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: ir@trendmicro.co.jp
