National Aerospace Fasteners : Corrections Board of Directors resolved to issue employee stock options

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Provided by: National Aerospace Fasteners Corporation
SEQ_NO	2	Date of announcement	2022/07/29	Time of announcement	18:33:03
Subject	Corrections Board of Directors resolved to issue employee stock options
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.Issuance period: Issuance within one year from the arrival date of the notification of competent authority declaration effective, it may be issued one time or several times according to actual needs. The actual date of issue will be approved by the chairman. 3.Eligibility criteria for optionees: (1) The actual employees who can obtain stock option are limited to full-time regular employees of the Company and its subsidiaries at home and abroad (2)The actual employees who can obtain stock option and the number of shares they receive will based on the seniority, grade, work performance, overall contribution, special merits, and will be handled in accordance with the following procedures: 1.Executive: If the stock option holder is qualified as a company executive, it must first be submitted to the Compensation and Remuneration Committee for discussion and then approved by the Board of Directors. 2.Non-Executive: If the stock option holder is not qualified as company executive, it must first submitted to the Audit Committee for discussion and then be approved by the Board of Directors. (3)The company issues employee stock certificates in accordance with Article 56-1, Item 1 of the Fundraising Standards, and the accumulates number of subscribed shares granted to a single employee, plus the total number of new shares that the employee has accumulatively obtained from restricted stock awards, shall not exceed three thousandths of the total number of issued shares, and plus the number of shares subscribed by a single employee accumulatively issued by the Company in accordance with Article 56 Paragraph 1 of the Issuing Standards shall not exceed 1% of the total number of issued shares. 4.Number of total issued units of the employee stock warrants: The total issuance is 2,412 units. It may be issued one time or several times according to actual needs. Per unit of stock option can be exercise for 1,000 shares, and total number of new shares to be issued due to exercise of options, or the no.of shares for shares buyback as required by Article 28-2 of the Securities and Exchange Act: The total number of new common shares to be issued due to the exercise of stock options is 2,412,000. 5.Number of shares each stock warrant unit may subscribe for: Per unit of stock option can be exercise for 1,000 shares 6.Total number of new shares to be issued due to exercise of options, or the no.of shares for shares buyback as required by Article 28-2 of the Securities and Exchange Act: The total number of new common shares to be issued due to the exercise of stock options is 2,412,000 7.Subscription price: The closing price of the company's common stock is the subscription price based on the date on which the employee's stock option is issued. 8.Period of subscription rights: After two years from granted of the stock option till the 10 days prior maturity, the option can be exercise according to the following schedule. The duration of this stock option is six years from the date of issue. The stock option certificate and its rights and interests cannot be transferred, but the successor is not subject to this limit. Option granting period Exercisable option ratio -------------------------------- ---------------------- 2 years after grant 50% 3 years after grant 75% 4 years after grant 100% 9.Types of shares which may be subscribed for: Common stock of the company 10.Handling method for employee resignation/inheritance: (1)Voluntary resignation or severance Employee's share option certificate with exercise rights can be exercise within 3 months from the effective date of resignation / severance. Employee's share option certificate without exercise right shall be deemed as abandonment of share option right on the effective date of resignation / severance. (2)Leave without pay (LWOP) For stockholders who have been approved by the company to apply for Leave without pay (LWOP), the employee's stock option certificate that has exercised their rights shall be within three month from the date of retention of leave; the option with no exercise rights shall be restored to their rights since reinstatement/ removal of work, the exercise period will postpone based on the leave period, but it is still limited to the duration of this option. (3)Retirement The granted warrant may exercise all the rights of the stock at the time of retirement. Except that it shall be exercised after 2 years have elapsed since the expiry of the grant of the warrant, it shall not be subject to the restriction on the percentage of shares that may be exercised at the expiration of the relevant time slot in paragraph 2 of this Article. However, the subscription right shall be exercised within one year from the date of retirement or from the date of grant of the warrant for 2 years (in the case of a later date.) (4)Death Employee's share option certificate with exercise rights can be exercise within 1 year by the heir. Employee's share option certificate without exercise right shall be deemed as abandonment of share option right on the date of death. (5)Persons with disabilities/ death due to occupational disasters For those who are unable to continue their employment due to physical disabilities or death caused by occupational disasters, the employee stock option certificates they have granted may exercise the right during the period of the option rights. The granted warrant may exercise all the rights of the stock at the time of resignation or death ( by the heir). Except that it shall be exercised after 2 years have elapsed since the expiry of the grant of the warrant, it shall not be subject to the restriction on the percentage of shares that may be exercised at the expiration of the relevant time slot in paragraph 2 of this Article. However, the subscription right shall be exercised within one year from the date of resignation/ date of death or from the date of grant of the warrant for 2 years (in the case of a later date.), but it is still limited to the duration of this option. (6)Transfer The shareholder who transferred to another company, the rights and obligations of employee stock option certificates are considered as resignation. (7) Other termination of employment relationship In addition to the above reasons, other termination of employment relationship or adjustment of employment relationship that has not been agreed upon shall be exercised in accordance with the period of rights and the time limit for exercising rights stipulated in Paragraph 2 of this Article, or the chairman of the board of directors may approve his subscription rights and the time limit for exercising them, and report to the board of directors for retroactive approval and approval afterwards. (8) A subscriber or his or her successor who fails to exercise the option within the said period shall be deemed to have waived the right to subscribe. 11.Other criteria for subscription: For warrants that are invalid, voluntarily waived by the delegator or waived in accordance with the preceding paragraph, the Company will cancel and no longer issue them 12.Method for performance of contract: The employee's stock option certificate shall be delivered by the company by issuing new shares. 13.Adjustment of subscription price: (1)After the issuance of the employee's stock option certificate, if the company issues cash dividends for ordinary shares(>1.5% per share), it shall be adjusted according to the following formula on the base date of the ex-dividend (calculated to the NTD, rounded down to the following): Adjusted exercise price = pre-adjusted exercise price × (1 - ratio of cash dividends paid for common stock to current price per share) The above setting of the current price per share is based on the simple arithmetic average of one, three, and five business days before the announcement date of the cash dividend stop transfer ex-dividend. (2)After the issuance of this stock option certificate, in addition to the exchange of common stock of various securities issued by the company with common stock conversion rights or options or the issuance of new shares due to employee payment or limited right, when there are changes in the company's common stock (ie Apply for cash capital increase (including private placement), surplus capital increase, capital surplus increase capital, company merger, transfer of shares of other companies to issue new shares, stock split, and cash capital increase to participate in the issuance of overseas depository receipts, etc.), the exercise price is adjusted based on the following formula and principle (calculated up to the NTD, rounded down to the following). Adjusted exercise price = pre-adjusted exercise price × [number of issued shares + (payment amount per share × number of new shares issued ÷ current price per share)] ÷ (number of issued shares + number of new shares issued) (2.1)Number of issued shares" refers to the total number of issued shares of common stock (including shares issued and private placement), minus the number of "unwritten or untransferred treasury shares. (2.2) If the "Payment Amount per Share" is for free allotment or stock split, the payment amount will be zero. (2.3) When merging with other companies or transfers shares of another company to issue new shares, the capital contribution per share of new shares will be the average closing price of the common stock of the company 30 business days prior to the merger base date or the transfer of other company shares. (2.4) When the shares of the company are issued by the other company, the amount of per share paid for the capital increase is the average closing price of the ordinary shares for 30 consecutive days from the 45th business day before the completion of the transfer of the transferred shares (2.5) When the adjusted exercise price is higher than the pre-adjusted exercise price, no adjustment will be made. (2.6) The setting of the current price per share is based on the simple arithmetic average of one, three, and five business days before the announcement date of the cash dividend stop transfer ex-dividend. (3)After the issuance of the employee 's stock option certificate, if the company encounters a decrease in the number of common stock due to a capital reduction which is not due to the cancellation of treasury shares, the exercise price is adjusted according to the following formula on the base date of the capital reduction (calculated to the NTD, divided into rounding): Capital reduction to make up losses Adjusted exercise price = pre-adjusted exercise price × [number of common stock issued before capital reduction / number of ordinary shares issued after capital reduction]. Cash capital reduction Adjusted exercise price = (pre-adjusted exercise price - amount of cash refunded per share) × [number of common stock issued before capital reduction / number of ordinary shares issued after capital reduction]. 14.Procedures for exercising options: (1)Except for the period during which the transfer of the shareholder is suspended according to law and the company's negotiation for the announcement of the termination of the transfer of non-paid shares, the announcement of the date of the suspension of the transfer of cash dividends, the announcement of the date of the cash increase capital subscription stop transfer from the first fifteen business days to the base date for rights distribution, or from the base date of the capital reduction to the day before the start of the trading day of the capital reduction and renewal of stocks, the exerciser may fill out the exercise request to the company. (2) After accepting the share exercising request, the company will notify the employee to pay to the designated bank within the time limit. Once the employee has paid, the exercise payment cannot be revoked. Those who fail to make payment within the time limit shall be deemed to have voluntarily waived the exercising application. (3).After the stock agency receives all the documents and confirms that the stock has been paid, the number of shares exercise for is published in the company's shareholder register, the newly issued ordinary shares of the company shall be issued to the company within five business days by way of the CIRC transfer. (4)The newly issued ordinary shares of the company may be listed for trading from the date of delivery to the shareholder. (5)The company need to register for change with in capital amount at the end of each quarter once the Company issues new shares in accordance with these measures and delivers them to the stockholders. 15.Rights and obligations after exercising options: The common stock delivered by the company have the same rights and obligations as the common stock of the company. 16.Record date for any additional share exchange, stock swap, or subscription: N/A 17.Possible dilution of equity in case of any additional share exchange, stock swap, or subscription: The Company's stock option holders shall not be granted employee stock option certificates until two years after the expiration of the employee stock option certificates. The stock option holders of the Company can only exercise their stock options in accordance with the schedule set forth in the Employee Stock Option Issuance and Stock Option Regulations after the stock option certificates have been granted to them for two years. Therefore, it will not cause any material dilution to the shareholders' equity. 18.Other important terms and conditions:None. 19.Any other matters that need to be specified: 1.(1.1)These measures shall be attended by more than two-thirds of the directors of the board of directors, and agreed by one-half of the directors present. (1.2)Chairman has been authorized to amend these methods in response to the request of the competent authority during the case review, but the option shall not be issued until the board of directors has to approve afterwards. 2.If there are any unresolved matters in these measures, please follow relevant laws and regulations.