At the meeting of the Board of Directors held today, based on “Issuance of Subscription Rights to Shares as Stock Options” approved at the 15th Annual General Shareholders’ Meeting held on March 29, 2012, Rakuten, Inc. (hereinafter the “Company”) resolved to issue Subscription Rights to Shares as stock options to Directors, Executive Officers and employees of the Company’s subsidiary.
Regarding the said matter, the decision regarding the contents of issuance is delegated to the Board of Directors, based on proposals resolved at the 15th Annual General Shareholders’ Meeting held on March 29, 2012
1. Reason for issuing the Subscription Rights to Shares on especially favorable conditions
The Company is aiming to increase the Group’s overall corporate value by recruiting and retaining excellent staff together with enhancing motivation and morale to encourage higher performance of Directors, Executive Officers and employees of Kobo Inc. (Head office: Toronto, Canada) which became the Company’s wholly owned subsidiary on January 11, 2012 (local time in Toronto, Canada) after its acquisition by the Company.
2. Outline of the issuance of the Subscription Rights to Shares
(1) Persons to whom Subscription Rights to Shares will be allotted, the number of the persons, and the number of Subscription Rights to Shares to be allotted
Total of 11,051 units of Subscription Rights to Shares to fifteen Directors, Executive Officers and employees of Kobo Inc., the Company’s wholly owned subsidiary
(2) Class and number of shares to be issued upon exercise of Subscription Rights to Shares
Common stock of the Company 11,051 shares
However, if the Company splits its common stock (including allotment of its common stock without compensation; hereinafter the same shall apply) or consolidates its common stock, the number of shares to be issued upon exercise of each unit of such Subscription Rights to Shares shall be adjusted according to the following formula; provided that such adjustment shall be made only to those remain unexercised or uncanceled at the time of such adjustment and; provided, further, that if any fraction less than one share arises as a result of such adjustment, such fraction shall be discarded.
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Number of shares after adjustment |
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Number of shares before adjustment |
x |
Ratio of split or consolidation |
In addition, if the Company carries out a merger, a company split, share exchange, share transfer, etc. that makes it necessary to adjust the number of shares, the number of shares shall be adjusted within a reasonable range, taking into account the conditions of the merger, company split, share exchange, share transfer, etc.
(3) Total number of Subscription Rights to Shares to be issued
11,051 units
One share shall be issued for each Subscription Right to Shares, provided however that in the event of any adjustment in the number of shares stipulated in (2) above, the number of shares to be issued for the Subscription Right to Shares shall be adjusted likewise.
(4) Cash payment for Subscription Rights to Shares
No cash payment is required for Subscription Rights to Shares.
(5) Value of the assets to be contributed upon exercise of Subscription Rights to Shares
The value of the assets to be contributed upon the exercise of each Subscription Rights to Shares is equal to the amount of payment per share (hereinafter referred to as the “Exercise Price”) multiplied by the number of shares to be issued upon the exercise of such rights (these include shares held as treasury stock in replacement for an issuance of new shares; the same applies whenever referred to hereinafter) and the Exercise Price is set at one yen. In the case that the Company splits or consolidates its common stock after the date of issuance of Subscription Rights to Shares (hereinafter referred to as the “Issue Date”), the exercise price shall be adjusted according to the following formula. If any fraction less than one yen per share arises as a result of the adjustment, such fraction shall be rounded up.
Exercise price after adjustment = Exercise price before adjustment x (1 / Ratio of split or consolidation)
In addition to the above, following the Issue Date, if the Company carries out a merger or similar deals that give rise to the necessity of adjusting the Exercise Price, the Exercise Price shall be properly adjusted within an appropriate and reasonable range.
(6) Exercise period of Subscription Rights to Shares
From April 20, 2014 to April 20, 2022 (Japan Time; hereinafter the same shall apply).
(7) Conditions for exercise of Subscription Rights to Shares
1) Those who received the allotment of the issue of Subscription Rights to Shares may exercise all or part of such rights in accordance with the following classifications.
(i) Those who received the allotment of issue of Subscription Rights to Shares may not exercise any of the Subscription Rights to Shares allotted to him/her from April 20, 2012 to April 19, 2014.
(ii) Those who received the allotment of issue of Subscription Rights to Shares may exercise one-third of the Subscription Rights to Shares allotted to him/her from April 20, 2014 to April 19, 2015 (in calculating the number of Subscription Rights to Shares that would have become exercisable, any fraction less than one shall be rounded down).
(iii) Those who received the allotment of issue of Subscription Rights to Shares may exercise two-thirds (however if a part of the Subscription Rights to Shares allotted has been exercised by April 20, 2015, exercisable Subscription Rights to Shares shall be within two-thirds of the allotted Subscription Rights to Shares, including the already exercised Subscription Rights to Shares) of the Subscription Rights to Shares allotted to him/her from April 20, 2015 to April 19, 2016 (in calculating the number of Subscription Rights to Shares that would have become exercisable, any fraction less than one shall be rounded down).
(iv) Those who have received the allotment of issue of Subscription Rights to Shares may exercise all the Subscription Rights to Shares allotted to him/her from April 20, 2016 to April 20, 2022.
2) Those who received the allotment of issue of Subscription Rights to Shares shall remain Directors, Executive Officers, Company Auditors or employees of the Company, or its subsidiaries or affiliates at the time of exercising such rights; provided however that, this shall not apply to cases where (i) those who received the allotment of the issue of Subscription Rights to Shares exercise Subscription Rights to Shares which are exercisable at the time of the termination of delegation or employment relationship (including death of the person who received the allotment of the issue of Subscription Rights to Shares) between them and Kobo Inc. within 30 days from such termination, or (ii) it is allowed as an exceptional case by the Board of Directors in consideration of circumstances.
In addition, allotted Subscription Rights to Shares which are not then exercisable shall not be exercised thereafter: (a) in cases where those who received the allotment of the issue of Subscription Rights to Shares retire or leave the Company of their own accord; those who received the allotment of the issue of Subscription Rights to Shares dismissed or displaced by Kobo Inc. due to reasons imputable to them under the laws of Canada; or delegation or employment relationship between those who received the allotment of the issue of subscription rights shares and Kobo Inc. terminated due to death of those who received the allotment of the issue of Subscription Rights to Shares, permanent invalidity which disables them to continue to execute their duties for Kobo Inc. or an affiliate under the governing law for its incorporation, or mandatory retirement, (b) in cases where those who received the allotment of the issue of Subscription Rights to Shares retire or leave the Company of their own accord because significant disadvantageous changes in the basic terms of the delegation or employment contract unilaterally imposed on them by Kobo Inc. or an affiliate thereof under the governing law for tis incorporation, those who received the allotment of the issue of Subscription Rights to Shares, notwithstanding the provision in 1), may also exercise their rights with respect to allotted Subscription Rights to Shares to the extent of the number obtained by multiplying the ratio of the period from the anniversary date of April 20, 2012 (hereinafter referred to as “Commencement Date”) against the one-year period which includes the date of the retirement or leaving of the Company (hereinafter referred to as “Date of Leaving”) and commences on the Commencement Date by the number of Subscription Rights to Shares that would have become exercisable pursuant to the provision in 1) at the time when the said one-year period has elapsed (However, in cases where those who received the allotment of the issue of Subscription Rights to Shares retire or leave the Company on or before April 20, 2014, those who received the allotment of the issue of Subscription Rights to Shares may exercise their rights with respect to allotted Subscription Rights to Shares to the extent of the number obtained by multiplying the ratio of the period from April 20, 2012 to the Date of Leaving against the two-year period by the number of Subscription Rights to Shares that would have become exercisable pursuant to the provision in 1) (ii) on April 20, 2014) (in calculating the number of Subscription Rights to Shares that would have become exercisable, any fraction less than one shall be rounded down) (however, those who received the allotment of the issue of Subscription Rights to Shares shall exercise Subscription Rights to Shares within 30 days from the date of the termination of delegation or employment relationship with Kobo Inc.), and (c) in cases where those who received the allotment of the issue of Subscription Rights to Shares are dismissed or displaced by Kobo Inc. despite the lack of reasons imputable to them under the laws of Canada, those who received the allotment of the issue of Subscription Rights to Shares may, notwithstanding the provision in 1), exercise all of allotted Subscription Rights to Shares that are held at the time of receiving the notification of dismissal or displacement (However, those who received the allotment of the issue of Subscription Rights to Shares shall exercise Subscription Rights to Shares within 30 days from the date of the termination of delegation or employment relationship with Kobo Inc.
3) Notwithstanding the provisions of 1) above, in the event of a sale of all or substantially all of the assets of the business of Kobo Inc. to a third party other than the Company or an affiliate of Kobo Inc. under the governing law for its incorporation, or in the event of a reorganization such as a merger (except for reorganization carried out by solely involving Kobo Inc. and one or more of its affiliates under the governing law for its incorporation) with respect to which all or substantially all of the persons who were the beneficial owners of the common shares of Kobo Inc. immediately prior to such transaction do not, following such transaction, beneficially own directly or indirectly more than 50% of the resulting voting rights of all shareholders of Kobo Inc. (including all the voting rights of Kobo Inc. or other similar rights which may be issued or transferred as a result of the exercising of the Subscription Rights to Shares of Kobo Inc.), the older of the Subscription Rights to Shares may exercise all the rights he/she holds at the time of such event, provided that such Subscription Rights to Shares are exercised immediately before such event comes into force.
4) Subscription Rights to Shares shall not be inherited, however exceptional treatment may be allowed in this regard upon acceptance by the Board of Directors in consideration of circumstances.
5) Subscription Rights to Shares shall not be offered for pledge or disposed of in any other way.
(8) Matters concerning increase in capital stock and capital reserve by issuing of shares upon exercise of Subscription Rights to Shares
1) Amount of increase in capital stock by issuing shares upon exercise of Subscription Rights to Shares shall be half of the upper limit of capital increase as calculated pursuant to the provisions of Article 17, Paragraph 1 of the Ordinance on Accounting of Companies, where any resultant fraction less than one yen shall be rounded up.
2) Amount of increase in capital reserve by issuing shares upon exercise of Subscription
Rights to Shares shall be the upper limit of capital stock increase as described in 1) above less the amount of increase in capital stock set out therein.
(9) Reasons and conditions for the acquisition of Subscription Rights to Shares
1) In case that the proposal of any merger agreement under which the Company is dissolved, or any absorption-type company split (kyushu-bunkatsu) agreement or incorporation-type company split (shinsetsu-bunkatsu) plan in which the Company will be a splitting company, or any share exchange agreement or share transfer plan in which the Company will be a wholly owned subsidiary of another company is approved at a General Shareholders’ Meeting of the Company, the Company may acquire Subscription Rights to Shares at the date specifically determined by the Board of Directors of the Company without any compensation therefor.
2) In case that a holder of Subscription Rights to Shares becomes unable to exercise all or part of Subscription Rights to Shares pursuant to the provision in (7) 2) or 3), the Company may acquire such Subscription Rights to Shares at the date specifically determined by the Board of Directors of the Company without any compensation therefor.
(10) Restriction on the acquisition of Subscription Rights to Shares by transfer
Any acquisition of Subscription Rights to Shares by transfer shall require an approval of the Board of Directors of the Company by its resolution.
(11) Treatment of Subscription Rights to Shares in case of organizational restructuring of the Company
In the event the Company merges (limited to cases where the Company becomes a dissolving company), performs an absorption-type company split or an incorporation-type company split, or conducts a share exchange or a share transfer (hereinafter collectively referred to as “Organizational Restructuring”), Subscription Rights to Shares of a corporation described in Article 236, Paragraph 1, Items 8.1 through 8.5 of the Companies Act (hereinafter “Restructured Company”) shall be delivered under the following conditions to each those who received the allotment of issue of Subscription Rights to Shares remaining unexercised (hereinafter “Remaining Subscription Rights to Shares”) at the time when Organizational Restructuring takes effect. In this case, the Remaining Subscription Rights to Shares will lapse and the Restructured Company will issue new Subscription Rights to Shares. However, the foregoing shall apply only to cases in which the delivery of Subscription Rights to Shares of the Restructured Company according to the following conditions is stipulated in the merger agreement, the absorption-type company split agreement, the incorporation-type company split plan, the share exchange agreement or the share transfer plan.
1) Number of Subscription Rights to Shares of the Restructured Company to be delivered
The Restructured Company shall deliver Subscription Rights to Shares, the number of which shall equal the number of Subscription Rights to Shares held by the holder of the Remaining Subscription Rights to Shares.
2) Class of shares of the Restructured Company to be issued upon the exercise of Subscription Rights to Shares
Shares of common stock of the Restructured Company
3) Number of shares of the Restructured Company to be issued upon the exercise of Subscription Rights to Shares
To be decided according to (2) and (3) above after taking into consideration the conditions, etc. of the Organizational Restructuring.
4) Value of the assets to be contributed upon the exercise of Subscription Rights to Shares
The value of the assets to be contributed upon the exercise of each Subscription Right to Shares shall be the amount obtained by multiplying the amount paid after Organizational Restructuring which is the adjusted amount of the Exercise Price determined in (5) above by the number of shares of the Restructured Company to be issued upon the exercise of Subscription Rights to Shares determined in accordance with 3) above, after taking into consideration the conditions, etc. of the Organizational Restructuring.
5) Exercise period of Subscription Rights to Shares
Starting from the later of either the first date of the exercise period of Subscription Rights to Shares as stipulated in (6) above, or the date on which the Organizational Restructuring becomes effective and ending on the expiration date for the exercise of Subscription Rights to Shares as stipulated in (6) above.
6) Matters concerning increase in capital stock and capital reserve to be increased by issuing of shares by the Restructured Company upon the exercise of Subscription Rights to Shares
To be determined in accordance with (8) above.
7) Restriction on acquisition of Subscription Rights to Shares by transfer
Acquisition of Subscription Rights to Shares by transfer shall be subject to the approval of the Board of Directors of the Company under Organizational Restructuring (or by the majority decision of directors if such company is not a company with board of directors).
8) Reason and conditions for acquisition of Subscription Rights to Shares
To be determined in accordance with (9) above.
(12) Rules pertaining to fractions of less than one share arising from the exercise of Subscription Rights to Shares
Fractions of less than one share in the number of shares to be delivered to holders of Subscription Rights to Shares who exercised Subscription Rights to Shares shall be discarded.
(13) Adjustments due to share splits
On and after July 1, 2012, the effective date of share splits resolved at the meeting of Board of Directors held on February 20, 2012, each number of shares stated in (2) and (3) has been centupled in accordance with the adjustment to the number of shares defined in (2) and (3) above and the Exercise Price prescribed in (5) has been adjusted to one hundredth of the original value in accordance with the adjustment provision in (5). (Subscription Rights to Shares less than one yen shall be rounded up.) As a result of these adjustments, the Exercise Price for each Subscription Right to Shares and the number of shares to be issued upon the exercise of such rights are set at one yen and one hundred shares respectively.
(Reference)
(1) Resolution date of the meeting of the Board of Directors for the discussion at the Annual General Shareholders’ Meeting: February 20, 2012
(2) Resolution date of the Annual General Shareholders’ Meeting: March 29, 2012