Letter To Shareholders - Mitac

C. The following sets forth the pension information based on the actuarial report:
a. Funded status of the pension plan:
December 31, (the measurement date)
2009 2008
Vested benefit obligation ( $ 102,118 ) ( $ 71,492 )
Non-vested benefit obligation ( 230,411 ) ( 235,344 )
Accumulated benefit obligation ( 332,529 ) ( 306,836 )
Effect of projected salary increase ( 100,162 ) ( 101,665 )
Projected benefit obligation ( 432,691 ) ( 408,501 )
Fair value of plan assets 263,002 263,036
Funded status ( 169,689 ) ( 145,465 )
Unrecognized transition (asset) obligation ( 1,048 ) ( 2,098 )
Unrecognized loss 93,376 71,353
Prepaid pension cost ( $ 77,361 ) ( $ 76,210 )
Vested benefit $ 117,404 $ 95,095
b. Net pension cost comprises the following:
2009 2008
Service cost $ 10,116 $ 11,237
Interest cost 10,212 15,233
Expected return on plan assets ( 6,722 ) ( 8,957 )
Amortization of unrecognized loss on plan
assets 1,453 3,962
Amortization of unrecognized transition
asset ( 1,050 ) ( 1,050 )
Net periodic pension cost $ 14,009 $ 20,425
D. Effective July 1, 2005, the Company established a defined contribution pension
plan (the “New Plan”) under the Labor Pension Act, covering all regular
employees of R.O.C. nationality. Employees have the option to be covered under
the New Plan. Under the New Plan, the Company and its subsidiary contributes
monthly an amount based on 6% of the employees’ monthly salaries and wages to
the employees’ individual pension accounts at the Bureau of Labor Insurance.
The benefits accrued are portable upon termination of employment. Pensions are
paid by monthly installments or in lump sum based on the accumulated balances
of the employees’ individual pension accounts.
E. The Company’s mainland subsidiaries have a defined contribution plan. Monthly
contributions are based on a certain percentage of employees' monthly salaries
and wages to an independent fund administered by the government in accordance
with the pension regulations in the People’s Republic of China.
F. The pension costs were $107,847 and $160,301 in 2009 and 2008, respectively.
16) Capital
As of December 31, 2009, the Companys authorized capital was $22,000,000,
consisting of 2,200,000 thousand shares of common stock (including 250,000
thousand shares reserved for employee stock options), and the paid-in capital was
$15,361,724 with a par value of $10 (in dollars) per share.
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