1.Resolution date of the board of directors:2022/05/06
2.Expected issue price:Grants will be made free of charge with an issue price per share of NT$0.
3.Expected total amount (shares) of issuance:A total of 500,000 common shares, each with a par value of NT$10, for a total amount of NT$5,000,000.
The RSAs granted to an employee can only be vested if
(1)Remain employed on the vesting date after receiving the RSA;
(2)Have not violated the Company’s employment agreement and work rules within the vesting period; and
(3)Have met the performance evaluation indicators established by the Company (Namely, the employee’s year-end performance rating should be (Exceed) or above for the year preceding completion of the vesting period.
Shares can be vested each year are, respectively:
(a)50% once an employee remains employed after 2 years from the grant date;
(b)25% once an employee remains employed after 3 years from the grant date; and
(c)25% once an employee remains employed after 4 years from the grant date.
5.Measures to be taken when employees fail to meet the vesting conditions or in the event of inheritance:
Upon failure to meet the vesting conditions of RSA, such shares will be redeemed by the Company without charge and will be canceled. For exceptional events, including but not limited to inheritance, the Company will take measures pursuant to the Restricted Stock Awards Issuance Rules.
6.Other issuance criteria:None
7.Qualification criteria for employees:
(1)Only the Company’s full-time executives who are employed on the grant date and meet certain performance requirements are eligible for this incentive plan. Eligible executives must also be those who (i) have a significant influence on the Company’s operational decisions or (ii) are the Company’s critical talents for its future core technologies and strategy development.
(2)The employees eligible and the number of shares granted will be determined by the Chairman with consideration to the Company’s business performance and the employee’s job grade, performance, and other factors appropriate, and then sent to Compensation Committee and the Board of Directors for approval.
(3)Where an issuer issues employee stock warrants under Article 56-1, paragraph 1, the cumulative number of shares subscribable by a single warrant holder of the employee stock warrants, in combination with the cumulative number of new restricted employee shares obtained by the single warrant holder, may not exceed 0.3% of the issuer’s total issued shares. And the above in combination with the cumulative number of shares subscribable by the single warrant holder of employee stock warrants issued by an issuer under Article 56, paragraph 1, may not exceed 1% of the issuer’s total issued shares. However, with special approval from the central competent authority of the relevant industry, the total number of employee stock warrants and new restricted employee shares obtained by a single employee may be exempted from the above-mentioned restriction.
8.The reason the current issuance of RSA is necessary:To attract and retain professional talents, motivate employees, enhance internal cohesion within the Company, and create long-term benefits for the Company and its shareholders.
9.Calculated expense amount:Based on the expected issuance amount of 500,000 shares and the average closing price NT$110.67 of March 2022, the total calculated expense is estimated at approximately NT$55 million. The calculated expenses are estimated at approximately NT$9 million, NT$22 million, NT$16 million, NT$6 million and NT$2 million from 2022 to 2026 respectively, assuming that the RSAs will be issued in August 2022.
10.Dilution of the Company’s earnings per share (EPS):Based on the amount of the Company’s outstanding shares and expected issuance amount of 500,000 RSA shares, the potential impact from the aforementioned expenses to the Company’s EPS is estimated at approximately NT$0.04, NT$0.096, NT$0.07, NT$0.027, and NT$0.009 from 2022 to 2026 respectively.
11.Other matters affecting shareholder’s equity: There is no material impact on shareholders’ interest.
12.Restrictions before employees meet the vesting conditions once the RSA are received or subscribed for:
(1)During each vesting period, employees eligible may not sell, pledge, transfer, give away to others, provide as collaterals, or otherwise dispose of the RSA.
(2)Unless otherwise regulated by the issuance Rules, before employees reach the vesting conditions, rights of the granted RSA including but not limited to distribution of dividends, bonuses and capital surplus, and the subscription right of cash capital increase, are the same as existing common shares. The Company will proceed pursuant to the trust agreement.
(3)Before employees reach the vesting conditions, the attendance, proposal, expression, voting rights, and other matters regarding shareholders’ rights and interests and in the shareholders’ shall all be exercised by the custodian bank on their behalf.
(4)During the vesting period, if the Company conduct non-statutory capital reduction, such as reduction with cash payment or to offset losses, the RSA will be redeemed by the Company according to the capital reduction ratio. In the event of reduction with cash payment, the cash refund will be delivered to a custodian bank and will only delivered to employees once the vesting conditions are fulfilled. If the employees fail to meet the vesting conditions, the Company will take the cash refund back.
13.Other important terms and conditions (including stock trust custody, etc.):
(1)The RSA shall be delivered to the trust immediately after issuance. Employees may not ask the trustee to return the RSA for any reasons or by any method prior to the fulfillment of vesting conditions.
(2)During the custodial period, the Company is authorized to represent all the employees eligible to negotiate, execute, modify, extend, rescind, terminate the agreement with the trustee/custodian, and give instructions to deliver, use, and dispose of any of the properties under the trust/custody.
(3)If revisions of the vesting conditions have to be made due to the amendment to the laws and regulations or the competent authority’s instruction, it is proposed that the general shareholders’ meeting authorize the Chairman to amend the Issuance Rules, which will then be issued once approved by the Compensation Committee and the Board of Directors.
14.Any other matters that need to be specified:None
The Company’s Board of Directors approved 2022 Restricted Stock Awards and the Issuance Rules
1.Resolution date of the board of directors:2022/05/06