and respectfully submitted for recognition.

Explanation:

1. The undistributed earnings at the beginning of 2012 was NT$ (same as below) 22,475,923.96 dollars plus the net income after tax in the fiscal year of 2012 is NT$3,403,839,265.47, the statements of which were audited by Tan-Tan Chung, CPA and Fung-Huei Lee, CPA of KPMG..

The allocation of surplus is conducted in conformity with The Articles of Incorporation of Taiwan Business Bank and related laws as follows:

1. NT$1,021,151,779.64 is to be set aside to Legal Reserve.
2. NT$364,885,302.27 is to be set aside to Special Reserve.
3. According to the approval letter from Financial Supervisory Commission at January 27, 2006, with the issuing number FSS(I)0950000507, TWSE & GTSM listed companies may distribute earnings in term of the reversed amount for special earnings reserve set aside for net debit amount of shareholders’ equity on book (including unrealized loss of financial instruments, accumulative translation adjustment and net loss not recognized as pension cost).
4. The debit amount of shareholders’ equity on book as of December 31, 2012: “Cumulative translation adjustments” was negative 99,750,685.88 dollars “Unrealized losses on financial instrument” was86,181,736.07 dollars , ”Net loss not recognized as pension cost” was 585,029,000 dollars and need to be set aside special earnings reserve 770,961,421.95 dollars. Since 406,076,119.68 dollars had been set aside in previous years, therefore 364,885,302.27 dollars could be reversed for earnings distribution.
5. Shareholders’ bonus – stock dividend (0.40 dollar per share): NT$1,959,287,750
6. NT$80,990,357.96 is be set aside to undistributed earnings.
7. Bonus to employees and remuneration of Directors and Supervisors:

Bonus to employees (8%): NT$161,424,175.

Remunerations of Directors and Supervisors (1%): NT$20,178,022

The above proposed of bonus to employees and remuneration of Directors and Supervisors had been recognized as expenses of current year in accordance with regulations.

1. Table of year 2012 Surplus Allocation of Taiwan Business Bank is attached.

To be resolved.

Discussion Matter

1. The proposal for 2012 stock dividend and capital injection by earnings recapitalization.

Explanation:

1. Response to the requirement of common equity of Basel III and make up the reduction of retained earnings from implementation of IFRSs, The Bank plans to manage capital injection by issuing 195,928,775 shares from earnings recapitalization in accordance with Article 240 of the Company Act to reinforce the capital structure, improve capital adequacy ratio and increase business competition of Taiwan Business Bank.
2. The total amount of new shares and conditions of issuance for capital injection:
3. It is proposed to inject capital NT$ (same as below) 1,959,287,750 at ten dollars each, divided into 195,928,775 shares. They are all registered common shares.
4. After approval of competent authority for this capital injection by earnings recapitalization submitted upon approval of shareholders meeting, the Board of Directors is authorized to determine ex-dividend date otherwise. The stock dividend is 40 shares over each thousand in accordance with shareholding ratio specified in the stock ledger as of the ex-dividend date. For share less than one, shareholders may apply to stock service agent for combining the fractional stock within five days from ex-dividend date. For failure to combine by deadline or there is still fractional stock after combination, the fractional stock will be distributed by cash (rounded to dollar). The cumulative number of fractional shares to authorize the Chairman to contact specific people to subscribe at par.
5. If the shareholders’ stock dividend ratio is altered due to buyback of shares or transfer, conversion and cancellation of treasury stocks or other circumstances, it is proposed to be authorized the Board of Directors by shareholders’ meeting for affairs regarding modification.
6. The shareholders’ rights and obligations of the new shares are the same as those of existing shares.
7. The effect on performance and EPS of the stock dividends distribution: the EPS of 2012 is NT$0.7, the EPS after dividend distribution is NT$ 0.67, the difference is minor and there’s no effect on the performance.
8. The paid-in capital after this capital injection shall be NT$50,941,481,340, which is still under the total capital NT$60 billion.
9. For anything not mentioned in this proposal, the Board of Directors is duly authorized for management.

To be resolved.

1. Amendments to Articles of Incorporation of Taiwan Business Bank.
2. The Bank has made the following key revisions to its Articles of Incorporation in accordance with the addition and revision of laws and regulations:
3. In response to the additional requirements of Basel III for common equity, Article 41, Paragraph 2 of the Bank’s Corporate Charter was revised to change the dividend policy from the primary issuance of cash dividends to a residual dividend policy. In the future, the Bank’s capital budgeting will follow the principle of distributing stock dividends to retain needed capital, with only the remaining amount distributed as cash. This will augment the Bank’s capital and heighten its profitability.
4. It is stipulated that cash dividends may not be lower than 10% of the total amount of dividend distribution. When cash dividends per share do not reach NT$0.1, distribution will not be allowed unless otherwise resolved by the Shareholders Meeting.
5. A provision was added to Article 41, Paragraph 3 banning the distribution of earnings in the form of cash.
6. The provision originally in the final part of Article 41, Paragraph 2 regarding the issuance of employee bonuses was switched to Paragraph 4, and the original Article 41, Paragraph 3 was moved to Paragraph 5.
7. Please refer to the Meeting Handbook for details.

To be resolved.

1. Amendments to the Rules of Shareholders’ Meeting of Taiwan Business Bank.

Explanation:

1. Handled in accordance with the Company Act and Taiwan Stock Exchange document Tai Zheng Shang Yi Zi No. 102000348.
2. The key revisions are as follows:
3. To reinforce the operation of Shareholders Meetings and avoid confusion in shareholders registering for the meetings to an extent that affects shareholders’ rights to participate in the Shareholders Meetings, new provisions were added in Paragraphs 1 and 2 of Article 3.
4. Article 7 was partially revised to provide for the reproduction of Shareholders Meetings in their entirety, with the time and method of sound and image recording beginning from the time shareholders are allwed to register and running continuously without interruption through the entire progress of the meeting, voting, vote counting, and other processes, in this way facilitating the clarification of facts.
5. A Paragraph 2 was added to Article 8 stating that the chairperson of a Shareholders Meeting should make necessary explanations of motions and other important Company matters at the site, and to respond to shareholders’ questions. If a managing director chairs a shareholders meeting on behalf of the chairperson, and such managing director has limited knowledge about company conditions, it may be difficult for him or her to answer shareholders’ questions clearly and concretely.
6. In view of the fact that the voting, recording of ballots, examination of ballots, and announcement of voting results at shareholders meetings should be public and fair, Article 10, Paragraph 9 was amended to make this desirability clear.
7. Article 3 was added to Article 13 in line with the stipulation in Article 177, Paragraph 4 of the Company Act that “…in case the shareholder issuing the said proxy intends to attend the shareholders' meeting in person or to exercise his/her/its voting power in writing or by way of electronic transmission, a proxy rescission notice shall be filed with the company two days prior to the date of the shareholders' meeting….”
8. The text of Article 15, Paragraph 2 was amended to provide for shareholders’ full and timely knowledge of the results of voting for directors, and of the list of winning candidates and the vote counts.
9. Please refer to the Meeting Handbook for details.

To be resolved.

1. Rescind the restraint of non-competition restrictions on Directors.

Explanation:

1. According to regulations set forth in paragraph 1 of Article 209 of the Company Act “A director who does anything for himself or on behalf of another person that is within the scope of the company's business, shall explain to the meeting of shareholders the essential contents of such an act and secure its approval.”
2. See attachment for directors who does anything for himself or on behalf of another person that is within the scope of the company's business. It is proposed to release of the directors and representatives of the Company from non-competition restrictions from the day serving office of the Company.

Special Motions

Appendices

1. The Rules of Shareholders’ Meeting of Taiwan Business Bank

1. Article 1 (Applicable Principles)
2. Article 2 (Convention and Notice of Shareholders’ Meeting)
3. Article 3 (Preparation for Sign in Book such Documents)
4. Article 4 (Principle of Meeting Place and Time)
5. Article 5 (Calculation of Attending Shares and Call for Meeting)
6. Article 6 (Discussion)
7. Article 7 (Taperecording and Videotaping of the Meeting Process as Evidence)
8. Article 8 (Chairman and Observers of Shareholders’ Meeting)
9. Article 9 (Speak of Shareholders)
10. Article 10 (Voting, Voting Supervision and Avoidance of Conflict of

Interest)

1. Article 11 (Meeting Order Maintenance)
2. Article 12 (Proxy and Authorization of Shareholders)
3. Article 13 (Announcement)
4. Article 14 (Meeting Minute and Signature)
5. Article 15 (Election)
6. Article 16 (Rest, Resume the Meeting)
7. Article 17 (Implementation)

The amendment for the comparison table of the Rules of Shareholders’ Meeting of Taiwan Business Bank is attached.

2. Articles of Incorporation of Taiwan Business Bank

1. Chapter 1 (Applicable Principles)
2. Chapter 2 (Shares)
3. Chapter 3 (Business)
4. Chapter 4 (Meeting of Shareholders)
5. Chapter 5 (Board of Directors)
6. Chapter 6 (Supervisor)
7. Chapter 7 (Manager)
8. Chapter 8 (Accounting)
9. Chapter 9 (Appendix)

The amendment for the comparison table of the Articles of Incorporation of Taiwan Business Bank is attached.

3. Rules of Board of Directors’ Meeting of Taiwan Business Bank

1. Article 1 (Accordance)
2. Article 2 (Rules of Meeting)
3. Article 3 (Meeting Gathering)
4. Article 4 (Notification and Material)
5. Article 5 (Content)
6. Article 6 (Matters shall be discussed)
7. Article 7 (Principles of Authority)
8. Article 8 (Setting Signature Book and Delegation of Director Attendance)
9. Article 9 (Principle of Board Meeting Place and Time)
10. Article 10 (Chairman and the agent)
11. Article 11 (Reference Material and Non-Voting Delegates)
12. Article 12 (Meeting Hold)
13. Article 13 (Discussion)
14. Article 14 (Directors Speak and the Chairman Procedure Command)
15. Article 15 (Vote)
16. Article 16 (Scrutinizing and Counting of the Vote)
17. Article 17 (System of Interest of Conflict)
18. Article 18 (Minutes and Signed Matters)
19. Article 19 (Audio or video recording of the meeting process)
20. Article 20 (Applicable for Managing Director)
21. Article 21 (Appendix)

4. List of shareholding for all directors:

Title	Name	Current shareholding
Number of Shares	Shareholding Ratio (%)
Chairman of the Board	Tsan-Chang Liao	108,060,467	2.21
Managing Director	Tien-Chang Huang	(108,060,467)	(2.21)
Managing Director	Tie-Hai Lin	843,676,422	17.22
Managing Director	Ling-Lee Lin	(843,676,422)	(17.22)
Independent Managing Director	Len-Yu Liu	0	0
Director	Liang Wang	(108,060,467)	(2.21)
Director	Hsueh-Shiang Chen	(108,060,467)	(2.21)
Director	Hong-Yen Lee	(108,060,467)	(2.21)
Director	Wan-Fu Lin	(843,676,422)	(17.22)
Director	Chien-Hwa Shu	1,813,654	0.04
Director	Jong-Jyr Kau	1,407,008	0.03
Director	Che Nan Wang	(1,407,008)	(0.03)
Director	Huang Chung-Min	118,906,613	2.43
Director	Chau-Chen Yang	0	0
Director	Chih-Yu, Cheng	0	0
TOTAL		1,073,864,164	21.93