The Board of Directors approved the issuance of 2022 employee restricted stock awards, RSAs.

 The Board of Directors approved the issuance of
2022 employee restricted stock awards, RSAs.

1.Date of the board of directors resolution:2022/02/23
2.Expected issue price: Grants will be made free of charge.
3.Expected total amount (shares) of issuance:
The number of shares to be issued will be 3,000,000 common shares, with a
par value of NT$10 per share.
4.Vesting conditions:
(1)Senior executives must remain in office on each vesting date after
they are allocated RSAs, and at the same time meet the group's
operational objectives and individual performance conditions, and have not
violated the company's (or affiliated company's) labor contract during the
performance measurement period. If the company (or affiliated company)
employees are punished by major demerits, etc., the maximum shareholding
ratio that can be acquired in each year is: 33% after one year of issuance,
33% after two years, and 34% after three years, or from 2022 to 2024 the
upper limit of the total vested ratio for three years is 100%.
However, the actual ratio and the number of shares that can be acquired in
each year must be calculated based on the achievement of the group's
operational objectives and individual performance. The calculation results
are up to the number of shares, and those less than one share are
unconditionally discarded.
(2)Conditions for the determination of the group's operational objectives
and individual performance:
The Group's operating target is to achieve the Group's pre-tax profit
from the business of NTD2.3 billion within 3 years. The three-year
performance period has been calculated since 2022. Each year is an
independent settlement performance period and the target value is as
follows:
The pre-tax profit from the business in 2022 is NTD1.5 billion
The pre-tax profit from the business in 2023 is NTD1.9 billion
The pre-tax profit from the business in 2024 is NTD2.3 billion
If the performance of each year reaches the target value (inclusive) or
above, the vested ratio will be 100%. If the target value is reached in
the range of 90% to 100%,the vested ratio will be calculated incrementally
from 20% (see the table below for an example). If the target threshold is
90%, the vested ratio is 0%.
Reach the goal: 91%, 92%, 93%, 94%, 95%, 96%, 97%, 98%, 99%, 100%
Vested ratio:   20%, 28%, 36%, 52%, 60%, 68%, 76%, 84%, 82%, 100%
In addition, in 2022 and 2023, if the group's operating target does not
reach 100% of the unacquired proportional shares (and those who meet the
individual performance conditions), it will not be withdrawn and cancelled
temporarily.
If the target value (inclusive) or above is reached in 2024. The annual
vested proportional shares and the aforementioned shares that have not yet
been vested will be issued together.
The personal performance is 100% if the performance appraisal level of the
most recent year at the end of the vested period is 3 (inclusive) or above,
and the vested ratio is 0% if the appraisal grade is below 2 (inclusive).
5.Measures to be taken when employees fail to meet the vesting conditions or
in the event of inheritance:
Where an executive fails to meet the vesting conditions, the Company will
reclaim the granted RSAs and cancel the same at no extra cost to the
Company; for exceptional events, including but not limited to inheritance,
the Company will take measures as set forth in the Employee Restricted
Stock Awards Rules.
6.Other issuance criteria:
As set forth in the Employee Restricted Stock Awards Rules.
7.Qualification criteria for employees:
(1)Only the Company's and affiliate Companys'full-time executives who are
employed as of the date of the granting of the RSAs and who meet certain
performance requirements are eligible for this incentive plan. Eligible
executives must also be those who (a) have a significant influence on the
Company's operational decisions or (b) are the Company's critical talents
for its future core technologies and strategy development.
(2)The number of shares granted to eligible executives will be determined
by Chairman and approved by the Remuneration Committee and the Board of
Directors by reference to the Company's business performance and the
employee's job grade, performance, and other factors as deemed appropriate.
8.The necessary reason of the current issuance of RSA:
To attract and retain the talents required by the company, to motivate
employees and to enhance employee co-ordination so as to jointly create
the interests of the company and shareholders.
9.Calculated expense amount:
The total expenses are preliminarily estimated at approximately NTD254,340
thousands based on the maximum of 3,000,000 common shares to be granted
as RSAs, the average closing price of NT$84.78 per share in January 2022,
and the calculation by the valuation model. The expenses are preliminarily
estimated at approximately NTD51,575 thousands, NTD126,746 thousands,
NTD56,803 thousands and NTD19,216 from 2022 to 2025 respectively, assuming
that the RSAs will be issued in September 2022.
10.Dilution of the Company's earnings per share (EPS):
The Company's EPS is preliminarily estimated at approximately NT$0.21,
NT$0.51, NT$0.23 and NT$0.08 from 2022 to 2025 (Calculated based on the
estimated annual number of outstanding shares). The potential dilution
of the Company's EPS is minimal; therefore, there is no material impact
on shareholders' interest.
11.Other matters affecting shareholder's equity:None.
12.Restrictions before employees meet the vesting conditions once the RSA
are received or subscribed for:
According to the trust agreement, after employees are allotted new shares,
they may not sell, mortgage, transfer, donate or pledge the new shares that
limit the rights of employees, or apply for the right to buy or dispose of
them in other ways without objection until the vested conditions are met.
Other related matters are as set forth in the Employee Restricted Stock
Awards Rules.
13.Other important terms and conditions (including stock trust custody,
etc.):Granted RSAs will be deposited in a stock trust custody account.
14.Any other matters that need to be specified:
If any revision or adjustment has to be made due to any instruction of
the competent authority or amendment to the laws and regulations, it is
proposed that the Annual Shareholders' Meeting authorize the Board of
Directors or the person authorized by the Board of Directors to handle
off the relevant matters regarding the granting of the RSAs.