Subject : The board of directors resolution on the issuance of employees stock options plan To which item it meets article 2 paragraph 11 Date of the occurrence of event : 2012/03/26 Content: 1.Date of the board of directors resolution : 2012/03/26 2. Issuance period : The options maybe issued a single time or incrementally within one year from te effective date after the approval by the relevant authorities. The chairman is authorized to determine the actual date of issuance. 3. Eligibility of subscription rights: (1) According to the Financial supervisory commission of the Legislative Yuan dated 2007 Dec 26 th,approved by Securities and Futures Bureau with certificate number0960073134, all the full time employees(here after the employee granted with stock options rights shall be referred to as incumbent) of either the Company or any of its domestic or foreign subsidiaries are eligible. (2)The record date of subscription will be determined by the chairman. The number of options granted to each employee shall be reviewed and approved by the Chairman and then obtain approval of the board members to finalize. The chairman and board members will consider factors like job grade, performance, contribution, special achievements, years of employment and other related management criteria to determine the eligibility and number of stock options granted (3) The company reserves the rights to cancel all or part of the unexercised stock options of the employees upon any violation of labor contract, company rules and regulations of different degree. (4) The number of options granted to a single employee shall not exceed ten percent of the total number of options granted. The total number of options to be exercised by any employee within each fiscal year shall not exceed one percent of the year end total outstanding common shares of the company. 4. Total number of employee stock option certificates to be issued : 8,000 units 5. Number of shares of each unit represent: 1,000 6. The total number of new shares to be issued due to exercising of stock option, or the total number of buy back shares required by Article 28-2 of the Securities and Exchange Act : 8,000,000 shares 7. Terms and conditions for stock option (including price exercise, exercise period, class of shares, handling process in case of employee resignation or inheritance issue etc) (1) Exercise Price : The exercise price shall be based on the closing price of the common stock on date of issuance. (2) Effective period 1. Incumbent may exercise his/her stock options accordingly to the vesting policy schedule listed below when options mature after 2 years: The stock option shall remain valid for six years (hereinafter Effective Period ) and is non-transferable, and shall not be mortgaged, give and process to any other person other than to incumbent s successors. Upon maturation of the effective period, incumbent automatically surrender his/her rights to those options that were not exercised and shall not assert any rights to exercise such options. Incumbents shall exercise their granted options in accordance with the
vesting policy schedule listed below on an accumulative basis: 2 years 50% 3 years 75% 4 years 100% 2. The company reserves the rights to cancel or void any of the Employees unvested stock option upon his/her violation of labor laws, company rules and regulations or any restrictions stated in contract with the company etc. (3) Classes of shares : the company s common shares (4) When incumbent terminates his/her employment with the company for a cause, incumbent shall exercise his/her stock options rights in accordance to the followings: 1. Resignation : Incumbent shall exercise his/her stock options within 30 days effective on the date of resignation. If options cannot be exercised due to book closure period, the effective period will be delayed to cover the book closure period. Any unexercised options will be forfeited upon expiration of effective period. Incumbent will automatically surrender any unvested option rights upon the date of resignation. 2. Retirement Entitle to exercise all the vested stock options. The incumbent is entitled to exercise all his/her stock options granted upon its 2 year maturation date, and will not be restricted by the effective period restrictions stated in article 2 paragraph1. Incumbent is restricted to exercise his/her vested stock options within 1 year starting from the date of resignation or from the 2 year maturation date (which ever is later). Incumbent automatically surrender his/her unexercised stock options rights within the above mentioned effective period. 3. Death Successors may exercise vested options within a year upon the death of the employees granted. The unvested options shall expire or become invalid if the successor is not able to exercise the options within the period set forth above. Unvested options shall be voided on the day of the death of the employee. The successor shall process and complete all the necessary legal documents for inheriting the option rights conformed to the Regulations governing certification of Corporate Stock and Bond Issues by Public Companies. Successor can only apply for the inheritance right upon his/her submission of the mandatory documents and within the effective period set forth. 4. Occupational injuries or death : (1) Incumbents may exercise all the vested stocks upon his/her date of employment termination and not restricted by article 2 paragraph 1 policy. Incumbent may exercise the stock option within a year effective from the date of employment termination or upon the 2 years maturation date of the stock option (which ever date is later) (2) Successors of employee who died in occupational hazard may inherit and process all the vested stock options within a year dated from the death of the employees or upon the 2 years maturation date, (which ever date is later) and not restricted by policy of article 2 paragraph 1. The unexercised options shall expire or become invalid if the successor is not able to exercise the options
within the effective period set forth above. Any unvested options shall be voided on the day of the death of the employee. The successor shall process and complete all the necessary legal documents for inheriting the option rights conformed to the Regulations governing certification of Corporate Stock and Bond Issues by Public Companies. Successor can only apply for the inheritance right upon his/her after submission of all the necessary documents stated and within the effective period set forth. 5. Leave of absence Incumbent can exercise his/her vested options within 30 days from the effective date of leave of absence. In case of mandatory book closure, the effective period shall be deferred accordingly. The company will suspend all the unexercised options rights and the unvested option rights til the day incumbent returns. However, the company will defer the maturation date of the unvested options simultaneously with the incumbent s leave of absence. 6.Lay off Incumbent may exercise the vested options within 30 days dating from the effective lay off day. The effective period will be deferred along with any mandatory book closure. Incumbent automatically surrender his/her unexercised vested options rights within the effective period. Unvested options shall become invalid from the lay off effective date. 7. Transfer Incumbent transfer to affiliates or other company due to the necessity of the operation of the company has the same options rights as resigned employees if he/she is granted the options before the transfer takes place. Incumbent can exercise his/her rights according to the vesting policy schedule stated in the article 2 paragraph 1. 8. Termination of employment due to the 12 th rules in labor law Incumbent may exercise all the vested options within 30 days starting from the effective date of employment termination. The effective period will defer simultaneously along with any mandatory book closure and become invalid if not exercised within the effective period. Any unvested options will be invalid upon the employment termination date. 9. Other reasons for employment terminations For any other employment termination not stated above, the Chairman of the company has the right to determine the grant of option rights and their effective period. 10. All the vested options not exercised during the effective period shall expire and become invalid to Incumbent or his/her inheritors. (5)Process and procedures for invalidated options All the invalidated options will not be issued and will be voided by the company. 8. Method for performance of contract : new shares issued by the company Adjustment of exercise price ( (1)Should there be any profit or capital surplus plowed back to increase capital which might impact the total number of shares, the exercise price will be adjusted (calculate down to one tenth of an NT
dollar, round off NTD0.5 and above). Adjusted exercise price = exercise price before adjustment x [Total number of issued shares (Total number of shares issued+ Total number of newly issued shares) ] 1. The total number of shares issued refers to the total number of common shares issued (through private equity)less the total number of buy backs shares to be voided or to be transferred. 2. There will be no price adjustment when the company issue new shares due to merger etc. (2) If cash dividend distributed exceeds 1.5% of the common stock market price after the issuance of the stock option, the exercise unit price will be adjusted according to the following formula (calculate down to one tenth of an NT dollar and rounded off from NTD0.5 and above: Adjusted exercise price = exercise price before adjustment X (1-percentage of cash dividend to the common stock market price). The common stock market price should be the simple average closing price of either one, three or five days prior to the announcement date of the ex-dividend book closure period. (3) When there is a deduction of the total number of common shares due to voiding of buy back shares after the issuance of stock options, the exercise price will be adjusted according to the following formula : (calculate down to one tenth of an NT dollar and round off from NTD 0.5 and above) Adjusted exercise price = exercise price before adjustment x (Total number of issued shares before capital reduction total number of issued shares after capital reduction) The total number of issued shares refers to the total number of common shares issued less the number of buy back shares to be voided or transferred. 10. Procedures for exercising option : (1) Except during the mandatory book period and the period of three business days prior to the date of public announcement to the date of public announcement to close shareholder s book for stock dividends, cash dividends or rights offering, capital reduction application day to the day prior to the trading day after capital reduction filed by the company with the Taiwan Stock Exchange Corporation, incumbent may exercise options according to the vesting policy schedule set by article 5, item 2 paragraph 1 by submitting a written notice to the stock affairs of the company. The stock affair will notify incumbent to wire the money to designated bank within a stated effective period after all necessary documents are fully submitted and audited. Incumbent cannot withdraw the exercise notice one the payment has been made. Incumbent shall complete all the necessary application and payment process one day before the suspension date of the effective period (2) Upon payment confirmation, the stock affair will register the number of shares exercised onto the company s shareholder list and transfer the common shares to the incumbent s account within 5 working days. The common shares so issued can be traded on the TSE upon delivery. (3)The company shall file the change in the paid in capital with the relevant authority on a quarterly basis after its shares delivery to the incumbents. 11.Rights and obligations The shares acquired by stock options have the same rights and obligations with all the common shares issued by the company 12. The record date for share conversion, exchange or incumbent (subscription) : N/A
13. Dilution of equity for share conversion, exchange or incumbent (subscription) : N/A 14. Other important stipulations : I. Tax Incumbent will process the tax generated by exercising the stock options according to the tax policy by the R.O.C government. 2. Contract and confidentiality (1) Upon completion of all the legal processes required, the incumbent is requested to sign a contract of consent for the stock options granted. Incumbent has acquired the rights to the stock options upon submission of the signed contract. Incumbents shall abandon his/her rights when contact is not submitted before deadline. (2) Incumbents shall keep all the contract details confidential and shall not probe or release the content and shares granted details upon the day he/ she receives the contract. Incumbents will face punishment stated article 5 item 2, paragraph 2 upon violation. 15. Any other matters that need to be specified (1) This plan has been approved by 2/3 of the board members, 1/2 of the board members present in the meeting and is effective after the approval of the related authority. Any revisions or rectifications of the plan before issuance needs to obtain the approval as stated above. The chairman is authorized to make any revisions required by the governing Authority during the auditing process and will obtain the approval from the board members prior to issuance. (2) Any other matters not set forth in the plan shall be dealt with in accordance with the applicable laws and regulations.