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Article 56-1
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To issue employee stock warrants that are not subject to the exercise price restriction set out in Article 53, an issuer is required to obtain the consent of at least two-thirds of the voting rights represented at a shareholders meeting attended by shareholders representing a majority of the total issued shares. The issuer is allowed to register multiple issues over a period of 1 year from the date of the shareholders resolution [provided that the combined number of subscribable shares does not exceed the number approved by the shareholders].
To conduct the matter under the preceding paragraph, the issuer shall be required to specify the following information in the notice of reasons for convening the shareholders meeting, and may not raise the matter by means of an extraordinary motion:
- The total number of employee stock warrants to be issued, the number of shares subscribable per stock warrant, and the number of new shares that will have to be issued to cover exercise of the warrants or the number of shares that will have to be repurchased in accordance with the provisions of Article 28-2 of the Act.
- The criteria for determination of the exercise price, and the reasonableness of the price.
- Qualification requirements for warrant subscribers, and the number of shares they are allowed to subscribe for.
- The reasons why it is necessary to issue the employee stock warrants.
- Factors affecting shareholders' equity:
- The expensable amount, and dilution of the company's earnings per share.
- Where previously issued shares will be used to cover the warrants, explain what financial burden this will impose on the company.
Matters required by paragraph 1 to be submitted for resolution at a shareholders meeting shall be set out in the company's articles of incorporation.
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Article 60-2
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To file for registration of issuance of new restricted employee shares, an issuer shall be required to have a resolution adopted by a majority of the voting rights of the shareholders present at a meeting of shareholders representing two-thirds or more of the total number of issued shares of the company. The issuer is allowed to register multiple issues over a period of 1 year from the date of the shareholders resolution [provided that the combined number of subscribable shares registered does not exceed the number approved by the shareholders meeting].
If the total number of shares represented by the shareholders present is insufficient to satisfy the requirements of the preceding paragraph, the resolution may be adopted by two-thirds of the voting rights of the shareholders present at a meeting of shareholders representing a majority of the total number of issued shares of the company.
To conduct the matters under the preceding two paragraphs, the issuer shall be required to specify the following information in the notice of reasons for convening the shareholders meeting, and may not raise the matters by means of an extraordinary motion:
- The total number of shares to be issued.
- The terms and conditions of issuance.
- Qualifications and conditions for employees and the numbers of shares distributable or subscribable.
- The reasons why it is necessary to issue the new restricted employee shares.
- The expensable amount, the dilution of the company's earnings per share, and any other impact on shareholders equity.
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