Board Approves Gratis Issuance of 1.5 Million Restricted Employee Shares

The board of directors resolved on May 14, 2026 to issue restricted employee shares free of charge. The issuance consists of 1.5 million common shares with a par value of NT$10 per share, for a total par value of NT$15 million. Employees must remain employed on each vesting date, have no violations of labor contracts, work rules, non-compete and confidentiality agreements, or other contractual obligations with the company, and meet the company’s required performance conditions. The vesting schedule is 40% from the issuance date, 30% after one year of continued employment, and 30% after two years of continued employment. Allocation criteria include annual performance at or above the average level, outstanding project performance or major contributions to the company, nomination by department heads as beneficial to business growth, and possession of special skills required by the company. If the company is involved in a merger, acquisition, or spin-off while some restricted shares remain unvested, employees may request accelerated vesting within 30 days from the earlier of the relevant legal resolution date or record date. Shares that fail to meet vesting conditions will be fully repurchased by the company without consideration and cancelled. Employees who resign voluntarily or are laid off will forfeit all unvested shares as of the effective date. Employees unable to continue working due to occupational injury-related disability may have all unvested shares vest on the resignation date. In the event of death due to occupational injury or ordinary death, all unvested shares will be deemed vested on the date of death, and heirs may claim the inherited shares or related disposed rights after completing required legal procedures and submitting supporting documents. Employees transferred to the company or to domestic or overseas subsidiaries in which the company directly or indirectly holds more than 50% of voting shares may retain the rights and obligations of unvested shares with the chairman’s approval. The shares may be issued in one or multiple tranches within one year from the effective registration notice by the competent authority, with the actual issuance date to be determined by the chairman as authorized by the board. Eligible participants are full-time regular employees of the company and its domestic or overseas controlling or subordinate companies who have reported for duty by the grant date. The number of shares granted will be determined based on seniority, rank, work performance, overall contribution, special achievements, and other management considerations, subject to approval by the chairman and the board. Grants to managers or employee-directors require prior approval from the remuneration committee. The purpose of the issuance is to attract and retain needed professional talent, motivate employees, enhance employee cohesion, jointly create value for the company and shareholders, and align the interests of management and employees with those of shareholders. Based on 140,223,647 outstanding shares, the proposed restricted employee shares represent approximately 1.06% of total issued shares. If all shares vest, using the May 5, 2026 closing price of NT$24.55, the maximum estimated compensation expense is approximately NT$36.83 million, to be recognized as approximately NT$18.91 million, NT$13.78 million, and NT$4.14 million in 2026, 2027, and 2028, respectively. The estimated dilution to earnings per share is NT$0.13, NT$0.10, and NT$0.03 for the same years. The company considers the dilution limited and not materially adverse to shareholder equity. After issuance, the restricted shares will be immediately placed in trust. Before vesting conditions are met, employees may not request return of the shares from the trustee, sell, pledge, transfer, gift, request company repurchase, or otherwise dispose of the shares. Apart from these restrictions, the shares generally carry the same rights and obligations as issued common shares, including rights related to stock dividends, cash dividends, cash capital increases, capital reductions, mergers, spin-offs, and share exchanges. Before vesting, attendance, proposal, speech, voting, and other shareholder rights at shareholders’ meetings will be exercised by the trust custodian on behalf of employees. Employees must sign a restricted share acceptance agreement and comply with confidentiality obligations. Failure to sign will be deemed a waiver of eligibility. Employees may not disclose case details or personal entitlements; violations may result in disciplinary action, and serious breaches may lead to the company reclaiming and cancelling the restricted shares without consideration. Any matters not fully addressed, or revisions required due to instructions from competent authorities, laws and regulations, financial market conditions, or objective circumstances, will be handled by the board as authorized by the shareholders’ meeting.