Loans to or guarantees in favor of directors, supervisors, senior managers or their spouses, children, and relatives  within the second degree are prohibited in order to avoid from conflict of interests. Loans to other personnel shall be  reviewed and approved in advance pursuant to the Company’s rules. A conflict of interests may arise when a director or supervisor takes actions or has interests that might make him/her  difficult to perform the director’s or supervisor’s duty objectively and effectively. Conflict of interests will arise where a  director or supervisor, or the director’s or supervisor’s spouses, children or relatives within the second degree, receives  improper personal benefits because of the director’s or supervisor’s position in the Company. Directors or supervisors  shall not have a direct economic relationship with the Company unless otherwise authorized by Chunghwa’s Board of  Directors (hereinafter referred to as the “Board”). While potential conflict of interests involving directors, supervisors, or senior managers shall be reviewed directly  by the Board, those of other personnel of the Company shall be reviewed in accordance with the Company’s relevant  regulations. The relevant activities may be permitted if they are determined to be not harmful to the Company. Directors, supervisors, managers, and employees have a duty to protect the Company’s legitimate interests. Unless  the Company otherwise agrees, any individual shall not take advantage of the Company’s assets, information or its  position to obtain personal interests. Any person is prohibited from competing with the Company unless it is otherwise approved in writing by the  Company’s Human Resources Department in advance. Employees are the most important assets of the Company. The Company’s sustainable development relies on  excellent employees who have realized their dreams in an excellent working environment and abundant business  opportunities. The Company’s management shall be in compliance with the following requirements: “Trade secret” is defined under this Code of Ethics to include all the Company’s trade secrets and information that is  obtained from or through business or cooperative relationship which shall be kept confidential. The Company’s directors,  supervisors, managers, and employees shall keep the trade secret they obtain in confidential, except where a disclosure is  required by applicable laws, rules or regulations or authorized by the Company. All the Company related transactions and any disposition of assets shall be reflected in the accounts, financial  statements and records of the Company in a full, fair, accurate, and timely manner. All directors, supervisors, managers, and employees handling the Company’s disclosure process are required to  know and understand the relevant rules with respect to disclosure requirements within the scope of their duties and  shall ensure that information in documents that the Company files with or submits to the Securities and Futures Bureau,  Financial Supervisory Commission, Executive Yuan, R.O.C (hereinafter referred to as “SFB”) and the U.S. Securities  and Exchange Commission (hereinafter referred to as “U.S. SEC”), or information otherwise disclosed to the public, is  Article 7 Disclosing the Company’s information in a full, fair, accurate, timely, and understandable manner Article 6 Keeping trade secrets  Articles 5 Caring for Employees  Article 4 No appropriation for personal gains  1.  Complying with labor related laws and regulations; 2.  Treating each employee fairly, openly, and justly; 3.  Caring for employees, respecting employees, and listening to the mployees; 4.  Motivating employee’s innovation and passion toward the Company; 5.  Providing employees with a safe, healthy, and sanitary working nvironment; 6.  Striving to improve working conditions; 7.  Protecting employee’s legitimate rights and interests; 8.  Improving harmony relationship between employer and employees; 9.  Creating working opportunities of employees and value; and 10.  Implementing the compliance with collective bargaining agreement. PART III