| Subject |
The board of directors of the Company approved a resolution on the 1st issue of the employee stock option certificate of 2025. |
- Date of the board of directors resolution: 2025/01/21
- Issue period: According to Article 28-3 under Securities and Exchange Act and the Criteria Governing the Offering and Issuance of Securities by Securities Issuers implemented by Financial Supervisory Commission, the Chairman is authorized by the board to determine the actual issue date for one or multiple issues subject to the actual requirement within two years from the date of receipt for notice of the competent authority’s approval.
- Eligibility criteria for optionees:
- (1)Restricted to the employees (include full-time and part-time employees) of the Company and investee companies over which the Company owns or controls, directly or indirectly over 50%.
- A.Full-time employees: Those who are employed by the Company, perform the work assigned by the Company, and receive monthly salary.
- B.Part-time employees: Those who are employed by the Company on an hourly basis (i.e., those who do not need to work 8 hours per day) or on a fixed-term contract, and paid monthly.
- (2)The Chairman shall consider the factors including but not limited to work experience, seniority, position, work performance and overall contribution or specific achievements and propose the Board of Directors for approval on the list of employees who are entitled to stock option and the number of stocks allowed for stock option. The number of stocks allowed for stock options by the employees who are managerial officers or directors shall be proposed to be discussed by the Remuneration Committee before being submitted for a resolution by the Board. The number of stocks allowed for stock options by the employees who are non-managerial officers or directors shall be proposed to be discussed by the Audit Committee before being submitted for a resolution by the Board.
- (3)The cumulative number of Restricted Stock Awards exercisable by stock option to a single employee shall not exceed 0.3% of the total issued shares by the Company according to Paragraph 1, Article 56-1 of the Criteria Governing the Offering and Issuance of Securities by Securities Issuers, in combination with the cumulative no. of restricted stock awards obtained by such employee, shall not exceed 0.3% of the total issued shares. The above, in combination with the cumulative no. of shares such employee can subscribe for by exercising the stock option granted under Paragraph 1, Article 56 of the Criteria Governing the Offering and Issuance of Securities by Securities Issuers implemented by Securities Issuers shall not exceed 1% of the total issued shares. Unless otherwise approved by the central competent authority of the relevant industry, the total number of employee stock option certificates and new restricted employee shares obtained by a single employee may be exempted from the above-mentioned restriction.
- Number of total issued units of the employee stock warrants: 5,000 units.
- Number of shares each stock warrant unit may subscribe for: Each stock option unit may subscribe for 1,000 shares of the Company.
- Total number of new shares to be issued due to exercise of options, or the no.of shares for buyback as required by Article 28-2 of the Securities and Exchange Act: 5,000,000 shares.
- Subscription price: The subscription price shall consist in the closing price for the Company’s common stock on the day these employee stock option certificates are issued.
- Period of subscription rights:
- (1)Duration for these stock option certificate is 6 years, and once this period has elapsed, any options which have not been exercised shall be cancelled. Upon the expiration date, unexercised options are deemed forfeited by the employee and the option may no longer claim right to buy shares.
- (2)Employees are entitled to exercise the vested options after 2 years, and the schedule for exercise of options is as follows:
| Grant Period of Stock Option |
Certificate Proportion of Exercisable Options (Accumulated) |
| After 2 years |
20% |
| After 3 years |
40% |
| After 4 years |
60% |
| After 5 years |
100% |
- (3)The Company shall have the right to forfeit and cancel stock option certificate for which rights have not been vested or exercised yet in the event that the employees violates his/her employment contract, service agreement or work rules after the stock option certificate have been granted by the Company.
- (4)Employees may not transfer, distribute or mortgage their options or its profits by any methods or similar procedures to the others, except by death and succession.
- Types of shares which may be subscribed for: Common shares of the Company.
- Handling method for employee resignation/inheritance:
- (1)Resignation (including voluntary resignation, discharge, dismissal, or severance package): The stock option certificates exercisable may be exercised within one month of the date of such occurrence. However, it may not exceed the duration of the options. All rights for unvested stock option certificates shall be deemed as waived upon the date of such occurrence.
- (2)Leave without pay: For employees who have been approved by the Company for a leave without pay, vested options may be exercised within one month of the starting date of the leave without pay. If not exercised by then, vested options shall be frozen, and shall be deferred until reinstatement. Rights and interests to any unvested stock warrants shall be restored upon reinstatement. However, the vesting period shall be deferred retroactively by the same duration as the period of the leave without pay, subject at all times to the original duration of the stock option certificates.
- (3)Death: All vested options may be exercised by inheritor within one year of death of the deceased employee; all un-exercised vested options shall expire after such one-year period. All unvested stock option shall expire on the date of the decease of the employee.
- (4)Disability or death caused by work injury:
- A.Work injury: In the event that an employee who has already been granted stock option certificates becomes physically disabled and cannot continue his/her employment due to work injury, he/she may exercise all vested options at the time of resignation. Other than the requirement that two years shall have elapsed since the granting of the stock option certificates in order to have them exercised, restrictions regarding the schedule in Paragraph 2, Article 5 shall not apply. Such certificates should be exercised within one year after the date of employment termination or after two years of granting the certificates (whichever occurs later).
- B.Death caused by work injury: In the event that an employee who has been granted stock option certificates dies due to work injury, his/her heir may exercise all such options from the time of his/her death. Other than the requirement that two years shall have elapsed since the granting of the stock warrants in order to have them exercised, restrictions regarding the schedule in Paragraph 2, Article 5 shall not apply. Such certificates should be exercised within one year after the date of death or after two years of granting the certificates (whichever occurs later).
- (5)Transfer: Due to business needs, transfer of the optionee to an affiliate of the Company or other company upon the Company’s decision shall not affect the right of stock subscription according to stock option certificates granted.
- (6)Once the option duration has elapsed, rights for options that have not been exercised shall be deemed as waived, and employee may no longer claim rights to exercise their subscription rights.
- (7)The Company shall cancel any stock option certificates of which rights have been waived, and these shall not be issued again.
- Other criteria for subscription: None
- Method for performance of contract: New common shares issued by the Company shall be delivered.
- Adjustment of subscription price:
- (1)After the stock option certificates are issued, except for the issuance of common shares upon conversion of all securities with conversion rights or subscription rights for common shares, issuance of restricted stock awards, or new shares issued as employee compensation, if there is any change to the Company’s no. of common shares (including cash capital increase, capital increase by earnings, capital increase by capital surplus, merger or transfer of new shares issued by other companies, stock divide, participation in overseas depositary receipts through cash capital increase, etc.), the subscription price shall be adjusted in accordance with the following formula. If the reduction in common shares is due to a change in the par value of the stock, the adjustment shall be made on the new share issuance date. Adjusted subscription price = Subscription price prior to adjustment * [number of issued shares + (paid purchase price per share * number of newly issued shares) ÷ current price per share] / (number of issued shares + number of newly issued shares) When changing par value: Adjusted subscription price = Subscription price prior to adjustment * common shares issued before change / common shares issued after change
- A.Number of issued shares refers to total number of issued common shares excluding the number of shares from “the certificates of payment for stock option” and “the certificate of entitlement to new shares form convertible bond”.
- B.In the event of gratuitous distribution of shares or stock divide, the paid purchase price per new share shall be zero.
- C.In the event of merger, the paid purchase price per share shall be the average closing price of the common shares of the Company for 30 consecutive business days calculated from the 45th business day prior to the record date of merger.
- D.The adjusted subscription shall be rounded up to the nearest tenth of one New Taiwan Dollar.
- E.If the adjusted subscription price is higher than the subscription price prior to adjustment, the subscription price shall not be adjusted.
- F.If the final adjusted subscription price is lower than the par value of common shares, issuance shall be based on the par value of common shares.
- (2)After the stock option certificates are issued, the subscription price shall be subject to adjustment in accordance with the following formula in case that the reduction in no. of common shares is not caused by capital reduction through cancellation of treasury shares:
- A.Capital reduction to offset losses Adjusted subscription price = Subscription price prior to adjustment × (number of issued shares before capital reduction ÷number of issued shares after capital reduction)
- B.Capital reduction with cash payment Adjusted subscription price = (Subscription price prior to adjustment- cash refund per share) × (number of issued shares before capital reduction ÷ number of issued shares after capital reduction)
- C.When changing par value: Adjusted subscription price = Subscription price prior to adjustment * common shares issued before change / common shares issued after change
- (3)After the stock option certificate are issued, the subscription price shall be subject to adjustment in accordance with the following formula for the ex-dividend record date of cash dividends: Adjusted subscription price = Subscription price prior to adjustment * (1-cash dividends distributed per common share÷current price per share). The aforementioned current price per share shall be the simple arithmetic average of the closing price of shares either on the first, third or fifth business day immediately prior to the announced book closure and ex-dividend date for the cash dividends.
- Procedures for exercising options:
- (1)Except during the statutory book closure period and restriction period, the employee may exercise options in accordance with the schedule set forth in Paragraph 2, Article 5 of these terms by filling a subscription request and applying with the stock transfer agent of the Company.
- (2)Upon receipt of the exercise request, the stock transfer agent shall inform the employee to make payment for shares to the designated bank within the designated period. Any delayed payment shall be deemed as a waiver of subscription rights for the said request, and no shares shall be deemed assubscribed for by this request without payment.
- (3)The stock transfer agent of the Company will issue the newly issued common shares of the Company to such employee through depository book-entry transfer within five business days upon confirmation of sufficient payment, and register the shares in the shareholders’roster.
- (4)The Company shall report the change in registered amount of subscribed shares and capital to the competent authority at the end of each quarter.
- Rights and obligations after exercising options: The rights and obligations of the common shares delivered according to the regulations shall be the same as those for the Company's common shares.
- Reference date for any additional share exchange, stock swap, or subscription: NA
- Possible dilution of equity in case of any additional share exchange, stock swap, or subscription: NA
- Other important terms and conditions:
- (1)After the Company completes the legal issuance procedure, the Company will notify the employee to sign the ”Recipient Consent” by the Subscription Rights Management Department. The employee will be granted employee stock option certificates after the employee completes the signature, and if the signature is not completed according to the regulations, it shall be deemed that rights to these options have been waived.
- (2)After stock option certificates are granted to employees, employees shall abide by confidentiality regulations and shall not disclose related contents or individual equity.
- (3)Employees may not transfer, mortgage or donate their options or equity to others or dispose by any other methods.
- (4)The optionee and the holders of equity derivatives who obtain the stock option through this issuance principle shall comply with the terms and the requirements on Recipient Consent.
- (5)These terms and conditions shall come into effect and be issued once they're approved by a majority vote in a Board of Directors’ meeting attended by two-thirds or more of the directors, and reported to the competent authority for approval.
- (6)Any matter on which these terms and condition have not specified, it shall be handled in accordance with applicable laws and regulations.
- Any other matters that need to be specified: None
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