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WISDOM AGM Information 2020

Jun 1, 2020

52177_rns_2020-06-01_8df00888-5570-4e4d-bdbd-acf36f50e6d1.pdf

AGM Information

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Stock Code ： 2637

Wisdom Marine Lines Co., Limited

Agenda of 2020 Annual General Meeting

Date ： May 22, 2020

Place ： B1, No.85, Sec.4, Roosevelt Rd., Da'an Dist., Taipei City

106, Taiwan （ GIS NTU Convention Center ）

Notice to readers

This English-version Agenda is a summary translation of the Chinese version and is not an official document of the shareholders’ meeting. If there is any discrepancy between the English and Chinese versions, the Chinese version shall prevail.

Table of Contents

2020 Annual General Meeting Procedure ...................................................................... 1 2020 Annual General Meeting Procedure ...................................................................... 1
2020 Annual General Meeting Agenda....................................................... 2
Reports ....................................................................................................... 3
Proposals for Ratification .............................................................................................. 4
Proposals for Discussions .............................................................................................. 6
Meeting Adjourned 9
Annex....................................................................................................... 10
Annex I. 2019 Management Report................................................................. 10
Annex II. Audit Report of Independent Auditors and 2019 Financial Report
12
Annex III. Audit Committee Report on the review of the 2019 Financial
Report................................................................................................. 21
Annex IV. Comparison Table the Rules of Board Meetings............................ 22
Annex V. Comparison Table for the Proposed Amendements to the Exiting
Articles of Association....................................................................... 25
Annex VI. Comparison Table for the amendments to the Procedures for Loan
to Others............................................................................................. 38
Annex VII. Comparison Table for the amendments to Procedures for
Endorsement and Guarantee............................................................ 39
Annex VIII. Comparison Table for the amendments to the Rule of General
Meeting............................................................................................... 40
Annex IX. Rules of Board Meetings................................................................... 91
Annex X. Memorandum and Articles of Association...................................... 45
Annex XI. Procedures for Loan to Others......................................................... 91
Annex XII. Procedures for Endorsement and Guarantee................................ 101
Annex XIII. Rules of General Meeting................................................................ 104
Annex XIV. Shareholdings of Directors.............................................................. 113
Annex XV. Relevant Information on Proposals Made by Shareholders Holding
1% or More of the Total Issued Shares of the Company............. 115

Wisdom Marine Lines Co., Limited

(the “ Company ” )

2020 Annual General Meeting Procedure

Call the Meeting to Order

Reports

Proposals for Ratification

Proposals for Discussions

Meeting Adjourned

1

Wisdom Marine Lines Co., Limited

2020 Annual General Meeting Agenda

Time ： 10:00 a.m., Friday, May 22, 2020

Place ： B1, No.85,Sec.4, Roosevelt Rd., Da'an Dist., Taipei City

106, Taiwan （ GIS NTU Convention Center ）

I. Call the Meeting to Order

II. Chairman’s Address

III. Reports

  1. 2019 Business Report.

  2. 2019 Financial Report.

  3. The Audit Committee Report on the Review of the 2019 Financial Report.

  4. 2019 Directors’ Remuneration Report.

  5. First Secured Corporate Bond Issue in 2019

  6. Amendments to the Rules of Board Meetings

IV. Proposals for Ratification

  1. Recognition of 2019 Financial Report.

  2. Recognition of 2019 Dividend Proposal.

V. Proposals for Discussions

  1. Amendment to Articles of Association

  2. Amendments to Procedures for Loan to Others

  3. Amendments to Procedures for Endorsement and Guarantee

  4. Amendments to the Rules of General Meeting

  5. Distribution of Cash Dividends out of Capital Reserve

  6. Capitalization of Capital Reserve by Issuing New Shares

VI. Meeting Adjourned

2

Reports

1. 2019 Business Report

Explanatory Notes ： Please refer to page 10(Annex I).

2. 2019 Financial Report

Explanatory Notes ： Please refer to page 12 for the 2019 financial report and the audit report of Ernst & Young (Annex II).

3. The Audit Committee Report on the review of the 2019 Financial Report

Explanatory Notes ： Please refer to page 21 for the Audit Committee Report on the review of the 2019 Financial Report (Annex III).

4. 2019 Director s' Remuneration Report

Explanatory Notes ：

  • (1) The distribution of directors' remuneration shall be made pursuant to the Company's Articles of Association of the Company and the resolutions of the Remuneration Committee.

  • (2) The Company proposed to distribute director reward of NTD 9,922,221 by cash.

  • (3) The Remuneration Committee approved the proposed director reward at 4th Meeting of the 6th Remuneration Committee of the Company on March 20, 2020.

5. First Secured Corporate Bond Issue in 2019

Explanatory Notes ：

  • I. At a meeting held on March 29, 2019, the Board of Direcotors of the Company approved the Directors resolved to raise NTD1,385,000,000 by issuing secured bonds (the “ 1st SB ”). The Company received formal approval for the 1st SB Issue from the Central Bank of the Republic of China (Taiwan) and the Taipei Exchange（TPEx） on April,19 2019 and May 3, 2019 respectively.

  • II. The 1st SB was issued in accordance with the Articles of the Company, on the following terms:

  • (1) Total Amount of the 1st SB Issue: NTD 1,385,000,000.

  • (2) Type, Face Value and Issue Price: the 1st SB were issued in the form of secured bonds with a face value of NTD 1,000,000 and issued at 100% of the face value.

  • (3) Issuance Date: May 7, 2019.

  • (4) Period: 5 years, with maturity date on May 7, 2024.

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(5) Coupon Rate: 0.86% per annum.

(6) Repayment at Maturity: Secured Corporate Bond will be repaid with cash upon maturity.

  • (7)Traded at Taipei Exchange（TPEx）from the issued date.

  • (8)Funds raised from the 1st SB Issue had been fully invested by Q2 2019.

6. Amendments to the Rules of Board Meetings

Explanatory Notes ：

  • (1) In order to better comply with recent amendments to laws and regulations promulgated by the Taiwan Stock Exchange on January 16, 2020 per Letter No. 1090000926, the Company proposed to amend the Rules of Board Meetings.

  • (2) Please refer to page 22 (Annex IV) for a comparison table for the amendments to the Rules of Board Meetings.

Proposals for Ratification

1. Recognition of 2019 Financial Report

Explanatory Notes ：

  • (1) The financial report including consolidated results of the Company for 2019 (the “ 2019 Financial Report ” ) has been audited by Ernst & Young and reviewed by the Audit Committee of the Company.

  • (2) Please refer to page 12 (Annex II) for the 2019 Financial Report and the audit report of Ernst & Young.

  • (3) The above is hereby proposed for recognition.

Resolution:

4

2. Recognition of 2019 Dividend Proposal

Explanatory Notes ：

  • (1) The Board of Directors of the Company (the “ Board ” ) has approved a dividend proposal of 2019 profit (the “ Dividend Proposal ” ) on March 20, 2020. The details of the proposed Dividend Proposal is set out as follows:
Wisdom Marine Lines Co., Ltd.
2019 EarningDistribution Table Unit：NT$
Items Undistributed Earnings
2018 Distributable Retained Earnings 13,851,984,608
minus：2019 Legal Reserve -
add：2019 Net Income (Remarks 1) 2,198,582,861
add：2019 Other Income (338,703)
Total Distributable Earnings up to 2019 16,050,228,766
Undistributed Earnings at End of 2019 16,050,228,766
Remark 1: Equivalent to USD 71,123,928.

  • (2) The total amount of distributable retained earnings up to the year of 2019 was NT$16,050,228,766. The total amount of undistributed earnings at the end of 2019 was NT$16,050,228,766.

  • (3) The above is hereby proposed for recognition.

  • Resolution:

5

Proposals for Discussions

1. Amendment to Articles of Association

Explanatory Notes ：

  • (1) In order to better comply with recent amendments to laws and regulations promulgated by the Taiwan Stock Exchange on Deceember 25, 2019 per Letter No. 10800235681, the Company proposed to amend its exiting Articles of Association in the form attached here to as Annex V (the “ AoA Amendment ” ) which forms part of these resolutions.

  • (2) Please refer to page 25 (Annex V) for the comparison table for the proposed amendements to the exiting Articles of Association.

  • (3) It is hereby proposed that the exiting Articles of Association of the Company be amended and restated as Annex X (the “ Eighth Amended and Restated Articles of Association ” ), which incorporate the amendedments as approved by the Members of at the oridinary general meeting of the Company held on 17 May 2019 and the AoA Amendment.

  • Resolution ：

2. Amendments to Procedures for Loan to Others

Explanatory Notes ：

  • (1) In order to btter comply with the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies amended by the Financial Supervisory Commission of Taiwan (the “ FSC ” ), the Company proposed to amend the Procedures for Loan to Others .

  • (2) Please refer to page 38 (Annex VI) for a comparison table for the amendments to the Procedures for Loan to Others.

  • (3) The above is hereby proposed for resolution.

  • Resolution ：

3. Amendments to Procedures for Endorsement and Guarantee

Explanatory Notes ：

  • (1) In order to btter comply with the Regulations Governing Loaning of Funds and Making of Endorsements/Guarantees by Public Companies amended by the Financial Supervisory Commission of Taiwan (the “ FSC ” ), the Company proposed to amend the Procedures for Endorsement and Guarantee.

  • (2) Please refer to page 39 (Annex VII) for a comparison table for the

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amendments to the Procedures for Endorsement and Guarantee.

(3) The above is hereby proposed for resolution.

Resolution ：

4. Amendments to the Rules of General Meeting

Explanatory Notes ：

  1. In orcer to better comply with recent amendemnets to laws and regulations promulgated by the Taiwan Stock Exchange Corporation on January 2, 2020 per Letter No. 10800242211, the Company proposed to amend the Rules of General Meeting.

  2. Please refer to page 40 (Annex VIII) for the comparison table for the amendements to the Rules of General Meeting.

  3. The above is hereby proposed for resolution.

  4. Resolution ：

5. Distribution of Cash Dividends out of Capital Reserve

Explanatory Notes ：

  • (1) The total Capital Reserve from the issuance of shares at a premium in the 2019 Financial Report is NT$1,386,689,555. The Company proposed to distribute, on a date (the “Dividend Declaration Distribution Date”) to be determined by the Board of Directors of the Company (the “Board”), NT$ 1,033,733,841 out of Capital Reserve by declaring an annual ordinary share cash dividend (the “Cash Dividends”) of approximately NT$1.5 per share, and (the “Dividend Ratio”), leaving a total of NT$ 352,955,714 in Capital Reserve after the distribution of the Cash Dividends.

  • (2) The aforementioned Cash Dividends will be distributed at NT$1,500 per 1,000 shares to the nearest New Taiwan Dollars according to the shareholding as set out in the Register of Members of the Company as of a record date for determining Members who are entitled to receive payment of Cash Dividends, as determined by the Directors in accordance with the Articles (the “ Dividend Declaration Record Date ” ). The Chairman will be authorised to distribute to specific person any amount remaining as result of rounding off the Cash Dividends.

  • (3) Prior to the Dividend Declaration Distribution Date, the Board shall be authorised to adjust the Dividend Ratio, and make public announcement(s) of such adjustment(s) in cases such as, but not limited to, share repurchases, share cancellations, the exercise of employee’s stock options, issuance of new shares, the conversion of convertible bonds and issuance of global

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depositary receipts, whereby the the number of issued and outstanding shares on the Dividend Declaration Record Date may be affected.

  • (4) The Board of Directors shall be authorised to set the Dividend Declaration Record Date and determine and finalize all matters in relation to the distribution of the Cash Dividends.

  • (5) The above is hereby proposed for resolution.

  • Resolution ：

  • Capitalization of Capital Reserve by Issuing New Shares Explanatory Notes ：

  • (1) The Board has proposed to capitalize the Company’s Capital Reserve (the “ Capitalization ”) by allotting and issuing 17,228,897 new Shares of par value NTD10 each (“ New Shares ”), to the Members at 25 Shares per 1,000 Shares (the “ Capitalization Distribution Ratio ”) based on the shareholding set out in the Register of Members of the Company as of a record date for determining Members who are entitled to receive the New Shares, as determined by the Directors in accordance with the Articles (the “ Capitalization Record Date ”). After obtaining approval for the Capitalization at this Meeting and from the relevant Taiwan government authority, the Board shall determine a date for the distribution of the New Shares (the “ Capitalization Distribution Date ”), provided that the Members, or failing that, the Chairman of the Company, shall take all actions necessary, desirable or expedient to deal with any resulting fractions so that at any time the Register of Members of the Company will register the shareholding of the Members in whole number without fraction.

  • (2) After the issuance of the New Shares, the issued share capital of the Company will be increased from NTD6,891,558,940 divided into 689,155,894 shares of par value NTD10.00 each. After the Capitalization, the issued share capital of the Company will be increased by 2.5% to NTD7,063,847,910 divided into 706,384,791 shares of par value NTD10.00 each. Upon Members’ approval at this Meeting, it was proposed that the Board be authorized to set the Capitalization Record Date.

  • (3) The New Shares will be issued by way of book-entry without issuing any physical share certificate, and the New Shares will rank pari passu and have the same rights and obligations as the current issued and outstanding shares of par value NTD10 of the Company.

  • (4) It was further proposed that the Board be authorized the full powers to adjust the Capitalization Distribution Ratio, and make public announcement of such adjustment(s), based on the number of issued and outstanding Shares as of the Capitalization Record Date.

8

Extemporary Motion

Meeting Adjourned

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Annex Annex I. 2019 Management Report

Wisdom Marine Lines Co., Ltd. 2019 Management Report

I. External Environment

The Brumadinho dam disaster led to a more volatile market in the first quarter of 2019, especially for capesize ships,. Later, when the US-China trade dispute was not resolved successfully as expected, the mood turned more pessimistic in the market as a whole. Despite rebounding in the third quarter, the market saw shipping companies still reluctant to take risks and more cautious toward newbuilding and long-term chartering agreements. Furthermore, shipping companies and cargo owners are opting to wait and see before the upcoming 2020 global sulphur limit. Many in the market are currently using low-sulphur fuel as the answer to sulphur emission control. However, the approach will inevitably lead to a low-sulphur fuel shortage and rising fuel prices. A period of adjustment is likely to be needed.

The outbreak of coronavirus disease at the beginning of 2020 caused the Chinese New Year holidays to be extended. Many cities took the necessary measures to prevent the disease from spreading and imposed traffic restrictions. These restrictions had a severe impact on the dry bulk shipping market in the first quarter. The sudden change of market conditions was a harsh blow to a market already grappling with the low-sulphur shift. Such market volatility, while threatening the confidence of shipping companies, puts constant pressure on the supply of ships. The demand in shipping may be cyclical, but shows steady growth over the medium- to long-term. Therefore, the market is often seen rebounding after drastic market volatility induced by short-term factors. For example, the slowing demand may pick up pace after the volatility in the first quarter. It is likely that the shipping outlook can be encouraged to turn upward at some point. Relatively low newbuilding investment due to the cautious stance adopted by most since 2019 suggests a potentially larger gap between the supply and the rising demand as well as more room for rebounding.

II. 2019 Business Results

In 2019, we had 2 new build ships, 1 new bareboat chartered and 1 new time chartered ship, added 2 to ships under management, disposed 6 ships, and terminated the lease of 1 ship. The number of ships in our fleet undergoes a net increase of 1 and holds at 129. The non-operating income from disposal of ships was US$3.2 million.

Owing to our excellent timing in newbuilding lease negotiations, we managed to achieve a 40% or higher gross profit margin in 2019 despite a volatile market. New contracts on existing ships delivered the same returns, but the percentage of short-term contracts in terms of revenue rose from 16.8% to 21.3%. Given the replacement of older, smaller ships with newer, bigger ships while keeping the total

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number of ships unchanged, the revenue rose by 3.2% from US$433 million to US$447 million. However, vessel depreciation, crew salary, maintenance costs, and higher fuel prices pushed the gross profit margin down from 27.8% to 25.8%.

In terms of nonoperating income, we received US$22.6 million from termination of agreement in addition to the ship sales revenue in 2019. Exchange rates were relatively stable. The annual exchange loss is US$2.4 million. Overall, our net operating profit is US$110 million and net profit is US$71 million in the year.

III. 2020 Business Plan

We expect to have 7 more new ships delivered in 2020. They include 2 kamsarmax, 4 supramax and 1 handysize. All are built by first class Japanese builders, such as Imabari, JMU, Namura, and Kawasaki. In particular, 2 comply with the Tier III NOx emission standards, and 3 are environment-friendly vessels equipped with desulfurization devices.

Facing greater uncertainty in the external environment, we will take a proprietary and short-term focused approach to our shipping business in order to leave more room for maneuver. It will allow us to stay up to date on market developments and be ready to negotiate more stable contracts after the low-sulphur impact and the coronavirus outbreak have subsided.

Meanwhile, we will look for opportunities to sell our older vessels. Ship sales will not only facilitate replacement of old vessels, but also hopefully reduce our exposure to interest rate volatility by disposing assets to improve our capital structure.

Chairman James Lan

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Annex II. Audit Report of Independent Auditors and 2019 Financial Report

Audit Report of Independent Auditors

English Translation of a Report Originally Issued in Chinese

Independent Auditors’ Report

To the Board of Directors and Stockholders of Wisdom Marine Lines Co., Limited (Cayman)

Opinion

We have audited the accompanying consolidated balance sheets of Wisdom Marine Lines Co., Limited (Cayman) (the “Company”) and its subsidiaries (together the “Group”) as of 31 December 2019 and 2018, and the related consolidated statements of comprehensive income, changes in equity and cash flows for the years ended 31 December 2019 and 2018, and notes to the consolidated financial statements, including the summary of significant accounting policies (together “the consolidated financial statements”).

In our opinion, the consolidated financial statements referred to above present fairly, in all material respects, the consolidated financial position of the Company and its subsidiaries as of 31 December 2019 and 2018, and their consolidated financial performance and cash flows for the years ended 31 December 2019 and 2018, in conformity with the requirements of the International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee or the former Standing Interpretations Committee.

Basis for Opinion

We conducted our audits in accordance with the Regulations Governing Auditing and Attestation of Financial Statements by Certified Public Accountants and auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Company and its subsidiaries in accordance with the Norm of Professional Ethics for Certified Public Accountant of the Republic of China (the “Norm”), and we have fulfilled our other ethical responsibilities in accordance with the Norm. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of 2019 consolidated financial statements. These matters were addressed in the context of our audit of the consolidated financial statements as a whole, and in forming our opinion thereon, and we

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do not provide a separate opinion on these matters. Impairment of property, plant and equipment

As at 31 December 2019, the amount of the Group’s property, plant and equipment was $2,507,936,429, which accounted for 87% of total assets. The management assessed if there is any indication that an asset may be impaired on balance sheet date. If there is any indication that an asset may be impaired, the Group should evaluate the recoverable amount of the cash-generating-unit (CGU), to which the asset belongs. The property, plant and equipment of the Group mainly consists of vessel equipment. The subsidiaries of the Company took the one-vessel-one-company strategy to manage vessels, and the main CGU for each subsidiary is their vessels. With the view that the amount of property, plant and equipment being material and the calculation of recoverable amount involving numerous assumptions and estimates, we have determined the impairment of property, plant and equipment as a key audit matter. The audit procedures we conducted regarding the impairment of property, plant and equipment included but not limited to the following, evaluating the appropriateness of the accounting policy for impairment of property, plant and equipment; inspecting the impairment evaluation report provided by the Group and assessing the reasonableness of managements identification of indicators of impairment and the assumptions used, including identification of CGU, estimation of cash flows and discount rate. We also evaluated the disclosure regarding property, plant and equipment in Notes 5 and 6 of the consolidated financial statements.

Valuation of the put option embedded in bond payable

As at 31 December 2019, the amount of the Group’s financial liabilities at fair value through profit or loss was $1,747,889, which accounted for 0% of total assets. The fair value measurement hierarchy of the put option embedded in bond payable is categorized as Level 3. The measurement of Level 3 investment uses unobservable inputs. The management measured the put option based on source data from external valuation institute. As the external valuation has a significant impact on the estimates of fair value, we determined it to be a key audit matter. The audit procedures we conducted regarding the valuation of the put option included but not limited to the following, comparing the report provided by internal experts with the report and related documents provided by the management; evaluating the reasonableness of the valuation methods and key valuation assumptions used by external valuation institute; conducting the recalculation and comparing the result with the one provided by the management. We also evaluated the disclosure regarding valuation of the put option in Notes 5, 6 and 12 of the consolidated financial statements.

Responsibilities of Management and Those Charged with Governance for the Consolidated Financial Statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the requirements of the International Financial Reporting Standards, International Accounting Standards, Interpretations developed by the International Financial Reporting Interpretations Committee and Interpretations developed by the Standing Interpretations Committee and for such internal control as management determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the consolidated financial statements, management is responsible for assessing the ability to continue as a going concern of the Company and its subsidiaries, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either

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intends to liquidate the Company and its subsidiaries or to cease operations, or has no realistic alternative but to do so.

Those charged with governance, including audit committee or supervisors, are responsible for overseeing the financial reporting process of the Company and its subsidiaries.

Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:

  1. Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

  2. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the internal control of the Company and its subsidiaries.

  3. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

  4. Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the ability to continue as a going concern of the Company and its subsidiaries. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company and its subsidiaries to cease to continue as a going concern.

  5. Evaluate the overall presentation, structure and content of the consolidated financial statements, including the accompanying notes, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

  6. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Company and its subsidiaries to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group

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audit. We remain solely responsible for our audit opinion.

We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.

We also provide those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determine those matters that were of most significance in the audit of 2019 consolidated financial statements and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

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Lin, Li Huang Fuh, Wen Fun Ernst & Young, Taiwan 21 February 2020

Notice to Readers

The accompanying consolidated financial statements are intended only to present the financial position, results of operations and cash flows in accordance with accounting principles and practices generally accepted in the Republic of China and not those of any other jurisdictions. The standards, procedures and practices to audit such consolidated financial statements are those generally accepted and applied in the Republic of China.

Accordingly, the accompanying consolidated financial statements and report of independent accountants are not intended for use by those

who are not informed about the accounting principles or auditing standards generally accepted in the Republic of China, and their applications in practice. As the financial statements are the responsibility of the management, Ernst & Young cannot accept any liability

for the use of, or reliance on, the English translation or for any errors or misunderstandings that may derive from the translation.

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Annex III. Audit Committee Report on the review of the 2019 Financial Report

Wisdom Marine Lines Co., Limited

Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2019 Business Report, Financial Statements and proposal for distribution of 2019 earnings. Of which, the Financial Statements have been audited by Lin, Li Huang and Fuh, Wen Fun, Ernst & Young, Taiwan.

The 2019 Business Report, Financial Statements and proposal for distribution of 2019 earnings have been audited by us as Audit Committee of the Company. We deem no inappropriateness on these documents. Pursuant to Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Act, we hereby submit this report. Please review.

To

The 2020 Annual General Meeting

Wisdom Marine Lines Co., Limited Chairman of the the Audit Committee : Tu, Neng-Mo On the date of March 20, 2020

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Annex IV. Comparison Table the Rules of Board Meetings

Article
Number		 After Amendment Prior to Amendment Reason
7 Meetings of the board of directors
shall be called and chaired by the
chairman of the board. However,
the first meeting of each newly
elected board of directors shall be
called and chaired by the director
who received votes representing the
largest portion of voting rights at
the shareholders' meeting in which
the directors were elected; if there
are two or more directors so
entitled to call the meeting, they
shall choose one person by and
from among themselves to do so.
According to Article 203 or 203-1
of Company Act, Meetings of the
board
of
directors
shall
be
convened by the chairman of the
board of directors.The majority or
more of the directors may, by filing
a written proposal setting forth
therein the subjects for discussions
and
the
reasons,
request
the
chairman of the board of directors
to convene a meeting of the board
of directors.
When the chairman of the board is
on leave or for any reason is unable
to exercise the powers of the
chairman, the vice chairman shall
do so in place of the chairman, or, if
there is no vice chairman or the
vice chairman also is on leave or
for any reason is unable to act, by a
managingdirector designated by		 Meetings of the board of directors
shall be called and chaired by the
chairman of the board. However,
the first meeting of each newly
elected board of directors shall be
called and chaired by the director
who received votes representing the
largest portion of voting rights at
the shareholders' meeting in which
the directors were elected; if there
are two or more directors so
entitled to call the meeting, they
shall choose one person by and
from among themselves to do so.
When the chairman of the board is
on leave or for any reason is unable
to exercise the powers of the
chairman, the vice chairman shall
do so in place of the chairman, or, if
there is no vice chairman or the
vice chairman also is on leave or
for any reason is unable to act, by a
managing director designated by
the chairman, or, if there is no
managing director, by a director
designated thereby, or, if the
chairman does not make such a
designation, by a managing director
or director elected by and from
among themselves.		 To
comply
with recent
amendments
to laws and
regulations
promulgated
by
the
Taiwan
Stock
Exchange on
November
30, 2018 per
Letter
No.
1071703794.

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Article
Number		 After Amendment Prior to Amendment Reason
the chairman, or, if there is no
managing director, by a director
designated thereby, or, if the
chairman does not make such a
designation, by a managing director
or director elected by and from
amongthemselves.
15 If any director or a juristic person
represented by a director is an
interested party with respect to any
agenda item, the director shall state
the
important
aspects
of
the
interested party relationship at the
respective
meeting.
In
the
merger/consolidation
and
acquisition by a company, the
Board of Directors shall, in the
course of conducting the merger
/consolidation or acquisition, in the
best interest of the company, fulfill
its
duty
of
care.When
the
relationship is likely to prejudice
the interests of the company, the
director may not participate in
discussion or voting on that agenda
item, and further, shall enter recusal
during discussion and voting on
that item and may not act as
another director's proxy to exercise
voting rights on that matter.
The provisions of Article 180,
paragraph 2 of the Company Act, as
applied mutatis mutandis under
Article 206, paragraph 3 of that
Act, apply to resolutions of board
of directors meetings when a board		 If any director or a juristic person
represented by a director is an
interested party with respect to any
agenda item, the director shall state
the
important
aspects
of
the
interested party relationship at the
respective
meeting.
When
the
relationship is likely to prejudice
the interests of the company, the
director may not participate in
discussion or voting on that agenda
item, and further, shall enter recusal
during discussion and voting on
that item and may not act as
another director's proxy to exercise
voting rights on that matter.
The provisions of Article 180,
paragraph 2 of the Company Act, as
applied mutatis mutandis under
Article 206, paragraph 3 of that
Act, apply to resolutions of board
of directors meetings when a board
director
is
prohibited
by
the
preceding
paragraph
from
exercising voting rights.		 To
comply
with recent
amendments
to laws and
regulations
promulgated
by
the
Taiwan
Stock
Exchange on
November
30, 2018 per
Letter
No.
1071703794.

23

Article
Number		 After Amendment Prior to Amendment Reason
director
is
prohibited
by
the
preceding
paragraph
from
exercising voting rights.

24

Annex V. Comparison Table for the Proposed Amendements to the Exiting Articles of

Association

Article
Number		 After Amendment Prior to Amendment Reason
Article 6 6(A)The issue of new ordinary
Shares of the Company shall be
approved by a majority of the
Directors present at a meeting
attended by two-thirds or more of
the total number of the Directors.
The issue of new Shares shall at
all times be subject to the
sufficiency
of
the
authorised
capital of the Company.
(B) When the total number of new
ordinary
Shares
has
been
subscribed to in full, the Company
shall immediately press each of
the
subscribers
for
payment.
Where
share
certificates
are
issued
above
the
par
value
thereof, the amount in excess of
such value shall be collected at
the same time with the payment
for Shares.
(C)
Where
subscriber
delays
payment for Shares as provided in
the
preceding
paragraph,
the
Company shall fix a period of not
less than one (1) month and call
upon each subscriber to pay up,
declaring that in case of default of
payment within the stipulated
period
their
right
shall
be
forfeited. After the Company has
made the aforesaid call, the
subscribers who fail to pay		 6 The issue of new ordinary
Shares of the Company shall be
approved by a majority of the
Directors present at a meeting
attended by two-thirds or more of
the total number of the Directors.
The issue of new Shares shall at
all times be subject to the
sufficiency
of
the
authorised
capital of the Company.		 To comply with
recent
amendments to
laws
and
regulations
promulgated by
the
Taiwan
Stock Exchange
on
Deceember
25,
2019
per
Letter
No.
10800235681.

25

Article
Number		 After Amendment Prior to Amendment Reason
accordingly shall forfeit their
rights and the Shares subscribed
to by them shall be otherwise
sold.
Under
the
aforesaid
circumstances, compensation for
loss or damage, if any, may still
be claimed against such defaulting
subscribers.
Article
10		 The Shareholders’ pre-emptive
right
prescribed
under
the
preceding Article 9 shall not apply
in the event that new Shares are
issued due to the following
reasons or for the following
purpose:
(a) in connection with~~a Merger~~
~~with another company, or the~~
~~Spin-off of the Company, or~~
~~pursuant to~~any reorganization of
the Company;
(b) in connection with meeting
the Company’s obligation under
Share
subscription
warrants
and/or options granted to the
employees;
(c) in connection with meeting
the Company’s obligation under
corporate
bonds
which
are
convertible bonds or vested with
rights to acquire Shares;
(d) in connection with meeting
the Company’s obligation under
Share subscription warrant or
Special Shares vested with rights
to acquire Shares; or
(e)any
other
exemptions		 The Shareholders’ pre-emptive
right
prescribed
under
the
preceding Article 9 shall not apply
in the event that new Shares are
issued due to the following
reasons or for the following
purpose:
(a) in connection with a Merger
with another company, or the
Spin-off of the Company, or
pursuant to any reorganization of
the Company;
(b) in connection with meeting
the Company’s obligation under
Share
subscription
warrants
and/or options granted to the
employees;
(c) in connection with meeting
the Company’s obligation under
corporate
bonds
which
are
convertible bonds or vested with
rights to acquire Shares;
(d) in connection with meeting
the Company’s obligation under
Share subscription warrant or
Special Shares vested with rights
to acquire Shares; or
(e)any
other
exemptions		 To comply with
recent
amendments to
laws
and
regulations
promulgated by
the
Taiwan
Stock Exchange
on
Deceember
25,
2019
per
Letter
No.
10800235681.

26

Article
Number		 After Amendment Prior to Amendment Reason
provided under Taiwan Laws. provided under Taiwan Laws.
Article
10A		 10A (A)The employees of the
Company’s pre-emptive right
prescribed under the preceding
Article 8 and the Shareholders’
pre-emptive
right
prescribed
under the preceding Article 9 shall
not apply in the event that new
Shares are issued due to the
following reasons or for the
following purpose:
(a) in connection with a Merger
with another company, or for the
Merger
between
subsidiary
companies of the Company and
other companies, or the Spin-off
of the Company;
(b) in connection with the Shares
issued for being acquired;
(c) in
connection
with
acquisition
of
issued
Shares,
business, or assets of another
company; or
(d) in connection with share
swap.
(B) Any new Shares issued under
preceding paragraph (A) may be
paid up in cash or assets required
in the business of the Company.
Article
30		 30 (A) The Company may by
Special Resolution:
(a) together with the approval of
the Board, issue any Special
Shares in accordance with Article		 30 (A) The Company may by
Special Resolution:
(a) together with the approval of
the Board, issue any Special
Shares in accordance with Article		 To comply with
recent
amendments to
laws
and
regulations

27

Article
Number		 After Amendment Prior to Amendment Reason
4 and 5;
(b) change its name;
(c) change
the
currency
denomination of its share capital
and/or increase the share capital
by such sum, to be divided into
new Shares of such Classes of
such par value, as the resolution
shall prescribe;
(d) subject to the Law and the
Taiwan Laws, reduce its share
capital and any capital redemption
reserve in any manner authorised
by Law and the Taiwan Laws;
~~(e) subject to the Law, be~~
~~voluntarily wound up;~~
~~(f)~~(e)
carry on the general
transfer and the trading of Shares
then traded on TSE markets shall
be terminated while the transferee
company is not listed on the
GreTai Securities Market or TSE;
and
~~(g) be acquired by any other~~
~~surviving or newly incorporated~~
~~company~~
~~as~~
~~a~~
~~100%~~
~~held~~
~~subsidiary company by means of~~
~~share exchange and the trading of~~
~~Shares then traded on TSE~~
~~markets shall be terminated while~~
~~the~~
~~surviving~~
~~or~~
~~newly~~
~~incorporated company is not listed~~		 4 and 5;
(b) change its name;
(c) change
the
currency
denomination of its share capital
and/or increase the share capital
by such sum, to be divided into
new Shares of such Classes of
such par value, as the resolution
shall prescribe;
(d) subject to the Law and the
Taiwan Laws, reduce its share
capital and any capital redemption
reserve in any manner authorised
by Law and the Taiwan Laws;
(e) subject to the Law, be
voluntarily wound up;
(f) carry on the general transfer
and the trading of Shares then
traded on TSE markets shall be
terminated while the transferee
company is not listed on the
GreTai Securities Market or TSE;
(g) be acquired by any other
surviving or newly incorporated
company
as
a
100%
held
subsidiary company by means of
share exchange and the trading of
Shares
then traded on TSE
markets shall be terminated while
the
surviving
or
newly
incorporated company is not listed
on the GreTai Securities Market
promulgated by
the
Taiwan
Stock Exchange
on
Deceember
25,
2019
per
Letter
No.
10800235681.

28

Article
Number		 After Amendment Prior to Amendment Reason
~~on the GreTai Securities Market~~
~~or TSE; and~~
~~(h)~~(f)carry on a division and the
trading of Shares then traded on
TSE market shall be terminated
while the surviving or newly
incorporated transferee company
after the division is not listed on
the GreTai Securities Market or
TSE.
(B) The Company may, by a
Special Resolution for Mergers,
effect a Merger of the Company
in accordance with the Law.		 or TSE; and
(h) carry on a division and the
trading of Shares then traded on
TSE market shall be terminated
while the surviving or newly
incorporated transferee company
after the division is not listed on
the GreTai Securities Market or
TSE.
(B) The Company may, by a
Special Resolution for Mergers,
effect a Merger of the Company
in accordance with the Law.
Article
31		 31 (A)
The Company may by a
Supermajority Resolution Type
A:
(a) enter
into,
amend,
or
terminate any contract for lease of
its business in whole, or for
entrusting business, or for regular
joint operation with others;
(b) transfer the whole or any
material part of its business or
assets;
(c) take over the transfer of
another's whole business or assets,
which will have a material effect
on the business operation of the
Company;
(d) distribute part or all of its
dividends or bonus bywayof		 31 (A) The Company may by a
Supermajority Resolution Type
A:
(a) enter into, amend, or terminate
any contract for lease of its
business
in
whole,
or
for
entrusting business, or for regular
joint operation with others;
(b) transfer the whole or any
material part of its business or
assets;
(c) take over the transfer of
another's
whole
business
or
assets, which will have a material
effect on the business operation of
the Company;
(d) distribute part or all of its
dividends or bonus bywayof

29

Article
Number		 After Amendment Prior to Amendment Reason
issuance of new Shares;
(e) effect
any
Spin-off
or
winding-upin accordance with
the Taiwan Laws;~~and~~
(f) carry out private placement
of its securities~~.~~;
(g) modify
or
alter
these
Articles; and
(h) be acquired by any Surviving
Company
as
a
100%
held
subsidiary company by means of
share exchange.
(B) Alternatively, if the total
number of Shares represented by
the Shareholders present at such
general meeting is not sufficient
to meet the quorum criteria
specified
in
the
preceding
paragraph (A), the Company may
effect the above matters by a
Supermajority Resolution Type B.
(C) For the matters which are
required to be approved by
Supermajority Resolution Type
A/ Type B under these Articles,
the Company shall not approve
such matters by way of Special
Resolution
or
Ordinary
Resolution.
(D) In case the Company has
issued
Special
Shares,
any
modification or alteration in these
issuance of new Shares;
(e)
effect
any
Spin-off
in
accordance
with
the
Taiwan
Laws; and
(f) carry out private placement of
its securities.
(B) Alternatively, if the total
number of Shares represented by
the Shareholders present at such
general meeting is not sufficient
to meet the quorum criteria
specified
in
the
preceding
paragraph (A), the Company may
effect the above matters by a
Supermajority Resolution Type
B.
(C) For the matters which are
required to be approved by
Supermajority Resolution Type
A/ Type B under these Articles,
the Company shall not approve
such matters by way of Special
Resolution
or
Ordinary
Resolution.

30

Article
Number		 After Amendment Prior to Amendment Reason
Articles
prejudicial
to
the
privileges of Special Shareholders
shall also be adopted by a meeting
of Special Shareholders.
Article
32		 32(A)In the event any of the
resolutions with respect to the
paragraph (a), (b), or (c) of the
preceding
Article
31(A)
is
adopted by general meeting in
accordance with the provisions of
the Law, any Shareholder who has
notified the Company in writing
of his objection to such proposal
prior
to
such
meeting
and
subsequently raised his objection
at the meeting may request the
Company to purchase all of his
Shares at the then prevailing fair
price; provided, however, that no
Shareholder
shall
have
the
abovementioned appraisal right if
the general meeting resolves on
the dissolution of the Company
after the completion of transfer of
business or assets under the
paragraph (b) of Article 31(A).
(B)In the event any part of the
Company’s business is spun off or
the Company isinvolved in any
Merger, acquisition, share swap
with any other company, the
Shareholder, who has forfeited his
right to vote on such matter and
expressed his dissent therefore, in
writing or verbally (with a record)
before or duringthegeneral		 32 In the event any of the
resolutions with respect to the
paragraph (a), (b), or (c) of the
preceding
Article
31(A)
is
adopted by general meeting in
accordance with the provisions of
the Law, any Shareholder who has
notified the Company in writing
of his objection to such proposal
prior
to
such
meeting
and
subsequently raised his objection
at the meeting may request the
Company to purchase all of his
Shares at the then prevailing fair
price; provided, however, that no
Shareholder
shall
have
the
abovementioned appraisal right if
the general meeting resolves on
the dissolution of the Company
after the completion of transfer of
business or assets under the
paragraph (b) of Article 31(A).
In the event any part of the
Company’s business is spun off or
involved in any Merger with any
other company, the Shareholder,
who has forfeited his right to vote
on such matter and expressed his
dissent therefore, in writing or
verbally (with a record) before or
during the general meeting, may
request the Companyto buyback		 To comply with
recent
amendments to
laws
and
regulations
promulgated by
the
Taiwan
Stock Exchange
on
Deceember
25,
2019
per
Letter
No.
10800235681.

31

Article
Number		 After Amendment Prior to Amendment Reason
meeting,
may
request
the
Company to buy back all of his
Shares at the then prevailing fair
price.
(C) If the Shareholder filing a
request
under
the
preceding
paragraph (A) and (B) of this
Article 32, the Shareholder shall
make such request in writing
within twenty (20) days since the
resolution of the general meeting
was made, specify the price for
buying back. If the Company and
the
Shareholder
reach
an
agreement about the price of
buying back, the Company shall
pay for the Shares within ninety
(90) days since the resolution of
the general meeting was made. In
case no agreement is reached, the
Company shall pay the fair price
it has recognized to the dissenting
Shareholder who asks for a higher
price within ninety (90) days
since the resolution of the general
meeting
was
made.
If
the
Company
did
not
pay,
the
Company shall be deemed to be
agreeable to the price requested
by the Shareholder.
(D)
In
the
event
that
the
Shareholder filing a request under
the preceding paragraph (B) of
this Article 32and the Company
fails to reach such agreement with
the Shareholder within a sixty-day		 all of his Shares at the then
prevailing fair price. In the
event the Company fails to reach
such
agreement
with
the
Shareholder within a sixty-day
period commencing from the
resolution date, the Shareholder
may, within thirty days after such
sixty-day period, file a petition to
any competent court of Taiwan
for a ruling on the appraisal price,
and such ruling by such Taiwan
court
shall
be
binding
and
conclusive
as
between
the
Company
and
requested
Shareholder solely with respect to
the appraisal price.

32

Article
Number		 After Amendment Prior to Amendment Reason
period commencing from the
resolution date, the Shareholder
may, within thirty(30)days after
such sixty-day period, file a
petition to any competent court of
Taiwan for a ruling on the
appraisal price, and such ruling by
such Taiwan court shall be
binding
and
conclusive
as
between
the
Company
and
requested Shareholder solely with
respect to the appraisal price.The
Taiwan Taipei District Court,
ROC, may be the court of first
instance for this matter.
Article
76		 76 (a) A Director may be
discharged at any time by a
Supermajority Resolution Type A
adopted at a general meeting.
Alternatively, if the total number
of Shares represented by the
Shareholders
present
at
such
general meeting is not sufficient
to meet the quorum criteria
specified above, the Company
may effect the above matter by a
Supermajority Resolution Type B.
(b) In the event a Director has, in
the course of performing his/her
duties as a Director, committed
any act resulting in material
damages to the Company or in
material
violation
of
these
Articles, Laws and Applicable
Listing Rules, but not dismissed
bya resolution of thegeneral		 76 (a) A Director may be
discharged at any time by a
Supermajority Resolution Type A
adopted at a general meeting.
Alternatively, if the total number
of Shares represented by the
Shareholders present at such
general meeting is not sufficient
to meet the quorum criteria
specified above, the Company
may effect the above matter by a
Supermajority Resolution Type
B.
(b) In the event a Director has, in
the course of performing his/her
duties as a Director, committed
any act resulting in material
damages to the Company or in
material
violation
of
these
Articles, Laws and Applicable
ListingRules, but not dismissed		 To comply with
recent
amendments to
laws
and
regulations
promulgated by
the
Taiwan
Stock Exchange
on
Deceember
25,
2019
per
Letter
No.
10800235681.

33

Article
Number		 After Amendment Prior to Amendment Reason
meeting, Shareholder(s) holding
3% or more of the issued and
outstanding
Shares
of
the
Company may, within 30 days
after
that
general
meeting,
institute a lawsuit in the Taipei
District Court of Taiwan or other
competent court for a judgment in
respect of such matter.
(c)
Any
Shareholder
or
Shareholders entitled to attend
general meetings of the Company
holding at least one percent (1%)
of the paid up share capital of the
Company for a period of six
months or a longer time may,
submit a written request to any
Independent Director of the Audit
Committee to initiate proceedings
against any Director or Directors
on behalf of the Company with a
competent court having proper
jurisdiction, including the Taiwan
Taipei District Court, ROC. If
Independent Director of the Audit
Committee fails to initiate such
proceedings within thirty (30)
days after receiving the request by
such
Shareholder(s),
such
Shareholder(s) may initiate such
proceedings on behalf of the
Company with a competent court
having
proper
jurisdiction,
including
the
Taiwan
Taipei
District Court, ROC.		 by a resolution of the general
meeting, Shareholder(s) holding
3% or more of the issued and
outstanding
Shares
of
the
Company may, within 30 days
after
that
general
meeting,
institute a lawsuit in the Taipei
District Court of Taiwan or other
competent court for a judgment in
respect of such matter.
(c)
Any
Shareholder
or
Shareholders entitled to attend
general meetings of the Company
holding at least one percent (1%)
of the paid up share capital of the
Company for a period of six
months or a longer time may,
submit a written request to any
Independent Director of the Audit
Committee to initiate proceedings
against any Director or Directors
on behalf of the Company with a
competent court having proper
jurisdiction, including the Taiwan
Taipei District Court, ROC. If
Independent Director of the Audit
Committee fails to initiate such
proceedings within thirty (30)
days after receiving the request by
such
Shareholder(s),
such
shareholder(s) may initiate such
proceedings on behalf of the
Company with a competent court
having
proper
jurisdiction,
including
the
Taiwan
Taipei

34

Article
Number		 After Amendment Prior to Amendment Reason
(d) In the event a Director has, in
the course of performing his
duties as a Director, committed
any act for himself or on behalf of
another Person in violation of the
duty of the loyalty and the due
care of a good administrator in
conducting the business operation
of the company, the meeting of
shareholders may, by a resolution,
consider the earnings in such an
act as earnings of the company
unless one year has lapsed since
the realization of such earnings.
(e) In the event a Director has, in
the course of performing the
business operations, violated any
provision of the applicable laws
and/or regulations and thus caused
damage to any other Person,
he/she/it
shall
jointly
and
severally be liable with the
Company for the damage to such
other Person.
(f) The Officers, in the course of
performing their duties to the
Company,
shall
assume
responsibilities identical to that of
the Directors.		 District Court, ROC.
(d) In the event a Director has, in
the course of performing his
duties as a Director, committed
any act for himself or on behalf of
another Person in violation of the
duty of the loyalty and the due
care of a good administrator in
conducting the business operation
of the company, the meeting of
shareholders may, by a resolution,
consider the earnings in such an
act as earnings of the company
unless one year has lapsed since
the realization of such earnings.
Article
86A		 86ABefore the Board is held to
resolve matters of the Merger and
acquisition, the Audit Committee
shall review the fairness and
reasonableness of the plan and
transaction of the Merger or		 86A For so long as the Shares are
registered
in
the
Emerging
Market or listed on the GreTai
Securities Market or TSE, the
Company
shall
establish
a
remuneration
committee.		 To comply with
recent
amendments to
laws
and
regulations
promulgated by

35

Article
Number		 After Amendment Prior to Amendment Reason
acquisition and then report the
review results to the Board and
the general meeting. When the
Audit Committee reviews the
fairness and reasonableness of the
plan and transaction of the Merger
and
acquisition,
the
Audit
Committee shall seek opinions
from an independent expert on the
reasonableness of the share swap
ratio or distribution of cash or
other assets. The review results of
the
Audit
Committees
and
opinions of independent experts
shall
be
delivered
to
the
Shareholders together with the
notice of a general meeting for the
Merger or acquisition. If the
Company has made a public
announcement
publishing
the
same
content
as
in
the
aforementioned documents, which
shall
be
delivered
to
the
Shareholders, on the website
designated by the Commission
and the GreTai Securities Market
or TSE and the aforementioned
documents are prepared at the
venue of the general meeting,
those documents shall be deemed
as having been sent to the
Shareholders.
~~For so long as the Shares are~~
~~registered in the Emerging Market~~
~~or listed on the GreTai Securities~~
~~Market or TSE, the Company~~		 Remuneration
shall
include
salary, stock options, and any
other
substantive
incentive
measures
for
directors
and
managerial
officers.
The
professional qualifications for the
members of the remuneration
committee, the exercise of their
powers of office, and related
matters
shall
be
made
in
accordance
with
rules
and
procedures established by the
Company.		 the
Taiwan
Stock Exchange
on
Deceember
25,
2019
per
Letter
No.
10800235681.

36

Article
Number		 After Amendment Prior to Amendment Reason
~~shall establish a remuneration~~
~~committee. Remuneration shall~~
~~include salary, stock options, and~~
~~any other substantive incentive~~
~~measures~~
~~for~~
~~directors~~
~~and~~
~~managerial~~
~~officers.~~
~~The~~
~~professional qualifications for the~~
~~members of the remuneration~~
~~committee, the exercise of their~~
~~powers of office, and related~~
~~matters~~
~~shall~~
~~be~~
~~made~~
~~in~~
~~accordance~~
~~with~~
~~rules~~
~~and~~
~~procedures established by the~~
~~Company.~~
Article
86B		 86BFor so long as the Shares are
registered in the Emerging Market
or listed on the GreTai Securities
Market or TSE, the Company
shall establish a remuneration
committee. Remuneration shall
include salary, stock options, and
any other substantive incentive
measures
for
directors
and
managerial
officers.
The
professional qualifications for the
members of the remuneration
committee, the exercise of their
powers of office, and related
matters
shall
be
made
in
accordance
with
rules
and
procedures established by the
Company.

37

Annex VI. Comparison Table for the amendments to the Procedures for Loan to Others

Article
Number		 After Amendment Prior to Amendment Reason
Four、
2.		 Inter-company
loans
of
funds
between
overseas
companies in which the
company holds, directly or
indirectly,
100%
of
the
voting shares, nor to loans of
fund to the public company
by any overseas company in
which the company holds,
directly or indirectly, 100%
of the voting shares, the
aggregate amount of such
loans and on the amount of
such loans permitted to a
single borrower may not
exceed 400 percent of which
company loan to others’ net
worth.		 Inter-company
loans
of
funds
between
overseas
companies in which the
company holds, directly or
indirectly,
100%
of
the
voting shares, nor to loans of
fund to the public company
by any overseas company in
which the company holds,
directly or indirectly, 100%
of the voting shares, the
aggregate amount of such
loans and on the amount of
such loans permitted to a
single borrower may not
exceed 400 percent of the
conflidated Company’s net
worth.		 To
comply
with
the
Regulations
Governing
Loaning of Funds and
Making
of
Endorsements/Guarantees
by Public Companies.

38

Annex VII. Comparison Table for the amendments to Procedures for Endorsement and

Guarantee

Article
Number		 After Amendment Prior to Amendment Reason
Four1.、
Four 2.		 The
ceilings
on
the
amounts:
1. The aggregate amount
of endorsements/guarantees
may not exceed 600 percent
of which company provide
endorsements/guarantees to
others’ net worth.
2.
The
amount
of
its
endorsements/guarantees for
any single entity may not
exceed 50 percent of which
company
provide
endorsements/guarantees to
others’
net
worth.Those
restriction shall not apply to
the
Company
provide
endorsements/guarantees to
its subsidiaries.		 The
ceilings
on
the
amounts:
1.The aggregate amount
of endorsements/guarantees
that is set as the ceiling for
the
Company
may
not
exceed 600 percent of the
consolidated company’s net
worth.
2.The amount of its
endorsements/guarantees for
any single entity may not
exceed 50 percent of the
consolidated company’s net
worth.
Those
restriction
shall not apply to the
Company
provide
endorsements/guarantees to
its subsidiaries.。		 To
comply
with
the
Regulations
Governing
Loaning of Funds and
Making
of
Endorsements/Guarantees
by Public Companies
Four 7. 上列所稱淨值應以最近期
經會計師查核（核閱）財務
報告為依據，以合併資產負
債表歸屬於母公司業主權
益之數額為之。若係子公司
提供背書保證，則以該子公
司最近期經會計師查核（核
閱）財務報告或該子公司最
近期併入合併財務報告時
經會計師查核(核閱)後之
淨值(孰為最近期)為依據。
New.		 To
comply
with
the
Regulations
Governing
Loaning of Funds and
Making
of
Endorsements/Guarantees
by Public Companies

39

Annex VIII. Comparison Table for the amendments to the Rule of General Meeting

Article
Number		 After Amendment Prior to Amendment Reason
3 Election or dismissal of
directors
or
supervisors,
amendments to the articles of
Incorporation,
reduction
of
capital,
application
for
the
approval of ceasing its status as a
public company, approval of
competing with the company by
directors,
surplus
profit
distributed in the form of new
shares, reserve distributed in the
form of new shares, dissolution,
merger, spin-off, or any matters
as set forth in Paragraph I,
Article 185 hereof shall be
itemized in the causes or subjects
to be described and the essential
contents shall be explained in the
notice to convene a meeting of
shareholders, and shall not be
brought
up
as
extemporary
motions;the essential contents
may be posted on the website
designated by the competent
authority in charge of securities
affairs or the company, and such
website shall be indicated in the
above notice.
股東會召集事由已載明全
面改選董事、監察人，並載明
就任日期，該次股東會改選完
成後，同次會議不得再以臨時
動議或其他方式變更其就任日
期。		 Election or dismissal of
directors
or
supervisors,
amendments to the articles of
incorporation,
the
dissolution,
merger,
or
demerger
of
the
corporation, or any matter under
Article 185, paragraph 1 of the
Company Act, Articles 26-1 and
43-6
of
the
Securities
and
Exchange Act, or Articles 56-1
and 60-2 of the Regulations
Governing
the
Offering
and
Issuance
of
Securities
by
Securities Issuers shall be set out
in the notice of the reasons for
convening
the
shareholders
meeting. None of the above
matters may be raised by an
extraordinary motion.		 To
comply
with
recent
amendemnets
to laws and
regulations
promulgated
by the Taiwan
Stock
Exchange
Corporation
on January 2,
2020
per
Letter
No.
10800242211.

40

Article
Number		 After Amendment Prior to Amendment Reason
A shareholder holding 1
percent or more of the total
number of issued shares may
submit to this Corporation a
written proposal for discussion at
a regular shareholders meeting.
Such proposals, however, are
limited to one item only, and no
proposal containing more than
one item will be included in the
meeting agenda.A shareholder
proposal proposed for urging the
Company to promote public
interests or fulfil its social
responsibilities
may
still
be
included in the agenda by the
Board. In addition, when the
circumstances
of
any
subparagraph of Article 172-1,
paragraph 4 of the Company Act
apply to a proposal put forward
by a shareholder, the board of
directors may exclude it from the
agenda.
Prior to the book closure date
before a regular shareholders
meeting is held, this Corporation
shall publicly announce that it
will
receive
shareholder
proposals, and the location and
time period for their submission,
can in writing or by way of
electronic
transmission;
the
period
for
submission
of
shareholder proposals may not
be less than 10 days.		 A
shareholder
holding
1
percent or more of the total
number of issued shares may
submit to this Corporation a
written proposal for discussion at a
regular
shareholders
meeting.
Such proposals, however, are
limited to one item only, and no
proposal containing more than one
item will be included in the
meeting agenda. In addition, when
the
circumstances
of
any
subparagraph of Article 172-1,
paragraph 4 of the Company Act
apply to a proposal put forward by
a
shareholder,
the
board
of
directors may exclude it from the
agenda.
Prior to the book closure date
before
a
regular
shareholders
meeting is held, this Corporation
shall publicly announce that it will
receive shareholder proposals, and
the location and time period for
their submission; the period for
submission
of
shareholder
proposals may not be less than 10
days.

41

Article
Number		 After Amendment Prior to Amendment Reason
Shareholder-submitted proposals
are limited to 300 words, and no
proposal containing more than
300 words will be included in the
meeting agenda. The shareholder
making the proposal shall be
present in person or by proxy at
the regular shareholders meeting
and take part in discussion of the
proposal.
Prior to the date for issuance of
notice of a shareholders meeting,
this Corporation shall inform the
shareholders
who
submitted
proposals
of
the
proposal
screening results, and shall list in
the meeting notice the proposals
that conform to the provisions of
this article. At the shareholders
meeting the board of directors
shall explain the reasons for
exclusion of any shareholder
proposals not included in the
agenda.		 Shareholder-submitted
proposals
are limited to 300 words, and no
proposal containing more than 300
words will be included in the
meeting agenda. The shareholder
making the proposal shall be
present in person or by proxy at
the regular shareholders meeting
and take part in discussion of the
proposal.
Prior to the date for issuance of
notice of a shareholders meeting,
this Corporation shall inform the
shareholders
who
submitted
proposals
of
the
proposal
screening results, and shall list in
the meeting notice the proposals
that conform to the provisions of
this article. At the shareholders
meeting the board of directors
shall explain the reasons for
exclusion
of
any
shareholder
proposals not included in the
agenda.
10 If a shareholders meeting is
convened
by
the
board
of
directors,
the
meeting
agenda(including
extraordinary
motions
and
revise
of
the
original proposal)shall be set by
the board of directors. The
meeting shall proceed in the
order set by the agenda, which
maynot be changed without a		 If a shareholders meeting is
convened
by
the
board
of
directors, the meeting agenda shall
be set by the board of directors.
The meeting shall proceed in the
order set by the agenda, which
may not be changed without a
resolution of the shareholders
meeting.		 To
comply
with
recent
amendemnets
to laws and
regulations
promulgated
by the Taiwan
Stock
Exchange
Corporation

42

Article
Number		 After Amendment Prior to Amendment Reason
resolution of the shareholders
meeting.
(Item 2 ~3 Omitted)
The chair shall allow ample
opportunity during the meeting
for explanation and discussion of
proposals and of amendments or
extraordinary
motions
put
forward by the shareholders;
when the chair is of the opinion
that
a
proposal
has
been
discussed sufficiently to put it to
a vote, the chair may announce
the discussion closed and call for
a vote. And arrange adequate
votingtime.		 (Item 2 ~3 Omitted)
The chair shall allow ample
opportunity during the meeting for
explanation and discussion of
proposals and of amendments or
extraordinary motions put forward
by the shareholders; when the
chair is of the opinion that a
proposal
has
been
discussed
sufficiently to put it to a vote, the
chair may announce the discussion
closed and call for a vote.		 on January 2,
2020
per
Letter
No.
10800242211.
13 (Item 1 Omitted)
When the Company holds a
shareholder meeting, it shall
adopt exercise of voting rights by
electronic means and may adopt
exercise of voting rights by
correspondence). When voting
rights
are
exercised
by
correspondence
or
electronic
means, the method of exercise
shall
be
specified
in
the
shareholders meeting notice. A
shareholder exercising voting
rights by correspondence or
electronic means will be deemed
to have attended the meeting in
person, but to have waived		 (Item 1 Omitted)
When the Company holds a
shareholders meeting, it may allow
the shareholders to exercise voting
rights
by
correspondence
or
electronic means (in accordance
with the proviso of Article 177-1
of the Company Act regarding
companies
that
shall
adopt
electronic
voting:
When
the
Company holds a shareholder
meeting, it shall adopt exercise of
voting rights by electronic means
and may adopt exercise of voting
rights by correspondence). When
voting rights are exercised by
correspondence
or
electronic		 To
comply
with
recent
amendemnets
to laws and
regulations
promulgated
by the Taiwan
Stock
Exchange
Corporation
on January 2,
2020
per
Letter
No.
10800242211.

43

Article
Number		 After Amendment Prior to Amendment Reason
his/her rights with respect to the
extraordinary
motions
and
amendments
to
original
proposals of that meeting; it is
therefore advisable that this
Corporation
avoid
the
submission
of
extraordinary
motions and amendments to
original proposals.
(Omitted)		 means, the method of exercise
shall
be
specified
in
the
shareholders meeting notice. A
shareholder
exercising
voting
rights
by
correspondence
or
electronic means will be deemed
to have attended the meeting in
person, but to have waived his/her
rights
with
respect
to
the
extraordinary
motions
and
amendments to original proposals
of that meeting; it is therefore
advisable that this Corporation
avoid
the
submission
of
extraordinary
motions
and
amendments to original proposals.
(Omitted)
15 The minutes of shareholders'
meeting shall record the date and
place of the meeting, the name of
the chairman, the method of
adopting
resolutions,
and
a
summary of the essential points
of the proceedings and the results
of
the
meeting
(including
votes). Shall disclosure every
candidates’votes when there’s
Election
for
the
Board
of
Directors.The minutes shall be
kept persistently throughout the
life of the company.		 The
minutes
of
shareholders'
meeting shall record the date and
place of the meeting, the name of
the chairman, the method of
adopting
resolutions,
and
a
summary of the essential points of
the proceedings and the results of
the meeting. The minutes shall be
kept persistently throughout the
life of the company.		 To
comply
with
recent
amendemnets
to laws and
regulations
promulgated
by the Taiwan
Stock
Exchange
Corporation
on January 2,
2020
per
Letter
No.
10800242211.

44

Annex IX. Memorandum and Articles of Association

THE COMPANIES LAW (2009 REVISION)

COMPANY LIMITED BY SHARES

SEVENTH AMENDED AND RESTATED ARTICLES OF ASSOCIATION

OF

WISDOM MARINE LINES CO., LIMITED

慧洋海運股份有限公司

(as adopted by a Special Resolution passed on 17 May 2019)

INTERPRETATION

  1. The Regulations contained or incorporated in Table A of the First Schedule of the Companies Law (2009 Revision) shall not apply to this Company.

  2. (a) In these Articles the following terms shall have the meanings set opposite unless the context otherwise requires:-

  3. (i) Affiliated Company with respect to any company, any other company that directly, or indirectly through one or more intermediaries, controls, is controlled by, or is under common control with, such first company;

  4. (ii) Applicable Listing the relevant laws, regulations, rules and code as amended, Rules from time to time, applicable as a result of the original and continued trading or listing of any Shares on any Taiwan stock exchange or securities market, including, without limitation the relevant provisions of Securities and Exchange Act, the Acts Governing Relations Between Peoples of the Taiwan Area and the Mainland Area, or any similar statute and the rules and regulations of the Taiwan authorities thereunder, and the rules and regulations promulgated by the Financial Supervisory Commission, the GreTai Securities Market or the Taiwan Stock Exchange;

(iii) Articles these Articles of Association of the Company in their

45

  • present form, as amended or substituted from time to time amended or supplemented by Special Resolution;

  • (iv) Auditors the Auditors for the time being of the Company, if any;

  • (v) Audit Committee has the meaning set forth in Article 85. (vi) Audit Committee members of the Audit Committee. Members

  • (vii) Chairman has the meaning given thereto in Article 77; (viii) Class or Classes any class or classes of Shares as may from time to time be issued by the Company;

  • (ix) Commission Financial Supervisory Commission of Taiwan or any other authority for the time being administering the Securities and Exchange Act of Taiwan;

  • (x) Company WISDOM MARINE LINES CO., LIMITED 慧洋海運股 份有限公司 ;

  • (xi) Consolidated means the new company that results from the Company consolidation of two or more Constituent Companies;

  • (xii) consolidation means the combination of two or more Constituent Companies into a Consolidated Company and the vesting of the undertaking, property and liabilities of such companies in the Consolidated Company within the meaning of the Law and the Taiwan Laws;

  • (xiii) Constituent an existing company that is participating in a Merger with Company one of more other existing companies within the meaning of the Law and the Taiwan Law;

  • (xiv) Directors or Board The directors of the Company for the time being or, as the case may be, the directors assembled as a board or as a committee thereof;

  • (xv) electronic shall have the meaning given to it in the Electronic Transactions Law (2003 Revision) (as amended) of the Cayman Islands and any amendment thereto or re-enactments thereof for the time being in force and

46

includes every other law incorporated therewith or substituted therefore;

  • (xvi) electronic transmission to any number, address or internet website or communication other electronic delivery methods as may be decided and approved by not less than two-thirds of the vote of the Board, subject to the Law;

  • (xvii) Emerging Market the emerging market board of GreTai Securities Market in Taiwan;

  • (xviii) FSC Financial Supervisory Commission of Taiwan;

  • (xix) GreTai Securities the GreTai Securities Market in Taiwan; Market or GTSM

  • (xx) Indemnified Person

  • has the meaning given thereto in Article 156;

  • (xxi) Independent a Director who is an independent director as defined in the Director Applicable Listing Rules;

  • (xxii) Law

  • The Companies Law (2009 Revision) of the Cayman Islands and any amendment or other statutory modification thereof and every other act, order, regulation or other instrument having statutory effect (as amended from time to time) for the time being in force in the Cayman Islands applying to or affecting the Company, the Memorandum of Association and/or the Articles of Association, and where in these Articles any provision of the Law is referred to, the reference is to that provision as modified by any law for the time being in force;

  • (xxiii) Member or a Person who is duly registered as the holder of any Share Shareholders or Shares in the Register and includes each subscriber to the Memorandum of Association pending entry in the Register of such subscriber as well as persons who are jointly so registered, and “Members” or “Shareholders” means 2 or more of them;

  • (xxiv) Memorandum of the memorandum of association of the Company, as Association amended or substituted from time to time;

  • (xxv) Merger a merger and/or a consolidation;

47

(xxvi) merger the merging of two or more Constituent Companies and the vesting of their undertaking, property and liabilities in one of such company as the Surviving Company within the meaning of the Law and the Taiwan Laws; (xxvii) Month a calendar month;

48

  • (xxviii) MOPS The Market Observation Post System maintained by TSE & GTSM;

  • (xxix) Ordinary Resolution a resolution passed by a simple majority of such Shareholders as, being entitled to do so, vote in person or, where proxies are allowed, by proxy or, in the case of any Shareholder being a corporation, by its duly authorized representative at a general meeting of the Company held in accordance with these Articles and where a poll is taken regard shall be had in computing a majority to the number of votes to which each Shareholder is entitled.

  • (xxx) paid up paid up as to the par value and any premium payable in respect of the issue of any Shares and includes credited as paid up;

  • (xxxi) Person any natural Person, firm, company, joint venture, partnership, corporation, association or other entity (whether or not having a separate legal personality) or any of them as the context so requires;

  • (xxxii) Register the principal register and any branch register of Members of the Company to be maintained at such place within or outside the Cayman Islands as the Board shall determine from time to time, as required to be kept pursuant to the Law;

  • (xxxiii) Registered Office the registered office of the Company for the time being as required under the Law;

  • (xxxiv) Registration Office

  • such place or places in the Republic of China or elsewhere where the Board from time to time determine to keep a branch register of Shareholders of the Company in respect of that class of share capital and where (except in cases where the Board otherwise agrees) transfers of other documents of title for Shares are to be lodged for registration and are to be registered;

  • (xxxv) Relevant Period

  • the period commencing from the date on which any of the securities of the Company first become listed on the

49

GTSM or TSE to and including the date immediately before the day on which none of such securities are so listed (and so that if at any time listing of any such securities is suspended for any reason whatsoever and for any length of time, they shall nevertheless be treated, for the purpose of this definition, as listed);

  • (xxxvi) Republic of China the Republic of China, its territories, its possessions and ROC or Taiwan all areas subject to its jurisdiction;

  • (xxxvii) Seal the common seal of the Company (if applicable) or any facsimile or official seal (if applicable) for the use outside of the Cayman Islands;

  • (xxxviii) Secretary any Person for the time being appointed by the Directors to perform any of the duties of the secretary of the Company and including any assistant, deputy, acting or temporary secretary;

  • (xxxix) Shares

  • a share in the capital of the Company. All references to "Shares" herein shall be deemed to be Shares of any or all Classes as the context may require. For the avoidance of doubt in these Articles the expression "Share" shall include a fraction of a Share;

  • (xl) Share Premium Account

  • the share premium account established in accordance with these Articles, the Law and the Taiwan Laws, meaning an account where a sum equal to the aggregate amount of the value of the premiums on Shares which are issued at a premium shall be transferred to;

  • (xli) Shareholders’ Service Agent

  • The agent licensed by Taiwan authorities to provide certain shareholders services in accordance with the Applicable Listing Rules to the Company;

  • (xlii) signed

  • bearing a signature or representation of a signature affixed by mechanical means or an electronic symbol or process attached to or logically associated with an electronic communication and executed or adopted by a Person with the intent to sign the electronic communication;

  • (xliii) Special means a special resolution of the Company passed in

50

Resolution

  • accordance with the Law, being a resolution passed by a majority of not less than two-thirds of such Shareholders as, being entitled to do so, vote in Person or, where proxies are allowed, by proxy or, in the cases of Shareholders which are corporations, by their respective duly authorized representatives at a general meeting of the Company of which notice, specifying (without prejudice to the power contained in the Articles to amend the same) the intention to propose the resolution as a Special Resolution, has been duly given and where a poll is taken regard shall be had in computing a majority to the number of votes to which each Shareholder is entitled.

A Special Resolution shall be effective for any purpose for which an Ordinary Resolution is expressed to be required under any provision of these Articles;

  • (xliv) Special Resolution for Merger

  • means a resolution of the Company passed in accordance with the Law, being a resolution:

  • (a) by majority in number representing seventy-five per cent in value of the Shareholders voting together as one class; and

  • (b) if the Shares to be issued to each Shareholder in the consolidated or surviving company are to have the same rights and economic value as the Shares held in the Company, a Special Resolution of the Shareholders voting together as one class,

and in either case a Shareholder shall have the right to vote regardless of whether the Shares that he holds otherwise give him voting rights;

  • (xlv) Special Shares

  • (xlvi) Spin-off

  • has the meaning given thereto in Article 4;

  • an act wherein a transferor company transfers all of its independently operated business or any single independently operated business to an existing or a newly incorporated company as consideration for that existing

51

transferee company or newly incorporated transferee company to issue new shares to the transferor company or to shareholders of the transferor company;

  • (xlvii) Supermajority a resolution passed by Shareholders, as being entitled to Resolution Type do so, vote in Person or, where proxies are allowed, by A proxy at a general meeting, such Shareholders holding at least a majority of the Shares held by all Shareholders attending that meeting, and such meeting attended by Shareholders holding not less than two-thirds of all issued Shares of the Company;

  • (xlviii) Supermajority a resolution passed by Shareholders, as being entitled to Resolution Type do so, vote in Person or, where proxies are allowed, by B proxy at a general meeting, such Shareholders holding not less than two-thirds of the Shares held by all Shareholders attending that meeting, and such meeting attended by Shareholders holding at least a majority of all issued Shares of the Company;

  • (xlix) Surviving means the sole remaining Constituent Company into Company which one or more other Constituent Companies are merged within the meaning of the Law and the Taiwan Laws;

  • (l) Taiwan Laws the laws and regulations of Taiwan, including without limitation to the Applicable Listing Rules;

  • (li) Transfer Office the place where the principal register of Shareholders is located for the time being; and

  • (lii) TSE the Taiwan Stock Exchange.

  • (b) Unless the context otherwise requires, expressions defined in the Law and used herein shall have the meanings so defined.

  • (c)

  • In these Articles unless the context otherwise requires:-

  • (a) words importing the singular number shall include the plural number and vice-versa;

  • (b) words importing the masculine gender shall include the feminine and neuter genders;

52

  • (c) a notice provided for herein shall be in writing unless otherwise specified and all reference herein to "in writing" and "written" shall include printing, lithography, photography and other modes of representing or reproducing words in permanent visible form; and

  • (d) "may" shall be construed as permissive and "shall" shall be construed as imperative.

  • (d) Heading used herein are intended for convenience only and shall not affect the construction of these Articles.

SHARES

  1. Subject to these Articles, the Directors may, in respect of all Shares for the time being unissued:

  2. (a) offer, issue, allot and dispose of such Shares to such Persons, in such manner, on such terms and having such rights and being subject to such restrictions as they may from time to time determine, but so that no Share shall be issued at a discount, except in accordance with the provisions of the Law; and

  3. (b) grant options with respect to such Shares and issue warrants or similar instruments with respect thereto, in accordance with the provisions of the Law;

and, for such purposes, the Directors may reserve an appropriate number of Shares for the time being unissued.

  1. Shares of different classes with rights which are preferential or inferior to those of ordinary Shares issued by the Company (“ Special Shares ”) may be created with the approval of a Special Resolution. Special Shares may be issued with the approval of a majority of the Directors present at a meeting attended by two-thirds or more of the total number of the Directors.

  2. Prior to the issuance of any Special Shares approved pursuant to the preceding Article 4, these Articles shall be amended to set forth the rights and obligations of the Special Shares, including but not limited to the following terms, and the same shall apply to any variation of rights of Special Shares:

  3. (a) Total number of Special Shares been authorized to be issued and the numbers of the Special Shares already issued;

53

  • (b) order, fixed amount or fixed ratio of allocation of dividends and bonus on Special Shares;

  • (c) order, fixed amount or fixed ratio of allocation of surplus assets of the Company;

  • (d) order of or restriction on the voting right(s) (including declaring no voting rights whatsoever) of special shareholders;

  • (e) other matters concerning rights and obligations incidental to Special Shares; and

  • (f) the method by which the Company is authorized or compelled to redeem the Special Shares, or a statement that redemption rights shall not apply.

  • The issue of new ordinary Shares of the Company shall be approved by a majority of the Directors present at a meeting attended by two-thirds or more of the total number of the Directors. The issue of new Shares shall at all times be subject to the sufficiency of the authorized capital of the Company.

  • (A)The Company shall not issue any unpaid Shares or partial paid-up Shares. The Company shall not issue Shares in bearer form.

  • (B) The Company shall not convert the Shares into par value shares if the Company chooses to issue no par value shares.

  • Upon each issuance of new Shares, the Directors may reserve not more than fifteen percent of the new Shares for subscription by the employees of the Company who are determined by the Board in its reasonable discretion.

  • For so long as the Shares are registered in the Emerging Market or listed on the GreTai Securities Market or TSE, unless otherwise resolved by the Shareholders in general meeting by Ordinary Resolution, if at anytime the Board resolves to issue any new Share under Article 6, the Company shall, after reserving the portion of Shares for subscription by its employees and for public offering in Taiwan pursuant to Article 8 and applicable Taiwan Laws respectively, first offer such remaining new Shares by a public announcement according to the Applicable Listing Rules, and a written notice to each then Shareholder for their subscriptions in proportion to the number of Shares held by them respectively. The Company shall state in such written notice that if any Shareholder fails to confirm his subscription within the assigned deadline, his right shall be forfeited. Where a fractional percentage of the original Shares being held by a Shareholder is insufficient to subscribe for one new Share, the fractional percentages of the original Shares being held by several Shareholders may be combined for joint subscription of one or more integral new Shares or for subscription of new Shares in the name of a single Shareholder. New Shares left

54

unsubscribed by then Shareholders may be open for public issuance or for subscription by specific Person or Persons through negotiation. Each Shareholder may subscribe such new Shares himself, or designate one or more Persons to subscribe such Shares.

  1. The Shareholders’ pre-emptive right prescribed under the preceding Article 9 shall not apply in the event that new Shares are issued due to the following reasons or for the following purpose:

  2. (a) in connection with a Merger with another company, or the Spin-off of the Company, or pursuant to any reorganization of the Company;

  3. (b) in connection with meeting the Company’s obligation under Share subscription warrants and/or options granted to the employees;

  4. (c) in connection with meeting the Company’s obligation under corporate bonds which are convertible bonds or vested with rights to acquire Shares;

  5. (d) in connection with meeting the Company’s obligation under Share subscription warrant or Special Shares vested with rights to acquire Shares; or

  6. (e) any other exemptions provided under Taiwan Laws.

  7. Where the Company increases its capital by issuing new Shares in Taiwan, the Company shall allocate 10% of the total amount of the new Shares to be issued, for offering in Taiwan to the public unless it is not necessary or appropriate, according to the Applicable Listing Rules, for the Company to conduct the aforementioned public offering. Provided however, if a percentage higher than the aforementioned 10% is resolved by an Ordinary Resolution to be offered, the percentage determined by such resolution shall prevail.

  8. The Company may, upon resolution by a majority votes at a meeting of the Board attended by two-thirds or more of the Directors, adopt one or more employee incentive programmes pursuant to which shares, options, warrants, or other similar instruments to acquire Shares may be granted to employees of the Company and/or any of its Affiliated Companies to subscribe for Shares to the extent as permitted by Taiwan Laws. The shares, options, warrants, or other similar instruments to acquire Shares granted to any employee under any employee stock option plan shall be non-transferable, except to the heirs of the employees.

MODIFICATION OF RIGHTS

  1. If at any time the share capital of the Company is divided into different Classes, all or any of the special rights attached to any such Class (unless otherwise provided by the terms of issue of the Shares of that Class) may only be materially adversely varied or abrogated with the

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sanction of a resolution passed at a separate meeting of the holders of the Shares of such Class by holders of not less than seventy-five percent of the issued Shares of that Class as may be present in person or by proxy at a separate general meeting of the holders of the Shares of such Class, but not otherwise. To every such separate meeting all the provisions of these Articles relating to general meetings of the Company or to the proceedings thereat shall, mutatis mutandis , apply, except that the necessary quorum shall be one or more Persons at least holding or representing by proxy one-half in nominal or par value amount of the issued Shares of the relevant Class (but so that if at any adjourned meeting of such holders a quorum as above defined is not present, those Shareholders who are present shall form a quorum) and that, subject to the terms of issue of the Shares of that Class, every Shareholder of the Class shall on a poll have one vote for each Share of the Class held by him.

  1. The rights conferred upon the holders of the Shares of any Class issued with preferred or other rights shall not, unless otherwise expressly provided by the terms of issue of the Shares of that Class, be deemed to be materially adversely varied or abrogated by, inter alia , the creation, allotment or issue of further Shares ranking pari passu with or subsequent to them, the redemption or purchase of Shares of any Class by the Company.

REGISTERS

  1. The Board shall cause to be kept the Register and there shall be entered therein the particulars required under the Law.

  2. Subject to the provisions of the Law, if the Board considers it necessary or appropriate, the Company may establish and maintain a principal or branch register of Shareholders at such location as the Board thinks fit and, during the Relevant Period, the Company shall keep its branch register of Shareholders in the Republic of China.

CERTIFICATE

  1. For so long as the Shares are registered in the Emerging Market or listed on the GreTai Securities Market or TSE, the Company shall deliver, or shall cause its Shareholders’ Service Agent to deliver, the share certificates to the subscribers by book-entry within thirty (30) days from the date such certificates may be issued pursuant to the Law and/or to the Taiwan Laws. The Company shall make a public announcement in accordance with Applicable Listing Rules prior to the delivery of such certificate.

TRANSFER AND TRANSMISSION OF SHARES

  1. Subject to the Law and the Taiwan Laws, Shares issued by the Company shall be freely transferable, provided that any Shares reserved for issuance to the employees of the

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Company may be subject to transfer restrictions for a period of not more than two years, or such other period as the Directors may determine in their discretion.

  1. The instrument of transfer of any Share shall be in writing in any usual or common form or such other form as the Directors may, in their absolute discretion, approve and be executed by or on behalf of the transferor and if so required by the Directors, shall also be executed on behalf of the transferee and shall be accompanied by the certificate (if any) of the Shares to which it relates and such other evidence as the Directors may reasonably require to show the right of the transferor to make the transfer. The transferor shall be deemed to remain a Shareholder until the name of the transferee is entered in the Register in respect of the relevant Shares.

  2. The Board may decline to register any transfer of any Share unless:

  3. (a) the instrument of transfer is lodged with the Company, accompanied by the certificate (if any) for the Shares to which it relates and such other evidence as the Board may reasonably require to show the right of the transferor to make the transfer;

  4. (b) the instrument of transfer is in respect of only one Class of Shares;

  5. (c) the Shares concerned are free of any lien in favour of the Company;

  6. (d) the instrument of transfer is properly stamped, if required; and

  7. (e) in the case of a transfer to joint holders, the number of joint holders to whom the Share is to be transferred does not exceed four.

  8. The registration of transfers may be suspended when the Register is closed in accordance with Article 37.

  9. All instruments of transfer that are registered shall be retained by the Company, but any instrument of transfer that the Directors decline to register shall (except in any case of fraud) be returned to the Person depositing the same.

  10. The Board may, in its absolute discretion at any time and from time to time, remove any Share on the principal register to any branch register or any Share on any branch register to the principal register or any other branch register.

  11. Unless the Board otherwise agrees (which agreement may be on such terms and subject to such conditions as the Board in its absolute discretion may from time to time stipulate, and which agreement it shall, without giving any reason therefore, be entitled in its absolute

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discretion to give or withhold) no Shares on the principal register shall be removed to any branch register nor shall Shares on any branch register be removed to the principal register or any other branch register and all removals and other documents of title relating to or affecting the title to any share or other securities of the Company shall be lodged for registration, and be registered, in the case of any Shares on a branch register, at the relevant Registration Office, and, in the case of any Shares on the principal register, at the Transfer Office.

  1. Notwithstanding anything contained in these Articles, the Company shall as soon as practicable and on a regular basis record in the principal register all removals of Shares effected on any branch register and shall at all times maintain the principal register and all branch registers in all respects in accordance with the Law.

  2. In the case of the death of a Shareholder, the survivor, and the legal personal representative of a deceased where he was a sole or only surviving holder of a Share, shall be the only Persons recognised by the Company as having any title to the Share. In case of a Share registered in the names of two or more holders, the survivors or survivor, or the legal personal representatives of the deceased survivor where he was a sole or only surviving holder of a Share, shall be the only Persons recognised by the Company as having any title to the Share.

  3. Any Person becoming entitled to a Share in consequence of the death or bankruptcy or winding-up of a Shareholder shall upon such evidence being produced as may from time to time be properly required by the Board, and subject as hereinafter provided, have the right either to be registered as a Shareholder in respect of the Share or, instead of being registered himself, to make such transfer of the Share as the deceased or bankrupt Person could have made; but the Directors shall, in either case, have the same right to decline or suspend registration as they would have had in the case of a transfer of the Share by the deceased or bankrupt Person before the death or bankruptcy.

  4. A Person becoming entitled to a Share by reason of the death or bankruptcy of the holder shall be entitled to the same dividends and other advantages to which he would be entitled if he were the registered holder of the Share, except that he shall not, before being registered as a Member in respect of the Share, be entitled in respect of it to exercise any right conferred by membership in relation to meetings of the Company.

ALTERATION OF SHARE CAPITAL

  1. The Company may from time to time by Ordinary Resolution:

  2. (a) (deleted)

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  • (b) consolidate and divide all or any of its share capital into Shares of a larger par value than its existing Shares;

  • (c) subdivide its existing Shares, or any of them, into Shares of a smaller par value than is fixed by the Memorandum of Association; and

  • (d) cancel any Shares that, at the date of the passing of the resolution, have not been taken or agreed to be taken by any Person and diminish the amount of its share capital by the amount of the Shares so cancelled.

  • (A) The Company may by Special Resolution:

    • (a) together with the approval of the Board, issue any Special Shares in accordance with Article 4 and 5;

    • (b) change its name;

    • (c) change the currency denomination of its share capital and/or increase the share capital by such sum, to be divided into new Shares of such Classes of such par value, as the resolution shall prescribe;

    • (d) subject to the Law and the Taiwan Laws, reduce its share capital and any capital redemption reserve in any manner authorized by Law and the Taiwan Laws;

    • (e) subject to the Law, be voluntarily wound up;

    • (f) carry on the general transfer and the trading of Shares then traded on TSE markets shall be terminated while the transferee company is not listed on the GreTai Securities Market or TSE;

    • (g) be acquired by any other surviving or newly incorporated company as a 100% held subsidiary company by means of share exchange and the trading of Shares then traded on TSE markets shall be terminated while the surviving or newly incorporated company is not listed on the GreTai Securities Market or TSE; and

    • (h) carry on a division and the trading of Shares then traded on TSE market shall be terminated while the surviving or newly incorporated transferee company after the division is not listed on the GreTai Securities Market or TSE.

  • (B) The Company may, by a Special Resolution for Mergers, effect a Merger of the Company in accordance with the Law.

  • (A) The Company may by a Supermajority Resolution Type A:

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  - (a) enter into, amend, or terminate any contract for lease of its business in whole, or for entrusting business, or for regular joint operation with others;

  - (b) transfer the whole or any material part of its business or assets;

  - (c) take over the transfer of another's whole business or assets, which will have a material effect on the business operation of the Company;

  - (d) distribute part or all of its dividends or bonus by way of issuance of new Shares;

  - (e) effect any Spin-off in accordance with the Taiwan Laws; and

  - (f) carry out private placement of its securities.

  • (B) Alternatively, if the total number of Shares represented by the Shareholders present at such general meeting is not sufficient to meet the quorum criteria specified in the preceding paragraph (A), the Company may effect the above matters by a Supermajority Resolution Type B.

  • (C) For the matters which are required to be approved by Supermajority Resolution Type A/ Type B under these Articles, the Company shall not approve such matters by way of Special Resolution or Ordinary Resolution.

  • In the event any of the resolutions with respect to the paragraph (a), (b), or (c) of the preceding Article 31(A) is adopted by general meeting in accordance with the provisions of the Law, any Shareholder who has notified the Company in writing of his objection to such proposal prior to such meeting and subsequently raised his objection at the meeting may request the Company to purchase all of his Shares at the then prevailing fair price; provided, however, that no Shareholder shall have the abovementioned appraisal right if the general meeting resolves on the dissolution of the Company after the completion of transfer of business or assets under the paragraph (b) of Article 31(A). In the event any part of the Company’s business is spun off or involved in any Merger with any other company, the Shareholder, who has forfeited his right to vote on such matter and expressed his dissent therefore, in writing or verbally (with a record) before or during the general meeting, may request the Company to buy back all of his Shares at the then prevailing fair price. In the event the Company fails to reach such agreement with the Shareholder within a sixty-day period commencing from the resolution date, the Shareholder may, within thirty days after such sixty-day period, file a petition to any competent court of Taiwan for a ruling on the appraisal price, and such ruling by such Taiwan court shall be binding and conclusive as between the Company and requested Shareholder solely with respect to the appraisal price.

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  • 32A The capital reduction shall be effected based on the percentage of shareholding of the Shareholders pro rata, unless otherwise expressly required by the Taiwan Laws. The Company reducing its capital may return share prices (or the capital stock) to Shareholders by properties other than cash; the returned property and the amount of such substitutive capital contribution shall require a prior approval of the Shareholders’ meeting and obtain consents from the Shareholders who receive such property. The Board of Directors shall first have the value of such property and the amount of such substitutive capital contribution audited and certified by a certified public accountant before the shareholders’ meeting.

REDEMPTION AND PURCHASE OF SHARES

  1. Subject to the Law, the Taiwan Laws and these Articles, the Company may issue Shares on terms that they are to be redeemed or are liable to be redeemed upon the happening of a specified event or upon a given date and either at the option of the Company or the Shareholder on such terms and in such manner as the Company may by Special Resolution, before the issue of such Shares, determine; provided that payment in respect of the redemption of its own Shares shall be made in a manner authorized by the applicable laws (including Taiwan Laws), including out of its profits or the proceeds of a fresh issue of Shares.

  2. (A) Subject to the Law, the Taiwan Laws and these Articles, and upon the approval of a majority of the Directors present at a Board meeting attended by two-thirds or more of Directors, the Company may purchase its own Shares for maintaining the Company’s credit shareholders’ equity and assigning or transferring those shares to its employees. The resolution and the implementation thereof shall be reported in the most recent shareholders meeting. This provision shall also apply if the shares are not purchased for any reason. Except for shares purchased for assigning or transferring to its employees, the Shares so purchased shall be deemed cancelled immediately. If the Company purchases its own Shares and assigns or transfers those Shares to its employees, the Company may restrain such Shares from being assigned or transferred to others within a specific period of time which shall in no case be longer than two years.

  3. (B) The Company may transfer shares to its employees at less than the average actual repurchase price by a Supermajority Resolution Type A. The Company may not raise the aforesaid matter by means of an extraordinary motion. The Company must have listed the following matters in the notice of reasons for that Shareholders Meeting:

  4. (a) the exercise price, the valuation percentage, the bases of calculations, and the reasonableness thereof;

(b) the amount of shares to be transferred, the purpose, and the reasonableness thereof;

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  • (c ) qualification requirements for employees subscribing to shares, and the number of shares they are allowed to subscribe for;

  • (d) factors affecting shareholders' equity:

  • The possible amount of expensing, and dilution of the Company's earnings per share.

  • Explain what financial burden will be imposed on the Company by transferring shares to employees at less than the average actual repurchase price.

The aggregate amount of the shares being transferred upon the approval of Shareholders Meetings specified in the preceding paragraph may not exceed five (5) percent of the total issued Shares of the Company, and the aggregate amount of shares subscribed by any single employee may not exceed zero point five (0.5) percent of total issued Shares.

  • 34A The Company may issue restricted stock for employees with the approval of a Special Resolution. Alternatively, if the total number of Shares represented by the Shareholders present at such general meeting is not sufficient to meet the quorum criteria specified above, the Company may effect the above matters by a Supermajority Resolution Type B. The Company issuing restricted stock for employees shall be in compliance with the Law, these Articles and the Applicable Listing Rules and other applicable Taiwan Laws, including but not limited to, the issuance amount, issuance price, issuance conditions and other matters.

  • The redemption or purchase of any Share shall not be deemed to give rise to the redemption or purchase of any other Share.

  • Subject to the Law and the Taiwan Laws, the Directors may when making payments in respect of redemption or purchase of Shares, if authorized by the terms of issue of the Shares being redeemed or purchased or with the agreement of the holder of such Shares, make such payment either in cash or in specie.

CLOSING REGISTER OR FIXING RECORD DATE

  1. For the purpose of determining those Members that are entitled to receive notice of, attend or vote at any meeting of Members or any adjournment thereof, or those Members that are entitled to receive payment of any dividend, or in order to make a determination as to who is a Member for any other purpose, the Directors may provide that the Register shall be closed for transfers for a stated period. For so long as the Shares are registered in the Emerging Market or listed in the GreTai Securities Market or TSE, the Register shall be closed at least for a period of sixty (60) days, thirty (30) days and five (5) days immediately before the date of each annual general meeting, each extraordinary general meeting and the record date for a dividend distribution, respectively.

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  1. Apart from closing the Register, the Directors may fix in advance the record dates for any such determination of those Members that are entitled to receive notice of, attend or vote at a meeting of the Members and for the purpose of determining those Members that are entitled to receive payment of any dividend. In the event the Directors designate a record date in accordance with this Article 38, such record date shall be a date prior to the general meeting and the Directors shall immediately make a public announcement on the website designated by the Commission and the GreTai Securities Market or TSE pursuant to the Applicable Listing Rules.

GENERAL MEETINGS

  1. All general meetings other than annual general meetings shall be called extraordinary general meetings.

  2. The Board may, whenever they think fit, convene a general meeting of the Company; provided that the Company shall in each year hold a general meeting as its annual general meeting within six months after close of each fiscal year and shall specify the meeting as such in the notices calling it.

  3. At these meetings the report of the Directors (if any) shall be presented. For so long as the Shares are registered in the Emerging Market or listed in the GreTai Securities Market or TSE, all general meetings shall be held in Taiwan. If any general meeting is to be held outside Taiwan, an application shall be filed with the GreTai Securities Market (or the TSE, as applicable) for approval within two days after the Board adopts such resolution. Where a general meeting is to be held outside Taiwan, the Company shall engage a duly licensed stock service agent within R.O.C. to handle the administration of such general meeting (such as voting).

  4. Any Shareholder or Shareholders entitled to attend general meetings of the Company holding at least three percent (3%) of the paid up share capital of the Company for a period of one year or a longer time may, by depositing the requisition notice at the Registration Office or the Shareholders’ Service Agent specifying the objects of the meeting, request the Board to convene an extraordinary general meeting. If the Board does not give notice to Shareholders to convene such meeting within 15 days after the date of the requisition notice, the requisitionists themselves may convene the general meeting. Any Shareholder or Shareholders entitled to attend general meetings of the Company holding at least fifty percent (50%) of the paid up share capital of the Company for a period of three months or a longer time may convene an extraordinary general meeting. The calculation of the holding period and holding number of Shares of the abovementioned Shareholder(s) shall be based on the holding at the time when the Register is closed. For so long as the Shares are

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registered in the Emerging Market or listed in the GreTai Securities Market or TWSE, such general meetings shall be held in Taiwan.

  • 42A. The Board or any other Person having the convening right may require the Company or its Shareholders’ Service Agent to provide with the roster of shareholders in convening shareholders’ meeting.

NOTICE OF GENERAL MEETING

  1. At least thirty and fifteen days’ notices in writing, specifying the place, the day and the time of meeting and, in the case of special business, the general nature of that business shall be given in manner hereinafter provided, or in such other manner (if any) as may be prescribed by the Company in general meetings, shall be given to such persons as are entitled to vote or may otherwise be entitled under these Articles of the Company to receive such notices from the Company for any annual and extraordinary general meetings, respectively. Every notice shall be exclusive of the day on which it is given or deemed to be given and of the day for which it is given and shall specify the place, the day and the hour of the meeting and the general nature of the business. The notice for a general meeting may be given by means of electronic communication if the Company obtains prior consent from the Shareholders or as permitted by the Law and Taiwan Laws.

  2. 43A The Company shall prepare electronic files of the meeting announcement, proxy form, explanatory materials relating to proposals for ratification, matters for deliberation, election or discharge of directors, and other matters on the shareholders’ meeting agenda, and upload them to the MOPS thirty days prior to the scheduled meeting date of that general meeting or fifteen days prior to the scheduled meeting date of a special shareholders’ meeting. Where voting powers at a shareholders' meeting are to be exercised in writing, a print version of the materials and a printed ballot shall also be sent to the shareholders.

  3. (A)The following matters shall be specified in the notice of a general meeting with the description of their major content, and shall not be proposed as ad hoc motions; the major content may be published on the website designated by the Commission and the GreTai Securities Market or TSE or the Company, and such website shall be indicated in the above notice:

  4. (a) election or discharge of Directors;

  5. (b) amendments to the Memorandum of Association and/or these Articles;

  6. (c) reduction of capital;

  7. (d) application for the approval of ceasing Shares to be publicly offered;

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  • (e) winding-up, Merger or Spin-off of the Company;

  • (f) entering into, amendment to, or termination of any contract for lease of its business in whole, or for entrusting business, or for regular joint operation with others;

  • (g) the transfer of the whole or any material part of its business or assets;

  • (h) taking over another's whole business or assets, which will have a material effect on the business operation of the Company;

  • (i) carrying out private placement of its securities;

  • (j) granting waiver to the Director’s engaging in any business within the scope of business of the Company;

  • (k) distributing part or all of its dividends or bonus by way of issuance of new Shares; and

  • (l) capitalization of the statutory reserve and the Capital Reserve (subject to Article 137) by issuing new Shares or cash to its then Shareholders in proportion to the number of Shares being held by each of them.

  • (B) However, a Shareholder may submit proposal by ad hoc motions at a general meeting if such proposal is related to the matters specified in the notice for such general meeting.

  • For so long as the Shares are registered in the Emerging Market or listed on the GreTai Securities Market or TSE, the Company shall prepare a manual for each general meeting and the relevant materials, which will be sent to or made available to all Shareholders and shall be published on the website designated by the Commission and the GreTai Securities Market or TSE twenty-one days prior to the scheduled meeting date of that general meeting or fifteen days prior to the scheduled meeting date of that special meeting pursuant to the Applicable Listing Rules and other applicable Taiwan Laws.

PROCEEDINGS AT GENERAL MEETING

  1. No business shall be transacted at any general meeting unless a quorum of Shareholders is present at the time when the meeting proceeds to business. Save as otherwise provided by these Articles, at least two holders of Shares being more than an aggregate of one-half of all Shares in issue present in Person or by proxy and entitled to vote shall be a quorum for all purposes. Provided however, in respect of Ordinary Resolutions, when the number of shares held by Shareholders present in Person or by proxy does not constitute the quorum set forth above, but those present represent an aggregate of one-third or more of all Shares in issue, a conditional resolution may be passed by a simple majority of those present and voting. A notice of such conditional resolution shall be given to each of the Shareholders and a general meeting shall be reconvened within one month. The quorum for such reconvened general

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meeting shall be at least two holders of Shares holding an aggregate of one-third or more of all Shares in issue. Such conditional resolution, if passed by a simple majority of those present and voting, shall be deemed to be passed as an Ordinary Resolution.

  1. (A)Shareholder(s) holding one percent or more of the total number of outstanding Shares at the time when the Register is closed for transfer prior to the convening date of the annual general meeting may propose in writing or by way of electronic transmission to the Company a proposal for discussion at an annual general meeting, provided that, unless any of the following circumstances is satisfied, the Board shall include the proposal submitted by a shareholder in the agenda:

  2. (a) Where the subject (the issue) of the said proposal cannot be settled or resolved by a resolution to be adopted at a meeting of shareholders;

(b) Where the number of shares of the Company in the possession of the shareholder making the said proposal is less than one percent of the total number of outstanding Shares at the time when the Register is closed for transfer prior to the convening date of the annual general meeting;

(c) Where the said proposal is submitted on a day beyond the deadline fixed and announced by the Company for accepting shareholders’ proposals; and

  • (d) Where the said proposal containing more than 300 words or more than one matter.

(B) A shareholder proposal proposed for urging the Company to promote public interests or fulfil its social responsibilities may still be included in the agenda by the Board.

(C)The submission and handling of shareholder proposals as provided herein shall be subject to the Law and the Taiwan Laws and in accordance with the rules and procedures of shareholders’ meeting of the Company from time to time.

  1. The Chairman of the Board shall preside as chairman at every general meeting of the Company convened by the Board. For a general meeting convened by any other Person having the convening right, such Person shall act as the chairman of that meeting; provided that if there are two or more Persons jointly having the convening right, the chairman of the meeting shall be elected from those Persons.

  2. If at any general meeting the Chairman is not present within fifteen minutes after the time appointed for holding the meeting or is unwilling to act as chairman, any Director nominated by the Directors shall preside as chairman, failing which the Shareholders present shall choose any Person present to be chairman of that meeting.

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  1. The chairman may by Ordinary Resolution (and shall if so directed by the meeting) adjourn a meeting from time to time and from place to place, but no business shall be transacted at any adjourned meeting other than the business left unfinished at the meeting from which the adjournment took place. When a meeting, or adjourned meeting, is adjourned for more than five (5) days, notice of the adjourned meeting shall be given as in the case of an original meeting. Save as aforesaid it shall not be necessary to give any notice of an adjournment or of the business to be transacted at an adjourned meeting.

  2. At any general meeting where a proposal put to the vote of the meeting is decided on a poll, the number or proportion of the votes in favour of, or against, that proposal shall be recorded in the minutes of the meeting. Where a poll is not demanded by any one Member, a declaration of the chairman that the resolution has been carried shall be conclusive evidence of the fact, without proof of the number or proportion of votes recorded in favour of or against the same.

  3. Unless otherwise expressly required by the Law or these Articles, any matter which has been presented for resolution, approval, confirmation or adoption by the Shareholders at any general meeting may be passed by an Ordinary Resolution.

  4. In the case of an equality of votes, the chairman of the meeting shall not be entitled to a second or casting vote.

VOTES OF SHAREHOLDERS

  1. Subject to any rights and restrictions for the time being attached to any Share, every Shareholder who is present in person (or in the case of a shareholder being a corporation, by its duly authorized representative) and every Person representing a Shareholder by proxy shall have one vote, and on a poll every Shareholder who is present in person (or in the case of a shareholder being a corporation, by its duly authorized representative) and every Person representing a Shareholder by proxy shall have one vote for each Share of which he or the Person represented by proxy is the holder which is fully paid or credited as fully paid.

  2. Where the Company has knowledge that any Shareholder is, under the Taiwan Laws, required to abstain from voting on any particular resolution or restricted to voting only for or only against any particular resolution, any votes cast by or on behalf of such Shareholder in contravention of such requirement or restriction shall not be counted.

  3. 55A In the event a Director has created a pledge on the Company’s Shares more than half of the Company’s Shares being held by him/her/it at the time he/she/it is elected, the voting power of the excessive portion of Shares shall not be exercised and the excessive portion of Shares shall not be counted in the number of votes of shareholders present at the meeting.

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  1. (A) No vote may be exercised with respect to any of the following Shares:

    • (a) the Shares held by any subordinate company (as defined under Taiwan Laws, hereinafter the “subsidiary”) of the Company, where the total number of voting shares or total voting shares equity held by the Company in such a subsidiary represents more than one half of the total number of voting shares or the total voting shares equity of such a subsidiary; or

    • (b) the Shares held by another company, where the total number of the voting shares or total voting shares equity of that company held by the Company and its subsidiaries directly or indirectly represents more than one half of the total number of voting shares or the total voting share equity of such a company.

  2. (B) The Shares held by any Shareholder having no voting right shall not be counted in the total number of issued Shares while adopting a resolution at a general meeting.

  3. In the case of joint holders, the joint holders shall select among them a representative for the exercise of their Shareholder’s rights and the vote of their representative who tenders a vote whether in Person or by proxy shall be accepted to the exclusion of the votes of the other joint holders.

  4. 57A In case a Shareholder holds shares for other Person, such Shareholder may exercise his voting power separately.

  5. A Shareholder of unsound mind, or in respect of whom an order has been made by any court having jurisdiction in lunacy, may vote by his committee, or other Person in the nature of a committee appointed by that court, and any such committee or other Person, may vote by proxy.

  6. A Shareholder may appoint a proxy to attend a general meeting on his behalf by executing a power of attorney prepared by the Company stating therein the scope of power authorized to the proxy. A Shareholder may only execute one power of attorney and appoint one proxy for each general meeting, and shall serve such written proxy to the Company no later than five (5) days prior to the meeting date. In case the Company receives two or more written proxies from one Shareholder, the first one arriving at the Company shall prevail unless an explicit statement to revoke the previous written proxy is made in the proxy which comes later. The use of proxies and solicitation and relevant proceedings shall be subject to the relevant Taiwan Laws and in particular the Regulations Governing the Use of Proxies for Attendance at Shareholder Meetings of Public Companies of the R.O.C.

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  1. In case a Shareholder has authorized a proxy to attend the Shareholders' meeting on his behalf and also exercised his voting power in writing or by way of electronic transmission, then the voting power exercised by the authorized proxy for the said Shareholder shall prevail, subject to the Law.

  2. The instrument appointing a proxy shall be in the form approved by the Board and be expressed to be for a particular meeting only. The form of proxy shall include at least the following information: (a) instructions on how to complete such proxy, (b) the matters to be voted upon pursuant to such proxy, and (c) basic identification information relating to the relevant Shareholder, proxy recipient and proxy solicitation agent (if any). The form of proxy shall be provided to the Shareholders together with the relevant notice for the relevant general meeting, sent either through post or by electronic transmission as the case maybe, and such notice and proxy materials shall be distributed, either through post or by electronic transmission as the case maybe, to all Shareholders on the same day.

  3. The instrument appointing a proxy shall be in writing under the hand of the appointer or of his attorney duly authorized in writing or, if the appointer is a corporation, either under Seal or under the hand of an officer or attorney duly authorized. A proxy need not be a Shareholder.

  4. Except for trust enterprises duly licensed under Taiwan Laws or Shareholders’ Service Agencies approved by Taiwan competent authorities, when a Person who acts as the proxy for two or more Shareholders, the number of votes represented by him shall not exceed three percent (3%) of the total number of votes of the Company and the portion of excessive votes represented by such proxy shall not be counted.

  5. A Shareholder cannot exercise his own vote or by proxy on behalf of another Shareholder in respect of any matter or proposed matter or arrangement if he may be interested therein and may cause damage to the Company’s interests. Such Shares shall not be counted in determining the number of votes of the Shareholders present at the said meeting.

  6. Where the Company has only one Shareholder, a resolution in writing signed by such Shareholder in accordance with these Articles shall be as valid and effective as if the same had been passed at a general meeting of the Company duly called and constituted.

  7. To the extent permitted by the Law, the votes may be exercised in writing or by way of electronic transmission if such method for exercising the votes has been described in the notice of the general meeting, subject to the Law and the Taiwan Laws. The Company shall facilitate and allow Shareholders to excise the votes in writing or by way of electronic transmission if the general meeting is held outside of Taiwan and shall specify the method of such excising of votes in the meeting notice, subject to the Law.

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  1. For the avoidance of doubt, a Shareholder who exercises his votes in writing or by way of electronic transmission in accordance with the Taiwan Laws and these Articles shall be counted towards the quorum, and shall be deemed to have attended and voted in person at such general meeting for the purposes of these Articles and the Law, but shall be deemed to have waived his votes in respect of any ad hoc motions and amendments to the contents of the original proposals at such general meeting, subject to the Law.

  2. A Shareholder shall deliver his declaration about the votes in writing or by way of electronic transmission to the Company no later than the second (2[ed] ) day prior to the scheduled meeting date of the general meeting; whereas if two or more declarations are delivered to the Company, the first declaration shall prevail unless an explicit statement to revoke the previous declaration is made in the declaration which comes later, subject to the Law.

  3. In case a Shareholder who has exercised his votes in writing or by way of electronic transmission intends to attend the general meeting in person, he shall, at two days prior to the meeting date serve a separate declaration of intention in the same manner as such Shareholder exercises his votes to revoke his previous declaration of intention made in exercising the votes, subject to the Law. In the absence of a timely revocation of the previous declaration of intention, the votes exercised in writing or by way of electronic transmission shall prevail, subject to the Law.

  4. In case the procedure for convening a general meeting of Members or the method of adopting resolutions is in violation of the Law, Taiwan Laws or these Articles, a Shareholder may, within thirty (30) days from the date of the resolution, submit a petition to the Taipei District Court of Taiwan or the competent court in Cayman Islands for an appropriate remedy, including but not limiting to request the court to invalidate and cancel the resolution adopted therein.

CORPORATIONS ACTING BY REPRESENTATIVES AT MEETING

  1. Any corporation which is a Member of the Company may by resolution of its Directors or other governing body authorise such Person as it thinks fit to act as its representative at any meeting of the Company or of any Class of Members of the Company, and the Person so authorized shall be entitled to exercise the same powers on behalf of the corporation which he represents as that corporation could exercise if it were an individual Member of the Company.

DIRECTORS

  1. The Company shall have no less than five Directors and no more than ten Directors in number. The exact number of Directors shall be determined by an Ordinary Resolution of

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the general meeting prior to the election of a new term of Directors. The Directors shall be elected or appointed in the first place by the subscribers to the Memorandum of Association or by a majority of them.

  1. The general meeting of the Shareholders may appoint any natural Person or corporation to be a Director. At a general meeting of election of Directors, the number of votes exercisable in respect of one Share shall be the same as the number of Directors to be elected, and the total number of votes per Share may be consolidated for election of one candidate or may be split for election of two or more candidates. A candidate to whom the ballots cast represent a prevailing number of votes shall be deemed a Director so elected.

  2. The Company should also adopt a candidate nomination system which is in compliance with Taiwan Laws. The nomination and election of Directors shall be made in accordance with rules and procedures established by the Company subject to an Ordinary Resolution of Shareholders from time to time, which shall be in compliance with the Law, these Articles and the Applicable Listing Rules and other applicable Taiwan Laws.

  3. Subject to these Articles, the term for which a Director will hold office shall be three years; thereafter he may be eligible for re-election. In case no election of new Directors is effected after expiration of the term of office of the existing Directors, the term of office of such Directors shall be extended until the time new Directors are elected and assume their office subject to these Articles and internal rules of the Company from time to time.

  4. (a) A Director may be discharged at any time by a Supermajority Resolution Type A adopted at a general meeting. Alternatively, if the total number of Shares represented by the Shareholders present at such general meeting is not sufficient to meet the quorum criteria specified above, the Company may effect the above matter by a Supermajority Resolution Type B.

  5. (b) In the event a Director has, in the course of performing his/her duties as a Director, committed any act resulting in material damages to the Company or in material violation of these Articles, Laws and Applicable Listing Rules, but not dismissed by a resolution of the general meeting, Shareholder(s) holding 3% or more of the issued and outstanding Shares of the Company may, within 30 days after that general meeting, institute a lawsuit in the Taipei District Court of Taiwan or other competent court for a judgment in respect of such matter.

  6. (c) Any Shareholder or Shareholders entitled to attend general meetings of the Company holding at least one percent (1%) of the paid up share capital of the Company for a period of six months or a longer time may, submit a written request to any Independent Director of the Audit Committee to initiate proceedings against any Director or Directors

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on behalf of the Company with a competent court having proper jurisdiction, including the Taiwan Taipei District Court, ROC. If Independent Director of the Audit Committee fails to initiate such proceedings within thirty (30) days after receiving the request by such Shareholder(s), such Shareholder(s) may initiate such proceedings on behalf of the Company with a competent court having proper jurisdiction, including the Taiwan Taipei District Court, ROC.

  • (d) In the event a Director has, in the course of performing his duties as a Director, committed any act for himself or on behalf of another Person in violation of the duty of the loyalty and the due care of a good administrator in conducting the business operation of the company, the meeting of shareholders may, by a resolution, consider the earnings in such an act as earnings of the company unless one year has lapsed since the realization of such earnings.

  • The Board shall have a Chairman (the “ Chairman ”) elected and appointed by a majority of the Directors present at the Board meeting the quorum of which shall be two-thirds of all of the Directors then in office. The period for which the Chairman will hold office will also be determined by a majority of the Directors present at the Board meeting with a quorum of at least two-thirds of all of the Directors then in office. The Chairman shall preside as chairman at every meeting of the Board. To the extent the Chairman is not present at a meeting of the Board within fifteen minutes after the time appointed for holding the same, the attending Directors may choose one of their number to be the chairman of the meeting.

  • The Board may, from time to time, and except as required by the applicable Laws and Taiwan Laws, adopt, institute, amend, modify or revoke the corporate governance policies or initiatives, which shall be intended to set forth the policies of the Company and the Board on various corporate governance related matters as the Board shall determine by resolution from time to time.

  • A Director shall not be required to hold any Shares in the Company by way of qualification.

DIRECTORS’ FEES AND EXPENSES

  1. The Directors shall receive such remuneration as determined by the Board, in accordance with the extent of the involvement of the business operation and the contribution of each Director, no matter the Company profits or losses at such year, and the Board shall take reference to the average level of the industry.

  2. With respect to the preceding Article 80, each Director shall be entitled to be repaid or prepaid all travelling, hotel and incidental expenses reasonably incurred or expected to be incurred by him in attending meetings of the Board or committees of the Board or general

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meetings or separate meetings of any Class of Shares or of debentures of the Company or otherwise in connection with the discharge of his duties as a Director.

  1. Any Director who, by request, goes or resides abroad for any purpose of the Company or who performs services which in the opinion of the Board go beyond the ordinary duties of a Director may be paid such extra remuneration (whether by way of salary, commission, participation in profits or otherwise) as the Board may determine and such extra remuneration shall be in addition to or in substitution for any ordinary remuneration provided for by or pursuant to any other Article.

INDEPENDENT DIRECTORS, THE AUDIT COMMITTEE AND THE REMUNERATION COMMITTEE

  1. For so long as the Shares are listed on the GreTai Securities Market or TSE, the Company shall have at least 3 Independent Directors, among them at least one Person shall have a domicile within Taiwan, to be elected by way of a candidate nomination system in compliance with the Law, the Applicable Listing Rules and other applicable Taiwan Laws. In the event that the seat of any Independent Director being lower than three Persons, a by-election for Independent Director(s) shall be held at the next following general meeting. In the event that the seats of all Independent Directors become vacant, the Company shall convene an extraordinary general meeting to hold a by-election within 60 days from the date on which the situation arose. The term of each new Independent Director shall be the remainder of the term of each respective Independent Director whose seat has become vacant.

  2. Independent Directors shall possess professional knowledge and maintain independence within the scope of their directorial duties, and may not have any direct or indirect interest in the Company. The professional qualifications, restrictions on shareholdings and concurrent positions held, as well as assessment of independence of Independent Directors shall be governed by the Applicable Listing Rules, in particular, the Regulations Governing Appointment of Independent Directors and Compliance Matters for Public Companies promulgated by the FSC on March 28, 2006 and any amendments or supplements made subsequently mutatis mutandis. Subject to the condition that the Board does not or is unable to convene a meeting of shareholders, the independent directors of the Audit Committee may, for the benefit of the Company, call a meeting of shareholders when it is deemed necessary.

  3. (a) The Company shall establish an Audit Committee.

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  • (b) The Audit Committee shall comprise all the Independent Directors. It shall not be fewer than three Persons in number, one of whom shall be the convenor, and at least one of whom shall have accounting or financial expertise.

  • (c) A resolution of the Audit Committee shall be approved by one-half or more of all Audit Committee Members.

  • (a) The following matters shall be subject to the approval of one-half or more of all Audit Committee Members and be submitted to the Directors for a resolution:

    • (1) adoption or amendment of an internal control system;

    • (2) assessment of the effectiveness of the internal control system;

    • (3) adoption of or amendment to handling procedures for financial or operational actions of material significance, such as acquisition or disposal of assets, derivatives trading, monetary loans to others, or endorsements or guarantees for others;

    • (4) a matter bearing on the personal interest of a Director;

    • (5) a transaction related to material asset or derivatives;

    • (6) a material monetary loan, endorsement, or provision of guarantee;

    • (7) the offering, issuance, or private placement of any equity-type securities;

    • (8) the engagement or dismissal of an attesting chartered public accountant, or the compensation given thereto;

    • (9) the appointment or discharge of a financial, accounting, or internal auditing officer; and

    • (10) annual and semi-annual financial reports;

  • (b) With the exception of subparagraph 10, any matter under a subparagraph of the preceding paragraph (a) of this Article 86 that has not been approved with the approval of one-half or more of all Audit Committee Members may be undertaken upon the approval of two-thirds or more of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the meeting of Directors.

  • 86A For so long as the Shares are registered in the Emerging Market or listed on the GreTai Securities Market or TSE, the Company shall establish a remuneration committee. Remuneration shall include salary, stock options, and any other substantive incentive measures for directors and managerial officers. The professional qualifications for the members of the remuneration committee, the exercise of their powers of office, and related matters shall be made in accordance with rules and procedures established by the Company.

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ALTERNATE DIRECTOR OR PROXY

  1. Any Director may in writing appoint another Shareholder to be his alternate and, save to the extent provided otherwise in the form of appointment, such alternate shall have authority to act in such Director's place at any meeting of the Directors at which he is unable to be present. Every such alternate shall be entitled to attend and vote at meetings of the Directors as a Director when the Director appointing him is not personally present and where he is a Director to have a separate vote on behalf of the Director he is representing in addition to his own vote. A Director may at any time in writing revoke the appointment of an alternate appointed by him. Such alternate shall not be an officer of the Company and shall be deemed to be the agent of the Director appointing him. The remuneration of such alternate shall be payable out of the remuneration of the Director appointing him and the proportion thereof shall be agreed between them

  2. Any Director may appoint another Director to be the proxy of that Director to attend and vote on his behalf, in accordance with instructions given by that Director at a meeting or meetings of the Directors which that Director is unable to attend personally. The instrument appointing the proxy shall be in writing under the hand of the appointing Director and shall be in any usual or common form or such other form as the Directors may approve, and must be lodged with the chairman of the meeting of the Directors at which such proxy is to be used, or first used, prior to the commencement of the meeting.

POWERS AND DUTIES OF DIRECTORS

  1. Subject to the Law, these Articles, Taiwan Laws and to any resolutions passed in a general meeting, the business of the Company shall be managed by the Directors, who may pay all expenses incurred in setting up and registering the Company and may exercise all powers of the Company. No resolution passed by the Company in general meeting shall invalidate any prior act of the Directors that would have been valid if that resolution had not been passed.

  2. The Directors may from time to time appoint any Person, whether or not a Director to hold such office in the Company as the Directors may think necessary for the administration of the Company, including but not limited to, the office of the chief executive officer, president, one or more vice-presidents, chief financial officer or controller, treasurer, assistant treasurer, or manager, and for such term and at such remuneration (whether by way of salary or commission or participation in profits or partly in one way and partly in another), and with such powers and duties as the Directors may think fit. Any Person so appointed by the Directors may be removed by the Directors. The Directors may also appoint one or more of their number to the office of managing director upon like terms, but any such appointment shall ipso facto determine if any managing director ceases from any cause to be a Director, or if the Company by Ordinary Resolution resolves that his tenure of office be terminated.

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  1. The Directors may appoint a Secretary (and if need be an assistant Secretary or assistant Secretaries) who shall hold office for such term, at such remuneration and upon such conditions and with such powers as they think fit. Any Secretary or assistant Secretary so appointed by the Directors may be removed by the Directors.

  2. The Directors may delegate any of their powers to committees consisting of such member or members of their body as they think fit; any committee so formed shall in the exercise of the powers so delegated conform to any regulations that may be imposed on it by the Directors.

  3. The Directors may from time to time and at any time by power of attorney (whether under Seal or under hand) or otherwise appoint any company, firm or Person or body of Persons, whether nominated directly or indirectly by the Directors, to be the attorney or attorneys of the Company for such purposes and with such powers, authorities and discretion (not exceeding those vested in or exercisable by the Directors under these Articles) and for such period and subject to such conditions as they may think fit, and any such power of attorney or other appointment may contain such provisions for the protection and convenience of Persons dealing with any such attorney as the Directors may think fit, and may also authorise any such attorney to delegate all or any of the powers, authorities and discretion vested in him.

  4. The Directors may from time to time provide for the management of the affairs of the Company in such manner as they shall think fit and the provisions contained in the three next following Articles shall not limit the general powers conferred by this Article.

  5. The Directors from time to time and at any time may establish any committees, local boards or agencies for managing any of the affairs of the Company and may appoint any Persons to be members of such committees or local boards and may appoint any managers or agents of the Company and may fix the remuneration of any such Persons.

  6. The Directors from time to time and at any time may delegate to any such committee, local board, manager or agent any of the powers, authorities and discretions for the time being vested in the Directors and may authorise the members for the time being of any such local board, or any of them to fill any vacancies therein and to act notwithstanding vacancies and any such appointment or delegation may be made on such terms and subject to such conditions as the Directors may think fit and the Directors may at any time remove any Person so appointed and may annul or vary any such delegation, but no Person dealing in good faith and without notice of any such annulment or variation shall be affected thereby.

  7. Any such delegates as aforesaid may be authorized by the Directors to sub-delegate all or any of the powers, authorities, and discretion for the time being vested in them.

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Borrowing Powers Of Directors

  1. Subject to these Articles, the Directors may exercise all the powers of the Company to borrow money and to mortgage or charge its undertaking and property, to issue debentures, debenture stock and other securities whenever money is borrowed or as security for any debt, liability or obligation of the Company or of any third party.

THE SEAL

  1. The Seal shall not be affixed to any instrument except by the authority of a resolution of the Directors provided always that such authority may be given prior to or after the affixing of the Seal and if given after may be in general form confirming a number of affixings of the Seal. The Seal shall be affixed in the presence of a Director or a Secretary or in the presence of any one or more Persons as the Directors may appoint for the purpose and every Person as aforesaid shall sign every instrument to which the Seal is so affixed in their presence

  2. The Company may maintain a facsimile of the Seal in such countries or places as the Directors may appoint and such facsimile Seal shall not be affixed to any instrument except by the authority of a resolution of the Directors provided always that such authority may be given prior to or after the affixing of such facsimile Seal and if given after may be in general form confirming a number of affixings of such facsimile Seal. The facsimile Seal shall be affixed in the presence of such Person or Persons as the Directors shall for this purpose appoint and such Person or Persons as aforesaid shall sign every instrument to which the facsimile Seal is so affixed in their presence and such affixing of the facsimile Seal and signing as aforesaid shall have the same meaning and effect as if the Seal had been affixed in the presence of and the instrument signed by a Director or a Secretary or in the presence of any one or more Persons as the Directors may appoint for the purpose

  3. Notwithstanding the foregoing, a Secretary shall have the authority to affix the Seal, or the facsimile Seal, to any instrument for the purposes of attesting authenticity of the matter contained therein but which does not create any obligation binding on the Company.

DISQUALIFICATION AND CHANGES OF DIRECTORS

  1. The office of Director shall be vacated, if such Director:

  2. (a) committed a felony (including but not limiting to an offence under Statute for Prevention of Organizational Crimes of Taiwan) and has been adjudicated guilty by a final judgment, and has not started serving the sentence, has not completed serving the sentence, or five years have not elapsed since completion of serving the sentence, expiration of the probation, or pardon;

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  • (b) has been sentenced to imprisonment for a term of more than one year for commitment of fraud, breach of trust or misappropriation, and has not started serving the sentence, has not completed serving the sentence, or two years have not elapsed since completion of serving the sentence, expiration of the probation, or pardon;

  • (c) committed an offence under the Anti-Corruption Act of Taiwan and has been adjudicated guilty by a final judgment, and has not started serving the sentence, has not completed serving the sentence, or two years have not elapsed since completion of serving the sentence, expiration of the probation, or pardon;

  • (d) becomes bankrupt under the laws of any country or has been adjudicated of the commencement of the liquidation procedure by the court, and having not been reinstated to his rights and privileges;;

  • (e) has been dishonoured for unlawful use of credit instruments, and the term of such sanction has not expired yet;

  • (f) losses all or part of legal capacity as defined under the Taiwan Laws;

  • (g) dies or is found to be or becomes of unsound mind or a patient for any purpose of any statute or applicable law relating to mental health and the Directors resolved that his office is vacated;

  • (h) if he ceases to be a Director by virtue of, or becomes prohibited from being a Director by reason of, an order made under any provisions of any law or enactment;

  • (i) resigns his office by notice in writing to the Company;

  • (j) is removed from office pursuant to Article 76;

  • (k) has been adjudicated the commencement of assistantship and such assistantship has not been revoked yet; and/or

  • (l) transfers more than one half of the total number of the Shares of the Company being held by him/her/it at the time he/she/it was elected during the term of office as a Director; unless otherwise, he/she/it is the Independent Director.

  • Except as approved by the GreTai Securities Market or TSE or the Commission, the following relationships shall not exist among more than half of the Company's Directors: (1) A spousal relationship; or (2) A familial relationship within the second degree of kinship as defined under the Taiwan Laws.

  • (A)When the Company convenes a general meeting for the election of Directors and the original selectees do not meet the conditions stipulated in the preceding Article 103, the election of the Director receiving the lowest number of votes among those Directors not

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meeting the conditions shall be deemed invalid and void. When a Person serving as Director violates the preceding Article 103, that Person shall cease to act as a Director.

(B) In the event that any Director, after being elected and before his/her/its inauguration of the office of Director, transfers more than one half of the total number of shares of the Company held by him/her/it at the time he/she/it was elected; or transfers more than one half of the total number of shares of the Company held by him/her/it within the period stated in Article 37 before the date of meeting of shareholders, then his/her/its election as a Director shall be deemed invalid; unless otherwise, he/she/it is the Independent Director.

  1. When the number of Directors falls below five due to a Director ceasing to act for any reason, the Company shall hold a by-election for Director at the next following general meeting of Shareholders. When the number of Directors falls short by one-third of the total number of Directors of the same term elected pursuant to these Articles, the Company shall convene an extraordinary general meeting within sixty days of the occurrence of that fact to hold a by-election for Directors. The term of each new Director shall be the remainder of the term of each respective Director whose seat has become vacant.

  2. 105A.Where re-election of all directors is effected prior to the expiration of the term of office of existing directors, and in the absence of a resolution that existing directors will not be discharged until the expiry of their present term of office, all existing directors shall be deemed discharged in advance. The aforesaid resolution of re-election shall be attended by shareholders holding at least a majority of all issued Shares of the Company.

PROCEEDINGS OF DIRECTORS

  1. The Directors may meet together (either within or without the Cayman Islands) for the dispatch of business, adjourn, and otherwise regulate their meetings and proceedings, as they think fit. Unless otherwise provided, questions arising at any meeting shall be decided by a majority of votes. In case of an equality of votes the chairman shall have a second or casting vote. A Director may, and on the requisition of a Director shall, at any time summon a meeting of the Directors.

  2. A Director may participate in any meeting of the Board, or of any committee appointed by the Board of which such Director is a member, by means of video conference and such participation shall be deemed to constitute presence in person at the meeting.

  3. Unless otherwise provided, the quorum necessary for the transaction of the business of the Directors shall be more than one-half of the Directors. A Director represented by proxy or by an alternate Director at any meeting shall be deemed to be present for the purposes of determining whether or not a quorum is present.

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  1. A Director who is in any way, whether directly or indirectly, interested in a contract or proposed contract with the Company shall declare the nature of his interest at a meeting of the Directors. A general notice given to the Directors by any Director to the effect that he is a member of any specified company or firm and is to be regarded as interested in any contract which may thereafter be made with that company or firm shall be deemed a sufficient declaration of interest in regard to any contract so made. A Director who has a personal interest in the matter under discussion at a meeting of Directors shall explain to the Board meeting the essential contents of such personal interest. A Director who has a personal interest in the matter under discussion at a meeting, which may be adverse to the interest of the Company, cannot vote his own vote or by proxy on behalf of another Director. The voting right of such Director which cannot be exercised shall not be counted in the number of votes of Directors present at the board meeting (but shall still be counted in the quorum for such meeting).

  2. Notwithstanding the preceding Articles, a Director may hold any other office or place of profit under the Company (other than the office of auditor) in conjunction with his office of Director for such period and on such terms (as to remuneration and otherwise) as the Directors may determine and no Director or intending Director shall be disqualified by his office from contracting with the Company either with regard to his tenure of any such other office or place of profit nor shall any Director so contracting or being so interested be liable to account to the Company for any profit realised by any such contract or arrangement by reason of such Director holding that office or of the fiduciary relation thereby established.

  3. Subject to these Articles, any Director may act by himself or his firm in a professional capacity for the Company, and he or his firm shall be entitled to remuneration for professional services as if he were not a Director; provided that nothing herein contained shall authorise a Director or his firm to act as auditor to the Company.

  4. The Directors shall cause all minutes to be made in books or loose-leaf folders provided for the purpose of recording:

  5. (a) all appointments of officers made by the Directors;

  6. (b) the names of the Directors present at each meeting of the Directors and of any committee of the Directors; and

  7. (c) all resolutions and proceedings at all meetings of the Company, and of the Directors and of committees of Directors.

  8. (deleted)

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  1. The continuing Directors may act notwithstanding any vacancy in their body but if and for so long as their number is reduced below the number fixed by or pursuant to these Articles as the necessary quorum of Directors, the continuing Directors may act for summoning a general meeting of the Company, but for no other purpose.

  2. Subject to any regulations imposed on it by the Directors, a committee appointed by the Directors may elect a chairman of its meetings. If no such chairman is elected, or if at any meeting the chairman is not present within fifteen minutes after the time appointed for holding the meeting, the committee members present may choose one of their number to be chairman of the meeting.

  3. A committee appointed by the Directors may meet and adjourn as it thinks proper. Subject to any regulations imposed on it by the Directors, questions arising at any meeting shall be determined by a majority of votes of the committee members present.

  4. All acts done by any meeting of the Directors or of a committee of Directors, or by any Person acting as a Director, shall notwithstanding that it be afterwards discovered that there was some defect in the appointment of any such Director or Person acting as aforesaid, or that they or any of them were disqualified, be as valid as if every such Person had been duly appointed and was qualified to be a Director.

  5. The following actions require the approval of a majority of the votes of the Directors present at a Board meeting attended by at least two-thirds of all Directors:

  6. (a) entering into, amendment to, or termination of any contract for lease of its business in whole, or for entrusted business, or for regular joint operation with others;

  7. (b) the sale or transfer of the whole or any material part of its business or assets;

  8. (c) taking over the transfer of another's whole business or assets, which will have a material effect on the business operation of the Company;

  9. (d) the election of Chairman of the Board pursuant to these Articles; and

  10. (e) issuance of corporate bonds.

DIVIDENDS

  1. Subject to any rights and restrictions for the time being attached to any Shares, the Company by Ordinary Resolution may declare dividends and other distributions on Shares in issue and authorize payment of the same out of the funds of the Company lawfully available therefor.

  2. 119A. As regards the dividend policy, subject to the Law, the Company may consider factors including, among others, the Company’s overall development, financial plans, the demand

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for working capital, the current industry outlook, future prospects and the proportion of cash and/or shares to be paid as dividends. Subject to Article 120, and after paying or reserving taxes due, deducting previous years’ losses, the Directors may present for approval by Ordinary Resolution at a general meeting a proposed plan for allocation of dividends (“ Distributable Profits ”) and, upon such approval being duly given, cause the said plan to be implemented in the form of cash and/or shares, provided that no less than ten percent (10%) of the Profit for the year attributable to Owners of the Company shall be

distributed as dividend in each financial year, and no less than twenty percent (20%) of the total dividends distributed in each financial year shall be in the form of cash.

  1. The Directors may, before recommending any dividend, set aside out of the funds legally available for distribution such sums as they think proper as a reserve or reserves which shall, in the discretion of the Directors be applicable for meeting contingencies, or for equalizing dividends or for any other purpose to which those funds may be properly applied and pending such application may in the absolute discretion of the Directors, either be employed in the business of the Company or be invested in such investments as the Directors may from time to time think fit.

  2. Any dividend may be paid by cheque sent through the post to the registered address of the Shareholder or Person entitled thereto, or in the case of joint holders, to the representative of such joint holders at his registered address or to such Person and such address as the Shareholder or Person entitled, or such joint holders as the case may be, may direct. Every such cheque shall be made payable to the order of the Person to whom it is sent or to the order of such other Person as the Shareholder or Person entitled, or such joint holders as the case may be, may direct.

  3. Subject to any rights and restrictions for the time being attached to any Shares, all dividends shall be declared and paid according to the number of the Shares held by the Shareholders.

  4. If several Persons are registered as joint holders of any Share, any of them may give effectual receipts for any dividend or other moneys payable on or in respect of the Share.

  5. No dividend shall bear interest against the Company.

  6. No dividend shall be declared or paid or shall be made otherwise than in accordance with the Law.

ACCOUNTS, AUDIT, AND ANNUAL RETURN AND DECLARATION

  1. The books of account relating to the Company's affairs shall be kept in such manner as may be determined from time to time by the Directors.

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  1. The books of account shall be kept at the Registered Office or at such other place or places as the Directors think fit, and shall always be open to the inspection of the Directors.

  2. No Shareholder (not being a Director) or other person shall have any right of inspecting any account or book or document of the Company except as conferred by the Law and Taiwan Laws or ordered by a court of competent jurisdiction or authorized by the Board or the Company in general meeting.

  3. After the end of each fiscal year, the Board shall prepare and submit the financial statements and records and such other reports and documents as may be required by the Law and the Taiwan Laws to the annual general meeting of Shareholders for its ratification and after the meeting shall distribute to each Shareholder the copies of ratified financial statements and the resolutions on the earning distribution and/or loss offsetting. However, the Company may notify its Shareholders who hold less than 1,000 Shares by way of a public announcement of the abovementioned statements and resolutions.

  4. The Board shall keep copies of the yearly business report and financial statements at the office of its Shareholders’ Service Agent before ten (10) days of the annual general meeting and any of its Shareholders is entitled to inspect such documents during normal business hours of such service agent. The Board shall keep copies of the Articles, the minutes of every general meeting of the Shareholders and the financial statements, the Register and the counterfoil of corporate bonds issued by the Company at the business office of its Shareholders’ Service Agent. Any Shareholder may request at any time, by submitting evidentiary document(s) to show his interests involved and indicating the scope of requested matters, an access to inspect and to make copies of the above documents.

  5. Save for otherwise provided under these Articles, Directors shall from time to time determine whether and to what extent and at what times and places and under what conditions or regulations the accounts and books of the Company or any of them shall be open to the inspection of Shareholders not being Directors, and no Shareholder (not being a Director) shall have any right of inspecting any account or book or document of the Company except as conferred by law or authorized by the Directors or by Ordinary Resolution.

  6. The accounts relating to the Company's affairs shall only be audited in such manner and with such financial year end as may be determined from time to time by the Directors, or required by the Applicable Listing Rules or other Taiwan Laws.

  7. The Directors in each year shall prepare, or cause to be prepared, an annual return and declaration setting forth the particulars required by the Law and deliver a copy thereof to the Registrar of Companies in the Cayman Islands.

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AUDIT

  1. The Directors may appoint an Auditor of the Company who shall hold office until removed from office by a resolution of the Directors and may fix his remuneration.

  2. Every Auditor of the Company shall have a right of access at all times to the books and accounts and vouchers of the Company and shall be entitled to require from the Directors and Officers of the Company such information and explanation as may be necessary for the performance of the duties of the auditors.

  3. Auditors shall, if so required by the Directors, make a report on the accounts of the Company during their tenure of office at the next annual general meeting following their appointment, and at any time during their term of office, upon request of the Directors or any general meeting of the Members.

CAPITALISATION OF RESERVE

  1. (A) For purpose of the Articles, Capital Reserve means (1) the Share Premium Account, (2) the income from endowments received by the Company, and (3) other items required to be treated as Capital Reserve pursuant to the Taiwan Laws. Capital Reserve may only be used for (a) making good the loss of the Company, (b) capitalisation as set forth in the Article 137, or (c) as otherwise provided for in the Taiwan Laws and/or the Law.

  2. (B) Subject to the Law, when the Company does not have any loss on its books, the Company may by Special Resolution capitalize (1) the Share Premium Account and (2) the income from endowments received by the Company, from the Capital Reserve in whole or in part, by issuing new shares to its Shareholders in proportion to the number of Shares being held by each of them. Article 8 is not applicable for the issuance of new Share pursuant to Article 137 herein.

Tender Offer

  1. Within seven days after the receipt of the copy of a tender offer application form and relevant documents by the Company or its litigation or non-litigation agent appointed pursuant to the Applicable Listing Rules, the Board shall resolve to recommend to the Shareholders whether to accept or object to the tender offer and make a public announcement of the following:

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  • (a) the types and amount of the Shares held by the Directors and the Shareholders holding more than 10% of the outstanding Shares in its own name or in the name of other Persons;

  • (b) recommendations to the Shareholders on the tender offer, which shall set forth the names of the Directors who abstain or object to the tender offer and the reason(s) therefore;

  • (c) whether there is any material change in the financial condition of the Company after the submission of the latest financial report and an explanation of the change, if any;

  • (d) the types, numbers and amount of the Shares of the tender offeror or its affiliates held by the Directors and the Shareholders holding more than 10% of the outstanding Shares held in its own name or in the name of other Persons.

Share Premium Account

  1. The Directors shall in accordance with the Law establish a Share Premium Account and shall carry to the credit of such account from time to time a sum equal to the amount or value of the premium paid on the issue of any Share.

  2. There shall be debited to any Share Premium Account on the redemption or purchase of a Share the difference between the nominal value of such Share and the redemption or purchase price provided always that at the discretion of the Directors such sum may be paid out of the profits of the Company or, if permitted by the Law, out of capital.

  3. The Company shall at all times comply with the provisions of the Law in relation to the share premium account, the premiums attaching to Shares and the capital redemption reserve fund.

WINDING UP

  1. Subject to the Law, if the Company shall be wound up, and the assets available for distribution amongst the Shareholders shall be insufficient to repay the whole of the share capital, such assets shall be distributed so that, as nearly as may be, the losses shall be borne by the Shareholders in proportion to the number of the Shares held by them. If in a winding up the assets available for distribution amongst the Shareholders shall be more than sufficient to repay the whole of the share capital at the commencement of the winding up, the surplus shall be distributed amongst the Shareholders in proportion to the number of the Shares held by them at the commencement of the winding up. This Article is without prejudice to the rights of the holders of Shares issued upon special terms and conditions.

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  1. Subject to the Law, if the Company shall be wound up, the liquidator may, with the sanction of a Special Resolution and any other sanction required by the Law and in compliance with the Applicable Listing Rules, divide amongst the Shareholders in specie or kind the whole or any part of the assets of the Company (whether they shall consist of property of the same kind or not) and may, for such purpose set such value as he deems fair upon any property to be divided as aforesaid and may determine how such division shall be carried out as between the Shareholders or different Classes. The liquidator may, with the like sanction, vest the whole or any part of such assets in trustees upon such trusts for the benefit of the Shareholders as the liquidator, with the like sanction shall think fit, but so that no Shareholder shall be compelled to accept any asset whereon there is any liability.

  2. The Company shall keep all statements, records of account and documents for a period of ten years from the date of the completion of liquidation, and the custodian thereof shall be appointed by the liquidator or the Company by Ordinary Resolution.

NOTICES

  1. Subject to the Law and except as otherwise provided in these Articles, any notice or document may be served by the Company or by the Person entitled to give notice to any Shareholder either personally, or by facsimile, or by sending it through the post in a prepaid letter or via a recognised courier service, fees prepaid, addressed to such Shareholder at his address as appearing in the Register, or to the extent permitted by all applicable laws and regulations, by posting on the MOPS or the Company’s website, by electronic means by transmitting it to any electronic mail number or address such Shareholder may have positively confirmed in writing for the purpose of such service of notices. In the case of joint holders of a Share, all notices shall be given to that one of the joint holders whose name stands as their representative in the Register in respect of the joint holding, and notice so given shall be sufficient notice to all the joint holders.

  2. Any Shareholder present, either personally or by proxy, at any meeting of the Company shall for all purposes be deemed to have received due notice of such meeting and, where requisite, of the purposes for which such meeting was convened.

  3. Any notice or other document, if served by:

  4. (a) post or courier, shall be deemed to have been served five days after the time when the letter containing the same is posted or delivered to the courier;

  5. (b) facsimile, shall be deemed to have been served upon production by the transmitting facsimile machine of a report confirming transmission of the facsimile in full to the facsimile number of the recipient;

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  • (c) recognised courier service, shall be deemed to have been served 48 hours after the time when the letter containing the same is delivered to the courier service; or

  • (d) electronic mail, shall be deemed to have been served immediately upon the time of the transmission by electronic mail, subject to the Law.

In proving service by post or courier service it shall be sufficient to prove that the letter containing the notice or documents was properly addressed and duly posted or delivered to the courier service

  1. Any notice or document delivered or sent by post to or left at the registered address of any Shareholder in accordance with the terms of these Articles shall notwithstanding that such Shareholder be then dead or bankrupt, and whether or not the Company has notice of his death or bankruptcy, be deemed to have been duly served in respect of any Share registered in the name of such Shareholder as sole or joint holder, unless his name shall at the time of the service of the notice or document, have been removed from the Register as the holder of the Share, and such service shall for all purposes be deemed a sufficient service of such notice or document on all Persons interested (whether jointly with or as claiming through or under him) in the Share.

  2. Notice of every general meeting of the Company shall be given to:

  3. (a) all Shareholders holding Shares with the right to receive notice as at the record date and who have supplied to the Company an address for the giving of notices to them; and

  4. (b) every Person entitled to a Share in consequence of the death or bankruptcy of a Shareholder, who but for his death or bankruptcy would be entitled to receive notice of the meeting and has informed the Company with the supporting documents as requested by and satisfactory to the Company.

No other Person shall be entitled to receive notices of general meetings.

AMENDMENT OF MEMORANDUM AND ARTICLES

  1. Subject to the Law, Taiwan Laws and the Articles including without limitation Article 13, the Company may at any time and from time to time by a Special Resolution alter or amend the Memorandum of Association or these Articles in whole or in part, or change the name of the Company.

ORGANISATION EXPENSES

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  1. The preliminary and organisation expenses incurred in forming the Company shall be paid by the Company and may be amortised in such manner and over such period of time and at such rate as the Directors shall determine and the amount so paid shall in the accounts of the Company, be charged against income and/or capital.

OFFICES OF THE COMPANY

  1. The Registered Office of the Company shall be at such address in the Cayman Islands as the Directors shall from time to time determine. The Company, in addition to its Registered Office, may establish and maintain an office in the Cayman Islands or elsewhere as the Directors may from time to time determine.

Information

  1. The Board shall keep at the office of its Shareholders’ Service Agent in Taiwan copies of these Articles, the minutes of every meeting of the Shareholders and the financial statements, the Register of Members and the counterfoil of corporate bonds issued by the Company. Any Shareholder of the Company may request, by submitting evidentiary document(s) to show his interests involved and indicating the scope of interested matters, an access to inspect, transcribe and to make copies of these Articles, accounting books and records referred to in the above; if these Articles, accounting books and records are kept in a Shareholders’ Service Agent, the Company shall make such agent to provide with the access.

  2. Without prejudice to the rights set forth in these Articles, no Shareholder shall be entitled to require discovery of any information in respect of any detail of the Company’s trading or any information which is or may be in the nature of a trade secret or secret process which may relate to the conduct of the business of the Company and which in the opinion of the Board would not be in the interests of the members of the Company to communicate to the public.

  3. The Board shall be entitled to release or disclose to any regulatory or judicial authority any information in its possession, custody or control regarding the Company or its affairs to any of its Shareholder including, without limitation, information contained in the Register of Members and transfer books of the Company

INDEMNITY

  1. Every Director (including for the purposes of this Article 156 any alternate Director appointed pursuant to the provisions of these Articles), the Managing Directors, every alternate Directors, every Auditors, every Secretary and other officer for the time being and from time to time of the Company (each an " Indemnified Person ") shall be indemnified

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and secured harmless out of the assets and funds of the Company against all actions, proceedings, costs, charges, expenses, losses, damages or liabilities incurred or sustained by such Indemnified Person, other than by reason of such Indemnified Person's own dishonesty, willful default or fraud, in or about the conduct of the Company's business or affairs (including as a result of any mistake of judgment) or in the execution or discharge of his duties, powers, authorities or discretions, including without prejudice to the generality of the foregoing, any costs, expenses, losses or liabilities incurred by such Indemnified Person in defending (whether successfully or otherwise) any civil proceedings concerning the Company or its affairs in any court whether in the Cayman Islands or elsewhere.

  1. No Indemnified Person shall be liable to the Company unless such liability arises through such Indemnified Person's own dishonesty, wilful default or fraud.

Non-Recognition Of Trusts

  1. Subject to the proviso hereto, no Person shall be recognised by the Company as holding any Share upon any trust and the Company shall not, unless required by law, be bound by or be compelled in any way to recognise (even when having notice thereof) any equitable, contingent, future or partial interest in any Share or (except only as otherwise provided by these Articles or as the Law requires) any other right in respect of any Share except an absolute right to the entirety thereof in each Shareholder registered in the Register, provided that, notwithstanding the foregoing, the Company shall be entitled to recognise any such interests as shall be determined by the Directors in their absolute discretion.

Financial Year

  1. Unless the Directors otherwise prescribe, the financial year of the Company shall end on December 31st in each year and shall begin on January 1st in each year.

Registration By Way Of Continuation

  1. The Company may by Special Resolution resolve to be registered by way of continuation in a jurisdiction outside the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing. In furtherance of a resolution adopted pursuant to this Article 160, the Directors may cause an application to be made to the Registrar of Companies in the Cayman Islands to deregister the Company in the Cayman Islands or such other jurisdiction in which it is for the time being incorporated, registered or existing and may cause all such further steps as they consider appropriate to be taken to effect the transfer by way of continuation of the Company.

Corporate Social Responsibility

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  1. The Company shall comply with the laws and regulations as well as business ethics and may take actions which will promote public interests in order to fulfill its social responsibilities when conducting business.

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Annex X. Rules of Board Meetings

Wisdom Marine Lines Co., Limited Rules of Board Meetings

February 22, 2019 Approval by the Board Meetings

Article 1 （

The Company comply with Regulations Governing Procedure for Board of Directors Meetings of Public Companies to amend these rules.

Article 2

The Company shall adopt rules of procedure for meetings of its board of directors; the main agenda items, operational procedures, required content of meeting minutes, public announcements, and other compliance requirements for board meetings shall be handled in accordance with these Regulations.

Article 3

A board of directors shall meet at least quarterly, which shall be set out in the rules of procedure. The reasons for calling a board of directors meeting shall be notified to each director and supervisor at least seven days in advance. In emergency circumstances, however, a meeting may be called on shorter notice.

All matters set out in the subparagraphs of Article 12, , shall be specified in the notice of the reasons for calling a board of directors meeting; none of them may be raised by an extraordinary motion except in the case of an emergency or legitimate reason.

Article 4

The board of directors of a company appoint the Administration department as an agenda working group, which shall be specified in the rules of procedure.

The agenda working group shall prepare agenda items for board of directors meetings and provide comprehensive pre-meeting materials, to be sent together with the notice of the meeting.

A director of the opinion that the pre-meeting materials provided are insufficiently comprehensive may request the agenda working group to supplement the materials. If a director is of the opinion that materials concerning any proposal are insufficient in content, the deliberation of such proposal may be postponed by a resolution of the board of directors.

Article 5

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When a meeting of the board of directors is held, an attendance book shall be made ready for signature by directors attending the meeting and thereafter made available for future reference.

All board directors shall attend board meetings in person; if attendance in person is not possible, they may, pursuant to the company's articles of incorporation, appoint another director to attend as their proxy. Attendance via tele- or video-conference is deemed as attendance in person.

A director appointing another director to attend a board meeting in his or her place shall in each case give to that director a written proxy stating the scope of authorization with respect to the reasons for meeting.

A proxy under paragraph 2 may accept a proxy from one person only.

Article 6

A board of directors meeting shall be held at the location and during the business hours of the company, or at a place and time convenient to all directors and suitable for holding such a meeting.

Article 7

Meetings of the board of directors shall be called and chaired by the chairman of the board. However, the first meeting of each newly elected board of directors shall be called and chaired by the director who received votes representing the largest portion of voting rights at the shareholders' meeting in which the directors were elected; if there are two or more directors so entitled to call the meeting, they shall choose one person by and from among themselves to do so.

When the chairman of the board is on leave or for any reason is unable to exercise the powers of the chairman, the vice chairman shall do so in place of the chairman, or, if there is no vice chairman or the vice chairman also is on leave or for any reason is unable to act, by a managing director designated by the chairman, or, if there is no managing director, by a director designated thereby, or, if the chairman does not make such a designation, by a managing director or director elected by and from among themselves.

Article 8

When holding a meeting of the board of directors, a company may, as necessary for the agenda items of the meeting, notify personnel of relevant departments or subsidiaries to attend the meeting as nonvoting participants.

When necessary, the company may also invite certificated public accounts, attorneys, or other professionals to attend as nonvoting participants and to make explanatory statements, provided that they shall leave the meeting when deliberation or voting takes place.

When the time of a meeting has arrived and one-half all board directors are not present, the meeting chair may announce postponement of the meeting time, provided that only two postponements may be made. If the quorum is still not met after two such delays, the chair shall re-call the meeting

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following the procedures provided in Article 3, paragraph 2.

The term "all board directors " as used in the preceding paragraph and in Article 17, paragraph 2, subparagraph 2 shall be calculated as the number of directors then in office.

Article 9

A company shall record on audio or video tape the entire proceedings of a board of directors meeting, and preserve the recordings for at least five years, in electronic form or otherwise.

If before the end of the preservation period referred to in the preceding paragraph any litigation arises in connection with a resolution of a board of directors meeting, the relevant audio or video recordings shall continue to be preserved until the litigation is concluded.

Where a board of directors meeting is held via tele- or video conferencing, the audio and visual documentation of the meeting form a part of the meeting minutes and shall be well preserved during the existence of the company.

Article 10

Agenda items for regular board of directors meetings shall include at least the following:

  1. Reports:

  2. A. Minutes of the last meeting and actions arising.

  3. B. Reporting on important financial and business matters.

  4. C. Reporting on internal audit activities.

  5. D. Other important matters to be reported.

  6. Discussions:

  7. A. Items discussed and continued from the last meeting.

  8. B. Items for discussion at this meeting.

  9. Extraordinary motions.

Article 11

A board of directors meeting shall be conducted in accordance with the order of business on the agenda as specified in the meeting notice. However, the order may be changed with the approval of a majority of directors present at the meeting.

The meeting chair may not declare the meeting closed without the approval of a majority of directors present at the meeting.

If at any time during the proceeding of a board of directors meeting the directors sitting at the meeting are not more than half of the directors present at the meeting, then upon motion by the directors sitting at the meeting, the chair shall declare a suspension of meeting, in which case Article 8, paragraph 3 of the preceding article shall apply mutatis mutandis.

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Article 12

The following items for discussion by the board of directors:

  1. Corporate business plan.

  2. Annual financial reports.

  3. Adoption or amendment of an internal control system pursuant to Article 14-1 of the Act, and an assessment of the effectiveness of the internal control system.

  4. Adoption or amendment, pursuant to Article 36-1 of the Act, of handling procedures for financial or operational actions of material significance, such as acquisition or disposal of assets, derivatives trading, extension of monetary loans to others, and endorsements or guarantees for others.

  5. The offering, issuance, or private placement of any equity-type securities.

  6. The appointment or discharge of a financial, accounting, or internal audit officer.

  7. A donation to a related party or a major donation to a non-related party, provided that a public-interest donation of disaster relief for a major natural disaster may be submitted to the following board of directors meeting for retroactive recognition.

  8. Any matter required by Article 14-3 of the Act or any other law, regulation, or bylaw to be approved by resolution at a shareholders' meeting or board of directors meeting, or any such significant matter as may be prescribed by the competent authority.

The term "related party" in subparagraph 7 of the preceding paragraph means a related party as defined in the Regulations Governing the Preparation of Financial Reports by Securities Issuers. The term "major donation to a non-related party" means any individual donation, or cumulative donations within a 1-year period to a single recipient, at an amount of NTD100 million or more, or at an amount equal to or greater than 1 percent of net operating revenue or 5 percent of paid-in capital as stated in the CPA-attested financial report for the most recent year.

The term "within a 1-year period" in the preceding paragraph means a period of 1 year calculated retroactively from the date on which the current board of directors meeting is convened. Amounts already submitted to and passed by a resolution of the board are exempted from inclusion in the calculation.

For foreign companies whose stock has no par value or a par value other than NTD10, the "5 percent of paid-in capital" in paragraph 2 above shall be calculated instead as 2.5 percent of shareholder equity.

At least one independent director shall attend each meeting in person. In the case of a meeting concerning any matter required to be submitted for a resolution by the board of directors under paragraph 1, each independent director shall attend in person; if an independent director is unable to attend in person, he or she shall appoint another independent director to attend as his or her proxy. If an independent director expresses any objection or reservation about a matter, it shall be recorded in the board meeting minutes. An independent director intending to express an objection or

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reservation but unable to attend the meeting in person shall, unless there is some legitimate reason to do otherwise, issue a written opinion in advance, which shall be recorded in the meeting minutes.

Article 13

When the chair at a board meeting is of the opinion that a proposal has been discussed sufficiently to put it to a vote, the chair may announce the discussion closed and call a vote.

When a proposal comes to a vote at a board meeting, if no attending director voices an objection following an inquiry by the chair, the proposal will be deemed approved. If there is an objection following an inquiry by the chair, the proposal shall be brought to a vote.

One voting method for proposals at a board meeting shall be selected by the chair from among those below, provided that when an attending director has an objection, the chair shall seek the opinion of the majority to make a decision:

  1. A show of hands or a vote by voting machine.

  2. A roll call vote.

  3. A vote by ballot.

  4. A vote by a method selected at this Corporation's discretion.

"Attending directors," as used in the preceding two paragraphs, does not include directors that may not exercise voting rights pursuant to Article 15, paragraph 1.

Article 14

Except as otherwise stated in the Act or in the Company Act, a resolution on a matter at a board of directors meeting requires the approval of a majority of the directors present at the meeting that shall be attended by a majority of all directors.

If there is an amendment to or substitute for a proposed resolution, the Chairman shall decide the sequence of voting for such proposed resolution and the amendment or substitute. If any one of them has been adopted, the others shall be deemed vetoed and no further voting is required. The result of voting shall be announced at the meeting and placed on record.

Article 15

If any director or a juristic person represented by a director is an interested party with respect to any agenda item, the director shall state the important aspects of the interested party relationship at the respective meeting. When the relationship is likely to prejudice the interests of the company, the director may not participate in discussion or voting on that agenda item, and further, shall enter recusal during discussion and voting on that item and may not act as another director's proxy to exercise voting rights on that matter.

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The provisions of Article 180, paragraph 2 of the Company Act, as applied mutatis mutandis under Article 206, paragraph 3 of that Act, apply to resolutions of board of directors meetings when a board director is prohibited by the preceding paragraph from exercising voting rights.

Article 16

Minutes shall be prepared of the discussions at board of directors meetings. The meeting minutes shall record the following:

  1. Session (or year), time, and place of meeting.

  2. Name of the meeting chair.

  3. Attendance of directors at the meeting, specifying the names and number of members present, excused, and absent.

  4. Names and titles of those attending the meeting as nonvoting participants.

  5. Name of minutes taker.

  6. Matters reported on.

  7. Agenda items: the method of resolution and the result for each proposal; a summary of the comments made by directors, supervisors, experts, or other persons; the name of any director that is an interested party as referred to in paragraph 1 of the preceding article, an explanation of the important aspects of the relationship of interest, the reasons why the director was required or not required to enter recusal, and the status of their recusal; opinions expressing objections or reservations at the meeting that were included in records or stated in writing; and any opinion issued in writing by an independent director under Article 12, paragraph 4.

  8. Extraordinary motions: the name of the mover; the method of resolution and the result for each motion; a summary of the comments made by directors, supervisors, experts, or other persons; the name of any director that is an interested party as referred to in paragraph 1 of the preceding article, an explanation of the important aspects of the relationship of interest, the reasons why the director was required or not required to enter recusal, and the status of their recusal; opinions expressing objections or reservations at the meeting that were included in records or stated in writing.

  9. Other matters required to be recorded.

Any of the following matters in relation to a resolution passed at a meeting of the board of directors shall be stated in the meeting minutes and within two days of the meeting be published on an information reporting website designated by the competent authority:

  1. Any matter about which an independent director expresses an objection or reservation that has been included in records or stated in writing.

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  1. If any matter that has not been passed by the audit committee, but has been adopted with the approval of two-thirds or more of all board directors without having been passed by the audit committee.

The attendance book forms a part of the minutes for each board of directors meeting and shall be well preserved during the existence of the company.

The minutes of a board of directors meeting shall bear the signature or seal of both the meeting chair and the minutes taker; a copy of the minutes shall be distributed to each director and supervisor within 20 days after the meeting and well preserved as important company records during the existence of the company.

The production and distribution of the meeting minutes referred to in paragraph 1 may be done in electronic form.

Article 17

With the exception of matters required to be discussed at a board meeting under Article 12, paragraph 1, when the board of directors appoints a party to exercise the powers of the board in accordance with applicable laws and regulations or this Corporation's articles of incorporation, the levels of such delegation and the content or matters it covers shall be definite and specific.

Article 18

These Rules of Procedure shall be adopted by the approval of meeting of the board of directors and shall be reported to the shareholders meeting. The board of directors may be authorized to adopt, by resolution, any future amendments to these Rules.

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Annex XI. Procedures for Loan to Others

Wisdom Marine Group and its Subsidiries Procedures for Loan to Others

  • 一、本作業程序依中華民國「公開發行公司資金貸與及背書保證處理準則」規定訂定之。本 公司係指公開發行公司慧洋海運股份有限公司，子公司泛指依國際財務報導準則第二十 七號及第二十八號之規定認定屬本公司之子公司者。

  • 本作業程序所稱淨值，係指證券發行人財務報告編制準則規定之資產負債表歸屬於母公 司業主之權益。

二、得貸與資金之對象:

1. 本公司及子公司資金貸與對象，以下列為限: 

  - `(1) 有業務往來之公司。`

  - `(2) 本公司直接及間接持有表決權股份100%之中華民國境外公司。`

  - `(3) 其他有短期融通資金必要之公司`

2. 前項所稱短期，係指一年。

  • 三、資金貸與他人之評估標準:

1. 因業務往來關係從事資金貸與：以不超過一年業務往來之金額為限。

2. 本公司直接及間接持有表決權股份100%之中華民國境外公司：子公司因購建新船、 償還貸款、營運週轉及其他營運必要之資金需求者。

3. 其他有短期融通資金之必要者：經本公司董事會同意貸與資金者。

  • 四、資金貸與總額及個別對象之限額：

1. 有業務往來者：貸與總額不得超過借出企業淨值之30%，個別貸與金額以不超過一 年業務往來之金額為限。

2. 本公司直接及間接持有表決權股份100%之國外公司間從事資金貸與，或本公司直接 及間接持有表決權股份100%之國外公司對本公司從事資金貸與，貸與總額及個別貸 與金額以不超過本公司合併淨值之400%為限。

3. 有短期融通資金之必要者：貸與總額不得超過借出企業淨值之40%；對單一企業資 金貸與之金額不得超過借出企業淨值之10%。

  • 五、資金貸與期限及計息方式：

1. 有業務往來者：貸款期限應參酌往來業務及合作契約時間，但最長不得超過五年。

2. 本公司直接及間接持有表決權股份100%之國外公司間從事資金貸與，或本公司直接 及間接持有表決權股份100%之國外公司對本公司從事資金貸與，其融通期間以十年 為限。若因業務需要，得由董事會通過展期，展期次數以2 次為限。

3. 其他有短期融通資金必要之公司：每筆貸款之期限最長為一年。

4. 計息方式:由董事會參考市場利率、資金成本及風險後議定之。但本公司直接及間接 持有表決權股份100%之國外公司間，及本公司直接及間接持有表決權股份100%之國 外公司對本公司從事資金貸與，得不計利息。

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六、資金貸與辦理及審查程序:

1. 由權責單位出具簽呈及書面報告，經財務部審核後，將審核意見連同相關資料一併 呈報董事會決議。審查內容應包含下列： 

  - `(1) 資金貸與之必要性及合理性`

  - `(2) 資金貸與對象之徵信及風險評估`

  - `(3) 對公司之營運風險、財務狀況及股東權益之影響`

  - `(4) 應否取得擔保品及擔保品之評估價值`

2. 本公司與子公司間，或本公司之子公司間，應依前項規定提董事會決議。

3. 本公司將資金貸與他人，應充分考量各獨立董事之意見，並將其同意或反對之明確 意見及反對之理由列入董事會紀錄。

4. 本公司因情事變更致貸與餘額超限時，應訂定改善計劃，將相關改善計劃送審計委 員會，並依計畫時程完成改善。

  • 七、本公司與關係人間之往來，應遵循本公司各項規章辦法執行之，且交易之目的、價格、 條件、交易之實質與形式及相關處理程序，不應與非關係人之正常交易有顯不相當或顯 欠合理之情事。

八、公告申報程序:

1. 本公司應於每月十日前公告申報本公司及子公司上月份資金貸與餘額。

2. 本公司資金貸與達下列標準之一者，應於事實發生之即日起算二日內公告申報： (1) 本公司及子公司資金貸與他人之餘額達該本公司最近期財務報表淨值百分之二 十以上。 

  - `(2) 本公司及子公司對單一企業資金貸與餘額達本公司最近期財務報表淨值百分之 十以上。`

  - `(3) 本公司或子公司新增資金貸與金額達新臺幣一千萬元以上且達本公司最近期財 務報表淨值百分之二以上。`

3. 本公司之子公司非屬國內公開發行公司者，該子公司有前項第三款應公告申報之事 項，應由本公司為之。

  • 九、已貸與金額之後續控管措施:本公司有關部門應定期檢查、評估貸與對象之財務狀況。 十、 逾期債權處理程序:由業務往來單位進行催討，若無善意回應則備齊相關文件依法進 行債權之回收。

  • 十一、 資金貸與事項備查簿：

    1. 本公司辦理資金貸與事項，應建立備查簿，就資金貸與之對象、金額、董事會 通過日期、資金貸放日期及依前條第一項規定應審慎評估之事項詳予登載於備 查簿備查。

2. 本公司內部稽核人員應至少每季稽核資金貸與他人作業程序及其執行情形，並 作成書面紀錄，如發現重大違規情事，應即以書面通知各獨立董事。

十二、 相關人員違反之處罰依「員工工作規則」辦理。公司負責人違反第二條規定時，應 與借用人連帶負返還責任；如公司受有損害者，亦應由其負損害賠償責任。

  • 十三、 子公司資金貸與他人之控管程序:

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1. 本公司之子公司擬將資金貸與他人者，亦應按前述各項程序辦理。

2. 子公司應於每月十日前編製上月份資金貸與明細表向本公司申報，如達本作業 程序第八條第2 項所訂標準時，應立即通知本公司辦理公告申報。

3. 子公司稽核人員應依年度稽核計畫，查核所訂之程序是否符合相關準則之規定 及資金貸與他人是否依所訂作業程序規定辦理，並呈報母公司。

  • 十四、 本作業程序經審計委員會、董事會通過並提報股東會同意後實施。修正時亦同。

  • 十五、 1. 本辦法訂定於2009 年1 月12 日。

2. 第一次修訂於2009 年9 月18 日。

3. 第二次修訂於2010 年6 月28 日。

4. 第三次修訂於2011 年2 月14 日。

5. 第四次修訂於2014 年6 月27 日。

6. 第五次修訂於2019 年5 月17 日。

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Annex XII. Procedures for Endorsement and Guarantee

Wisdom Marine Group Procedures for Endorsement and Guarantee

  • 一、本作業程序依中華民國「公開發行公司資金貸與及背書保證處理準則」規定訂定之。本 公司係指公開發行公司慧洋海運股份有限公司，子公司泛指依國際財務報導準則第二十 七號及第二十八號之規定認定屬本公司之子公司者。

  • 本作業程序所稱淨值，係指證券發行人財務報告編制準則規定之資產負債表歸屬於母公 司業主之權益。

  • 二、本程序所稱背書保證係指下列事項：

1. 融資背書保證，包括: 

  - `(1) 客票貼現融資。`

  - `(2) 為他公司融資之目的所為之背書或保證。`

  - `(3) 為本公司融資之目的而另開立票據予非金融事業作擔保者。`

2. 關稅背書保證，係指為本公司或他公司有關關稅事項所為之背書或保證。

3. 其他背書保證，係指無法歸類列入前二項之背書或保證事項。

  • 本公司提供動產或不動產為他公司借款之擔保設定質權、或抵押權者，亦應依本程序規 定辦理。 
三、得背書保證之對象

1. 本公司背書保證之對象，以下列為限：

  • (1) 有業務往來之公司。

  • (2) 本公司直接及間接持有表決權之股份超過百分之五十之公司。

  • (3) 直接及間接對本公司持有表決權之股份超過百分之五十之公司。

2. 本公司直接及間接持有表決權股份達百分之九十以上之公司間，得為背書保證，且 其金額不得超過本公司淨值之百分之十。但本公司直接及間接持有表決權股份百分 之百之公司間背書保證，不在此限。

3. 本公司基於承攬工程需要之同業間或共同起造人間依合約規定互保，或因共同投資 關係由全體出資股東依其持股比率對被投資公司背書保證者，不受前二項規定之限 制，得為背書保證。

4. 前項所稱出資，係指公開發行公司直接出資或透過持有表決權股份百分之百之公司 出資。

5. 本程序所稱子公司及母公司，應依財團法人中華民國會計研究發展基金會發布之財 務會計準則公報第五號及第七號之規定認定之。

四、額度：

1. 本公司背書保證之總額不得超過公司合併淨值之600%。

2. 本公司對單一企業背書保證之金額不得超過公司合併淨值之50%。但本公司對子公 司背書保證額度不受上述比例之限制。

3. 因業務往來須本公司背書之公司，背書保證金額不得超過本公司與被保證人一年之

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業務往來金額。

4. 本公司及子公司整體對外得為背書保證之總額及對單一企業背書保證之金額均不得 超過本公司合併淨值之50%。

5. 如因業務有超額背書保證需要者，應經董事會同意並由半數以上之董事對公司超限 可能產生之損失具名聯保，並修正背書保證作業程序，報經股東會追認之；股東會 不同意時，應訂定計畫於一定期限內銷除超限部分。

6. 於前項董事會討論時，應充分考量各獨立董事之意見，並將其同意或反對之明確意 見及反對之理由列入董事會紀錄。

  • 五、背書保證之辦理及審查程序：

1. 除對子公司之保證外，應由業務往來之權責單位出具書面報告，經財務部審核後， 將審核意見連同相關資料一併呈報董事會(或董事長)決議(或核准)。審查內容應包 含下列: 

  - `(1) 背書保證之必要性及合理性`

  - `(2) 背書保證對象之徵信及風險評估`

  - `(3) 對公司之營運風險、財務狀況及股東權益之影響`

  - `(4) 應否取得擔保品及擔保品之評估價值`

2. 背書保證對象若為淨值低於實收資本額二分之一之子公司，應進行下列續後相關管 控措施：

  • (1) 在業務方面，若該子公司營運體質尚佳，本公司應協助其業務拓展，以增加營收及 獲利，強化經營體質；若該子公司營運體質不佳，且未來發展前景堪慮，應縮小其 營運規模，並以保全資產安全為主。

  • (2) 在財務方面，本公司應協助該子公司控管各項資金收支，以利公司營運使用。

  • (3) 在內部控制方面，本公司應協助該子公司進行內部控制各項作業流程控管，必要時， 應查核內部控制執行情形，以釐清內部控制執行是否有缺失。

3. 本公司因情事變更，致背書保證對象不符規定或金額超限時，應訂定改善計畫，並 將相關改善計畫送審計委員會，並依計畫時程完成改善。

4. 子公司股票無面額或每股面額非屬新臺幣十元者，依第二項規定計算之實收資本 額，應以股本加計資本公積－發行溢價之合計數為之。

  • 六、本公司與關係人間之往來，應遵循本公司各項規章辦法執行之，且交易之目的、價格、 條件、交易之實質與形式及相關處理程序，不應與非關係人之正常交易有顯不相當或顯 欠合理之情事。

  • 七、印鑑章使用及保管程序依「801 公司印鑑使用管理作業」辦理。或得由董事會授權之人 為簽名保證。

八、決策及授權層級：

1. 背書保證金額在淨值10%以下者得由董事長先行授權辦理，事後另由董事會追認。

2. 本公司直接及間接持有表決權股份達百分之九十以上之子公司間依本程序規定為背 書保證前，應提報本公司董事會決議後始得辦理。但本公司直接及間接持有表決權 股份百分之百之公司間背書保證，不在此限。

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3. 本公司為他人背書保證，應充分考量各獨立董事之意見，並將其同意或反對之明確 意見及反對之理由列入董事會紀錄。

  • 九、背書保證事項備查簿：

1. 本公司辦理背書保證事項，應建立備查簿就背書保證對象、金額、董事會通過或董 事長決行日期、背書保證日期及依前條第一項規定應審慎評估之事項，詳予登載於 備查簿備查。

2. 本公司之內部稽核人員應至少每季稽核背書保證作業程序及其執行情形，並作成書 面紀錄，如發現重大違規情事，應即以書面通知各獨立董事。

  • 十、公告申報程序：

4. 本公司應於每月十日前公告申報本公司及子公司上月份背書保證餘額。

5. 本公司背書保證達下列標準之一者，應於事實發生之即日起算二日內公告申報： 

  - `(4) 本公司及子公司背書保證餘額達本公司最近期財務報表淨值百分之五十以上。`

  - `(5) 本公司及子公司對單一企業背書保證餘額達本公司最近期財務報表淨值百分之 二十以上。`

  - `(6) 本公司及子公司對單一企業背書保證餘額達新臺幣一千萬元以上且對其背書保 證、採用權益法之投資帳面金額及資金貸與餘額合計數達本公司最近期財務報 表淨值百分之三十以上。`

  - `(7) 本公司或子公司新增背書保證金額達新臺幣三千萬元以上且達本公司最近期財 務報表淨值百分之五以上。`

6. 本公司之子公司非屬國內公開發行公司者，該子公司有前項第四款應公告申報之事 項，應由本公司為之。

  • 十一、 相關人員違反之處罰依「員工工作規則」辦理。

  • 十二、 子公司背書保證之控管程序：依照本作業程序辦理。

  • 十三、 本作業程序經審計委員會、董事會通過並提報股東會同意後實施。修正時亦同。 十四、 1. 本辦法訂定於2009 年1 月12 日。

    2. 第一次修訂於2009 年9 月18 日。

    3. 第二次修訂於2010 年6 月28 日。

    4. 第三次修訂於2011 年2 月14 日。

    5. 第四次修訂於2014 年6 月27 日。

    6. 第五次修訂於2019 年5 月17 日。

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Annex XIII. Rules of General Meeting

Wisdom Marine Lines Co., Limited Rules of General Meeting

May 29, 2015 Implemented after adoption by shareholders meetings.

Article 1

To establish a strong governance system and sound supervisory capabilities for this Corporation's shareholders meetings, and to strengthen management capabilities

Article 2

The rules of procedures for this Corporation's shareholders meetings, except as otherwise provided by law, regulation, or the articles of incorporation, shall be as provided in these Rules.

Article 3 （ Convening shareholders meetings and shareholders meeting notices ）

Unless otherwise provided by law or regulation, this Corporation's shareholders meetings shall be convened by the board of directors.

This Corporation shall prepare electronic versions of the shareholders meeting notice and proxy forms, and the origins of and explanatory materials relating to all proposals, including proposals for ratification, matters for deliberation, or the election or dismissal of directors or supervisors, and upload them to the Market Observation Post System (MOPS) before 30 days before the date of a regular shareholders meeting or before 15 days before the date of a special shareholders meeting.

This Corporation shall prepare electronic versions of the shareholders meeting agenda and supplemental meeting materials and upload them to the MOPS before 21 days before the date of the regular shareholders meeting or before 15 days before the date of the special shareholders meeting. In addition, before 15 days before the date of the shareholders meeting, this Corporation shall also have prepared the shareholders meeting agenda and supplemental meeting materials and made them available for review by shareholders at any time. The meeting agenda and supplemental materials shall also be displayed at this Corporation and the professional shareholder services agent designated thereby as well as being distributed on-site at the meeting place.

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

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

A shareholder holding 1 percent or more of the total number of issued shares may submit to this

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Corporation a written proposal for discussion at a regular shareholders meeting. Such proposals, however, are limited to one item only, and no proposal containing more than one item will be included in the meeting agenda. In addition, when the circumstances of any subparagraph of Article 172-1, paragraph 4 of the Company Act apply to a proposal put forward by a shareholder, the board of directors may exclude it from the agenda.

Prior to the book closure date before a regular shareholders meeting is held, this Corporation shall publicly announce that it will receive shareholder proposals, and the location and time period for their submission; the period for submission of shareholder proposals may not be less than 10 days. Shareholder-submitted proposals are limited to 300 words, and no proposal containing more than 300 words will be included in the meeting agenda. The shareholder making the proposal shall be present in person or by proxy at the regular shareholders meeting and take part in discussion of the proposal.

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

Article 4

For each shareholders meeting, a shareholder may appoint a proxy to attend the meeting by providing the proxy form issued by this Corporation and stating the scope of the proxy's authorization.

A shareholder may issue only one proxy form and appoint only one proxy for any given shareholders meeting, and shall deliver the proxy form to this Corporation before 5 days before the date of the shareholders meeting. When duplicate proxy forms are delivered, the one received earliest shall prevail unless a declaration is made to cancel the previous proxy appointment.

After a proxy form has been delivered to this Corporation, if the shareholder intends to attend the meeting in person or to exercise voting rights by correspondence or electronically, a written notice of proxy cancellation shall be submitted to this Corporation before 2 business days before the meeting date. If the cancellation notice is submitted after that time, votes cast at the meeting by the proxy shall prevail.

Article 5 （ Principles determining the time and place of a shareholders meeting ）

The venue for a shareholders meeting shall be the premises of this Corporation, or a place easily accessible to shareholders and suitable for a shareholders meeting. The meeting may begin no earlier than 9 a.m. and no later than 3 p.m. Full consideration shall be given to the opinions of the independent directors with respect to the place and time of the meeting.

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Article 6 （ Preparation of documents such as the attendance book ）

This Corporation shall specify in its shareholders meeting notices the time during which shareholder attendance registrations will be accepted, the place to register for attendance, and other matters for attention.

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

Shareholders and their proxies (collectively, "shareholders") shall attend shareholders meetings based on attendance cards, sign-in cards, or other certificates of attendance. This Corporation may not arbitrarily add requirements for other documents beyond those showing eligibility to attend presented by shareholders. Solicitors soliciting proxy forms shall also bring identification documents for verification.

This Corporation shall furnish the attending shareholders with an attendance book to sign, or attending shareholders may hand in a sign-in card in lieu of signing in.

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

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

Article 7 （ The chair and non-voting participants of a shareholders meeting ）

If a shareholders meeting is convened by the board of directors, the meeting shall be chaired by the chairman of the board. When the chairman of the board is on leave or for any reason unable to exercise the powers of the chairman, the vice chairman shall act in place of the chairman; if there is no vice chairman or the vice chairman also is on leave or for any reason unable to exercise the powers of the vice chairman, the chairman shall appoint one of the managing directors to act as chair, or, if there are no managing directors, one of the directors shall be appointed to act as chair. Where the chairman does not make such a designation, the managing directors or the directors shall select from among themselves one person to serve as chair.

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

It is advisable that shareholders meetings convened by the board of directors be chaired by the chairman of the board in person and attended by a majority of the directors, at least one supervisor

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in person, and at least one member of each functional committee on behalf of the committee. The attendance shall be recorded in the meeting minutess.

If a shareholders meeting is convened by a party with power to convene but other than the board of directors, the convening party shall chair the meeting. When there are two or more such convening parties, they shall mutually select a chair from among themselves.

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

Article 8 （ Documentation of a shareholders meeting by audio or video ）

This Corporation, beginning from the time it accepts shareholder attendance registrations, shall make an uninterrupted audio and video recording of the registration procedure, the proceedings of the shareholders meeting, and the voting and vote counting procedures.

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

Article 9

Attendance at shareholders meetings shall be calculated based on numbers of shares. The number of shares in attendance shall be calculated according to the shares indicated by the attendance book and sign-in cards handed in plus the number of shares whose voting rights are exercised by correspondence or electronically.

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

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

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

Article 10 （ Discussion of proposals ）

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If a shareholders meeting is convened by the board of directors, the meeting agenda shall be set by the board of directors. The meeting shall proceed in the order set by the agenda, which may not be changed without a resolution of the shareholders meeting.

The provisions of the preceding paragraph apply mutatis mutandis to a shareholders meeting convened by a party with the power to convene that is not the board of directors.

The chair may not declare the meeting adjourned prior to completion of deliberation on the meeting agenda of the preceding two paragraphs (including extraordinary motions), except by a resolution of the shareholders meeting. If the chair declares the meeting adjourned in violation of the rules of procedure, the other members of the board of directors shall promptly assist the attending shareholders in electing a new chair in accordance with statutory procedures, by agreement of a majority of the votes represented by the attending shareholders, and then continue the meeting.

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

Article 11 （ Shareholder speech ）

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

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

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

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

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

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

Article 12 （ Calculation of voting shares and recusal system ）

Voting at a shareholders meeting shall be calculated based the number of shares.

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

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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 this Corporation, that shareholder may not vote on that item, and may not exercise voting rights as proxy for any other shareholder.

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

With the exception of a trust enterprise or a shareholder services agent approved by the competent securities authority, when one person is concurrently appointed as proxy by two or more shareholders, the voting rights represented by that proxy may not exceed 3 percent of the voting rights represented by the total number of issued shares. If that percentage is exceeded, the voting rights in excess of that percentage shall not be included in the calculation.

Article 13

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

When this Corporation holds a shareholders meeting, it may allow the shareholders to exercise voting rights by correspondence or electronic means (in accordance with the proviso of Article 177-1 of the Company Act regarding companies that shall adopt electronic voting: When this Corporation holds a shareholder meeting, it shall adopt exercise of voting rights by electronic means and may adopt exercise of voting rights by correspondence). When voting rights are exercised by correspondence or electronic means, the method of exercise shall be specified in the shareholders meeting notice. A shareholder exercising voting rights by correspondence or electronic means will be deemed to have attended the meeting in person, but to have waived his/her rights with respect to the extraordinary motions and amendments to original proposals of that meeting; it is therefore advisable that this Corporation avoid the submission of extraordinary motions and amendments to original proposals.

A shareholder intending to exercise voting rights by correspondence or electronic means under the preceding paragraph shall deliver a written declaration of intent to this Corporation before 2 days before the date of the shareholders meeting. When duplicate declarations of intent are delivered, the one received earliest shall prevail, except when a declaration is made to cancel the earlier declaration of intent.

After a shareholder has exercised voting rights by correspondence or electronic means, in the event the shareholder intends to attend the shareholders meeting in person, a written declaration of intent to retract the voting rights already exercised under the preceding paragraph shall be made known to this Corporation, by the same means by which the voting rights were exercised, before 2 business days before the date of the shareholders meeting. If the notice of retraction is submitted after that time, the voting rights already exercised by correspondence or electronic means shall prevail. When a shareholder has exercised voting rights both by correspondence or electronic means and by appointing a proxy to attend a shareholders meeting, the voting rights exercised by the proxy in the

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meeting shall prevail.

Except as otherwise provided in the Company Act and in this Corporation's articles of incorporation, the passage of a proposal shall require an affirmative vote of a majority of the voting rights represented by the attending shareholders. At the time of a vote, for each proposal, the chair or a person designated by the chair shall 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.

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

Vote monitoring and counting personnel for the voting on a proposal shall be appointed by the chair, provided that all monitoring personnel shall be shareholders of this Corporation.

Vote counting for shareholders meeting proposals or elections shall be conducted in public at the place of the shareholders meeting. Immediately after vote counting has been completed, the results of the voting, including the statistical tallies of the numbers of votes, shall be announced on-site at the meeting, and a record made of the vote.

Article 14 （ Election of directors and supervisors ）

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

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

Article 15

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

This Corporation may distribute the meeting minutes of the preceding paragraph by means of a public announcement made through the MOPS.

The meeting minutes shall accurately record the year, month, day, and place of the meeting, the chair's full name, the methods by which resolutions were adopted, and a summary of the

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deliberations and their results, and shall be retained for the duration of the existence of this Corporation.

Article 16 （ Public disclosure ）

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

If matters put to a resolution at a shareholders meeting constitute material information under applicable laws or regulations or under Taiwan Stock Exchange Corporation (or GreTai Securities Market) regulations, this Corporation shall upload the content of such resolution to the MOPS within the prescribed time period.

Article 17 （ Maintaining order at the meeting place ）

Staff handling administrative affairs of a shareholders meeting shall wear identification cards or arm bands.

The chair may direct the proctors or security personnel to help maintain order at the meeting place. When proctors or security personnel help maintain order at the meeting place, they shall wear an identification card or armband bearing the word "Proctor."

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

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

Article 18 （ Recess and resumption of a shareholders meeting ）

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

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

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

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Article 19

These Rules, and any amendments hereto, shall be implemented after adoption by shareholders meetings.

Article 20

  1. These Rules was regulated at December 31, 2008.

  2. First revision date: June 17, 2011.

  3. Second revision date: June 29, 2012.

  4. Third revision date: June 21, 2013.

  5. Fourth revision date: May 29, 2015.

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Annex XIV. Shareholdings of Directors

Wisdom Marine Lines Co., Limited

Shareholdings of Directors

Shareholdings on Date Elected Shareholdings on Date Elected Shareholdings on Date Elected Current Shareholdings Current Shareholdings Current Shareholdings Remarks
Title Name Date Elected Type Number of
Shares		 % of Shares Number of % of Shares
Outstanding Type Shares Outstanding
Chairman Lan, Chun-Sheng May 25, 2018 Ordinary
Shares		 197,793,456 32.07% Ordinary
Shares		 197,793,456 32.07% Chairman
Director Chao, Tzu-Lung May 25, 2018 Ordinary
Shares		 603,710 0.10% Ordinary
Shares		 603,710 0.10% Director
Director Fukui Masayuki May 25, 2018 Ordinary
Shares		 1,470,819 0.24% Ordinary
Shares		 1,470,819 0.24% Director
Director Jinzhou Investment
Co., Ltd.		 May 25, 2018 Ordinary
Shares		 1,472,721 0.24% Ordinary
Shares		 1,472,721 0.24% Director
Independent
Director		 Tu, Neng-Mo May 25, 2018 Ordinary
Shares		 0 0% Ordinary
Shares		 0 0% Independent
Director
Independent
Director		 Chen, Po-Chih May 25, 2018 Ordinary
Shares		 0 0% Ordinary
Shares		 0 0% Independent
Director
Independent
Director		 Lin,Tse-Chun May 25, 2018 Ordinary
Shares		 0 0% Ordinary
Shares		 0 0% Independent
Director
Independent
Director		 Chiu,Yung-Ho May 25, 2018 Ordinary
Shares		 0 0% Ordinary
Shares		 0 0% Independent
Director

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Shareholdings on Date Elected Shareholdings on Date Elected Shareholdings on Date Elected Current Shareholdings Current Shareholdings Current Shareholdings Remarks
Title Name Date Elected Type Number of
Shares		 % of Shares Number of % of Shares
Outstanding Type Shares Outstanding
Independent
Director		 Liu,Tsai-Ching May 25, 2018 Ordinary
Shares		 0 0% Ordinary
Shares		 0 0% Independent
Director

Note 1 ： Total issued shares outstanding on May 25, 2018: 616,707,566 shares.

Note 2 ： Total issued shares outstanding as of the book closing date: 689,155,894 shares.

Note 3 ： Pursuant to Article 26 of the Securities and Exchange Act, the total shares of nominal stocks held by the entire body of directors of an issuer shall not be less than 22,052,988 shares.

Note 4 ： Total shares held by the entire body directors as of the book closing date: 201,340,706 shares.

Note 5 ： Shareholdings of indepent directors are excluded from the total shares held by the entire body directors.

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Annex XV. Relevant Information on Proposals Made by Shareholders Holding

1% or More of the Total Issued Shares of the Company

  1. In accordance with Article 172-1 of the Company Act, the proposal acceptance period began on March 09, 2020 and ended on March 19, 2020.

  2. There were no submissions of proposals by the shareholders holding 1% of more of the total issued shares during the proposal acceptance period.

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