Asus 2010 Annual Report Download - page 111

107
B. On June 16, 2009, the stockholders resolved to increase the Company’s capital by
26,851,000 shares by capitalizing its retained earnings and employees’ bonuses of
$268,512.
C. In order to maximize the efficiency of the own-brand business and to diversify the OEM
business, the Company held a special shareholders’ meeting on February 9, 2010 and
resolved to decrease its authorized capital by 85% and transfer its OEM business. The
record date for the capital reduction and transfer is June 1, 2010. The capital reduction,
which amounted to $36,097,609, was authorized by Financial Supervisory Commission,
Executive Yuan, R.O.C. on April 9, 2010. The registration procedures related to the
reduction were completed on June 21, 2010.
D. As of December 31, 2010, the Company issued Global Depositary Receipts (GDRs), of
which 4,617,000 units of the GDRs are now listed on the London Stock Exchange. Per
unit of GDR represents 5 shares of the Company’s common stock and total GDRs
represent 23,085,000 shares of the Company’s common stock. The terms of GDR are as
follows:
(A) Voting Rights
GDR holders may, pursuant to the Depositary Agreement and the relevant laws and
regulations of the R.O.C., exercise the voting rights pertaining to the underlying
common shares represented by the GDRs.
(B) Dividends, stock warrants and other rights
GDR holders and common shares holders are all entitled to receive dividends. The
Depositary may issue new GDRs in proportion to GDRs holding ratios or raise the
number of shares of common stock represented by each unit of GDR or sell stock
dividends on behalf of GDR holders and distribute selling income to them in
proportion to their GDRs holding ratios.
(14) Additional paid-in capital
The R.O.C. Securities and Exchange Act requires that capital reserve shall be exclusively used
to cover accumulated deficit or to increase capital and shall not be used for any other purpose.
However, capital reserve arising from paid-in capital in excess of par value on issuance of
common stock and donations can be capitalized once a year, provided that the Company has
no accumulated deficit and the amount to be capitalized does not exceed 10% of the paid-in
capital.
(15) Retained earnings
A. According to the Company’s articles of incorporation, annual net income after covering
prior years’ losses, if any, should be distributed as follows: 10% as legal reserve, an
appropriate amount as special reserve according to relevant regulation or as required by
the government, 10% of capital stock as capital interest, no less than 1% as employees’
bonuses, and no more than 1% as directors’ and supervisors’ bonuses. When the
employees’ bonuses are distributed in stock, the recipients must include the employees of
subsidiaries. After the distribution of earnings, the remaining earnings, if any, may be
appropriated according to a resolution adopted in the stockholders’ meeting.