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TBB AGM Information 2020

Jul 23, 2020

52201_rns_2020-07-23_4d3b4266-d616-478a-8a08-358a1aa0e320.pdf

AGM Information

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Stock Code: 2834

Taiwan Business Bank Co., Ltd. 2020 Annual Shareholders' Meeting

Meeting Handbook

Ti m e : May 29, 2020, at 9:00 am Venue : 17F., No.30, Tacheng St., Datong Dist., Taipei City

Contents

Page
I. Meeting Agenda------------------------------------------------------ 1
II. Bank Reports----------------------------------------------------------- 2
III. Proposals----------------------------------------------------------------- 15
IV. Discussion--------------------------------------------------------------- 50
V. Questions and Motions--------------------------------------------- 65
VI. Appendices-------------------------------------------------------------- 66
1.
Rules of Procedures for Shareholders' Meeting
of the Bank----------------------------------------------------- 66
2.
Articles of Association of the Bank------------------		 73
3.
Rules of Procedures for Board Meeting of the
Bank-------------------------------------------------------------- 84
4.
Shareholding of Directors of the Bank--------------		 91

I. Meeting Agenda

for 2020 Annual Shareholders' Meeting of Taiwan Business Bank Co., Ltd.

Time: Friday, May 29, 2020, at 9:00 am Venue: Auditorium, 17F., No.30, Tacheng St., Datong Dist., Taipei City

Attendance: (Please refer to the register of attendance)

Chairman: Chairman Bor-Yi Huang

  1. Reporting shares held by shareholders present and calling the meeting to order

  2. Chairman Remarks

  3. Bank Reports

  4. (I) The Bank's 2019 Operating Report.

  5. (II) The Audit Committee's review report on the 2019 financial statements of the Bank.

  6. (III) Reporting on the distribution of remuneration for employees and Directors of the Bank for 2019.

  7. (IV)Reporting on the amendments to the Rules of Procedures for Board Meeting of the Bank.

  8. (V) Reporting on the execution of capital increase through private placement for common shares of the Bank.

  9. (VI)Communicating relevant legal measures for the same person or same concerned party who holds more than a certain percent of the Bank's outstanding voting shares.

  10. Proposals

  11. (I) Adoption of the 2019 financial statements of the Bank.

  12. (II) Adoption of the earnings distribution from the final accounts for 2019.

  13. Discussion

  14. (I) Resolution to carry out a capital increase via transferred earnings in accordance with the earnings distribution for 2019.

  15. (II) Amendment to the Articles of Association of the Bank.

  16. (III) Amendment to the Rules of Procedures for Shareholders' Meeting of the Bank.

  17. Questions and Motions

  18. Adjournment

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II. Bank Reports

Report I

Explanation: The Bank's 2019 Operating Report.

Description: For the Bank's 2019 Operating Report, please refer to Page 16 ~ 30 of the Handbook.

Resolution:

Report II

Explanation: The Audit Committee's review report on the 2019 financial statements of the Bank

Description: For the Audit Committee's review report, please refer to Page 3 of the Handbook.

Resolution:

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Report III

Explanation: Reporting on the distribution of remuneration for employees and Directors of the Bank for 2019

Description:

  1. Complying with Article 235-1 of the Company Act, relevant distribution had been submitted to the 11th meeting of the 4th Remuneration Committee and the 13th meeting of the 15th Board of Directors and had received the approval.

  2. Remuneration of employees and Directors for 2019 were distributed in cash and distributed as follows:

  3. (1) Employee remuneration (4.574%): NT$384,639,214.

  4. (2) Director remuneration (0.6%): NT$50,455,516.

    • The proposed distribution for the remuneration of employees and Directors shown above have been accounted for the expenses of the year according to requirements.

Resolution:

-4-

Report IV

Explanation: Reporting on the amendments to the Rules of Procedures for Board Meeting of the Bank.

Description:

  1. Complying with the requirements of Article 10 and Article 16 under the "Regulations Governing Procedure for Board of Directors Meetings of Public Companies" amended through Order Jin-Guan-Zheng-Fa-Zi No. 1080361934 issued by the Financial Supervisory Commission on January 15, 2020.

  2. The amendments to the Articles are summarized as below:

  3. (1) Where the Board meeting is convened by the majority of the Directors according to the law, the chairman shall be elected among the Directors. (Article 10)

  4. (2) Where the spouse, a relative within the second degree of kinship of a Director, or any company which has a controlling or subordinate relation with a Director has any interests in the matters under discussion at the meeting, the Director shall be deemed as having a personal interest in such matters. (Article 17)

  5. The amendments were made after inquiring about the opinions from the Compliance Department, Administration Management Department, Risk Management Department, and Auditing Department.

  6. For the "Comparison Table of the Drafted Amendment to the Rules of Procedures for Board Meeting" of the Bank, please refer to Page 6 ~ 9 of the Handbook.

Resolution:

-5-

Comparison Table of the Drafted Amendment to the Rules of Procedures for Board Meeting of Taiwan Business Bank

Amended Provisions Current Provisions Description Article 10 (Chairman and Article 10 (Chairman and 1. Amended representative of the Board) representative of the Board) wording. Board meetings of the Bank convened The Board meetings shall be convened 2. Added that by the Chairman shall be chaired by the and chaired by the Chairman of the where the Chairman. The first Board meeting of Board. However, the first Board Board meeting each term shall be convened and meeting of each term shall be convened is convened by chaired by the Director who received and chaired by the Director who the majority of votes representing the largest portion of received votes representing the largest the Directors voting rights at the shareholders' portion of voting rights at the according to meeting. When there are two or more shareholders' meeting. When there are the law, the persons with the right to convene, they two or more persons with the right to chairman shall shall select one from among themselves convene, they shall select one from be elected to serve as chairperson of the meeting. among themselves to serve as among the Where the Board meeting is convened chairperson of the meeting. Directors by the majority of the Directors according to according to the law, the chairman shall requirements of be elected among the Directors. Article 10 under the When the Chairman is unable to present When the Chairman is unable to present "Regulations himself/herself when he/she is on leave himself/herself when he/she is on leave Governing or due to other causes, the Chairman or due to other causes, the Chairman Procedure for shall designate a Managing Director as shall designate a Managing Director as Board of the proxy. When there is no designation the proxy. When there is no designation Directors made, a Managing Director shall be made, a Managing Director shall be Meetings of elected among themselves. elected among themselves. Public Companies." Article 17 (Conflict of interests Article 17 (Conflict of interests 1. Added that abstaining system for Directors) abstaining system for Directors) where the Where any item on the agenda results Where any item on the agenda results spouse, a in conflicts of interest with any Director in conflicts of interest with any Director relative within or the corporation represented by the or the corporation represented by the the second Director, the Director shall state the Director, the Director shall state the degree of important aspects of the interested party important aspects of the interested party kinship of a relationship at the Board meeting; when relationship at the Board meeting; when Director, or any the said interest is harmful to the the said interest is harmful to the company which interests of the Bank, the Director shall interests of the Bank, the Director shall has a not participate in and shall abstain from not participate in and shall abstain from controlling or discussion and voting and shall not discussion and voting and shall not subordinate represent other Directors as a proxy to represent other Directors as a proxy to relation with a exercise their voting rights. exercise their voting rights. Director has Where the spouse, a relative within the interests in the second degree of kinship of a Director, matters under or any company which has a controlling discussion in or subordinate relation with a Director the meeting of has interests in the matters under the preceding discussion in the meeting of the Paragraph, the preceding Paragraph, the Director shall Director shall be deemed to have a personal interest in be deemed to

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Amended Provisions Current Provisions Description
the matter.
For resolutions of the Board meeting,
Directors who are not permitted to
exercise their voting rights in the
previous two Paragraphs shall comply
with requirements under Paragraph 4,
Article 206 of the Company Act, under
which the provisions of Paragraph 2,
Article 180 shall apply mutatis
mutandis.		 For resolutions of the Board meeting,
Directors who are not permitted to
exercise their voting rights in the
previous Paragraph shall comply with
requirements under Paragraph 3, Article
206 of the Company Act, under which
the provisions of Paragraph 2, Article
180 shall apply mutatis mutandis.
have a personal
interest in the
matter,
according to
requirements of
Article 16
under the
"Regulations
Governing
Procedure for
Board of
Directors
Meetings of
Public
Companies."
2. Adjusted the
Paragraph
sequence and
amended the
wording.
Article 11 (Reference materials and
attending personnel at the Board
meeting)
Upon convening the Board meeting, the
unit responsible for meeting affairs and
the managing department shall prepare
relevant information readily available
to Directors at the meeting for
reference. When holding a meeting of
the Board, the Bank may notify
personnel of relevant departments or
subsidiaries to present at the meeting
and report the current business situation
of the Bank and answer questions
raised by Directors to assist them in
understanding the current condition of
the Bank and arrive at proper
resolutions.
When necessary, the CPAs, lawyers or
other professionals may also be invited
to be present at the meeting and provide
explanations. However, they shall
excuse themselves during discussion
and voting.


Article 11 (Reference materials and
attending personnel at the Board
meeting)
Upon convening the Board meeting, the
unit responsible for meeting affairs and
the managing department shall prepare
relevant information readily available
to Directors at the meeting for
reference. When holding a meeting of
the Board, the Bank may notify
personnel of relevant departments or
subsidiaries to present at the meeting
and report the current business situation
of the Bank and answer questions
raised by Directors to assist them in
understanding the current condition of
the Bank and arrive at proper
resolutions. When necessary, the CPAs,
lawyers or other professionals may also
be invited to be present at the meeting
and provide explanations. However,
they shall excuse themselves during
discussion and voting.

With reference to
the requirements
of Article 11 under
the "Regulations
Governing
Procedure for
Board of Directors
Meetings of
Public
Companies,"
adjust the
Paragraph "When
necessary, the
CPAs, ..." as
Paragraph 2 to
clarify the
meaning.
Article 18 (Meeting minutes and signed
matters)
A minute book shall be prepared for the
discussions at Board meetings. The
minute book shall detail the following
matters:
1. The term(oryear),time,andplace

Article 18 (Meeting minutes and signed
matters)
A minute book shall be prepared for the
discussions at Board meetings. The
minute book shall detail the following
matters:
1. The term(oryear),time,andplace		 Amended the
name of the
department-in-
charge.

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Amended Provisions of the Board meeting.

  • Current Provisions Description

  • of the Board meeting.

    1. Name of the Chairman. 3. Directors' attendance status, including names and numbers of Directors who are present, on leave, and absent.

  • Name of the Chairman.

  • Directors' attendance status, including names and numbers of Directors who are present, on leave, and absent.

  • Names and titles of non-voting attendees.

  • Names and titles of non-voting attendees.

  • Name of the recorder.

  • Name of the recorder.

  • Report items.

  • Report items.

  • Discussion: The resolution method and the result for each motion; a summary of comments made by Directors, experts, or other individuals; the name of any Director that is an interested party as referred to in Paragraph 1 of the previous Article, an explanation for the important aspects of the relationship of interest, the reasons why the Director was required or not required to recuse, and the status of their recusal; objection or qualified opinions which are on record or indicated in a written statement as well as the written opinions issued by independent Directors according to the requirements under Paragraph 6, Article 6.

  • Discussion: The resolution method and the result for each motion; a summary of comments made by Directors, experts, or other individuals; the name of any Director that is an interested party as referred to in Paragraph 1 of the previous Article, an explanation for the important aspects of the relationship of interest, the reasons why the Director was required or not required to recuse, and the status of their recusal; objection or qualified opinions which are on record or indicated in a written statement as well as the written opinions issued by independent Directors according to the requirements under Paragraph 6, Article 6.

  • Questions and motions: Name of 8. Questions and motions: Name of proposer, resolution methods and proposer, resolution methods and the results for the motions; a the results for the motions; a summary of comments made by summary of comments made by Directors, experts, or other Directors, experts, or other individuals; the name of any individuals; the name of any Director that is an interested party Director that is an interested party as referred to in Paragraph 1 of the as referred to in Paragraph 1 of the previous Article, an explanation for previous Article, an explanation for the important aspects of the the important aspects of the relationship of interest, the reasons relationship of interest, the reasons why the Director was required or why the Director was required or not required to abstain, and the not required to abstain, and the status of their abstaining; objection status of their abstaining; objection or qualified opinions which are on or qualified opinions which are on record or indicated in a written record or indicated in a written statement. statement.

  • Other matters that shall be recorded. 9. Other matters that shall be recorded. Any of the following matters in relation Any of the following matters in to a resolution passed at a meeting of relation to a resolution passed at a the Board of shall be stated in the meeting of the Board of shall be

-8-

Amended Provisions Current Provisions Description
meeting minutes and be published on
an information reporting website
designated by the competent authority
within two days from the meeting:
1. Independent Directors have any
objection or qualified opinions
which are on record or indicated in
a written statement.
2. Matters which are approved by two-
thirds of all Directors when the
Bank's Audit Committee does not
approve.
The attendance book of the Board
meeting is a part of the meeting
minutes and shall be retained
throughout the duration of the Bank's
existence.
A minute book shall be dispatched to
all Directors within 20 days from the
meeting after being signed or affixed
seal by the Chairman and the recorder
of the meeting. A minute book shall be
listed as an important document of the
Bank and shall be retained throughout
the duration of the Bank's existence.
The meeting minutes set out in
Paragraph 1 may be prepared and
distributed by electronic means.
Where the resolution at the meeting of
the Board is material information under
the law or the requirements of Taiwan
Stock Exchange, the department-in-
charge shall submit the material
information to the Business
Development Department within the
prescribed time for uploading to the
Market Observation Post System.		 stated in the meeting minutes and be
published on an information
reporting website designated by the
competent authority within two days
from the meeting:
1. Independent Directors have
objection or qualified opinions
which are on record or indicated in
a written statement.
2. Matters which are approved by two-
thirds of all Directors when the
Bank's Audit Committee does not
approve.
The attendance book of the Board
meeting is a part of the meeting
minutes and shall be retained
throughout the duration of the Bank's
existence.
A minute book shall be dispatched to
all Directors within 20 days from the
meeting after being signed or affixed
seal by the Chairman and the recorder
of the meeting. A minute book shall be
listed as an important document of the
Bank and shall be retained throughout
the duration of the Bank's existence.
The meeting minutes set out in
Paragraph 1 may be prepared and
distributed by electronic means.
Where the resolution at the meeting of
the Board is material information under
the law or the requirements of Taiwan
Stock Exchange, the department-in-
charge shall submit the material
information to the Business
Management Department within the
prescribed time for uploading to the
Market Observation Post System.

-9-

Report V

Explanation: Reporting on the execution of capital increase through private placement for common shares of the Bank.

Description:

  1. The following was passed by the shareholders' meeting of the Bank on June 14, 2019: To carry out the private placement for no more than 1,000,000,000 common shares of the Bank in batches (no more than three times) within one year from the date of resolution at the shareholders' meeting.

  2. The Bank has already carried out the private placement for 418,410,041 common shares. The private placement will expire on June 13, 2020 and the Bank has no intention to continue the private placement for common shares regarding the remaining limits within the remaining term.

  3. For the private placement for common shares of the Bank during 2019, please refer to Page11 ~ 12 of the Handbook.

Resolution:

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Report on the execution of capital increase through private placement for common shares of Taiwan Business Bank.

common shares of Taiwan Business Bank. common shares of Taiwan Business Bank. common shares of Taiwan Business Bank. common shares of Taiwan Business Bank. common shares of Taiwan Business Bank.
Item Private placement during 2019
Date of issuance(date of delivery): November 1,2019
The type of
securities of the
privateplacement		 Common shares
Approved at the
shareholders'
meeting
Date and amount		 Passed by the shareholders' meeting on June 14, 2019
Amount: No more than 1,000,000,000 common shares in batches (no more than three times) within
one year.
Basis and rationale
for the pricing		 1. Taking August 19, 2019 as the pricing date:
(1) NT$12.50, NT$12.55, and NT$12.54, respectively, the simple average closing price of the
common shares of the Bank for either the 1, 3, or 5 business days before the pricing date,
after adjustment for any distribution of stock dividends, cash dividends or capital
reduction.
(2) NT$12.46, the simple average closing price of the common shares of the Bank for 30
business days before the pricing date, after adjustment for any distribution of stock
dividends, cash dividends or capital reduction.
(3) Select NT$12.54, the higher of NT$12.54 and NT$12.46, the simple average closing price
of the common shares of the Bank for 5 and 30 business days before the pricing date,
after adjustment for any distribution of stock dividends, cash dividends or capital
reduction, as the reference price for the private placement.
2. The pricing of the private placement shall base on the requirements under the laws and
regulations issued by the competent authority, and shall consider factors such as stringent
restriction on the transfer timing, target, and amount of the private placement for common
shares, restriction of three-year in no consultancy for listing, and poor liquidity. Therefore, the
pricingfor theprivateplacement shall be reasonable.
The method for
selecting the
specificpersons		 Strategic investors with qualification complying with the relevant requirements under
Subparagraph 2, Paragraph 1, Article 43-6 of the Securities and Exchange Act and Order Tai-cai-
cheng-(yi)-zi No. 0910003455 issued bythe Financial SupervisoryCommission on June 13,2002.
Reasons for the
necessity for
conducting the
privateplacement		 To strengthen Bank's role as a specialized bank, comply with its policy function, and allow the
operating direction of the Bank to work closely with the economic and industrial policies of the
government, the Bank intends to carry out a capital increase through the private placement and
engage strategic investors.
Date of full
payment for shares		 August 26, 2019
Information about
the placement
investor		 Private
placement
target
Company		 Qualifications Quantity of
subscription		 Relationship with
the Bank
Operating
conditions of
participating
companies
National
Development
Fund
Its qualification shall comply
with the relevant requirements
under Subparagraph 2,
Paragraph 1, Article 43-6 of the
Securities and Exchange Act
and Order Tai-cai-cheng-(yi)-zi
No. 0910003455 issued by the
Financial Supervisory
Commission on June 13, 2002.		 418,410,041
(shares)		 National Development Fund had
no shareholding in the Bank before
participating in the private
placement and had not involved in
the operation of the Bank. After
participating in the private
placement, National Development
Fund became the second
substantial shareholder of the
Bank, holding approximately
5.87% shares of the Bank.
Actual subscription
price
NT$11.95 per share
Discrepancy
between the actual
subscription price
and the reference
price		 The actual price for the private placement was NT$11.95, which was 95.3% of the reference price
and complied with the resolution passed by the shareholders' meeting that the actual price shall be
no less than 95% of the reference price.

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Item Private placement during 2019
Date of issuance(date of delivery): November 1,2019
Effect of the
private placement
on shareholder
equity		 After the capital increase through the private placement, the net value, common equity ratio, and
government-owned shareholding of the Bank have increased, which effectively enriched the
operating capital of the Bank, enhanced our capital structure, and injected development momentum
for our operation, further consolidating the operating ownership of the government and benefiting
the shareholder equityin a whole.
Use of capital
raised through
private placement
and progress of the
plan		 Proceeds from the private placement are fully utilized in increasing loans for SMEs. Proceeds from
the private placement were fully utilized in the fourth quarter of 2019.
Realization of
benefits of the plan		 1. Balances for loans to SMEs of the Bank amounted to NT$533.933 billion as of the end of the
fourth quarter in 2019, representing an increase of NT$16.784 billion from NT$517.149 billion
as of the end of August 2019. The proceeds from the private placement have effectively
injected development momentum for our operation in loans to SMEs.
2. Common equity ratio was 8.39% as of the end of August 2019, representing an increase of
0.52% from 7.87% as of July 2019; the net value also increased from NT$88.592 billion to
NT$94.103 billion. The private placement has effectively enriched the operating capital of the
Bank,enhanced our capital structure,and injected development momentum for our operation.

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Report VI

Explanation: Communicating relevant legal measures for the same person or same concerned party who holds more than a certain percent of the Bank's outstanding voting shares.

Description:

  1. According to the Letter Jin-guan-yin-kong-zi No. 1006005191 issued by the Financial Supervisory Commission on January 31, 2012, to implement the requirements under Article 25 of the Banking Act, the Bank shall include the information regarding the election as a reporting case one year prior to the election to remind shareholders to pay attention to relevant requirements.

  2. The contents of the related law to be propagated are stated as follows:

  3. (1) According to the requirements under Paragraph 2 and Paragraph 3, Article 25 of the Banking Act, the same person or same concerned party who singly, jointly or collectively acquires more than five percent (5%) of the Bank's outstanding voting shares shall report such fact to the Financial Supervisory Commission within ten (10) days from the day of acquisition; the preceding provision applies to each cumulative increase or decrease in the shares of the same person or same concerned party by more than one percent (1%) thereafter. The same person or same concerned party who acquires more than ten percent (10%), twenty-five percent (25%) or fifty percent (50%) of the Bank's outstanding voting shares shall apply for prior approval of the Financial Supervisory Commission. The definition of the "same person" and "same concerned party," and the exceptional circumstances are stated in Article 25-1 of the Banking Act.

  4. (2) Where the same person or same concerned party who holds voting shares issued by the Bank without filing a report with or obtaining approval from the

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Financial Supervisory Commission in accordance with the above provisions, the excess shares held by such same person or same concerned party shall not have voting rights and shall be disposed of within the given period prescribed by the Financial Supervisory Commission according to the provision under Paragraph 7, Article 25 of the same Act. Furthermore, according to the provision under Paragraph 3, Article 128 of the same Act, such shareholders shall be punished by an administrative fine no less than NT$2 million and no more than NT$10 million. Where such personnel is elected as a Director or other responsible person of the Bank in the future, the Financial Supervisory Commission would consider the reasons unfit for being a such as or responsible person, dishonesty inappropriateness, under Subparagraph 13, Article 3 of the "Regulations Governing Qualification Requirements and Concurrent Serving Restrictions and Matters for Compliance by the Responsible Persons of Banks."

Resolution:

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III. Proposals

Proposal I by the Board

Explanation: Adoption of the 2019 financial statements of the Bank. Description: The 2019 financial statements of the Bank, including the operating report, balance sheet, consolidated statement of profit or loss, statement of changes in equity, and statement of cash flow (please refer to Page 16 ~ 46 of the Handbook) have been submitted to and passed by the 13th meeting of the 15th Board of Directors.

Resolution:

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Taiwan Business Bank Co., Ltd. Operating Report for 2019

The prosperous economic environment was clouded over abruptly at the end of 2018 due to the heated trade conflicts between the U.S. and the PRC, resulting in the fluctuations of global financial performance during 2019. Throughout 2019, the global economic conditions have been shadowed by the impacts arising from the trade conflicts between the U.S. and the PRC. Positive estimation regarding the trade negotiations between the U.S. and the PRC had only been brought by December. Therefore, the IMF estimated the global economic growth rate in 2019 to be 3.0%, setting the lowest record since 2009.

The U.S. Federal Reserve (Fed) announced the cut of interest rates for a consecutive three times, significantly narrowing the long-term and short-term interest rate differentials of the U.S. dollars (USD), and even resulted in a short period of rate inversion. In regards to the European situation, the European Central Bank (ECB), the Bank of Japan (BoJ), and the People's Bank of China have continued to maintain easing monetary policies. In general, major central banks worldwide have continued to implement Quantitative easing monetary policies.

In terms of domestic economic performance, the Directorate-General of Budget, Accounting and Statistics, Executive Yuan estimated the economic growth rate of Taiwan in 2019 to be 2.71%.

Regarding interest rates, the trend of interest rates throughout the year 2019 remained relatively stable. The Central Bank determined to make no adjustment to the interest rates for a consecutive 14 seasons at the joint meeting of directors and supervisors at the end of 2019; the rediscount rate, rate on accommodations with collateral, and rate on accommodations without collateral remained at 1.375%, 1.75%, and 3.625%, respectively.

Regarding the trend of the New Taiwan Dollar's (NTD) currency rate, the currency rate at the beginning of 2019 was around US$1 to NT$30.8. The currency rate of NTD depreciated against USD in the middle of the year, affected by the heated trade conflicts between the U.S. and the PRC and dropped to US$1 to NT$31.5. The currency rate of NTD appreciated against USD gradually due to the effects of capital return invested by Taiwanese businessmen in the 4th quarter in 2019 and rose to approximately US$1 to NT$30 near the year end.

Looking into 2020, the sluggish investment condition in the past years is expected to be cleared away with the capital investments made by the returned Taiwanese businessmen. In addition to being a contributor to the GDP of the year, such investments increase the capital stock (sum of corporate assets) and future production capacities. In particular, the government focuses on high-valued, intelligent, or 5+2

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industries, where the salary level is generally higher than the average salary. In the future, when the return of Taiwanese businessmen is able to facilitate the domestic industry transformation continuously, and together with technical and occupational training, the growth of overall salary and the distributable income is expected to increase, providing assistance to the internal demand market.

Due to the outbreak of COVID-19 in the Mainland China area, impacts are inevitable in the short run. However, due to the high transparency of pandemic information in Taiwan, Taiwanese businesses are likely to further repatriate, procuring large-scale international companies to place orders with companies within the supply chain in Taiwan.

Furthermore, as the global trading volume is affected by the trade war between the U.S. and the PRC, Taiwan, benefiting from the phenomenon of order transfers, has recorded a significant increase in its export value to the U.S.; therefore, Taiwan is holding relatively more support as compared with other Four Asian Tigers, including Hong Kong, Singapore, and South Korea. Even though the trade negotiation between the U.S. and the PRC has improved, Taiwanese businesses will continue to transfer their supply chains due to the surge of operating costs in the PRC resulted from factors such as the increase in awareness of environmental protection in the PRC and the salary growth in coastal provinces. As such, the trend of repatriation for Taiwanese businesses and high-valued industries will continue.

In the future, the Bank will continue to carry through the internal controls using three lines of defense, strengthen the overall risk control, and reinforce FinTech development as well as information security controls. Furthermore, looking from the perspective of a professional financial institution, the Bank will grasp business opportunities upon the return of Taiwanese businessmen and proactively assist returning Taiwanese businessmen in transforming their businesses in accordance with government policies not only to shape Taiwan into Asia’s high-end manufacturing center, but also jointly create Taiwan's 2.0 economic miracle. Meanwhile, the Bank will provide financial products and services integrated with environmental protection and social welfare measures that correspond to social requirements, proactively strengthening and assisting growth sustainability of Taiwanese SMEs, thus fulfilling its corporate social responsibility (CSR) initiatives. The Bank will endeavor to turn the Bank into a leading brand in the field of SME financing and establish a solid foundation for the sustainable development of the Bank upon stepping into the next century.

The operation results in 2019 and the business plan for 2020 are summarized below:

1. Operation Results in 2019

(1) Implementation Status and Result of Business Plans

A. Profitability:

After-tax net profit for 2019 amounted to NT$6.734 billion (before-tax net profit was NT$7.974 billion). The Bank carried out a capital increase of NT$5 billion via transferred earnings of NT$3.197 billion and issued

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stock and cash dividends of NT$0.50 and NT$0.30 per share, respectively, for the previous year (2018).

  • B. Corporate Governance:

  • Reinforcement of information disclosure channels and upgrading of transparency in corporate governance

  • a. The Bank has long strived to enhance its corporate governance and is a listed company in the Top 5% of the Fifth Annual Corporate Governance Evaluation organized by the Taiwan Stock Exchange (TWSE).

  • b. The Bank actively increased communication channels for domestic and overseas investors, and an online roadshow was respectively held in the first and second half of 2019. Each investor has immediate access to information on the Market Observation Post System (MOPS) and can obtain the same information simultaneously on the official TBB website. The Bank also issues press releases on an irregular basis, giving investors multiple channels for acquiring TBB information.

  • C. Core Businesses:

  • a. Corporate Banking

    • 1) The Bank received the Outstanding Award and Special Award for Balanced Regional Development from the Financial Supervisory Commission (FSC) for the Program to Encourage Loan Projects by Domestic Banks to SMEs (Group A).

    • 2) The Bank received the Outstanding Award and Special Award for the National Defense Industry, and Special Award for the Circular Economy Industry from the FSC for the Program to Encourage Lending by Domestic Banks to Key Innovative Industries (Group A).

    • 3) In recognition of the Bank's outstanding performance in small and medium enterprise financing, it received three major awards from the Small and Medium Enterprise Credit Guarantee Fund of Taiwan: The Credit Guarantee Partner Award, Policy Facilitation Award, and Direct Guarantee Performance Award.

    • 4) The Bank actively promoted the Phoenix Micro Start-up Loans and the Unemployment Start-up Loan for Employment Insurance and received a certificate of appreciation from the Ministry of Labor.

    • 5) The Bank received the Best from the Best Service Award for Start-up Enterprises from the Excellence Magazine under the category of non-financial holding for the 2019 5th Excellent Bank.

    • 6) In the extension of small and medium enterprise loans, the Bank

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ranked No. 1 in Taiwan in both total amount and ratio of loans transferred for guarantees to the Small and Medium Enterprise Credit Guarantee Fund.

  • b. Foreign Exchange Operations

The Bank worked vigorously to expand foreign-currency loans and boost interest margin income. Accumulated average loans outstanding in 2019 increased by 8.16% over 2018.

  • c. Wealth Management

    • In 2019, the Bank focused on strengthening its wealth-management business by vigorously expanding fee income from the insurance and fund businesses, with boosting revenue and generating profit as the priority goal. With the vigorous promotion of special programs aimed at the marketing of designated products, fee income from the wealth-management business amounted to approximately NT$1.44 billion in 2019.

  • D. Innovative Products

  • a. Continuous Innovation in Digital Banking businesses to provide more convenient services

    • 1) Added Taiwan Pay transaction function for mobile payment and inaugurated functions of Scanned for Withdrawal, Tax Payment by Credit Cards, and Debit Payment for Credit Card Purchase.

    • 2) Added the Taiwan Pay Merchant Service System for mobile payment.

    • 3) Added the Voice Access for Payment through Mobile Banking Service.

    • 4) Inaugurated the Cloud Payment HCE Card Service.

    • 5) Added functions of "User authentication procedures" and "QR Code scanned payment for cross-border online shopping" for the cross border online shopping (cross-border outward remittance) service.

  • b. Develop products up to date with social trends and provide diversified services to customers

    • 1) Teller operations have been simplified, and the automated name list scanning operations have been established for centralized domestic remittances.

    • 2) Added automated printed bank reply to reduce labor at branches from filling out the reply manually after the system has reviewed data related to the creation of pledge.

    • 3) Established the Account Opening Data Request List for branches to refer to and improve the accuracy of data requests made for account opening.

  • c. Established the "Innovative Finance Project Office" to strengthen

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the support for material loans of green finance, urban renewal, and cultural innovation industries. 

  - 1) Urban renewal: In accordance with the urban renewal policies and accelerated reconstruction of hazardous and old buildings policies implemented by the government, the Bank promulgated the "Guidelines for Urban Renewal Loans" and "Regulations for Reconstruction of Hazardous and Old Buildings Loans." In 2019, the Bank had approved a total of 17 loans with a total loan amount of NT$14.517 billion and organized Urban Renewal Fair with the Wealth Magazine.

  - 2) Green finance: Promote the development of the green energy industry and establish an economic model with low carbon emission. The total credit balances as of the end of 2019 amounted to NT$59.822 billion.

  - 3) Cultural innovation industries: Strengthen the upgrade of cultural innovation industries and improve the industrial structure. The total loan balance as of the end of 2019 amounted to NT$26.417 billion.

  • d. Assisted in industry innovation and provided intangible asset financing To assist in the industry innovation, the Bank established the "Regulations for Financing and Loan on Intangible Assets with Revenue Mezzanine." Leveraging on the expertise of the Industrial Technology Research Institute in the valuation of intangible assets, the Bank referred to the professional valuation report provided by the Institute to determine the development potentials and market values of intangible assets in the future, and worked with the SMEG to provide higher credit guarantee loan ratio.

  • E. Expansion of the Scope of Channel Services

  • a. Make adjustments on the location distribution of the Bank's branches for the increase of value regarding physical channels, so as to provide better and more comprehensive financial services. The Chi Lin Branch reallocation was completed and re-opened on Jul. 29, 2019 and the branch was renamed as the East Lin Kou Branch.

  • b. To develop more diversified operations, the Bank had successfully engaged Yuanta Futures as its futures trader on Oct. 1, 2019, and added foreign futures trading auxiliary businesses as well as programs for the increase in commission allocation ratio, improvement in educational training, and business promotion incentives.

  • F. Information System Reinforcement and Information Security Promotion

  • a. Completed the update for the central billing mainframe to improve

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service capacities

  • 1) The Bank completed the update for the central billing mainframe to accelerate data accessing speed and system response time and continued to establish the SYSPLEX system with local HA.

  • 2) Simplified the accounting closing procedures of the Bank, which has significantly improved the operating efficiency of branches and minimized the time for accounting closing.

  • 3) Established a data center and continues to collect data from inside and outside of the Bank. The rapid data processing is provided for product design, risk analysis, and customer marketing.

  • 4) Continued to replace the software/hardware equipment for the e-banking to improve Internet transaction security.

  • 5) Completed the overseas core system database encryption mechanism, established the personal data terminal protection system and Intranet terminal equipment management system to reinforce the information security protection mechanism.

  • b. Reinforce the security control mechanism for the information system 1) Participated in Cyber Offensive and Defensive Exercise 2019 (CODE 2019) organized by National Information & Communication Security Taskforce, Executive Yuan held from Nov. 6 to 8, 2019.

  • 2) Completed the assessment on the information security of the Bank’s computer system in August 2019, according to the "Assessment Regulations for the Information Security of the Computer System of Financial Institutions."

  • 3) The Information Security Department and other relevant departments of the Bank formed the New York Branch 2019 Joint Financial Inspection Taskforce to help carry out the Part 500 compliance program in accordance with the network security regulations of the New York State Department of Financial Services (NYDFS).

  • 4) Self-assessment was carried out in accordance with SWIFT Customer Security Program (CSP) specifications and was approved by SWIFT in December 2019.

  • c. Continuous promotion of the digital banking business

  • 1) Actively promoted the Taiwan Pay acquiring businesses, endeavored to increase the rate of QR Code adoption in common payment services by established merchants, such as large-scale chained stores, business area, and night markets, and organized marketing discount events to facilitate the inclusive

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finance and the penetration rate of e-payment. 

  - 2) Strived to obtain business dealings regarding the ACH distribution of dividends on behalf of listed companies, cooperated with major hospitals to introduce medical payment machine, to provide customers with diversified payment collection on behalf/payment service, so as to increase fee income of digital banking business.

  - 3) Improve the interaction and attachment between the fans on Facebook with the page of the Bank, designed relevant events for the products launched by the Bank, and successfully attracted the mobile and Internet groups of all ages to participate in such events through Facebook as its online media.

  • G. Implementation of Legal Compliance and Anti-Money Laundering Operations

  • a. Implementation of legal compliance and anti-money laundering in line with the regulations of the competent authority

    • 1) On Mar. 26, 2019, the Bank promulgated its "Regulations for Legal Compliance, Anti-money Laundering, and Combatting the Financing of Terrorism for Overseas Branches" to regulate material managing matters including the function of relevant personnel, reporting system, reported matters, audit for departments and relevant personnel, educational training in overseas branches. The Bank will supervise the execution of its overseas branches for legal compliance, anti-money laundering, and combatting the financing of terrorism according to the Regulations on an ongoing basis.

    • 2) The Bank performed its compliance risk assessment (CRA) operation for 2018 and reported to the FSC for filings after being approved by the Board.

    • 3) With regards to anti-money laundering and combatting the financing of terrorism, the Bank performed its institutional risk assessment (IRA) operation for 2019 and reported to the FSC for filings after being approved by the Board.

  • b. Holding of regular compliance and anti-money laundering training

    • 1) Five Anti-Money Laundering & Combatting the Financing of Terrorism Seminars were held in Northern, Central, and Southern Taiwan from Apr. 16 to 23, 2019.

    • 2) A Compliance Officer Seminar was held in each the first and second halves of 2019.

  • c. Strengthening of the monitoring mechanism for compliance followup

According to the "Legal Compliance Follow-up Cases Control

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System," the letters regarding relevant laws and regulations from external parties and the changes in laws and regulations that the Bank shall comply with under the are included in "Legal Compliance Follow-up Cases" for control. The Bank compiles the subsequent implementation of "Legal Compliance Follow-up Cases" each month according to the competent authorities and reports to the legal compliance director of the Bank.

  • d. Carried out annual project audits for personal information protection, anti-money laundering, and combatting the financing of terrorism by accountants in accordance with the Implementation Rules of Internal Audit and Internal Control System of Financial Holding Companies and Banking Industries.

    • An accounting firm was commissioned to carry out the "2018 Project Audit for Personal Information Protection and the Internal Control System for Anti-Money Laundering and Combatting the Financing of Terrorism."

  • e. The Bank ranked top 20% for the Principle for Financial Service Industries to Treat Clients Fairly carried out by the FSC for the first time.

  • H. Corporate Social Responsibility

  • a. Active implementation of corporate social responsibility and realization of the value of the sustainable operation

    • 1) The Bank’s "CSR Report" passed two stages of verification by the British Standards Institution (BSI) for four consecutive years, and BSI issued the Bank an Independent Assurance Opinion Statement.

    • 2) The Bank received the Bronze Award in the financial and insurance group of corporate sustainability report division under the 12th TCSA Taiwan Corporate Sustainability Awards of 2019 organized by the Taiwan Institute for Sustainable Energy, the Sustainability Performance Award from BSI Standards Awards, and was ranked the 49th in "2019 Excellence in Corporate Social Responsibility" organized by the CommonWealth Magazine. Such achievements help upgrade the Bank's visibility and its corporate image for CSR implementation.

    • 3) The Bank continues to optimize the design of its website for the general public to obtain and understand the information on the corporate social responsibility of the Bank through the website of the Bank more conveniently, to effectively strengthening the communicating function of the Bank regarding corporate social responsibility.

  • b. Implementation of senior caring policy, donations to disadvantaged

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groups, and active participation in public benefit affairs

  • 1) The Bank has initiated the Project of Senior Dining & Learning Center Sponsorship. The Bank exclusively allocated 3‰ of the general card consumption from the Silver Love Credit Card issued by the Bank to help seniors to dine and learn together. This originated from the non-profit fund that was used in building a School for Seniors in the community to help take care of vulnerable seniors in the local community and improve their living standards.

  • 2) Set up senior caring spots to improve the standards of caring services at senior welfare agencies, providing local and appropriate caring services accessible to disadvantaged seniors. The Bank vigorously devotes in the public benefit affairs to achieve the goal of "aging in place."

  • 3) The Bank continued to promote property trust business for the senior and the disabled, recorded outstanding results for a consecutive three years, and received the award for recognition from the FSC.

  • c. Fulfilling responsibility for environmental protection and continue energy conservation and carbon reduction efforts

  • 1) The Environmental Protection Administration of the Executive Yuan and the Department of Environment Protection of the Taipei City Government cited the TBB eight years in a row for outstanding performance in green procurement.

  • 2) The Taipei City Government publicly cited the TBB for receiving ISO 50001 Energy Management Systems certification and the designation of its headquarters as an energy-savinglabel building.

  • 3) The Bank implemented its "Energy Policies" and "Measures for Water and Electricity Conservation" with scheduled follow-up on the status of water and electricity conservation by different units and inclusion of the results in business performance assessments. Various energy conservation improvement programs were vigorously implemented in order to enhance the energy efficiency of equipment and save on electricity costs.

(2) Budget Implementation

  • A. The annual average balance of deposits was NT$1,436.285 billion, for an achievement rate of 97.19%.

  • B. The annual average balance of loans outstanding was NT$1,129.913 billion, for an achievement rate of 97.75%.

(3) Revenues, Expenditures, and Profitability

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  • A. Net income for 2019 amounted to NT$22.838 billion; bad debt expense, commitment and provision for guaranteed liabilities totaled at NT$2.349 billion; operating expenses were NT$12.515 billion; before-tax net income from continuing operations was NT$7.974 billion; net profit after tax was NT$6.734 billion; return on assets ratio (after-tax) amounted to 0.40%; return on equity ratio (after-tax) amounted to 7.47%; net profit margin (after-tax) was 29.49%, and earnings per share (aftertax) was NT$0.98.

  • B. Net income before taxes (excluding provisions) in 2019 amounted to NT$10.324 billion, an increase of NT$491 million from 2018. NT$2.349 billion was allocated as an allowance for bad debts in order to strengthen risk appetite. Before-tax net profit for 2019 amounted to NT$7.974 billion, a decrease of NT$1.113 billion from 2019, primarily due to the increase in allowances for bad debts.

  • C. The non-performing loan ratio at the end of 2019 stood at 0.32%, an increase of 0.02% compared with the end of 2018; the bad-debt coverage ratio was 367.77%, a decrease of 26.31% over the end of 2018.

(4) Research and Development

  • A. Establishment of an Exclusive Unit for Industry Research

  • a. A total of 127 industry analysis reports were written and published in the Bank's E-Library in 2019 for colleagues to peruse.

  • b. Elite professionals from industry, government, and academia are invited to speak on an occasional basis to help the Bank's employees understand the latest trends in industrial development.

  • B. Encouragement of Innovation and Professionalism in Line with Business Development Needs

  • Business lectures are held on a scheduled basis and a wide variety of digital learning courses are offered to encourage employees to engage in further on-the-job studies and absorb new knowledge that will strengthen their competitiveness and enhance their professional know-how.

2. Business Plans for 2020

(1) Operating Directions and Policies

  • A. Strengthen the positioning and responsibility as a specialized bank for SMEs

  • a. Continue to promote the "Youngster first, seniors second, and startups third" program

    • Combine the core competencies of the Bank with concerning issues in society to integrate our business with social welfare. Implement the "Youngster first, seniors second, and start-ups third" program to help solve the problems of youth start-up and employment, promote senior financing and the acceleration of renewal for hazardous and

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old buildings, and support the development of innovation, creation, and start-up businesses.

  • b. Reinforce the "Micro-to-small Enterprises + Startups ・ Double the Vital Source of Fund" project loans

    • Regarding the capital requirements for SMEs with a capital amount less than NT$30 million, the " Micro-to-small Enterprises + Startups ・ Double the Vital Source of Fund " project loans was launched in

    • collaboration with the SMEG to assist SMEs in obtaining the capital required through the express pass mechanism with "active exploration, simplified procedures, rapid review, and audit incentives."

  • c. Promote Urban Renewal Finance 2.0

    • To solve two seniority issues (old buildings and aging population) and two insufficiency issues (land insufficiency and electricity insufficiency), the Bank will demonstrate its image of professional service, not only by combining the urban renewal with senior caring to improve housing security and realize the concept of nursing at home, but also integrating urban renewal for hazardous and old buildings with electricity-farming and energy-saving to encourage corporates to generate electricity for their own usage, solving the land and electricity insufficiencies among the five insufficiencies currently faced in Taiwan.

  • d. Enhance investment and counseling functions

    • Explore premium customers with the potential nature of invisible champions in different industries. Support the stable growth of industrial seedlings through the capital contribution from TBB Venture Capital Co., Ltd.; together with external counseling resources from SMEG and SMECF, the Bank will assist enterprises in improving their operating management capacities and counseling their transformation and upgrade.

  • B. Grasp the green business opportunities and fully promote green finance With the effect of climate change, it is estimated that the business opportunities of domestic green finance will amount to NT$1.8 trillion in the future. To grasp such business opportunities, the Bank will enhance its promotion in green finance to help enterprises develop the green energy industry; for example, utilizing the feature of abundant sunlight in Central and Southern Taiwan, help enterprises establish solar power generation system to achieve the goal of sustainable operations.

(2) Operating Policies

Facing the ever-changing financial environment and in response to the upsurge of FinTech and development of digital finance, the Bank will adhere to its core value of SME Specialized Bank and utilize the four aspects on its

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strategy map with a bottom-up approach, to enhance risk control and improve assets quality. Furthermore, in line with the aspects of learning & growth, internal procedures, customers, and finance, the Bank will establish a five-year strategy structure with specified directions and centralized resources for its departments by proposing the strategy structure to the Strategy Development Committee after being discussed by the Business Management Committee, so as to reinforce the adjustments in its three major structures of labor, channels, and capital. The Bank will achieve its goal of sustainable development by realizing our operating concept and become a premium bank with comprehensive financial services.

  • A. Learning & Growth

  • a. Improve the professional competencies of our employees: Establish a talent database through human resource inventory; deploy human resources of the entire Bank with plans; enhance cultivation of professional talent for SMEs, digital finance, and international finance; strengthen management and talent cultivation for critical posts.

  • b. Establish a successor scheme: Nurture key talents; establish a successor cultivation scheme; enhance the successor system; plan to cultivate successor candidates with potentials for the benefit of the Bank's sustainable operations.

  • c. Optimize the labor structure: Revitalize retired human resources to enhance the inheritance of experience; diversify employment channels; connect with the tertiary education sector for industryacademia cooperation; participate in the youth employment pilot program; recruit outstanding personnel to enrich the talent database of the Bank.

  • d. Improve the performance of information systems: Increase investment in IT building and integrate it closely with our business; enhance the overall efficiency of the information system; improve diversity and innovative capacities of our IT team; reinforce the cultivation and motivation of key IT personnel to lay a solid foundation for information technology.

  • e. Enhance cybersecurity defense and monitoring capacity: Establish the Bank's cybersecurity management system and maintenance plan; optimize the joint defense system; continue to organize its cybersecurity upgrade and improvement measures; enhance cybersecurity training to reinforce cybersecurity protection ability and realize cybersecurity compliance.

  • f. Optimize an accountability mechanism: Establish a comprehensive accountability mechanism and cultivate the culture of accountability to form the organization and value that allows our fellow colleagues

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to internalize it as their mission, vision, and core values, so as to strive toward the goal of the Bank's sustainable development.

  • g. Realize the corporate culture of learning and sharing: Build a "learning" experience inheritance system based on the concept of "learning by doing and doing by learning" and encourage internal innovation of young employees to invigorate corporate human resources.

  • B. Internal Procedures

  • a. Improve management by setting objectives: Establish goals and realize the execution, optimize the evaluation management system, reinforce the connection between evaluation, and rewards to boost performance.

  • b. Optimize the procedures for better efficiency: Establish smart customer services to improve service quality and optimize customer experiences; value the management for the internal and operating process, regularly examine the SOP for continuous creation of a better working process, and utilize the information system to assist in the manual examination, improving efficiency.

  • c. Enhance risk management: Improve asset quality and coverage for allowance for bad debts through understanding, managing and reducing risks, and enhancing risk control.

  • d. Adopt integrated marketing to increase customer contribution: Integrate marketing resources to increase dealings with customers, increase overall customer contribution, and provide comprehensive financial services according to the requirements for the business development of customers.

  • e. Provide premium services to build customer loyalty: Bear customers' interests in mind, design comprehensive financial services based on customers' requirements to meet their expectations and demands, thus, building customer loyalty.

  • f. Strengthen customer relationships with the second generation upon the succession of the family business: Strengthen the customer relationship with the younger generation or the second generation upon the succession of the family business to improve SME customers' support to the Bank after generational changes.

  • g. Differentiated products and marketing: Apply Big Data analysis to understand customer behavior patterns to provide customized services and precise marketing services.

  • h. Adhere to rigorous compliance: Enhance legal compliance and duly comply with the monitoring measures of the competent authorities; uphold provisions for anti-money laundering and combating the terrorism financing; implement whistle-blower protection and

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uphold customer interests; thereby forming a corporate culture that prioritizes legal compliance.

  • i. Strengthen corporate governance: Improve Directors' functions, corporate governance mechanisms, and operations of functional committees; disclose material information regarding corporate governance to improve transparency for information disclosure and shape the culture of corporate governance.

  • j. Fulfill corporate social responsibility: Attach importance to the ESG valuation; focus on the "Youngster first, seniors second, and startups third" program with our core business to promote the integration of corporates and society; and internalize the fulfillment of social responsibility as its corporate spirit.

  • C. Customers

  • a. Improve channel service quality and integrate customer views from all channels: Improve the value of physical channels; expand the service scope for virtual channels; enhance the control on business opportunities regarding clusters of SMEs to meet the mission of the Bank to provide services for SMEs; establish a data market with the cross-business omnidirectional single view of customers. This shall be done so as to fully present customer preferences and service channels, optimizing service and experiences for customers.

  • b. Focus on the niche market of SMEs and reinforce the brand image of a specialized bank: Specify positioning as an SME specialized bank and focus on the core business of SMEs; commit to policy financing such as micro-to-small enterprises, startups, urban renewal for hazardous and old buildings, intangible assets, and placemaking to shape the brand image of a specialized bank.

  • c. Enhance wealth management services and gain trust from customers: Focus on the three major keys—customization, segmentation, and digitization to deepen the wealth management services, satisfy customers' demand; undertake deep-rooted support for investment analysis in order to provide financial planning services for owners and high-asset customers.

  • D. Finance

  • A. Increase operating performance and take risk management into account: Expand operating scale, increase the profit margins of overseas branches, improve interest rates and diversify the income sources of service charges to enhance profitability.

  • B. Enhance capital and uphold shareholders' interests: Comply with the monitoring requirements of the competent authority regarding authorized capital; ensure a healthy capital structure and the goal of optimized resource allocation; strengthen the risk appetite to expand

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the growth of operating income; achieve the goal of maximized shareholders' value.

  • E. Enhance risk control and improve assets quality

Impacts arising from the outbreak of COVID-19 have extended across the manufacturing industry and the service industry; the effects on SMEs are relatively significant as they have lower tolerance for risks. As a specialized bank for SMEs, the Bank also suffer greater impacts as compared to general commercial banks. To minimize the impact of COVID-19, the Bank will strengthen the control on customers who suffered from greater impacts of COVID-19 (such as adjust credit limit in due course and increase the frequency of visits) and make adjustments to the industrial limit at any time to control risks effectively.

(3) Business Targets

To give equal weight to the protection of shareholder interests, improvement of the capital structure, and enhancement of asset quality, the Bank has set the following targets in consideration of the economic growth forecast of the Directorate General of Budget, Accounting and Statistics for 2020.

  1. Annual average deposit balance: NT$1,473.750 billion.

  2. Annual average balance of loans outstanding: NT$1,188.073 billion.

  3. Total foreign exchange transactions: US$64.955 billion.

3. Results of Latest Credit Rating

Date of
Rating		 Rating Institution Ratings Ratings Outlook
Long-term
Credit		 Short-term
Credit
2020.1.13 Taiwan Ratings twAA- twA-1+ Stable
2020.1.13 Standard & Poor's BBB+ A-2 Stable

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Proposal II by the Board

Explanation: Adoption of the earnings distribution from final accounts of the Bank for 2019.

Description:

  1. After an audit, the earnings available for distribution of the Bank for 2019 was NT$5,185,142,299.24, and the description is set out below:

  2. (1) The opening undistributed earnings for 2019 was NT$356,940,304.77.

  3. (2) Items added:

    • A. Reversal of "recognized actuarial gains and losses for defined benefit plans" of NT$23,594,400.

    • B. "Gains and losses arising from disposals of investments in equity instruments designated at fair value through other comprehensive income": NT$52,427,832.

    • C. Reversed special reserve was NT$38,202,709:

      • a. Based on the requirements under the Letter Jin-guan-zheng-fa-zi No. 1010012865 dated April 6, 2012, and the Letter Jinguan-yin-fa-zi No. 10510001510 dated May 25, 2016, issued by the Financial Supervisory Commission.

      • b. As of December 31, 2018, the stated net deduction of other equity: The sum of "difference of foreign exchange in translating financial statements of foreign operating units" of -NT$862,865,585.21 and "unrealized gain or loss on financial assets at fair value through other comprehensive income" of NT$4,541,167,789.08 is a positive number; therefore, no special reserve shall be The transfer or

      • provided. employee placement expenses of NT$38,202,709 provided in 2018 may be fully reversed.

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  - D. After reviewed and approved by Accountant Tan-Tan Chung and Jeff Chen from KPMG, the after-tax net income for 2019 was NT$6,734,252,933.53.

  • (3) Items less:

    • Appropriated as legal reserve: NT$2,020,275,880.06.

  • (4) Distribution of shareholders' bonus - cash dividends (NT$0.20 per share): NT$1,426,396,849. The minimum distribution of cash dividend made to shareholders shall be round up to NT$1, and fraction cash dividend less than NT$1 shall be accounted as other income.

  • (5) Distribution of shareholders' bonus - stock dividends (NT$0.50 per share): NT$3,565,992,130.

  • (6) Closing undistributed earnings: NT$192,753,320.24.

  • Please see the attachment "Disposition of Earnings for 2019" of the Bank (please refer to Page 49 of the Handbook."

Resolution:

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Taiwan Business Bank Co., Ltd.
Disposition of Earnings
2019
Unit: NT$		 Taiwan Business Bank Co., Ltd.
Disposition of Earnings
2019
Unit: NT$
Item Amount
Openingundistributed earnings 356,940,304.77
Add: Recognized actuarial gains and losses for defined
benefit plans		 23,594,400.00
Add: Gains or losses arising from disposals of investments
in equity instruments designated at fair value through
other comprehensive income		 52,427,832.00
Add: Reversed special reserve 38,202,709.00
Add: After-tax net income for 2019 6,734,252,933.53
Less: Appropriated as legal reserve (2,020,275,880.06)
Earnings available for distribution 5,185,142,299.24
Item of distribution:
Distribution of shareholders' bonus - cash dividends
(NT$0.20per share)		 1,426,396,849.00
Distribution of shareholders' bonus - stock dividends
(NT$0.50per share)		 3,565,992,130.00
Closingundistributed earnings 192,753,320.24

Note:

  • A. The calculation of shareholders' bonus per share was based on 7,131,984,244 shares.

  • B. The distribution shall initially be appropriated from the undistributed earnings in the latest year.

  • C. Conduct in accordance with the Order Jin-guan-zi No. 10510001510 issued by the Financial Supervisory Commission on May 25, 2016.

Chairman: President:

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SVP & GM of the Accounting Dept.:

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IV.Discussion

Proposal I by the Board

Explanation: In response to the earnings distribution of stock dividends for 2019, the Bank intends to carry out a capital increase via transferred earnings for the issuance of new shares, hereby proposed for approval.

Description:

  1. In response to the requirements on the inclusion of common equity under the new Basel III to improve its capital structure, and in turns increase the profitability, the Bank intends to carry out a capital increase via transferred earnings for the issuance of 356,599,213 new shares according to the requirements under Article 240 of the Company Act.

  2. Total amount of the new shares for capital increase and the conditions for issuance:

  3. (1) A capital increase of NT$3,565,992,130 is proposed, with the par value of NT$10 per share, for the issuance of 356,599,213 new registered common shares.

  4. (2) The capital increase via transferred earnings shall be submitted to the competent authority for approval after being approved by the shareholders' meeting. The Board may otherwise determine the date of exrights for the allotment of new shares, and, based on the shareholding ratio stated in the Shareholders' registrar on the date of ex-rights, allot 50 shares for every thousand shares without compensation. Allotment of fraction shares less than one share; the shareholder may present at the stock affairs agency of the Bank within 5 days from the date of ex-rights for aggregation. A cash distribution may be paid for fraction shares less than one share upon aggregation (round up to NT$1); the Chairman may assign a specific person to subscribe for the overdue unaggregated number of fraction shares at the par value.

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  • (3) Subsequently, if the repurchase of Bank's shares, or the transfer, conversion, and cancellation of treasury stocks or otherwise affected the number of total issued shares, resulting in changes in share distribution rate of shareholders, hereby proposed to the shareholders' meeting to authorize the Board for handling the changes.

  • (4) The new shares issued under the capital increase via transferred earnings shall rank pari passu in all respects with the originally issued shares.

  • The proposed stock dividends have no effect on the operating performance and earnings per share of the Bank: According to the requirements under the "Regulations Governing the Publication of Financial Forecasts of Public Companies" and "Taiwan Stock Exchange Corporation Standards for Determining Whether a TWSE Listed Company Shall Publish Complete Financial Forecasts," the Bank has not made public disclosure regarding its financial forecast for 2020; therefore, the Bank is unable to estimate the forecast information concerning the effects of stock dividends proposed above on the revenue, profit or loss, and earning per share; the item is not applicable to the Bank.

  • After the capital increase, the total paid-in capital is NT$74,885,834,570, falling within the total capital of NT$80 billion of the Bank.

  • Hereby proposed to authorize full discretion to the Board for unaddressed matters regarding the proposal.

Resolution:

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Proposal II by the Board

Explanation: Amendment to the Articles of Association of the Bank, hereby proposed for approval.

Description:

  1. In response to the amendments to the Company Act, the Bank intends to amend its Articles of Association, summarized as below:

  2. (1) As Article 162-1 of the Company Act is deleted and the Bank had adopted scripless stock issuance, amended the wording accordingly. (Article 6)

  3. (2) Added that shareholders continuously holding 50% or more of the total number of outstanding shares of the Bank for a period of three months or longer time may convene a special shareholders' meeting according to the requirements under Article 173-1 of the Company Act. (Article 12)

  4. (3) Amended partial wording according to requirements under Article 17 of the "Regulations Governing Procedure for Board of Directors Meetings of Public Companies." (Article 28 and 31)

  5. (4) Added the scope of authorization when the Managing Board executing the function of the Board of Directors according to requirements under Article 43 of the "Corporate Governance Best Practice Principles for Banks." (Article 30)

  6. For the "Comparison Table of the Drafted Amendment to Articles of Association" of the Bank, please refer to Page 53 ~ 56 of the Handbook.

Resolution:

-52-

Comparison Table of the Drafted Amendment to Provisions of Articles of Association of Taiwan Business Bank Co., Ltd.

Amended Provisions Current Provisions Description
Article 4
Except for otherwise required by the
competent authority for securities,
the Bank shall publish its
announcements on newspapers or e-
mail newsletter.
Article 4
The Bank shall make announcements on
the circulating daily newspaper where
the headquarters of the Bank locates or
in the manner prescribed by the
competent authority.
Amended according
to requirements
under Article 28 of
the Company Act.
Article 6
The Bank is exempted from printing
any share certificate for the shares
issued; however, the Bank shall
register the issued shares with a
centralized securities depository
enterprise, and shall be handled
according to the requirements of the
enterprise.

Article 6
The share certificates of the Bank are
registered and shall be issued after
being signed or stamped by three or
more directors according to the law.
When issuing new shares, the share
certificate shall be printed altogether
according to the number of total
issuances; however, the share
certificates shall be kept by a
centralized securities depository
enterprise.
The Bank is exempted from printing any
share certificate for the shares issued;
however, the Bank shall register the
issued shares with a centralized
securities depository enterprise.
1. Article 162-1 of
the Company Act
is deleted, and the
Bank had adopted
scripless share
issuance;
therefore, deleted
Paragraphs 1 and
2 of the Article.
2. The Bank has
fully adopted
scripless share
issuance;
therefore, in
accordance with
Paragraph 2 of
Article 161-2 of
the Company Act,
the Bank made
the amendment
that the Bank
shall register
according to
relevant
requirements of
the centralized
securities
depository
enterprise.
Article 12
Shareholders' meetings of the Bank
are categorized into annual
meetings and extraordinary
meetings. Annual meetings shall be
convened at least once a year, and it
shall be convened by the Board
according to the laws within 6
months after each accounting year.
Except for otherwise required by
the Company Act, extraordinary
meetings shall be convened bythe		 Article 12
Shareholders' meetings of the Bank are
categorized into annual meetings and
extraordinary meetings. Annual
meetings shall be convened at least once
a year, and it shall be convened by the
Board according to the laws within 6
months after each accounting year.
Except for otherwise required by the
Company Act, extraordinary meetings
shall be convened by the Board when
necessary. Anyor aplural number of
Added and amended
partial wording
according to the
requirements under
Article 173-1 of the
Company Act.

-53-

Amended Provisions Current Provisions Description
Board when necessary. Any or a
plural number of shareholder(s) of
who has (have) continuously held
3% or more of the total number of
outstanding shares for a period of
one year or longer time may, by
filing a written proposal setting
forth therein the subjects for
discussion and the reasons, request
the Board to call an extraordinary
meeting of shareholders. Any or a
plural number of shareholder(s) of
who has (have) continuously held
more than half (50%) of total issued
shares for a period of three months
may call upon an extraordinary
meeting.
shareholder(s) of who has (have)
continuously held 3% or more of the
total number of outstanding shares for a
period of one year or longer time may,
by filing a written proposal setting forth
therein the subjects for discussion and
the reasons, request the Board to call an
extraordinary meeting of shareholders.
Article 23
When investing in other companies,
except for otherwise required by the
Banking Act, the Bank shall not be
subject to the limit of 40% of the
Bank's paid-up capital regarding the
total investments in other
companies under Paragraph 2,
Article 13 of the CompanyAct.		 Article 23
When investing in other companies,
except for otherwise required by the
Banking Act, the Bank shall not be
subject to the limit of 40% of the Bank's
paid-up capital regarding the total
investments in other companies under
Paragraph 1, Article 13 of the Company
Act.		 Amended the quoted
provision according
to the requirements
under Article 13 of
the Company Act.
Article 25
A regular meeting of the Board shall
be held every two months. Shall
there be an emergency, or if the
majority of the Directors request so,
an extraordinary meeting may be
held. Except for otherwise required
by the Company Act, all meetings
shall be convened by the Chairman
in writing and may send out the
electronic notice upon receiving the
consent from the counterparty.
The Board shall establish the "Rules
of Procedures for Board Meeting"
and submit to the shareholders'
meeting, so as to improve the
operating efficiency and decision-
making abilities of the Board
meeting.
To reinforce the corporate
governance abilities, the Board may
establish functional committees and
the rules for exercising their
functions shall be separately
determined bythe Board.

Article 25
A regular meeting of the Board shall be
held every two months. Shall there be
an emergency, or if the majority of the
Directors request so, an extraordinary
meeting may be held. Except for
otherwise required by the Company Act,
all meetings shall be convened by the
Chairman in writing and shall send out
the notice via e-mail or fax.
The Board shall establish the "Rules of
Procedures for Board Meeting" and
submit to the shareholders' meeting, so
as to improve the operating efficiency
and decision-making abilities of the
Board meeting.
To reinforce the corporate governance
abilities, the Board may establish
functional committees and the rules for
exercising their functions shall be
separately determined by the Board.
Amended partial
wording according to
the requirements
under Article 204 of
the Company Act.

-54-

Amended Provisions Current Provisions Description
Article 28
A minute book shall be prepared for
the discussions at Board meetings,
and the minute book shall be
dispatched to all Directors within 20
days from the meeting after being
signed by or affixed seal by the
Chairman of the meeting and the
recorder. The minute book shall set
out the year, month, date, name of
the Chairman, resolution method,
the summary of the discussion
process, and its results, and shall be
permanently preserved throughout
the existence of the Bank. The sign-
in book of the attending Directors
and the power of attorney for
engaging proxies shall be
permanently preserved throughout
the existence of the Bank.
Article 28
A minute book shall be prepared for the
discussions at Board meetings, and the
minute book shall be dispatched to all
Directors within 20 days from the
meeting after being signed by or affixed
seal by the Chairman. The minute book
shall set out the year, month, date, name
of the Chairman, resolution method, the
summary of the discussion process, and
its results, and shall be permanently
preserved throughout the existence of
the Bank. The sign-in book of the
attending Directors and the power of
attorney for engaging proxies shall be
kept for a least a year.		 Amended partial
wording according to
requirements under
Article 17 of the
"Regulations
Governing Procedure
for Board of
Directors Meetings
of Public
Companies."
Article 30
During the recess of the Board, the
Managing Directors shall regularly
exercise the power and authority of
the Board in accordance with the
laws and regulations, the Articles of
Association, and the resolutions
adopted by the shareholders'
meetings and the Board, and the
Board meetings to be called from
time to time by the Chairman; such
meetings shall be chaired by the
Chairman.
The scope of power and authority of
the Board exercised by the
Managing Board mentioned in the
previous Paragraph refer to matters
other than the significant matters
required to be considered by the
shareholders' meeting or submitted
to the Board meeting for discussion
according to the laws and articles of
association or prescribed by the
competent authority, and the
determination of business scope
other than the Bank's Articles of
Association, overall operating
strategies, significant policies, or
significant risk management.
When the Chairman is unable to
present himself/herself,the
Article 30
During the recess of the Board, the
Managing Directors shall regularly
exercise the power and authority of the
Board in accordance with the laws and
regulations, the Articles of Association,
and the resolutions adopted by the
shareholders' meetings and the Board,
and the Board meetings to be called
from time to time by the Chairman; such
meetings shall be chaired by the
Chairman.
When the Chairman is unable to present
himself/herself, the Chairman shall
designate a Managing Director as the
proxy. When there is no designation
made, a Managing Director shall be
elected among themselves.
Added the scope of
authorization when
the Managing Board
executing the
function of the Board
of Directors
according to
requirements under
Article 43 of the
"Corporate
Governance Best
Practice Principles
for Banks."

-55-

Amended Provisions Current Provisions Description
Chairman shall designate a
Managing Director as the proxy.
When there is no designation made,
a Managing Director shall be
elected amongthemselves.
Article 31
For a resolution at the Managing
Directors meeting, except for
otherwise required by the Company
Act, the resolution shall receive the
consent from the majority of the
attending Managing Directors at the
meeting attended by the majority of
Managing Directors. The minute
book shall be signed or affixed seal
by the Chairman of the meeting and
the recorder.		 Article 31
For a resolution at the Managing
Directors meeting, except for otherwise
required by the Company Act, the
resolution shall receive the consent from
the majority of the attending Managing
Directors at the meeting attended by the
majority of Managing Directors. The
minute book shall be signed or affixed
seal by the Chairman.
Amended partial
wording according to
requirements under
Article 17 of the
"Regulations
Governing Procedure
for Board of
Directors Meetings
of Public
Companies."

-56-

Proposal III by the Board

Explanation: Amendment to the Rules of Procedures for Shareholders' Meeting of the Bank, hereby proposed for approval.

Description:

  1. To improve our corporate governance and comply with the "Sample Template for XXX Co., Ltd. Rules of Procedure for Board of Directors Meetings" (the "Sample Template") promulgated by Taiwan Stock Exchange Corporation, the Bank, therefore, amended its "Rules of Procedures for Shareholders' Meeting."

  2. The key amendments are summarized as follow:

  3. (1) To establish a strong governance system and sound supervisory capabilities for the Bank's shareholders' meetings, and to strengthen management capabilities, the Bank amended the purpose of establishing such Rules. (Article 1)

  4. (2) Added that a shareholders' meetings convened by the Board shall be attended by a majority of the Directors and at least one member of each functional committee on behalf of the committee. The attendance shall be recorded in the meeting minutes. (Article 8)

  5. (3) Deleted the requirements which specify that the proposal is passed when none voiced an objection, and stated that a vote shall be performed for each proposal and the results for each proposal shall be entered into the MOPS with reference to the mentioned Sample Template. (Paragraph 1, Article 10)

  6. (4) Added that 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. (Paragraph 3, Article 10)

  7. (5) 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

-57-

the Bank, the shareholder may not vote on the item, and the number of shares for which voting rights may not be exercised shall not be calculated as part of the voting rights represented by attending shareholders. (Paragraph 10, Article 10)

  1. For the "Comparison Table of the Drafted Amendment to Rules of Procedures for Shareholders' Meeting" of the Bank, please refer to Page 59 ~ 64 of the Handbook.

Resolution:

-58-

Comparison Table of the Drafted Amendment to Rules of Procedures for Shareholders' Meeting of Taiwan Business Bank Co., Ltd.

Amended Provisions Current Provisions Description
Article 1 (Purpose and applying
principle)
To establish a strong governance
system and sound supervisory
capabilities for the Bank's
shareholders' meetings, and to
strengthen management capabilities,
the Bank established the Rules for
compliance.
Except for otherwise required by the
laws and regulations as well as the
Articles of Association of the Bank,
the rules of procedures for
shareholders' meeting of the Bank shall
be subject to the Rules.
Article 1 (Applying principle)
Except for otherwise required by the
laws and regulations as well as the
Articles of Association of the Bank,
matters related to the shareholders'
meeting of the Bank shall be subject to
the Rules.		 1. Added the
purpose in
Paragraph 1.
2. Amended the
wording of
Paragraph 2
according to the
name of the
regulations.
Article 3 (Preparation for documents
such as the sign-in book)
The Bank shall set out registration
time, registration location, and other
notes for shareholders in the letter of
advice for the meeting.
The registration time for shareholders
in the previous Paragraph shall be at
least 30 minutes prior to the beginning
of the meeting. The registration
location shall have clear signs as well
as enough and eligible personnel for
registration.
The Bank shall prepare the sign-in
book for attending shareholders or
proxies of shareholders to sign-in, or
use sign-in cards from the shareholders
or proxies of shareholders to substitute
signing in.
The Bank shall deliver the meeting
handbook, annual report, attendance
card, speech slip, voting ticket, and
supplemental information of the
meeting to the shareholders or proxies
of shareholders attending the
shareholders' meeting. Election tickets
shall be otherwise enclosed when there
is an election involved.
Shareholders or proxies of
shareholders shall attend the
shareholders' meeting with the
presence of the attendance card,sign-

Article 3 (Preparation for documents
such as the sign-in book)
The Bank shall set out registration
time, registration location, and other
notes for shareholders in the letter of
advice for the meeting.
The registration time for shareholders
in the previous Paragraph shall be at
least 30 minutes prior to the beginning
of the meeting. The registration
location shall have clear signs as well
as enough and eligible personnel for
registration.
The Bank shall prepare the sign-in
book for attending shareholders or
proxies of shareholders to sign-in, or
use sign-in cards from the shareholders
or proxies of shareholders to substitute
signing in.
The Bank shall deliver the meeting
handbook, annual report, attendance
card, speech slip, voting ticket, and
supplemental information of the
meeting to the shareholders or proxies
of shareholders attending the
shareholders' meeting. Election tickets
shall be otherwise enclosed when there
is an election involved.
Shareholders or proxies of
shareholders shall attend the
shareholders' meeting with the
presence of the attendance card,sign-

Added Paragraph 6,
moved the current
Paragraph 6 of
Article 9 to this
Article, and
amended wording
with reference to
Paragraph 6, Article
6 of the "Sample
Template for XXX
Co., Ltd. Rules of
Procedure for
Board of Directors
Meetings" (the
"Sample
Template").

-59-

Amended Provisions Current Provisions Description
in card, or other attendance
certificates. The solicitors for soliciting
proxies shall bring the identity
document 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 has
been delegated to attend the
shareholders' meeting, only one person
should be delegated as theproxy.
in card, or other attendance
certificates. The solicitors for soliciting
proxies shall bring the identity
document for verification.
Article 8 (Chairman and attending
personnel at the shareholders' meeting)
Where a shareholders' meeting is
convened by the Board, the meeting
shall be chaired by the Chairman.
When the Chairman is on leave or for
any reason unable to exercise the
powers, the Chairman shall designate a
Managing Director as the proxy. When
there is no designation made, a
Managing Director shall be elected
among themselves.
Where the Director is represented by a
Managing Director, the Managing
Director shall have been a Managing
Director for more than six months and
shall have in-depth knowledge
regarding the financial and business
condition of the Bank.
A shareholders' meetings convened by
the Board shall be attended by a
majority of the Directors and at least
one member of each functional
committee on behalf of the committee.
The attendance shall be recorded in the
meeting minutes.
Where a shareholders' meeting is
convened by other conveners entitled
to calling the meeting other than the
Board, the meeting shall be chaired by
the convener. Where there are two or
more conveners, one of the conveners
shall be elected among themselves.
The lawyer, accountant, or relevant
personnel engaged by the Bank may
attend the shareholders' meeting.



Article 8 (Chairman and attending
personnel at the shareholders' meeting)
Where a shareholders' meeting is
convened by the Board, the meeting
shall be chaired by the Chairman.
When the Chairman is unable to
present himself/herself, the Chairman
shall designate a Managing Director as
the proxy. When there is no
designation made, a Managing
Director shall be elected among
themselves.
Where the Director is represented by a
Managing Director, the Managing
Director shall have been a Managing
Director for more than six months and
shall have in-depth knowledge
regarding the financial and business
condition of the Bank.
Where a shareholders' meeting is
convened by other conveners entitled
to calling the meeting other than the
Board, the meeting shall be chaired by
the convener. Where there are two or
more conveners, one of the conveners
will be elected among themselves.
The lawyer, accountant, or relevant
personnel engaged by the Bank may
attend the shareholders' meeting.
The meeting staff organizing the
shareholders' meeting shall wear the
identification card or armband.
1. Amended the
wording
according to
Paragraph 1,
Article 7 of the
aforementioned
Sample
Template.
2. Added
Paragraph 3 to
improve our
corporate
governance.
3. Changed the
sequence and
amended
wording of the
remaining
Paragraphs.
4. Move the
current
Paragraph 5 of
the Article to
Paragraph 1,
Article 11.

-60-

Amended Provisions Current Provisions Description
Article 9 (Speech of shareholders)
Before the speech, the attending
shareholders shall complete the speech
slip and state the purpose of such
speech, shareholders account number
(or attendance card number) and
account name; the Chairman may
determine the speech order.
Attending shareholders who submitted
the speech slip without giving the
speech shall be deemed as having
provided no speech. Where the speech
content deviates from the speech slip,
the speech content shall prevail.
During the speech of an attending
shareholder, except for receiving the
consent from the Chairman and the
speaking shareholder, other
shareholders shall not speak out and
interrupt. The Chairman shall stop
such shareholders who violate the
requirement.
Without consent from the Chairman,
each shareholder shall not speak more
than two times regarding the same
proposal, and each time shall not
exceed five minutes.
Where the speech of a shareholder
violates the requirement in the
previous Paragraph, the Chairman may
stop the speech.
When a corporate shareholder assigned
more than two representatives to attend
the shareholders' meeting, only one
person may give a speech regarding
the same proposals.
After the speech of an attending
shareholder, the Chairman may, in
person or designate relevant personnel
to, respond.


Article 9 (Speech of Shareholders)
Before the speech, the attending
shareholders shall complete the speech
slip and state the purpose of such
speech, shareholders account number
(or attendance card number) and
account name; the Chairman may
determine the speech order.
Attending shareholders who submitted
the speech slip without giving the
speech shall be deemed as having
provided no speech. Where the speech
content deviates from the speech slip,
the speech content shall prevail.
During the speech of an attending
shareholder, except for receiving the
consent from the Chairman and the
speaking shareholder, other
shareholders shall not speak out and
interrupt. The Chairman shall stop
such shareholders who violate the
requirement.
Without consent from the Chairman,
each shareholder shall not speak more
than two times regarding the same
proposal, and each time shall not
exceed five minutes.
Where the speech of a shareholder
violates the requirement in the
previous Paragraph, the Chairman may
stop the speech.
Where a corporation is engaged to
attend the shareholders' meeting, the
corporation may only assign one
person as the representative to attend.
When a corporate shareholder assigned
more than two representatives to attend
the shareholders' meeting, only one
person may give a speech regarding
the same proposals.
After the speech of an attending
shareholder, the Chairman may, in
person or designate relevant personnel
to,respond.


1. Moved the
current
Paragraph 6 of
the Article to
Paragraph 6,
Article 3.
2. Changed
sequence of the
remaining
Paragraphs.
Article 10 (Ballot, scrutinize balloting,
and abstaining system for related
parties)
Except for otherwise required by the
Company Act and Articles of
Association, the ballot for a proposal
shall be approved bythe attending		 Article 10 (Ballot, scrutinize balloting,
and abstaining system for related
parties)
Except for otherwise required by the
Company Act and Articles of
Association, the ballot for a proposal
shall be approved bythe attending		 1. To improve our
corporate
governance,
deleted the
requirements
related to the
proposal is

-61-

Amended Provisions Current Provisions Description
shareholders who represent half of the
voting rights. At the time of a vote, for
each proposal, the Chairman or a
person designated by the Chairman
shall first 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.
A shareholder shall be entitled to one
vote for each share held, except when
the shares are deemed as non-voting
shares under Article 179-2 of the
Company Act.
For the resolutions of the shareholders'
meeting, the number of shares of the
non-voting shareholders is not
included in the total number of issued
shares.
Except for otherwise required by the
law, regarding the proxy engaged by
the shareholder for attending the
shareholders' meeting, when one proxy
is engaged by two or more
shareholders, the voting right of such
proxy shall not exceed 3% of the
number of total issued shares. In the
case of exceeding 3%, the exceeding
portion of voting rights will not be
counted.
For the convening of the Bank's
shareholders' meeting, the electronic
method shall be deemed as one of the
exercising channels for voting rights;
also, the written method shall also be
adopted for exercising voting rights.
The exercising method shall be set out
in the convening notice for
shareholders' meeting. Shareholders
who exercise their voting rights via
written or electronic methods shall be
deemed as attending the shareholders'
meeting in person. However, they shall
be deemed as abstaining from the
extempore motions and the amendment
on the originalproposal at the





shareholders who represent half of the
voting rights. During which, where
there is no objection upon the inquiry
of the Chairman, the ballot shall be
deemed as the passing by the majority,
and its efficacy shall rank the same as
a vote by poll.
A shareholder is entitled to one vote
with each share held.
Except for otherwise required by the
Company Act, regarding the proxy
engaged by the shareholder for
attending the shareholders' meeting,
when one proxy is engaged by two or
more shareholders, the voting right of
such proxy shall not exceed 3% of the
number of total issued shares. In the
case of exceeding 3%, the exceeding
portion of voting rights will not be
counted.
For the convening of the Bank's
shareholders' meeting, the electronic
method shall be deemed as one of the
exercising channels for voting rights;
also, the written method shall also be
adopted for exercising voting rights.
The exercising method shall be set out
in the convening notice for
shareholders' meeting. Shareholders
who exercise their voting rights via
written or electronic methods shall be
deemed as attending the shareholders'
meeting in person. However, they shall
be deemed as abstaining from the
extempore motions and the amendment
on the originalproposal at the

passed when
none voiced an
objection in
Paragraph 1 and
stated that a
vote shall be
performed for
each proposal
and the results
for each
proposal shall
be entered into
the MOPS with
reference to the
Paragraph 5,
Article 13 of the
mentioned
Sample
Template.
2. Added the
precondition
that a
shareholder
shall be entitled
to one vote for
each share held
in Paragraph 2
according to
Article 179 of
the Company
Act and with
reference to
Paragraph 1,
Article 13 of the
mentioned
Sample
Template.
3. Added
Paragraph 3 and
stated that the
number of
shares of the
non-voting
shareholders is
not included in
the total number
of issued shares
with reference
to Paragraph 2,
Article 12 of the
mentioned

-62-

Amended Provisions Current Provisions Description
shareholders' meeting.
Shareholders who exercised their
voting rights via written or electronic
methods as set out in the previous
Paragraph, such shareholders shall
deliver their instruction to the Bank
two days prior to the convening of the
shareholders' meeting. Shall there be
duplicate instructions, the instruction
delivered earlier shall prevail.
However, where the shareholder
declared to cancel the previous
instruction shall not be subject to the
requirements.
After shareholders exercised their
voting rights via written or electronic
methods, if such shareholders wish to
attend the shareholders' meeting in
person, they shall cancel the
instruction for exercising their voting
rights in the previous Paragraph in the
same manner adopted for exercising
their voting rights two days before the
convening of the shareholders'
meeting. For canceling made after the
past due, the voting right exercised via
written or electronic methods shall
prevail. Where shareholders exercised
their voting rights via written or
electronic methods and engaged
proxies for attending the shareholders'
meeting with power of attorney, the
voting right exercised by the attending
proxies shall prevail.
Shall there be revision or substitute for
the same proposal, the Chairman shall
combine such revision or substitute to
the original proposal and determine the
voting sequence. If any of the
proposals are deemed obsolete, the
other proposals shall be deemed as
being rejected, and exempted from the
vote.
Where a shareholder has personal
interests in the matter of the meeting
that may endanger the interests of the
Bank, the shareholder shall not
participate in the ballot, and shall not
exercise voting rights on behalf of
other shareholders.
The number of shares for which voting
shareholders' meeting.
Shareholders who exercised their
voting rights via written or electronic
methods as set out in the previous
Paragraph, such shareholders shall
deliver their instruction to the Bank
two days prior to the convening of the
shareholders' meeting. Shall there be
duplicate instructions, the instruction
delivered earlier shall prevail.
However, where the shareholder
declared to cancel the previous
instruction shall not be subject to the
requirements.
After shareholders exercised their
voting rights via written or electronic
methods, if such shareholders wish to
attend the shareholders' meeting in
person, they shall cancel the
instruction for exercising their voting
rights in the previous Paragraph in the
same manner adopted for exercising
their voting rights no later than two
days before the convening of the
shareholders' meeting. For canceling
made after the past due, the voting
right exercised via written or electronic
methods shall prevail. Where
shareholders exercised their voting
rights via written or electronic methods
and engaged proxies for attending the
shareholders' meeting with power of
attorney, the voting right exercised by
the attending proxies shall prevail.
Shall there be revision or substitute for
the same proposal, the Chairman shall
combine such revision or substitute to
the original proposal and determine the
voting sequence. If any of the
proposals are deemed obsolete, the
other proposals shall be deemed as
being rejected, and exempted from the
vote.
Where a shareholder has personal
interests in the matter of the meeting
that may endanger the interests of the
Bank, the shareholder shall not
participate in the ballot, and shall not
exercise voting rights on behalf of
other shareholders.
The scrutineers and counting personnel



Sample
Template.
4. Amended the
wording of
Paragraph 4
according to
Article 177 of
the Company
Act.
5. Added
Paragraph 10
and stated that
when a
shareholder is
an interested
party in any
item of the
agenda, and
there is the
likelihood that
such a conflict
of interest
would prejudice
the shareholder,
and the number
of shares for
which voting
rights may not
be exercised
shall not be
calculated as
part of the
voting rights
represented by
attending
shareholders
with reference
to Paragraph 4,
Article 12 of the
mentioned
Sample
Template.
6. Amended the
wording of
Paragraphs 7
and 9.
7. Changed the
sequence of the
remaining
Paragraphs.

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Amended Provisions Current Provisions Description
rights may not be exercised under the
preceding Paragraph shall not be
calculated as part of the voting rights
represented by attending shareholders
The scrutineers and counting personnel
for the ballot of the proposal shall be
designated by the Chairman, but the
scrutineers shall be shareholders. The
ballot or the counting process for
elective proposals shall be carried out
publicly at the venue of the
shareholders' meeting. Also, upon the
completion of counting, the results of
the ballot shall be announced at the
scene, including the statistical number
of votes, and made a record
accordingly.
for the ballot of the proposal shall be
designated by the Chairman, but the
scrutineers shall be shareholders. The
ballot or the counting process for
elective proposals shall be carried out
publicly at the venue of the
shareholders' meeting. Also, upon the
completion of counting, the results of
the ballot shall be announced at the
scene, including the statistical number
of votes, and made a record
accordingly.
Article 11 (Maintain the order of the
meeting venue)
The meeting staff organizing the
shareholders' meeting shall wear the
identification card or armband.
The Chairman may instruct
disciplinary officers or security
personnel to help keep the order of the
meeting. Disciplinary officers or
security personnel shall wear armbands
or have identification card with
"Disciplinary Officer" texts when help
keep the order of the meeting.
For meeting venue equipped with an
amplification system, the Chairman
may stop the speech of a shareholder
who fails to use the system prepared
by the Bank.
Where a shareholder violates the Rules
of Procedures and disagrees with the
correction from the Chairman, or
obstructs the meeting process and fails
to obey after being stopped, the
Chairman may instruct disciplinary
officers or security personnel to escort
the shareholder leaving the meeting
venue.

Article 11 (Maintain the order of the
meeting venue)
The Chairman may instruct
disciplinary officers (or security
personnel) to help keep the order of the
meeting. Disciplinary officers (or
security personnel) shall wear
armbands with "Disciplinary Officer"
texts when help keep the order of the
meeting.
For meeting venue equipped with an
amplification system, the Chairman
may stop the speech of a shareholder
who fails to use the system prepared
by the Bank.
Where a shareholder violates the Rules
of Procedures and disagrees with the
correction from the Chairman, or
obstructs the meeting process and fails
to obey after being stopped, the
Chairman may instruct disciplinary
officers (or security personnel) to escor
the shareholder leaving the meeting
venue.

t
1. Added
Paragraph 1 by
moving the
current
Paragraph 5 of
Article 8 to this
Article.
2. Amended
wording with
reference to
Paragraph 2,
Article 17 of the
mentioned
Sample
Template.

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V. Questions and Motions

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VI.Appendices

1. Rules of Procedures for Shareholders' Meetings of Taiwan Business Bank Co., Ltd.

The annual shareholders' meeting passed the Rul es of Procedures on November 16, 1996. The 1st amendment was made by the annual shareholders' meeting on December 19, 1998. The 2nd amendment was made by the annual shareholders' meeting on May 18, 2001. The 3rd amendment was made by the annual shareholder s' meeting on May 24, 2002. The 4th amendment was made by the annual shareholders' meeting on June 23, 2010. The 5th amendment was made by the annual shareholders' meeting on May 25, 2012. The 6th amendment was made by the annual shareholders' meeting on J une 21,2013.

Article 1 (Applying principle)

Except for otherwise required by the laws and regulations as well as the Articles of Association of the Bank, matters related to the shareholders' meeting of the Bank shall be subject to the Rules.

Article 2 (Convening and notice for shareholders' meeting)

Except for otherwise required by laws and regulations, the shareholders' meeting shall be convened by the Board.

A notice shall be provided to all shareholders for the convening of the annual shareholders' meeting 30 days prior to the meeting. The Bank may notify shareholders holding less than 1,000 inscribed stock by way of entering the information into the Market Observation Post System as announcement 30 days prior to the meeting. A notice shall be provided to all shareholders for the convening of the extraordinary general meeting 15 days prior to the meeting. The Bank may notify shareholders holding less than 1,000 inscribed stock by way of entering the information into the Market Observation Post System as announcement 15 days prior to the meeting.

The notice and announcement shall set out the reason for the meeting. When approved by the respondent, the notice may be made via electronic methods.

Article 3 (Preparation for documents such as the sign-in book)

The Bank shall set out registration time, registration location, and other notes for shareholders in the letter of advice for the meeting.

The registration time for shareholders in the previous paragraph shall be at least 30 minutes prior to the beginning of the meeting. The registration location shall have clear signs as well as enough and eligible personnel for registration.

The Bank shall prepare the sign-in book for attending shareholders or proxies of shareholders to sign-in, or use sign-in cards from the shareholders or proxies of shareholders to substitute signing in.

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The Bank shall deliver the meeting handbook, annual report, attendance card, speech slip, voting ticket, and supplemental information of the meeting to the shareholders or proxies of shareholders attending the shareholders' meeting. Election tickets shall be otherwise enclosed when there is election involved.

Shareholders or proxies of shareholders shall attend the shareholders' meeting with the presence of the attendance card, sign-in card, or other attendance certificates. The solicitors for soliciting proxies shall bring the identity document for verification.

Article 4 (Principles for the convening venue and time)

The convening venue of the shareholders’ meeting shall be at the location of the Bank or a location where is convenient for shareholders to present at and suitable for the convening of the shareholders’ meeting. The starting time of the meeting shall not be earlier than 9:00 am or later than 3:00 pm.

Article 5 (Calculation for the number of presenting shares and the meeting)

The attendance of the shareholders' meeting shall be based on the shares. The number of presenting shares shall be based on the sign-in book or the sign-in cards provided, plus the number of shares with voting right exercised in written or electronic form.

The Chairman shall declare the start of the meeting upon the meeting time where the number of shares represented by the attending shareholders has exceeded half of the issued shares. However, the Chairman may declare delaying the meeting when the attending shareholders are less than the quota, and the number of time for such delay shall be limited to two times. The total time of delaying shall not exceed one hour. After delaying for two times, if there are still insufficient shareholders presenting but shareholders presenting who represent one-third or more of the total number of issued shares, a tentative resolution may be made when receiving consent from the majority attending shareholders' voting rights according to Paragraph 1, Article 175 of the Company Act.

Before the closure of the meeting, if the attending shareholders represent more than half of the total issued shares, a tentative resolution may be made by the Chairman, and re-submitted to the shareholders’ meeting for approval according to Article 174 of the Company Act.

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Article 6 (Discussion on proposals)

Where a shareholders’ meeting is convened by the Board, the meeting agenda shall be determined by the Board. The meeting shall be carried out according to the scheduled agenda, and the agenda shall not be altered unless being resolved by the shareholders’ meeting.

Where a shareholders’ meeting is convened by other conveners entitled for calling the meeting, the requirements in the previous paragraph shall apply.

The Chairman may not declare adjournment before the closure of proceedings (including extemporaneous motions) for the scheduled agenda. When the Chairman declared adjournment in violation with the Rules, one person may be elected as the Chairman with the consent from the attending shareholders who represent the majority of the voting rights and continue the meeting.

The Chairman shall provide enough time for sufficient illustration and discussion on the proposal and amendment or extemporaneous motions proposed by the shareholders, where the Chairman considers the discussion has been carried out to the extent that a vote shall be conducted, the Chairman may declare and stop the discussion and proceed through the vote.

Article 7 (Audio/video recording of the entire proceedings)

The Bank shall provide audio/video recording of the entire proceedings from the registration process of shareholders, meeting process, voting and counting process.

The audio/video recording mentioned in the previous paragraph shall be preserved for at least one year. However, if a shareholder files a suit under Article 189 of the Company Act, they shall be kept until the conclusion of the litigation.

Article 8 (Chairman and attending personnel at the shareholders' meeting)

Where a shareholders’ meeting is convened by the Board, the meeting shall be chaired by the Chairman. When the Chairman is unable to present himself/herself, the Chairman shall designate a managing director as the proxy. When there is no designation made, a managing director shall be elected among themselves.

Where the Director is represented by a managing director, the managing director shall have been a managing director for more than six months and shall have in-depth knowledge regarding the financial and business condition of the Bank.

Where a shareholders’ meeting is convened by other conveners entitled for calling the meeting other than the Board, the meeting shall be chaired by the convener. Where there are two or more conveners, one of the conveners shall be elected among themselves.

The lawyer, accountant, or relevant personnel engaged by the Bank may attend the shareholders’ meeting.

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The meeting staff organizing the shareholders’ meeting shall wear the identification card or armband.

Article 9 (Speech of Shareholders)

Before the speech, the attending shareholders shall complete the speech slip and state the purpose of such speech, shareholders account number (or attendance card number) and account name; the Chairman may determine the speech order.

Attending shareholders who submitted the speech slip without giving the speech shall be deemed as no such speech. Where the speech content deviates from the speech slip, the speech content shall prevail.

During the speech of an attending shareholder, except for receiving the consent from the Chairman and the speaking shareholder, other shareholders shall not speak out and interrupt. The Chairman shall stop such shareholders who violate the requirement.

Without the consent from the Chairman, each shareholder shall not speak more than two times regarding the same proposal, and each time shall not exceed five minutes.

Where the speech of a shareholder violates the requirement in the previous paragraph, the Chairman may stop the speech.

Where a corporation is engaged to attend the shareholders’ meeting, the corporation may only assign one person as the representative to attend.

When a corporation shareholder assigned more than two representatives to attend the shareholders’ meeting, only one person may give a speech regarding the same proposals.

After the speech of an attending shareholder, the Chairman may, in person or designate relevant personnel to, respond.

Article 10 (Ballot, scrutinize balloting, and abstaining system for related parties)

Except for otherwise required by the Company Act and Articles of Association, the ballot for a proposal shall be approved by the attending shareholders who represent half of the voting rights. During which, where there is no objection upon the inquiry of the Chairman, the ballot shall be deemed as the passing by the majority, and its efficacy shall rank the same as a vote by poll.

A shareholder is entitled to one vote with each share held.

Except for otherwise required by the Company Act, regarding the proxy engaged by the shareholder for attending the shareholders' meeting, when one proxy is engaged by two or more shareholders, the voting right of such proxy shall not exceed 3% of the number of total issued shares. In the case of exceeding 3%, the exceeding portion of voting rights will not be counted.

For the convening of the Bank’s shareholders’ meeting, the electronic method shall be deemed as one of the exercising channels for voting rights; also, the written

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method shall also be adopted for exercising voting rights. The exercising method shall be set out in the convening notice for shareholders' meeting. Shareholders who exercise their voting rights via written or electronic methods shall be deemed as attending the shareholders' meeting in person. However, they shall be deemed as abstaining from the extemporaneous motions and the amendment on the original proposal at the shareholders' meeting.

Shareholders who exercised their voting rights via written or electronic methods as set out in the previous paragraph, such shareholders shall deliver their instruction to the Bank two days prior to the convening of the shareholders' meeting. Shall there be duplicate instructions, the instruction delivered earlier shall prevail. However, where the shareholder declared to cancel the previous instruction shall not be subject to the requirements.

After shareholders exercised their voting rights via written or electronic methods, if such shareholders wish to attend the shareholders' meeting in person, they shall cancel the instruction for exercising their voting rights in the previous paragraph in the same manner adopted for exercising their voting rights at least two days before the convening of the shareholders' meeting. For canceling made after the past due, the voting right exercised via written or electronic methods shall prevail. Where shareholders exercised their voting rights via written or electronic methods and engaged proxies for attending the shareholders' meeting with power of attorney, the voting right exercised by the attending proxies shall prevail.

Shall there be revision or substitute for the same proposal, the Chairman shall combine such revision or substitute to the original proposal and determine the voting sequence. If any of the proposals are deemed obsolete, the other proposals shall be deemed as being rejected, and exempted from the vote.

Where a shareholder has personal interests in the matter of the meeting that may endanger the interests of the Bank, the shareholder shall not participate in the ballot, and shall not exercise voting rights on behalf of other shareholders.

The scrutineers and counting personnel for the ballot of the proposal shall be designated by the Chairman, but the scrutineers shall be shareholders. The ballot or the counting process for elective proposals shall be carried out publicly at the venue of the shareholders' meeting. Also, upon the completion of counting, the results of the ballot shall be announced at the scene, including the statistical number of votes, and made a record accordingly.

Article 11 (Maintain the order of the meeting venue)

The Chairman may instruct disciplinary officers (or security personnel) to help keep the order of the meeting. Disciplinary officers (or security personnel) shall wear armbands with “Disciplinary Officer” texts when help keep the order of the meeting.

For meeting venue equipped with an amplification system, the Chairman may stop the speech of a shareholder who fails to use the system prepared by the Bank.

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Where a shareholder violates the Rules of Procedures and disagrees with the correction from the Chairman, or obstructs the meeting process and fails to obey after being stopped, the Chairman may instruct disciplinary officers (or security personnel) to escort the shareholder leaving the meeting venue.

Article 12 (Delegation and authorization principles for shareholders)

A shareholder may present a power of attorney printed and issued by the Bank that sets out the scope of authorization to engage a proxy for attending the shareholders' meeting at each shareholders' meeting.

One shareholder may only present one power of attorney to engage one proxy. The power of attorney shall be delivered to the Bank five days prior to the convening of the shareholders' meeting. Shall there be duplicate power of attorney, the power of attorney delivered earlier shall prevail. However, where the shareholder declared to cancel the previous power of attorney shall not be subject to the requirements.

After delivered the power of attorney to the Bank, if the shareholders wish to attend the shareholders' meeting in person or wish to exercise their voting rights via written or electronic methods, they shall cancel the power of attorney in writing to the Bank two days before the convening of the shareholders' meeting. For canceling made after the past due, the voting right exercised by the attending proxies shall prevail.

Article 13 (External announcement)

Regarding the number of shares solicited by solicitors and the number of shares represented by proxies, the Bank shall prepare a statistic statement on the date of the shareholders' meeting and make clear disclosures at the venue of the shareholders' meeting.

Regarding the resolutions at the shareholders' meeting, where such resolutions involve significant information required by the laws and regulations or required by the Taiwan Stock Exchange Corporation, the Bank shall transmit such content to the Market Observation Post System within the prescribed time.

Article 14 (Meeting minutes and signed matters)

A minute book shall be prepared for the discussions at shareholder' meetings, and the minute book shall be dispatched to all shareholders within 20 days from the meeting after being signed by or affixed seal by the Chairman.

The dispatch of the minute book in the previous paragraph may be carried out via electronic or announcement methods.

The minute book shall be duly recorded based on the year, month, date, name of the Chairman, resolution method, the summary of the discussion process, and its results, and shall be permanently preserved during the existence of the Bank.

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Regarding the resolution method in the previous paragraph, if the Chairman puts the matter before all shareholders and none voices an objection, "the proposal is passed after the Chairman put the matter before all attending shareholders and none voiced an objection." However, where there is an objection from shareholders, set out the method of voting by poll and the ratio of the number of passing votes to the total voting rights.

Article 15 (Election)

Where there is a Director election at the shareholders' meeting, the election shall be carried out according to the Procedures for Directors' Election of the Bank, and the election results shall be announced at the scene, including the name list of the elected Directors and the number of passing votes thereof.

The election votes for the election matter in the previous paragraph shall be sealed and signed by the scrutinizers, and shall be kept for at least one year. However, if a shareholder files a suit under Article 189 of the Company Act, they shall be kept until the conclusion of the litigation.

Article 16 (Break and reconvening of the meeting)

During the course of the meeting, the Chairman may determine the time to declare breaks on his/her discretion. In the case of force majeure, the Chairman may determine to suspend the meeting and declare the time of the reconvening of the meeting subject to the condition.

Before the closure of the discussion (including extemporaneous motions) under the agenda scheduled by the shareholders' meeting, if no continuous usage of the venue of the meeting, the shareholders' meeting may resolve to seek another venue for the reconvening of the meeting.

The shareholders' meeting may resolve to adjourn or reconvene the meeting within 5 days according to the requirements under Article 182 of the Company Act.

Article 17 (Implementation)

The Rules of Procedures was implemented upon receiving the approval from the shareholders’ meeting, and shall do the same upon any amendment thereto.

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2. Article of Association of the Taiwan Business Bank Co., Ltd.

Established by the extraordinary general meeting on April 12, 1976 Approved by the Letter (65) Tai-cai-chien No. 15056 issued by the Ministry of Finance on May 8, 1976 The 1st amendment was made by the 3rd annual shareholders' meeting on September 19, 1978 Approved by the Letter (67) Tai-cai-chien No. 23084 issued by the Ministry of Finance on December 11, 1978 The 2nd amendment was made by the 4th annual shareholders' meeting on September 12, 1979 Approved by the Letter (68) Tai-cai-chien No. 24747 issued by the Ministry of Finance on December 24, 1979 The 3rd amendment was made by the 5th annual shareholders' meeting on October 8, 1980 Approved by the Letter (70) Tai-cai-rong No. 13472 issued by the Ministry of Finance on March 26, 1981 The 4th amendment was made by the 6th annual shareholders' meeting on October 14, 1981 Approved by the Letter (70) Tai-cai-rong No. 24142 issued by the Ministry of Finance on November 23, 1981 The 5th amendment was made by the 8th annual shareholders' meeting on September 13, 1983 Approved by the Letter (73) Tai-cai-rong No. 15728 issued by the Ministry of Finance on April 27, 1984 The 6th amendment was made by the 9th annual shareholders' meeting on September 24, 1984 Approved by the Letter (74) Tai-cai-rong No. 17496 issued by the Ministry of Finance on June 13, 1985 The 7th amendment was made by the 1st extraordinary shareholders' meeting in 1985 on June 5, 1985 Approved by the Letter (74) Tai-cai-rong No. 27088 issued by the Ministry of Finance on December 31, 1985 The 8th amendment was made by the 10th annual shareholders' meeting on September 24, 1985 Approved by the Letter Tai-cai-rong No. 7561189 issued by the Ministry of Finance on July 31, 1986 The 9th amendment was made by the 12th annual shareholders' meeting on September 24, 1987 Approved by the Letter Tai-cai-rong No. 770174351 issued by the Ministry of Finance on June 3, 1988 The 10th amendment was made by the 13th annual shareholders' meeting on October 17, 1988 Approved by the Letter Tai-cai-rong No. 780040823 issued by the Ministry of Finance on February 23, 1989 The 11th amendment was made by the 16th annual shareholders' meeting on October 19, 1991 Approved by the Letter Tai-cai-rong No. 810268921 issued by the Ministry of Finance on July 21, 1991 Approved by the Letter Tai-cai-rong No. 811214231 issued by the Ministry of Finance on October 8, 1992 Approved by the Letter Tai-cai-rong No. 810502770 issued by the Ministry of Finance on November 18, 1992 The 12th amendment was made by the 17th annual shareholders' meeting on December 5, 1992 Approved by the Letter Tai-cai-rong No. 821153565 issued by the Ministry of Finance on August 11, 1993 The 13th amendment was made by the 18th annual shareholders' meeting on November 29, 1993 Approved by the Letter Tai-cai-rong No. 832297402 issued by the Ministry of Finance on June 2, 1994 The 14th amendment was made by the 19th annual shareholders' meeting on October 15, 1994 Approved by the Letter Tai-cai-rong No. 8470900 issued by the Ministry of Finance on March 17, 1995 The 15th amendment was made by the 20th annual shareholders' meeting on November 25, 1995 Approved by the Letter Tai-cai-rong No. 85526951 issued by the Ministry of Finance on June 14, 1996 The 16th amendment was made by the 21st annual shareholders' meeting on November 16, 1996 Approved by the Letter Tai-cai-rong No. 86092674 issued by the Ministry of Finance on April 9, 1997 The 17th amendment was made by the 1st extraordinary shareholders' meeting in 1998 on May 12, 1998 The 18th amendment was made by the 24th annual shareholders' meeting in 2000 on June 3, 2000 The 19th amendment was made by the 25th annual shareholders' meeting in 2001 on May 18, 2001 Received and acknowledged through the Letter Tai-cai-rong No. 9022900 issued by the Ministry of Finance on June 12, 2001 The 20th amendment was made by the 26th annual shareholders' meeting in 2002 on May 24, 2002 Approved by the Letter Jing-shou-shang-zi No. 09101207880 issued by the Ministry of Economic Affairs on June 19, 2002 The 21st amendment was made by the 27th annual shareholders' meeting in 2003 on June 6, 2003 Approved by the Letter Jing-shou-shang-zi No. 09201255440 issued by the Ministry of Economic Affairs on August 25, 2003 The 22nd amendment was made by the 1st extraordinary shareholders' meeting in 2004 on February 6, 2004 The 23rd amendment was made by the 28th annual shareholders' meeting in 2004 on June 11, 2004 Approved by the Letter Jing-shou-shang-zi No. 093011111210 issued by the Ministry of Economic Affairs on July 2, 2004 The 24th amendment was made by the 1st extraordinary shareholders' meeting in 2005 on March 2, 2005 Approved by the Letter Jing-shou-shang-zi No. 09401118120 issued by the Ministry of Economic Affairs on June 30, 2005 The 25th amendment was made by the annual shareholders' meeting of the Bank in 2006 on June 9, 2006 Approved by the Letter Jing-shou-shang-zi No. 09501187220 issued by the Ministry of Economic Affairs on August 22, 2006 The 26th amendment was made by the annual shareholders' meeting of the Bank in 2008 on June 13, 2008 Approved by the Letter Jing-shou-shang-zi No. 09701181380 issued by the Ministry of Economic Affairs on July 21, 2008 The 27th amendment was made by the annual shareholders' meeting of the Bank in 2010 on June 23, 2010 Approved by the Letter Jing-shou-shang-zi No. 09901217300 issued by the Ministry of Economic Affairs on September 29, 2010 The 28th amendment was made by the annual shareholders' meeting of the Bank in 2011 on June 24, 2011 Approved by the Letter Jing-shou-shang-zi No. 10001151580 issued by the Ministry of Economic Affairs on July 12, 2011 The 29th amendment was made by the annual shareholders' meeting of the Bank in 2012 on May 25, 2012 Approved by the Letter Jing-shou-shang-zi No. 10101116160 issued by the Ministry of Economic Affairs on June 25, 2012 The 30th amendment was made by the annual shareholders' meeting of the Bank in 2013 on June 21, 2013 Approved by the Letter Jing-shou-shang-zi No. 10201129360 issued by the Ministry of Economic Affairs on July 8, 2013 The 31st amendment was made by the annual shareholders' meeting of the Bank in 2015 on June 26, 2015 Approved by the Letter Jing-shou-shang-zi No. 10601116160 issued by the Ministry of Economic Affairs on August 23, 2017 The 32nd amendment was made by the annual shareholders' meeting of the Bank in 2016 on June 24, 2016 Approved by the Letter Jing-shou-shang-zi No. 10501158980 issued by the Ministry of Economic Affairs on July 12, 2016 The 33rd amendment was made by the annual shareholders' meeting of the Bank in 2017 on June 16, 2017 The 34th amendment was made by the annual shareholders' meeting of the Bank in 2018 on June 29, 2018 Approved by the Letter Jing-shou-shang-zi No. 10701087000 issued by the Ministry of Economic Affairs on July 18, 2018 The 35th amendment was made by the annual shareholders' meeting of the Bank in 2019 on June 14, 2019 Approved by the Letter Jing-shou-shang-zi No. 10801142640 issued by the Ministry of Economic Affairs on November 1, 2019

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Chapter I General

  • Article 1: The purpose of the Bank is to comply with the national fiscal policies, provide credits for the public and SMEs, and help SMEs improving their production facilities, financial structures, and ensure the healthy operations and management.

  • Article 2: The Bank is incorporated in accordance with the Banking Act and the Company Act, a limited liability company named as TAIWAN BUSINESS BANK (or TBB) in English.

  • Article 3: The headquarter of the Bank is in Taipei City and may establish subsidiaries at appropriate domestic or overseas locations based on the requirements of its business.

  • Article 4: The Bank shall make announcements on the circulating daily newspaper where the headquarter of the Bank locates or in the manner prescribed by the competent authority.

Chapter II

  • Article 5: The total capital amount of the Bank is NT$100 billion only, and has been divided into 10 billion shares with a nominal value of NT$10 each. The Board is authorized to resolve and issue the un-issued shares in batches.

  • Article 6: The share certificates of the Bank are registered and shall be issued after being signed or stamped by three or more directors according to the law.

  • When issuing new shares, the share certificate shall be printed altogether according to the number of total issuances; however, the share certificates shall be kept by a centralized securities depositary enterprise.

The Bank is exempted from printing any share certificate for the shares issued; however, the Bank shall register the issued shares with a centralized securities depositary enterprise.

  • Article 7: Shareholders of the Bank shall complete and provide their signature specimen for the Bank or the shareholder service agent of the Bank for keeping, and shall do the same upon any changes thereto. The receipt of shareholder’s bonus or exercising shareholder's rights in writing or written contact with the Bank shall use such signature as evidence.

  • Article 8: Transfer of share certificates shall not be set up as a defense against the Bank unless an application for such transfer was made to the Bank or the shareholder service agent of the Bank, and the name/title and residence/domicile of the transferee have been recorded in the shareholders' registrar.

  • The entries in the shareholders' registrar referred to in the preceding paragraph shall not be altered within 60 days prior to the convening

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date of an annual shareholders' meeting, or within 30 days prior to the convening date of an extraordinary shareholders' meeting, or within 5 days prior to the target date fixed for distribution of dividends, bonus or other benefits.

  • Article 9: Shareholder services of the Bank shall be carried out according to Regulations Governing the Administration of Shareholder Services of Public Companies promulgated by the competent authorities.

  • Article 10: Application of transfer and change of name for shareholders, reissue or renewal of new share certificates and other shareholder service matters shall be subject to service charges.

Chapter III Scope of business

Article 11: Scope of business of the Bank is as follow:

  • I. H101081 Small and Medium Business Banking.

  • II. H408011 Futures Exchange Supporting Services.

  • III. H601011 Life Insurance Agency.

  • IV. H601021 Property Insurance Agency

Article 11-1: Scope of business of the Bank is as follow:

  • I. To accept deposits.

  • II. To issue financial debts.

  • III. To discount bills and notes and provide loans.

  • IV. To invest in marketable securities.

  • V. To handle domestic and foreign remittances.

  • VI. To accept commercial drafts.

  • VII. To issue domestic and overseas letter of credits.

  • VIII.To guarantee the issuance of corporate bonds.

  • IX. To guarantee domestic and foreign transactions.

  • X. To act as collecting and paying agent.

  • XI. To handle marketable securities agency business, trading, margin purchase and short sale businesses.

  • XII. To handle operation of futures introducing broker business.

  • XIII.To conduct warehousing, custody and proxy in relation to the businesses.

  • XIV.To conduct safe deposit boxes rental business.

  • XV. To engage in credit card business.

  • XVI.To sell and trade gold bars, gold coins, and silver coins.

  • XVII. To engage in credit activities and auxiliary activities approved by the competent authorities.

  • XVIII. To engage in the short-term note agency business, trading, attesting, and underwriting business.

  • XIX.To engage in public welfare lottery agency business authorized by the competent authorities.

  • XX. To engage in bonds, beneficial securities, or asset-backed securities trading business.

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  • XXI. To engage in the life insurance agency business.

  • XXII. To engage in the property insurance agency business.

  • XXIII. To engage in other related business approved by the competent authorities.

Chapter IV Shareholders’ meetings

  • Article 12: Shareholders’ meetings of the Bank are categorized into annual meetings and extraordinary meetings. Annual meetings shall be convened at least once a year, and it shall be convened by the Board according to the laws within 6 months after each accounting year. Except for otherwise required by the Company Act, extraordinary meetings shall be convened by the Board when necessary. Any or a plural number of shareholder(s) of who has (have) continuously held 3% or more of the total number of outstanding shares for a period of one year or a longer time may, by filing a written proposal setting forth therein the subjects for discussion and the reasons, request the Board to call an extraordinary meeting of shareholders.

  • Article 13: A notice to convene an annual meeting of shareholders shall be given to each Shareholder no later than 30 days prior to the scheduled meeting date and notice to convene an extraordinary meeting of shareholders, a meeting notice shall be given to each shareholder no later than 15 days prior to the scheduled meeting date to notify shareholders regarding the date, venue, and reason for the meeting. The Bank may notify shareholders holding less than 1,000 shares for the convening notice of the shareholders' meeting by way of an announcement.

  • Article 14: Shareholders may present a power of attorney printed (signed or affixed seal) and issued by the Bank that sets out the scope of authorization, deliver to the Bank five days prior to the convening date of the shareholders' meeting to engage a proxy for attending the shareholders' meeting when the shareholder is unable to attend for other causes. One shareholder may only present one power of attorney to engage one proxy.

  • Except for otherwise required by the Company Act, when one proxy is engaged by two or more shareholders in the preceding paragraph, the voting right of such proxy shall not exceed 3% voting rights of the number of total issued shares. In the case of exceeding 3%, the exceeding portion of voting rights will not be counted.

  • Article 15: Where a shareholders’ meeting is convened by the Board, the meeting shall be chaired by the Chairman. When the Chairman is unable to present himself/herself, the Chairman shall designate a Managing Director as the proxy. When there is no designation made, a Managing Director shall be elected among themselves.

Where a shareholders’ meeting is convened by other conveners entitled for calling the meeting other than the Board, the meeting shall be

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chaired by the convener. Where there are two or more conveners, one of the conveners shall be elected among themselves.

  • Article 16: Resolved matters by the shareholders' meeting are as follow:

  • I. To determine and amend the Articles of Association of the Bank.

  • II. Appointment and removal of Directors.

  • III. To examine the statistical forms and report prepared by the Board and the Audit Committee respectively. In order to conduct the examination, the shareholders' meeting may select and appoint inspectors as required.

  • IV. To resolve the capital increase or reduction.

  • V. To resolve on surplus earning distribution or loss appropriation.

  • VI. To resolve on other significant matters.

  • Article 17: Except for otherwise required by the Company Act, the resolution may be adopted by half of the voting rights exercised by the shareholders present at the shareholders’ meeting who represent a majority of the total outstanding shares.

When the number of shareholders present does not constitute the quorum prescribed in the preceding paragraph, but those present represent one-third or more of the total number of issued shares, a tentative resolution may be passed by a majority of those who presented. A notice of such tentative resolution shall be given to each of the shareholders, and reconvene a shareholders’ meeting within one month.

In the aforesaid meeting of shareholders, if the tentative resolution is again adopted by a majority of those present who represent one-third or more of the total number of issued shares, such tentative resolution shall be deemed to be a resolution under the first paragraph.

  • Article 18: A shareholder is entitled to one vote with each share held. However, the shares shall have no voting power under any of the circumstances prescribed in the second paragraph under Article 179 of the Company Act.

  • Article 19: A minute book shall be prepared for the discussions at shareholder' meetings, and the minute book shall be dispatched to all shareholders within 20 days from the meeting after being signed by or affixed seal by the Chairman.

The dispatch of the minute book in the previous paragraph may be carried out via electronic or announcement methods.

The minute book shall set out the year, month, date, name of the Chairman, resolution method, the summary of the discussion process, and its results.

The minute book shall be permanently preserved, the sign-in book (or sign-in) of the attending shareholders and the power of attorney for

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engaging proxies shall be kept for at least one year. However, if a shareholder institutes a suit under Article 189 of the Company Act, they shall be kept until the conclusion of the litigation.

Chapter V Board

  • Article 20: The Bank has 15 Directors, of which, there shall be no less than 3 Independent Directors, and the Board shall not be established with less than one-fifth of the seat for Directors being taken.

The term of the Director shall be three years; however, where a government and a corporate shareholder or its representative is elected as a Director, owing to the change of his/her functional duties, may be replaced by a person.

A candidate nomination system was adopted for the election of the Bank’s Directors (including Independent Directors). Shareholders shall elect Directors from the relevant candidate list thereof.

The elections for both Independent Directors and non-Independent Directors are carried out at once, with the elected number of seats accounted for separately.

The professional qualification, shareholding, concurrent serving restrictions, nomination, and election method, as well as other matter to be complied with regarding independent Directors, shall be based on the relevant requirements from competent authorities.

The total number of shares held by all Directors shall comply with requirements from competent authorities.

The by-election for filling the vacancies of Directors and Independent Directors shall be based on the requirements under the Company Act and the Securities and Exchange Act. Regarding the term of Directors elected through a by-election and the replacement based on Paragraph 2 is limited to fulfilling the unexposed term of office of the predecessor.

  • Article 21: A Board meeting shall be attended by two-thirds of the Directors, and five Managing Directors shall be elected when receiving the consent from the majority of the attending Directors among themselves. Among the Managing Directors, there shall be at least one independent Director, and the one-fifth of the seats of the Managing Directors shall be taken by independent Directors. A Chairman shall be elected when receiving the consent from the majority of the attending Managing Directors among themselves at a meeting where two-third of Managing Director present. The Chairman shall be the chair of shareholders' meetings, Board meetings, and Managing Director meetings, internally; while represents the Bank, externally. When the Chairman is unable to present himself/herself when he/she is on leave or due to other causes, the Chairman shall designate a Managing Director as the proxy. When

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there is no designation made, a Managing Director shall be elected among themselves.

The Board is authorized by the shareholders' meeting to determine the remuneration of Directors, which shall be discussed in accordance with the general standards within the industry.

The remuneration of the Chairman shall be calculated by multiplying the remuneration of the President by 1.25.

Requirements in relation to the retiring employees of the Bank shall apply to the pension of the Chairman, which shall not be subject to age and year of experience.

The Bank may enter into liability insurance contracts with insurance companies for Directors and major employees with respect to liabilities resulting from performing their duties according to the law.

  • Article 22: Functions of the Board of Directors are as follow:

  • I. To determine significant regulations and rules.

  • II. To determine and review the overall operating strategies and significant policies.

  • III. To determine the business plan.

  • IV. To determine the internal control system.

  • V. To prepare for the capital increase or reduction.

  • VI. To determine the establishment, cancellation, or alteration of branches.

  • VII. To determine the significant contracts.

  • VIII.To determine budgets and discuss the final accounts.

  • IX. To determine the purchases and sales of real properties.

  • X. To determine investments in other companies.

  • XI. To prepare for surplus earning distribution or loss appropriation.

  • XII. To approve the significant businesses.

  • XIII.To determine the appointment and removal of major employees such as President, Executive Vice President, Chief Auditor, Consultant, Chief Secretary, Senior Vice President, department managers, divisional managers, center managers, branch managers, and managers of representative offices.

  • XIV.Matters handed down by the Chairman.

  • XV. Other functions authorized according to the laws and regulations and the shareholders meeting.

  • Article 23: When investing in other companies, except for otherwise required by the Banking Act, the Bank shall not be subject to the limit of 40% of the Bank's paid-up capital regarding the total investments in other companies under Paragraph 1, Article 13 of the Company Act.

  • Article 24: The organization of the Board of the Bank shall be separately determined by the Board.

The Bank has an Auditing Department subordinated to the Board and

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has a Chief Auditor that manages the audit business of the entire Bank and regularly reports to the Board and the Audit Committee.

  • Article 25: A regular meeting of the Board shall be held every two months. Shall there be an emergency, or if the majority of the Directors request so, an extraordinary meeting may be held. Except for otherwise required by the Company Act, all meetings shall be convened by the Chairman in writing and shall send out the notice via e-mail or fax.

The Board shall establish the Rules of Procedures for the Board meeting and submit to the shareholders' meeting, so as to improve the operating efficiency and decision-making abilities of the Board meeting.

  • To reinforce the corporate governance abilities, the Board may establish functional committees and the rules for exercising their functions shall be separately determined by the Board.

  • Article 26: For Board meetings, if a Director is unable to attend due to other causes, the Director may engage other Director as a proxy to attend on behalf of him/her; however, the Director shall present the power of attorney and set out the scope of authorization concerning the reason for convening the meeting.

  • The proxy in the previous paragraph may only be engaged by one Director.

  • Article 27: Regarding the resolution at a Board meeting, except for otherwise required by the Company Act, the resolution shall receive the consent from the majority of the attending Directors at the meeting attended by the majority of Directors.

  • Article 28: A minute book shall be prepared for the discussions at Board meetings, and the minute book shall be dispatched to all Directors within 20 days from the meeting after being signed by or affixed seal by the Chairman The minute book shall set out the year, month, date, name of the Chairman, resolution method, the summary of the discussion process, and its results, and shall be permanently preserved during the existence of the Bank. The sign-in book of the attending Directors and the power of attorney for engaging proxies shall be kept for a least a year.

  • Article 29: The President, Executive Vice Presidents, Chief Auditor, and the managers of the departments and divisions at the headquarters shall be invited to Board meetings as observers with no voting rights.

  • Article 30: During the recess of the Board, the Managing Directors shall regularly exercise the power and authority of the Board in accordance with the laws and regulations, the Articles of Association, and the resolutions adopted by the shareholders' meetings and the Board, and the Board meetings to be called from time to time by the Chairman; such meetings shall be chaired by the Chairman.

When the Chairman is unable to present himself/herself, the Chairman

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shall designate a Managing Director as the proxy. When there is no designation made, a Managing Director shall be elected among themselves.

  • Article 31: For a resolution at the Managing Directors meeting, except for otherwise required by the Company Act, the resolution shall receive the consent from the majority of the attending Managing Directors at the meeting attended by the majority of Managing Directors. The minute book shall be signed or affixed seal by the Chairman.

  • Article 32: For a Managing Directors meeting, the President, Executive Vice Presidents, Chief Auditor, and the managers of the departments and divisions at the headquarters shall be invited to attend, with no voting rights.

Chapter VI Audit Committee

  • Article 33: The Bank has established an Audit Committee comprised of all Independent Directors and the term of the member shall be the same as the term of the independent Director. The number of members shall not be less than three persons, and at least one of them shall specialize in accounting or finance. The functions, rules of procedures, and other matters to be complied with for the Audit Committee shall be based on relevant laws and regulations as well as the "Regulations for the Audit Committee" of the Bank.

  • Article 34: (Deleted)

  • Article 35: (Deleted)

  • Article 36: (Deleted)

Chapter VII Managers

  • Article 37: The Bank has one President, who follows the resolution of the Board meetings to manage the business, and several Executive Vice Presidents, who assist the President to manage affairs. Their appointment and removal shall be proposed by the Chairman and shall receive the consent from the majority of the attending Directors at a Board meeting attended by the majority of Directors.

  • Article 38: When the President is unable to perform its duties due to other causes, the Chairman shall appoint one person among the Executive Vice Presidents to perform its duties after being submitted to and approved by the Board.

Chapter VIII Accounting

  • Article 39: The fiscal year of the Bank shall commence from January 1 and end on December 31 each year whereas the current fiscal year shall be given

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the title of the current calendar year of the Republic of China. Settlement shall be carried out based on the first half and the second half of each year. The account day for the first half shall be June 30 while the account day for the second half shall be December 31, and a final account shall be carried out at the end of the year.

  • Article 40: After the end of the accounting year, the Bank shall prepare the following statements and books, submit to the Audit Committee and the Board meeting for approval, and propose to the shareholders' meeting for ratification.

  • I. Operating Report.

  • II. Financial Statements.

  • III. Resolution for surplus earning distribution or loss appropriation.

  • Regarding the statements and books in the previous paragraph, within 15 days from receiving the approval of the annual shareholders' meeting, the statements and books shall be combined with the annual report and report to the competent authority and the central bank for future reference, respectively. The Bank shall also announce its financial statements and other items required by the competent authority on the circulating daily newspaper where the headquarter of the Bank locates or in the manner prescribed by the competent authority. However, for those complying with the requirements under Article 36 of the Securities Exchange Act shall be exempted from such announcements.

  • Article 41: Shall there be general final accounts surplus, the Bank shall allocate such surplus to taxation payment and accumulated losses coverage first and then the remaining balances shall be utilized as follow:

  • I. Allocate 1% to 6% as employee remuneration (accounted for as expenses).

  • II. Allocate 0.6% as Director remuneration (accounted for as expenses).

  • Employee remuneration shall be provided in share certificates or cash, and such resolution shall receive the consent from the majority of attending Directors at a Board meeting attended by the two-thirds of the Directors, and report to the shareholders' meeting.

  • Article 42: Shall the Bank has any surplus after the final accounts of the year, after paying all taxes and making up for previous losses according to the law, the Bank shall allocate 30% as the legal reserve and provide for or reverse the special reserve according to other laws and regulations. After such, the Bank shall include the accumulated undistributed surplus from the previous years as the distributable surplus and distribute the dividends and bonuses to shareholders, which shall be submitted by the Board to the shareholders' meeting for resolution.

In order to continually expand the scale and improve the profitability of

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the Bank, based on the plan for our future capital budgeting, the Bank adopts the residual dividend policy to comply with the principle of distributing stock dividends for keeping the capital required, and the remaining portion may be distributed in cash dividends. However, the cash dividends shall not be lower than 10% of the total dividend distribution. Where the cash dividends distributed for per share is less than NT$0.1, except for otherwise resolved by the shareholders' meeting, such dividends will not be distributed.

The Bank is prohibited from distributing cash surplus or buying back shares under the circumstances set out in Paragraph 1, Article 44-1 of the Banking Act.

Unless and until the accumulated legal capital reserve equals the Bank's paid-in capital, the maximum cash surplus which may be distributed shall not exceed 15% of the Bank's paid-in capital.

Chapter IX Appendices

  • Article 43: The Board shall be authorized to institute the Organization Code, Gate Approval Along the Corporate Hierarchy, and other internal regulations of The Bank.

  • Article 44: Unaddressed matter in the Articles of Association shall be based on the requirements under the Banking Act, the Company Act, and other related laws and regulations.

  • Article 45: The Articles of Association was implemented upon receiving the approval from the shareholders’ meeting, and shall do the same upon any amendment thereto.

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3. Rules of Procedures for Board Meeting of Taiwan Business Bank Co., Ltd.

Established at the 5th meeting of the 10th Board of Directors on May 5, 2004 Reported to the general shareholders' meeting on June 11, 2004 Amended and approved at the 5th meeting of the 11th Board of Directors on December 19, 2006 Reported to the general shareholders' meeting on June 9, 2007 Amended and approved at the 11th extraordinary meeting of the 11th Board of Directors on March 25, 2008 Amended and approved at the 16th meeting of the 12th Board of Directors on December 26, 2011 Amended and approved at the 3rd meeting of the 13th Board of Directors on August 24, 2012 Amended and approved at the 4th meeting of the 13th Board of Directors on October 22, 2012 Reported to the general shareholders' meeting on June 21, 2013 Amended and approved at the 19th meeting of the 13th Board of Directors on December 12, 2014 Reported to the general shareholders' meeting on June 26, 2015 Amended and approved at the 17th meeting of the 14th Board of Directors on October 25, 2017 Reported to the general shareholders' meeting on June 29, 2018

Article 1 (Basis)

Rules of Procedures for Board Meeting of Taiwan Business Bank Co., Ltd. (the "Bank") was established in accordance with the requirements under the "Regulations Governing Procedure for Board of Directors Meetings of Public Companies." Article 2 (Rules of procedures)

Except for otherwise required by the law or the Articles of Association of the Bank, the Rules shall govern the procedures of the Bank's Board meeting.

Article 3 (Convening Board meeting)

The regular Board meeting of the Bank is held every two-month.

The reasons for calling a Board meeting shall be notified to all Directors at least seven days in advance. However, an extraordinary meeting may be called on shorter notice in emergency circumstances, upon the requests from the majority of Directors. The notice set forth in the preceding Paragraph may be effected by means of electronic transmission, after obtaining prior consent from the recipients thereof. Unless there is an emergency or a legitimate reason, the matters specified in Paragraph 1 of Article 6 shall be listed in the reasons for convening a Board meeting, and may not be proposed by means of extempore motion.

The term "all Directors" in the Rules means the actual number of Directors currently holding the positions.

Article 4 (Notice and materials for meetings)

The Board Secretariat Department shall be the agenda working group for the Board meeting called by the Bank.

The agenda working group shall schedule the date, agenda items, and agenda for the meetings in advance, and notify all Directors.

The agenda working group shall provide sufficient materials for the meeting and dispatch with the notice of the meeting.

If Directors consider the meeting materials to be insufficient, they may request the unit in charge to provide supplementary information. If Directors consider the materials concerning the proposals to be insufficient, the deliberation may be postponed upon a resolution of the Board.

Article 5 (Agenda items)

Agenda items for regular Board meetings shall include at least the following:

  1. Reports:

  2. (1) Meeting minutes of the last Board meeting and implementation status.

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  • (2) Significant financial or business reports (including financial reports for the 1st quarter and the 3rd quarter of each accounting year).

  • (3) Internal audit report.

  • (4) Other important matters to be reported.

  • Discussion:

  • (1) Items discussed and continued from the last meeting.

  • (2) Items to be discussed at this meeting.

  • Questions and Motions Article 6 (Matters to be discussed at the Board meeting)

The following matters shall be submitted to the Board for discussion:

  1. The Company's business plan.

  2. Annual and semi-annual financial reports.

  3. Adoption or amendment of internal control systems in accordance with Article 14-1 of the Securities Exchange Act and other laws and regulations.

  4. Assessment of the effectiveness of the internal control system.

  5. Setting or revising the processing procedures for significant financial business practices such as the acquisition or disposal of assets, engaging in derivatives trading, loaning to others, providing endorsement/guarantees for others according to the requirements under Article 36-1 of the Securities and Exchange Act. However, the authorization hierarchy of credit loans shall be subject to the requirements under the "Directions for the Authorizations of Credit Loan" of the Bank.

  6. Transaction of material assets or derivatives.

  7. Offering, issuance or private placement of any equity based securities.

  8. Appointment and discharge of a financial, accounting, risk management, regulatory compliance, and internal audit officers.

  9. Hiring, discharge or remuneration of attesting CPAs.

  10. Matters regarding the personal interest of the respective Directors.

  11. Performance audit system and remuneration standards for managerial and sales personnel.

  12. Remuneration structure and system of Directors.

  13. Donations to related parties or material donations to non-related parties. However, public-interest donations of disaster relief for a major natural disaster may be submitted to the next Board meeting for ratification.

  14. Other material matters to be decided by a shareholders' meeting or submitted to the Board of Directors in accordance with the laws and regulations or required by the competent authority.

The "transaction of material assets or derivatives" mentioned in Subparagraph 6 of Paragraph 1 refers to transactions of material assets or derivatives the shall be passed by the Board meeting according to the requirements of the law or the "Procedures for Acquisition or Disposal of Assets" or other regulations of the Bank.

The term "related parties" mentioned in Subparagraph 13 of Paragraph 1 refers to related parties defined in the "Regulations Governing the Preparation of Financial Reports by Securities Issuers." The term "material donations to non-related parties" means one-off or the cumulative amount of donations to the same party within one

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year reaches NT$100 million, or 1 percent of net operating revenue, or 5 percent of paid-in capital in the Company's audited financial statement for the most recent year. The "within the one year" mentioned in the previous Paragraph refers to the year preceding the date of convening the Board meeting.

Except for proposals that may not be proposed as extempore motions according to requirements under the law and the Rules, extempore motions may be proposed during the meeting when permitted by the Chairman.

At least one of the independent Directors of the Bank shall attend the Board meetings in person. For matters specified in Paragraph 1 to be resolved at the Board meetings, all independent Directors shall attend in person. For those who are unable to attend in person, they shall appoint other independent Directors to attend on their behalf. When an independent Director has a dissenting or qualified opinion, it shall be noted in the minutes of the Board meeting. Where the independent Director cannot attend the Board meeting in-person to voice his/her dissenting or qualified opinion, unless there are justifiable reasons for failure to do so, he/she shall provide a written opinion in advance, and the opinion shall be noted in the minutes of the Board meeting. Article 7 (Principle of authorization of the Board)

During the recess of the Board, the Managing Directors shall regularly exercise the power and authority of the Board in accordance with the laws and regulations, the Bank's Articles of Association, and the resolutions adopted by the shareholders' meetings and the Board, and the Board meetings to be called from time to time by the Chairman; such meetings shall be chaired by the Chairman. When the Chairman is unable to present himself/herself, the Chairman shall designate a Managing Director as the proxy. When there is no designation made, a Managing Director shall be elected among themselves.

Where a meeting of Managing Directors is scheduled to be convened within seven days, the notice to each Managing Director may be made two days in advance. However, emergencies are not subject to this requirement.

The notice set forth in the preceding Paragraph may be effected by means of electronic transmission, after obtaining prior consent from the recipients thereof. The scope of authorization when the Managing Board executing the function of the Board of Directors are as follow:

  1. The review of the regulations and material business other than articles of association and overall operating strategy, material policies or administrative regulations for significant risks, and business regulations.

  2. The review of matters other than matters to be submitted to the shareholders' meeting or the Board meeting for discussion according to the law and the articles of association, or significant matters required by the competent authority.

  3. Matters handed down by the Chairman. Any resolution passed by the Managing Board according to requirements in the previous Paragraph shall be reported to the Board.

Article 8 (Preparation for the sign-in book and the attendance by a Director proxy)

The Bank shall prepare the sign-in book for attending Directors and presenting personnel for future reference. For Board meetings, if a Director is unable to attend,

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the Director may engage other Director as a proxy to attend on behalf of him/her pursuance to the Bank's Articles of Association; Directors who participated the meeting via video call shall be deemed as attending in person, and shall deliver the sign-in cards via fax for sign-in.

When a Director may engage other Director as a proxy to attend on behalf of him/her, the Director shall present the power of attorney and set out the scope of authorization concerning the reason for convening the meeting.

The proxy in Paragraph 2 may only be engaged by one Director. Article 9 (Principles for location and time of Board meeting) The Board of Directors shall meet at the Bank's location and within the Bank's

working hours in general. However, the meeting can convene in other locations and at other times for the convenience of Directors.

Article 10 (Chairman and representative of the Board)

The Board meetings shall be convened and chaired by the Chairman of the Board. However, the first Board meeting of each term shall be convened and chaired by the Director who received votes representing the largest portion of voting rights at the shareholders' meeting. When there are two or more persons with the right to convene, they shall select one from among themselves to serve as chairperson of the meeting. When the Chairman is unable to present himself/herself when he/she is on leave or due to other causes, the Chairman shall designate a Managing Director as the proxy. When there is no designation made, a Managing Director shall be elected among themselves.

Article 11 (Reference materials and attending personnel at the Board meeting) Upon convening the Board meeting, the unit responsible for meeting affairs and the managing department shall prepare relevant information readily available to Directors at the meeting for reference. When holding a meeting of the Board, the Bank may notify personnel of relevant departments or subsidiaries to present at the meeting and report the current business situation of the Bank and answer questions raised by Directors to assist them in understanding the current condition of the Bank and arrive at proper resolutions. When necessary, the CPAs, lawyers or other professionals may also be invited to be present at the meeting and provide explanations. However, they shall excuse themselves during discussion and voting.

Article 12 (Convening of Board meetings)

When a majority of the Directors have presented upon the designated time of the meeting, the Chairman shall call the meeting to order. When a majority of the Directors have not presented upon the designated time of the meeting, the Chairman may announce to postpone the meeting. The postponement is limited to two times. When the number of Directors had not met the quorum after two postponements, the Chairman shall reconvene the meeting in accordance with the procedures set out in the Article 3.

Article 13 (Discussion on proposals)

The Board shall conduct the meeting according to the agenda as specified in the meeting notice. However, the agenda can be changed when being approved by the majority of attending Directors.

The Chairman may not announce the adjournment of the meeting before the

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completion of the agenda unless agreed by the majority of attending Directors. During the Board meetings, where the number of Directors in attendance was less than the majority of Directors originally attending the meeting, the Chairman shall declare a temporary suspension of meeting upon a motion proposed by the Directors in attendance. In which case, Paragraph 1 of the preceding Article shall apply mutatis mutandis.

During the meeting, the Chairman may, at his/her discretion, announce intermission or negotiation.

Article 14 (Director's speech and the order of the Chairman)

After the speech of a Director, the Chairman may, in person or designate relevant personnel to, respond, or designate presenting experts to provide the relevant information.

Where a Director has repeated his/her statements on the agenda or has diverged from the agenda, to the extent of affecting other Directors' turn for speech or hindering the meeting process, the Chairman may stop the speech.

Article 15 (Ballot)

Where the Chairman considers the discussion has been carried out to the extent that a vote shall be conducted, the Chairman may declare and stop the discussion and proceed through the vote.

Regarding the resolution at a Board meeting, except for otherwise required by the Securities and Exchange Act, the Company Act, other laws, or the Bank's Articles of Association, the resolution shall receive the consent from the majority of the attending Directors at the meeting attended by the majority of Directors.

During the ballot, where there is no objection was raised by the attending Directors upon the inquiry of the Chairman, the ballot shall be deemed as the passing by the majority.

The "attending Directors" in the preceding Paragraphs does not include Directors prohibited from exercising voting rights pursuant to Article 17.

Where there is an objection raised upon the inquiry of the Chairman, proceed through the vote; the Chairman may elect to proceed through the vote by adopting one of the following methods:

  1. Vote by raising hands

  2. Vote by casting ballots.

Shall there be revision or substitute for the same proposal, the Chairman shall combine such revision or substitute to the original proposal and determine the voting sequence. If any of the proposals are deemed obsolete, the other proposals shall be deemed as being rejected, and exempted from the vote.

Article 16 (Scrutineers and counting)

The scrutineers and counting personnel, if any, for the ballot of the proposal shall be designated by the Chairman, but the scrutineers shall be Directors.

The results of the ballot shall be reported at the scene and made a record accordingly. The supervising and counting methods shall also be stated in the minute books of the Board meeting.

Article 17 (Conflict of interests abstaining system for Directors)

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Where any item on the agenda results in conflicts of interest with any Director or the corporation represented by the Director, the Director shall state the important aspects of the interested party relationship at the Board meeting; when the said interest is harmful to the interests of the Bank, the Director shall not participate in and shall abstain from discussion and voting and shall not represent other Directors as a proxy to exercise their voting rights.

For resolutions of the Board meeting, Directors who are not permitted to exercise their voting rights in the previous Paragraph shall comply with requirements under Paragraph 3, Article 206 of the Company Act, under which the provisions of Paragraph 2, Article 180 shall apply mutatis mutandis.

Article 18 (Meeting minutes and signed matters)

A minute book shall be prepared for the discussions at Board meetings. The minute book shall detail the following matters:

  1. The term (or year), time, and place of the Board meeting.

  2. Name of the Chairman.

  3. Directors' attendance status, including names and numbers of Directors who are present, on leave, and absent.

  4. Names and titles of non-voting attendees.

  5. Name of the recorder.

  6. Report items.

  7. Discussion: The resolution method and the result for each motion; a summary of comments made by Directors, experts, or other individuals; the name of any Director that is an interested party as referred to in Paragraph 1 of the previous Article, an explanation for the important aspects of the relationship of interest, the reasons why the Director was required or not required to recuse, and the status of their recusal; objection or qualified opinions which are on record or indicated in a written statement as well as the written opinions issued by independent Directors according to the requirements under Paragraph 6, Article

  9. Questions and motions: Name of proposer, resolution methods and the results for the motions; a summary of comments made by Directors, experts, or other individuals; the name of any Director that is an interested party as referred to in Paragraph 1 of the previous Article, an explanation for the important aspects of the relationship of interest, the reasons why the Director was required or not required to abstain, and the status of their abstaining; objection or qualified opinions which are on record or indicated in a written statement.

  10. Other matters that shall be recorded. Any of the following matters in relation to a resolution passed at a meeting of the Board of shall be stated in the meeting minutes and be published on an information reporting website designated by the competent authority within two days from the meeting:

  11. (1) Independent Directors have objection or qualified opinions which are on record or indicated in a written statement.

  12. (2) Matters which are approved by two-thirds of all Directors when the Bank's Audit Committee does not approve.

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The attendance book of the Board meeting is a part of the meeting minutes and shall be retained throughout the duration of the Bank's existence.

A minute book shall be dispatched to all Directors within 20 days from the meeting after being signed or affixed seal by the Chairman and the recorder of the meeting. A minute book shall be listed as an important document of the Bank and shall be retained throughout the duration of the Bank's existence.

The meeting minutes set out in Paragraph 1 may be prepared and distributed by electronic means.

Where the resolution at the meeting of the Board is material information under the law or the requirements of Taiwan Stock Exchange, the department-in-charge shall submit the material information to the Business Management Department within the prescribed time for uploading to the Market Observation Post System.

Article 19 (Audio/video recording of the entire proceedings of Board meetings) The Bank shall provide audio/video recording of the entire proceedings for Board meetings, and the recordings shall be preserved for at least five years. The recordings may be electronically archived.

Before the expiry of the preservation mentioned in the previous Paragraph, where litigation arises from the matters resolved in the Board meetings, the recordings shall be kept until the conclusion of the litigation.

Where a Board meeting is held via video conference, the audio/video recordings of the meeting shall be a part of the minute book and shall be kept permanently. Article 20 (Applicability to Managing Board)

Requirements under Article 2, Paragraph 2 of Article 3, Article 4 to Article 5, Article 7 to Article 9, and Article 11 to Article 19 under the Rules shall apply mutatis mutandis for the proceedings of Managing Board meetings.

Article 21 (Appendices)

The Rules were implemented upon receiving the approval from Board meeting after discussion and reported to the shareholders' meeting, and shall do the same upon any amendment thereto.

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4. Shareholding of Directors of the Bank Taiwan Business Bank Co., Ltd. Shareholding of Directors

Book closure date: March 31, 2020

Title Name Number of shares Shareholding ratio
(%)
Director Ministry of Finance
Representative: Bor-Yi Huang		 148,109,320
2.08
Managing Director Ministry of Finance
Representative: Chih-Chien Chang		 (148,109,320)
(2.08)
Managing Director Bank of Taiwan Co. Ltd.
Representative: Shih-Yuan Tai		 1,156,355,774
16.21
Managing Director Ministry of Finance
Representative: Lien-Wen Liang		 (148,109,320)
(2.08)
Managing Director
(Independent Director)		 Xin-Wu Lin 0
0
Director Ministry of Finance
Representative: Wen-Chieh Wang		 (148,109,320)
(2.08)
Director Ministry of Finance
Representative: Hung-ShengYu		 (148,109,320)
(2.08)
Director Ministry of Finance
Representative: Shiu-Yen Lin		 (148,109,320)
(2.08)
Director Bank of Taiwan Co. Ltd.
Representative: Li-LingLin		 (1,156,355,774)
(16.21)
Director Bank of Taiwan Co. Ltd.
Representative: Tzu-Hao Tsai		 (1,156,355,774)
(16.21)
Director Land Bank of Taiwan Co., Ltd.
Representative: Ying-MingHe		 162,975,215
2.29
Director Che-Nan Wang 10,342,090
0.15
Director TBB Industry Union
Representative: Kuo-ChangHuang		 3,776,670
0.05
Independent Director Jin-Long Liu 0
0
Independent Director Wei-Sheng Huang 0
0
Total 1,481,559,069
20.78

Notes:

  1. Based on the 7,131,984,244 issued shares of the Bank, according to the requirements under Article 2 of the "Rules and Review Procedures for Director and Supervisor Share Ownership Ratios at Public Companies," the minimum shareholding ratio for all Directors shall be 2% (142,639,685 shares). As of the book closure date (March 31, 2020) for the annual shareholders' meeting, the share held by all Directors of the Bank is 1,481,559,069 shares.

  2. The Bank has an Audit Committee; therefore, no applicable minimum shareholding ratio for supervisors is applicable.

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