Tons Lightology : Announcement of the Company's seventh issuance of employee stock option certificates and the subscription rules

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Provided by: TONS LIGHTOLOGY INC.
SEQ_NO	2	Date of announcement	2022/07/28	Time of announcement	15:31:18
Subject	Announcement of the Company's seventh issuance of employee stock option certificates and the subscription rules
Date of events	2022/07/28	To which item it meets	paragraph 11
Statement	1.Date of the board of directors resolution:2022/07/28 2.Issue period:The Issuance would be in overall or separately conducted within the period of one year after the approval for effective application by the Competent Authority. The actual issuance date would be determined by the Chairman after being appointed by the Board of Directors. 3.Eligibility criteria for optionees: 一、The qualified personnel to be granted with stock option shall be the full-time employees officially organized at domestic subsidiaries of the Company or the Company itself (please refer to the definition provided by Official Order Jin-Guan-Zheng-Zi No. 1070121068 of the Financial Supervisory Commission dated December 27, 2018. for the term "subsidiary"). 二、The Chairman shall determine the employees who are entitled to the stock options and the no. of stock options to be granted after taking into consideration factors including but not limited to position, performance, overall contribution or specific achievement, and then process according to the following procedures: 1.For employees who are managerial officers or directors of the Company, approval by the Compensation Committee must be obtained first, which shall then be submitted to the Board of Directors for approval. For employees of controlled and affiliated entity who are also managerial officers or directors of the Company, the aforementioned procedures shall apply and obtain approval by the Compensation Committee and the Board of Directors. 2.For employees not specified in the preceding subparagraph,approval by the Audit Committee must be obtained first, which shall then be submitted to the Board of Directors for approval. 三、The Company additionally calculates the accumulated number of employee stock option certificates for each qualified personnel based on Paragraph 1 of Article 56-1 of Regulations Governing the Offering and Issuance of Securities by Securities Issuers where the additionally calculated number of employee restricted stock available for employees for such qualified personnel shall not exceed 0.3% of the total number of issued stocks of the Company. The additionally calculated number of employee stock option certificates available for each qualified personnel shall not exceed 1%of the total number of issued stocks of the Company based on in Paragraph 1 of Article 56 of the aforesaid Act. 4.Number of total issued units of the employee stock warrants: The total issued units are 600,000. 5.Number of shares each stock warrant unit may subscribe for: The number of shares each unit represents is 1 share. 6.Total number of new shares to be issued due to exercise of options, or the no.of shares for buyback as required by Article 28-2 of the Securities and Exchange Act: The required shares of new common stock for the stock option are 600,000 shares. 7.Subscription price:The price of each unit shall be the closing price of the Company on the Issuance Date. 8.Period of subscription rights: The qualified personnel may perform the subscription right after two years of the granting of stock certificates. The exercise period of the certificate (referred to as "Exercise Period" hereinafter) is five years and the certificate shall not be transferred, pledged, granted ant third parties, or processed with any other approach but the successors. After the expiration of the Exercise Period, those which have not been exercised would be considered as being waived, and the rights that have not satisfied the level of exercise will be automatically eliminated, and the stock options shall not be claimed by any qualified personnel. Period after granting stock option 2 years reached 3 years reached 4 years reached Percentage for stock option available for exercise (accumulative) 50% 75% 100% 9.Types of shares which may be subscribed for: Common stock of the Company. 10.Handling method for employee resignation/inheritance: If the qualified personnel has violated the employment contract or the working rules and other major negligence after the Company has granted the certificates, the Company may recover and cancel the certificates for which it would have no exercise rights for the certificates that have yet not been exercised. The treatment for resignation of the qualified personnel shall be conducted according to the following: 一. Voluntary resignation: The certificates suitable for the right to exercise subscription may be exercised within 30 days from the date of resignation; however, for the case of the Paragraph 1 of Article 12, the Exercise Period of the subscription right may be deferred based on the duration in order; the certificates not having the right to exercise are deemed to be waived from the right to subscribe on the date of resignation. 二. Retirement: The granted certificates may exercise the right of subscription. Except for those that may be exercised after the expiration of the two-year extension, regulations about limitation of percentage of stock option subscription which may be exercised after period expiration of Paragraph 2 of Article 6 would not apply. However, the right of subscription shall be exercised within one year from the date of retirement or two years after the expiration of the certificates (the one with later date shall prevail), and those who exercise within one year and have not exercised the right of subscription during the preceding period shall be deemed the same. 三. Death: The certificates suitable for the exercise of right of subscription may be exercised by the successor within one year from the date of the death of the qualified personnel. If the rights are not exercised within the preceding period, it shall be deemed to waive the right of subscription; the certificates with no right of subscription shall be eliminated after the death of the qualified personnel. Those who are entitled to exercise the right of certificates due to legal inheritance shall, after the fact of death have occurred, inherit based on relevant provisions of the Civil Law's Succession Chapter and the "Regulations Governing the Administration of Shareholder Services of Public Companies", complete the necessary statutory procedures and provide relevant supporting documents to apply for the subscription rights as the part to be inherited, but any application and subscription process shall not exceed the validity period of the certificates. 四. Disabilities or Deaths due to Occupational Hazards: 1.If the qualified personnel are unable to continue the employment due to a physical disability caused by any occupational hazard and has been granted certificates, it may exercise all the rights to subscribe when resigning. Except for those that may be exercised after the expiration of the two-year extension, regulations about limitation of percentage of stock option subscription which may be exercised after period expiration of Paragraph 2 of Article 6 would not apply. However, the right of subscription shall be exercised within one year from the date of retirement or two years after the expiration of the certificates (the one with later date shall prevail). 2.The qualified personnel who had been granted the certificates and deceases due to occupational hazard, the right of subscription may be exercised by the successors. Except for those that may be exercised after the expiration of the two-year extension, regulations about limitation of percentage of stock option subscription which may be exercised after period expiration of Paragraph 2 of Article 6 would not apply. However, the right of subscription shall be exercised within one year from the date of death or two years after the expiration of the certificates (the one with later date shall prevail). Those who are entitled to exercise the right of certificates due to legal inheritance shall, after the fact of death have occurred, inherit based on relevant provisions of the Civil Law's Succession Chapter and the "Regulations Governing the Administration of Shareholder Services of Public Companies", complete the necessary statutory procedures and provide relevant supporting documents to apply for the subscription rights as the part to be inherited, but any application and subscription process shall not exceed the validity period of the certificates. 五. Leave without Pay: The certificates suitable for the right to exercise subscription may be exercised within 30 days from the date of the leave without pay; and would be deemed as having waived such right if it has not been exercised within the period. Certificates with no right of subscription shall recover the right from the date of reinstatement. However, the Exercise Period for such right shall be deferred in accordance with the period of leave without pay and the duration of such right of subscription shall still apply. Those who have not applied for reinstatement after the expiration of the term of leave without pay are deemed to have voluntarily waived the right to subscribe. 六. Lay Off:The certificates suitable for the right to exercise subscription may be exercised within 30 days from the date of being laid off; however, for the case of the Paragraph 1 of Article 12, the Exercise Period of the subscription right may be deferred based on the duration in order; the certificates not having the right to exercise are deemed to be waived from the right to subscribe on the date of being laid off. 七. Direct Dismissal: Those who are dismissed directly based on employment contract or working rules shall be deemed as having waiving the right of subscription of the certificates with no subscription right from the date of dismissal. 八. Transfer: If the qualified personnel is transferred to an affiliate directly or indirectly holds less than 50% of the Company's stock, its employee stock option certificates shall be handled in the same manner as the voluntary resignation of Paragraph 1 of this Article or dismissal according to the relevant provisions of the Labor Standards Act. However, the employees who have been transferred to the Company's affiliates or other companies as required by the Company's operations would not affect their employee stock option certificates due to such transfer. 九. Termination of Employment due to other Issues: In addition to the above reasons, other termination of employment or adjustment which are not scheduled shall be exercised in accordance with the period of right and the exercise of Paragraph 2 of Article 6. 十. The qualified personnel or the successors would be deemed as having waived the right of subscription if not having exercised such right within the aforesaid period, and shall not further request the exercise of such right. 十一. The certificates waived by the qualified personnel or recovered by the Company would be cancelled any no longer issued. 11.Other criteria for subscription:NA 12.Method for performance of contract: The contract performance approach shall be the delivery of new shares issued to the qualified personnel by the Company. 13.Adjustment of subscription price: 一. After the issuance of the certificates, except for the issue of various securities with common stock conversion rights or stock option or the issue of new shares stock due to employee compensation by the Company, in the events of a change in the common stock of the Company which include privately placed securities for capital increase by cash, revenue transferred to capital, capital surplus transferred to capital increase, company merging, company division, stock split, transfer of shares of other companies to issue new stock or capital increase by cash to participate in the issuance of GDR, etc. The subscription price would be adjusted according to the following formula ; however, the marketable securities with ordinary share conversion rights or warrant rights that are issued by the company are permitted to be converted to ordinary shares, and new shares can be issued due to remuneration to employees. If the number of the issued shares increases due to the change of par value, an adjustment shall be made on the record date of issuance of, or conversion to, new shares. In case payments for some shares have been made, an adjustment shall be made on the date when payments for all shares have been made in full. (calculated to the unit of dime of NTD and round any unit below 1 cent). The adjusted price for stock option (subscription)= Price for stock option before adjustment x [Issued number of shares+ (Payment amount for each share x Issued number of new stock)/Market price of each share]/(Issued number of shares + Issued number of new stock) When the stock denomination changes: The adjusted price for stock option (subscription)= Price for stock option before adjustment (the number of ordinary shares issued before the change of stock denomination / the number of ordinary shares issued after the change of stock denomination) Notes: Note 1: For the stock split, it shall be the adjustment of split record date, since there is no ex-right record date for capital increase by cash by book building or participation of GDR with capital increase by cash, the adjustment shall be conducted on the full-payment date of stock. The adjustment shall be conducted on the record date of merge or reception for merging or receiving stock from other companies. The adjustment shall be conducted on the delivery date of privately placed securities for capital increase by cash or the increased stock is e privately placed securities. Note 2: The number of issued shares refers to the total number of issued shares of common stock (including the number of issued shares offered and privately offered) deducting the number of treasury shares that have been repurchased by Company and have not been eliminated or transferred. Note 3: In the events of companies merging, transferring shares of other companies or stock split of the Company, the adjustment approach of the subscription price would be determined by the merger contract, the share transfer contract or the split plan and related laws and regulations. Note 4: If the adjusted subscription price is higher than the subscription price prior to adjustment, the subscription price shall not be adjusted. If the final adjusted subscription price is lower than the par value of common shares, the subscription price shall be the par value of common shares. Note 5:The market price per share shall be determined on the basis of the simple arithmetic average of the closing price of the common stock calculated for 1, 3 or 5 business days before the record dates of ex-right, bidding or stock split which one of the three dates shall be ultimately determined. 二. After the issuance of the certificates if the Company issues cash dividends and the ratio of the cash dividends of common stock to the market price per share exceeds 1.5%, the subscription price would be adjusted according to the following formula: The adjusted price for stock option (subscription) = Price for stock option before adjustment x (1- Rate for issued cash dividends and the ratio of the cash dividends of common stock to the market price per share) The aforesaid market price per share shall be determined based on the simple arithmetic average of the closing price of the common stock calculated for 1, 3 or 5 business days before the date of ex-interest of closure of cash dividends. 三. In the events of reduction in the number of common stock due to the elimination of non-treasury, the adjusted subscription price shall be calculated according to the following formula. 1.Capital reduction to cover loss: The adjusted price for stock option (subscription)= Price for stock option before adjustment x [Issued number of common stock before reduction/Issued number of common stock after reduction]. 2.Cash capital reduction: The adjusted price for stock option (subscription)= (Price for stock option before adjustment - Cash amount refunded per share) x (Issued number of common stock before reduction/Issued number of common stock after reduction) 3.When the stock denomination changes: The adjusted price for stock option (subscription)= Price for stock option before adjustment (the number of ordinary shares issued before the change of stock denomination / the number of ordinary shares issued after the change of stock denomination) 四.In the case of simultaneous issuance of cash dividends and stock dividends (including capital revenue transferred to capital, capital surplus transferred to capital increase), the cash dividends shall be deducted first, and then the subscription price shall be adjusted according to the amount of stock dividends. 五. If the adjusted price for stock option is higher than the price before adjustment, no adjustment would be conducted. 六. If the adjusted price for stock option is lower than the price before adjustment, the denomination shall be the subscription price. 14.Procedures for exercising options: 一.In addition to the following periods, the stock option may be exercised by the qualified personnel in accordance with the time limit set out in Article 6 of the Regulations, and shall fill out a request for subscription to the Company's stock agency (or the Company itself). 1.Annually, the period shall between the convened for discussion of scheduled allocation proposals shall be held from the seventh business day before the date of the meeting of the Board of Directors (excluding the convene day of the meeting of the Board of Directors) to the record date of the bonus shares or the record date of the dividend distribution (the one with latter date shall prevail). 2. The statutory period of suspension of transfer before the convening of the regular or temporary meeting of shareholders in the current year. 3.Determine period between the convene date of the meeting of the Board of Directors until the record date of merger; or period between the convene date of the meeting of the Board of Directors until the record date of division. 4.When the Company determines to process the capital reduction of the non-treasury, it shall be the period between the convene date of the meeting of the Board of Directors until the date before the trading day of the capital reduction and reissue of shares. 二.After accepting the request for stock option, the stock agent (or the Company itself) of the Company shall notify the qualified personnel to make payment to the designated bank before the payment deadline, and the qualified personnel shall not cancel the subscription payment once the payment has been made. Those who fail to pay within the time limit are deemed to have waived their rights to subscribe. 三.After the full payment, the stock agent (or the Company itself) of the Company shall record the numbers of stock option subscribed by employees and the employee's names in the Shareholders List, and transfer them to the designated depository account within five business days with the approach of depository transfer (non-physical issuance). The aforesaid common stock which are traded on the counters from the date of delivery to the qualified personnel. 四.The Company shall apply for registration of capital adjustment on basis to the Competent Authority when issuing new stock and deliver to the qualified personnel based on this Regulations. 15.Rights and obligations after exercising options: The right and obligation for those who received the common stock delivered by the Company shall be the same as those bore by shareholders of common stock of the Company. 16.Reference date for any additional share exchange, stock swap, or subscription:NA 17.Possible dilution of equity in case of any additional share exchange, stock swap, or subscription:Not applicable. 18.Other important terms and conditions: After being granted with stock option, the qualified personnel shall abide by the confidentiality provisions. Except for the requirements of the court orders or the Competent Authority, the contents and quantity of the stock option granted shall not be disclosed. If there is any violation, the provisions of Article 7 of the Regulations shall be performed. 19.Any other matters that need to be specified: The Regulations shall be effective upon the attendance of more than two-thirds of Directors of the Board and the consent of more than one-half of the attending ones. If during the delivery process, due to the requirements of the Competent Authority on revision, the Chairman may be authorized to amend the Regulations and then the ratified by the Board of Directors.