Letter To Shareholders - Mitac

converting price is to be adjusted on the stock split cut-off date. If the
recapitalization of cash is by pricing and purchasing or if the recapitalization
of cash is by attending global depository receipt, since there is not an
Ex-right cut-off date designated, the converting price is to be adjusted upon
the completion of stock issuance.
2) Upon the issuance of the convertible debenture bond, if the Company has marketable
securities with debt-for-equity SWAP or stock option issued at the price lower than
the transfer price per share (Note 1) or stock option price, or, if debt-for-equity
SWAP is offered to others for a reason other than the recapitalization of cash,
converting price is to be adjusted according to the following equation (rounded up to
the first decimal of New Taiwan Dollar) also, please contact the GreTai to have the
converting price adjusted on the issuance date of the marketable security or stock
option:
Adjusted
converting
price
Converting
price before
=adjustment
× Outstanding
stock shares
Converting price or stock
+option price of new bonus ×
shares or stock option
Converting shares or
stock option shares of
newly issued marketable
security or stock option
Outstanding stock shares + Converting shares or stock option shares of newly issued
marketable security or stock option
Note 1: The market price per share is the average closing price of the Company’s
common stock share for one business day, three business days, or five
business days prior to the cutoff date of the marketable security with
debt-for-equity swap or stock option.
Note 2: The outstanding shares are net of the Treasury stock shares that are not yet
cancelled or transferred.
Note 3: If the marketable security with debt-for-equity swap or stock option is paid
for with the Treasury stock, the outstanding stock shares in the equation are
net of the new bonus shares for the newly issued marketable security or
stock option.
3) Upon the issuance of the convertible debenture bond, if the outstanding common
stock shares are reduced for a reason other than the cancellation of Treasury stock,
the converting price is to be adjusted according to the equation below; also, please
contact the GreTai to have it adjusted on the recapitalization cutoff date:
Outstanding common shares before decapitalization
Adjusted converting price=Converting price before adjustment×
Outstanding common shares after decapitalization
Note 1: The outstanding shares are net of the Treasury stock shares that are not yet
cancelled or transferred.
(3) Converting price reset
In addition to having the converting price adjusted according to the aforementioned
anti-dilution clause, the Company is to have the price reset on the date when it is issued
for six months and the stock dividend ex-right cutoff date or ex-dividend cutoff date
(whichever is later) from 2007 to 2010.If there is no stock dividend or cash dividend
distributed in the year, the converting price (no adjustment is needed if it is higher than
the converting price of the year before the price reset) is to be reset on the cutoff date of
July 5th according to the pricing model for converting price in clause (1).The adjusted
converting price may not be lower than an amount equivalent to 80% of the converting
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