Advanced Power Electronics : The Company’s Board of Directors resolved to issue employee restricted stock awards

Statement

1.Date of the board of directors resolution:2022/02/24
2.Expected issue price:
The Restricted Shares shall be issued at NT$ 0 per share, and grants will
be made free of charge.
3.Expected total amount (shares) of issuance:
The total number of Restricted Shares to be issued hereunder shall be
1,000,000 shares with a par value of NT$ 10 per share and the total amount
shall be NT$ 10,000,000. The Restricted Stock Awards (RSAs) will be granted
one or more times over a period of one year from the date of receipt of the
notice of effective registration of the competent authority.
4.Vesting conditions:
An employee's continuous employment with the Company through the vesting
dates; no breach by the employee of any terms of any agreement with the
Company to which the employee is subject, including, without limitation,
the employee's employment terms and conditions or any other
employment-related agreement, any non-competition or confidentiality
agreements; no violation by the employee of employee handbook; and, the
achievement by the employee of the employee's individual performance goals,
and the Company's achievement of operational objectives during the
applicable Performance Period. The maximum percentage of granted RSAs that
may be vested each year shall be as follows: one-year anniversary of the
grant: 30%;  two-year anniversary of the grant: 30%; and three-year
anniversary of the grant: 40%.
5.Measures to be taken when employees fail to meet the vesting conditions or
in the event of inheritance:
(1)All unvested RSAs will be forfeited and canceled by the Company without
   consideration in accordance with these Rules.
(2)Methods to Handle the Unvested RSAs:
A.Voluntary Separation, separation with a severance, or retirement:
  Any unvested RSAs will be forfeited on the effective date of separation
  due to a voluntary separation, separation with a severance, or retirement
  of such executives. The Company will reclaim the RSAs granted to them and
  cancel the same at no extra cost to the Company.
B.Disability or Death Caused by Work Injury or Death:
  a.In the event that an employee is physically disabled and cannot continue
    his/her employment because of work injury, all RSAs held by him/her
    shall be vested upon his/her termination.
  b.In the event that an employee dies because of work injury or not, all
    RSAs held by him/her shall be vested upon his/her death. The heir(s) of
    such employee may apply to the Company for inheriting part of such RSAs
    or the interest arising out of the disposition of such RSAs after
    completing the statutory and necessary procedures pursuant to the
    applicable laws andregulations and provide relevant certificates with
    the Company.
C.Leave Without Pay:
  All the rights and obligations in connection with the unvested RSAs will
  not be affected as a result of executives taking extended leave without
  pay. However, the actual number of shares that may be vested will not
  only be calculated according to the vesting conditions but also be
  prorated based on the number of  months of their service during the year
  prior to the applicable vesting@  day. If such employees are on leave
  without pay on any vesting day, it shall be deemed that they fail to meet
  the vesting conditions, and the Company will reclaim the RSAs granted to
  them and cancel the same at no extra cost to the Company.
6.Other issuance criteria:None.
7.Qualification criteria for employees:
A.Full-time employees of the Company are eligible participants of the RSAs.
B.The Chairman shall determine the employees who are to be granted the RSAs
  and the number of Restricted Shares to be granted after taking into
  consideration factors including but not limited to seniority, position,
  job performance and overall contribution or special achievements of the
  employees, and any other management-related factors, and then submit his
  determination to the Board for approval. However, the Compensation
  Committee must first give approval for an employee who is also a
  managerial officer or a director who is also an employee.
C.The accumulative number of shares an employee can subscribe for by
  exercising the employee stock options granted to him/her under Article
  56-1, paragraph 1 of the Regulations, in combination with the accumulative
  number of Restricted Shares granted to such employee, shall not exceed 0.3%
  of the total issued shares of the Company. And the above in combination
  with the accumulative number of shares such employee can subscribe for by
  exercising the stock options granted under Article 56, paragraph 1 of the
  Regulations,shall not exceed 1% of the total issued shares of the Company.
8.The necessary reason of the current issuance of RSA:
 To attract and retain talents, to motivate employees, and to foster the best
 interests of the Company and its shareholders with those of the Company's
 employees
9.Calculated expense amount:
 The total expenses are preliminarily estimated at approximately NT$ 105,000
 thousand based on the maximum of 1,000,000 common shares to be granted as
 RSAs, the closing price (the date before BOD meeting) of NT$105 per share on
 February 23, 2022. The expenses are preliminarily estimated at approximately
 NT$ 25,520 thousand, NT$48,125 thousand, NT$23,188 thousand and NT$8,167
 thousand from 2022 to 2025 respectively, assuming that the RSAs will be
 issued at the end of August 2022.
10.Dilution of the Company's earnings per share (EPS):
 Based on the Company's outstanding shares, the potential impact from above
 mentioned expenses to the Company's EPS is preliminarily estimated at
 approximately NT$0.31, NT$0.59, NT$0.29, and NT$0.10 from 2022 to 2025
 respectively.
 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:
A.Except for inheritance, employees are prohibited from and shall not sell,
  pledge, transfer, give to another person, create any encumbrance on, or in
  any other way dispose of any unvested RSAs.
B.Rights to attend the Company's shareholder's meeting, submit proposals,
  or speak and vote at the meeting attributed to ownership of stock with
  respect to any unvested RSAs will be the same as those of the common shares
  of the Company but shall be subject to and performed in accordance with the
  trust agreement.
C.Rights to dividends, interest, capital reserve, and share subscription
  warrants attributed to ownership of stock with respect to any unvested RSAs
  will be the same as those of the common shares of the Company and shall be
  subject to and performed in accordance with the trust agreement.
D.If any Shares vest on a date that falls during a period in which the
  Company is prohibited from altering the Company's shareholders' roster,
  including but not limited to, for reasons pertaining to the Company's
  issuance of bonus or cash dividends, or conducting a rights offering,
  convening shareholder's meeting pursuant to paragraph 3 of Article 165 of
  the Company Act, the release of the restrictions on such RSAs shall be in
  accordance with the trust agreement and applicable laws and regulations.
13.Other important terms and conditions (including stock trust custody,
etc.):
A.All Shares under each RSAs shall be deposited in a trust/custody governed
  by the trust agreement immediately after the granting of the RSAs and
  execution of Company-required documentation. The employee shall have no
  right to request and shall not request that the trustee(s) release unvested
  RSAs held in the trust account for any reason or in any method.
B.During the period when the granted RSAs are deposited in a trust/custody
  account, each employee must enter into an agreement authorizing the Company
  to, among others, negotiate, execute, modify, extend, rescind, and
  terminate the trust/custody agreement with the trustee/custodian, and give
  instructions deliver, use, and dispose of any of the properties under the
  trust/custody, to on their behalf, with full power and authority.
C.Signing of Contracts and Confidentiality
  a.Those employees who have been granted the RSAs shall sign the "Agreement
    of Restricted Stock Awards" and complete all the trust/custody
    management process upon receipt of the notification from the Company.
    Any employees who do not complete such signing of relevant documents will
    be considered to forfeit the RSAs.
  b.Those employees who receive the RSAs and the related rights through these
    Rules shall comply with these Rules and the "Agreement of Restricted
    Stock Awards". In the event of any breach thereof, they will be deemed
    to fail to fulfill the vesting conditions. They shall comply with the
    confidentiality clauses as well. Except as required by laws and
    regulations or by any competent authority, they are not allowed to
    inquire any other about or disclose to any other any information about
    the number of the RSAs granted to them and any relevant matters, nor may
    they inform any other of any relevant content of these Rules or any of
    their rights or interest under these Rules. In the event of any breach
    thereof, the Company is entitled to reclaim their unvested RSAs and
    cancel the same at no extra cost to the Company.
D.Before these Rules may be implemented, it shall be approved by the majority
  votes in a meeting of the Board of Directors in which two-thirds or more
  directors are present and shall become effective after effective
  registration with the competent authority. If any amendment hereto is
  necessary due to any change of any laws or regulations or any requirement
  of the competent authority, Chairman is authorized to make any necessary
  amendment hereto and submit the revised Rules to the Board of Directors
  for acknowledgement, before the RSAs may be granted.
E.Any other matters not set forth in these Rules shall be dealt with in
  accordance with the applicable laws and regulations.
14.Any other matters that need to be specified:None.

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