HTC 2009 Annual Report Download - page 42

8382
CAPITAL AND SHARES
(VI) Company's dividend policy and implementation thereof :
1. Dividend policy:
Because the Company is a technology and capital-intensive enterprise in
its growing phase, the Company sets a policy to allocate dividends with
consideration to factors such as the Company's current and future invest-
ment climate, demand for working capital, competitive environment at
home and globally, capital budget, as well as the interests of the share-
holders, balanced dividends, and long-term financial planning of the
Company. Every year, the board of directors shall propose the allocation
ratio and propose it at the shareholders' meeting. The earnings may be
allocated in cash dividends or stock dividends, provided that the ratio of
cash dividends may not be less than 50% of the total dividends.
According to the company's Articles of Incorporation, If the Company has
earnings after the annual final accounting, it shall be allocated in the fol-
lowing order:
>To pay taxes.
>To cover accumulated losses, if any.
>To appropriate 10% legal reserve unless the total legal reserve accu-
mulated has already reached the amount of the Company's authorized
capital.
>To pay remuneration to directors and supervisors at 0.3% maximum
of the balance after withholding the amounts under subparagraphs 1
to 3.
>To pay bonus to employees at 5% minimum of the balance after with-
holding the amounts under subparagraphs 1 to 3, or such balance
plus the unappropriated retained earnings of previous years.
However, the bonus may not exceed the limits on employee bonus
distributions as set out in the Regulations Governing the Offering and
Issuance of Securities by Issuers. Where bonus to employees is allo-
cated by means of new share issuance, the employees to receive
bonus may include employees serving with affiliates who meet spe-
cific requirements. Such specific requirements shall be prescribed by
the board of directors.
>For any remainder, the board of directors shall propose allocation
ratios based on the dividend policy set forth in paragraph 2 of this
Article and propose them at the shareholders' meeting.
2. The dividend distributions proposed at the most recent shareholders'
meeting : (Board of Directors has adopted, 2010 pending on the approval
of the Shareholders General Meeting. )
On April 28, 2010 Company adopted a resolution passed by Board of
Directors for the distribution of 2009 earnings for the proposed allocation
of NTD 386,967,920 in stock dividend and NTD 20,122,331,946 in cash
dividend, propose to distribute NT$0.5 stock dividends and NT$26 cash
dividends per share.(based on book closure date of outstanding shares for
2010 Annual Shareholders' Meeting), the Board of Directors may make the
required adjustments to the actual earnings distribution ratio on the basis
of the number of issued and outstanding stocks registered in the Common
Stockholders' Roster as at the record date.
3. If a material change in dividend policy is expected, provide an explanation:
There is no material change in dividend policy.
(VII) Impact of the Stock Dividend Proposal of this Shareholders
Meeting on Operational Performance and Earnings per Share:
Company is not required to make public Company's 2010 financial fore-
cast information ; therefore it is inapplicable.
(VIII)Information on Employee Profit Sharing & Regular
Compensation for Directors and Supervisors:
1. Company's Articles of Incorporation stipulate the distribution of employ-
ee profit sharing as well as Directors and Supervisors' remuneration in
terms of percentage or scope.
Company's Articles of Incorporation stipulate that for earnings, the order
of distribution shall be followed according to below:
(1) To pay taxes.
(2) To cover accumulated losses, if any.
(3) To appropriate 10% legal reserve unless the total legal reserve accu-
mulated has already reached the amount of the Company's authorized
capital.
(4) To pay remuneration to directors and supervisors at 0.3% maximum of
the balance after withholding the amounts under subparagraphs 1to3.
(5) To pay bonus to employees at 5% minimum of the balance after with-
holding the amounts under subparagraphs 1 to 3, or such balance
plus the unappropriated retained earnings of previous years.
3. Distributions of earnings in 2008 as employees' bonus and remunerations for directors and supervisors:
Distributions of earnings in 2008
Date of the Board of Directors' Meeting resolution 04/30/2009
Date of Regular Shareholders' Meeting 06/19/2009
Total stock bonus as employee bonus Total Number of Shares (1,000 shares) 13,357
Total Amount (NT$1,000) 4,954,889
Total cash bonus as employee bonus (NT$1,000) 1,210,000
Total amount bonus as employee bonus (NT$1,000) 6,164,889
Director' and Supervisors' Remunerations (NT$1,000) 0
Note: For employee stock bonuses NT$4,954,889,133, the total issuance of new shares 13,357,296 shares is calculated based on the closing price (NT$416.50) one day prior to the 2009 Annual General Shareholders'
Meeting on an ex-dividend basis NT$370.95. The amount of NT$ 181 which is calculated less than one share will be distributed in the form of cash.
(IX) Share Repurchases:
Topic Explanation
Initial Estimation of Share Buy-back Status
Board of Director resolution 07/31/2009
Purpose of the share buy-back To stabilize stock price by maintaining company credibility and shareholders rights.
According to the Regulations Governing Share Repurchase by Listed and OTC
Companies, Article 2 requires off-setting of buy-back Treasury stocks.
Type of share buy-back Common stock
Total amount allocated for share buy-back NTD 6,500,000,000
Buy-back period 08/03/2009~10/02/2009
Estimated number of buy-back shares (as percentage of total outstanding shares) 13,000,000 shares (1.744%)
Estimated buy-back price interval Buy-back stock price is between NTD 300 to NTD 500. It is further resolved by the Board
of Directors to continue buy-back of shares if the stock price falls under NTD 300.
Method of Buy-back Buy-back shares from stock exchange
Actual Stock Buy-back Status
Buy-back period 08/05/2009~10/02/2009
Number of buy-back shares (as a percentage of total shares outstanding) 7,085,000 shares (0.89%)
Total amount for buy-back shares NTD 2,405,587,000 (Note: Excluding handling fee)
Average price per buy-back share NTD 339.53
Number of Shares Cancelled or Transferred Cancelled 7,085,000 shares
Cumulative number of own shares held 0 shares
Ratio of cumulative number of own shares held during the repurchase period to the
total number of the Company's issued shares 0%
Initial Estimation of Share Buy-back Status
Board of Director resolution 02/09/2010
Purpose of the share buy-back To stabilize stock price by maintaining company credibility and shareholders rights.
According to the Regulations Governing Share Repurchase by Listed and OTC
Companies, Article 2 requires off-setting of buy-back Treasury stocks.
Type of share buy-back Common stock
Total amount allocated for share buy-back NTD 7,500,000,000
Buy-back period 02/10/2010~04/09/2010
Estimated number of buy-back shares (as percentage of total outstanding shares) 15,000,000 shares (1.90%)
Estimated buy-back price interval Buy-back stock price is between NTD 280 to NTD 500. It is further resolved by the Board
of Directors to continue buy-back of shares if the stock price falls under NTD 280.
Method of Buy-back Buy-back shares from stock exchange
Actual Stock Buy-back Status
Buy-back period 02/10/2010~03/05/2010
Number of buy-back shares (as a percentage of total shares outstanding) 15,000,000 shares (1.90%)
Total amount for buy-back share NTD 4,832,242,000 (Note: Excluding handling fee)
Average price per buy-back share NTD 322.15
Number of Shares Cancelled or Transferred Cancelled 15,000,000 shares
Cumulative number of own shares held 0 shares
Ratio of cumulative number of own shares held during the repurchase period to the
total number of the Company's issued shares 0%
2. Board of Directors has adopted the proposed distribution of bonus for employees in the following manner:
Unit: NT$ 1,000
Distributions of Earnings in 2009 Accrued Expenses for Employee Bonus Resolution Approved by the Board of Directors
April 28, 2010
Employee Bonus 4,859,236 Employee Stock Bonus (Note) 1,943,694
Employee Cash Bonus 2,915,542
Total Amount 4,859,236
Directors' and Supervisors' Remunerations 0 0
Note: The value of employee cash/stock bonuses and director/supervisor remunerations proposals approved by the board of directors is the same as the Company's accrued
expenses in the financial reporting period.
Note:For employee stock bonuses NT$1,943,694, the number of shares shall be calculated based on the closing price one day prior to the 2010 annual general shareholders' meeting on an ex-dividend
basis. For employees receiving less than one share, bonuses will be distributed in the form of cash.