Form 20-F Filings with U.S. SEC (4/15/2011) - TSMC

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Table of Contents Compensation Committee Our board of directors established a Compensation Committee in June 2003 to assist our board of directors in discharging its responsibilities related to our compensation and benefit policies, plans and programs, and the compensation of our executives. The Compensation Committee, by its charter, shall consist of no fewer than three members of the Board. As of February 28, 2011, four members comprised the Compensation Committee: three of whom are independent directors serving as voting members of the Compensation Committee, and the Chairman of the Board of Directors is a non-voting member on this committee. The current members of the Compensation Committee are Mr. Stan Shih (who is the Chairman of the Compensation Committee), Sir Peter Bonfield, Thomas J. Engibous, and Dr. Morris Chang. The Compensation Committee convened four regular meetings in 2010. Employees The following table sets out, as of the dates indicated, the number of our full-time employees serving in the capacities indicated. As of December 31, Function 2008 2009 2010 Managers 2,618 2,792 3,142 Professionals 8,830 9,861 12,729 Assistant Engineers/Clericals 824 761 2,650 Technicians 10,571 11,052 14,711 Total 22,843 24,466 33,232 The following table sets out, as of the dates indicated, a breakdown of the number of our full-time employees by geographic location: As of December 31, Location of Facility and Principal Offices 2008 2009 2010 Hsinchu Science Park, Taiwan 14,635 16,010 20,703 Tainan Science Park, Taiwan 5,500 5,920 9,158 Taichung Science Park, Taiwan — — 29 China 1,397 1,270 1,903 North America 1,252 1,198 1,355 Europe 28 36 48 Japan 29 29 32 Korea 2 3 4 Total 22,843 24,466 33,232 As of December 31, 2010, our total employee population was 33,232 with an educational makeup of 3.3% Ph.Ds, 31.7% masters, 25.9% university bachelors, 14.3% college degrees and 24.8% others. Among this employee population, 47.8% were at a managerial or professional level. Continuous learning is the cornerstone of our employee development strategy. Individual development plans for each employee are customized and tailored to their individual development needs. Employee development is further supported and enforced by a comprehensive and integrated network of resources including on-the-job training, coaching, mentoring, job rotation, on-site courses, e-learning and external learning opportunities. Pursuant to our Articles of Incorporation, our employees participate in our profits by way of a bonus. Employees in the aggregate are entitled to not less than 1% of our net income after the deduction for prior years’ losses and contributions to legal and special reserves. Our practice in the past has been to determine the amount of the bonus based on our operating results and industry practice in the R.O.C. In 2010, we distributed an employees’ cash bonus of NT$6,691 million (US$230 million) and an employees’ cash profit sharing of NT$6,691 million (US$230 million) to our employees in relation to earning year 2009. In 2010 and 2011, we also distributed an employees’ cash bonus of NT$10,908 million (US$374 million) to our employees in relation to earning year 2010. In June 2002, we adopted the 2002 Employee Stock Option Plan that authorizes the grant of options exercisable for up to 100 million common shares (approximately 0.5% of our total then outstanding common shares). These options vested between two and four years after the date of grant, with 50% of the option granted being exercisable two years after the grant, 75% exercisable three years after the grant and 100% exercisable four years after the grant. Any options granted will expire ten years after the date of grant. Under the 2002 Employee Stock Option Plan, a total of 48,137,264 options were granted, of which 2,726,796 options were originally granted to certain of our officers as a result of their voluntary election to exchange part of their profit sharing for stock options. The remaining balance of options under the 2002 Employee Stock Option Plan expired on June 25, 2003. As of December 31, 2010, 16,438,619 options were outstanding under the 2002 Employee Stock Option Plan. 43
Table of Contents In September 2003, we adopted the 2003 Employee Stock Option Plan that authorizes the grant of the options exercisable for up to 120 million common shares (approximately 0.6% of our total then outstanding common shares) in one or more tranches before October 29, 2004, when the 2003 Employee Stock Option Plan expired. These options vested between two and four years after the date of grant, with 50% of the options granted being exercisable two years after the grant, 75% exercisable three years after the grant and 100% exercisable four years after the grant. Any options granted will expire ten years after the date of grant. Under the 2003 Employee Stock Option Plan, a total of 12,055,735 options have been granted. The remaining balance under the 2003 Employee Stock Option Plan expired on October 29, 2004. As of December 31, 2010, 2,231,114 options were outstanding under the 2003 Employee Stock Option Plan. In November 2004, we adopted the 2004 Employee Stock Option Plan that authorizes the grant of options exercisable for up to 11 million common shares (approximately 0.05% of our total then outstanding common shares) in one or more tranches before January 6, 2006, when the 2004 Employee Stock Option Plan expired. These options will vest between two and four years after the date of grant, with 50% of the options granted being exercisable two years after the grant, 75% exercisable three years after the grant and 100% exercisable four years after the grant. Any options granted will expire ten years after the date of grant. Under the 2004 Employee Stock Option Plan, a total of 10,374,550 options have been granted. The remaining balance under the 2004 Employee Stock Option Plan expired on January 6, 2006. As of December 31, 2010, 2,767,698 options were outstanding under the 2004 Employee Stock Option Plan. The following table provides information with respect to outstanding stock options held by our current officers as of December 31, 2010 under the 2002 Employee Stock Option Plan. The numbers of the common shares underlying the stock options and the exercise prices were adjusted for the cash and stock dividends distributed from 2003 to 2010, according to the terms of the 2002 Employee Stock Option Plan. Outstanding Stock Options under the 2002 Employee Stock Option Plan Number of Common Shares Underlying Option Adjusted Unexercised Options Exercise Price Name Grant Date (#) (NT$) Expiration Date Mark Liu 03/07/2003 826,541 21.7 03/06/2013 C.C. Wei 03/07/2003 276,882 21.7 03/06/2013 Richard Thurston 03/07/2003 87,710 21.7 03/06/2013 L.C. Tu 03/07/2003 61,373 21.7 03/06/2013 Rick Cassidy 08/22/2002 42,016 27.6 08/21/2012 06/06/2003 928,891 30.5 06/05/2013 J.K. Lin 03/07/2003 218,900 21.7 03/06/2013 In order to attract qualified senior management, we maintain a sign-on bonus plan, under which selected newly hired senior employees, upon approval by our senior management, receive a hiring bonus with the general condition of staying in our employment for at least one year (based on the quantum of sign-on bonus). In 2010, a total of NT$40 million (US$1 million) was distributed to our senior management under our sign-on bonus plan. We value two-way communication and are committed to keep our communication channels open and transparent; between the management level and their subordinates. In addition, we are dedicated to providing diverse employee engagement programs, which support our goals in reinforcing close rapport with employees and maintaining harmonious labor relations. 44
Page 1 and 2: Table of Contents SECURITIES AND E
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Page 43 and 44: Table of Contents Richard Thurston
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Table of Contents Foreign-currency
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Table of Contents Outstanding forwa
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Table of Contents 27. PLEDGED OR MO
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Table of Contents Adjustments North
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Table of Contents d. 10% tax on una
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Table of Contents Year Ended Decemb
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Exhibit 12.1 CERTIFICATIONS I, Morr
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Exhibit 12.2 CERTIFICATIONS I, Lora
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Exhibit 13.1 TAIWAN SEMICONDUCTOR M
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Exhibit 99.1 CONSENT OF INDEPENDENT
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Form 20-F Filings with U.S. SEC (4/15/2011) - TSMC

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