Advantech : 2023 Annual Shareholders' Meeting - Meeting Minutes

Advantech Co., Ltd.

2023 Annual Shareholders' Meeting

Meeting Minutes

(Translation)

Time: 09:00 AM, May 25,2023

Place: (Neihu Headquarters) B1, No. 1, Line 20, Lane 26, Rueiguang Road, Neihu District, Taipei City

Meeting type: Hybrid (in‐person and video conference)

E‐Meeting Platform: "Shareholders meeting e‐Voting Platform ‐ Hybrid Shareholders' Meeting" by Taiwan Depository & Clearing Corporation website: http://www.stockvote.com.tw

The total outstanding ACL shares: 778,487,191 shares

The total shares represented by shareholders present in person or by proxy: 743,404,159 shares (among them, 474,998,563 shares voted via electronic transmission and E‐Meeting)

The Percentage of shares held by shareholders present in person or by proxy: 95.49%

Chairman: K . C Liu, the Chairman of the Board of Directors

Attendees: K . C Liu Chairman, Jeff Chen (Independent Director), Benson Liu (Independent Director), Chan‐Jane Lin (Independent Director), Eric Chen (President), Miller Chang (President), Linda Tsai (President), Liang, Hua‐Ling, CPA, PricewaterhouseCoopers, Villis Yang (Director)

The aggregate shareholding of the shareholders present in person or by proxy constituted a quorum. The Chairman called the meeting to order.

Chairman's Address (omitted)

1. Management Presentations
2. 1. The 2022 Business Report (see appendix I)
   2. The Audit Committee's Review Report on the 2022 Financial Statements (see appendix II)
   3. Status reports of the Cash dividends for Distribution of 2022 Profits
   4. Report of Employees' compensation and Directors' compensation of 2022.
   5. The Status of Endorsement and Guarantee in 2022. (see meeting agenda)

1. Proposals
   1. Adoption of the 2022 Business Report and Financial Statements
   (Proposed by the board of directors) Explanation:
2. 1. The 2022 business report and standalone financial statements (including consolidated

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financial statements) were composed by the Board of Directors. The Company's financial statements were audited by independent auditors, Liang, Hua‐Ling and Lin, Yi‐Fan, of PricewaterhouseCoopers Taiwan and were reviewed by the supervisor along with the business report with a written audit report issued.

1. The Business Report, independent auditor's report, and Financial Statements are enclosed as Attachment I and Attachment III.

Voting Results:

743,404,159 shares were represented at the time of voting; 704,077,945 votes were in favor of the proposal (including votes casted electronically: 435,672,349); 330,005 votes were cast against the proposal (including votes casted electronically: 330,005); 0 votes were invalid; 38,996,209 votes were either invalidly cast or abstained

(including votes casted electronically: 38,996,209).

Approved, that the above proposal be and hereby were accepted as submitted.

2. Adoption of the Proposal for Distribution of 2022 Earnings. (Proposed by the board of directors)

Explanation:

1. Please refer to the 2022 profit distribution table in Attachment IV.

2. The Company's net income after tax of FY2022 was NT$10,757,076,798 and resulted from adding NT$6,971,065,420 of undistributed earnings at the beginning of the period, deducting NT$11,017,508 of retained earnings from investments accounted for using equity method, adding NT$31,990,380 of re‐measured amount of the benefit plan recognized in retained earnings , and adding NT$958,450 of disposing the investments in equity instruments measured at fair value through other comprehensive income, the cumulative profit and losses directly transferred to retained earnings. After appropriating the legal reserve of NT$1,077,900,812 and reversing special reserves of NT$555,793,996, the available surplus for distribution is NT$17,227,966,724. The proposed distribution is as follows:

1. The amounts of NT$7,779,769,710 (cash dividends) and NT$777,976,970 (stock dividends) out of the 2022 earnings are appropriated for distribution as cash dividends and share dividends to shareholders, respectively. The dividend will be calculated based on the total number of outstanding common shares issued as of December 31, 2022, which is 777,976,971 shares. The proposed cash dividend to be distributed to shareholders is NT$10 per share, and the stock dividend is NT$1 per share.
2. The distribution of cash dividend is calculated to the dollar (round up to the dollar). The total amount of the odd shares with a distribution of less than NT$1 will be booked as the other income or other expense of the company.

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1. The current distribution of earnings is scheduled before the dividend benchmark date. If there is any change in the yield rate because of any change in the company's outstanding shares, a request is to be made having the Chairman authorized to handle matters related to the changes

Voting Results:

743,404,159 shares were represented at the time of voting; 705,789,870 votes were in favor of the proposal (including votes casted electronically: 437,384,274); 3,955 votes were cast against the proposal (including votes casted electronically: 3,955); 0 votes were invalid; 37,610,334 votes were either invalidly cast or abstained

(including votes casted electronically: 37,610,334).

Approved, that the above proposal be and hereby were accepted as submitted.

1. Discussion and Election Items
   1. Issuance of new shares from capital increase by earnings.
   (Proposed by the board of directors) Explanation:
2. 1. In response to the business development, the Company plans to issue
      77,797,697shares from capital increase by the 2022 dividends distributed to Shareholders at the amount of NT$777,976,970, with the par value per share of NT$10. Based on shareholders and their shareholding ratio listed in the shareholders' roster on the target date for distribution of dividends, 100 shares per 1000 shares will be distributed free of charge; the fractional share that is less than 1 share shall be put together by the stock agency appointed by the Company within 5 days after the date on which share transfer registration is suspended. The fractional share that is insufficient to make up the balance or put together by the deadline will be subscribed by a person designated by the chairman of the Board.
   2. When there is a change in the distribution rate due to change in the number of shares circulated outside, the shareholders' meeting shall authorize the Board of Directors to solely handle such a change.
   3. Rights and obligations arising from the issuance of new shares are same as those arising from the issuance of original shares.
   4. After the issuance of new shares from capital increase is resolved by the annual shareholders' meeting and reported to the competent authority, the Board of Directors will be authorized to set the ex‐right date and announce it separately.

Voting Results:

743,404,159 shares were represented at the time of voting; 700,714,202 votes were in favor of the proposal (including votes casted electronically: 432,308,606); 8,753 votes were cast against the proposal (including votes casted electronically: 8,753); 0 votes

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were invalid; 42,681,204 votes were either invalidly cast or abstained (including votes casted electronically: 42,681,204).

Approved, that the above proposal be and hereby were accepted as submitted.

2.The company's plan of issuing employee stock warrants at a price below market price is hereby proposed for a resolution.

(Proposed by the board of directors)

Explanation:

1. The company intends to have employee stock warrant issued at a price below market price in accordance with Article 28.3 of the Securities Exchange Act and the "Regulations Governing the Offering and Issuance of Securities by Securities Issuers" published by the Securities and Futures Bureau, Financial Supervisory Commission, R.O.C.
2. According to Article 56‐1 of the "Regulations Governing the Offering and Issuance of Securities by Securities Issuers:" The Company will issue 8,000,000 units of employee stock warrants at a price below market price, details referring to Attachment V.

1. Total number of employee stock warrants issued, the number of shares to be subscribed for each unit of stock warrant, and the total number of stock shares to be issued for the stock option exercised:
   A total of 8,000,000 units of employee stock warrants are issued currently and each unit of stock warrant are entitled to the subscription of 1 stock shares. A total of 8,000,000 common stock shares are issued for the stock option exercised.

(b)The reference and reasonability of stock price: Stock price is NT$200 per share.

1. Stock subscriber's qualification and the number of subscriber Shares:
   It is limited to the full‐time employees in particular level or position or who have made a special contribution to the Company and the full‐time employees of the domestic and overseas subsidiaries that are with over 50% (inclusive) shareholding held by the Company directly or indirectly. The stock subscription qualification base date is decided by the chairman. The employees who qualified for stock subscription and the number of stock shares to be subscribed by each qualified employee are determined according to their job performance, overall contributions, or special achievements with the approval of the chairman and the consent of the board of directors. Approval by the Compensation Committee must be obtained first then reviewed by the Board of Director for approval for employees who are managerial officers or director's Non‐executive: approval by the Audit Committee must be obtained first then reviewed by the Board of Director for approval for employees who are non‐executive officers. According to Article 56‐1 Paragraph 1 of the "Regulations Governing the Offering and Issuance of Securities by Securities Issuers," the stock warrant issued by the company and subscribe by one single subscriber accumulatively plus the new shares with limited rights accumulated by the subscriber together may not exceed 0.3% of the total outstanding stock shares; moreover, together with the stock warrant issued by the issuer in accordance with

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Article 56 Paragraph 1 and subscribe by one single subscriber accumulatively may not exceed 1% of the total outstanding stock shares.

(d)The reasons for issuing current employee stock warrant:

The Company aims to attract and retain talents that are needed by the company and to motivate employees and enhance employee's loyalty in order to create common interests of the Company and shareholders.

1. The impacts on shareholders' equity:
2. 1. The potential expense amount and its impact on the company's earnings per share dilution:
      Input the common stock closing price the actuarial assumptions and estimates in the stock option evaluation model for calculations. The annual amortized expense amount in 2023~2028: NT$167,633,333, NT$402,320,000, NT$308,320,000, NT$145,386,667, NT$78,020,000, and NT$26,320,000, respectively, for a grand total of NT$1,128,000,000. According to the stock closing price the actuarial assumptions and estimates, the annual earnings per share dilution in 2023~2028:

NT$0.19, NT$0.46, NT$0.35, NT$0.15, NT$0.08, and NT$0.03, respectively.

1. Please explain the Company's financial burden resulted from those who have the contract performed with the outstanding stock shares: Not applicable.

Voting Results:

743,404,159 shares were represented at the time of voting; 593,084,302 votes were in favor of the proposal (including votes casted electronically: 324,678,706); 104,906,425 votes were cast against the proposal (including votes casted electronically: 104,906,425); 0 votes were invalid; 45,413,432 votes were either invalidly cast or abstained

(including votes casted electronically: 45,413,432).

Approved, that the above proposal be and hereby were accepted as submitted.

3. Election of directors. Please Vote

Explanation:

1. As the term of the Company's directors and supervisors is about to expire, the reelection of directors and supervisors shall be held in the shareholders' Meeting this year according to Article 13 of the Company's Articles of Incorporation.
2. The Company plans to set up 7~9 directors (including 3 independent directors) according to Article 13 of the Company's Articles of Incorporation. In the 13th reelection, 7 directors are planned to be set up (including 3 independent directors) with a term of 3 years and they may be eligible for reelection. The Company plans to establish the audit committee, which is composed of all independent directors, according to Article 13‐6 of the Company's Articles of Incorporation.
3. According to Article 13 of the Company's Articles of Incorporation, the candidate nomination system is adopted for the election of directors. After the Board of Directors reviews the qualifications of nominees based on the roster of candidates for directors and independent directors, qualified nominees are enrolled in the final roster of

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