Trend Micro Notice Relating to Remuneration, etc. in the Form of Stock Options of Directors
21 Februar 2007 - 1:00PM
PR Newswire (US)
TOKYO, Feb. 21 /Xinhua-PRNewswire-FirstCall/ -- Trend Micro
(TSE:4704) ( NASDAQ: TMIC) , a leader in network antivirus and
Internet content security software and services, today resolved at
a meeting of its Board of Directors to obtain an authorization by
shareholder resolution to be adopted at the 18th ordinary General
Meeting of Shareholders scheduled to be held on March 27, 2007, for
the Remuneration, etc. in the form of stock options of directors,
as discussed under the agendum below. 1. Reason for Proposal The
Company issues Options to directors for the purpose of linking the
Company's stock price to the directors' interest and thereby
strengthening their motivation and moral to improve performance of
the Trend Micro Group which we believe would lead to the
development of business focusing on shareholders' interests and the
enhancement of shareholder value. We will maintain the number of
Options to be issued within appropriate range in consideration of
the balance between such number and profitability of the Company as
well as payout ratio. It was resolved at the ordinary general
meeting of shareholders held on March 11, 1999 that the annual
remuneration, etc. of directors would be 1 billion yen or less, and
the rules have been applicable up to the present. However, upon
recent enforcement of the Company Law, the stock acquisition rights
granted to company officers as stock options have been determined
to be included in their remuneration, etc., and we would like to
revise the annual remuneration, etc. of directors including
remuneration, etc. in the form of stock options to 800 million yen
or less (of which outside director receives 10 million yen or less
per year) . We would also like to ask the shareholders' to approve
on the grant of stock acquisition rights to directors (other than
outside director) in the following terms and conditions. Please
note that the amount of remuneration, etc. of directors (other than
outsider director) and the details thereof have been determined
taking into consideration the recent payment records, fair
appraisal value of the stock acquisition rights granted to
directors other than outside director as stock options (as
calculated by multiplying the fair unit value of the stock
acquisition right per share calculated using Black-Scholes model
based on the Company's stock price, by the total number of stock
acquisition rights to be allocated) and the effect of such stock
options as an incentive to improve performance of Trend Micro
Group. Please also note that the remuneration, etc. of directors
does not include, as before, employees' salaries payable to
directors who also serve as employees. There are currently four
directors (including one outside director) and four corporate
auditors, which numbers will not change even if Agenda relating to
Election of four Directors will be approved and resolved as
originally proposed at the 18th ordinary General Meeting of
Shareholders scheduled to be held on March 27, 2007. 2. Terms and
conditions of the Options (1) Class of shares to be issued upon
exercise of the Options: Ordinary shares of the Company (2) Number
of shares to be issued upon exercise of the Options: The aggregate
number of shares to be issued upon exercise of the Options during
the period of one year from the date of the ordinary general
meeting of shareholders of each fiscal year shall be up to 255,000
ordinary shares of the Company In the event of stock split or
consolidation, the number of shares to be issued upon exercise of
the Options (the "Option Shares") shall be adjusted using the
following formula; provided, however, that such adjustment shall be
made only in respect of the number of the Option Shares which are
not exercised at that time and any fractions less than one (1)
share resulting from such adjustment shall be disregarded. Number
of Shares = Number of Shares x Split/Consolidation after Adjustment
before Adjustment Ratio In addition to the above, if it becomes
necessary to adjust the number of Option Shares after the date of
allotment of the Options then the Company may also make necessary
adjustment of the number of the Option Shares to the reasonable
extent. (3) Aggregate number of the Options to be issued: Up to 510
in aggregate (The number of the Option Shares shall be 500 shares
per one (1) Option; provided, however, that if the adjustment in
clause (2) above has been made, it shall also be adjusted
accordingly.) (4) Amount of assets to be contributed upon exercise
of each Option: The amount of assets to be contributed upon
exercise of each Option shall be the amount of each share delivered
upon exercise of the Options (the "Exercise Price") multiplied by
the number of the Option Shares. The Exercise Price shall be the
closing price of the ordinary shares of the Company established
through regular transactions reported by the Tokyo Stock Exchange
on the date when the Options will be allotted or the immediately
preceding date of such date if there is no trading on such date. In
the event of stock split or consolidation occurring after the date
of allotment of the Options, the Exercise Price shall be adjusted
using the following formula and any fractions less than one (1) yen
resulting from such adjustment shall be rounded up. Exercise Price
Exercise Price 1 = X ------------------------ after Adjustment
before Adjustment Split/Consolidation Ratio In the event of
issuance of new shares or disposition of treasury stock at a price
less than the market price (excluding the exercise of the Options
(including those attached to the bonds with stock acquisition
rights), exercise of the subscription rights pursuant to the
provision of Article 280-19 of the Commercial Code prior to the
amendment on April 1, 2002 (including the subscription rights in
connection with the bonds with subscription rights pursuant to the
provision of Article 341-8 thereof) and conversion of securities to
be converted or convertible into ordinary shares of the Company),
then the Exercise Price shall be adjusted using the following
formula and any fractions less than one (1) yen resulting from such
adjustment shall be rounded up. Number of Number of Subscription
Shares Shares x Price per issued newly issued share Exercise
Exercise and + ---------------------------- Price Price outstanding
Share Price before new issue after = before x
------------------------------------------- Adjustment Adjustment
Number of Shares issued Number of Shares and + newly outstanding
issued In the formula above, "Number of Shares issued and
outstanding" shall mean the number calculated by the number of
outstanding shares less the number of treasury stock held by the
Company and in the event of the disposition of treasury stock,
"Number of Shares newly issued" shall be read as "Number of
Treasury Stock disposed" and "Share Price before new issue" shall
be read as "Share Price before disposition". In addition to the
above, in the event of merger or split-off of the Company occurring
after the date of allotment of the Options, the Company may also
adjust the Exercise Price to a reasonable extent in the similar
manner upon resolution of the board of directors. (5) Exercise
period of the Options: Within four (4) years from the date on which
one (1) year has passed from the day immediately following the date
of allotment of the Options (6) Conditions on the exercise of the
Options: (a) If the person having the Options (the "Optionee")
loses its position as a director, corporate auditor, employee of,
staff seconded to or advisor of the Company or its subsidiary
(hereinafter in this clause referred to as the "Prior Position"),
such Optionee may exercise the Options only during a period of
forty-five (45) days from the day on which such Optionee loses its
Prior Position. In addition, if the Optionee loses its Prior
Position for the reason of incapacity due to physical disability,
etc., such Optionee may exercise the Options only during a period
of six (6) months from the day on which such Optionee loses its
Prior Position unless there is a special reason, which the Board of
Directors of the Company deems valid, such as the provision of this
clause being in violation of any forcible laws of the country in
which the Optionee resides. (b) In the event of death of the
Optionee, then the successor(s) of the Optionee may, upon making
necessary arrangement for the succession of the Options within six
(6) months of the Optionee's death, exercise the succeeded Options
only during a period of such six (6) months unless there is a
special reason, which the Board of Directors of the Company deems
valid, such as the provision of this clause being in violation of
any forcible laws of the country in which the Optionee resides. (C)
If there is any provision restricting the exercise of the Options
for the period set forth in (5) above in the "Share Acquisition
Right Grant Agreement" to be entered into between the Company and
any person subject to the allocation according to the resolution of
this general meeting of shareholders and the Board of Directors,
then the Optionees shall exercise the Options in accordance with
such provision. (d) The Options may not be exercised if any pledge
or other security interest is established or created thereon. (e)
Any other condition shall be provided for in the "Share Acquisition
Right Grant Agreement". The Company may, upon grant of the Options,
enter into the "Share Acquisition Right Grant Agreement" with the
conditions (a) through (d) more restricting the Optionees. (7)
Restriction on the acquisition of the Options by way of transfer:
Acquisition of the Options by way of transfer requires approval of
the Board of Directors. (8) The Board of Directors determining the
terms of offering of the Options shall provide any other details of
issue of the Options. About Trend Micro Trend Micro, Inc. is a
leader in network antivirus and Internet content security software
and services. The Tokyo-based corporation has business units
worldwide. Trend Micro products are sold through corporate and
value- added resellers and managed service providers. For
additional information and evaluation copies of all Trend Micro
products, visit our Web site http://www.trendmicro.com/ . For
additional Information Mr. Mahendra Negi Chief Operating Officer /
Chief Financial Officer / IR Officer Phone: +81-3-5334-4899 Fax:
+81-3-5334-4874 Email: DATASOURCE: Trend Micro, Inc. CONTACT:
Mahendra Negi of Trend Micro, +81-3-5334-4899, or fax,
+81-3-5334-4874, or
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