Square Enix 2007 Annual Report Download - page 53

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SQUARE
ENIX
C O., L T D.
• FY2006 (April 1, 2006 to March 31, 2007)
Granting of Stock Options
At the 27th Annual General Meeting of Shareholders, con-
vened on June 23, 2007, a resolution was passed to grant
stock acquisition rights to directors as a part of their remu-
neration in accordance with articles 236 and 238 of
Corporation Law.
These stock options are outlined below.
(1) Reason for issuing stock acquisition rights to directors
The objective of issuing stock acquisition rights as
stock options is to provide an incentive to the Company’s
directors in consideration of the execution of their
duties, to improve operating performance and corporate
value and to heighten their managerial awareness from
a shareholder’s perspective.
(2) Overview of stock options
1. Recipients of stock acquisition rights allocation
Directors of the Company
2. Type and number of shares for the purpose of stock
acquisition rights
A maximum of 450,000 shares of common stock in a
one-year period. In the event that the Company conducts a
stock split or a reverse stock split, the Company shall adjust
this number in the manner it deems fit.
3. Amount payable upon delivery of stock acquisition rights
No cash need be paid in exchange for these stock
acquisition rights.
4. Value of assets subscribed upon exercise of each stock
acquisition right
The value of assets subscribed upon exercise of stock
acquisition rights shall be the per-share payment that may
be paid upon accepting delivery (“hereinafter, Exercise
Price”) multiplied by the number of shares granted that
corresponds to these stock acquisition rights.
The exercise price shall be the average of the closing
price on Tokyo Stock Exchange during the six months
period preceding the month in which the allocation
date falls (exception applies in the event trading is not
conducted on that day), multiplied by 1.05 with amounts
less than one yen truncated. If the amount is less than
the closing price of the day preceding the allocation date,
the closing price of the day preceding the allocation date
shall be used. (If the closing price is not available on the day
preceding the allocation date, the most recent closing
price shall be used.)
In the event the Company carries out a stock split or a
reverse stock split and revaluation of the Company’s
shares of common stocks become nesessary, the
Company applies any appropriate measures deemed
necessary to justify the price per share.
No cash need be paid in exchange for these stock options.
Significant Subsequent Events
• FY2005 (April 1, 2005 to March 31, 2006)
Business transfer of consolidated subsidiary TAITO
CORPORATION’s commercial karaoke-on-demand business
1. Reasons for the business transfer
At a meeting of its Board of Directors held on April 27,
2006, TAITO CORPORATION resolved to transfer its com-
mercial karaoke-on-demand business to XING INC. This
business was separated as a new company, and all shares
of the new company were sold to XING INC.
Since TAITO CORPORTATION was added as a consolidated
subsidiary in September 2005, the Company has considered
medium- to long-term growth strategies for the entire
Group. One of the conclusions reached through this
process was that the sale of TAITO CORPORATION’s com-
mercial karaoke-on-demand business to XING INC. would
contribute to raising the corporate value of the Group.
2. Name of the partner company to transfer
XING INC.
3. Detail of the business to transfer
Selling party TAITO CORPORATION
Main operations - Operation and rental business
- Product and merchandise sales
- Content services
- Other businesses
Paid-in capital ¥16 million
Shareholding ratio SQUARE ENIX CO., LTD. 100%
Brands LAVCA, X2000
Partner company
to transfer XING INC.
Main operations - Commercial karaoke-on-demand
business
- Mobile phone content distribution
business
Paid-in capital ¥1,621 million
Shareholding ratio Brother Industries LTD. 88%,
INTEC LEASING INC. 11%
Brand JOYSOUND
4. Book value of assets and liabilities to be transferred:
Planned amount of assets to
be transferred ¥2,602 million
Planned amount of liabilities to
be transferred ¥708 million
5. Date of transfer July 3, 2006
6. Transfer price ¥4,683 million (planned)
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