Letter To Shareholders - Mitac

4.1.6 Dividend policy and its implementation
1. Company dividend policy:
The company is in a growing industry; hence the life cycle of the company
grows with the industry. In order to take our industry’s conditions, long-term
financial planning, and future cash flow into consideration, and also to satisfy
shareholders’ demand for cash inflow, the company has withdrawn 10% of its
earnings as a legal reserve. This 10 %, after making up for deficits of previous
years and tax deductibles, will have 5% leftover for employees’ bonus. The
other, with remaining amounts from previous years, will be distributed after
approval during the Board of Directors’ and the shareholders’ meeting.
If the bonus is decided to be distributed in stocks, any employee who fits the
profiles, which are set by the CEO, will be entitled to receive the bonus.
The ratio of cash and stocks allocation will be decided by the Board of
Directors from different aspects: financial structure, future cash flow, and
profitability. The cash bonus will not exceed 10% of the stocks bonus. But the
number needs to be approved by the shareholders.
2. The resolution for dividend distribution at the shareholders’ meeting:
Based on the principles above, the Board of Directors drafted a proposal for
dividend distribution at its meeting on Apr 22, 2010. This proposal covers
dividends for the fiscal year of 2009 and the dividend per share is NT$0.15. The
proposal will be presented for approval at the shareholder’s meeting on June 18,
2010.
3. Expected change of dividend policy: None.
4.1.7 Impact on the company’s performance and earnings per share at stock grants set for the
consideration of this year’s shareholders’ meeting: N/A.
4.1.8 Employee bonuses and Remuneration for Directors and Supervisors:
1. Percentage of employees’ bonuses and remuneration for directors and supervisors
as set forth in the company charter:
(1) Employee bonus: Where the company has earnings at the end of a business
year, after all tax deductibles and cumulative deficits from past year, a ten
percent of legal reserve, plus special earnings surplus and payment of interest
on stocks, a minimum of 5% of the remainder will be the employees’ bonus.
(2) Percentage of remuneration for directors and supervisors: not specified in the
company charter.
2. After accounting for changes to the basis of estimation for employees’ bonus,
directors’ and supervisors’ remuneration, changes to the calculation basis for stock
dividends, and discrepancies between the amounts actually paid and the amounts it
is estimated:
(1) The estimation basis for employees' bonus, directors' and supervisors'
remuneration: the company's 2009 employees' bonus, directors' and supervisors'
remuneration were determined by applying the appropriate percentage
prescribed in the Memorandum of Association (5% for employees' bonus) to
the year to date net profit after tax, after taking into account legal earnings
reserves and other factors. These sums are recognized as operating expenses.
(2) That calculation basis for stock dividends: the number of ordinary shares to be
distributed as stock dividends is calculated based on the fair value per share
(closing price) one trading day before the general shareholders' meeting of the
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