Olympus 2014 Annual Report Download - page 55

Concerning investigations by domestic investigative authorities, supervisory bodies and other public bodies, in a case that was pending
in the Tokyo District Court for breaches of the Securities and Exchange Act and the Financial Instruments and Exchange Act, the Company
was fi ned ¥700 million ($6,796 thousand) on July 3, 2013 (prosecution’s demand: ¥1,000 million ($9,709 thousand)). The judgment for the
case was settled after the period allowed for appeal had expired and the case was resolved upon payment of the fi ne.
The Company recorded the fi ne in the consolidated statement of operations as “penalty charges.”
In addition, in conjunction with the Company’s deferral of recognition of losses mentioned above, the investigation by the UK Serious
Fraud Offi ce that had been ongoing is now completed and on September 3, 2013, prosecution was brought against the Company and its
subsidiary Gyrus Group Limited (“GGL”) on charges of breaching Section 501 of the UK Companies Act of 2006 in relation to the explana-
tion made to the auditors of GGL subsidiaries concerning the documents related to GGL’s fi nancial accounts. The trial of this case is currently
ongoing in the UK courts.
The effect of this prosecution on the fi nancial results of the Company is uncertain since its fi nancial impact is not estimable at this stage.
(2) Settlement of Lawsuit
Concerning a lawsuit fi led against the Company, the Company made a comprehensive examination by taking into account the progress of
the action, details of lawsuit and potential legal costs and other matters that would arise if the lawsuit were to be continued, and decided
that swiftly resolving the matter through settlement would be the best approach. As a result, a court settlement was reached on November
18, 2013.
(1) Date of fi ling lawsuit
July 23, 2012
(2) Plaintiff
1. Company: Terumo Corporation
2. Address: 2–44–1, Hatagaya, Shibuya–ku, Tokyo
3. Representative: Yutaro Shintaku, President, Representative Director
(3) Content of lawsuit and amount of claim
The Company issued 6,811,000 shares, amounting to a total of ¥14,998 million ($159,553 thousand), to Terumo Corporation through
third party allotment, in accordance with the securities registration statement submitted on August 4, 2005.
Terumo Corporation claims, owing to the Company’s past deferral of the recognition of losses, that false statements on important
matters were contained in the securities registration statement when such third party allotment was made. Consequently, the lawsuit
was fi led to seek compensation for damages of ¥6,612 million ($70,340 thousand), in accordance with Article 18, Paragraph 1 and
Paragraph 2 of the former Securities and Exchange Act and Article 19 of the said Act, which are applied by replacing the terms pur-
suant to the provision of Article 23–2 of the said Act.
The amount of compensation for damages claimed consists of ¥6,612 million ($70,340 thousand) and 5% per annum interest on
this amount for the period from August 22, 2005 up to the payment of the principal.
(4) Details of settlement including name, address and representative of counterparty and the terms of settlement
1. Company: Terumo Corporation
2. Address: 2–44–1, Hatagaya, Shibuya–ku, Tokyo
3. Representative: Yutaro Shintaku, President, Representative Director
4. Terms of settlement: The Company will pay Terumo Corporation ¥6 billion as a settlement package and Terumo Corporation will
dismiss its claim against the Company.
Due to the settlement of this lawsuit in the year ended March 31, 2014, the settlement package paid to Terumo Corporation was recorded
as “settlement package” in the consolidated statement of operation.
(4) Granting of Share-Based Compensation Stock Options
The Company made a resolution at a meeting of its Board of Directors held on June 26, 2014, to allot stock acquisition rights (The 2nd
stock acquisition rights of Olympus Corporation) as share-based compensation stock options to Directors (excluding Outside Directors)
andExecutive Offi cers for the purpose of incentivizing Directors and Executive Offi cers to work for medium-to-long-term performance
improvement and corporate value enhancement.
(1) Date of rights granted
July 11, 2014
(2) Number of stock acquisition rights to be issued
Directors (excluding Outside Directors) 129
Executive Offi cers 281
Total 410
(3) Class and number of shares to be issued upon exercise of stock acquisition rights
41,000 shares of common stock of the Company
(4) Qualifi ed benefi ciaries
25 in total (5 Directors and 20 Executive Offi cers of the Company)
(5) Period of exercise of the stock acquisition rights
From July 12, 2014 to July 11, 2044
(6) Proceeds upon exercise of stock acquisition rights
The amount is determined by multiplying the exercise price of ¥1 per share by the number of shares granted.
(7) Method to calculate amount to be paid in for stock acquisition rights granted
The amount to be paid in shall be determined by the Board of Directors of the Company based on the fair value calculated using
theBlack-Scholes model as of the date of stock acquisition rights granted. The said amount shall be offset against the remuneration
claims of each Director and Executive Offi cer.
(8) Amount to increase common stock upon exercise of stock acquisition rights
The amount of the increase in common stock in the case that shares are issued due to the exercise of the stock acquisition rights
shall be determined by multiplying the maximum increase in common stock, etc. calculated in accordance with Article 17, Paragraph
1 of the Ordinance on Accounting of Companies by 0.5. If any fractional amounts less than ¥1 occur as a result of this calculation, the
said amounts will be rounded up to the nearest yen.
The amount of the increase in legal capital surplus in the case that shares are issued due to the exercise of offered stock acquisi-
tion rights shall be determined by deducting the increase in common stock stipulated above from the maximum increase in common
stock, etc.
36. Supplemental Information
(1) Future Circumstances
Following the Company’s announcement on November 8, 2011 concerning its deferral of recognition of losses on securities investments,
etc., investigations by overseas investigative authorities, supervisory bodies and other public bodies (including those in the U.K. and the
U.S.) remain ongoing. The consolidated fi nancial statements may be corrected if any further material facts come to light during such investi-
gations in the future.
As a result of inappropriate fi nancial reporting by the Company, holders of its shares, etc. have fi led lawsuits against the Company, and there
is a risk that various shareholders and shareholder groups may claim damages or fi le lawsuits against the Company in the future for a similar
reason. The effect of these events on the fi nancial results of the Company is uncertain since its fi nancial impact is not estimable at this stage.
Notes to the Consolidated Financial Statements
107
OLYMPUS Annual Report 2014
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