News Release
Investor Relations 2026/03/10
David Chen, Vice President & Spokesman Tel : 03 567 0889 ext. 25800
Contact : ir@novatek.com.tw https://www.novatek.com.tw
Subject: Announcement of the Board of Directors resolution on issuance of Restricted Stock Awards To which item it meets -- article 4 paragraph 11
Date of events: 2026/03/10
Contents:
Date of the board of directors resolution：2026/03/10
Expected issue price：This issuance is gratuitous; the issue price per share is NT$0.
Expected total amount (shares) of issuance：
The expected number of shares to be issued shall not exceed 3,000,000 new common shares, each with a par value of NT$10, resulting in a total par value not to exceed NT$30,000,000. The actual number of shares to be issued shall be determined by a separate resolution of the Board of Directors following approval of the issuance of restricted stock awards to employees by the Shareholders' Meeting and the competent authority.
Vesting conditions：
After an employee is granted restricted stock awards, the awards shall vest only upon satisfaction of the following conditions：
An employee's continuous employment with the Company through the vesting dates;
The employee has not, during any Vesting Period, breached any agreement with the Company or violated any of the Company's rules, policies or procedures;
Achieve the Company's specified operational and ESG performance metrics.
The maximum percentage of shares that may vest in each vesting year shall be：33% after one
year, 33% after two years, and 34% after three years. The actual percentage and number of shares that may vest in each year shall be further adjusted based on the Company's operational performance indicators and the achievement levels of the ESG performance indicators. Detailed explanations are provided below：
Performance Index Weighting Threshold and Target Range
Pre-Tax Income Margin
35%
19%~22%
Return on Equity
35%
24%~28%
ESG performance indicators
30%
MSCI annual ESG rating of BBB or
above, or ranking in the top 5%
of the TWSE Corporate Governance
(ESG) Evaluation.
The number of vested shares determined by each index will range from 0% to 100% of the portions of vesting shares of the corresponding performance period, as follows: 0% if the performance result is below the threshold level, 50% if the performance result meets the threshold level, and 100% if the performance result meets the target level. For the performance result between the threshold and the target level, a proportionate fraction of the portions between 50% and 100% will be applied. For rounding rule applied to calculations, a rounding down rule will be used to determine if the threshold level or the target level is achieved or not, while, for levels between the threshold level and the target level, the portions will be rounded to the nearest hundredth percent. Achievement of an indicator shall be determined based on the financial statements for the indicator's measurement period that have been audited and certified by the independent auditor.
Measures to be taken when employees fail to meet the vesting conditions or in the event of inheritance：
If the employee fails to satisfy the vesting conditions, the Company shall, without consideration, reacquire the shares and effect their cancellation.
Any other matters will be subject to the terms of Restricted Stock Awards Plan established by the Company.
Other issuance criteria：None.
Qualification criteria for employees：
This plan applies to full-time employees of the Company who are employed as of the grant date of restricted stock awards, have met the applicable performance standards, and satisfy at least one of the following criteria：
highly related to the future strategy and development of the Company,
critical to the Company's business operation,
7.2.3 key technical talents, as determined by the Company.
The number of shares to be allocated to eligible employees shall be determined with reference to the Company's operating performance and pursuant to allocation principles that take into account individual job level, work performance and other appropriate factors. Allocations for employees who are managerial officers, or directors with employee status shall require the approval of the Remuneration Committee, while allocations for non-managerial employees shall require the approval of the Audit and Risk Committee. Prior to submission to the Board for resolution, the Chairman shall submit the matter to the applicable committee(s) for approval; the matter shall then be submitted to the Board.
The aggregate number of shares granted to each employee by (1) share subscription warrants (issued outside the Rules) pursuant to paragraph 1, Article 56 1 of the Regulations, together with (2) restricted stock awards (whether issued under or outside the Rules), shall not exceed 0.3% of the Company's total outstanding common shares. The foregoing sum, together with the share subscription warrants the Company grants to each employee pursuant to paragraph 1, Article 56 of the Regulations, shall not exceed 1% of the Company's total outstanding common shares. Notwithstanding the foregoing, the total number of share subscription warrants and restricted stock awards granted to any single employee may be exempted from these limits with special approval from the applicable R.O.C. authorities. If
applicable laws or regulations are subsequently revised, the Company shall comply with the revised laws and regulations.
The necessary reason of the current issuance of RSA：
To attract and retain key talent required by the Company, to motivate employees to achieve the Company's operational objectives and to align their compensation with shareholder interests and Environmental, Social and Governance ("ESG") performance.
Calculated expense amount：
The Company shall determine the fair value of the shares on the grant date and recognize the related expenses annually over the vesting period.
The number of Restricted Stock Awards proposed at the 2026 Annual General Meeting of Shareholders shall not exceed 3,000,000 shares, to be issued at NT$0 per share. The estimated potential expense to be recognized is approximately NT$1,179,000,000 (estimated based on the closing price of NT$393.00 on February 26, 2026). The amortized expenses for 2026- 2029 are estimated to be NT$129,690,000, NT$389,070,000, NT$393,000,000, and NT$267,240,000
for 2026, 2027, 2028, and 2029, respectively.
Dilution of the Company's earnings per share (EPS)：
Based on the Company's outstanding shares as of February 26, 2026 (608,511,469 shares), the estimated reductions in diluted earnings per share (EPS) are NT$0.21, NT$0.64, NT$0.65, and NT$0.44 for 2026, 2027, 2028, and 2029, respectively. The potential dilution is limited and is not expected to materially affect shareholders' equity.
Other matters affecting shareholder's equity：Not materially affect shareholders' equity.
Restrictions before employees meet the vesting conditions once the RSA are received or subscribed for：
Except for inheritance, employees are prohibited from selling, pledging, transferring, gifting, encumbering, or otherwise disposing of any unvested shares.
Other restrictions will be handled in accordance with the issuance rule.
Other important terms and conditions (including stock trust custody, etc.)：
While shares subject to a restricted stock award are held in custody, the Company shall act as the employees' exclusive agent in dealings with the designated custodian, including, but not
limited to, negotiating, executing, amending, renewing, rescinding and terminating custodial arrangements, and issuing instructions regarding the delivery, use and disposition of the shares.
Any other matters that need to be specified：
If some revision or adjustment has to be made due to the competent authority's instruction, it is proposed that the Annual Shareholders'Meeting authorizes the Board of Directors or the appointed person by the Board of Directors with full power and authority to handle all the issues regarding the issuance of Restricted Stock Awards.
For any matters not yet stipulated in these Rules, except as otherwise provided by law, the Board of Directors, or a person appointed by the Board, shall have full power and authority to amend these Rules and to handle such matters in accordance with applicable laws and regulations.