EPISTAR Board of Directors resolved to spin-off and transfer its existing Semiconductor Foundry business to a newly established and 100% owned subsidiary
2.Date of occurrence of the event:2017/06/25
3.Names of companies participating in the merger (e.g.name of the other company participating in the merger or consolidation, newly established company in a spin-off, acquired company, or company whose shares are taken assignment of): Jing Cheng Semiconductor Corporation (tentative translated company name)
4.Counterparty (e.g.name of the other company participating in the merger or consolidation, company taking assignment of the spin-off, or counterparty to the acquisition or assignment of shares): Jing Cheng Semiconductor Corporation
5.Relationship between the counterparty and the Company (investee company in which the Company has re-invested and has shareholding of XX%), and explanation of the reasons for the decision to acquire, or take assignment of the shares of, an affiliated enterprise or related person, and whether it will affect shareholders' equity: This spin-off will incorporate a division by formation a new company, that is, the company will divide and transfer the relevant business (including assets, liabilities and business) of the semiconductor foundry business to the newly established and 100% owend Jing Cheng Semiconductor Company after the splitting date. The valuation of the shares from the spin-off in Jing Cheng Semiconductor Co., Ltd. is equal to its Business valuation and therefore has no material impact on the company's shareholders equity.
6.Purpose/objective of the merger/acquisitionation: To implement the professional specialization of labor to strengthen the company's overall competitiveness and operational efficiency.
7.Anticipated benefits of the merger/acquisition: To increase the value of Shareholders' equity by strengthening the company's overall competitiveness and operational efficiency.
8.Effect of the merger or consolidation on net worth per share and earnings per share: No capital reduction has been conducted from the spin-off, therefore, the value of the shares from the spin-off in Jing Cheng Semiconductor Co., Ltd. is equal to its operating value and therefore has no vital impact on the company's shareholders equity.
9.Share exchange ratio and basis of its calculation:
(1)The company's spin-off and granted operating value to Jing Cheng
Semiconductor is estimated to be NT$1 billion, and Jing Cheng
Semiconductor Company shall issue 100 million ordinary shares to the
company for the operating value it inherited. The nominal par value
is NT5 per share and issued at a premium of NT$10 per share; the company
will obtain one hundred million shares with nominal par value of NT5
per share in exchange the value of the spin-off.
(2)Calculation basis: the foresaid shares quantity is by referencing both the book value of assets and liability predesignated to be spin-off and by the expert’s comments on the rationality of conversion split-value.
11.Matters related to assumption by the existing company or new company of rights and obligations of the extinguished (or spun-off) company:
(1)From the date of the spin-off reference date, all assets and liability
together with all valid rights and obligations that the Company
divides as of the cut-off date shall generally be accepted by
Jing Cheng Semiconductor Co., Ltd. according to the Law; The company
should cooperate with Jing Cheng Semiconductor Co., Ltd. if related
procedure and process is necessary.
(2)In addition to the debts from spin-off and the dividable debts of the company prior to the separation, Jing Cheng Semiconductor Company shall comply with the scope of the capital contribution and of the company's debts before the spin-off, in accordance with the Mergers and Acquisitions Act No. 35. Clause 6 that the company is jointly and severally liable for repayment. However, the rights of claims of the creditor’s shall be extinguished after they have not been exercised within two years from the base date of the division.
13.Matters related to the spin-off (including estimated value of the business and assets planned to be assigned to the existing company or new company; the total number and the types and volumesof the shares to be acquired by the split company or its shareholders; matters related to the reduction, if any, in capital of the split company) (note: not applicable other than where there is announcementof a spin-off):
(1)The business value of spin-off: the value is estimated at NT one
billion after assets deducted the liability.
(2)The assets of the spin-off: estimated NT one billion.
(3)The liability of the spin-off: estimated NT0.
(4)The amount of the business value, assets and liabilities of the spin-off with which disclosure previously was based on the book value of the company's financial statements audited by accountants on December 31, 2017, and estimated by considering the depreciation, capital expenditure plans, and projections related to the reference date of the spin-off, the actual amount is still based on the book value at the spin-off date.
(5)It is authorized to Board of Directors to adjust foresaid assets and liability of the spin-off if necessary, and to adjust the new issuance quantity of shares or price per share of the Jing Cheng Semiconductor Company by the same time.
(6)The company's spin-off and granted operating value to Jing Cheng Semiconductor is estimated to be NT$1 billion, and Jing Cheng Semiconductor Company shall issue 100 million ordinary shares to the company for the operating value it inherited. The nominal par value is NT5 per share and issued at a premium of NT$10 per share; the company will obtain one hundred million shares with nominal par value of NT5 per share in exchange the value of the spin-off.
15.Other important stipulations: It is authorized to Board of Director to further resolved that if the business scope of the spin-off, the business value( including assets and liability), the shares exchange ratio, the operation schedule or any other matters that is necessary to be adjusted or, from the competent authority's administrative guidance or related decrees, or when the objective environment is subject to change.
16.Do the directors have any objection to the present transaction?:None.