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Kuraray Co., Ltd. resolved at a meeting of its Board of Directors held on May 16, 2002 to propose an agenda titled "Issue of Stock Acquisition Rights as stock options" as detailed below, pursuant to Articles 280-20 and 280-21 of the Commercial Code for resolution at the Ordinary General Meeting of Shareholders scheduled to held on June 27, 2002:
1. Reason for Issuing Stock Acquisition Rights as Stock Options
The Company will issue Stock Acquisition Rights to directors and employees of the Company and the like for the purpose of enhancing their consciousness of participation in the management of the Company and raising their commitment and willingness to contribute for the improvement of the business performance of the Company.
2. Terms of Issue of Stock Acquisition Rights
(1) Persons to whom Stock Acquisition Rights will be allocated:
Directors, statutory auditors and employees of the Company and its subsidiaries
(2) Class and number of shares for which Stock Acquisition Rights will be issued:
1.2 million shares of common stock of the Company
If the Company splits or consolidates its common stock, the number of shares to be issued upon exercise of each Stock Acquisition Right shall be adjusted according to the following formula; provided, however, that such adjustment shall be made only to those remain unexercised 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.
(3) Total number of Stock Acquisition Rights to be issued:
2,400 (The number of shares to be issued upon exercise of each Stock Acquisition Rights shall be 500.)
(4) Issue price of Stock Acquisition Rights:
No consideration shall be payable.
(5) Amount to be paid in upon exercise of Stock Acquisition Rights:
Whichever is higher of (i) the average (any fraction less than one yen will be rounded up) of the closing price of the common stock of the Company in the regular trading on the Tokyo Stock Exchange (including indication of any bid or offer, hereafter referred to as the "Closing Price") for 30 consecutive trading days (excluding days on which there is no Closing Price) from the beginning of 45 days period preceding the issue of Stock Acquisition Rights, multiplied by 1.05 (any fraction less than one yen will be rounded up), or (ii) the Closing Price on the day of issue of Stock Acquisition Rights (if there is no Closing Price on such date, the Closing Price on the latest trading day on which the Closing Price is quoted).
If the Company splits or consolidates its common stock after the day of issue of Stock Acquisition Rights, the exercise price shall be adjusted according to the following formula, and any fraction less than one yen resulting from this adjustment shall be rounded up.
In addition, in the case the Company issues new shares at a price lower than the then current market value after the day of issue of Stock Acquisition Rights (excluding the case where such lower price is resulted from the exercise of Stock Acquisition Rights), the exercise price shall be adjusted according to the following formula, and any fraction less than one yen resulting from this adjustment shall be rounded up.
(6) Exercise period of Stock Acquisition Rights:
From June 28, 2004 to June 27, 2012.
(7) Conditions for exercise of Stock Acquisition Rights:
- a) A person who received allocation of Stock Acquisition Rights shall remain a director, a statutory auditor or an employee of the Company or any of its subsidiaries at the time of exercise the Stock Acquisition Rights; provided, however, that a person who held a position of director, statutory auditor or associate director of the Company or president of any of Company's subsidiaries may exercise Stock Acquisition Rights even after resignation from such position or retirement by reason of the age limit.
- b) No transfer, assignment or any other disposal of Stock Acquisition Rights shall be permitted.
- c) Other conditions for exercise shall be determined by the "Agreement for Granting Stock Acquisition Rights" to be entered into between the Company and each person to whom Stock Acquisition Rights will be allocated, pursuant to the resolution at the Ordinary General Meeting of Shareholders and the resolution at the meeting of the Board of Directors for the issue of Stock Acquisition Rights.
(8) Reasons and conditions for the cancellation of Stock Acquisition Rights:
- a) In the case that a resolution for the approval of any joint venture agreement under which the Company is merged into other company, or any share exchange agreement under which the Company will become a wholly-owned subsidiary of other company is adopted at the General Meeting of Shareholders of the Company, the Company may cancel Stock Acquisition Rights without any consideration therefor.
- b) In case that a person who received allocation of Stock Acquisition Rights (other than a person who held a position of director, statutory auditor or associate director of the Company or president of any of Company's subsidiaries) fails to exercise its Stock Acquisition Rights by reason of loss of its position as director, statutory auditor or employee of the Company or any of its subsidiaries before exercising its rights, or pass away before exercising its rights, the Company may cancel such Stock Acquisition Rights without any consideration therefor.
(9) Restriction on transfer of Stock Acquisition Rights:
Any transfer of Stock Acquisition Rights shall require an approval of the Board of Directors.
- * The foregoing statement shall be subject to the resolution at the 121st Ordinary General Meeting of Shareholders of the Company scheduled to be held on June 27, 2002.
