1934 Act Registration No. 1-14700
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 6-K
REPORT OF FOREIGN PRIVATE ISSUER
PURSUANT TO RULE 13a-16 OR 15d-16 OF
THE SECURITIES EXCHANGE ACT OF 1934
For the month of September 2003
Taiwan Semiconductor Manufacturing Company Ltd.
(Translation of Registrant's Name Into English)
No.8 Li-Hsin Rd. 6,
Science-Based Industrial Park
Hsin-chu, Taiwan
(Address of Principal Executive Offices)
(Indicate by check mark whether the registrant files or will file
annual reports under cover of Form 20-F or Form 40-F.)
Form 20-F X Form 40-F
----- ______
(Indicate by check mark whether the registrant by furnishing the
information contained in this form is also thereby furnishing the information to
the Commission pursuant to Rule 12g3-2(b) under the Securities Exchange Act of
1934.)
Yes No X
_____ -----
(If "Yes" is marked, indicated below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82: ______.)
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
Taiwan Semiconductor Manufacturing Company Ltd.
Date: September 3, 2003 By /s/ Harvey Chang
--------------------------------------------
Harvey Chang
Senior Vice President & Chief Financial
Officer
Taiwan Semiconductor Manufacturing Company Limited
2003 Employee Stock Options Plan
(Translation)
1. Purpose
The purpose of the 2003 Employee Stock Options Plan (the "Plan") of Taiwan
Semiconductor Manufacturing Company Limited (the "Company") is to promote
the interests of the Company and its shareholders by attracting and
retaining the high-tech talents/professionals of the Company and its
subsidiaries by means of incentives in the form of stock options.
2. Period of Grant
The Company may grant the options in one or more tranches within one (1)
year from the date of receipt of notice from the relevant authority
("Authority") indicating that the Company's filing of the Plan with the
Authority has become effective. The actual dates of grant will be
determined by the Chairman of the Board of Directors of the Company (the
"Chairman").
3. Optionee
Each optionee shall be a full-time employee of either the Company or any of
its domestic or foreign subsidiaries, in which the Company's shareholding
with voting rights, directly or indirectly, is more than fifty percent
(50%). Whether an employee is entitled to receive options, and the number
of options to be received, shall be reviewed and determined by the Chairman
taking into consideration factors as relates to job grade, performance,
contribution, special achievement and/or years of employment, subject to
approval by the Compensation Committee of the Board of Directors of the
Company. The number of options granted to any optionee in any tranche shall
not exceed ten percent (10%) of the total number of options granted in that
tranche, and the total number of options to be exercised by any optionee
within each fiscal year shall not exceed one percent (1%) of the
outstanding common shares of the Company at the year-end.
4. Total Number of Options to be Granted
The total number of options authorized to be granted with respect to the
Plan shall be 120,000,000 units, with one (1) unit entitled to subscribe
one (1) common share of the Company. The total number of common shares of
the Company to be reserved for granting the options shall be 120,000,000
shares.
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5. Terms and Conditions
(1) Exercise Price
The exercise price of the options shall be the closing price of the
Company's common shares on the date that the options are granted.
(2) Vesting Schedule
The options will not vest in the first two (2) years ("Waiting Period")
and may be exercised in accordance with the following schedule. The
options will be existent for ten (10) years and may not be transferred,
except by inheritance.
Number of Years after Accumulated Percentage of
the Date the Options Options Exercisable
are Granted
-------------------------- --------------------------------
2 years 50%
3 years 75%
4 years 100%
(3) Type of Shares Underlying the Options
The common shares of the Company shall be the underlying shares.
(4) After the Company grants options to an optionee, the Company shall have
the right to revoke and cancel unvested options in the event that the
optionee commits serious misconduct and violates the employment
contract or policies of the Company.
(5) Termination of Employment
If an optionee's employment with the Company is terminated, the
optionee shall exercise options in accordance with the following
provisions, subject to the ten-year limit set forth in Paragraph 5(2)
above:
a. Voluntary Termination or Terminated for Cause by the Company in
Accordance with Labor Law of ROC ---
Options vested in accordance with the schedule set forth in
Paragraph 5(2) above shall be exercised within three (3) months from
the employment termination date. Unvested options shall become
invalid on the employment termination date.
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b. Retirement ---
All options granted are exercisable subject to the Waiting Period,
regardless of the vesting schedule set forth in Paragraph 5(2) above.
Nevertheless, the optionee shall exercise all options within one (1)
year from the later of: (x) the date of retirement; or, (y) the end
of the Waiting Period.
c. Temporarily on Leave Without Pay ---
In case the optionee is approved to be temporarily on leave without
pay, vested options shall be exercised within three (3) months from
the effective date of the temporary leave; otherwise, the right to
exercise options shall be deferred until the optionee's
reinstatement. For unvested options, the accumulation of years of
employment with respect to the vesting schedule set forth in
Paragraph 5(2) above shall suspend during the period of the
optionee's temporary leave and shall resume after the optionee's
reinstatement, subject to the ten-year limit set forth in Paragraph
5(2) above.
d. Death ---
Options vested in accordance with the schedule set forth in Paragraph
5(2) above shall be exercised by the optionee's inheritor within one
(1) year from the death of the optionee. Unvested options shall
expire and become invalid upon the death of the optionee.
e. Death or Disability Caused by Work Injury ---
(a) Regardless of the vesting schedule set forth in Paragraph 5(2)
above, all options granted are exercisable upon the departure of
the optionee from the Company due to any disability caused by
work injury, subject only to the Waiting Period. Nevertheless,
the optionee shall exercise the options within one (1) year from
the later of: (x) the date of departure; or, (y) the end of the
Waiting Period.
(b) Regardless of the vesting schedule set forth in Paragraph 5(2)
above, all options granted are exercisable by the optionee's
inheritor upon the death of the optionee, which is caused by work
injury, subject only to the Waiting Period. Nevertheless, the
inheritor shall exercise the options within one (1) year from the
later of: (x) the death of the optionee; or, (y) the end of the
Waiting Period.
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f. Transfer to Affiliates ---
In case the optionee is transferred to an affiliate due to the
necessity of the operations of the Company, the rights and
obligations of the options granted shall not be affected by such
transfer.
g. Severance/Layoff in Accordance with Labor Law of ROC ---
Options vested in accordance with the schedule set forth in Paragraph
5(2) above shall be exercised within three (3) months from the
effective date of the severance/layoff (other than situations set
forth in Paragraph 5(5) a above). Unvested options shall become
invalid upon the effective date of the severance/layoff; or, may be
exercised in accordance with a schedule determined by the Chairman
based on the schedule set forth in Paragraph 5(2) above, which shall
be subsequently approved by the Compensation Committee of the Board
of Directors of the Company.
h. If the optionee or his/her inheritor is unable to exercise the
options within the periods set forth above, the unexercised options
shall expire and become invalid.
(6) Invalidated Options
Any invalidated options shall be cancelled.
6. Underlying Shares
The Company will issue new common shares of the Company as the underlying
shares.
7. Adjustments of the Exercise Price
The exercise price shall be subject to adjustment in accordance with the
following formula, to be rounded to the tenth, upon the occurrence of
changes in paid-in capital of the Company as a result of capitalization of
retained earnings or capital reserves.
NEP = OEP x [N / (N+ n)]
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Where: NEP = the exercise price after such adjustment
OEP = the exercise price before such adjustment
N = the number of outstanding common shares (the number of
treasury shares which have not been transferred or
cancelled shall be deducted.)
n = the number of new common shares arising from the
capitalization of retained earnings or capital reserves
The exercise price will not be adjusted in case of issuance of new common
shares in connection with mergers.
8. Issuance of Additional Options
Upon the occurrence of the Company's capitalization of retained earnings or
capital reserves, in addition to adjusting the exercise price in accordance
with provisions set forth in Paragraph 7(1) above, the Company will issue
additional options in proportion to the increase of paid-in capital (only
integral options will be issued and any fractional options resulting
therefrom will be disregarded) at the adjusted price to holders of existing
unvested or unexercised options, provided that there are sufficient common
shares reserved for granting the options as specified in the Articles of
Incorporation of the Company.
9. Procedures for Exercising Options
(1) Except during a period in which the shareholders' book is closed in
accordance with relevant laws; or, the period from three (3) business
days prior to the date of public announcement to close shareholders'
book for stock dividends, cash dividends, or rights offering filed by
the Company with the Taiwan Stock Exchange Corporation to the record
date, optionee may exercise options in accordance with the vesting
schedule set forth in Paragraph 5(2) above by submitting a written
notice (the "Exercise Notice") to the Company to purchase the newly
issued common shares of the Company.
(2) The Company shall inform the optionee of the payment for exercising the
options to a designated bank upon the receipt of the Exercise Notice.
The Exercise Notice shall not be withdrawn once the payment has been
made.
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(3) The transfer agent of the Company shall register the optionee and
his/her shares in the shareholders record upon the Company's
confirmation of the payment and shall book transfer common shares of the
Company to the optionee within five (5) business days. The common shares
so issued are tradeable on the Taiwan Stock Exchange upon delivery to
the optionee.
(4) The Company shall file the change in the paid-in capital with the
relevant authority within fifteen (15) days from each quarter end.
10. Rights and Obligations after Exercising Options
The holders of common shares of the Company issued after options are
exercised shall have the same rights, obligations and privileges as holders
of common shares of the Company.
11. Miscellaneous
(1) The Plan, and its amendments, shall become effective upon obtaining
approval from the Board of Directors of the Company and the Authority.
(2) Any other matters not set forth in the Plan shall be dealt with in
accordance with the applicable laws and regulations.
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