Contents - MiTAC

B. Based on the resolution of the shareholders’ meeting on June 5, 2002, the
Company issued 47,055 thousand new shares from the capitalization of retained
earnings of $397,729 and employees’ bonus of $72,824. The Company completed
the amendment procedures for registration in 2003.
C. The exercise price of the Company’s stock option incentive plan was based on the
market price of the Company’s common stock on the issuance date. The exercise
price can be adjusted when the Company issues stock dividends or declares cash
dividends after option granted. Options granted vest ratably over a four-years
period and expire in six years.
A summary of the activity under the Company’s stock option plans is set forth
below:
For the year ended December 31, 2003 For the year ended December 31, 2002
In thousands of
shares
Weighted average
exercisable price
(in NT dollars)
- 61 -
In thousands of
shares
Outstanding at the
beginning of the year 99,000 $ 9.5
99,000
Option granted
Stock dividends or
adjustment of
- -
number of options
-
-
Option exercised ( 14,813 ) 9.3 -
Option confiscated
Outstanding at the
- -
end of the year
Exercisable options at
84,187
9.3
99,000
the end of the year
Approved and not yet
34,687
-
issued options at the
end of the year
-
-
Weighted average
exercisable price
(in NT dollars)
$ 9.5
D. As of December 31, 2003, the summary of the outstanding stock option plan was as
follows:
Range of
exercisable
price
(in NT dollars)
Number of options outstanding at the end of the year Exercisable options at the end of the year
In thousands
of shares
Expected
weighted
average
residual years
Weighted
average
exercise price
(in NT dollars)
In thousands
of shares
9.5
Weighted average
exercise price
(in NT dollars)
$ 9.3 84,187 3.75 $ 9.3 34,687 $ 9.3
14) CAPITAL RESERVE
According to the R.O.C. Company Law, capital reserve shall be exclusively used to
offset against accumulated deficit. However, capital reserve arising from paid-in
capital in excess of par and donation can be used to increase capital after covering
accumulated deficit. The capitalization of the paid-in capital in excess of par and
donation is limited to 10% of the Company’s capital each year.
15) RETAINED EARNINGS
A. Legal reserve
In accordance with the Company Law and the Company's Articles of
Incorporation, the annual net income should first be used to cover any
accumulated deficit, thereafter, 10% of the remaining balance shall be set aside as
legal reserve until the legal reserve equals the total paid in capital. The legal
reserve shall only be used either to cover losses or to increase share capital.