Isuzu 2006 Annual Report Download - page 35

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Isuzu Motors Limited Annual Report 2006
7. Shareholders’ Equity
The legal reserves of the consolidated subsidiaries are included
in retained earnings in the accompanying consolidated financial
statements.
The Company issued new common stock due to the exercise of
stock acquisition right. As the effect of the issuance, the Company’s
common stock increased by ¥8,027 millions ($68,332 thousands),
the Company’s capital surplus increased by ¥7,972 millions ($67,872
thousands).
8. Preferred Stock
The Company issued the preferred stock (Class I, Class II, Class III and
Class IV) in the fiscal year 2003. The Company has retired Class-II pre-
ferred stock in fiscal year 2005. No other dividends of surplus than
specified in a) (1), b) (1), and c) (1) respectively shall be paid to preferred
shareholders or to preferentially registered stock pledgees. When the
amount of surplus to be paid to the preferred shareholders or pref-
erentially registered stock pledgees in a given business year does not
reach the amount of the preferred dividend, the shortfall will not be
carried over to the next business year for accumulation.
When the residual property of the Company is to be distributed,
¥800 per share of the preferred stocks shall be paid to the preferred
shareholders or to the preferentially registered stock pledgees before
the ordinary shareholders or the ordinarily registered stock pledgees.
No other residual property than the above shall be distributed to
the preferred shareholders or to the preferentially registered stock
pledgees.
The Company can always purchase preferred stocks and cancel
them according to law. The preferred shareholders shall not have a
voting right at the General Meeting of Shareholders.
The Company shall not make the consolidation or division of pre-
ferred stocks unless otherwise stipulated by law.
The Company shall not give the rights to receive allotments of of-
fered shares or to receive allotments of offered share warrants to the
preferred shareholders.
Payment of dividends and distribution of residual property to each
class of the preferred stock shall be made according to the same order
of priority.
a) Outline of the Issue of Class-I Preferred Stock
(1) Preferred Dividend
Class-I preferred dividend shall be calculated according to the following
formula. Class-I preferred dividend shall be calculated to four places
of decimals of less than yen and rounded off at the fourth place of
decimals. However, when the calculation result exceeds ¥80, Class-I
preferred dividend will be set at ¥80.
Class I preferred dividend = ¥800 × (Japanese Yen TIBOR + 0.750%)
Any portion of dividend which exceeds the amount of the Class-I pre-
ferred stocks shall not be paid to Class-I preferred shareholders and
Class-I preferentially registered stock pledgees.
(2) Right of Claim for Acquisition
(i) Period for Claiming Acquisition
Period for claiming the acquisition of the Class-I preferred stocks shall
be from October 1, 2006 to September 30, 2022.
(ii) Conditions for Acquisition
Shareholders of the Class-I preferred stocks can claim the common
stocks of the Company to be issued, whose number is obtained from
the equation (iii) below based on the per-share acquisition price of the
Class-I preferred stocks that is determined by a) (1) above, in exchange
for the Company’s acquiring the Class-I preferred stocks.
(a) Initial Acquisition Price = ¥54
(b) Revision of Acquisition Price
Acquisition price is revised to the average price on October 1 every
year from October 1, 2007 to September 30, 2022 (hereinafter re-
ferred to as the date of revision of acquisition price respectively) when
the average price (excluding days without closing price) of daily clos-
ing prices (including quoted price) in regular transactions of common
stocks of the Company at the Tokyo Stock Exchange during 30 busi-
ness days starting from 45th business day preceding the date of revi-
sion of acquisition price (hereinafter referred to as actual value calcu-
lation period respectively) is below the initial acquisition price (revised
acquisition price shall be calculated to the first decimal point and then
rounded up. In addition, if during the actual value calculation period,
a revision specified in (c) below has to be necessary, the average price
shall be revised to an amount judged appropriate by the Board of
Directors in accordance with (c). However, when after calculation, the
revised acquisition price is below the price equal to 70% of the initial
acquisition price (calculated to the first decimal point and then round-
ed up, hereinafter referred to as floor acquisition price and revised ac-
cording to (c).), the floor acquisition price shall be treated as the revised
acquisition price.
(c) Adjustment of Acquisition Price
After the issue of Class-I preferred stocks, if any of the followings
applies, the acquisition price shall be adjusted by the formula below
(hereinafter referred to as formula for the adjustment of acquisition
price). In this formula, figures shall be calculated to the first decimal
point and then rounded up.
No. of new and disposal common stocks x Amount paid per share
Market value per share
No. of issued common stocks +
Adj. acquisition price = Pre-adjust acquisition price x
No. of issued common stocks + No. of new and disposal common stocks