Omron 2004 Annual Report Download - page 56

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component of retained earnings) until such reserve and capital surplus equals 25% of common stock. The amount of total capital sur-
plus and legal reserve that exceeds 25% of the common stock may be available for dividends by resolution of the shareholders.
In addition, the Code permits the transfer of a portion of capital surplus and legal reserve to the common stock by resolution of the
Board of Directors.
The revised Code eliminated restrictions on the repurchase and use of treasury stock allowing Japanese companies to repurchase
treasury stock by a resolution of the shareholders at the general shareholders meeting or by resolution of the Board of Directors provid-
ed it is stipulated in an article of incorporation and dispose of such treasury stock by resolution of the Board of Directors. The repur-
chased amount of treasury stock cannot exceed the amount available for future dividend plus amount of common stock, capital sur-
plus or legal reserve to be reduced in the case where such reduction was resolved at the general shareholders meeting.
The Code permits companies to transfer a portion of additional paid-in capital and legal reserve to stated capital by resolution of the
Board of Directors. The Code also permits companies to transfer a portion of unappropriated retained earnings, available for dividends,
to stated capital by resolution of the shareholders.
Dividends are approved by the shareholders at a meeting held subsequent to the fiscal year to which the dividends are applicable.
Semiannual interim dividends may also be paid upon resolution of the Board of Directors, subject to certain limitations imposed by the
Code.
Under the Code, the amount legally available for dividends is based on retained earnings as recorded in the books of the Company
for Japanese financial reporting purposes. At March 31, 2004, retained earnings amounting to ¥31,086 million ($293,264 thousand)
were available for future dividends subject to legal reserve requirements.
In 2003, the Company acquired the minority interests of certain domestic subsidiaries in exchange for the Company’s common stock
previously held in its treasury. The Company reissued 52,275 shares of treasury stock to acquire minority interests with book values
and fair values equal to ¥84 million. These transactions resulted in a combined loss on reissuance of treasury stock of ¥32 million, rep-
resenting the aggregate difference between the cost of shares repurchased and the fair value of shares reissued on the effective date
of acquisition. The loss was charged directly to retained earnings.
Stock Options
The Company has authorized the grant of options to purchase common stock of the Company to certain directors and officers of the
Company under a fixed stock option plan. All of the authorized shares available for grant have been granted.
Under the above plan, the exercise price of each option exceeded the market price of the Company’s common stock on the date of
grant and the options expire 5 years after the date of the grant. Generally, options become fully vested and exercisable after 3 years. A
summary of the Company’s fixed stock option plan activity and related information is as follows:
Options outstanding at April 1, 2001 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Forfeited. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options outstanding at March 31, 2002. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options outstanding at March 31, 2003. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Granted . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Exercised . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
Options outstanding at March 31, 2004. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
325
285
736
¥2,467
2,306
1,839
2,161
2,446
1,913
2,294
2,435
1,839
¥2,357
498,000
292,000
(10,000)
(85,000)
695,000
276,000
971,000
204,000
(86,000)
1,089,000
Yen
Weighted-
average fair value
of options
granted during
the year
Weighted-
average exercise
price
Shares
Fixed options