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NEC Electronics to Grant Stock Acquisition Rights for Stock Option
KAWASAKI Japan, September 30, 2003 -
NEC Electronics Corporation (the "Company") today announced the issuance of "stock acquisition rights" (the "Stock Acquisition Rights"), in accordance with the resolution adopted at the 1st Ordinary General Meeting of Shareholders held on June 13, 2003 and the resolution adopted at the Meeting of the Board of Directors, the meeting of which was held today. Details are outlined below.
| 1. |
Purpose of adopting Stock Option
Plan and Reason for issue of the Stock Acquisition Rights under favorable
conditions to persons other than its shareholders
In order to encourage the use of business practices which will contribute
to the advancement of shareholder value and to enhance the willingness to
contribute towards the advancement of NEC Electronics Group's business performance
by making the economic interest, which the Qualified Person (defined below)
will receive, correspond to the business performance of the Company, the
Company has adopted a Stock Option Plan. As the Stock Acquisition Rights
are issued for Stock Option purpose, no issue price of the Stock Acquisition
Rights will be payable. The amount to be paid upon exercise of the Stock
Acquisition Rights will be calculated based on the market value of the Company's
common stock at the time of the issuance. |
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| 2. |
Overview of the Stock Option Plan |
| (1) |
Person to whom the Stock Acquisition
Rights will be allotted (the "Qualified Person") |
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The Stock Acquisition Rights will be issued to directors, officers and certain key employees of the Company, and certain key employees of its subsidiaries. |
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| (2) |
Class and number of shares to be
issued or transferred upon exercise of the Stock Acquisition Rights |
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320,500 shares of common stock of
the Company. The number of shares per one unit of the Stock Acquisition
Rights (the "Number of Granted Shares") is 100 shares. However,
in the event of a stock split or consolidation of the Company's share of
common stock, the number of shares to be issued or transferred upon exercise
of each Stock Acquisition Rights will be adjusted according to the following
formula:
Number of Granted Shares after adjustment = Number of Granted Shares before
adjustment X Ratio of split or consolidation.
The Number of Granted Shares will be adjusted to the extent reasonable and
necessary in the event of merger, corporate separation, reduction in capital
or in the events similar thereto where the Number of Granted Shares is required
to be adjusted. |
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| (3) |
Aggregate number of the Stock Acquisition
Rights to be issued
3,205 |
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| (4) |
Issue Price of Stock Acquisition
Rights
None (No consideration shall be paid) |
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| (5) |
Exercise Price of the Stock Acquisition
Rights
The price to be paid in per share upon exercise of each Stock Acquisition
Rights (the "Exercise Price") shall be equal to the price obtained
by multiplying by 1.05 the average of the closing prices in regular way
of shares of the Company on the Tokyo Stock Exchange on each day (except
the days on which no sales take place) in September 2003, with fractional
amounts of less than one yen resulting from the calculation to be rounded
up to one yen. However, if the Exercise Price so calculated shall be less
than the closing price of the shares of the Company on the day prior to
the Stock Acquisition Rights are issued (or the next closest day, if no
closing price is available), the closing price shall become the Exercise
Price.
In the event of a stock split of common stock or a consolidation of stock
after the date of issue, the Exercise Price will be adjusted according to
the following formula, with fractional amounts of less than one yen resulting
from the calculation to be rounded up to one yen.
The Exercise Price will be adjusted to the extent reasonable and necessary
in the event of merger, corporate separation, reduction in capital or in
other events similar thereto where the Number of Granted Shares is required
to be adjusted. |
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| (6) |
Period during which the Stock Acquisition
Rights may be exercised
From October 17, 2005 to October 16, 2007
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| (7) |
Conditions of Exercise of the Stock
Acquisition Rights |
| (I) |
Each Stock Acquisition Right may
not be exercised in part.
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| (II) |
The Stock Acquisition Rights may
not be exercised on or after approval of a General Meeting of Shareholders
of a merger agreement in which the Company is officially dissolved.
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| (III) |
The Stock Acquisition Rights may
not be exercised on or after approval of a General Meeting of Shareholders
of a share exchange agreement or matters relating to share transfer pursuant
to which share exchange or share transfer the Company becomes the wholly
owned subsidiary of another company.
Further, the exercise of the Stock Acquisition Rights shall be subject to
all of the following conditions: |
| i) |
For the fiscal year ending March 31, 2004, the
Company must record income before income taxes of \44.0 billion or more
on a consolidated basis. |
| ii) |
The Qualified Person must continuously be a
director, officer or employee of the Company or its subsidiary up to and
through the time that his/her Stock Acquisition Rights are exercised. Provided,
however, that: (a) If the Qualified Person ceases to be a director, officer
or employee of the Company or its subsidiary during the Exercise period
for reasons other than involuntary termination for cause, the Qualified
Person may exercise the Stock Acquisition Rights for a period limited to
one year from the day (inclusive) on which he/she ceases to be a director,
officer or employee of the Company or its subsidiary; (b) In case that the
Qualified Person ceases to be a director, officer or employee of the Company
or its subsidiary during the period form April 1, 2004 (inclusive) to October
16, 2005 (inclusive) for reasons other than involuntary termination for
cause or his/her voluntary termination, the Qualified Person may exercise
the Stock Acquisition Rights for a period of one year from October 17, 2005
(inclusive) and (c) In case that the Qualified Person ceases to be a director,
officer or employee of the Company or its subsidiary due to his/her death,
the exercise rights by persons inheriting the Stock Acquisition Rights in
question shall be permitted for the same period as stated in (a) or (b)
above, as applicable. |
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| (8) |
Cancellation of the Stock Acquisition
Rights
None. |
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| (9) |
Restriction on the transfer of the
Stock Acquisition Rights
The Stock Acquisition Rights are nontransferable, unless such transfer is
expressly approved by the Board of Director of the Company. |
About NEC Electronics Corporation
NEC Electronics Corporation (TSE: 6723) specializes in semiconductor products encompassing advanced technology solutions for the high-end computing and broadband networking markets, system solutions for the mobile handsets, PC peripherals, automotive and digital consumer markets, and platform solutions for a wide range of customer applications. NEC Electronics Corporation has 24 subsidiaries worldwide including NEC Electronics America, Inc. (www.am.necel.com) and NEC Electronics (Europe) GmbH (www.ee.nec.de). For additional information
about NEC Electronics worldwide, visit www.necel.com.
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Information in the press releases, including product prices and
specifications is current on the date of the press announcement,
but is subject to change without prior notice.
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