Omron 2010 Annual Report Download - page 91

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Financial Section (U.S. GAAP)
The Corporate Law also requires that an amount equal
to 10% of dividends must be appropriated as a legal reserve
or as additional paid-in capital (a component of capital sur-
plus) depending on the equity account charged upon the
payment of such dividends until the total of aggregate amount
of legal reserve and additional paid-in capital equals 25% of
the common stock. Under the Corporate Law, the total
amount of additional paid-in capital and legal reserve may be
reversed without limitation of such threshold. The Corporate
Law also provides that common stock, legal reserve, addi-
tional paid-in capital, other capital surplus and retained
earnings can be transferred among the accounts under cer-
tain conditions upon resolution of the shareholders.
The Corporate Law also provides for companies to pur-
chase 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 deter-
mined by specific formula.
Under the Corporate Law, companies can pay divi-
dends 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 Board of Corporate Auditors, 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 may declare dividends
(except for dividends in kind) if the company has prescribed
so in its articles of incorporation.
The Corporate Law permits companies to distribute
dividends-in-kind (non-cash assets) to shareholders sub-
ject to a certain limitation 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. Under the
Corporate Law, certain limitations were imposed on the
amount of capital surplus and retained earnings available for
dividends. The Corporate Law also provides certain limita-
tions 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. Such amount available for the dividends
under the Corporate Law was ¥56,040 million ($602,581
thousand) at March 31, 2010, based on the amount record-
ed in the parent company’s general books of account.
The Company has authorized the grant of options to pur-
chase common stock of the Company to certain directors
and executive officers of the Company under a fixed stock
option plan.
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 2 years. A summary of the
Company’s fixed stock option plan activity and related infor-
mation for the year ended March 31, 2010 are as follows:
Stock Options
Options outstanding at March 31, 2007
Granted
Exercised
Expired
Options outstanding at March 31, 2008
Granted
Exercised
Expired
Options outstanding at March 31, 2009
Granted
Exercised
Expired
Options outstanding at March 31, 2010
Options exercisable at March 31, 2010
Fixed options
Weighted-average fair
value of options granted
during the year
Yen
¥ 744
¥ —
¥ —
Weighted-average
exercise price
¥ 2,570
3,432
2,131
1,913
¥ 2,868
—
—
2,435
¥ 2,930
—
—
2,580
¥ 3,026
¥ 3,026
Shares
(number)
905,000
237,000
(181,000)
(3,000)
958,000
—
—
(120,000)
838,000
—
—
(179,000)
659,000
659,000