Nikon 2014 Annual Report Download - page 68

8. Equity
Japanese companies are subject to the Companies Act of Japan (the
“Companies Act”). The significant provisions in the Companies Act
that affect financial and accounting matters are summarized below.
(a) Dividends
Under the Companies Act, companies can pay dividends at any
time during the fiscal year in addition to the year-end dividend upon
resolution at the shareholders’ meeting. For companies that meet
certain criteria, such as: (1) having the Board of Directors, (2)
having independent auditors, (3) having the Audit & Supervisory
Board, and (4) the term of service of the directors is prescribed as
one year rather than two years of normal term by its articles of
incorporation, the Board of Directors of such company may declare
dividends (except for dividends in kind) at any time during the
fiscal year if the company has prescribed so in its articles of incor-
poration. The Company meets all the above criteria.
The Companies Act permits companies to distribute dividends in
kind (non-cash assets) to shareholders subject to a certain limita-
tion and additional requirements.
Semiannual interim dividends may also be paid once a year upon
resolution by the Board of Directors if the articles of incorporation
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 net assets
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 divi-
dends 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 the aggregate amount
of the 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 the legal reserve may be reversed
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 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 shareholders, which is
determined by a specific formula.
Under the Companies Act, stock acquisition rights are presented
as a separate component of equity.
The Companies Act also provides that companies can purchase
both treasury stock acquisition rights and treasury stock. Such trea-
sury 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, 2014 were as follows:
Stock Options Persons Granted
Number of
Options Granted Date of Grant Exercise Price Exercise Period
2004 Stock Options 12 directors
10 officers
210,000 shares June 29, 2004 ¥1,225 From June 30, 2006
to June 29, 2014
2005 Stock Options 11 directors
10 officers
178,000 shares June 29, 2005 ¥1,273 From June 30, 2007
to June 29, 2015
2007 Stock Options 12 directors
12 officers
99,000 shares March 14, 2007 ¥2,902 From February 28, 2009
to February 27, 2017
2007 Stock Options 8 directors
15 officers
26,100 shares August 27, 2007 ¥ 1 From August 28, 2007
to August 27, 2037
2008 Stock Options 8 directors
16 officers
117,900 shares November 25, 2008 ¥ 1 From November 26, 2008
to November 25, 2038
2009 Stock Options 9 directors
15 officers
68,100 shares August 10, 2009 ¥ 1 From August 11, 2009
to August 10, 2039
2010 Stock Options 10 directors
13 officers
66,800 shares July 14, 2010 ¥ 1 From July 15, 2010
to July 14, 2040
2012 Stock Options 10 directors
14 officers
99,700 shares March 19, 2012 ¥ 1 From March 20, 2012
to March 19, 2042
2013 Stock Options 8 directors
16 officers
108,300 shares August 23, 2012 ¥ 1 From August 24, 2012
to August 23, 2042
2014 Stock Options 8 directors
15 officers
119,600 shares August 1, 2013 ¥ 1 From August 2, 2013
to August 1, 2043
FINANCIAL INFORMATION
Notes to Consolidated Financial Statements
66 NIKON REPORT 2014