ShenYun Technology Co., Ltd. Announces Board Resolution to Issue First Employee Stock Option Warrants

1. Board Resolution Date: 115/06/09

2. Issuance Period:
May be issued in one or multiple tranches based on actual needs. The actual issuance date shall be determined by the Chairman authorized by the Board of Directors.

3. Eligibility Criteria for Option Holders:
Limited to employees of the Company and its domestic and overseas controlling or affiliated companies (where 'controlling or affiliated companies' refers to those meeting the criteria of MOEA Letter No. 10702427750 dated 107.11.30). The actual employees eligible for options and the number of shares they may acquire will be determined by the Chairman, considering seniority, job level, performance, overall contribution, or special achievements, and then submitted to the Board for approval. If the Company or its controlling or affiliated companies have established a Compensation Committee, employees with managerial status or directors with employee status in such companies shall first be reviewed by the respective Compensation Committee before submission to the Company’s Board for approval. The eligibility benchmark date shall be determined by the Chairman.

4. Total Number of Issued Employee Stock Option Units: 12,000 units

5. Number of Shares per Unit: 1,000 shares

6. Total Number of New Shares to be Issued upon Exercise or Shares to be Repurchased under Article 28-2 of the Securities and Exchange Act: 12,000,000 shares

7. Exercise Price: NT$32.5 per share

8. Exercise Period:
Option holders may exercise their rights starting from the month following the second anniversary of the issuance date, provided they remain employed during the exercise period, except during the share transfer suspension period specified in Article 8, Paragraph 1. The exercise schedule is as follows. The validity period of the stock option warrants ends in the month following the fourth anniversary of the issuance date.

Schedule Cumulative Exercise Ratio
---------------------- ------------------------
Month following 2nd anniversary 50%
Month following 3rd anniversary 75%
Month following 4th anniversary 100%

9. Type of Shares to be Subscribed: Ordinary shares of the Company.

10. Handling upon Employee Resignation or Inheritance:
(1) Resignation (including voluntary resignation, dismissal, layoff, retirement, death)
Employee stock option warrants that have become exercisable shall be deemed forfeited as of the resignation date.

(2) Leave of Absence with Salary Retention
For employees on approved leave with salary retention, exercisable employee stock option warrants shall be deemed forfeited as of the leave commencement date.
Non-exercisable warrants shall have their rights reinstated upon return to work, but the exercise schedule shall be extended by the duration of the leave, subject to the validity period of the employee stock option warrants.

(3) Transfer
If an option holder is transferred to an affiliated company, the stock option warrant shall be handled as if the employee had resigned. However, if the transfer is due to the Company’s operational needs, the rights to previously granted options shall remain unaffected.

(4) Other Termination of Employment
For other unmentioned cases of employment termination or adjustment, the option holder may exercise rights according to the exercise period and schedule in Paragraph 2 of this Article, or the Chairman may determine the exercise rights and deadline.

(5) If an option holder fails to exercise the right within the above period, the right shall be deemed forfeited.

11. Other Exercise Conditions:
Handling of Forfeited Option Warrants
Option warrants that become invalid, voluntarily forfeited by the holder, or forfeited under the above provisions shall be canceled by the Company and will not be reissued.

12. Settlement Method: The settlement of this employee stock option warrant shall be fulfilled by issuing new shares.

13. Adjustment of Exercise Price:
(a) Upon Cash Dividend Distribution
After the issuance of this option warrant, if the Company distributes cash dividends on ordinary shares, the exercise price shall be adjusted downward on the ex-dividend benchmark date using the following formula (rounded to the nearest NT$0.1, with cents rounded down):
Adjusted Exercise Price = Previous Exercise Price × (1 - Ratio of Ordinary Cash Dividend per Share to Market Price per Share)

(b) Upon Increase in Issued Ordinary Shares
After the issuance of this option warrant, except for conversions of securities with ordinary share conversion or subscription rights, employee bonus share issuances, or restricted employee share issuances, if the number of issued ordinary shares increases (including cash capital increases via public or private placement, surplus reserves capitalization, capital reserve capitalization, corporate mergers, acquisition of other companies’ shares, stock splits, or cash capital increases for issuing overseas depository receipts), the exercise price shall be adjusted on the ex-rights benchmark date of the new share issuance using the following formula (rounded to the nearest NT$0.1, with cents rounded down). If the increase results from a change in par value, the adjustment shall occur on the new share exchange benchmark date, or on the date when payment is fully settled if actual payment is involved:
Adjusted Exercise Price = Previous Exercise Price × [Issued Shares + (Per-Share Payment Amount × New Shares Issued) / Market Price per Share] / (Issued Shares + New Shares Issued)
In case of par value change:
Adjusted Exercise Price = Previous Exercise Price × (Pre-change Issued Ordinary Shares / Post-change Issued Ordinary Shares)
(1) Issued Shares refer to the total number of issued ordinary shares, excluding shares from bond conversion rights certificates and subscription payment certificates, and deducting treasury shares repurchased but not yet canceled or transferred.
(2) Per-Share Payment Amount shall be zero for free share distributions or stock splits.
(3) In case of merger with another company, the per-share payment amount for new shares shall be the average closing price of the Company’s ordinary shares over 30 consecutive trading days starting from the 45th trading day before the merger benchmark date.
(4) When issuing new shares for acquiring another company’s shares, the per-share payment amount shall be the average closing price of the Company’s ordinary shares over 30 consecutive trading days starting from the 45th trading day before the share transfer completion date.
(5) No adjustment shall be made if the adjusted exercise price exceeds the previous exercise price.

(c) Upon Decrease in Issued Ordinary Shares
After the issuance of this option warrant, if the number of issued ordinary shares decreases due to capital reduction (excluding cancellation of treasury shares), the exercise price shall be adjusted on the capital reduction benchmark date using the following formula (rounded to the nearest NT$0.1, with cents rounded down). If the decrease results from a change in par value, the adjustment shall occur on the new share exchange benchmark date:
For capital reduction to cover losses:
Adjusted Exercise Price = Previous Exercise Price × (Pre-reduction Issued Ordinary Shares / Post-reduction Issued Ordinary Shares)
For cash capital reduction:
(1) Before listing on the Emerging Stock Market:
Adjusted Exercise Price = (Previous Exercise Price – Cash Refund per Share) × (Pre-reduction Issued Ordinary Shares / Post-reduction Issued Ordinary Shares)
(2) After listing on the Emerging Stock Market:
Adjusted Exercise Price = (Previous Exercise Price × [1 – (Cash Refund per Share / Closing Price on Last Trading Day Before New Share Exchange)]) × (Pre-reduction Issued Ordinary Shares / Post-reduction Issued Ordinary Shares)
In case of par value change:
Adjusted Exercise Price = Previous Exercise Price × (Pre-change Issued Ordinary Shares / Post-change Issued Ordinary Shares)

(d) Determination of Market Price per Share:
Before listing on the Emerging Stock Market, the market price shall be the exercise price before adjustment on the ex-rights/dividend benchmark date, pricing benchmark date, or stock split benchmark date.
After listing on the Emerging Stock Market, the market price shall be the weighted average trading price of the Company’s ordinary shares calculated by dividing the total trading value by the total trading volume over the 30 trading days preceding the ex-rights/dividend benchmark date, pricing benchmark date, or stock split benchmark date, and shall not be lower than the net asset value per share from the most recent financial report audited or reviewed by a certified public accountant.
After listing on the main or OTC market, the market price shall be the simple arithmetic average of the closing prices of ordinary shares on the 1st, 3rd, or 5th trading day before the ex-rights/dividend benchmark date, pricing benchmark date, or stock split benchmark date.

14. Exercise Procedure:
(a) Option holders may exercise their rights except during legally mandated share transfer suspension periods, and from 15 trading days before the record date for free share distribution, cash dividend, or cash capital subscription until the rights distribution benchmark date, and from the capital reduction benchmark date until the first trading day of the new shares issued due to capital reduction.