Internet Initiative Japan Inc. ("IIJ", the "Company") (NASDAQ:IIJI)
(TSE1:3774) announced that IIJ’s Board of Directors today resolved
that stock-compensation-type stock options (Stock Acquisition
Rights) be issued to Directors (excluding Part-time and Outside
Directors) and Executive Officers of IIJ, in accordance with the
provisions of Articles 236 Paragraph 1, Article 238 Paragraph 1 and
2 and Article 240 Paragraph 1 of the Corporation Law of Japan, as
follows.
1. The reason for issuing the Stock Acquisition Rights as
Stock Options
The purposes of issuing the Stock Acquisition
Rights as Stock Options for Directors (excluding Part-time and
Outside Directors) and Executive Officers of IIJ are to further
promote their motivation and incentives to contribute to the
enhancement of the mid- to long-term continuous business
performance and corporate value.
2. Details of Issuance of Stock Acquisition Right
(1) Name of the stock acquisition rights
Internet Initiative Japan Inc. Stock Acquisition
Rights (7th series)
(2) Maximum number of stock acquisition rights: 245
The maximum number as described above is the
number of planned allotments. If the maximum number of the stock
acquisition rights to be allotted is decreased due to no
subscription for some of the rights, etc, then the maximum number
of the stock acquisition rights to be issued shall be equal to the
maximum number of the stock acquisition right to be allotted.
(3) Class and number of shares to be issued upon exercise
of stock acquisition rights
The class of shares to be issued upon exercise
of stock acquisition rights shall be common stock of IIJ. The
number of shares to be issued upon exercise of each stock
acquisition right (hereinafter referred as “Number of Shares
Granted”) shall be two hundred (200). However, in case the Company
carries out a share split or share consolidation after the date of
allotment of the stock acquisition rights (hereinafter referred to
as the “Allotment Date”) as defined in (13), the Number of Shares
Granted shall be adjusted according to the following formula, with
the resulting fractions of less than one (1) share occurring upon
such adjustment rounded down.
Number
of SharesGranted afteradjustment |
= |
Number
of SharesGranted beforeadjustment |
× |
Ratio
of share splitor share consolidation |
In the case of a share split, the Number of
Shares Granted after adjustment shall apply from the day after the
record date of the said share split. Whereas, in the case of a
share consolidation, the Number of Shares Granted after adjustment
shall apply from the day the share consolidation becomes effective.
Provided, however, that in cases where the Company conducts a share
split conditional on approval at a General Meeting of Shareholders
of the Company of a proposal to reduce surplus and increase capital
stock and capital reserve, and the record date for the share split
shall be the day prior to the day on which said shareholders’
meeting closes, the Number of Shares Granted after adjustment shall
retroactively apply from the day after the day the applicable
shareholders’ meeting closes and the day following the applicable
record date.
In case the Company carries out a merger,
demerger or the like that makes it necessary to adjust the Number
of Shares Granted, the Company may make appropriate adjustment to
the Number of Shares Granted within a reasonable range.
(4) Value of assets to be contributed upon exercise of
stock acquisition rights
The value of assets to be contributed upon
exercise of stock acquisition rights shall be determined by
multiplying the price to be paid per share upon exercise of each
stock acquisition right (the “exercise price”) by the Number of
Shares Granted, and the exercise price shall be one (1) yen.
(5) Exercise period of stock acquisition rights
From July 15, 2017 to July 14, 2047
(6) Matters concerning increase in capital stock and
capital reserve by the issuance of shares upon exercise of stock
acquisition rights
- Amount of increase in capital stock by issuing shares upon
exercise of stock acquisition rights shall be half of the upper
limit of capital increase as calculated pursuant to the provisions
of Article 17, Paragraph 1 of the Ordinance for Corporate
Accounting, with the resulting fractions of less than one (1) yen
occurring upon such calculation shall be rounded up to the nearest
yen.
- Amount of increase in capital reserve by issuing shares upon
exercise of stock acquisition rights shall be the upper limit of
capital increase as described in 1) above less the amount of
increase in capital set out therein.
(7) Restriction on acquisition of stock acquisition rights
by transfer
Any acquisition of stock acquisition rights by
transfer shall be subject to the approval by resolution of the
Board of Directors of the Company.
(8) Conditions for acquisition of stock acquisition
rights
In case that a resolution for the approval of
any of the proposals 1) or 2) below is adopted at the General
Meeting of Shareholders of the Company (or at a meeting of the
Board of Directors of the Company if resolution at a General
Meeting of Shareholders is not required), the Company may acquire
the stock acquisition rights as at the date specifically determined
by the Board of Directors of the Company without contribution.
- Proposal for approval of a merger agreement under which the
Company shall be merged
- Proposal for approval of a share exchange agreement or share
transfer plan under which the Company shall be a wholly-owned
subsidiary
(9) Matters concerning the details of the issuance of
stock acquisition rights undergoing Organizational
Restructuring
In the event the Company merges (limited to
cases wherein the Company becomes a dissolving company), performs
an absorption-type demerger or an incorporation-type demerger (only
if the Company becomes the split company), or conducts a share
exchange or a share transfer (only if the Company becomes a
wholly-owned subsidiary) (hereinafter collectively referred to as
“Organizational Restructuring”), stock acquisition rights of a
corporation described in Article 236, Paragraph 1, Items 8.1
through 8.5 of the Corporation Law of Japan (hereinafter
“Restructured Company”) shall be granted to each Stock Acquisition
Right Holder remaining unexercised (hereinafter “Remaining Stock
Acquisition Rights”) immediately before the date when
Organizational Restructuring takes effect (refers to the date when
absorption-type merger takes effect, the date on which the company
incorporated through the incorporation-type merger, the date when
absorption-type demerger takes effect, the date on which the
company incorporated through the incorporation-type demerger, the
date when share exchange takes effect, or the date when the
wholly-owning parent company is established by share transfer).
However, the foregoing shall apply only to cases in which the
delivery of stock acquisition rights of the Restructured Company
according to the following conditions is stipulated in the
absorption-type merger agreement, the incorporation-type merger
agreement, the absorption-type demerger agreement, the
incorporation-type demerger plan, the share exchange agreement or
the share transfer plan.
- Number of stock acquisition rights of the Restructured Company
to be deliveredThe Company shall deliver stock acquisition rights,
the number of which shall equal the number of stock acquisition
rights held by the holder of the Remaining Stock Acquisition
Rights.
- Class of shares of the Restructured Company to be issued upon
exercise of stock acquisition rightsCommon stock of the
Restructured Company
- Number of shares of the Restructured Company to be issued upon
exercise of stock acquisition rightsTo be decided according to (3)
above after taking into consideration the conditions etc. of the
Organizational Restructuring.
- Value of the assets to be contributed upon exercise of stock
acquisition rightsThe value of the assets to be contributed upon
exercise of each stock acquisition rights shall be the amount
obtained by multiplying the amount to be paid after restructuring
as stipulated below, and the number of shares of the Reorganized
Company to be issued upon exercise of the stock acquisition rights
as determined in accordance with 3) above. The amount to be paid
after restructuring shall be one (1) yen per share of the
Restructured Company that can be granted due to the exercise of
each stock acquisition right that is to be granted.
- Exercise period of stock acquisition rightsStarting from the
later of either the commencement date of the exercise period of
stock acquisition rights as stipulated in (5) above, or the date on
which the Organizational Restructuring becomes effective and ending
on the expiration date for the exercise of stock acquisition rights
as stipulated in (5) above.
- Matters concerning increase in capital stock and capital
reserve to be increased by the issuance of shares upon exercise of
stock acquisition rightsTo be determined in accordance with (6)
above.
- Restriction on acquisition of stock acquisition rights by
transferAny acquisition of stock acquisition rights by transfer
shall be subject to the approval by resolution of the Board of
Directors of the Restructured Company.
- Conditions for acquisition of stock acquisition rightsTo be
determined in accordance with (8) above.
- Other terms and conditions of exercising stock acquisition
rightsTo be determined in accordance with (11) below.
(10) Rules pertaining to fractions of less than one (1)
share arising from the exercise of stock acquisition rights
Fractions of less than one (1) share in the
number of shares to be granted to Stock Acquisition Right Holders
who exercised stock acquisition rights shall be rounded down.
(11) Other terms and conditions of exercising stock
acquisition rights
- Partial execution of each stock acquisition rights is not
allowed.
- A person granted the stock acquisition rights may exercise its
rights only within ten (10) days from the day following the day the
person loses his or her position as a Director or Executive Officer
of the Company, except for losing his or her position by passing
away. However, this does not apply if his or her legal heir who
inherits the stock acquisition rights as described in the following
paragraph 3) exercises the rights.
- If a person granted the stock acquisition rights passes away,
only one of his or her legal heir is permitted to inherit the
granted stock acquisition rights (hereinafter referred as
“Grantee”), The Grantee can exercise only within six (6) months
after inheriting the new shares acquisition rights. If the Grantee
passes away, the stock acquisition rights cannot be passed on to
the legal heir of the Grantee.
- The Share Purchase Warrants shall not be transferred to
third-party, offered for pledge or disposed of in any other
way.
- Matters concerning other conditions for the exercise of stock
acquisition rights, other than the items prescribed above, shall be
determined at the meeting of the Board of Directors when the terms
and conditions of offering of stock acquisition rights are
determined.
(12) Method for calculating the amount to be paid upon
allocation of stock acquisition rights
The amount to be paid upon allocation of each
stock acquisition rights shall be the option price per share
calculated based on the following figures from 2) to 7) according
to the formula of the Black-Scholes model, multiplied by the Number
of Shares Granted, with fractions of less than one (1) yen
being rounded up to the nearest yen.
To access the Black-Scholes model, please click
here: http://www.globenewswire.com/NewsRoom/AttachmentNg/be14723b-8254-44fe-adb1-2081bbe0b794
- Option price per share (C)
- Share price (S): the closing price (base price for the next
trading day when there is no closing price) of the common stock of
the Company in regular trading on the Tokyo Stock Exchange on July
14, 2017
- Exercise price (X): one (1) yen
- Expected remaining period (T): 15 years
- Volatility (σ): volatility of share price computed based on the
closing price of the common stock of the Company in regular trading
for the last trading date of each week between December 2, 2005 to
July 14, 2017.
- Risk-free interest rate (r): The interest rate on
super-long-term Japanese government bonds with remaining years
corresponding to the expected remaining period.
- Dividend yield (q): Dividend per share (amount of dividend per
share paid for the fiscal year ended March, 2017) divided by the
share price as set forth in 2) above.
- Cumulative distribution function of the standard normal
distribution (N(・))
The option price to be calculated as described
above is a fair value of the stock acquisition rights. Accordingly,
the issuance of the stock acquisition rights is not an issuance of
shares with favorable terms. The monetary remuneration claims of
the person who will be allotted the stock acquisition rights
against the Company and their obligations to pay for the allotment
of the stock acquisition rights will be offset.
(13) Date of allotment of the stock acquisition rights
July 14, 2017
(14) Date of payment of consideration in exchange of the
stock acquisition rights
July 14, 2017
(15) Persons to be allotted stock acquisition rights,
number of persons, and number of stock acquisition rights to be
allotted
Directors (excluding Part-time and Outside Directors) of IIJ |
7
Directors |
168
rights |
Executive Officers of IIJ |
11
Executive Officers |
77
rights |
(16) Details in case of issuance of stock acquisition
rights certificates
There will be no issuance of stock acquisition
rights certificates.
About IIJ
Founded in 1992, IIJ is one of Japan's leading
Internet-access and comprehensive network solutions providers. IIJ
and its group companies provide total network solutions that mainly
cater to high-end corporate customers. IIJ's services include
high-quality Internet connectivity services, systems integration,
cloud computing services, security services and mobile services.
Moreover, IIJ has built one of the largest Internet backbone
networks in Japan that is connected to the United States, the
United Kingdom and Asia. IIJ listed on the U.S. NASDAQ Stock Market
in 1999 and on the First Section of the Tokyo Stock Exchange in
2006.
The statements within this release contain forward-looking
statements about our future plans that involve risk and
uncertainty. These statements may differ materially from actual
future events or results. Readers are referred to the documents
furnished by Internet Initiative Japan Inc. with the SEC,
specifically the most recent reports on Forms 20-F and 6-K, which
identify important risk factors that could cause actual results to
differ from those contained in the forward-looking statements.
For inquiries, contact:
IIJ Investor Relations
Tel: +81-3-5205-6500 E-mail: ir@iij.ad.jp URL: http://www.iij.ad.jp/en/ir
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