11 May 2016
TOKYO, Japan, May 11, 2016 — Renesas Electronics Corporation (TSE: 6723), a premier supplier of advanced semiconductor solutions, today announced that it has resolved at the Meeting of Board of Directors held on May 11, 2016, to submit a proposal concerning both the level of remuneration, etc., relating to stock options for Renesas members of the board (excluding outside directors) and the determination of the concrete details to the 14th Ordinary General Shareholders' Meeting to be held on June 28, 2016.
1. Reason for the proposal
The proposal will ask shareholders to approve the adoption of stock option plan in which Renesas members of the board (except for outside directors) will be allocated stock acquisition rights as remuneration. This would mean that Renesas members of the board would share the merits of a rise in Renesas’ share value and the risks of a drop in the share value with the shareholders, and would increase their desire to further contribute to increasing Renesas' stock price and increasing the value of the company.
2. Details of stock acquisition rights to be granted as stock option
(1) Type and number of stocks to be issued upon exercise of the stock acquisition rights
The type of shares to be issued upon exercise of the stock acquisition rights shall be Renesas common stock, and the number of stocks that are in each stock acquisition right (hereinafter “number of shares granted”) shall be 100 shares. However, following the date of passage of this proposal (hereinafter "date of passage"), if Renesas performs either a stock split (including an allotment of shares without contribution of Renesas common stock. This applies to all mentions of stock splitting in the remainder of this document.) or a stock consolidation, the number of stocks granted shall be adjusted according to the following formula. If the result of the adjustment includes a fractional part of a stock, that fractional part would be discarded.
(Adjusted number of shares granted) = (Number of shares granted prior to adjustment) × (Stock split or stock consolidation ratio)
In addition to the above, if, at any time after the date of passage, Renesas undergoes a merger or a company split, or similar situation of this type and an adjustment of the number of shares granted, Renesas may appropriately adjust the number of shares granted within a logical range. Note that if, at any time after the date of passage, Renesas performs an adjustment of the number of share unit (excluding cases where this is associated with a stock split or a stock consolidation; this definition applies to the term “adjustment of the number of share unit” in the remainder of this document), Renesas may appropriately adjust the number of shares granted within a logical range and proportional to the ratio of the said adjustment of the number of share unit. This applies to these new stock options as resolved by the Meeting of Board of Directors for that issuance following the date that the said adjustment of the number of share unit takes effect.
Note that while there are now five members of the board (of whom two are outside directors), if the company director appointment proposal is adopted without change at Renesas' 14th Ordinary General Shareholders’ Meeting scheduled for June, 28, 2016, then there will be five members of the board (of whom three are outside directors).
(2) Total number of stock acquisition rights
The maximum number of stock acquisition rights to be allocated is limited to the number (with the fractional part, if any, dropped) calculated as follows. This number is given by dividing the value to be given as remuneration or other compensation as stock options to members of the board by the fair price of a stock option as calculated by a fair calculation method such as the Black-Scholes Model based on the closing price of Renesas common on the previous business day of the Meeting of Member of the Board at which the stock option allocation was determined (in case there was no closing price, the reference price of the next business day shall be used).
(3) Amount to be paid for stock acquisition rights
The amount paid for each individual stock option shall be an amount determined at the Meeting of the Board of Directors based on a fair price for the stock option as calculated by a fair calculation method such as the Black-Scholes Model when the stock options are allocated.
(4) The amount to be invested when exercising each stock acquisition right
The amount to be invested when exercising each stock acquisition right shall be given by multiplying a monetary value of 1 JPY per each individual stock that can be granted by exercising the corresponding stock option by the number of assigned stocks.
(5) Exercise period for stock acquisition rights
The exercise period shall be determined by the Meeting of Board of Directors within the range of ten years from the following day after the stock options are allocated (hereinafter “allocation date”).
(6) Transfer restrictions of stock acquisition rights
Regarding the acquisition of stock acquisition rights due to transfer, approval is required as a resolution of the Meeting of Board of Directors.
(7) Conditions relating to exercise of stock acquisition rights
In principle, a person granted an allocation of stock options may execute those options starting on the day one year after the share allocation date. However, when such a person lose his position both as Member of the Board and as Senior Vice President due to, for example, expiration of the term of office, the said person may execute the said stock options starting on the day following said loss of position. Other conditions on execution of stock options shall be decided by the Meeting of Board of Directors.
(8) Other items for exercise of stock acquisition rights
The details of other items for exercise of stock acquisition rights, etc. shall be determined by the Meeting of Board of Directors that resolves the subscription requirements of the allocation of stock acquisition rights.
Renesas expects following the conclusion of the General Shareholders’ Meeting, to grant stock options with the same conditions as the above-mentioned stock options, to Renesas senior vice presidents (excluding senior vice presidents with joint appointment as members of the board), Renesas employees, and members of the board (excluding outside directors), senior vice presidents, and employees of Renesas consolidated subsidiary companies.
The statements in this press release with respect to the plans, strategies and financial outlook of Renesas Electronics and its consolidated subsidiaries (collectively “we”) are forward-looking statements involving risks and uncertainties. We caution you in advance that actual results may differ materially from such forward-looking statements due to several important factors including, but not limited to, general economic conditions in our markets, which are primarily Japan, North America, Asia, and Europe; demand for, and competitive pricing pressure on, products and services in the marketplace; ability to continue to win acceptance of products and services in these highly competitive markets; and fluctuations in currency exchange rates, particularly between the yen and the U.S. dollar. Amongst other factors, downturn of the world economy; deteriorating financial conditions in world markets, or deterioration in domestic and overseas stock markets may cause actual results to differ from the projected results forecast.
About Renesas Electronics Corporation
Renesas Electronics Corporation (TSE: 6723) delivers trusted embedded design innovation with complete semiconductor solutions that enable billions of connected, intelligent devices to enhance the way people work and live. A global leader in microcontrollers, analog, power, and SoC products, Renesas provides comprehensive solutions for a broad range of automotive, industrial, home electronics, office automation, and information communication technology applications that help shape a limitless future. Learn more at renesas.com.
The content in the press release, including, but not limited to, product prices and specifications, is based on the information as of the date indicated on the document, but may be subject to change without prior notice.