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Notice Concerning Issuance of Stock Compensation-type Stock Options (Stock Subscription Rights)

Date
30 Aug 2007
Nippon Sheet Glass Co., Ltd. ( “the Company” ) has decided, at the Board of Directors meeting held earlier today, terms and conditions of Stock Subscription Rights, in the form of stock options, to be allocated to the directors ( except non-executive directors ), executive officers and riji , pursuant to stipulations in Articles 236, 238 and 240 of the Corporation Law. Objectives of the issue are: sharing between the Company’s shareholders and management of benefits and risks associated with share price movements; and further improvement in motivation for the Company’s management to increase the corporate value. Details of terms and conditions of the issue are set out as below.

1. Type and number of shares to be issued with the exercise of Stock Subscription Rights : Common Stock of the Company : 281,000 shares

If the Company splits or consolidates its shares, number of shares to be issued or transferred with the exercise of the Stock Subscription Rights shall be adjusted according to the following formula. Such adjustment, however, shall be made only for, of the subject Stock Subscription Rights, the number of the shares reserved for the Stock Subscription Rights that have not been exercised as of the said time. Any fraction of a share resulting from the adjustment shall be rounded down.

 

Number of Shares after Adjustment

 

 

=

 

Number of Shares before Adjustment

 

 

x

 

Ratio of Split or Consolidation

 

 

 

2. Total number of Stock Subscription Rights : 281
Number of shares to be issued or transferred with the exercise of one Stock

Subscription Right shall be 1,000. Number of shares to be issued or transferred shall be subject to adjustment as stipulated in 1 above.



3. Allottees of Stock Subscription Rights and the number of rights to be granted

Allottees (Number of Allottees)

Number of Stock Subscription Rights per Person

Total Number of Stock Subscription Rights to be granted

Directors of the Company (excluding non-Executive Directors) (7)

between 12 and 27

131

Executive Officers of the Company (excluding Those Also Serving as Director) (6)

between 9 and 12

60

Riji of the Company (10)

9

90

Total (23)

-

281

4. Amount to be paid in exchange of Stock Subscription Rights

No amount shall be required to pay in exchange for the Stock Subscription Rights.

Under the scheme, the Stock Subscription Rights shall be allocated with its fair value as the amount to be paid. At the same time, a compensation request right shall be allocated, as of the payment date of the Stock Subscription Rights, to each of the allottees of the Stock Subscription Rights for an amount equivalent to the fair value of the Stock Subscription Rights allotted to the allottee. The compensation request right shall then be used to offset the payment for the Stock Subscription Rights on the same day. The allotment of the Stock Subscription Rights under the scheme therefore does not constitute the issuance under the terms and conditions that are particularly favorable to the allottees.

5. Amount to be paid with the exercise of Stock Subscription Rights

The amount to be paid in upon exercise of a Stock Subscription Right shall be one yen per share to be issued or transferred upon exercise of a Stock Subscription Right, multiplied by the number of shares to be issued or transferred upon exercise of a Stock Subscription Right, as stipulated in 2 above.

6. Allotment Date of Stock Subscription Rights

September 28, 2007

7. Exercise period of Stock Subscription Rights

From September 29, 2007, to September 28, 2037

8. Conditions of exercising Stock Subscription Rights

  1. An allottee of the Stock Subscription Rights may in principle exercise the Stock Subscription Rights only during a five-year period beginning the following day the allottee loses all the positions of director, executive officer, and riji of the Company.
  2. In case an allottee of the Stock Subscription Rights is deceased, the heir to the allottee may exercise the Stock Subscription Rights. An heir to the heir to the allottee, however, may not exercise the Stock Subscription Rights.
  3. Other terms and conditions shall be as stipulated in the contract to be concluded separately between the Company and the allottees, based on the resolutions at the Stockholders' General Meeting and at the Board of Directors meeting.

9. Requirements of Stock Subscription Rights

  1. If an allottee of the Stock Subscription Rights no longer meets one or more of the conditions stipulated in 8 above and loses his/her right, the Company shall be entitled to acquire the Stock Subscription Rights concerned without any consideration.
  2. If a merger contract in which the Company shall be an expiring party, a split contract or a split plan in which the Company shall be split, or a stock exchange contract or a stock transfer contract in which the Company shall be a wholly-owned subsidiary of another company, is approved at a Stockholders' General Meeting, the Company shall be entitled to acquire the Stock Subscription Rights without any consideration.

10. Handling of Stock Subscription Rights under corporate realignment

In case of a merger ( limited to the cases wherein the Company shall be an expiring company ), an absorption spin-off, a new company spin-off, stock exchanges, or stock transfers ( hereinafter collectively referred to as “acts of corporate realignment” ), if the contract or plan document of the act of corporate realignment stipulates that a Stock Company prescribed in Article 236, Paragraph 1, Items 8a through 8e of the Corporation Law ( hereinafter referred to as “reorganized company” ) shall issue Stock Subscription Rights of the reorganized company to the holders of remaining Stock Subscription Rights of the Company immediately prior to the effective date of the act of corporate realignment, Stock Subscription Rights of the reorganized company shall be issued to the holders of the remaining Stock Subscription Rights of the Company pursuant to the ratio of the said act of corporate realignment and terms and conditions stipulated in the contract or plan document. In this case, the Stock Subscription Rights remaining just prior to the effective date of the act of corporate realignment shall cease to exist, and the reorganized company shall newly issue the Stock Subscription Rights.

11. Issues related to capital and capital surplus after issuing new shares with the exercise of Stock Subscription Rights

  1. Amount of capital increase after the issuance of new shares with the exercise of Stock Subscription Rights shall be 50% of the maximum limit of such capital increase calculated in accordance with Article 40, Paragraph 1 of the Company's Calculation Rules. Any fraction shall be rounded up to the nearest one yen above.
  2. The amount of increase in the capital surplus following issuance of new shares upon exercise of the Stock Subscription Rights shall be the maximum limit for the increase in capital, etc., as described in (1) above, less the amount of increase in the capital, as stipulated in (1) above.

12. Restriction on transfer of Stock Subscription Rights

Transfer of Stock Subscription Rights shall require approval of the Board of Directors.

13. Fraction adjustment

Any fraction of a share in the number of shares to be issued or transferred to the holder of the Stock Subscription Rights shall be omitted.

(Reference)

Date of the Board Meeting which selects issues to be discussed and approved at the Company's General Shareholders' Meeting : May 31, 2007

Date of the Company's General Shareholders' Meeting which gives final approval to the above selected issues : June 28, 2007