Creative 2005 Annual Report Download - page 33

33
NOTE 8 – DIVIDENDS
At the Annual General Meeting held on October 29, 2004, Creative’s shareholders approved an ordinary dividend of $0.25 and a special
dividend of $0.25 for each outstanding ordinary share of Creative for the fiscal year ending June 30, 2005. Dividends of $41.4 million
were paid on December 3, 2004 to all shareholders of record as of November 19, 2004. Creative paid an ordinary dividend of $0.25
in fiscal years 2004 and 2003, amounting to $20.2 million and $19.8 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 years 2004 and 2003, 137,900 and 282,700 shares were issued at a weighted average exercise price of $5.71 and $5.24 per
share under Creative’s Employee Share Purchase Plan respectively.
No shares were issued under Creative’s Employee Share Purchase Plan in fiscal year 2005.
Creative Employee Stock Option Plans
Creative Technology (1999) Share Option Scheme (“1999 Scheme”) was approved by the shareholders on December 30, 1998. The
1999 Scheme allows options to be granted to full-time employees as well as consultants and non-executive directors. The total number
of shares that may be granted under the 1999 Scheme is 7.5 million, provided that such amount shall be automatically increased on the
first day (July 1) of each of the five fiscal years ending June 30, 2001, 2002, 2003, 2004 and 2005 by four percent of the issued share
capital of Creative as at the last day of the immediate preceding fiscal year. The Option Committee, made up of the Board of Directors,
has the discretion to decide the vesting schedule in the letter of offer. If it is not specifically stated in the letter of offer, 1/4 of the total
amount of shares underlying the grant vest on the first anniversary of the grant date and 1/48 of the total amount of the grant on the
last day of each calendar month thereafter. The exercise price of options granted under the 1999 Scheme may be less than the fair
market value of the shares as of the date of grant and the options expire after the tenth anniversary of the date of grant, except in the
case of options granted to participants other than employees, whose options expire not later than the fifth anniversary of the date of
grant.
8.2 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.