CHUNGHWA TELECOM CO LTD | CIK:0001132924 |

Filed: 4/27/2018

Entity registrant name: CHUNGHWA TELECOM CO LTD (CIK: 0001132924)

Generator: Donnelley Financial Solutions

SEC filing page: http://www.sec.gov/Archives/edgar/data/1132924/000156459018009423/0001564590-18-009423-index.htm

XBRL Instance: http://www.sec.gov/Archives/edgar/data/1132924/000156459018009423/cht-20171231.xml

XBRL Cloud Viewer: Click to open XBRL Cloud Viewer

EDGAR Dashboard: https://edgardashboard.xbrlcloud.com/edgar-dashboard/?cik=0001132924

Open this page in separate window: Click

 

 

Each option is eligible to subscribe for one common share when exercisable.  Under the terms of the SENAO Plan, the options are granted at an exercise price equal to the closing price of the SENAO’s common stocks listed on the TWSE on the higher of closing price or par value.  The SENAO Plan have exercise price adjustment formula upon the changes in common stocks equity (including cash capital increase, new share issue through capitalization of earnings and additional paid-in capital, merger, spin off and new share issue for Global Depositary Shares, and so on) or distribution of cash dividends.  The options of SENAO Plan are valid for six years and the graded vesting schedule for which 50% of option granted will vest two years after the grant date and another two tranches of 25%, each will vest three and four years after the grant date respectively.

The compensation costs of stock options granted on May 7, 2013, were $35 million, $13 million and $4 million for the years ended December 31, 2015, 2016 and 2017, respectively.

SENAO modified the plan terms of the outstanding stock options in August 2015, the exercise price changed from $84.30 to $81.40 per share.  The modification did not cause any incremental fair value granted.

SENAO modified the plan terms of the outstanding stock options in July 2016, the exercise price changed from $81.40 to $76.10 per share.  The modification did not cause any incremental fair value granted.

SENAO modified the plan terms of the outstanding stock options in July 2017, the exercise price changed from $76.10 to $70.70 per share.  The modification did not cause any incremental fair value granted.

Information about SENAO’s outstanding stock options for the years ended December 31, 2015, 2016 and 2017 was as follows:

 

 

 

 

As of December 31, 2016 information about employee stock options outstanding was as follows:

 

 

As of December 31, 2017 information about employee stock options outstanding was as follows:

 

 

SENAO used the fair value method to evaluate the options using the Black-Scholes model and the related assumptions and the fair value of the options were as follows:

 

 

Expected volatility was based on the historical share price volatility of SENAO over the period equal to the expected life of SENAO Plan.

 

The Board of Directors of SENAO resolved to transfer treasury stock to specific employees in May and November 2017.  The aforementioned treasury stock transferred to employees were measured at the fair value of the grant date.  SENAO totally transfered 3,342 thousand shares of treasury stock and the compensation cost of $9 million was recognized for the year ended December 31, 2017.

SENAO used the fair value method to evaluate share-based payment transaction using the Black-Scholes model and the related assumptions and the fair value of the option were as follows:

Expected volatility was based on the historical share price volatility of SENAO over three months before the grant date.

 

 

Each option is eligible to subscribe for one thousand common stocks when exercisable.  Under the terms of the CHIEF Plan, the options are granted at an exercise price equal to $147.00 and $43.00, respectively.  The options are granted to specific employees that meet the vesting conditions.  The CHIEF Plan has exercise price adjustment formula upon the changes in common stocks or distribution of cash dividends.  The options of CHIEF Plan are valid for five years and the graded vesting schedule will vest two years after the grant date.

The compensation costs recognized for stock options granted on October 22, 2015 were $1 million, $4 million and $3 million for the years ended December 31, 2015, 2016 and 2017, respectively.

The compensation cost recognized for stock options granted on December 19, 2017 was $0.1 million for the year ended December 31, 2017.

CHIEF modified the plan terms of the outstanding stock options in July 2016, the exercise price changed from $43.00 to $34.40 per share.  The modification did not cause any incremental fair value granted.

Information about CHIEF’s outstanding stock options for the years ended December 31, 2015, 2016 and 2017 was as follows:

 

 

 

 

As of December 31, 2016, information about employee stock options outstanding was as follows:

 

 

As of December 31, 2017, information about employee stock options outstanding was as follows:

 

 

 

CHIEF used the fair value method to evaluate the options using the Black-Scholes model and binomial option pricing model and the related assumptions and the fair value of the options were as follows:

 

 

Expected volatility was based on the average annualized historical share price volatility of CHIEF’s comparable companies before the grant date.

On December 8, 2015, the Board of Directors of CHPT approved the cash injection to issue 2,787 thousand shares and simultaneously reserved 418 thousand shares for subscription by employees according to the Company Act of the ROC.  Furthermore, when the employees subscribed some shares or discarded their rights to subscribe shares, the Board of Directors of CHPT authorized the chairman of the Board of Directors to contact specific people or group to subscribe.

The aforementioned options granted to employees are accounted for and measured at fair value.  The compensation cost was $0.016 million for the year ended December 31, 2016.

CHPT used the fair value method to evaluate the options granted to employees on March 10, 2016 using the Black-Scholes model and the related assumptions and the fair value of the options were as follows:

 

 

Expected volatility was based on the average annualized historical share price volatility of CHPT’s comparable companies before the grant date.

 

On February 8, 2017, the Board of Directors of CHPT approved the cash injection to issue 2,000 thousand shares and simultaneously reserved 300 thousand shares for subscription by employees according to the Company Act of the ROC.  Furthermore, when the employees subscribed some shares or discarded their rights to subscribe shares, the Board of Directors of CHPT authorized the chairman of the Board of Directors to contact specific people or group to subscribe.

The aforementioned options granted to employees are accounted for and measured at fair value.  The compensation cost was $6 million for the year ended December 31, 2017.

CHPT used the fair value method to evaluate the options granted to employees on September 18, 2017 using the Black-Scholes model and the related assumptions and the fair value of the options were as follows:

 

Expected volatility was based on the historical share price volatility of CHPT over the period equal to the expected life.