HTC Investors

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HTC Board of Directors resolved to buy back HTC common stocks for transferring to employees
1.Date of the board of directors resolution:2010/10/29

2.Purpose of the share repurchase:For transferring to employees

3.Type of shares to be repurchased:HTC's common stocks

4.Ceiling on total monetary amount of the share repurchase:NT$59,156,204,056

5.Scheduled period for the repurchase:2010/11/01~2010/11/30

6.Number of shares to be repurchased: 5,000,000 shares.

7.Repurchase price range:NT$565 to NT$850 per share. In the event that HTC's share price is lower than this price range, HTC may continue to buy back its shares.

8.Method for the repurchase:To buy back shares from Taiwan Stock Exchange.

9.Ratio of the shares to be repurchased to total issued shares of the Company:0.61%

10.Number of the Company’s own shares held at the time of reporting:4,786,000 shares

11.Status of repurchases within three years prior to the time of reporting: From Oct. 13, 2008 to Sep. 03, 2010, HTC had bought back 36,871,000 shares of common stock.

12.Status of repurchases that have been reported but not yet completed:
The first time and the third time of repurchase of shares were not completed.
Reason: In order to protect shareholders' interset, the Company bought back its own shares according to the movement of stock price.
The fifth time of repurchase of shares was not completed.
Reason:The stock price of the Company was over the price ceiling sometimes during the buyback period.

13.Minutes of the board of directors meeting that resolved for the share repurchase:
Proposal for the repurchasing of the Company’s shares and transferring of such shares to employees, is submitted for resolution.
Contents:
(1)Pursuant to the second article of the Regulations Governing Share Repurchases by Listed and OTC Companies, the Company will repurchase Treasury Stock for the transfer of shares to employees to encourage and take care of employees.
(2)The following related matters are proposed for this repurchase:
(a) Purpose of the repurchase: such repurchase is proposed and arranged for the transfer of shares to employees in order to encourage and take care of employees.
(b) Types of shares to be repurchased: the Company’s common shares
(c) Ceiling on total monetary amount of the repurchase: NT$4,250,000,000.
(d) Planned period for the repurchase, and number of shares to be repurchased: It is proposed to repurchase 5,000,000 shares from November 1, 2010 to November 30, 2010.
(e) Price range of the shares to be repurchased: From NT$565 to NT$850, repurchasing will continue even when the share price is lower than the above price range.
(f) Method for the repurchase: Repurchasing at a centralized securities exchange market.
(g) For Company’s Rules for Transfer of Shares to employees, please refer to Appendix 17.
(3)The number of issued outstanding common shares is 817,653,285. The number of repurchased common shares constitutes 0.61% of the issued outstanding common shares, and the repurchase is using the Company’s own funds to buy Treasury Stock, so that the financial state of the company and that the maintenance of its capital would not be affected by the repurchase. By law, when the Company repurchases its own shares, it shall announce the repurchase, and report to the Financial Supervisory Commission (FSC), Executive Yuan and make a Declaration  (as Appendix 18/ Board Declaration) that was considered at a meeting of the board of directors and on which the resolution was made by the directors present.
(4)The resolution is submitted for discussion.
This Proposal has been approved unanimously by the Directors presented (six seats).

14.The rules for transfer of shares set forth in Article 10 of the Guidelines for Repurchase of Shares by Listed and OTC Companies:
HTC Corporation Rules for the Repurchase of Shares and Transfer to Employees
Article 1
In order to care for and encourage its employees, HTC adopts these Rules for
the Repurchase of Shares and Transfer to Employees in accordance with
Article 28-2, paragraph 1, subparagraph 1 of the Securities and Exchange
Act and the provisions of the Regulations Governing Share Repurchase by
Exchange-Listed and OTC-Listed Companies issued by the Financial Supervisory
Commission, Executive Yuan. Any repurchase of shares and transfer to
employees by HTC, in addition to complying with related laws and
regulations, will be carried out in accordance with these Rules.
(Type of shares transferred, associated rights, and restrictions on rights)
Article 2
The shares in the present transfer of shares to employees will be common
shares, and the rights and obligations associated with those shares, unless
otherwise provided by applicable laws and regulations or these Rules, will
be the same as other outstanding common shares of HTC.
(Period of transfer)
Article 3
In accordance with these Rules, the shares in the present share repurchase
may be transferred to employees in a single transfer or multiple transfers
within three years from the date of the share repurchase.
(Eligibility of transferees)
Article 4
All middle and upper-level officers at HTC, including at the level of
managerial officer and above at HTC and at the division director level and
above at either domestic or foreign subsidiaries, are eligible to
subscribe to shares in the amounts set out in Article 5 herein.
(Transfer procedures)
Article 5
The number of shares to which employees may subscribe will be determined
based on their rank, seniority, and performance evaluations, as set out
below:
1. A list of employees and the number of shares to which they may subscribe
will be drawn up according to the recommendations of the chief executive
officer and submitted to the chairman of the board for approval.
2. Employees who have not subscribed and completed payment at the
conclusion of the designated subscription and payment period will be deemed
to have waived their subscription rights. In the event of an insufficient
number of subscriptions, the chairman may contact other employees regarding
subscription to the remaining shares. If the amount of subscriptions still
remains insufficient, Article 9 will govern.
Article 6
Procedures for the present repurchase of shares and transfer to employees:
1. The repurchase of HTC shares will be publicly announced, reported, and
carried out during the implementation period in accordance with a
resolution of the board of directors.
2. The chairman is hereby authorized to adopt and to publicly announce
operating procedures relating to the record date for employee subscriptions,
the standards for numbers of shares to which employees may subscribe, the
period for payment for subscriptions, and the rights associated with share
subscriptions and any restrictive conditions.
3. Statistics will be compiled on the numbers of shares actually subscribed
and paid for, and the registration of share transfers will be carried out.
(Stipulation of share transfer price)
Article 7
The share transfer price for the present repurchase of shares and transfer
to employees will be the average of the actual share repurchase prices,
provided that if, prior to the transfer, there is either an increase or a
decrease in the number of issued shares of HTC common stock, the transfer
price may be adjusted within a range proportional to the increase or
decrease.
Formula for transfer price adjustment:
Adjusted transfer price = average actual repurchase price per share × (total
number of common stock shares after the repurchase has been executed by HTC
÷ total number of common stock shares prior to HTC's transfer of the
repurchased shares to employees)
(Rights and obligations subsequent to transfer)
Article 8
Except where otherwise provided, the rights and obligations associated with
the transferred shares, following the transfer of shares in the present
share repurchase to employees and registration of share transfer, will be
the same as those originally associated with the shares.
Article 9
When HTC transfers to employees shares of treasury stock it has repurchased,
the full number of those shares shall be transferred within three years
from the date of repurchase. Any portion not yet transferred after that date
will be deemed unissued HTC shares, and amendment registration of the share
cancellation shall duly be carried out.
Article 10
These Rules will be adopted and take effect following a resolution of the
board of directors authorizing the chairman and their approval by the
chairman, and may be amended by submission to the board of directors for a
resolution.
Article 11
These Rules, and any amendments hereto, shall be reported to the
shareholders meeting.

15.The rules for conversion or subscription of shares set forth in Article 11 of the Guidelines for Repurchase of Shares by Listed and OTC Companies:N/A

16.Declaration that the financial state of the Company has been considered by the board of directors and that its capital maintenance will not be affected:The Declaration of the board of directors of HTC Corporation
1. The Corporation will repurchase, through a majority vote at the 5th meeting of the sixth board of directors attended by at least a two-thirds quorum on Oct. 29, 2010, its own shares at a centralized securities exchange market within two months from the day on which the repurchase was reported to the Financial Supervisory Commission (FSC), Executive Yuan.
2. The total number of the repurchased common shares constitutes 0.61% of the issued outstanding common shares and capitals needed for such repurchase only consist 3.32% of its current assets. The financial state of the company was considered at a meeting of the board of directors and that the maintenance of its capital would not be affected by the repurchase.
3. This Declaration has been approved unanimously by all the directors presented in person(Six) at this board meeting.

17.Appraisal by a CPA or securities underwriter of the reasonableness of the share repurchase price:The buyback of these common shares in the stated price range will not have an impact on HTC's financial structure, book value per share, earnings per share, return on equity, quick ratio, and current ratio except for cash flow.

18.Other particular specified by the Securities and Futures Bureau:Note:
 
The aforementioned NT$59,156,204,056 is the regulatory cap on the total value of the shares could be bought.HTC Board of Directors resolved the Ceiling on total monetary amount of the repurchase is NT$4,250,000,000