Page 89 - TSMC 2022 Annual Report

As of 03/12/2023 (Note)
Employee Restricted Stock Awards for Year 2022
07/25/2022/3 065 000 shares
03/01/2023 2 110 000 shares
955 000 shares
None 0 0 0 00814%
1 2 3 4 1 2 3 4 5 The RSAs granted to an
an
an
an
an
employee employee can only be vested if (a) the the the the the employee employee remains employed by the the the the the Company Company or the the the the the Company’s subsidiaries on on the the the the the last date of each vesting vesting period period (b) during the the the the the vesting vesting period period the the the the the employee employee may not breach any any any any any agreement with the the the the the Company Company Company Company or or or or or the the the the the Company’s Company’s Company’s subsidiaries subsidiaries or or or or or violate the the the the the Company’s Company’s Company’s or or or or or the the the the the Company’s Company’s Company’s subsidiaries’ work rules and (c) certain employee employee performance metrics (a year-end performance performance rating of of at at at at least “S” “S” (Note)
or or or or above for for for the the the year year immediately preceding the the the expiration of of each vesting period) and the the the Company’s business performance performance metrics are met met (Note: “S” “S” stands for “Successful”)
The maximum percentage of of of of granted RSAs that may be be vested each year year year year shall be be as follows: one-year anniversary anniversary anniversary of of of of the the the grant: grant: 50% two-year anniversary anniversary anniversary of of of of the the the grant: grant: 25% and three-year anniversary anniversary anniversary of of of of the the the grant: 25% provided that the the the the the actual percentage and number of of the the the the the RSAs to be be be vested in in in each year will be be be calculated based on the the the the the achievement of of the the the the the Company’s business performance metrics as as detailed in in in the the the the the following points For eligible executive officers of of of the the Company: The maximum number of of of RSAs that may be be be be vested in each year will will be be be be set as as 110% among which 100% will will be be be be subject to a a a a a a a a a a a a a calculation based on on on the the Company’s relative TSR (Note)
achievement (see table below) to to to to to determine the the the number number of RSAs to to to to to be be be be be vested this number number will be be be be be further subject to to to to to a a a a a a a a modifier to to to to to increase or decrease up to to to to to 10% based on on the the the Compensation Committee’s evaluation of of the the Company’s ESG achievements The number of of shares
so calculated should be be rounded down to the the nearest integral The Company’s TSR TSR Relative to the TSR TSR of S&P 500 IT Index
Ratio of Shares
to be Vested
Above the Index
by X percentage points Equal to the Index
Below the Index
by X percentage points 50% + X * 2 5%
with the maximum of 100% 50% 50% - X * 2 5%
with the minimum of 0% 0% Note: TSR: Total Shareholder Return (including capital gains and dividends)
For eligible employees who are not executive officers of of of the the the Company Company and the the the Company’s subsidiaries: The number of of of RSAs to be be be be vested in in each year will be be be be calculated in in accordance with the the the below table based on on the the the the Company’s audited consolidated financial statements for the the the the year year prior to to the the the the vesting year year The number of shares
so so calculated should be be rounded down to to the the the the nearest integral Threshold
Target
Weighting
Ratio of Shares
to be Vested
Revenue Growth
Gross Margin
Return on Equity (ROE)
10% 15%
50% 53%
20% 25% One-third < Threshold: 0% One-third One-third = Threshold: 50% ≧Target: 100% Between Threshold
and Target: as calculated by interpolation method
Upon the the the the the the the the grant of the the the the the the the the RSAs RSAs RSAs the the the the the the the the RSAs RSAs RSAs shall be deposited in in a a a a a a a trust/custody account Before the the the the the the the the vesting conditions are fulfilled the the the the the the the the employees cannot request the the the the the the the the trustee/custodian to to to to return to to to to them the the the the the the the the RSAs RSAs RSAs for for any any reasons or by any any means During each vesting period no no employees granted RSAs RSAs may sell pledge transfer give to another person create any any encumbrance on on or otherwise dispose of any any shares
under the the the unvested RSAs RSAs Subject to to the the the the the the the restrictions mentioned above the the the the the the the rights of of the the the the the the the employees with regard to to the the the the the the the unvested RSAs granted under these Rules before the the the the the the the fulfillment of of the the the the the the the vesting conditions including but not limited to to the the the the entitlement to to any any distribution regarding dividends bonuses and and capital capital reserve and and the the the the subscription right of of of the the the the new shares
issued for any any capital capital increase are are the the the the same as as those of of of holders of of of common shares
of the the Company The relevant matters shall be handled in accordance with the the RSA trust/custody agreement Before the the the the the vesting conditions are are fulfilled the the the the the attendance proposal rights rights rights rights speech rights rights rights rights voting rights rights rights rights and any other shareholder rights rights rights rights shall be exercised by the the the the the engaged trustee/custodian on on on the the the the the employees’ behalf During each vesting period if the the the Company conducts a a a a a a a a a a a a a capital capital capital reduction reduction reduction for for cash return capital capital capital reduction reduction reduction for for loss offset or or or or other non-statutory capital capital capital reduction reduction reduction the the the unvested RSAs shall be cancelled proportionally by the the the the ratio of such capital capital reduction reduction If the the the the Company conducts a a a a a a a a a a a a a a a capital capital reduction reduction for cash cash return return the the the the returned cash cash shall shall be be deposited in a a a a a a a a a a a a a a a trust/custody account and shall shall not be be delivered to to the the the the employees until the the the the vesting conditions are fulfilled otherwise the the the the cash will be returned to the the the the Company (Continued)
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