Brother International 2009 Annual Report Download - page 33

Semiannual interim dividends may also be paid once a year upon resolution by the Board of Directors if the articles of incorpo-
ration of the company so stipulate. The Companies Act provides certain limitations on the amounts available for dividends or the
purchase of treasury stock. The limitation is defined as the amount available for distribution to the shareholders, but the amount
of equity after dividends must be maintained at no less than ¥3 million.
(b) Increases / decreases and transfer of common stock, reserve and surplus
The Companies Act requires that an amount equal to 10% of dividends must be appropriated as a legal reserve (a component of
retained earnings) or as additional paid-in capital (a component of capital surplus) depending on the equity account charged upon
the payment of such dividends until the total of aggregate amount of legal reserve and additional paid-in capital equals 25% of the
common stock. Under the Companies Act, the total amount of additional paid-in capital and legal reserve may be reserved without
limitation. The Companies Act also provides that common stock, legal reserve, additional paid-in capital, other capital surplus and
retained earnings can be transferred among the accounts under certain conditions upon resolution of the shareholders.
(c) Treasury stock and treasury stock acquisition rights
The Companies Act also provides for companies to purchase treasury stock and dispose of such treasury stock by resolution of the
Board of Directors. The amount of treasury stock purchased cannot exceed the amount available for distribution to the sharehold-
ers which is determined by specific formula. Under the Companies Act, stock acquisition rights, which were previously presented
as a liability, are now presented as a separate component of equity. The Companies Act also provides that companies can pur-
chase both treasury stock acquisition rights and treasury stock. Such treasury stock acquisition rights are presented as a separate
component of equity or deducted directly from stock acquisition rights.
9. Stock Options
The stock options outstanding as of March 31, 2009 were as follows:
Stock Option
Persons
Granted
Number of
Options granted
Date of
Grant
Exercise
Price Exercise Period
2007 Stock Option 6 directors 46,000 shares Mar 19, 2007 ¥ 1
($0.010)
30 years starting
on the following
day of stock option
grant date
2008 Stock Option 6 directors 65,100 shares Mar 24, 2008 ¥ 1
($0.010) Same as above
2009 Stock Option 5 directors 114,500 shares Mar 23, 2009 ¥ 1
($0.010) Same as above
31Brother Annual Report 2009