Nanya Technology Corporation — AGM Information 2017

Stock Code: 2408

==> picture [79 x 81] intentionally omitted <==

==> picture [406 x 55] intentionally omitted <==

2017 ANNUAL SHAREHOLDERS’ MEETING

MEETING HANDBOOK

(SUMMARY)

(This English translation is prepared in accordance with the Chinese version and is for reference purposes only. If there are any inconsistency between the Chinese original and this translation, the Chinese version shall prevail.)

May 26, 2017

Table of Contents

Meeting Procedure …………………………………… Page 1 Meeting Agenda …………………..…..……………… Page 2 Reporting Items …….………………………………… Page 4 Ratification Items …………………….………………. Page 14 Discussion Items …...………………….……………… Page 16 Appendices .…………………………………………... Page 56

NANYA TECHNOLOGY CORP.

2017 ANNUAL SHAREHOLDERS’ MEETING PROCEDURE

1. Call Meeting to Order

2. Chairman’s Address

1. Reporting Items

2. Ratification Items

5. Discussion Items

6. Extraordinary Motions

7. Meeting Adjourned

• 1 -

NANYA TECHNOLOGY CORP.

2017 ANNUAL SHAREHOLDERS’ MEETING AGENDA

Time: 10:00 a.m., Friday, May 26, 2017

Venue: Jin-Xing-Factory-Area Movie Theater, No.336, Sec. 1, Nankan Rd., Luzhu Dist., Taoyuan City, Taiwan (R.O.C.)

1. Reporting Items

2. (1) Business Report for 2016

3. (2) Audit Committee’s Review Report for FY2016

4. (3) Report of Distribution of Employees’ Compensation for 2016

5. (4) Report of Issuance of Unsecured Euro Convertible Bonds Due 2022

6. (5) Report of the Amendment to “The Codes of Ethics of Directors and Managers” of the Company

7. Ratification Items

8. (1) To Ratify the Business Report and Financial Statements for 2016

9. (2) To Ratify the Proposal for Distribution of 2016 Profits

10. Discussion Items

11. (1) To Approve Amendments to the Articles of Incorporation of the Company

12. (2) To Approve Amendments to the “Convention Rules and Procedures for Shareholders’ Meeting” of the Company

13. (3) To Approve Amendments to the “Procedure of Acquisition or Disposal of Assets of the Company”

14. (4) To Approve Amendments to the “Handling Procedures to Engage in the Derivative Transaction of Products” of the Company

15. 2 -

16. (5) To Approve Amendments to “The Procedure of Loans of Funds to Others” of the Company

17. (6) To Approve Amendments to “The Procedure of Making Endorsements or Guarantees” of the Company

18. 3 -

Reporting Items

1. Regarding the Company’s business operation condition of FY2016, please refer to Business Report for further details (on Page 6 through Page 9 of the Handbook.)

2. The Company’s Audit Committee had reviewed the 2016 Business Report and Financial Statements and issued their Review Report in accordance with the applicable laws. Please refer to Audit Committee’s Review Report (on Page 10 of the Handbook.)

3. Report of Distribution of Employees’ Compensation for FY2016

Explanation:

The amount of the 2016 pre-tax profit prior to deducting employees’ compensation was NT$26,113,354,878. The Company has no accumulated losses. In accordance with Article 19 of the Articles of Incorporation of the Company, the Board of Directors approved to set aside 1.8% as employees’ compensation on March 9, 2017. The payment of employees’ compensation will be in cash, i.e. a total amount of NT$460,347,000.

1. Report of Issuance of Unsecured Euro Convertible Bonds (“the Bonds”) Due 2022

Explanation:

The proceeds from the Bonds was intended to pay for the capital expenditure of 20nm technology conversion. The plan was approved by the Board of Directors on November 9, 2016 and the Financial Supervisory Commission on December 22, 2016 with the document number 1050051255. The Bonds actual issuance amount of US$500,000,000 was collected on January 24, 2017.

• 4 -

• Report of the Amendment to “The Codes of Ethics of Directors and Managers” of the Company

Explanation:

To accommodate the requirement by the competent securities authority, the Company has established an Audit Committee to replace the Supervisors, the Board of Directors approved the amendment of the “The Codes of Ethics of Directors and Managers” of the Company on June 22, 2016. Please refer to Page 11 through Page 13 of the Handbook for the amended “The Codes of Ethics of Directors and Managers”.

• 5 -

NANYA TECHNOLOGY CORP.

Business Report for 2016

Year 2016 Financial Performance

Even though dynamic random access memory (DRAM) market suffered a 2-year period of price declines since the 2nd half of 2014, Nanya Technology Corp. (NTC) has maintained steady operation results as a result of its successful business transformation. DRAM average selling prices stayed lowed in the first of half of 2016 and have rebounded since in the 2nd half 2016, the Company, by optimizing its product portfolio and expanding market shares in specialty segments with price premiums,

remained to be profitable in every quarter of 2016. The improving market situation in the 2nd half 2016 and the sale of the

Company’s shareholdings in Inotera further boosted the Company’s bottom line. NTC reported consolidated revenues of NT$41.63 billion in 2016. Net incomes were NT$23.71 billion, which translated into an EPS of NT$8.67.

In 2016, the Company further enhanced its production efficiency to reduce manufacturing costs, thereby improving its competitiveness. Annual bit output grew by 5.3% compared with that in 2015. Output based on 30nm design shrink grew to account for about 80% of total output in the fourth quarter. Meanwhile, the Company completed the construction of a new clean room and started to move in new equipment to commence on 20nm technology conversion.

To fulfill various needs entailed by specialty DRAM market, the Company established strategic alliances with customers and controller suppliers with forward-looking market planning and excellent customer services to facilitate the launch of

• 6 -

next-generation consumer electronic products collaboratively. The Company also strengthened its capabilities in product design, product verification, and multi-chip packaging to meet market development. The company would like to expand its customer base in premium segments including automotive, industrial, networking, SiP(System-in-Package) and customized products.

Fiscal Year 2017 Business Outlook

The operation focuses in 2017 are to migrate to 20nm process technology, develop 20nm product lineups, deeply-root in specialty market, customize products to increase wafer value, enhance production efficiency, and minimize the negative impact due to technology migration.

Further explanations are described as follows:

1. The pilot run of 20nm process technology was commenced in the first quarter and the mass production of high density 8Gb DDR4 is scheduled for the third quarter. Meanwhile, the Company will carry out fast ramp up of its 20nm wafer starts and aggressively develop LPDDR4 to expand product lineup to meet the requirements of next-generation consumer electronic devices.

2. The Compnay will continuously concentrate on consumer and low power specialty markets, develop customized products to improve product diversification, and increase the revenue ratio from specialty DRAM. The Company targets to derive up to 90% of its total revenues from consumer & low power market segments.

3. Drive cost reduction program by enhancing the efficiency of equipment for 30nm technology to improve output. Rapidly

4. 7 -

deploy equipment for 20nm technology and optimize production line adjustments to ramp up 20nm capacity smoothly.

Future Corporate Strategy and Industry Outlook

The Company sold its entire shareholdings in Inotera to Micron in December 2016 and at the same time invested NT$31.5B to acquire about 5.26% interest in Micron, becoming one of Micron’s major shareholders. The Company also obtained option rights to license 1x and 1y class DRAM technology nodes from Micron. Based on the new alliance relationship, the Company will, with its strategic positioning, ensure its role as a key supplier in specialty DRAM market.

The DRAM market structure already became an oligopoly. Top 3 suppliers who own advanced technologies are expected to build capacity with discipline to maintain a healthy demand and supply market condition. In addition, complexities of advanced

technologies and related patent rights create huge entry barriers for new comers, not to be overcome in the near term. The overall DRAM supply is expected to maintain its current stability and structure.

The DRAM market recovered significantly from the second half of 2016 and is expected to continue throughout 2017. Supply growth is limited, mainly contributed by advanced process conversion. According to forecasts by market intelligences, worldwide bit growth rate in 2017 will be less than 20%. As for demand side, mid to high end smart phone with high resolution and dual lens cameras, servers, high end/ultra-thin/gaming laptops, 4K digital television and automotive infotainment are key drivers. The demand growth rate is projected to be higher than 20% in

• 8 -

• Therefore, it is believed that the DRAM market condition will remain steady in 2017.

We appreciate the trust and support from all of our shareholders. We will make the best effort to deliver great operation performance and increase the company’s value to maximize returns to our shareholders.

Chairman: Chia Chau, Wu

President: Pei-Ing Lee

Accountant Officer: Hung Chi Kuo

• 9 -

Audit Committee’s Review Report

The Board of Directors has prepared the Company’s 2016 Business Report, Financial Statements (including consolidated and Stand-alone statements), and Proposal for Profits Distribution. The CPA firm of KPMG has audited the Financial Statements and issued an audit report relating to Financial Statements. The Business Report, Financial Statements, and Proposal for Profits Distribution have been reviewed and determined to be correct and accurate by the Audit Committee members of NANYA TECHNOLOGY CORP.. According to the Article 14-4 of the Securities and Exchange Act and Article 219 of the Company Law, we hereby submit this report.

NANYA TECHNOLOGY CORP.

Chairman of the Audit Committee:

March 9, 2017

• 10 -

Nanya Technology Corp. The Codes of Ethics of Directors and Managers

Amended by the Board of Directors on June 22, 2016

CHAPTER Ⅰ GENERAL PRINCIPLES

Article 1

To establish the codes to avoid immoral behavior and activities resulting damages to the interests of company and shareholders in order to enable Directors and Managers (including President, Executive Vice Presidents, Senior Vice Presidents, Vice Presidents, Assistant Vice Presidents, Financial Officer, Accountant Officer and those who can manage affairs for and sign documents on behalf of the company) to conduct business activities on their duties and power for the company ethically.

CHAPTER Ⅱ CONTENTS OF THE CODES OF ETHICS

Article 2

Directors and Managers should manage affairs of the company honestly, faithfully, lawfully, fairly, justly and ethically.

Article 3

Directors and Managers should avoid to intervene conflicts with personal interests or interests of the company, including but not limited to unable managing affairs objectively and effectively, or letting themselves, spouse, parents, children or a blood relation within the second degree get improper interests for their position. To avoid conflicts, expansion monetary loans or guarantees and acquisition or disposition of major assets to the preceding persons or their affiliated enterprises shall be approved by the Board of Directors. Creating the greatest interests for the Company should be concerned while purchase or sale between these companies.

Article 4

When the company has a chance to gain profit, Directors and Managers should guard interests for Company legally. Directors and Mangers can’t gain personal profit by their duties or from using properties or information of the Company. Directors and Managers can’t do anything that is within

• 11 -

the scope of the company’s business except for complying the regulations of Company Law or Articles of Incorporation.

Article 5

Directors and Managers should keep secret for any information of Company’s customers and suppliers unless they are authorized or permitted by law. Confidential information includes all undisclosed information that can be used by competitors or will be harmful to the company or customers after disclosure.

Article 6

Directors and Managers should treat customers, suppliers, competitors and employees fairly. They can’t gain improper interests by controlling, hiding, or abusing information given by their duties, describing major affairs unreally or transacting unfairly.

Article 7

Directors and Managers should protect and properly utilize properties of the Company, and they should avoid the properties of the company being stolen, neglected or wasted and then affecting profitability.

Article 8

Directors and Managers should follow laws and rules of the Company.

Article 9

When employees find that Directors and Managers violate laws, regulations or the codes, they should provide sufficient evidence to the Audit Committee, Direct Managers, personnel officers, internal control officers or other appropriate persons. Once the report is certified correct, the company should give a reward in accordance with the personal management regulation.

The Company should deal with the said report properly, confidentially and conscientiously, and the Company should protect the reporter’s safety from all kinds of retaliation.

Article 10

If Directors and Managers violate the codes, the Company should punish them in accordance with the personal management regulation and report to the Board of Directors after certification. The related violators should take

• 12 -

civil and criminal responsibility and the Company should disclose dates of events, reasons of violation, items of violation and handling situation on the Market Observation Post System.

CHAPTER Ⅲ PROCEDURES OF APPLICATION OF EXEMPTION

Article 11

When the Company proposes to exempt Directors or Managers from complying the codes under special circumstances, the issue shall be determined by the Board of Directors by a resolution adopted by a majority vote at the Board Meeting by over two-thirds of the Directors attendance. The Company should immediately disclose dates of approval by the Board, any opposing or qualified opinion expressed by the independent directors, terms of exemption, reasons of exemption and items of exemption on the Market Observation Post System so as to be assessed the appropriateness by the shareholders and to protect the interests of the Company.

CHAPTER Ⅳ WAYS OF DISCLOSURE

Article 12

The codes should be disclosed on the Company’s website, annual report, prospectus and the Market Observation Post System. The same shall apply to any amendments to the codes.

CHAPTER ANCILLARY RULES

Article 13

The codes shall take effect after approval by the Board of Directors and be reported to the Shareholders’ Meeting. The same shall apply to any amendments to the codes.

• 13 -

Ratification Items

Item 1

To Ratify the Business Report and Financial Statements for 2016 Proposed by the Board of Directors

Explanation:

1. The preparation of the Company’s 2016 Consolidated and Stand-alone Financial Statements were completed and the same were reviewed by the Audit Committee, approved by the Board of Directors on March 9, 2017 and audited by independent auditors, Ms. Delphi Chen and Ms. Isabel Lee, of KPMG. The aforesaid Financial Statements together with the Business Report were reviewed by the Audit Committee, which the Audit Committee’s Review Report is presented.

2. For the aforementioned Business Report, please refer to Page 6 through Page 9 of the Handbook. As for the Financial Statements, please refer to Page 47 through Page 56 of the 54 Handbook. Please approve the Business Report and the Financial Statements.

Resolution:

• 14 -

Ratification Items

Item 2

To Ratify the Proposal for Distribution of 2016 Profits Proposed by the Board of Directors

Explanation:

The Proposal for Distribution of 2016 Profits of the Company was reviewed by the Audit Committee and approved by the Board of Directors on March 9, 2017.

(Please refer to Page 57 of the Handbook for the Statement of 55 Profits Distribution.)

Resolution:

• 15 -

Discussion Items

Item 1

To Approve Amendments to the Articles of Incorporation of the Company

Proposed by the Board of Directors

Explanation:

In order to accommodate the needs of the Company’s business development, the Articles of Incorporation of the Company shall be amended accordingly. The corresponding comparison table for the current and amended articles is attached.

Article	Article before Amendment	Article after Amendment	Reason for Amendment
Article 3	The Company’s principal office is located in Taoyuan City, and, if necessary, may set up local or foreign offices or branches in accordance with the resolution of the Board of Directors.	The Company’s principal office is located inNew Taipei City,and, if necessary, may set up local or foreign offices or branches in accordance with the resolution of the Board of Directors.	Accommodate the Company’s principal office.
Article 22	(Omitted)	Add ”The 24th amendment was made on May 26, 2017” to the exsiting Artcle.	Add the date of amendment and execution to the Artcle.

Resolution:

• 16 -

Discussion Items

Item 2

To Approve Amendments to the “Convention Rules and Procedures for Shareholders’ Meeting” of the Company Proposed by the Board of Directors

Explanation:

To accommodate the requirement by the competent securities authority, the Company was established an Audit Committee to replace the Supervisors. The “Convention Rules and Procedures for Shareholders’ Meeting” of the Company shall be amended accordingly. The corresponding comparison table for the current and amended articles is attached.

Article	Article before Amendment	Article after Amendment
Article 3	(above omitted) To convene a Meeting, a Meeting agenda shall be prepared. The softcopy of meeting notice, proxy form, subject matters and explanations for topics related to ratification items, discussion item, and election or discharge of Directors(s) and/or Supervisor(s), shall be prepared and uploaded to the Market Observation Post System of TSE at least thirty (30) days prior to the scheduled regular Meeting date or at least fifteen (15) days prior to the scheduled special Meeting date. Also, the softcopy of Meeting Agenda and supplemental materials shall be prepared and uploaded to the Market Observation Post System of TSE at least twenty-one (21) days prior to the scheduled regular Meeting date or at least fifteen (15) days	(above omitted) To convene a Meeting, a Meeting agenda shall be prepared. The softcopy of meeting notice, proxy form, subject matters and explanations for topics related to ratification items, discussion item, and election or discharge of Directors(s), shall be prepared and uploaded to the Market Observation Post System of TSE at least thirty (30) days prior to the scheduled regular Meeting date or at least fifteen (15) days prior to the scheduled special Meeting date. Also, the softcopy of Meeting Agenda and supplemental materials shall be prepared and uploaded to the Market Observation Post System of TSE at least twenty-one (21) days prior to the scheduled regular Meeting date or at least fifteen (15) days prior to the

• 17 -

Article	Article before Amendment	Article after Amendment
	prior to the scheduled special Meeting date. The hardcopy of Meeting Agenda and supplemental materials shall be available for shareholders to obtain and review at any time fifteen (15) days prior to the scheduled Meeting date and be displayed at the Company and the professional stock agency engaged by the Company, and be distributed in the venue of a Meeting. Causes and subjects of a Meeting to be convened shall be explicitly described in the notice and public announcement. The notice may be made in electronic form upon the consent of the counter party. Matters regarding re-election or discharge of directorsand supervisors,amendments to the AOI, and dissolution, merger, splitting of the Company, or any matters stipulated in Paragraph 1 of Article 185 of the R.O.C. Company Law, Articles 26-1 and 43-6 of the Securities and Exchange Law, Articles 56-1 and 60-2 of Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be itemized by causes and subjects in the notice of convening a Meeting, rather than being brought up by special motions. (below omitted)	scheduled special Meeting date. The hardcopy of Meeting Agenda and supplemental materials shall be available for shareholders to obtain and review at any time fifteen (15) days prior to the scheduled Meeting date and be displayed at the Company and the professional stock agency engaged by the Company, and be distributed in the venue of a Meeting. Causes and subjects of a Meeting to be convened shall be explicitly described in the notice and public announcement. The notice may be made in electronic form upon the consent of the counter party. Matters regarding re-election or discharge of directors, amendments to the AOI, and dissolution, merger, splitting of the Company, or any matters stipulated in Paragraph 1 of Article 185 of the R.O.C. Company Law, Articles 26-1 and 43-6 of the Securities and Exchange Law, Articles 56-1 and 60-2 of Regulations Governing the Offering and Issuance of Securities by Securities Issuers shall be itemized by causes and subjects in the notice of convening a Meeting, rather than being brought up by special motions. (below omitted)
Article 6	(above omitted) The Company shall deliver the	(above omitted) The Company shall deliver the

• 18 -

Article	Article before Amendment	Article after Amendment
	Meeting agenda, annual report, attendance certificate, speaker’s slips, ballots and other Meeting related documents to shareholders who attend a Meeting. Election ballots shall be delivered as well in case that Director(s)and/or Supervisor(s) will be elected in that Meeting. (below omitted)	Meeting agenda, annual report, attendance certificate, speaker’s slips, ballots and other Meeting related documents to shareholders who attend a Meeting. Election ballots shall be delivered as well in case that Director(s) will be elected in that Meeting. (below omitted)
Article 7	(above omitted) If the Meeting is convened by the Board of Directors, the Chairman of the Board of Directors shall be the chairman presiding over the meeting, and majority of the Board of Directors ought to attend the Meetingand at least one supervisor attend in person, and that at least one member of each functional committee attend as representative. Attendance details should be recorded in the Shareholders Meeting minutes. (below omitted)	(above omitted) If the Meeting is convened by the Board of Directors, the Chairman of the Board of Directors shall be the chairman presiding over the meeting, and majority of the Board of Directors ought to attend the Meeting, and that at least one member of each functional committee attend as representative. Attendance details should be recorded in the Shareholders Meeting minutes. (below omitted)
Article 14	Election of Directorsand/or Supervisors shall be conducted according to the relevant election rules of the Company. Election results which shall include the roster of Directorsand/or Supervisors and the total number of the voting rights shall be announced extemporarily at the Meeting. (below omitted)	Election of Directors shall be conducted according to the relevant election rules of the Company. Election results which shall include the roster of Directors and the total number of the voting rights shall be announced extemporarily at the Meeting. (below omitted)

Resolution:

• 19 -

Discussion Items

Item 3

To Approve Amendments to the “Procedure of Acquisition or Disposal of Assets of the Company”

Proposed by the Board of Directors

Explanation:

To accommodate the requirement by the competent securities authority, the Company was established an Audit Committee to replace the Supervisors. And to refer to the Financial Supervisory Commission on February 9, 2017 with the document number 1060001296, the “Procedure of Acquisition or Disposal of Assets of the Company” shall be amended accordingly. The

corresponding comparison table for the current and amended articles is attached.

Article	Article before Amendment	Article before Amendment	Article after Amendment
Article 6	If there is anywritten objection or statement from the Company’s Directors (the“Directors”) towards any acquisition or disposal of asset that shall be approved by the Board of Directors according to the Procedures or other relevant laws,	written objection or	If there is any dissentient or qualified opinions from the Independent Director(s) shall be record in the meeting minutes of Board of Directors meeting. Amaterial asset transaction or a derivatives transaction shall be approved with the consent of one-half or more than one-half of all members of The Audit Committee and then be submitted to the Board of Directors for approval. If the aforesaid transaction has not been approved with the consent of one-half or more than one-half of all members of the Audit Committee, the transaction may be undertaken upon the consent of at least two-thirds of all members of the
	the written objection or statement
	shall be submitted to the Supervisors of the Company (the “Supervisors”). If the Company has Independent Directors (the “Independent Directors”), the dissentient or qualified opinions from the Independent Director(s) shall be record in the meeting minutes of Board of Directors meeting. If the Company has established an

• 20 -

Article	Article before Amendment	Article after Amendment
	audit committee, amaterial asset transaction or a derivatives transaction shall be approved with the consent of one-half or more than one-half of all members of suchAudit Committee and then be submitted to the Board of Directors for approval. If the aforesaid transaction has not been approved with the consent of one-half or more than one-half of all members of the Audit Committee, the transaction may be undertaken upon the consent of at least two-thirds of all members of the Board of Directors, but the resolution adopted by the Audit Committee shall be recorded in the meeting minutes of the Board of Directors meeting.	Board of Directors, but the resolution adopted by the Audit Committee shall be recorded in the meeting minutes of the Board of Directors meeting.
Article 8-1	(Added)	In acquiring or disposing of membership cards or intangible
		assets where the transaction amount reaches 20 percent or more of the company's paid-in capital or NT$300 million or more, the Company, unless transacting with a government **institution, shall obtain a CPA’s **
		opinion on the reasonableness of the transaction price prior to the date of occurrence of the event. The CPA shall comply with the provisions of Statement
		of Auditing Standards No. 20 published by the Accounting Research and Development

• 21 -

Article	Article before Amendment	Article after Amendment
		Foundation.
Article 8-2	The calculation of transaction price of the above-mentionedtwo articles hereof shall be implemented in accordance with the second Paragraph of Article 26; the mentioned ‘within the past one year’ shall mean within one year backwards from the date of the subject transactions whereas transactions, which have already obtained an appraisal report issued by a Professional Appraiser or opinions given from a certified public accountant according to the Procedures, shall be excluded.	The calculation of transaction price of the above-mentioned three articles hereof shall be implemented in accordance with the second Paragraph of Article 26; the mentioned ‘within the past one year’ shall mean within one year backwards from the date of the subject transactions whereas transactions, which have already obtained an appraisal report issued by a Professional Appraiser or opinions given from a certified public accountant according to the Procedures, shall be excluded.
Article 12	Except for trading of government bonds, trading bonds under re-purchase/re-sale agreements, or purchase/redemptionof domestic money market funds, any transaction agreement for the acquisition or disposal of real estates from or to a Related Party, or for the acquisition or disposal of other non-real-estate assets from/to a Related Party with the transaction price reaching 20% or more of the Company’s paid-in capital, 10% or more of total assets, or NT$ 300 million or more, only after the following information or data are approved by the Board of Directorsand recognized by the Supervisors: 1. Purpose, necessity and	Except for trading of government bonds, trading bonds under re-purchase/re-sale agreements, or purchase/repurchase of domestic money market fundsissued by domestic securities investment trust enterprises,any transaction agreement for the acquisition or disposal of real estates from or to a Related Party, or for the acquisition or disposal of other non-real-estate assets from/to a Related Party with the transaction price reaching 20% or more of the Company’s paid-in capital, 10% or more of total assets, or NT$ 300 million or more, only after the following information or data are approved by the Board of Directors:

• 22 -

Article	Article before Amendment	Article after Amendment
	anticipated benefit of acquiring or disposing assets. 2. Reason for choosing the Related Party as the transaction counterparty. 3. Related information or data regarding the assessment of the reasonableness of the preliminary transaction conditions to be in accordance with the provisions of Article 13 to Article 15 while acquiring real estate from a Related Party. 4. The acquisition price and acquisition date of the real estate between the Related Party and its original trading counterparty, and the relationship between the foresaid transaction counterparty and the Company and the Related Party. 5. Monthly forecast statements of cash-in and cash-out flow of the coming year after the month in which the contract is expected to be entered into and the furthermore assessment of the necessity of the transaction and of the reasonableness of the usage of the funds. 6. An appraisal report issued by a Professional Appraiser or opinions given from a certified public accountant to be obtained according to the above-mentioned Article.	1. Purpose, necessity and anticipated benefit of acquiring or disposing assets. 2. Reason for choosing the Related Party as the transaction counterparty. 3. Related information or data regarding the assessment of the reasonableness of the preliminary transaction conditions to be in accordance with the provisions of Article 13 to Article 15 while acquiring real estate from a Related Party. 4. The acquisition price and acquisition date of the real estate between the Related Party and its original trading counterparty, and the relationship between the foresaid transaction counterparty and the Company and the Related Party. 5. Monthly forecast statements of cash-in and cash-out flow of the coming year after the month in which the contract is expected to be entered into and the furthermore assessment of the necessity of the transaction and of the reasonableness of the usage of the funds. 6. An appraisal report issued by a Professional Appraiser or opinions given from a certified public accountant to be obtained according to the

• 23 -

Article	Article before Amendment	Article after Amendment
	7. The constraint conditions and other material conventions of the transaction. The calculation of the above-mentioned transaction price shall be implemented in accordance with the second Paragraph of Article 26; the mentioned ‘within the past one year’ shall mean within one year backwards from the date of the subject transactions whereas transactions, which have already submitted to the Board of Directors for approvaland to the Supervisors for recognition according to the Procedures, shall be excluded. The acquisition or disposal of operation-purpose machinery and equipment between the Company and parent companies or subsidiaries could be approved by the Company’s Chairman in advance, who is authorized by the Board of Directors in accordance with Article 10, and proposed for ratification by the very next Board meeting thereafter. If the Company has established the Independent Director(s), the dissenting or qualified opinions from the Independent Director(s) of the Company on the matters submitted to the Board of Directors for discussion in accordance with the previous	above-mentioned Article. 7. The constraint conditions and other material conventions of the transaction. The calculation of the above-mentioned transaction price shall be implemented in accordance with the second Paragraph of Article 26; the mentioned ‘within the past one year’ shall mean within one year backwards from the date of the subject transactions whereas transactions, which have already submitted to the Board of Directors for approval according to the Procedures, shall be excluded. The acquisition or disposal of operation-purpose machinery and equipment between the Company and parent companies or subsidiaries could be approved by the Company’s Chairman in advance, who is authorized by the Board of Directors in accordance with Article 10, and proposed for ratification by the very next Board meeting thereafter. The dissenting or qualified opinions from the Independent Director(s) of the Company on the matters submitted to the Board of Directors for discussion in accordance with the previous paragraph of this Article shall be placed on record in the meeting

• 24 -

Article	Article before Amendment	Article after Amendment
	paragraph of this Article shall be placed on record in the meeting minutes of the Board of Directors meeting. If the Company has established the audit committee, amatterthat shall be recognized by the Supervisors pursuant to Paragraph 1 of this Article shall be approved by the audit committee with the consent of one-half or more than one-half of all members of such audit committee and then be submitted to the Board of Directors for approval. If the aforesaid matter has not been approved with the consent of one-half or more than one-half of all members of the audit committee, the matter may be undertaken upon the consent of at least two-thirds of all members of the Board of Directors, but the resolution adopted by the audit committee shall be recorded in the meeting minutes of the Board of Directors meeting.	minutes of the Board of Directors meeting. The matters for which Paragraph 1 of this Article requires submitted to the Board
		of Directors for a resolution shall firstbe approved by the audit committee with the consent of one-half or more than one-half of all members of such audit committee. If the aforesaid matter has not been approved with the consent of one-half or more than one-half of all members of the audit committee, the matter may be undertaken upon the consent of at least two-thirds of all members of the Board of Directors, but the resolution adopted by the audit committee shall be recorded in the meeting minutes of the Board of Directors meeting.
Article 16	If the transaction cost of the real estate of the Company’s Related Party, after the evaluation in accordance with the method of Article 13 to Article 15 hereof, is lower than the transaction price, the following matters shall be processed: 1. The amount of the difference between the transaction price	If the transaction cost of the real estate of the Company’s Related Party, after the evaluation in accordance with the method of Article 13 to Article 15 hereof, is lower than the transaction price, the following matters shall be processed: 1. The amount of the difference between the transaction price

• 25 -

Article		Article before Amendment		Article after Amendment
	and the evaluated transaction cost of the real estate shall be booked as special reserves of the Company in accordance with the first paragraph of the Article 41 of the Securities and Exchange Law and shall not be distributed to shareholders in cash or in shares. If the Company is an investor of other companies, which assesses the investment in equity method, the Company also shall book the foresaid difference amount as special reserves. 2. The Supervisors shall investigate this issue in accordance with Article 218 of Company Law. 3. The processing status of item one and item two of the first Paragraph of this Article hereof shall be submitted and reported to the Shareholders’ Meeting of the Company (the “Shareholders Meeting”) and the details of the transaction shall be disclosed in the annual report and the prospectus. (below omitted)		and the evaluated transaction cost of the real estate shall be booked as special reserves of the Company in accordance with the first paragraph of the Article 41 of the Securities and Exchange Law and shall not be distributed to shareholders in cash or in shares. If the Company is an investor of other companies, which assesses the investment in equity method, the Company also shall book the foresaid difference amount as special reserves. 2. The Audit Committee shall supervise the Company’s execution of the aforesaid matter. 3. The processing status of item one and item two of the first Paragraph of this Article hereof shall be submitted and reported to the Shareholders’ Meeting of the Company (the “Shareholders Meeting”) and the details of the transaction shall be disclosed in the annual report and the prospectus. (below omitted)
Article 18	Before the resolution of the Board of Directors regarding a merger, spin-off, acquisition or share exchange that the Company is planning to conduct, opinions regarding the reasonableness of		Before the resolution of the Board of Directors regarding a merger, spin-off, acquisition or share exchange that the Company is planning to conduct, opinions regarding the reasonableness of

• 26 -

Article	Article before Amendment	Article after Amendment
	the share exchange ratio, acquisition price or cash distribution to shareholders shall be obtained from the certified public accountants, lawyers or securities underwriters and submitted to the Board of Directors for their approval.	the share exchange ratio, acquisition price or cash distribution to shareholders shall be obtained from the certified public accountants, lawyers or securities underwriters and submitted to the Board of Directors for their approval. However, the requirement of obtaining an aforesaid opinion on reasonableness issued by an expert may be exempted in the case of a merger by the company of a subsidiary in which it directly or indirectly holds 100 percent of the issued shares or authorized capital, and in the case of a merger between subsidiaries in which the Company directly or indirectly holds 100 percent of the respective subsidiaries’ issued shares or authorized capital.
Article 26	If any one of the following conditions occurs during the acquisition or disposal of assets by the Company, the reporting and public announcements of the subject transaction shall be made in compliance with the required forms within two days from the date of the event in the website designated by the competent securities authority: 1. Acquisition of real estate from or disposal to a Related Party or	If any one of the following conditions occurs during the acquisition or disposal of assets by the Company, the reporting and public announcements of the subject transaction shall be made in compliance with the required forms within two days from the date of the event in the website designated by the competent securities authority: 1. Acquisition of real estate from or disposal to a Related Party or

• 27 -

Article	Article before Amendment		Article after Amendment
	acquisition or disposal of other non-real-estate assets from a Related Party with the transaction price reaching 20% or more of the Company’s paid-in capital, 10% or more of total assets or NT$ 300 million or more. The aforesaid provisions hereof shall not be applicable to trading government bonds or trading bonds under re-purchase/re-sale agreements or purchase/redemptionof domestic money market funds. 2. Merger, spin-off, acquisition or share transfer. 3. Financial derivatives transaction of which maximum loss for all and individual contract exceeds the maximum limit specified in the Procedures. 4.Assets acquisition or disposal other than those mentioned above or execution of investments in Mainland China, where the amount reaches 20% or more of the Company’s paid-in capital or exceeds NT$300 million. The following situations shall not be subject to the above filing/publishing requirements: (1)Trading government bonds; (2)Trading bonds under re-purchase/re-sale	acquisition or disposal of other non-real-estate assets from a Related Party with the transaction price reaching 20% or more of the Company’s paid-in capital, 10% or more of total assets or NT$ 300 million or more. The aforesaid provisions hereof shall not be applicable to trading government bonds or trading bonds under re-purchase/re-sale agreements or purchase/repurchaseof domestic money market funds issued by domestic securities investment trust enterprises. 2. Merger, spin-off, acquisition or share transfer. 3. Financial derivatives transaction of which maximum loss for all and individual contract exceeds the maximum limit specified in the Procedures. 4.Acquisition or disposal of operation-purpose machinery and equipment with non-related parties in an amount exceeding NT$ 1 billion. 5. Acquisition of real estate by way of contracting third parties to construct on land owned or rented by the Company, distribution of buildings under a joint construction project, distribution of profits under a

• 28 -

Article	Article before Amendment	Article after Amendment
	agreements, or purchase/redemptionof domestic money market funds; (3)Acquisition or disposal of operation-purpose machinery and equipment with non-related parties in an amountnotexceeding NT$500 million; (4)Acquisition of real estate by way of contracting third parties to construct on land owned or rented by the Company, distribution of buildings under a joint construction project, distribution of profits under a joint construction project, or selling buildings under a joint construction project, and the amount the Company plans to contribute notexceeding NT$ 500 million. (below omitted)	joint construction project, or selling buildings under a joint construction project, and the amount the Company plans to contribute exceeding NT$ 500 million. 6. Assets acquisition or disposal other than those mentioned above or execution of investments in Mainland China, where the amount reaches 20% or more of the Company’s paid-in capital or exceeds NT$300 million. The following situations shall not be subject to the above filing/publishing requirements: (1)Trading government bonds; (2)Trading bonds under re-purchase/re-sale agreements, or purchase/repurchase of domestic money market fundsissued by domestic securities investment trust enterprises. (below omitted)
Article 27	Should there be any mistake or omission in the Company’s required public announcement, the Company needs to repeat its public announcement of all items when the Company conduct the acquisition or disposal of assets.	Should there be any mistake or omission in the Company’s required public announcement, the Company needs to repeat its public announcement of all items when the Company conduct the acquisition or disposal of assets within two days from the date when is the Company becomes aware of the error or omission.

• 29 -

Article	Article before Amendment	Article after Amendment
Article 33	If the Company has established the audit committee, the provisions of Article 6, Article 12	(Deleted)
	and Article 34 of this Procedures regarding the Supervisors shall apply mutatis mutandis to the audit committee; in addition, Item
	2 of Paragraph 1 of Article 16 of this Procedures shall apply mutatis mutandis to the Independent Directors of the audit
	committee.
Article 35	After the Procedures are approved by the Board of Directors, the Procedures shall be submitted to the Supervisors, and ratified by the Shareholders Meeting. Any amendment is subject to the same procedure.Any written objection or statement from Directors of the	After the Procedures are approved by the Board of Directors, the Procedures shall be submitted to the Shareholders Meeting for approval.Any amendment is subject to the same procedure. The dissentient or qualified opinions from the Independent Director(s) shall be record in the meeting minutes of the Board of Directors meeting. The matters for which paragraph 1 requires submitted
	Board shall be submitted to the Supervisors. If the Company has Independent Directors, the dissentient or qualified opinions from the Independent Director(s) shall be record in the meeting minutes of the Board of Directors meeting. If the Company has established the audit committee, the establishment or a revision of this
		to the Board of Directors for a resolutionshall be approved with the consent of one-half or more than one-half of all members of the Audit Committee. If the aforesaid establishment or revision of this Procedures has not been approved by the Audit Committee with the consent of one-half or more than one-half of all members of the Audit Committee, the establishment or
	Proceduresshall be approved with the consent of one-half or more than one-half of all members of suchAudit Committee and then be submitted to the Board of Directors for approval. If the

• 30 -

Article	Article before Amendment	Article after Amendment
	aforesaid establishment or revision of this Procedures has not been approved bysuchAudit Committee with the consent of one-half or more than one-half of all members of the Audit Committee, the establishment or revision of this Procedures may be undertaken upon the consent of at least two-thirds of all members of the Board of Directors, but the resolution adopted by the Audit Committee shall be recorded in the meeting minutes of the Board of Directors meeting.	revision of this Procedures may be undertaken upon the consent of at least two-thirds of all members of the Board of Directors, but the resolution adopted by the Audit Committee shall be recorded in the meeting minutes of the Board of Directors meeting.

Resolution:

• 31 -

Discussion Items

Item 4

To Approve Amendments to the “Handling Procedures to Engage in the Derivative Transaction of Products” of the Company Proposed by the Board of Directors

Explanation:

To accommodate the requirement by the competent securities authority, the Company was established an Audit Committee to replace the Supervisors. The “Handling Procedures to Engage in the Derivative Transaction of Products” of the Company shall be amended accordingly. The corresponding comparison table for the current and amended articles is attached.

Article	Article before Amendment	Article after Amendment
Article 5	The amount of engaging in derivative transactions of the Company shall not exceed 50% of net value of the Company. The limit of loss for all and individual contracts shall not exceed 10% of the contract amount. The content of each contract shall be appraised and decided by the high-level manager authorized by the Board of Directors.	The amount of engaging in derivative transactions of the Company shall not exceed 50% of net value of the Company. The limit of loss for all and individual contracts shall not exceed 10% of the contract amount. The content of each contract shall be appraised and decided by the high-level manager authorized by the Board of Directors. Major derivatives transactions of the Company requires approved by more than half of all Audit Committee members and submitted to the Board of Directors for a resolution. If the
		approval by more than half of all Audit Committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit

• 32 -

Article	Article before Amendment	Article after Amendment
		Committee shall be recorded in the minutes of the Board of Directors meeting.
Article 9	When the Company’s subsidiaries are not domestic public companies and are participating in derivative transactions, the Company shall follow the requirements of Article 8.	When the Company’s subsidiaries are not domestic public companies and are participating in derivatives transactions, the Company shall follow the requirements of Article 8hereof to report and make public announcements on behalf of its subsidiaries.
Article 18	The positions from the trading of derivative products shall be evaluated at least once a week by the in-charge department, but the hedging transactions made for business purposes shall be evaluated at least twice a month. The manager of the in-charge department shall pay attention to the risk control and monitoring of derivative transactions from time to time, and periodically supervise and evaluate the derivative transactions to check whether they are conducted in accordance with the related procedures formulated by the Company hereof and whether the attendant risk of these transactions is within the capability of the Company. The foresaid evaluation reports shall be given to a high-level manager(s) authorized by the Board of Directors of the Company for review. If there is any abnormal situation highlighted in the market	The positions from the trading of derivative products shall be evaluated at least once a week by the in-charge department, but the hedging transactions made for business purposes shall be evaluated at least twice a month. The manager of the in-charge department shall pay attention to the risk control and monitoring of derivative transactions from time to time, and periodically supervise and evaluate the derivative transactions to check whether they are conducted in accordance with the related procedures formulated by the Company hereof and whether the attendant risk of these transactions is within the capability of the Company. The foresaid evaluation reports shall be given to a high-level manager(s) authorized by the Board of Directors of the Company for review. If there is any abnormal situation highlighted in the market

• 33 -

Article	Article before Amendment	Article after Amendment
	evaluation reports (e.g. the holding position has reached the upper loss limit), the Company shall immediately take necessary measures to deal with the situation and report to the Board of Directors of the Company.If the Company has independent directors, there shall be independent directors attending the Board meeting and express their opinions.	evaluation reports (e.g. the holding position has reached the upper loss limit), the Company shall immediately take necessary measures to deal with the situation and report to the Board of Directors of the Company. There shall be independent directors attending the Board meeting and express their opinions.
Article 19	The Company shall establish and maintain a reference book to record all its derivative transaction information, including, but not limited to: kind of transaction, amount, and matters to be evaluated cautiously in accordance with Article 18 hereof. The auditing personnel shall be in charge of periodically assessing the appropriateness of the internal control regarding the derivative transactions, and take the responsibility of auditing the trading department's compliance with the Procedures , analyzing the transaction cycle, preparing the auditing report on a monthly basis, and submitting the auditing report to the high-level management personnel authorized by the Board of Directors of the Company. If the auditing personnel find any material fault of the operation procedures, he or she shall report such fault toeach Supervisorof the Company in writing and the Company should,	The Company shall establish and maintain a reference book to record all its derivative transaction information, including, but not limited to: kind of transaction, amount, and matters to be evaluated cautiously in accordance with Article 18 hereof. The auditing personnel shall be in charge of periodically assessing the appropriateness of the internal control regarding the derivative transactions, and take the responsibility of auditing the trading department's compliance with the Procedures , analyzing the transaction cycle, preparing the auditing report on a monthly basis, and submitting the auditing report to the high-level management personnel authorized by the Board of Directors of the Company. If the auditing personnel find any material fault of the operation procedures, he or she shall report such fault to the Audit Committee of the Company in writing and the

• 34 -

Article	Article before Amendment	Article after Amendment
	depending on the status of such material fault, penalize the relevant personnel, who make such material fault, in accordance with the human resources management policies.	Company should, depending on the status of such material fault, penalize the relevant personnel, who make such material fault, in accordance with the human resources management policies.
Article 21	After the Procedures are approved by the Board of Directors of the Company, the Procedures shall be submitted tothe Supervisors of the Company, and ratified bythe Shareholders Meeting of the Company. Any amendment is subject to the same procedure. Any written objection or statement from Directors of the Board shall be submitted to the Supervisors of the Company. If the Company has independent Directors, the opinions of objection orendorsementfrom the independent Director(s) of the Company shall be placed on record in the meeting minutes of the Company’s Board of Directors meeting.	After the Procedures are approved by the Board of Directors of the Company, the Procedures shall be submitted to the Shareholders Meeting of the Companyfor approval.Any amendment is subject to the same procedure. The opinions of objection or reservations from the independent Director(s) of the Company shall be placed on record in the meeting minutes of the Company’s Board of Directors meeting. The matters for which paragraph 1 requires submitted
		to the Board of Directors for a resolution shall first be approved by more than half of all Audit Committee members. If the approval by more than half of all Audit Committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

Resolution:

• 35 -

Discussion Items

Item 5

To Approve Amendments to “The Procedure of Loans of Funds to Others” of the Company

Proposed by the Board of Directors

Explanation:

To accommodate the requirement by the competent securities authority, the Company was established an Audit Committee to replace the Supervisors. “The Procedure of Loans of Funds to Others” of the Company shall be amended accordingly. The corresponding comparison table for the current and amended articles is attached.

Article	Article before Amendment	Article after Amendment
Article 3	Loaning funds to business related companies or parties by the Company shall be conducted in compliance withParagraph2 of Article 4 hereof. As to loaning funds for non-business related but short-term financing needs, the following companies or parties are qualified: 1. Affiliated enterprises, which are in need of short term financing to meet their business requirements. 2. Other companies or parties, which need short-term or business financing for purchase of materials or business operation.	Loaning funds to business related companies or parties by the Company shall be conducted in compliance with subparagraph 2 of Article 4 hereof. As to loaning funds for non-business related but short-term financing needs, the following companies or parties are qualified: 3. Affiliated enterprises, which are in need of short term financing to meet their business requirements. 4. Other companies or parties, which need short-term or business financing for purchase of materials or business operation.
Article 5	When the Company intends to loan funds to a borrower who applies to borrow funds from the Company, the Company shall do an investigation and assessment	When the Company intends to loan funds to a borrower who applies to borrow funds from the Company, the Company shall do an investigation and assessment

• 36 -

Article	Article before Amendment	Article after Amendment
	of the following aspects: the purposes and terms of the guarantee for the borrowing, and the impact towards the Company’s business operations, financial condition, and shareholders’ equity. Based on these findings the amount of loaning or the limitation on the amount of loaning, duration and interest payment terms shall be determined and submitted to the Board of Directors of the Company for approval. The loan shall be advanced according to the approval of the Board of Directors of the Company.	of the following aspects: the purposes and terms of the guarantee for the borrowing, and the impact towards the Company’s business operations, financial condition, and shareholders’ equity. Based on these findings the amount of loaning or the limitation on the amount of loaning, duration and interest payment terms shall be determined and submitted to the Board of Directors of the Company for approval. The loan shall be advanced according to the approval of the Board of Directors of the Company. The independent directors’ opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. When the Company making major loans to others, it requires approved by more than half of all Audit Committee members and submitted to the Board of Directors for a resolution. If the
		approval by more than half of all Audit Committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in

• 37 -

Article	Article before Amendment	Article after Amendment
		the minutes of the Board of Directors meeting.
Article 10	The internal auditors shall audit the execution of the fund loaning operation no less frequently than quarterly and prepare written records accordingly. During the auditing, any violation(s), if applicable, shall be corrected. If any serious violation is found, the responsible personnel shall be penalized in accordance with the related rules of the Company. They shall promptly notify all the Supervisorsin writing of any material violation found.	The internal auditors shall audit the execution of the fund loaning operation no less frequently than quarterly and prepare written records accordingly. During the auditing, any violation(s), if applicable, shall be corrected. If any serious violation is found, the responsible personnel shall be penalized in accordance with the related rules of the Company. They shall promptly notify the Audit Committee in writing of any material violation found.
Article 11	If the borrower no longer meets the requirements of the Procedures, or the aggregate loaning amount exceeds the loaning limit approved by the board of directors due to changes of situation, the Company shall submit the improvement plan to theBoard of Directorsof the Company for its approval. In addition, the improvement plan needs to be submitted to the Supervisorsof the Company for review. The aforesaid improvement plan shall be accomplished according to the planned schedule thereof.	If the borrower no longer meets the requirements of the Procedures, or the aggregate loaning amount exceeds the loaning limit approved by the board of directors due to changes of situation, the Company shall submit the improvement plan to the Audit Committee of the Company for its approval. In addition, the improvement plan needs to be submitted to the Board of Directorsof the Company fora resolution. The aforesaid improvement plan shall be accomplished according to the planned schedulethereof.
Article 14	The procedure approved by the Board of Directors shall be submittedto each Supervisor and submit them for approval by the	The procedure approved by the Board of Directors shall be submitted them for approval by the Shareholders’Meeting. The

• 38 -

Article	Article before Amendment	Article after Amendment
	Shareholders’ Meeting. The same shall apply to any amendments to the Procedures; where any Director expresses dissent and it is contained in the minutes or a written statement, the company shall submit the dissenting opinion to each Supervisor. Where the Company has established the position of Independent Director, Independent Directors’ opinions specifically expressingassent or dissentand their reasons for dissentshall be included in the minutes of the Board of Directors’ meeting.	same shall apply to any amendments to the Procedures. The independent Directors’ opinions specifically expressing dissent or reservationsshall be included in the minutes of the Board of Directors’ meeting. The matters for which paragraph 1 requires submitted
		to the Board of Directors for a resolution shall first be approved by more than half of all Audit Committee members. If the approval by more than half of all Audit Committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

Resolution:

• 39 -

Discussion Items

Item 6

To Approve Amendments to the “The Procedure of Making Endorsements or Guarantees” of the Company Proposed by the Board of Directors

Explanation:

To accommodate the requirement by the competent securities authority, the Company was established an Audit Committee to replace the Supervisors. “The Procedure of Making Endorsements or Guarantees” of the Company shall be amended accordingly. The corresponding comparison table for the current and amended articles is attached.

Article	Article before Amendment	Article before Amendment	Article after Amendment
Article 3	The Company may make endorsements or guarantees for the following companies: 1. Companies with which it does business. 2. Companies in which the Company directly or indirectly holds more than fifty percent (50%) of their total outstanding shares with voting rights. 3. Companies which directly or indirectly hold more than fifty percent (50%) of the Company’s total outstanding shares with voting rights. 4. Companies in which the Company’s parent company directly or indirectly holds more than ninety percent (90%) of their total outstanding shares with voting rights and the endorsement amount should be not exceed 10% of the net value of the Company,		The Company may make endorsements or guarantees for the following companies: 1. Companies with which it does business. 2. Companies in which the Company directly or indirectly holds more than fifty percent (50%) of their total outstanding shares with voting rights. 3. Companies which directly or indirectly hold more than fifty percent (50%) of the Company’s total outstanding shares with voting rights. 4. The companies which participating business contracting projects, in which the Company and the foresaid companies having the same business scope of the Company fulfill their contractual obligations by providing mutual guarantees/
		shares with voting rights and the endorsement amount should be not exceed 10% of the net value of the Company,

• 40 -

Article		Article before Amendment	Article after Amendment
	exclusively for these companies in which the Company’s parent company directly or indirectly hold one hundred percent (100%) of their total outstanding shares with voting rights. 5.The companies which participating business contracting projects, in which the Company and the foresaid companies having the same business scope of the Company fulfill their contractual obligations by providing mutual guarantees/endorsements for each other; or the companies which participating business contracting projects, in which the Company and the foresaid companies are co-initiative builders of the construction project and fulfill their contractual obligations by providing mutual guarantees/endorsements for each other. 6.The companies in which their shareholders, including the Company, jointly make investment; provided that such endorsement and/ or guarantee shall be made in proportion to the shareholding percentages of each shareholder in the invested company. “Investment” in this subparagraph means that the		ndorsements for each other; or the companies which participating business contracting projects, in which the Company and the foresaid companies are co-initiative builders of the construction project and fulfill their contractual obligations by providing mutual guarantees/endorsements for each other. 5.The companies in which their shareholders, including the Company, jointly make investment; provided that such endorsement and/ or guarantee shall be made in proportion to the shareholding percentages of each shareholder in the invested company. “Investment” in this subparagraph means that the Company invests in the company directly or through its subsidiaries in which the Company holds one hundred percent (100%) of their total outstanding shares with voting rights. Companies in which the Company holds, directly or indirectly, 90% or more of the voting shares may make endorsements/guarantees for each other, and the amount of endorsements/guarantees may not exceed 10% of the net worth
			of the Company, provided that

• 41 -

Article	Article before Amendment	Article after Amendment
	Company invests in the company directly or through its subsidiaries in which the Company holds one hundred percent (100%) of their total outstanding shares with voting rights.	this restriction shall not apply to endorsements/guarantees made between companies in which the Company holds, directly or indirectly, 100% of the voting shares.
Article 4	Limitation on the total outstanding amount of making endorsements or guarantees of the Company and its subsidiaries: 1. The aggregate amount of making endorsements or guarantees shall not exceed 1.3 times of the net value of the Company. 2. For any one endorsee or guarantee, the amount shall not exceed 50% of the aggregate amount above. 3. The total outstanding amount of endorsement to each of the companies, which has a business relationship with the Company, shall not exceed the total transaction amount between the two parties. The foresaid “total transaction amount” shall be the total purchasing or selling amount, whichever is higher. Where the Company needs to exceed the limits set out in the Operational Procedures for Endorsements or Guarantees to satisfy its business requirements, and where the conditions set out in the Operational Procedures for Endorsements or Guarantees are	Limitation on the total outstanding amount of making endorsements or guarantees of the Company and its subsidiaries: 1. The aggregate amount of making endorsements or guarantees shall not exceed 1.3 times of the net value of the Company. 2. For any one endorsee or guarantee, the amount shall not exceed 50% of the aggregate amount above. 3. The total outstanding amount of endorsement to each of the companies, which has a business relationship with the Company, shall not exceed the total transaction amount between the two parties. The foresaid “total transaction amount” shall be the total purchasing or selling amount, whichever is higher. Where the Company needs to exceed the limits set out in the Operational Procedures for Endorsements or Guarantees to satisfy its business requirements, and where the conditions set out in the Operational Procedures for Endorsements or Guarantees are

• 42 -

Article	Article before Amendment	Article after Amendment
	complied with, it shall obtain approval from the Board of Directors and half or more of the Directors shall act as joint guarantors for any loss that may be caused to the Company by the excess endorsement or guarantee. It shall also amend the Operational Procedures for Endorsements or Guarantees accordingly and submit the same to the Shareholders' Meeting for ratification after the fact. If the Shareholders' Meeting does not give consent, the company shall adopt a plan to discharge the amount in excess within a given time limit. If the amount of making endorsements or guarantees exceeds the limits because of the change of the calculation bases or	complied with, it shall obtain approval from the Board of Directors and half or more of the Directors shall act as joint guarantors for any loss that may be caused to the Company by the excess endorsement or guarantee. It shall also amend the Operational Procedures for Endorsements or Guarantees accordingly and submit the same to the Shareholders' Meeting for ratification after the fact. If the Shareholders' Meeting does not give consent, the company shall adopt a plan to discharge the amount in excess within a given time limit. Where as a result of changes of condition the entity for which an endorsement/guarantee is made no longer meets the requirements of the Procedures,
	endorsees or guarantees originally
	comply with Article 3 and then not, the amount exceeding the limits or the amount of making endorsements or guarantees shall prepare an improvement plan to eliminated when contracts expire or making deadline to eliminate the amount and within the schedule of the aforesaid improvement plan then submit to the Board of Directors and Supervisors for its approval and then to the Supervisors of the Company for their review.	or the amount of endorsement/guarantee exceeds
		the limit, the Company shall adopt rectification plans and submit the rectification plans to
		the Audit Committee and to the Board of Directors for a resolution, and shall complete the rectification according to the timeframe set out in the plan.
Article 5	Any endorsement or guarantee made by the Company shall be	Any endorsement or guarantee made by the Company shall be

• 43 -

Article	Article before Amendment	Article after Amendment
	approved by the Board of Directors. Alternatively, the Board of Directors can authorize the Chairman to approve, in advance, any endorsement or guarantee within a certain amount without the approval of the Board of Directors. After that, the Chairman needs to submit the results for ratification to the Board of Directors. When the Company provide endorsements or guarantees tothe other companiesin whichunder thesame parent company directly or indirectly holds more than ninety percent (90%) of their total outstanding shares with voting rights, conducted in compliance with Paragraph4of Article 3, should also be approved by the Board of Directors of theparent company, exclusively for these companies in which the Company’s parent company directly or indirectly holds one hundred percent (100%) of their total outstanding shares with voting rights.	approved by the Board of Directors. Alternatively, the Board of Directors can authorize the Chairman to approve, in advance, any endorsement or guarantee within a certain amount without the approval of the Board of Directors. After that, the Chairman needs to submit the results for ratification to the Board of Directors. The independent directors' opinions specifically expressing dissent or reservations about any matter shall be included in the minutes of the Board of Directors meeting. Major endorsement/guarantee provided by the Company requires approved by more than half of all Audit Committee members and submitted to the Board of Directors for a resolution. If the
		approval by more than half of all Audit Committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting. When the Company provide endorsements or guarantees to a subsidiary in which the Company directly or indirectly holds more than ninety percent

• 44 -

Article	Article before Amendment	Article after Amendment
		(90%) of their total outstanding shares with voting rights, conducted in compliance with Paragraph 2of Article 3, should also be approved by the Board of Directors of the Company, exclusively for these companies in which the Company directly or indirectly holds one hundred percent (100%) of their total outstanding shares with voting rights.
Article 8	The internal auditors shall audit the execution of the endorsement or guarantee operation no less frequently than quarterly and prepare written records accordingly. During the auditing, any violation(s), if applicable, shall be corrected. If any serious violation is found, the responsible personnel shall be penalized in accordance with the related rules of the Company. They shall promptly notifyall the Supervisorsin writing of any material violation found.	The internal auditors shall audit the execution of the endorsement or guarantee operation no less frequently than quarterly and prepare written records accordingly. During the auditing, any violation(s), if applicable, shall be corrected. If any serious violation is found, the responsible personnel shall be penalized in accordance with the related rules of the Company. They shall promptly notifythe Audit Committee in writing of any material violation found.
Article 12	The Company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and report pursuant to any paragraphof Article 11. The percentage of the balance of endorsements or guarantees over the Company’s net worth for a subsidiary under the preceding	The Company shall announce and report on behalf of any subsidiary thereof that is not a public company of the Republic of China any matters that such subsidiary is required to announce and report pursuant to any subparagraph of Article 11. The percentage of the balance of endorsements or guarantees over the Company’s net worth for a subsidiary under the preceding

• 45 -

Article	Article before Amendment	Article after Amendment
	paragraph shall be calculated by the ratio of the subsidiary's balance of endorsements or guarantees to the Company's net worth.	paragraph shall be calculated by the ratio of the subsidiary's balance of endorsements or guarantees to the Company's net worth.
Article 14	The procedure approved by the Board of Directors shall be submittedto each Supervisor and submitthem for approval by the Shareholders’ Meeting. The same shall apply to any amendments to the Procedures; where any Director expresses dissent and it is contained in the minutes or a written statement, the Company shall submit the dissenting opinion to each Supervisor. Where the Company has established the position of Independent Director, Independent Directors’ opinions specifically expressingassent or dissentand their reasons for dissentshall be included in the minutes of the Board of Directors’ meeting.	The procedure approved by the Board of Directors shall be submitted them for approval by the Shareholders’ Meeting. The same shall apply to any amendments to the Procedures. The independent Directors’ opinions specifically expressing dissent or reservationsshall be included in the minutes of the Board of Directors’ meeting. The matters for which paragraph 1 requires submitted
		to the Board of Directors for a resolution shall first be approved by more than half of all Audit Committee members. If the approval by more than half of all Audit Committee members is not obtained, the aforesaid matter may be implemented if approved by more than two-thirds of all Directors, and the resolution of the Audit Committee shall be recorded in the minutes of the Board of Directors meeting.

Resolution:

• 46 -

==> picture [13 x 8] intentionally omitted <==

==> picture [55 x 24] intentionally omitted <==

==> picture [64 x 305] intentionally omitted <==

==> picture [79 x 132] intentionally omitted <==

==> picture [125 x 135] intentionally omitted <==

==> picture [139 x 531] intentionally omitted <==

==> picture [67 x 166] intentionally omitted <==

==> picture [119 x 383] intentionally omitted <==

==> picture [18 x 137] intentionally omitted <==

==> picture [110 x 216] intentionally omitted <==

==> picture [12 x 40] intentionally omitted <==

==> picture [12 x 197] intentionally omitted <==

-47-

==> picture [55 x 24] intentionally omitted <==

==> picture [329 x 62] intentionally omitted <==

==> picture [67 x 13] intentionally omitted <==

==> picture [61 x 11] intentionally omitted <==

==> picture [10 x 10] intentionally omitted <==

==> picture [127 x 11] intentionally omitted <==

==> picture [165 x 99] intentionally omitted <==

==> picture [173 x 11] intentionally omitted <==

==> picture [248 x 56] intentionally omitted <==

==> picture [104 x 31] intentionally omitted <==

==> picture [127 x 22] intentionally omitted <==

==> picture [125 x 12] intentionally omitted <==

==> picture [116 x 34] intentionally omitted <==

==> picture [45 x 13] intentionally omitted <==

==> picture [21 x 13] intentionally omitted <==

==> picture [41 x 11] intentionally omitted <==

==> picture [21 x 11] intentionally omitted <==

==> picture [45 x 11] intentionally omitted <==

==> picture [21 x 11] intentionally omitted <==

==> picture [41 x 12] intentionally omitted <==

==> picture [21 x 12] intentionally omitted <==

==> picture [122 x 34] intentionally omitted <==

==> picture [48 x 13] intentionally omitted <==

==> picture [81 x 13] intentionally omitted <==

==> picture [45 x 11] intentionally omitted <==

==> picture [61 x 12] intentionally omitted <==

==> picture [21 x 12] intentionally omitted <==

==> picture [119 x 11] intentionally omitted <==

==> picture [45 x 12] intentionally omitted <==

==> picture [21 x 11] intentionally omitted <==

==> picture [61 x 11] intentionally omitted <==

==> picture [45 x 11] intentionally omitted <==

==> picture [21 x 11] intentionally omitted <==

==> picture [41 x 11] intentionally omitted <==

==> picture [21 x 11] intentionally omitted <==

==> picture [185 x 24] intentionally omitted <==

==> picture [465 x 171] intentionally omitted <==

==> picture [223 x 36] intentionally omitted <==

==> picture [128 x 36] intentionally omitted <==

==> picture [124 x 24] intentionally omitted <==

==> picture [64 x 25] intentionally omitted <==

==> picture [64 x 25] intentionally omitted <==

==> picture [197 x 13] intentionally omitted <==

-48-

==> picture [52 x 24] intentionally omitted <==

==> picture [61 x 305] intentionally omitted <==

==> picture [364 x 754] intentionally omitted <==

==> picture [18 x 85] intentionally omitted <==

-49-

==> picture [55 x 24] intentionally omitted <==

==> picture [303 x 63] intentionally omitted <==

==> picture [128 x 14] intentionally omitted <==

==> picture [226 x 649] intentionally omitted <==

==> picture [99 x 11] intentionally omitted <==

==> picture [127 x 400] intentionally omitted <==

==> picture [130 x 83] intentionally omitted <==

==> picture [10 x 11] intentionally omitted <==

-50-

==> picture [55 x 24] intentionally omitted <==

==> picture [61 x 264] intentionally omitted <==

==> picture [303 x 779] intentionally omitted <==

==> picture [9 x 40] intentionally omitted <==

==> picture [12 x 155] intentionally omitted <==

-51-

==> picture [52 x 24] intentionally omitted <==

==> picture [332 x 62] intentionally omitted <==

==> picture [127 x 36] intentionally omitted <==

==> picture [283 x 200] intentionally omitted <==

==> picture [119 x 23] intentionally omitted <==

==> picture [122 x 22] intentionally omitted <==

==> picture [125 x 44] intentionally omitted <==

==> picture [105 x 12] intentionally omitted <==

==> picture [21 x 11] intentionally omitted <==

==> picture [122 x 33] intentionally omitted <==

==> picture [21 x 11] intentionally omitted <==

==> picture [122 x 23] intentionally omitted <==

==> picture [107 x 23] intentionally omitted <==

==> picture [125 x 23] intentionally omitted <==

==> picture [24 x 10] intentionally omitted <==

==> picture [225 x 24] intentionally omitted <==

==> picture [10 x 11] intentionally omitted <==

==> picture [450 x 43] intentionally omitted <==

==> picture [263 x 110] intentionally omitted <==

==> picture [96 x 23] intentionally omitted <==

==> picture [16 x 7] intentionally omitted <==

==> picture [16 x 5] intentionally omitted <==

==> picture [124 x 47] intentionally omitted <==

==> picture [124 x 24] intentionally omitted <==

==> picture [153 x 12] intentionally omitted <==

-52-

==> picture [10 x 10] intentionally omitted <==

==> picture [52 x 24] intentionally omitted <==

==> picture [64 x 264] intentionally omitted <==

==> picture [12 x 35] intentionally omitted <==

==> picture [21 x 36] intentionally omitted <==

==> picture [114 x 507] intentionally omitted <==

==> picture [65 x 508] intentionally omitted <==

==> picture [41 x 24] intentionally omitted <==

==> picture [73 x 503] intentionally omitted <==

==> picture [7 x 13] intentionally omitted <==

==> picture [9 x 7] intentionally omitted <==

==> picture [9 x 7] intentionally omitted <==

==> picture [10 x 7] intentionally omitted <==

==> picture [9 x 7] intentionally omitted <==

==> picture [9 x 7] intentionally omitted <==

==> picture [9 x 7] intentionally omitted <==

==> picture [27 x 622] intentionally omitted <==

==> picture [9 x 7] intentionally omitted <==

==> picture [9 x 7] intentionally omitted <==

==> picture [21 x 76] intentionally omitted <==

==> picture [21 x 34] intentionally omitted <==

==> picture [12 x 34] intentionally omitted <==

==> picture [10 x 7] intentionally omitted <==

==> picture [10 x 7] intentionally omitted <==

==> picture [13 x 29] intentionally omitted <==

==> picture [12 x 29] intentionally omitted <==

==> picture [10 x 7] intentionally omitted <==

==> picture [10 x 7] intentionally omitted <==

==> picture [12 x 30] intentionally omitted <==

==> picture [10 x 7] intentionally omitted <==

==> picture [182 x 292] intentionally omitted <==

==> picture [12 x 30] intentionally omitted <==

==> picture [73 x 227] intentionally omitted <==

==> picture [65 x 136] intentionally omitted <==

==> picture [9 x 42] intentionally omitted <==

-53-

==> picture [52 x 24] intentionally omitted <==

==> picture [10 x 10] intentionally omitted <==

==> picture [263 x 61] intentionally omitted <==

==> picture [21 x 9] intentionally omitted <==

==> picture [21 x 11] intentionally omitted <==

==> picture [378 x 647] intentionally omitted <==

==> picture [42 x 77] intentionally omitted <==

==> picture [65 x 48] intentionally omitted <==

==> picture [62 x 11] intentionally omitted <==

==> picture [33 x 67] intentionally omitted <==

==> picture [39 x 77] intentionally omitted <==

==> picture [44 x 75] intentionally omitted <==

-54-

NANYA TECHNOLOGY CORPORATION Statement of Profits Distribution For the year of 2016 Unit: NTD	Explanation	1. The Company plans to distribute cash dividends of NT$1.5 per share for current year. 2. The Company distributes dividends for a total of NT$4,122,848,715, all of which are from net profit after tax of 2016. 3. The proposed distribution of cash dividends is based on total outstanding shares of 2,748,565,810 shares and it may be changed by the Company’s employees who exercise their stock options or bondholders who covert their bonds into newly-issued common shares. It is proposed that the Board of Directors be authorized to adjust the ultimate cash dividend per share accordingly. 4. While the distribution of cash dividends to each individual shareholder is less than 1 dollar, the distribution will be rounded to the nearest dollar. 5. Other comprehensive income reclassified to unappropriated retained earnings of current year: adjust the actuarial pension valuation. 6. Reversal of special reserve is appropriated from the net amount of exchange differences losses on translation of foreign financial statements and	unrealized gains on available-for-sale financial assets in 2015.	- 57 -
	Amount	2,372,127,670 4,122,848,715 29,805,680,015	36,300,656,400
	Items	Distribution Items: 1. Appropriation of legal reserve (10% of the after-tax profit) 2. Distribution of cash dividends (NT$1.5 per share) 3. Unappropriated retained earnings carried forward to next year	Total
	Amount	12,498,949,297 78,200,985 (2,340,984) 4,570,407 23,721,276,695	36,300,656,400
	Items	Available for Distribution: 1. Unappropriated retained earnings of previous years 2. Other comprehensive income reclassified to unappropriated retained earnings of current year 3. Adjustment 4. Reversal of special reserve 5. Net profit after tax of current year	Total

-55-

==> picture [82 x 34] intentionally omitted <==

==> picture [116 x 31] intentionally omitted <==

==> picture [56 x 22] intentionally omitted <==

==> picture [168 x 24] intentionally omitted <==

==> picture [78 x 33] intentionally omitted <==

==> picture [10 x 14] intentionally omitted <==

==> picture [162 x 16] intentionally omitted <==

==> picture [18 x 14] intentionally omitted <==

==> picture [263 x 16] intentionally omitted <==

==> picture [508 x 380] intentionally omitted <==

==> picture [505 x 89] intentionally omitted <==

==> picture [240 x 16] intentionally omitted <==

-56-

==> picture [55 x 24] intentionally omitted <==

==> picture [18 x 14] intentionally omitted <==

==> picture [505 x 217] intentionally omitted <==

==> picture [505 x 28] intentionally omitted <==

==> picture [505 x 331] intentionally omitted <==

-57-

==> picture [55 x 24] intentionally omitted <==

==> picture [21 x 13] intentionally omitted <==

==> picture [505 x 474] intentionally omitted <==

-58-

==> picture [55 x 26] intentionally omitted <==

==> picture [21 x 14] intentionally omitted <==

==> picture [505 x 111] intentionally omitted <==

==> picture [165 x 50] intentionally omitted <==

==> picture [70 x 13] intentionally omitted <==

==> picture [505 x 87] intentionally omitted <==

-59-

==> picture [82 x 36] intentionally omitted <==

==> picture [116 x 31] intentionally omitted <==

==> picture [56 x 22] intentionally omitted <==

==> picture [10 x 14] intentionally omitted <==

==> picture [323 x 36] intentionally omitted <==

==> picture [162 x 17] intentionally omitted <==

==> picture [280 x 16] intentionally omitted <==

==> picture [508 x 339] intentionally omitted <==

==> picture [240 x 18] intentionally omitted <==

-60-

==> picture [55 x 25] intentionally omitted <==

==> picture [21 x 14] intentionally omitted <==

==> picture [505 x 327] intentionally omitted <==

==> picture [508 x 270] intentionally omitted <==

-61-

==> picture [52 x 25] intentionally omitted <==

==> picture [21 x 12] intentionally omitted <==

==> picture [508 x 437] intentionally omitted <==

==> picture [39 x 14] intentionally omitted <==

==> picture [165 x 27] intentionally omitted <==

==> picture [73 x 13] intentionally omitted <==

==> picture [508 x 87] intentionally omitted <==

-62-

Information regarding the Proposed Employees’ Compensation and Compensation to Directors Adopted by the Board of Directors of the Company:

1. Amounts of employees’ cash compensation, stock compensation, and cash com ensation to Directors and Su ervisors: p p

Employees’ cash compensation NT$ 460,347,000 Employees’ stock compensation NT$ 0 Cash Compensation to Directors NT$ 0

1. Share amount of the employees’ stock compensation and the percentage of the share amount to that of all stock dividend: Share amount of em lo ees’ stock com ensation 0 share p y p

Percentage of the share amount to that of all 0%

stock dividends

Effect upon Business Performance and Earnings Per Share of the Company by the Stock Dividend Distribution Proposed at the 2017 Annual Shareholders’ Meeting:

Not applicable since the Company does not propose the stock dividend distribution at the 2017 Annual Shareholders’ Meeting and does not required to prepare financial forecast information.

• 66 -

-63-