Creative 2000 Annual Report Download - page 28

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 7 – DIVIDENDS
In November 1998, Creative’s Directors recommended two dividends totaling $0.50 per ordinary share of Creative for fiscal
1999. The two recommended dividends, consisting of an Ordinary Dividend of $0.25 and a Special Dividend of $0.25, were
approved by the shareholders at the Annual General Meeting held on December 30, 1998. Dividends of approximately
$45.0 million were paid on February 2, 1999 to shareholders of record as of January 18, 1999.
At the Annual General Meeting held on November 9, 1999, Creative’s shareholders approved an Ordinary Dividend of
$0.25 per ordinary share of Creative for the fiscal year ending June 30, 2000. Dividends of $20.6 million were paid on
December 17, 1999 to all shareholders on record as of December 1, 1999.
NOTE 8 – EMPLOYEE SHARE PURCHASE AND STOCK OPTION PLANS
Creative Employee share purchase plan
As approved by the shareholders in November 1999, Creative has adopted the 1999 Employee Share Purchase Plan that
permits substantially all employees to purchase Ordinary Shares of Creative. Participating employees may purchase ordinary
shares through regular payroll deductions accumulated during each offering period at a purchase price of 85% of the lower
of the fair market value on the offering date or on the purchase date. Each offering period consists of four six months
purchase periods, except for the first purchase period in the first offering period which was four months. A total of 1.0 million
Ordinary Shares were reserved for issuance under this plan. In addition, on each July 1, the aggregate number of Ordinary
Shares reserved for issuance under the plan shall be increased automatically by 1% of the total number of outstanding
Ordinary Shares of Creative on the immediately preceding June 30; provided that the aggregate shares reserved under this
plan shall not exceed 5.0 million shares.
Creative Employee stock option plans
In 1992, Creative adopted two Flexible Share Incentive Plans (“Old Plans”), under which a total of 16 million Ordinary
Shares were reserved for issuance. Pursuant to the registration of Creative’s Ordinary Shares on the Stock Exchange of
Singapore on June 15, 1994, Creative restricted further grants under these plans. At June 30, 1999, all options under the
Old Plans had expired.
In December 1994, Creative adopted the new Creative Technology Employees’ Share Option Scheme (the “New Plan”).
Options granted under this plan were in accordance with Section 422(a) of the US Internal Revenue Code of 1986, as
amended. The New Plan was substantially more restrictive than the Old Plans. On November 13, 1996, at a special
meeting, shareholders approved certain changes to the New Plan to make it less restrictive. Under the amended New Plan,
the total number of shares that could be granted was increased to an overall maximum of 15% of the issued share capital
of Creative. The amended New Plan also provided for incentive stock options (ISO’s) to be granted to employees of Creative
on a quarterly basis, at the average market price established on the five days closing immediately prior to the date of grant.
The options vested at the rate of 25% at the end of each anniversary of the grant date and were exercisable over a period
not exceeding five years from the date of grant.