In order to attract, retain and reward employees, the Company and its subsidiary, ASE, have their employee share option plans for the Group’s full-time employees. As disclosed in Note 1, the Company assumed ASE’s obligations of outstanding employee share option plans starting from April 30, 2018, including the 2015 employee share option plan, and each share option represents the right to purchase

0.5

ordinary

share of the Company when exercised. In addition, the Company has the first and the second employee share option plans in November 2018 and August 2023, respectively, for full-time employees of the Group, with each unit representing the right to purchase one ordinary share issued by the company. The right of those share options granted under the plan is valid

for

10 years

non-transferable

and exercisable at certain percentages subsequent to the second anniversary of the grant date. For the employee share option plans the Company assumed and issued, the exercise price is subject to adjustment according to the prescribed criteria stipulated in employee share option plans.


	For the Year Ended December 31
	2021					2022					2023
				Weighted					Weighted					Weighted
				Average					Average					Average
	Number of			Exercise		Number of			Exercise		Number of			Exercise
	Options			Price		Options			Price		Options			Price
	(In			Per Share		(In			Per Share		(In			Per Share
	Thousands)			(NT$)		Thousands)			(NT$)		Thousands)			(NT$)

Balance at January 1		144,767		$	56.9		96,802		$	53.3		81,262		$	50.2
Options granted		—			—		—			—		150,000			107.0
Options forfeited		(5,907	)		52.3		(1,206	)		51.1		(1,471	)		66.9
Options exercised		(42,058	)		61.4		(14,334	)		51.5		(17,551	)		50.9


Balance at December 31		96,802			53.3		81,262			50.2		212,240			89.1


Options exercisable, end of year		49,696			55.5		58,216			51.3		62,505			46.5


Fair value of options granted (NT$)		—					—					29.7-35.1


	Range of Exercise Price Per Share (NT$)		Weighted Average Remaining Contractual Life (Years)

December 31, 2022

ASE 5 th share options	$	73.0		2.7
The Company 1 st share options		47.5		5.9

December 31, 2023

ASE 5 th share options		73.0		1.7
The Company 1 st share options		44.1		4.9
The Company 2 nd share options		107.0		9.6

To attract and retain talents as well as motivate and engage employees, the Company’s annual shareholders’ meetings resolved the 2021 employee restricted stock awards plan in August 2021 and granted 15,000 thousand ordinary shares on the record date of October 1, 2021. The par value and the exercise price was NT$10 and NT$0 per share, respectively. The fair value at the grant day was NT$92.4 per share.

The vested shares are settled and released on an annual basis during a three-year period starting from October 1, 2021. Up to

one-thirds

of the total shares granted will be vested only after the Company reaching specific performance targets before the end of each year-period. Except for inheritance, those shares shall not be sold, pledged, transferred, gifted, conditioned, or otherwise dispose of before vest, while the rights of attending, proposing, speaking, voting and election at shareholders meeting and other rights, including but not limited to, stock dividend, cash dividend, distribution from legal reserve and capital surplus, share options at cash capital increase are identical with the Company’s ordinary shares issued and outstanding. All the shares under this plan should be deposited in a trust account before vest.

After the grant date, the Company has the right to revoke and cancel those unvested shares. The dividends (including cash dividends, stock dividends, and the cash or the shares distributed from legal reserve or capital surplus) entitled to those unvested shares and interests derived therefrom shall be returned to the Company from the trust account at the same time.


	For the Year Ended December 31
	2021		2022			2023
	(in thousand shares)		(in thousand shares)			(in thousand shares)

Balance at January 1		—		15,000			10,000
Stocks granted		15,000		—			—
Stocks unrestricted		—		(5,000	)		(4,950	)
Stocks retired		—		—			(70	)
Stocks awaiting retired		—		—			(15	)


Balance at December 31		15,000		10,000			4,965

Under the share option plan issued in 2015 (“2015 share options”), each unit represents the right to purchase one ordinary share of USISH when exercised. The options are valid for 10 years,

non-transferable

and exercisable at certain percentages subsequent to the second anniversary of the grant date incorporated with certain performance conditions. For any subsequent changes in USISH’s capital structure, the exercise price is accordingly adjusted.

In November 2019, USISH adopted the share option plan (“2019 share options”) and granted 17,167 thousand share options to its employees. Each unit represents the right to purchase one ordinary share of USISH when exercised. The options are valid for 3.0 years, 4.0 years and 5.0 years, respectively, and are exercisable at certain percentages within 12 months subsequent to the second, the third and the fourth anniversary of the grant date under the satisfaction of certain performance conditions within each respective vesting period. In the event that USISH increases share capital by capital surplus or by cash, or distributes share dividends or cash dividends, the exercisable share option units and the exercise price are accordingly adjusted.

In September 2020, USISH adopted the share option plan (“2020 share options”) and granted 1,140 thousand share options to its employees. The conditions of issued 2020 share options are the same as 2019 share options plan, except that the options are valid for 2.2 years, 3.2 years and 4.2 years, respectively, and with each respective vesting period of 1.2 years, 2.2 years and 3.2 years.

In September 2023, USISH’s extraordinary general shareholders’ meetings resolved to adopt the share option plan (“2023 share options”). In October 2023, the board of directors resolved to grant 14,506 thousand share options to its employees. The conditions of issued 2023 share options are the same as 2019 share options plan, except that the options are valid for 2 years and 3 years, respectively, and with each respective vesting period of 1 year and 2 years.


	For the Year Ended December 31
	2021					2022					2023
	Number of			Weighted Average Exercise		Number of			Weighted Average Exercise		Number of			Weighted Average Exercise
	Options			Price		Options			Price		Options			Price
	(In			Per Share		(In			Per Share		(In			Per Share
	Thousands)			(RMB)		Thousands)			(RMB)		Thousands)			(RMB)


Balance at January 1		31,266		$	14.6		29,486		$	14.2		20,246		$	14.5
Options granted		—			—		—			—		14,506			14.5
Options expired		—			—		(2,312	)		13.9		(1,204	)		14.1
Options forfeited		(952	)		14.5		(942	)		13.0		(695	)		13.6
Options exercised		(828	)		13.8		(5,986	)		12.8		(3,125	)		12.1


Balance at December 31		29,486			14.2		20,246			14.5		29,728			14.7


Options exercisable, end of year		19,249			14.8		15,518			15.0		15,310			14.9


Fair value of options granted (RMB)		—					—					3.8-4.7

In May 2021, the authority approved AMPI’s employee share options plan with the issuance up to 10,000 thousand units. The options are valid for 10 years,

non-transferable

and exercisable at certain percentages subsequent to the second anniversary of the grant date. For any subsequent changes in AMPI’s capital structure, the exercise price will be adjusted accordingly. AMPI’s board of directors resolved a capital reduction which record date was determined at July 25, 2022, and the exercise price of its share options was adjusted from NT$7.5 to NT$30.0 accordingly.


	For the Year Ended December 31
	2022				2023
	Number of		Exercise		Number of		Exercise
	Options		Price		Options		Price
	(In		Per Share		(In		Per Share
	Thousands)		(NT$)		Thousands)		(NT$)

Balance at January 1		—	$	—		3,100	$	30.0
Options granted		3,100		30.0		—		—


Balance at December 31		3,100		30.0		3,100		30.0


Options exercisable, end of year		—		—		—		—


Fair value of options granted (NT$)		18.0-18.8				—

In November 2019, USISH adopted the restricted stock plan (“2019 restricted stocks”) and granted 6,156 thousand ordinary shares to its directors (excluding independent directors), supervisors and employees. In April 2020, the board of directors further resolved to grant 6,403 thousand ordinary shares instead, while other terms remain constant. The plan was of 3 phases starting from 2019 and each phase lasts for 1 year with a valid period of 4.5 years, 3.5 years and 2.5 years, respectively. Upon satisfaction of certain performance conditions in each phase, participants are entitled to subscribe a certain percentage of the total USISH’s ordinary shares issued under the plan with a

lock-up

period of 1 year. The valid period may be early terminated or extended prior to one month of the expiration date depending on the conditions of ordinary shares granted. In the event that USISH increases share capital by capital surplus or by cash, or distributes share dividends or cash dividends, the exercise price is accordingly adjusted.

In September 2020, USISH adopted the restricted stock plan (“2020 restricted stocks”) and granted 425 thousand ordinary shares to its employees. The conditions of issued 2020 restricted stocks are the same as 2019 restricted stocks plan, except that the restricted stocks are valid for 2 years and the ordinary shares that USISH would issue to participants for free are with a

lock-up

period of

1.3 year

In September 2021, USISH adopted the restricted stock plan (“2021 restricted stocks”) and granted 281 thousand ordinary shares to its expatriate staff. The conditions of issued 2021 restricted stocks are the same as 2020 restricted stocks plan.

In September 2023, USISH’s extraordinary general shareholders’ meetings resolved to adopt restricted

stock

plan (“2023 restricted stocks”), and granted 372 thousand shares and 5,722 thousand shares in November 2023 and January 2024, respectively, to its directors (excluding independent directors), supervisors and employees. The options are valid for 3 years. The valid period may be early terminated or extended prior to one month of the expiration date depending on the conditions of ordinary shares granted. Upon satisfaction of certain performance conditions in each phase, participants are entitled to subscribe USISH’s ordinary shares issued under the plan

at a certain percentage

at the end of the lock-up period. The plan was of 2 phases with a lock-up period of 1 year and 2 years, respectively.


	For the Year Ended December 31
	2021					2022					2023
	Number of			Weighted Average Exercise		Number of			Weighted Average Exercise		Number of			Weighted Average Exercise
	Options			Price		Options			Price		Options			Price
	(In			Per Share		(In			Per Share		(In			Per Share
	Thousands)			(RMB)		Thousands)			(RMB)		Thousands)			(RMB)


Balance at January 1		5,547		$	12.2		3,565		$	10.2		1,984		$	10.7
Options granted		281			—		—			—		372			14.5
Options expired		—			—		(4	)		—		—			—
Options exercised		(1,780	)		12.7		(395	)		—		(1,966	)		10.8
Options forfeited		(483	)		12.1		(1,182	)		12.2		(18	)		—


Balance at December 31		3,565			10.2		1,984			10.7		372			14.5


Options exercisable, end of year		—			—		1,715			12.4		—			—


Fair value of options granted (RMB)		11.78					—					12.2-13.0


	Range of Exercise Price Per Share (RMB)		Remaining Contractual Life (Years)

December 31, 2022

2019 restricted stocks	$	12.4		1.3
2021 restricted stocks		—		0.7

December 31, 2023

2023 restricted shares		14.5		2.9

The Group’s shareholdings in USISH decreased because the abovementioned share option plans and restricted stock plans were exercised in 2021, 2022 and 2023. The

transaction was accounted for as an equity transaction since the Group did not cease to have control over USISH and, as a result, capital surplus increased by NT$58,448 thousand, NT$125,049 thousand and NT$90,773 thousand (US$2,965 thousand) in 2021, 2022 and 2023, respectively.

The fair values at the grant dates and the record dates of capital reduction of the Company’s, AMPI’s and USISH’s share options plans issued in 2022 and 2023 were measured by using the trinomial tree model, while USISH’s restricted stocks plans issued in 2021 and 2023 were measured by using the Black-Scholes Option Pricing Model incorporating the effect of the

lock-up

period. The inputs to the models were as follows:


	AMPI 2022 share options plan	AMPI 2022 share options plan after capital reduction	The Company 2023 share options plan

Share price at the grant date	NT$7.5 per share	NT$30.2 per share	NT$108.0 per share
Exercise price	NT$7.5 per share	NT$30.0 per share	NT$107.0 per share
Expected volatility (%)	65.35-67.78	65.85-67.29	31.02-33.03
Expected lives (years)	6.0-7.0	5.8-6.8	3.9-6.1
Expected dividend yield	—	—	—
Risk free interest rate (%)	1.15-1.19	1.11-1.15	1.06-1.12


		USISH 2023 share options plan

Share price at the grant date		RMB15.16 per share
Exercise price		RMB14.54 per share
Expected volatility (%)		38.51-39.09
Expected lives (years)		2.0-3.0
Expected dividend yield		—
Risk free interest rate (%)		2.35-2.45


	USISH 2021 restricted stock plan	USISH 2023 restricted stock plan

Share price at the grant date	RMB14.65 per share	RMB15.02 per share
Exercise price	(Note)	RMB14.54 per share
Expected volatility (%)	47.15	36.56-38.77
Lock-up periods (years)	1.3	1.0-2.0
Expected dividend yield	—	—
Risk free interest rate (%)	2.34	2.33-2.44

For the years ended December 31, 2021, 2022 and 2023, employee benefits expense recognized on the aforementioned employee share options plans and the restricted shares/stocks plans were NT$699,211 thousand, NT$989,843 thousand and NT$742,890 thousand (US$24,262 thousand), respectively.