| (I) |
Expected issue price: The current issue is gratuitous. The issue price is NT$0 per share.
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| (II) |
The type of share issued and granted to employees will be the Company’s newly issued common shares that entail the same rights and obligations as those of any other outstanding common share, except for the limited rights prior to fulfillment
of the vesting conditions in accordance with Article VI.
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| 1. |
An employee, after having been granted a restricted stock award, shall fulfill the following vesting conditions
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| 1-1. |
Remain on the job on each vesting date;
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| 1-2. |
During the performance period, have no punishment record by the company in which he/she is employed in relation to violation of the employment contract, employee code of conduct, trust agreement, corporate governance best practice
principles, ethical corporate management best practice principles, work handbook or non-compete and non-disclosure policies of the company in which he/she is employed or any agreement with the company in which he/she is employed; however, if
the employee has such punishment records, the Company may determine the proportion of vesting shares to be granted based on the severity of the violation; and
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| 1-3. |
Have fulfilled both the personal performance indicators and operational goals set by the Company, the proportions of the vesting shares to be granted for such employee on the vesting date of each year will be as follows:
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| 2. |
Personal performance indicator(s): The performance rated “A” or higher for the most recent fiscal year prior to the end of each vesting period.
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| 3. |
The operational goals of the Company are based on the earnings per share (EPS), total shareholder return (Total Shareholder Return, TSR) and ESG as performance indicators. Listed below are the performance targets and weighting for the
indicators. Targets are set for each indicator. Indicators that have achieved the target value, the number of vested shares in the year are calculated according to the corresponding weighting. Otherwise, the corresponding weighting is 0%. The
performance period refers to the fiscal year of the most recent annual financial statements audited by a certified public accountant before the relevant vesting date. Performance indicators
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are based on the consolidated financial statements audited by a certified public accountant corresponding to the period required by the indicators.
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Indicator
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Weighting
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Target
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Earnings Per Share (EPS)
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30%
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Higher than the Company’s average of the previous three years (Note 1)
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Total Shareholder Return (TSR) (Note 2)
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30%
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The Company’s TSR compared to the TWSESCI Index TSR:
• Greater than or
equal to the TWSESCI Index TSR: 100%
• Less than
the TWSESCI Index TSR: 0%
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ESG
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40%
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100% if both of the following goals are met; otherwise, 0%. The conditions are as follows:
• Greenhouse gas (GHG) emissions
(Note 3)
On the job for 2 years after granted: Reduce 14% or more in year 2025 ；
On the job for 3 years after granted: Reduce 16% or more in year 2026；
On the job for 4 years after granted: Reduce 18% or more in year 2027.
• Female directors reach one-third or more of the Board. (Note 4)
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| Note 1. |
Comparing the performance period with the average of the preceding three years. The average of the preceding three years is calculated by taking the EPS of each year to infinite decimal places and then rounding the resulting average to
four decimal places.
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| Note 2. |
The TSR is calculated based on the share prices of the Company (Ticker: 2303 TT) and the Taiwan Semiconductor Index (Ticker: TWSESCI Index) during the performance period, with the initial share price defined as the average stock price of the
previous 30 trading days up to and including
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the first day of the performance period, and the ending share price defined as the average stock price of the previous 30 trading days up to and including the last day of the performance period, plus the dividends (if any). Stock price and
dividend information are based on the Taiwan Stock Exchange and Bloomberg Financial Database.
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| Note 3. |
GHG emissions take year 2020 as the base year, with the calculation scopes defined under GHG Protocol, including direct emissions (Scope 1) and indirect emissions from purchased or acquired energy (Scope 2) defined by GHG Protocol, and the reduction performance is calculated under a full-capacity production scenario.
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| Note 4. |
Based on the list of board members on each vesting date.
|
| 1. |
After the company's operational goals’ review, if it is confirmed that the targets are not achieved, the shares of restricted stock awards granted to him/her but unfulfilled vesting conditions will be recalled and canceled by the Company
without any compensation to such employee.
|
| 2. |
Where an employee who has been granted the shares of restricted stock awards is not on the job on the vesting date, has committed an act of gross negligence by violating any of the agreements under Article III, Paragraph (III), Sub-paragraph
1, or has failed to fulfill both the personal performance indicators and operational goals set by the Company, the shares of restricted stock awards granted to him/her but unfulfilled vesting conditions will be recalled and canceled by the
Company without any compensation to such employee.
|
| 3. |
During the vesting period, if an employee has voluntarily resigned or been dismissed or laid off, his/her unvested shares will be recalled and canceled by the Company without any compensation to such employee.
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| (V) |
Where any of the following circumstances occurs, the unvested shares of restricted stock awards shall be subject to the following:
|
| 1. |
Leave without pay:
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| 2. |
Transfer to an affiliated company:
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| 3. |
Retirement:
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| 4. |
Inability to continue the job due to physical disability caused by an occupational accident:
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| 5. |
Ordinary death or death caused by an occupational accident:
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| 6. |
Where the Company has undergone a reorganization in accordance with the Business Mergers and Acquisitions Act, the vesting conditions for those unvested shares of restricted stock awards deemed as completely fulfilled or not and the
vesting percentage shall be subject to the determination of the Board of Directors.
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| 7. |
In the event of any special circumstance such as where an employee has made an outstanding contribution to the company in which he/she is employed, at the termination of employment, the unvested shares of restricted stock awards deemed as
completely fulfilled or not and the vesting percentage shall be subject to the determination of the Chairman based on the actual circumstances of different cases. In case that such employee is a director or an executive, the prior approval from
the Remuneration Committee is required, and in case that such employee is not a director or executive, the prior approval from the Audit Committee is required.
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| (I) |
An eligible employee shall be any full-time employee of the Company or any of its affiliates as defined under Article 369-2 and 369-3 of the Company Act who remains on the job on the vesting date. Such employee shall reach a certain level of
performance and fulfill at least one of the following conditions:
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| (II) |
The number of grantable shares of restricted stock awards will be determined based on seniority, job level, position, job performance, overall contribution, special achievement, or other conditions required on the basis for management, and
the release criteria will be adopted accordingly. The number of shares granted shall be approved by the Chairman and submitted to the Board of Directors for resolution. Any employees who are directors or executives shall be subject to the
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approval of the Remuneration Committee, and any employees who are not directors or executives shall be subject to the approval of the Audit Committee.
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| (III) |
Any person who holds 10% or more of the outstanding common shares of the Company is not eligible for a grant hereunder. Any member of the Remuneration Committee or any member of the Board of Directors who is not an employee is not eligible
for a grant hereunder as well.
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| (IV) |
The sum of the cumulated number of shares of restricted stock awards obtained by a single employee, in combination with the cumulated number of shares subscribable under the employee stock options granted by the Company to such employee
pursuant to Article 56-1, Paragraph 1 of the Offering and Issuance Regulations shall not exceed 0.3% of the total outstanding shares of the Company. The total of the aforesaid sum plus the cumulated number of shares subscribable under the
employee stock options granted by the Company to such employee pursuant to Article 56, Paragraph 1 of the Offering and Issuance Regulations shall not exceed 1% of the total outstanding shares of the Company. However, subject to special approval
from the central competent authority of the relevant industry, such ceiling for a single employee could be exempted. Where the competent authority has updated its relevant regulations, the updated version of laws and regulations of the
competent authority shall apply.
|
| (I) |
Before any employee who has been granted the shares of restricted stock awards fulfills the vesting conditions, except for the case of inheritance, the shares of restricted stock awards shall not be sold, pledged, transferred, gifted to
others, created any encumbrance, or otherwise disposed of.
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| (II) |
Before any employee who has been granted the shares of restricted stock awards fulfills the vesting conditions, his/her rights to attendance, proposal, statement, voting and election at the Shareholders’ Meeting shall be the same as those of
the outstanding common shares of the
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Company, and shall be exercised by an entrusted institution according to the custodian agreement.
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| (III) |
Where any employee has been granted the shares of restricted stock awards pursuant to the Plan, his/her other rights prior to fulfillment of the vesting conditions include, but are not limited to, the right to distribution of cash dividends,
stock dividends, legal reserves and capital reserves, and the preemptive right for new shares of capital increase by cash, shall be the same as those of the outstanding common shares of the Company, and shall be exercised according to the
custodian agreement.
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| (IV) |
During the period from the book closure date for stock dividends granted by the Company, the book closure date for cash dividends, the book closure date for subscription of new shares from a cash capital increase, the book closure period of
the Shareholders’ Meeting as specified by Article 165, Paragraph 3 of the Company Act or any other statutory book closure date occurring based on the fact until the record date for distribution of rights, the time and process for lifting the
restrictions on the vested shares of any employee who has fulfilled the vesting conditions shall be subject to the custodian agreement or the applicable laws and regulations.
|
| (I) |
The shares of restricted stock awards shall be deposited in a security trust account after the issuance. Prior to fulfillment of the vesting conditions, an employee shall not request the trustee to return the shares of restricted stock
awards for any reason or in any way.
|
| (II) |
During the period when the shares of restricted stock awards are deposited in the security trust account, the Company or the person designated by it shall be fully authorized to act on behalf of the employees to deal with the following,
including but not limited to the negotiation, execution, revision, extension, rescission or termination of the custodian agreement, and instructions on the delivery, use, and disposition of the property thereunder with the custodian.
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| Article VIII |
Execution and Confidentiality
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| (I) |
Any employee who has been granted the shares of restricted stock awards may be deemed to have acquired such shares only after he/she has signed the “Agreement to Receive Restricted Stock Awards” and completed the processes relevant to the
custodial trust pursuant to a notice from the responsible department. Where the employee has failed to sign the relevant documents as required, he/she will be deemed to have renounced his/her shares of restricted stock awards.
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| (II) |
All employees and owners of the shares of restricted stock awards and derivative rights acquired in accordance with the Plan shall comply with the provisions of the Plan and the “Agreement to Receive Restricted Stock Awards”, and failure to
do so will be deemed as non-fulfillment of the vesting conditions. They shall also comply with the UMC Group’s pay secrecy requirements and may not inquire with others about or disclose the details and number of the restricted stock awards
granted or inform others of the details and personal rights relevant to the Plan. In the event of any violation of the aforesaid requirements, the Company may recall and cancel the unvested shares of restricted stock awards without any
compensation to such employees.
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| (I) |
The Plan shall be approved by the resolution of majority of the directors at a meeting of the Board of Directors attended by at least two-thirds of all directors, and shall be submitted to the Shareholders’ Meeting for approval and
implemented after its registration with the competent authority has become effective. Any amendments made to the Plan prior to the actual issuance shall follow the same procedure. If subsequent amendment to the Plan is required due to a change
of laws or pursuant to a review by the competent authority, the Chairman shall
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be authorized to amend the Plan. Issuance of shares may commence only after such amendment has been submitted to the Board of Directors for ratification.
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| (II) |
Except as otherwise specified by law, for any matter not provided for in the Plan, the Board of Directors or any person authorized by it shall be fully authorized to revise or implement the matter in accordance with the applicable laws and
regulations.
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