news & events

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

Resolution date of the board of directorsFebruary 22, 2016
Expected issue priceThe issue price is NTD0

Expected total amounts (shares) of issuance

 

 

A total of 500,000 common shares, each share having a par value of NTD10, for a total amount of NTD5,000,000

Determination of the terms and conditions
  1. Issue price:

    The current issue is gratuitous. The issue price is NTD0.

  2. Vesting conditions:

    Employees who are granted with the restricted employees shares should remain employed by EASTECH Group with 1 year or more from the time of the award of the new restricted employee shares and have achieved the required individual performance rating.

    The proportions of shares are granted to employees according to the respective vesting conditions reached as follows:

  1. Remain employed after 1 year from the time of the award: 25%

  2. Remain employed after 2 years from the time of the award: 25%

  3. Remain employed after 3 years from the time of the award: 25%

  4. Remain employed after 4 years from the time of the award: 25%

  1. Handling of an employee’s failure to meet the vesting conditions:

EASTECH will withdraw issued shares without compensation and cancel all shares granted to employees who fail to meet the vesting conditions.

Qualification requirements for employees
  1. Restricted to full-time regular employees of EASTECH Group whose employments are already confirmed by the date that 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 President 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 Remuneration Committee first.

The limit for the number of restricted employees shares granted to individual employee should be dealt with in accordance with the applicable laws and regulations.
The reason why it is necessary to issue restricted stocks for employeesTo attract and retain professional talents needed by EASTECH, and to provide incentive to employees and enhance employee commitment, so as to jointly create benefit to the company and its shareholders.
Calculated expense amount

The current issuance of the restricted employee shares is a total of 500,000 common shares which are not allowed to transfer before meeting the vesting conditions.  The estimated total possible expenses for the issuance of the restricted employee shares is approximately NTD21,775,000 calculated based on the closing share price on February 3, 2016 being NTD43.55 per share.

 

 

Dilution of EPS and other factors affecting shareholder’s equity

According to the vesting conditions, the annual amortized expenses from 2016 to 2020 will be projected as NTD4,253,000, NTD9,300,000, NTD4,877,000, NTD2,495,000 and NTD850,000 respectively. 

The EPS dilution from 2016 to 2020 will be projected as NTD0.07, NTD0.15, NTD0.08, NTD0.04 and NTD0.01.  [Based on the number of current outstanding shares 60,249,000 shares (after deducting the treasury shares held by EASTECH or its subsidiaries)].  Since the potential impact to EPS is limited, we do not expect any material impact to shareholders’ equity.

Apart from the above impact, the issuance of the new restricted employees shares will increase the share capital.  According to the current outstanding 60,249,000 shares issued, the % of share capital increment is 0.83% and thus it does not cause a material impact to shareholders’ equity.
Restricted rights before employees meet the vesting conditions
  1. 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.

  2. During the vesting period, the new restricted employee shares can participate in stock and cash dividends and subscription of shares by cash, same as the issued ordinary shares.

After issuance, the new restricted employee shares must immediately be deposited in trust or custody.  During the vesting period, there is no reason or way to request the trustee or custodian banks for return of the shares.
Other important stipulationsAfter issuance, the new restricted employee shares must immediately be deposited in trust.  Before achieving to the conditions to grant, the employees should delegate the trust agent or custodian banks to attend, propose, speak, vote and execute other matters related to shareholders’ rights in the shareholders’ meeting.
Any other matters that need to be specifiedNone