Rakuten, Inc. (the “Company”) announces that at the meeting of the Board of Directors held today, it resolved to issue the following Share Options as stock options to Auditors of the Company’s subsidiaries, on February 1, 2018, pursuant to "Issuance of Share Options as Stock Options", approved at the 20th Annual General Shareholders’ Meeting held on March 30, 2017.
- The reason for issuing the Share Options on especially favorable conditions
Since the value of the Share Options is linked with the Company’s stock price, delivering Share Options as part of a performance-linked compensation package to the Auditors of the the Company will make the enhancement of the Company’s corporate and shareholder values in the medium to long term be reflected in their compensation and allow shareholders and the Auditors of the Company to share equal benefits and disbenefits. This is expected to lead to a greater awareness on the part of the Auditors of the Company of the roles demanded of them, namely the execution of proper audits, thus ensuring the sound growth of the Group, which is indispensable to the enhancement of corporate and shareholder values, and the establishment of a system that will meet the trust placed in the Group by society.
The Company intends to implement stock options for the Auditors of the Company for the purpose of continuous enhancement of the Group’s corporate and shareholder values.
In addition, since the exercise period of Share Options starts on the day after at least three years from the date of issuance of Share Options, Share Options function as an incentive for higher performance and higher stock price for the medium to long term up to the start of the exercise period.
- Outline of the issuance of the Share Options
(1) Total number of units and persons to whom Share Options will be allotted
Auditors of the Company’s subsidiaries : 3 in total 17 units in total
(2) Class and number of shares to be issued upon exercise of Share Options
Common stock of the Company: 1,700 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 Share Options 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.
Number of shares after adjustment = 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.