3.Relationship to the Company (please enter ”head office” or
  ”subsidiaries”): head office
4.Reciprocal shareholding ratios:NA
5.Cause of occurrence:
(1)Considering the comprehensive growth plan in financial sector, operation
 capability reinforcement and asset scale expansion, CDF intends to swap
shares with China Life and converses China Life Insurance Co., Ltd.
(hereinafter as “China Life”) into a 100%-owned insurance subsidiary of
CDF. The share swap agreement was approved by the EGM held on October 1,
2021, and consented by the Financial Supervisory Commission.
(2)The consideration for the conversion is 0.8 common shares, 0.73
preferred shares and NTD11.5 in cash for 1 common share of China Life.
CDF intends to issue common shares and preferred shares B in
consideration for the share swap with China Life and has set the record
date of the capital increase and the effective date of share swap on
December 30, 2021. In the event that the record date of the capital
increase and the effective date of share swap are changed due to
force majeure such as natural disasters or at the request from the
competent authorities, it is proposed that the Chairman be authorized to
set a new record date of the capital increase and the effective date of
share swap, and make a subsequent public announcement. The issuing
shares, par value and issuing amount of the newly issued common share
and preferred shares B are listed below:
(a)Common share
Issuing Shares: 2,074,568,325 shares
Par value: NTD 10
Issuing Amount: NTD 20,745,683,250
(b)Preferred share B
Issuing Shares: 1,893,043,597 shares
Par value: NTD 10
Issuing Amount: NTD 18,930,435,970
(3)Any fraction of CDF’s common shares and preferred shares B as a result
of the Share Swap of China Life that shall be distributed to all of China
Life’s shareholders will be paid in the form of cash at the closing price
on the last trading date immediately prior to the Share Swap Effective Date
for the common shares and with a par value of the preferred shares B, on
a pro rata basis (rounded to the nearest whole number in New Taiwan Dollar).
In addition, CDF may authorize the Chairman or any person designated
thereby to subscribe for such fractional shares at the Market Price for the
common shares and at the par value for the preferred shares B.
(4)The rights and obligations of newly issued common shares are the same as
those of the existing common shares; the terms of the newly issued preferred
shares B are listed below:
(a)If CDF has a surplus after the year-end final accounts, it should first
pay taxes and make up the losses accumulated from preceding years. After
setting aside the legal reserve and setting aside or reversing the special
reserve as required by law, if there is any remaining balance, it may first
distribute the dividends for the year to which the preferred shares are
entitled.
(b)The dividend on the preferred shares is calculated at an annual rate
of 3.55% (seven-year IRS 0.75% + 2.80%) based on the issue price per share.
The seven-year IRS rate will reset on the business day following the seventh
year from the issue date and every seven years thereafter. The interest
rate reset record date is two Taiwan bank days prior to the interest rate
reset date. The interest rate index seven-year IRS is the arithmetic average
of Reuter’s TAIFXIRS and COSMOS3 seven-year interest rate swap quotes
priced at 11:00 a.m. on the interest rate reset record date. If such quotes
are not available on the interest rate reset record date, CDF will decide in
good faith and based on reasonable market conditions.
(c)The dividend on the preferred shares is paid annually in cash after the
board of directors set the record date for the distribution of the preceding
year’s dividend after the financial report is approved by the shareholders
at the annual general meeting. The number of dividends paid in the year of
issuance and the number of dividends received in the year of recovery are
calculated based on the actual number of days the preferred shares are
outstanding in that year.
(d)CDF has the discretion to distribute dividends on the preferred shares.
If CDF has no or insufficient surplus to distribute dividends on the
preferred shares in its annual accounts, or if the distribution of dividends
on the preferred shares will cause CDF’s capital adequacy ratio to fall
below the minimum requirements set by law or by the competent authorities,
or if there are other necessary considerations, CDF may resolve not to
distribute dividends on the preferred shares and the preferred shareholders
shall not dissent.
(e)The preferred shares are noncumulative, and any undistributed or
under-distributed dividends will not be accumulated and deferred in coming
years.
(f)The preferred shareholders shall not participate in the distribution of
earnings and capital surplus in cash and capitalization of common shares,
except for receiving the dividends set forth in (b).
(g)The preferred shareholders shall have priority in the distribution of
the residual property of CDF over the common shareholders, and the
shareholders of each class of preferred shares shall be paid in the same
order, provided that such distribution shall not exceed the original amount
of issuance.
(h)The preferred shareholders shall not have voting rights at general
shareholders’ meetings, but may be elected as directors, and shall have
voting rights at shareholders’ meetings of preferred shares and at
shareholders’ meetings concerning the rights and obligations of preferred
shareholders.
(i)Preferred shares shall not be converted into common shares.
(j)The preferred shares issued by CDF have no expiration date and the
preferred shareholders have no right to require CDF to buy back the
preferred shares held thereby. On the day following the expiration of
seven years from the date of issuance, CDF may redeem all or part of the
preferred shares issued at the actual issue price, and the un-redeemed
preferred shares shall continue to be subject to the rights and obligations
of the aforementioned terms of issuance. If CDF decides to pay dividends
in the current year, the dividends payable as of the date of recovery are
calculated based on the actual number of days the preferred shares are
outstanding in that year.
(k)When CDF issues new shares for cash, the preferred shareholders have the
same right of first refusal to purchase the new shares as the common
shareholders.
(l)The issue date shall be the Share Swap Effective Date; the issue price
referred to herein shall be NT$10 per share.
6.Countermeasures:NA
7.Any other matters that need to be specified:None