HTC Investors

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Announcement of the Board of Directors resolution on the issuance of New Restricted Employee Shares

1.Resolution date of the board of directors: 2015/04/15
2.Expected issue price: The issue price is NT$ 0.
3.Expected total amounts(shares) of issuance: A total of 7,500,000 common
shares, each share having a par value of NT$ 10, for a total amount of
NT$ 75,000,000.
4.Determination of the terms and conditions:
(1).Issue price: The current issue is gratuitous. The issue price is NT$ 0.
(2).Vesting conditions:
  Category A: executive level managers of HTC who achieve below-mentioned
  years of continuous employment and meet company’s financial performance
  evaluation index, shall be entitled to vesting of shares in ratio
  described below. Board of Directors shall be authorized to determine
  the applicable the index of Company’s financial performance.
   (I)  An employee who remains employed at HTC after 1 year has elapsed
       from the time of the award of the new restricted employee shares
       will be eligible for vesting of an installment of 25% of the
       shares.
  (II)  An employee who remains employed at HTC after 2 years have elapsed
       from the time of the award of the new shall be entitled to vesting
       of shares in ratio described below restricted employee shares will
       be eligible for vesting of an installment of 25% of the shares.
(III)  An employee who remains employed at HTC after 3 year has elapsed
       from the time of the award of the new restricted employee shares
       will be eligible for vesting of an installment of 25% of the
       shares.
  (IV)  An employee who remains employed at HTC after 4 year has elapsed
       from the time of the award of the new restricted employee shares
       will be eligible for vesting of an installment of 25% of the
       shares.
  Category B: full-time regular employees of HTC who achieve
  below-mentioned years of continuous employment and required individual
  performance rating shall be entitled to vesting of shares in ratio
  described below.
   (I)  An employee who remains employed at HTC after 1 year has elapsed
       from the time of the award of the new restricted employee shares,
       and who in the then-current fiscal year has a performance rating
       equal to or higher than “Satisfactory”, will be eligible for
       vesting of an installment of 30% of the shares.
  (II)  An employee who remains employed at HTC after 2 years have elapsed
       from the time of the award of the new restricted employee shares,
       and who in the then-current fiscal year has a performance rating
       equal to or higher than “Satisfactory”, will be eligible for
       vesting of an installment of 30% of the shares.
(III)  An employee who remains employed at HTC after 3 year has elapsed
       from the time of the award of the new restricted employee shares,
       and who in the then-current fiscal year has a performance rating
       equal to or higher than “Satisfactory”, will be eligible for
       vesting of an installment of 40% of the shares.
(3). Handling of an employee's failure to meet the vesting conditions:
     HTC will withdraw issuance without compensation and cancel the
     full number of the shares.
5.Qualification requirements for employees:
(1). Restricted to full-time regular employees of HTC who are already
     employed on the date that the new restricted employee shares are
     awarded.
(2). The employees who will be awarded new restricted employee shares
     and the numbers of such shares awarded will be decided by the
     chairperson and then approved by the board of directors, with
     consideration given to factors such as seniority, job rank, work
     performance, overall contribution, special merit, or other
     administrative conditions requiring consideration. However, for
     employees who are officers or hold management positions, the award
     of such shares is subject to approval by the Compensation Committee.
(3). The sum of the cumulative number of shares subscribable under any
     new restricted employee shares issued by HTC to a single employee
     shall be in accordance with the relevant restrictions in the
     Offering Regulations.
6.The reason why it is necessary to issue restricted stocks for employees:
To attract and retain professional talents needed by HTC, and to provide
incentive to employees and enhance employee commitment, so as to jointly
create benefit to the company and its shareholders.
7.Calculated expense amount: The estimated total possible expenses for
the issuance of the restricted employee shares is approximately
NT$ 1,001,250,000 calculated based on the closing share price on
April 10, 2015 (one trading day prior to the date of notice for
Board meeting) being NT$ 133.5 per share.
8.Dilution of EPS and other factors affecting shareholder’s equity:
The number of current outstanding shares is 827,988,925 shares, and
the estimated restricted employee shares to be issued constitute 0.91%
of the current outstanding shares. Factoring the vesting period and
the current outstanding shares, it is estimated that the expenses
generated (after tax) can dilute the earnings per share by approximately
NT$ 0.97 per share. Therefore, these expenses should not have a critical
impact on shareholder’s equity.
9.Restricted rights before employees meet the vesting conditions:
  (I)   During the vesting period, an employee may not sell, pledge,
       transfer, give to another person, create any encumbrance on,
       or otherwise dispose of, new restricted employee shares.
(II)   During the vesting period, the new restricted employee shares
       can still participate in stock and cash dividends and
       subscription to cash rights issues and such cash dividends
       and subscription is not required to be deposited in trust
       and will not be subject to restrictions.
10.Other important stipulations: After issuance, the new restricted
employee shares must immediately be deposited in trust.
11.Any other matters that need to be specified:
Unless otherwise provided in the applicable governmental regulations,
the Board of Directors is authorized to amend or execute any matter
which is not specifically prescribed in this proposal after it is
approved.