Square Enix 2008 Annual Report Download - page 52

Significant Subsequent Events
• FY2006 (April 1, 2006 to March 31, 2007)
Granting of Stock Options
At the 27th Annual General Meeting of Shareholders, convened
on June 23, 2007, a resolution was passed to grant stock
acquisition rights to directors as a part of their remuneration in
accordance with Articles 236 and 238 of Corporation Law.
The details are outlined below.
(1) Reason for issuing stock acquisition rights to directors
The objectives of issuing stock acquisition rights as stock
options are 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 reserved 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 acquisi-
tion right
The value of assets subscribed upon exercise of stock acqui-
sition rights shall be the per-share payment that may be paid
upon accepting delivery (hereinafter, “the Exercise Price”) multi-
plied 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 the Tokyo Stock Exchange during the six-month period pre-
ceding the month in which the allocation date falls (an excep-
tion applies in the event trading is not conducted on that day),
multiplied by 1.05 with amounts less than one yen truncated. If
the Exercise Price is less than the closing price of the day pre-
ceding the allocation date, the closing price of the day preced-
ing 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 a revaluation of the Company’s shares of common
stock become nesessary, the Company may apply any appropriate
measures it deems necessary to justify the price per share.
No cash need be paid in exchange for these stock options.
• FY2007 (April 1, 2007 to March 31, 2008)
Implementation of a Pure Holding Company Structure by Means of a
Company Split
On May 23, 2008, a meeting of the Board of Directors approved a
resolution under which the Company will move to a pure holding
company structure by means of an incorporation-type company split
effective October 1, 2008. Under this plan, a newly established
wholly-owned subsidiary will assume the operations of the
Company’s business effective October 1, 2008. Accompanying this
move to a holding company structure, effective October 1, 2008, the
Company’s Articles of Incorporation will be partially revised and the
company’s name is planned to be changed to SQUARE ENIX
HOLDINGS CO., LTD. The Board of Directors’ resolution referred to
above also determined that the Company’s purpose will be changed
to that of a pure holding company. The Company plans to maintain
the listing of its stock on the First Section of the Tokyo Stock
Exchange as a holding company.
(1) Purpose of the company split
The Company believes that it is crucial to maintain profitability and
achieve medium- to long-term growth through the provision of high-
quality, sophisticated content and services. However, in recent
years, as information technology (IT) and telecommunications tech-
nology and infrastructure have rapidly developed and seen wide-
spread adoption, customer preferences have become greatly
diversified and the speed of technical innovation has accelerated. In
such a business environment, the Company has determined to pur-
sue a strategy of moving to a pure holding company structure. As
well as aiming to clarify the profitability of each business and the
accountability structure, this move is seen as crucial to facilitating
Group management that can flexibly engage in strategic business
alliances, including capital alliances with other companies.
(2) Outline of the company split
1. Schedule for the split
Record date for the Ordinary General Meeting of Shareholders
March 31, 2008
Meeting of the Board of Directors to pass a resolution for the
move to a pure holding company structure
April 25, 2008
Meeting of the Board of Directors to pass a resolution for
implementation of the company split
May 23, 2008
Annual General Meeting of Shareholders in which a resolution
for the company split is to be approved
June 21, 2008
Effective date of the company split
October 1, 2008 (scheduled)
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