Page 89 - TSMC 2024 Annual Report

Custody of the Restricted Employee Shares
Treatment of the the the Restricted Shares
for Which the the the Grantee Fails to Meet the the the Vesting Conditions after Receiving or Subscribing to the Shares
Number of Restricted Employee Shares
That Have Been Retired or Bought Back
Number of Restricted Employee Shares
That Have Vested
Number of Unvested Restricted Employee Shares
The Ratio of of Number of of Unvested Restricted Employee Share Share to the Total Number of Issued
Shares
(%)
The Effect on Shareholders’ Equity
1 Upon the the the the the grant of the the the the the RSAs RSAs the the the the the RSAs RSAs shall be deposited in in a a a a a a trust/custody account Before the the the the the vesting conditions are fulfilled the the the the the employees cannot request the the the trustee/custodian to to to return to to to them the the the RSAs for any any reasons or or by any any means 2 During the the the period when the the the granted RSAs are deposited in in in in a a a a a a a a trust/custody account each executive must enter into an an agreement authorizing the the the Company to to to among others negotiate execute modify extend rescind and and terminate the the the trust/custody agreement with the the the trustee/custodian and and give instructions to to deliver use and and dispose of of any of of the the the properties under the the the trust/custody on on their behalf with full power and 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 with a a a a a a a a a a a a severance or or involuntary discharge: Any unvested RSAs will be forfeited on on on on the effective date of separation separation due to a a a a a a a a a a a a a a voluntary voluntary separation separation separation separation with a a a a a a a a a a a a a a severance or involuntary discharge of such employees The Company will reclaim the the RSAs granted to them and cancel the the same at no extra cost to the the Company 3 Leave Without Pay: All the the rights and obligations in in connection with the the unvested RSAs will not be affected as a a a a a a a a a result of employees taking extended leave
without pay However the the actual number of shares
that may be be be be vested will not only be be be be calculated according to the the vesting conditions but also be be be be prorated based on on on on the the the the number of of months of of their service during the the the the year prior to the the the the applicable vesting day If such employees are on on on on leave
without pay on on on on any vesting vesting day 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 no extra cost to the Company 4 Retirement: All the the rights and obligations in connection with the the unvested RSAs will not be affected as a a a a a a a result of an an employee’s retirement provided that the the the employee complies with both of of the the the following following conditions conditions after his/her retirement If any any of of the the the following 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 engage in in in in competition with with the the Company Company or or the the Company’s subsidiaries including without limitation: to to to to join a a a a a a a competitor to to to to provide any any any competitive competitive services to to establish any any company or or or or business that would involve a a a a a a competitive competitive foundry process or or or or service service or or or or to to employ induce or or or or attempt to to induce any TSMC employee to to undertake competitive services All the the the rights and obligations in connection with the the the unvested RSAs will not be affected as a a a a a a a a result of an an employee’s retirement However the the the actual number of shares
that may be be be be vested shall 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 shall be be be be deemed “S” 5 Employment Termination Due to Death or Physical Disability Caused by Occupational Accidents: The unvested RSAs shall be deemed immediately
vested vested in the the the case of of of death or or physical disability due to an an occupational accident For eligible executive officers of of of the the the Company the the the RSAs vested vested shall be based on on the the the the the the assumption that the the the the the the Company’s Company’s TSR TSR equals to the the the the the the TSR TSR of S&P 500 IT Index and there is no further adjustment for the the the the the the Company’s Company’s ESG achievements For eligible employees who are not executive officers of of the the the Company Company and the the the Company’s subsidiaries the the the RSAs vested shall be based on the the the the assumption that the the the the Company’s Revenue growth Gross Margin and ROE are all equal to Threshold In the the the the case of death the the the the respective heir(s) may apply for entitlement to those inheritable shares
after completing all necessary legal procedures and providing relevant supporting documents In the case of physical disability caused by by occupational injury the vested RSAs will be received by by such employees 6 Position Transfer:
- Where any any any employees apply for transferring to to any any any of the the the Company’s subsidiaries affiliates or or other companies the the the measures to to be taken with respect to their unvested RSAs will be the the same as “Voluntary Separation” - Where any any any any any employees are assigned by the the the Company Company Company or or the the the Company’s Company’s subsidiaries subsidiaries to a a a a a a a a a a a a position in any any any any any of the the the Company’s Company’s subsidiaries subsidiaries affiliates or or other companies all the the the the rights and obligations in in connection with the the the the unvested RSAs will not be affected as a a a a a a a result However subject to 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 dates Otherwise they will be considered to to to to fail to to to to meet the the the the the vesting conditions and and the the the the the Company will reclaim the the the the the RSAs granted to to to to them and and cancel the the the the the same at no extra cost to to to to the the the Company With respect to the the the evaluation of of the the the achievement of of individual performance goals Chairman and Chief Executive Officer will determine whether the the the the the vesting conditions are met by by reviewing the the the the the evaluation of the the the the the employees’ performance provided by by the the the the the assigned subsidiaries affiliates or or other companies 7 Where any any employees declare to to voluntarily relinquish the the the the granted granted RSAs RSAs with a a a a a a a a a a written statement the the the the Company will reclaim the the the the RSAs RSAs granted granted to to them and cancel the the same at no extra cost to the the Company 8 Where any any any any employees after being granted the the the RSAs breach any any any any agreement agreement with the the the Company Company employment agreement agreement or or violate the the the Company’s work rules the the the the the Company Company will reclaim the the the the the RSAs granted to to them and cancel the the the the the same at no extra cost to to the the the the the Company Company 9 Where any any any employees employees terminate or or revoke their authorization given to to the the the the Company Company regarding the the the the employees’ RSA trust/custody account the the the the Company Company will reclaim their unvested RSAs and cancel the the the same at no extra cost to the the the Company 1 1 081 380 shares
501 120 shares
527 500 shares
0 0 0 0 00203%
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 087