HTC Investors

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HTC Board of Directors Resolved the Issuance and Subscription of Employee Stock Options
  
1.Date of the board of directors resolution:2018/05/05
2.Issue period:
 The options will be issued within one year from the date of receipt of
 notice of effective registration from the competent authority. The
 issue may be done in a single or multiple installments, as actually
 needed. The chairman is authorized to set the actual issue date.
3.Conditions of eligibility for subscription rights:
 (1) Eligibility is limited to those who are full-time formal
     employees in the organizations of HTC and its domestic and
     overseas subsidiaries and branches on the share subscription
     record date ("subsidiary" means an invested company in which
     HTC directly or indirectly holds more than 50 percent of the
     voting rights, and over which it has controlling power, in
     compliance with Securities and Futures Bureau Letter No.
     Financial-Supervisory-Securities-I- 0960073134 of 26 December 2007.
 (2) The determination of employees who are actually eligible for stock
     options and the numbers of stock options for which they are
     eligible will be decided by the chairman, subject to approval
     by the board of directors, with consideration to factors such
     as work performance, overall contribution, special merit, or
     job level.
 (3) The limit on the cumulative quantity of stock options that
     HTC allocates to any single employee will be determined in
     accordance with the relevant provisions of Articles 60-9 of
     the Regulations Governing the Offering and Issuance of Securities
     by Securities Issuers (the "Offering Regulations").
4.Number of total issued units of the employee stock option
  certificates:20,000 units
5.Number of shares each unit represents:1,000 shares
6.Total number of new shares to be issued due to exercise of stock option or
  the number of shares for share buy-back as required by Article 28-2 of the
  Securities and Exchange Act:
 The total number of new shares of common stock that must be issued
 for the purpose of exercise of the options is 20,000,000 shares.
7.Exercise price:
 The share purchase price shall be the closing price of HTC common
 stock on the date of issuance of the employee stock options.
8.Exercise period:
 (1) After 2 full years have elapsed from the time the stock option
     holder is allocated the employee stock options, the option
     holder may exercise the share purchase rights according to
     the schedule set out below. The duration of the stock options
     is 10 years. The stock options and rights and interests therein
     may not be transferred, pledged, given to others, or disposed
     in any other manner, except by succession. After the expiration
     of the duration of the employee stock options, any unexercised
     options shall be deemed forfeited, and the stock option holder
     may not make any further claim to share purchase rights.
     Percentage of share purchase rights that may be exercised
     according to the time elapsed since the allocation of the stock
     options (cumulative):
     Two full years have elapsed: 60%
     Three full years have elapsed: 100%

 (2) If, after the allocation of employee stock options by the
     company, the stock option holder breaches any provision of
     the HTC work rules or employee handbook and disciplinary
     measures of a major demerit or higher penalty are determined
     upon, HTC shall be entitled to withdraw and cancel any stock
     options that are not yet exercisable and any stock options
     that are already exercisable but have not yet been exercised.
9.The class of shares with which to exercise stock option:
 HTC common stock.
10.The handling process in case of inheritance/employee
  resignation:
 (1) Voluntary departure from employment
     For stock options that are already exercisable under the provisions
     of paragraph (2) of this Article, the share purchase rights may
     be exercised within 3 months from the date of departure (but not
     beyond the duration of the stock options); if this happens to
     fall within a period during which, as specified under these Rules,
     exercise of the stock options is prohibited, the exercise period
     shall, from the date the options may be exercised, be extended
     by the number of days that they could not be exercised. If the
     share purchase rights are not exercised within the aforesaid period,
     the rights shall be deemed forfeited. For stock options that have
     not yet become exercisable, the share purchase rights shall be
     deemed forfeited from the date of departure from employment, and
     HTC shall be entitled to withdraw and cancel the stock options
     already allocated to the stock option holder.
 (2) Dismissal from employment
     If a stock option holder breaches any provision of the HTC work
     rules or employee handbook and a disposition of dismissal is
     determined upon, the share purchase rights under any stock
     options already allocated to the employee, shall, from the
     date of dismissal, be deemed forfeited.
 (3) Retirement
     For stock options that are already exercisable under the
     provisions of paragraph (2) of this Article, the share purchase
     rights may be exercised during the effective duration of the
     stock options. However, if there is any breach of non-competition
     restrictions, HTC shall be entitled to withdraw and cancel the
     stock options already exercisable. For stock options that
     have not yet become exercisable, the share purchase rights
     shall be deemed forfeited from the date of retirement.
 (4) Death
     For stock options that have already been allocated, upon
     the death of the stock option holder, the heir may exercise
     all of the share purchase rights. The heir shall remain
     subject to the restriction that he or she may exercise the
     stock options only after two full years have elapsed from
     the time of allocation, but apart from that restriction, the
     heir shall be free from the restrictions in paragraph (2) of
     this article regarding the schedule imposed on the percentages
     of exercisable stock rights. The share purchase rights may be
     exercised only after 2 full years have elapsed from the date
     of death or the date of allocation of the stock options
     (whichever date is later). Anyone entitled by statutory
     succession to share purchase rights under the options shall,
     after the occurrence of the fact, complete the statutorily
     required procedures and provide relevant documentary evidence
     in accordance with the laws and regulations governing succession
     of the stock option holder's home country and the provisions of
     the Regulations Governing the Administration of Shareholder
     Services of Public Companies concerning transfer by inheritance.
     Only after these procedures are complete may an application be
     submitted for the exercise of the purchase rights to which the
     heir shall succeed. However, no application and purchase procedures
     may be done beyond the effective duration of the stock options.
 (5) Sufferers of disability due to an occupational accident
     In the event of inability to continue in employment as a result
     of a physical disability due to an occupational accident, for
     stock options that are already exercisable under the provisions
     of paragraph (2) of this Article, the share purchase rights may
     be exercised during the effective duration of the stock options.
     For stock options that have not yet become exercisable, the
     restrictions in paragraph (2) of this article regarding the
     schedule imposed on the percentages of exercisable stock
     rights shall continue to apply, and the rights shall be exercisable
     only during the effective duration of the stock options.
 (6) Leave without pay
     In the case of any option holder who has received approval from
     HTC to take leave without pay, when calculating whether that
     option holder has satisfied the time period specified in paragraph (2),
     subparagraph 1 of this Article, (i.e. whether 2 full years or
     3 full years have elapsed since the date of allocation of the
     employee stock options), the period of the leave without pay may
     not be counted. The period specified in paragraph (2),
     subparagraph 1 of this Article shall be extended by the period of
     the leave without pay. Additionally, the effective duration of
     the options (10 years from the date of issue by HTC) shall not be
     extended on grounds of leave without pay. If the stock option holder,
     as a result of taking leave without pay, fails or is unable to
     exercise the option rights within the effective duration of the
     options, the option holder is deemed to have forfeited the option
     rights.
 (7) Severance
     For stock options that are already exercisable under the provisions
     of paragraph (2) of this Article, the share purchase rights may
     be exercised within 3 months from the effective date of severance
     (but not beyond the duration of the stock options); if this happens
     to fall within a period during which, as specified under these
     Rules, exercise of the stock options is prohibited, the exercise
     period shall, from the date the options may be exercised, be extended
     by the number of days that they could not be exercised. If the share
     purchase rights are not exercised within the aforesaid period, the
     rights shall be deemed forfeited. For stock options that have not
     yet become exercisable, the share purchase rights shall be deemed
     forfeited from the effective date of severance.
 (8) Job position transfer to an affiliate
     If due to HTC's operational needs, HTC decides that it is necessary
     to transfer a holder of HTC stock options to a position at an HTC
     affiliate, the transfer shall have no effect on the rights and
     obligations in connection with the stock options already allocated.
 (9) When a stock option holder leaves employment for a reason other
     than those listed above or when some adjustment must be made
     pursuant to laws or regulations in the course of actual
     execution of the measures above, the chairman is authorized
     to adopt or adjust relevant measures on an ad hoc basis
     according to the actual circumstances.
(10) If the stock option holder or heir is unable to exercise the
     option rights within the time period set out above, the holder
     or heir is deemed to have forfeited the share purchase rights.
11.Other terms and conditions for exercising stock option:
  Method for handling of stock options of which the share purchase rights
  have been forfeited.
  When the share purchase rights of a stock option are forfeited, HTC
  shall cancel the option and shall not reissue it.
12.Method for performance of contract:
  The method for the performance of the options is as follows:
  HTC will issue new shares in dematerialized form by book-entry
  transfer; furthermore, it will first issue the stock and then
  subsequently carry out registration of the change to its amount
  of registered capital, pursuant to the proviso of Article 161,
  paragraph 1 of the Company Act.
13.Adjustment of exercise price:
  (1) If, after the stock options are issued, except for the Company
      issuing new common shares due to the exercise of conversion
      rights or subscription rights of equity-linked instruments,
      or employee bonuses, after issuing employee stock options
      or restricted employee shares, the subscription price per
      share will be adjusted when then number of the Company's
      outstanding common shares is changed under certain situations,
      (including any private placement, cash capital increase,
      capitalization of earnings, capitalization of reserves,
      stock split, issue of new shares in connection with a merger,
      consolidation, or transfer of shares from another company,
      or issue of overseas depositary receipts for a cash capital
      increase, or so forth), the purchase price may be adjusted
      by the formula set out below (calculated to the 10th of a
      New Taiwan Dollar, with sums below that rounded off).
      However, if the adjustment of the purchase price might
      have an adverse effect on the tax burden of the stock
      option holder, HTC does not bear any liability to the stock
      option holder in connection with the decision to adjust
      the purchase price.
      Adjusted purchase price = purchase price before adjustment ×
      ﹝number of shares already issued + (amount paid per share ×
      number of new shares issued) / market price per share ﹞/
      (number of shares already issued + number of new shares issued)
      1. "Number of shares already issued" means the total number of
         common shares already issued, minus treasury shares that
         HTC has bought back but has not yet canceled or transferred.
      2. In the case of bonus shares or a stock split, the "amount paid
         per share" is zero.
      3. In the event that the adjusted purchase price is higher than
         the purchase price before adjustment, the adjustment will not
         be made.
      4. When new shares are issued in connection with a merger,
         consolidation, or transfer of shares from another company,
         the "amount paid per share" for the new capital increase
         shares shall be the average closing price of HTC common
         shares over the sequential 30 business days commencing
         from the day that is the 45 business day prior to the
         record date of such merger.
      5. The determination of the market price per share shall be
         done by calculating the simple arithmetic mean of the
         closing price of the common stock for either the 1, 3,
         or 5 business days prior to the ex-rights record date,
         the price determination record date, or the stock split
         record date.
  (2) If, after the employees stock options are issued, if the
      ratio of the cash dividend per share of the Company's
      common shares to the current share price of the Company
      is more than 1.5%, the purchase price will be adjusted
      by the formula set out below (calculated to the 10th of
      a New Taiwan Dollar, with sums below that rounded off).
      Adjusted purchase price per share = purchase price per
      share before adjustment × [1-(Cash dividend per share /
      Current share price)]
      The above-mentioned current share price shall be the
      simple arithmetic average closing prices of the Company's
      common shares over the period of one, three or five
      business day(s) prior to the date of the Company's making
      public announcements of a record date for determination of
      shareholders entitled to receive annual dividends distributions.
  (3) If, after the stock options are issued, there is any capital
      reduction resulting in a decrease in the shares of common stock,
      from a cause other than cancellation of treasury shares, the
      purchase price will be adjusted by the formula set out below
      (calculated to the 10th of a New Taiwan Dollar, with sums
      below that rounded off).
      When capital reduction for loss compensation:
      Exercise price after adjustment = exercise price before
      adjustment × (Number of shares already issued/shares
      issued after capital reduction)

      When cash capital reduction:
      Exercise price after adjustment = (exercise price before
      adjustment -the amount of money returned per share) ×
      (Number of shares already issued/shares issued after
      capital reduction)
14.Procedures for exercising option:
  (1) Except during a book closure period as provided by law or regulation
      and except as provided in paragraph (4) of this Article, the stock
      option holder may exercise share purchase rights in accordance with
      these Rules, and may complete a share purchase request and submit
      its application to HTC.
  (2) After processing the purchase request, HTC will notify the stock
      option holder to pay the share price at a designated bank within
      the time limit. If the price is not paid within the time limit,
      the holder is deemed to have voluntarily forfeited the share
      purchase rights in that request, and the portion requested
      but not paid for shall be deemed not to have been purchased,
      and the stock option holder will need to submit a new request
      for purchase. Furthermore, once a stock option holder has made
      a payment for a share purchase, the payment may not be canceled.
  (3) Once HTC has verified that the share price has been fully received,
      it will instruct HTC's shareholder services agent to enter the number
      of shares purchased by the employee and the employee's name into
      HTC's shareholder register, and to transfer within 5 business days,
      by book-entry through the central depository, the shares of new
      common stock issued by HTC. Those shares of common stock shall be
      listed for trading from the date that they are delivered to the
      stock option holder.
  (4) A stock option holder may, within the scope and time limits set
      out in Article 6, paragraph (2) of these Rules, complete a share
      purchase request and submit the application to HTC's shareholder
      services agent, except during the following periods, during which
      the option holder is prohibited from exercising option rights:
      1. The statutory book closure period before the annual shareholder
         meeting of the given fiscal year.
      2. When HTC arranges a book closure date with the Taiwan Stock
         Exchange for an issue of bonus shares, cash dividends, or a
         cash capital increase rights issue: the period from 15
         business days before the book closure date until the record
         date of the rights distribution.
      3. The period from the record date of a capital reduction until
         the day before the commencement of trading of the replacement
         shares issued in connection with the capital reduction.
  (5) Within 15 days after the end of each quarter, HTC shall publicly
      announce the number of shares delivered for the exercise of
      employee stock options in the preceding quarter. And at least
      once each quarter, it shall apply to the competent authority
      for company registration to make an amendment to its registered
      capital to reflect the shares that have been purchased under the
      options.
  (6) If a stock option holder referred to in paragraphs (1) to (4)
      hereinabove is an employee who has a household registration in
      the mainland area, the exercise of option rights shall be
      performed on the option holder's behalf by the option holder's
      agent or representative in the Taiwan area.
15.Rights and obligations after exercising options:
  (1) The rights and obligations pertaining to common stock shares
      delivered by HTC under these Rules are identical to those of other
      HTC common stock. The stock purchased by stock option holders under
      these Rules, and tax burdens arising in connection with any
      transaction thereof, shall without exception be subject to and
      handled in compliance with the then-current tax regulations adopted
      by ROC tax authorities and the tax regulations of the places of
      registration of the overseas subsidiaries where the options are
      allocated and the countries where the employees are located.
  (2) If an employee who has a household registration in the mainland
      area holds common shares delivered by HTC under these Rules, the
      voting rights of those shares, unless otherwise provided by law or
      regulation, may not be exercised in any matter that would involve
      substantial control or influence over the operations or management
      of the company, and the rights may be exercised only through its
      Taiwan agent or representative who attends a shareholder meeting
      on its behalf.
16.The record date for share conversion, if conversion, exchange, or
   subscription rights are attached:None
17.Possible dilution of equity, if conversion, exchange, or subscription
   rights are attached:None
18.Other important stipulations:
  (1) Confidentiality: after a stock option holder has been allocated stock
      options, the option holder shall comply with confidentiality
      requirements, and except as required by law or regulation or by
      demand of a competent authority, may not disclose any information
      related to the content or quantity of the stock options allocated.
      Any violation will be handled pursuant to Article 6, paragraph (2),
      subparagraph 2 of these Rules.
  (2) These Rules shall become effective after they have been passed by a
      majority of the directors present at a board of directors meeting
      attended by at least two-thirds of the directors, and have been
      reported to and approved by the competent authority. The same
      shall apply in the event of any amendment to these Rules before
      they are actually issued. Any amendments request by competent
      authority, the Chairman is authorized to amend the Rules and
      become effective upon the Board of Directors' approval.
  (3) The limit on the quantity of stock options issued by HTC
      shall be determined in accordance with Article 60-8 and other
      applicable provisions of the Offering Regulations.
  (4) Any matter on which these Rules are silent shall be handled in
      accordance with applicable laws and regulations.
19.Any other matters that need to be specified:None1.Date of