Page 91 - TSMC 2022 Annual Report

1 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 2 During the the the the period when the the the the granted RSAs are deposited in in in in a a a a a a a a a a a trust/custody account each executive must enter into an an an agreement authorizing the the the the Company to to to among others negotiate execute modify extend rescind and and and terminate the the the the the trust/custody trust/custody agreement with with the the the the the trustee/custodian and and and give instructions to to to to deliver use and and and dispose of of any of of the the the the the properties under the the the the the trust/custody trust/custody on on their behalf with with full power and authority 1 The Company Company will reclaim the the the the granted RSAs and cancel the the the the same at no extra cost to to the the the the Company Company where an an an an an an employee fails to to meet the the the the vesting conditions 2 Voluntary Separation separation separation separation separation with with a a a a a a a a a a a a a a a a a a a a severance severance or or or involuntary discharge: Any unvested RSAs will be forfeited on on on on on on the effective date of separation separation separation separation due to a a a a a a a a a a a a a a a a a a a a voluntary voluntary separation separation separation separation separation separation separation separation with with a a a a a a a a a a a a a a a a a a a a severance severance or or or involuntary discharge of such employees The Company Company will reclaim the the the the RSAs granted to to them and cancel the the the the same at no extra cost to to the the the the Company Company 3 Leave Without Pay: All the the the rights and obligations in in connection with with the the the unvested RSAs will not be be affected as a a a a a a a a a a a a a result of of employees taking extended leave
without pay However the the the actual number of of shares that may be be be be vested will not only be be be be calculated according to to the the the the the vesting vesting conditions but also be be be be prorated based on on on on on the the the the the number of of months of of their service during the the the the the year prior to to the the the the the applicable vesting vesting day If such employees are on on on on leave
without pay on on on on any any vesting vesting day it it it shall be deemed that they fail to to meet the the the the the the vesting vesting conditions and and the the the the the the Company will reclaim the the the the the the RSAs granted to to them and and cancel the the the the the the same at at no extra cost to the Company 4 Retirement: All the the the the rights and obligations in in connection with with the the the the unvested RSAs will not be affected as a a a a a a a result of of an an employee’s retirement provided that the the the the employee employee complies with with both of of the the the the following conditions conditions after his/her retirement If any any of the following conditions conditions is is not met any any unvested RSAs will be be forfeited Exemption could be be made case case by by case case by by Chairman and CEO - - Not to get any full-time job and - Not to to to to to engage in in in in in competition with with the the Company Company or or or the the Company’s subsidiaries including without limitation: to to to to to join a a a a a a a a a a a competitor to to to to to provide any any any any any competitive services to to to to to establish any any any any any company or or or business that would involve a a a a competitive competitive foundry process or or or service service or or or to to to employ employ induce induce or or or attempt to to to induce induce any TSMC employee to to to undertake competitive competitive services All the the the rights and obligations in connection with the the the unvested RSAs will not be be be be affected as a a a a a a a a a a a a a a result of of an an employee’s retirement However the the the actual number of of shares that may be be be be vested vested shall be be be be calculated according to to the the the vesting condition and the the the performance rating granted to to them shall be deemed “S” 5 Employment Termination Due to to Death or or Physical Disability Caused by Occupational Accidents: The unvested RSAs shall be deemed immediately vested vested in in the case of death or or physical disability due to to an occupational accident For eligible executive officers of of of the the the the the the the Company Company the the the the the the the RSAs vested shall be based on on on the the the the the the the assumption that the the the the the the the Company’s TSR TSR equals to the the the the the the the TSR TSR of of of S&P 500 IT Index and there is no further adjustment for the the the the the Company’s Company’s ESG achievements For eligible employees who are not executive officers of of the the the the the Company Company Company and the the the the the Company’s Company’s subsidiaries the the the the the RSAs vested shall be based on on the the the the the assumption that the the the Company’s Revenue growth Gross Margin and ROE are are all all equal to to Threshold In the the the case of death the the the respective heir(s) may apply for entitlement to to those inheritable shares after completing all all necessary legal procedures and providing relevant supporting documents In the the case of physical disability caused by by occupational injury the the vested RSAs will be received by by such employees 6 Position Transfer: - Where any any any employees apply for transferring to to to any any any of the the the the the Company’s subsidiaries affiliates or or other companies the the the the the measures to to to be be taken with respect to to to their unvested RSAs will be be the the the the the same as as “Voluntary Separation” - Where any any any any any employees are assigned by the the the the the Company Company Company or or the the the the the Company’s Company’s subsidiaries subsidiaries to a a a a a a a a a a a a a a a a position in in any any any any any of the the the the the Company’s Company’s subsidiaries subsidiaries affiliates or or other companies all the the the the the rights and obligations in in connection with the the the the the unvested RSAs will not be affected as as a a a a a a a a a result However subject to the the the the the vesting condition such employees shall continue working in in in in the the the the the assigned subsidiaries affiliates or or other companies on on on on the the the the the vesting vesting dates Otherwise they will will be considered to to to to fail to to to to meet the the the the the the the the vesting vesting conditions and and the the the the the the the the Company Company will will reclaim the the the the the the the the RSAs granted to to to to them and and cancel the the the the the the the the same at at no extra cost to to to to the the the the the the the the Company Company With respect to the the the the the the evaluation evaluation of of of the the the the the the achievement of of of individual performance goals Chairman and Chief Executive Officer will determine whether the the the the the the vesting conditions are met by reviewing the the the the the the evaluation evaluation of of of the the the the the the employees’ performance provided by the the assigned subsidiaries affiliates or or other companies 7 Where any any any employees declare to to to voluntarily relinquish the the the the the the granted granted RSAs RSAs with a a a a a a a a a a a a a a a written statement the the the the the the Company Company will reclaim the the the the the the RSAs RSAs granted granted to to to them and cancel the the the the the the same at at no extra cost to to to the the the the the the Company Company 8 Where any any any any any employees after being granted granted the the the the the the RSAs RSAs breach any any any any any agreement agreement with the the the the the the Company Company Company employment agreement agreement or or violate the the the the the the Company’s work rules the the the the the the Company Company Company will reclaim the the the the the the RSAs RSAs granted granted to them and cancel the the same at no extra cost to the the Company 9 Where any any any employees employees terminate or or revoke their their authorization given to to the the the the the the Company Company regarding the the the the the the employees’ RSA RSA trust/custody account the the the the the the Company Company will reclaim their their unvested RSAs and cancel the the the the the the same at at at no extra cost to the Company 0 share 0 share 2 110 000 shares 0 0 0 0081%
The potential dilution of the the the Company’s EPS is is minimal therefore there there is is no material impact on on shareholders’ interest 089