D-Link 2005 Annual Report Download - page 50
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D-LINK CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Continued)
The distributions stated above fulfilled the resolutions of the board of directors meetings.
Assuming that employees’ bonuses and directors’ and supervisors’ remuneration were
recognized as periodic expenses, net income per common share for 2004 and 2003 would
decrease from $4.83 and $2.57 to $4.52 and $2.23, respectively, in New Taiwan dollars. D-
Link distributed employees’ stock bonuses constituting 1.27% and 1.99% of its outstanding
shares as of December 31, 2004 and 2003, respectively.
The actual distribution of employees’ bonuses and directors’ and supervisors’ remuneration
for 2005 is subject to the proposal of the board of directors and a resolution of the
stockholders. Relevant information would be available on the Market Observation Post
System of the Taiwan Stock Exchange after the related meetings.
(5) Treasury stock
Pursuant to the board of directors’ resolution on October 28, 2003, D-Link bought back
12,000 thousand common shares for $466,671 thousand to fulfill the purpose of its employee
stock purchasing plan. D-Link bought back 13,876 thousand common shares for $506,820
thousand in 2004 to maintain its credit and stockholders’ equity. Based on the resolution of
D-Link’s board of directors, these treasury shares were cancelled on July 17, 2004, common
stock of $105,540 thousand and capital surplus of $58,263 thousand were eliminated, and the
insufficiency amounting to $248,928 thousand was deducted from retained earnings. The
capital decrease was registered with the government authorities on August 11, 2004.
Based on the resolution of D-Link’s board of directors, 112,044 thousand shares of treasury
stock were cancelled on December 27, 2004, common stock of $33,220 thousand and capital
surplus of $16,988 thousand were eliminated, and the insufficiency amounting to $61,836
thousand was deducted from retained earnings. The capital decrease was registered with
the government authorities on January 11, 2005.
As of December 31, 2005, D-Link had bought back 12,000 thousand common shares for
$448,716 thousand, recorded under stockholders’ equity.
Pursuant to the ROC Securities and Exchange Law, treasury stock should not exceed 10% of
a company’s total issued shares, and the total amount of the treasury stock should not exceed
the aggregation of retained earnings, capital surplus derived from paid-in capital in excess of
par value, plus other realized capital surplus. Based on the financial statements of D-Link
in 2005, the maximum number of shares and the maximum amount D-Link could buy back
on December 31, 2005, were 60,916 thousand shares and $6,386,462 thousand, respectively.
According to SFB regulations, treasury stock cannot be pledged as collateral. Until the
treasury stock is transferred, it does not carry any shareholder rights.