Letter To Shareholders - Mitac

13) Bonds payable
December 31,
2009 2008
Secured bonds payable $ - $ 1,500,000
Less: Current portion ( -) ( 1,500,000)
- -
Unsecured bonds payable 240,500 240,500
Less: Current portion ( 240,500) -
- 240,500
$ - $ 240,500
A. On May 25, 2004, the Company issued secured bonds. The main terms of the
issue are as follows:
(a) Total amount: $2,000,000
(b) Interest rate: 1.60% per annum for par value of $1,500,000. Floating rate
with approximately 1.60% after hedging for par value of $500,000.
(c) Maturity date: May 25, 2009 for par value of $500,000, and May 25, 2009
for par value of $1,500,000.
(d) Collateral: Equity securities. (Refer to Note 6)
All of the outstanding first domestic secured bonds stated above had been
redeemed in May 2009.
B. On August 12, 2006, the Company issued unsecured convertible bonds. The
main terms of the issue are as follows:
(a) Total amount: $3,000,000
(b) Interest rate: Zero
(c) Maturity date: August 12, 2010
(d) Convertible price: NT$48 per share of common stock. The price shall be
reset when issuance of common shares or distribution of cash dividends
exceeds 15% of total paid-in capital. The reset of convertible price is based
on the formula and terms defined in the bond’s prospectus. The reset price
shall be lower but no less than 80% of the original convertible price. As of
December 31, 2009, the convertible price is NT$29.9.
(e) Put and call: After three years from the issuance of bonds, the investors can
have the Company redeem all the bonds. On August 12, 2009, the investors
had the Company redeem bonds amounting to $2,759,500. From one month
after the bonds were issued to ten days before the maturity date, if the
Company’s closing price in Taiwan Stock Exchange is 50% higher than the
convertible price then for continuous 30 working days, or the unconverted
bonds exceed 10% of total amount of bonds issued, the Company can call all
the bonds at par value.
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