Creative 2004 Annual Report Download - page 32

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
NOTE 8 – DIVIDENDS
At the Annual General Meeting held on November 26, 2003, Creative’s shareholders approved an ordinary dividend of $0.25 for each
outstanding ordinary share of Creative for the fiscal year ending June 30, 2004. Dividends of $20.2 million were paid on December 23,
2003 to all shareholders of record as of December 10, 2003. Creative paid an ordinary dividend of $0.25 in fiscal 2003 and 2002,
amounting to $19.8 million and $18.0 million, respectively.
NOTE 9 – 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.
In fiscal 2004, 2003 and 2002, 137,900, 282,700 and 248,000 shares were issued at a weighted average exercise price of $5.71, $5.24
and $5.19 per share under Creative’s Employee Share Purchase Plan respectively.
Creative Employee Stock Option Plans
In December 1994, Creative adopted the new Creative Technology Employees’ Share Option Scheme (the “New Plan”). Options granted
under this plan were in accordance with Section 422(a) of the US Internal Revenue Code of 1986, as amended. On November 13, 1996,
at a special meeting, shareholders approved certain changes to the New Plan to make it less restrictive. Under the amended New Plan,
the total number of shares that could be granted was increased to an overall maximum of 15% of the issued share capital of Creative.
The amended New Plan also provided for incentive stock options to be granted to employees of Creative on a quarterly basis, at the
average market price established on the five days closing immediately prior to the date of grant. The options vested at the rate of 25%
at the end of each anniversary of the grant date and were exercisable over a period not exceeding five years from the date of grant.
NOTE 7 – SHARE REPURCHASES
Details of Share repurchases by Creative since the commencement date of the program on November 6, 1998 are set out below:
Number of Shares Repurchased Average Price
(in millions) (US$)
As of June 30, 2002 26.3 $ 13
Fiscal year 2003 – –
Fiscal year 2004 – –
Total 26.3 $ 13
At the Annual General Meeting (“AGM”) held on November 26, 2003, the shareholders approved the share repurchase mandate allowing
Creative to buy up to 10% of the issued share capital of Creative as at the date of the AGM. This amounts to approximately 8.1 million
shares. This authority to repurchase these shares shall continue in force unless revoked or revised by the shareholders in a general
meeting, or until the date that the next AGM of Creative is held or is required to be held, whichever is the earlier.
In accordance with Singapore statutes, such repurchases are recorded as a reduction in retained earnings.