Daiwa Securities Group Inc
18 May 2006
5/18/06
Press Release
Daiwa Securities Group Inc.
Notice Regarding Granting Stock Options Utilizing Stock Acquisition Rights
Attention
This document is an unofficial translation of a press release announced on May
18, 2006, by Daiwa Securities Group Inc. The original press release is in
Japanese.
Daiwa Securities Group Inc. (hereinafter, 'Company') resolved at a meeting of
its Board of Directors held today to propose to delegate the decision of the
terms of issuance of stock acquisition rights, pursuant to Articles 236, 238,
and 239 of the Corporation Law, to the Board of Directors of the Company or the
executive officers to whom the determination has been delegated by a resolution
of the Board of Directors of the Company. The stock acquisition rights will be
issued to directors, executive officers (both shikoyaku and shikoyakuin), and
employees of the Company and its subsidiaries and affiliates for the purpose of
granting stock options. The proposal will be made at the Company's 69th Ordinary
General Meeting of Shareholders to be held on June 24, 2006. Details are as
outlined below
1. Reason for Requiring Candidates Receiving Common Stock Acquisition Rights at
Especially Favorable Terms
The Company will issue the following two types of stock acquisition rights
stated in 2. and 3. below without consideration as stock options to directors,
executive officers, and employees of the Company and its subsidiaries and
affiliates as an incentive to contribute towards increasing consolidated
performance and to enable recruiting of talented personnel.
The first is stock acquisition rights to be granted to directors and executive
officers of the Company and its subsidiaries, for which the amount to be paid in
per share upon exercise shall be one (1) yen (hereinafter, 'Common Stock
Acquisition Rights I'). The issuance of the Common Stock Acquisition Rights I to
directors and executive officers of the Company is subject to resolution of
items pursuant to Item 1, Clause 3 of Article 409 and Item 3, Clause 3 of
Article 409 of the Corporation Law as individual compensation of directors and
executive officers at the Compensation Committee meeting to be held after the
ordinary general meeting of shareholders.
The other is stock acquisition rights to be granted to employees of the Company
and its subsidiaries and affiliates and to directors and executive officers of
the Company's subsidiaries and affiliates not subjected to the Common Stock
Acquisition Rights I above. The amount to be paid in per share upon exercise
shall be determined based on the market price of shares of Common Stock on the
allocation date of the stock acquisition rights (hereinafter, 'Common Stock
Acquisition Rights II').
Neither Common Stock Acquisition Rights I nor Common Stock Acquisition Rights II
above will be granted to outside directors of the Company.
2. Terms, Amount to be Paid In and Maximum Number of Common Stock Acquisition
Rights I to be Resolved Pursuant to the Resolution of the Ordinary General
Meeting of Shareholders
(1) Maximum number of Common Stock Acquisition Rights I to be Resolved
Pursuant to the
Not exceeding 400 common stock acquisition rights set according to (3) below.
Those issued to parties other than directors and executive officers of the
Company shall not exceed 300.
The aggregate number of shares to be issued upon exercise of Common Stock
Acquisition Rights I shall not exceed 400,000. If the number of granted shares
is adjusted pursuant to (3) (a) below, the maximum number of Common Stock
Acquisition Rights I to be issued shall be multiplied by the number of granted
shares after adjustment.
(2) Amount to be Paid In upon Issuance of Common Stock Acquisition Rights I to
be Resolved Pursuant to the Delegation
Common Stock Acquisition Rights I shall be issued without consideration and
require no payment.
(3) Terms of Common Stock Acquisition Rights I to be Resolved Pursuant to the
Delegation
(a) Class and Number of Shares to be Issued upon Exercise of Common Stock
Acquisition Rights I
The number of shares to be issued upon exercise of one (1) Common Stock
Acquisition Right I (hereinafter, in 2, 'Number of Granted Shares') shall be
1,000 shares of Common Stock.
If the Company splits (including gratis issue of shares, same onwards) or
consolidates the shares of Common Stock after the date of resolution of the
Ordinary General Meeting of Shareholders (hereinafter, 'Resolution Date'), the
Number of Granted Shares shall be adjusted in accordance with the following
formula. An adjustment shall be made only with respect to the Number of Granted
Shares for the Common Stock Acquisition Rights which have not been exercised at
the time of the adjustment. Any fraction less than one (1) share resulting from
the adjustment shall be disregarded.
Number of Granted Shares = Number of Granted Shares x Ratio of split
after adjustment before adjustment or consolidation
In addition, in the case of a merger with any other company, corporate split or
capital reduction of the Company, or in any other case similar thereto where an
adjustment of the Number of Granted Shares shall be required, in each case after
the resolution date, the Number of Granted Shares shall be appropriately
adjusted to the extent reasonable.
(b) Amount to be Paid In upon Exercise of Common Stock Acquisition Rights I
The amount to be paid in upon exercise of Common Stock Acquisition Rights I
shall be one (1) yen per share and shall be multiplied by the Number of Granted
Shares.
(c) Period during which Common Stock Acquisition Rights I may be Exercised
A period between July 1, 2006, to June 23, 2027, which will be determined by the
Board of Directors of the Company or the executive officers to whom the
determination has been delegated by a resolution of the Board of Directors of
the Company.
(d) Terms Regarding Increase in Capital Stock and Additional Paid-in Capital
upon Exercise of Common Stock Acquisition Rights I
1) The amount of capital stock to increase upon issuance of Common Stock due to
exercise of Common Stock Acquisition Rights I shall be half of the limit of
capital increase calculated according to Clause 1 of Article 40 of the Corporate
Computation Rule. Any fraction less than one (1) yen resulting from the
calculation shall be rounded up to the nearest one (1) yen.
2) The amount of additional paid-in capital to increase upon issuance of Common
Stock due to exercise of Common Stock Acquisition Rights I shall be the
difference between the limit of capital increase and the increase in capital
stock, both stated in 1) above.
(e) Restriction on Transfer of Common Stock Acquisition Rights I
Common Stock Acquisition Rights I are non-transferable unless the Board of
Directors of the Company approves such transfer.
(f) Conditions for Exercise of Common Stock Acquisition Rights I
1) Common Stock Acquisition Rights I cannot be exercised in part.
2) Holders of Common Stock Acquisition Rights I may exercise the rights from the
day after they leave from all positions of director or executive officer of the
Company or its subsidiaries as determined by the Board of Directors of the
Company or the executive officers to whom the determination has been delegated
by a resolution of the Board of Directors of the Company.
3) Disregarding 2) above, Common Stock Acquisition Rights I can be exercised
from 30 days prior to the last day of the period for exercise of the Common
Stock Acquisition Rights I pursuant to other conditions for exercise.
4) Other conditions for exercise shall be determined by the Board of Directors
of the Company or the executive officers to whom the determination has been
delegated by a resolution of the Board of Directors of the Company.
(g) Terms of Acquisition of Common Stock Acquisition Rights I
The Company may acquire Common Stock Acquisition Rights I without consideration
when a holder loses his/her rights due to reasons determined by The Board of
Directors of the Company or the executive officers to whom the determination has
been delegated by a resolution of the Board of Directors of the Company
(h) Treatment of Fractional Shares Less Than One Share
Any fraction less than one (1) share of Common Stock issued upon exercise of
Common Stock Acquisition Rights I shall be disregarded.
3. Terms, Amount to be Paid In and Maximum Number of Common Stock Acquisition
Rights II to be Resolved Pursuant to the Resolution of the Ordinary General
Meeting of Shareholders
(1) Maximum number of Common Stock Acquisition Rights II to be Resolved
Pursuant to the Delegation
Not exceeding 2,600 common stock acquisition rights set according to (3) below.
The aggregate number of shares to be issued upon exercise of Common Stock
Acquisition Rights II shall not exceed 2,600,000. If the number of granted
shares is adjusted pursuant to (3) (a) below, the maximum number of Common Stock
Acquisition Rights II to be issued shall be multiplied by the number of granted
shares after adjustment.
(2) Amount to be Paid In upon Issuance of Common Stock Acquisition Rights II
to be Resolved Pursuant to the Delegation
Common Stock Acquisition Rights II shall be issued without consideration and
require no payment.
(3) Terms of Common Stock Acquisition Rights II to be Resolved Pursuant to the
Delegation
(a) Class and Number of Shares to be Issued upon Exercise of Common Stock
Acquisition Rights II
The number of shares to be issued upon exercise of one (1) Common Stock
Acquisition Right II (hereinafter, in 3, 'Number of Granted Shares') shall be
1,000 shares of Common Stock.
If the Company splits or consolidates the shares of Common Stock after the
Resolution Date, the Number of Granted Shares shall be adjusted in accordance
with the following formula. An adjustment shall be made only with respect to the
Number of Granted Shares for the Common Stock Acquisition Rights which have not
been exercised at the time of the adjustment. Any fraction less than one (1)
share resulting from the adjustment shall be disregarded.
Number of Granted Shares = Number of Granted Shares x Ratio of split
after adjustment before adjustment or consolidation
In addition, in the case of a merger with any other company, corporate split or
capital reduction of the Company, or in any other case similar thereto where an
adjustment of the Number of Granted Shares shall be required, in each case after
the resolution date, the Number of Granted Shares shall be appropriately
adjusted to the extent reasonable.
(b) Amount to be Paid In upon Exercise of Common Stock Acquisition Rights II
The amount to be paid in upon exercise of Common Stock Acquisition Rights II
shall be the amount to be paid in per share (hereinafter, 'Exercise Price')
multiplied by the Number of Granted Shares.
The Exercise Price shall be 1.05 times the higher price of the following (i) or
(ii). Any fraction less than one (1) yen resulting from the adjustment shall be
rounded up to the nearest one (1) yen.
(i)The average of the closing prices of Common Stock in the trading thereof on
the Tokyo Stock Exchange (each, 'Closing Price') for trading days (excluding
days on which there is no Closing Price) during the month prior to the month of
the allocation date of Common Stock Acquisition Rights II (hereinafter, '
Allocation Date'), or
(ii) The Closing Price on the issue date of Common Stock Acquisition Rights II
(if there is no Closing Price on such date, the Closing Price for the immediate
preceding trading day).
If the Company splits or consolidates the shares of Common Stock after the
Allocation Date of Common Stock Acquisition Rights II, the Exercise Price shall
be adjusted in accordance to the following formula, and any fraction less than
one (1) yen resulting from the adjustment shall be rounded up to the nearest one
(1) yen.
Exercise Price = Exercise Price x 1
after adjustment before adjustment -------------------------------
Ratio of split or consolidation
The Exercise Price shall be adjusted using the following formula, in the event
the Company issues shares below market price (except in the case of conversion
of securities to be converted or that can be converted to Common Stock of the
Company, or exercise of common stock acquisition rights (including those
attached to bonds with common stock acquisition rights) which can claim issuance
of Common Stock of the Company). Any fraction less than one (1) yen resulting
from the adjustment shall be rounded up to the nearest one (1) yen.
Outstanding Number of newly issued shares x Payment for
Exercise price = Exercise price x number of shares + one share
after adjustment before ---------------------------------------------
adjustment Market price of one share
-------------------------------------------------------------------
Outstanding number of shares + Number of newly issued shares
'Outstanding number of shares' is the number of shares issued subtracting any
treasury stocks of Common Stock.
Other than above, in the case of a merger with any other company, corporate
split or capital reduction of the Company, or in any other case similar thereto
where an adjustment of the Exercise Price shall be required, in each case after
the allocation date of Common Stock Acquisition Rights II, the Exercise Price
shall be appropriately adjusted to the extent reasonable.
(c) Period during which Common Stock Acquisition Rights II may be Exercised
A period between July 1, 2011, to June 23, 2016, which will be determined by the
Board of Directors of the Company or the executive officers to whom the
determination has been delegated by a resolution of the Board of Directors of
the Company.
(d) Terms Regarding Increase in Capital Stock and Additional Paid-in Capital
upon Exercise of Common Stock Acquisition Rights II
1) The amount of capital stock to increase upon issuance of Common Stock due to
exercise of Common Stock Acquisition Rights II shall be half of the limit of
capital increase calculated according to Clause 1 of Article 40 of the Corporate
Computation Rule. Any fraction less than one (1) yen resulting from the
calculation shall be rounded up to the nearest one (1) yen.
2) The amount of additional paid-in capital to increase upon issuance of Common
Stock due to exercise of Common Stock Acquisition Rights II shall be the
difference between the limit of capital increase and the increase in capital
stock, both stated in 1) above.
(e) Restriction on Transfer of Common Stock Acquisition Rights II
Common Stock Acquisition Rights II are non-transferable unless the Board of
Directors of the Company approves such transfer.
(f) Conditions for Exercise of Common Stock Acquisition Rights II
1) Common Stock Acquisition Rights II cannot be exercised in part.
2) Other conditions for exercise shall be determined by the Board of Directors
of the Company or the executive officers to whom the determination has been
delegated by a resolution of the Board of Directors of the Company.
(g) Terms of Acquisition of Common Stock Acquisition Rights II
The Company may acquire Common Stock Acquisition Rights II without consideration
when a holder loses his/her rights due to reasons determined by The Board of
Directors of the Company or the executive officers to whom the determination has
been delegated by a resolution of the Board of Directors of the Company
(h) Treatment of Fractional Shares Less Than One Share
Any fraction less than one (1) share of Common Stock issued upon exercise of
Common Stock Acquisition Rights II shall be disregarded.
End
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