Agenda for Annual General Meeting of Shareholders for the FY 2006
2007-03-08The agenda for the annual general meeting of shareholders to be held on March 23, 2007 was also released through the two Korean daily newspapers, and the detailed contents of such agenda are also currently being distributed to shareholders of Kookmin Bank for their reference as they exercise their voting rights.
Agendum 1. Approval of Non-consolidated Financial Statements (Balance Sheet, Income Statement and Statement of Appropriation of Retained Earnings) for the Fiscal Year 2006.
Agendum 2. Appointment of Directors.
Agendum 3. Appointment of candidates for the members of the audit committee, who are non-executive directors.
Agendum 4. Approval of previously granted stock options.
Agendum 5. Grant of stock options.
Please find the following Exhibits attached to this document:
Exhibit Index
99.1 Non-consolidated Balance Sheet as of December 31, 2006 and 2005
99.2 Non-consolidated Income Statement for the Year Ended December 31, 2006 and 2005
99.3 Non-consolidated Statement of Appropriation of Retained Earnings for the Year Ended December 31, 2006 and 2005
List of Non-Executive Director Nominees
| Name (Date of Birth) |
Current Position | Education | Career | Relationship with the largest shareholder | Transactions with the Bank during the past 3 years |
|---|---|---|---|---|---|
| Jacques P.M. Kemp (Newly appointed) (05/15/1949) |
CEO of ING Insurance Asia/Pacific | ㆍ Higher Economic School, Rotterdam ㆍ International Senior Management Program at Harvard Univ. ㆍ MBA, Univ. of Chicago |
ㆍ General Manager for ING Bank Brazil ㆍ Chairman of ING Bank International ㆍ Global Head e-Business for ING Group ㆍ CEO of ING Insurance Asia/Pacific |
None | None |
| Name (Date of Birth) |
Current Position | Education | Career | Relationship with the largest shareholder | Transactions with the Bank during the past 3 years |
|---|---|---|---|---|---|
| >Kee Young Chung (Reappointed) (09/07/1948) |
Professor, Accounting Keimyung Univ. (C.P.A) |
Ph.D. in Accounting, Univ. of Texas, Austin M.A. in Business, Seoul Nat’l Univ. B.A. in Business, Seoul Nat’l Univ. |
Non-executive Director, LG Corporation President, Korea Accounting Institute Chairman, Korea Accounting Association Member, Examination Committee, FSS |
None | None |
| Dam Cho (Reappointed) (08/01/1952) |
Professor, Chonnam Nat’l Univ. |
Ph.D. in Finance, Korea Univ. M.S in Business Administration, Korea Univ. B.A. in Business Administration, Korea Univ. |
President, Korean Financial Management Association Lecturer, Hongik Univ. |
None | None |
| Bo Kyung Byun (Reappointed) (08/09/1953) |
CEO, Kolon I’Networks Co., Ltd. |
B.S. in Mechanical Engineering, Seoul Nat’l Univ. |
CEO, LG-IBM PC Co., Ltd. Managing Director, IBM Korea |
None | None |
| Baek In Cha (Newly appointed) (07/23/1958) |
Senior Research Fellow, Korea Institute of Finance |
Ph.D. in Economics, Univ. of Minnesota B.A. in Economics, Seoul Nat’l Univ. |
Director of Research, Vice President, KIF Professor, Economics & Finance, Hong Kong City Univ. Professor, Economics, Univ. of Texas |
None | None |
On each of February 8, 2007, and October 27 and April 28, 2006, the Board of Directors of Kookmin Bank resolved to grant stock options to senior executive vice presidents, executive vice presidents, heads of regional head offices and the head of research center of the Bank.
Pursuant to Article 13 of the Articles of Incorporation, these resolutions by the Board are subject to the approval at the first General Meeting of Shareholders convocated after the date of grant.
The purpose of these stock option grants is i) to derive better performance by relating performance and compensation in order to elevate shareholder value, and ii) to motivate our management towards meeting internal business targets and conducting responsible management practices. The methods through which we may grant these stock options are provided in more detail below.
1. List of Grantees, Number of Stock Options and Date of Grant
| Date of Grant | Grantees | Number of Shares1 | Offering Structure | Remarks | |
|---|---|---|---|---|---|
| Title | Name | ||||
| February 8, 2007 |
Senior EVP | Dong Su Yeo Hyeog Kwan Kwon Jeung Ho Lee |
30,000 (10,000 each) |
Granted over 1 year | Index –Linked Stock Options |
| Kyoung Woo Nam | 45,000 | Granted over 3 years | |||
| EVP | Gi Eui Choi Chung Wook Kim Kyung Hak Lee< Jae Gon Kim< Heung Un Kim Woo Shick Lee |
810,000 (30,000 each) |
|||
| Head of Corporate Regional Head Office | Young Hwan Sohn Young Gu Joo Han Ok Kim Yong Shin Kim |
||||
| Head of Consumer Regional Head Office | Kyung Gu Lee Kyun Shin Hwa Jung Kim Tae Sung Hwang Myung Heun You Nam Cheol Shin In Byung Park Kun Soo Kang Kwang Won Jee Youn Dong Kim Chan Bon Park Jong Bum Kim Byong Duk Min Hye Seok Seo Bou Hwan Sim Yong Soo Seok Sang Hun Choi |
||||
| Subtotal: 31 people |
885,000 |
||||
| October 27, 2006 | Head of Research Center |
Dong Hyun Ji | 20,000 | Granted over 2 years | Index -Linked Stock Options |
| April 28, 2006 | Head of Consumer Regional Head Office | Young Mo Lee | 30,000 | Granted over 3 years | |
| Subtotal: 2 people | 50,000 | ||||
| Total: 33 people | 935,000 |
||||
2. Method of Exercise
Kookmin Bank may respond to a grantee’s exercise of his or her stock options by choosing one of the following:
- issuing him or her new common shares,
- delivering him or her treasury shares (which will be common shares), or
- giving him or her cash or treasury shares, the value of which is equivalent to the difference between the exercise price and the market price.
3. Exercise Price
Exercise price = ( Base Price ) Won x (1 + TRS of the three major competitors x 0.4)
(1) Rounded up to the nearest 100 Won.
style="MARGIN-TOP: 1em;"(2) ( Base Price ) Won is the arithmetic mean of the following three numbers: the sum of the daily closing price multiplied by the daily trading volume divided by the daily trading volume for the common shares during each of the following periods: (i) two months prior to, but excluding, the grant date; (ii) one month prior to, but excluding, the grant date; and (iii) one week prior to, but excluding, the grant date.
Base Price
| Date of Grant | ( Base Price ) Won |
|---|---|
| February 8, 2007 | 77,100 |
| October 27, 2006 | 76,600 |
| April 28, 2006 | 81,900 |
(3) TRS of the three major competitors shall mean (the sum of each of the three major competitor’s Total Market Cap at the expected exercise price confirmation dateless the sum of each of the three major competitor’s Total Market Cap at the grant date) divided by the sum of each of the three major competitor’s Total Market Cap at the grant date.
Total Market Cap at the expected exercise price confirmation date shall mean the “expected exercise price confirmation date closing price” multiplied by the number of outstanding shares as of the expected exercise price confirmation date. The “expected exercise price confirmation date closing price” shall be the arithmetic mean of the following three numbers: the sum of the daily closing price multiplied by the daily trading volume divided by the daily trading volume for the common shares during each of the following periods: (i) two months prior to, but excluding, the expected exercise price confirmation date; (ii) one month prior to, but excluding, the expected exercise price confirmation date; and (iii) one week prior to, but excluding, the expected exercise price confirmation date.
Total Market Cap at the grant date shall mean the “grant date closing price” multiplied by the number of outstanding shares as of the grant date. The “grant date closing price” shall be the arithmetic mean of the following three numbers: the sum of the daily closing price multiplied by the daily trading volume divided by the daily trading volume for the common shares during each of the following periods: (i) two months prior to, but excluding, the grant date; (ii) one month prior to, but excluding, the grant date; and (iii) one week prior to, but excluding, the grant date.
(4) Three major competitors shall mean the Shinhan Financial Group, Hana Financial Group and Woori Financial Group.
(5) In the event of (i) a grantee’s early retirement, the day before such retirement date or (ii) the expected exercise price confirmation date falling on a holiday, the day before such holiday, each such day shall be deemed the expected exercise price confirmation date.
(6) If the growth rate of the three major competitors’ Total Market Cap is negative, the exercise price shall be ( Base Price ) Won.
4. Exercise Period
| Date of Grant | Exercise Period |
|---|---|
| February 8, 2007 | From February 9, 2010 to February 8, 2015 |
| October 27, 2006 | From October 28, 2009 to October 27, 2014 |
| April 28, 2006 | From April 29, 2009 to April 28, 2014 |
5. Adjustment to Exercise Price and Number of Stock Options
In the event that there is a capital increase, stock dividend, stock split, reverse stock split, merger or consolidation, or a decrease in number of outstanding shares due to capital reduction, redemption of stock using retained earnings or redemption of redeemable stock, and such event requires an adjustment in the exercise price or number of exercisable shares pursuant to these stock option grants, then such adjustment shall be made in accordance with a resolution passed by our board of directors.
6. Adjustment Following Resignation
If any grantee resigns or ceases his/her office before completing his/her term but after the conditions for exercising his/her stock options have been satisfied, such grantee may exercise his/her options, adjusted pursuant to the formula below and rounded down to the nearest whole share.
Formula
Exercisable number of shares shall mean the number of shares granted by the stock option grant multiplied by the number of days at work after the stock option grant divided by the number of days in the granting period(1 ~ 3 yrs).
7. Effective Date: Resolution Date of Board of Directors
| Date of Grant | Effective Date |
|---|---|
| February 8, 2007 | February 8, 2007 |
| October 27, 2006 | October 27, 2006 |
| April 28, 2006 | April 28, 2006 |
On February 8, 2007, the board of directors of Kookmin Bank resolved to present the following stock option grant plan for approval at the general meeting of shareholders scheduled on March 23, 2007.
The purpose of these stock option grants is to derive better performance by relating performance and compensation in order to elevate shareholder value. The methods through which we may grant these stock options are provided in more detail below.
1. List of Grantees and the Stock Option Details
| Title | Name | Number of Shares1 | Note |
|---|---|---|---|
| Non-Executive Director | Jacques P. M. Kemp | 30,000 | Granted over3 yrs |
Conditional Grant of Stock Option
| Title | Name | Additional Shares to be Granted2 | Note |
|---|---|---|---|
| Non-Executive Directors | Doo Hwan Song | 5,000 | Granted over 1 yr |
| Chang Kyu Lee | 5,000 | ||
| Dam Cho | 5,000 | ||
| Nobuya Takasugi | 5,000 | ||
| Kee Young Chung | 10,000 | Granted over2yrs | |
| Bo Kyung Byun | 10,000 | ||
| Baek In Cha | 10,000 | ||
| Jacques P. M. Kemp | 15,000 | Granted over3yrs |
2. Grant Date: March 23, 2007
3. Exercise Price
Exercise price = ( ) Won x (1 + TRS of the three major competitors x 0.4)
(1) Rounded up to the nearest 100 Won.
(2) ( ) Won is the arithmetic mean of the following three numbers: the sum of the daily closing price multiplied by the daily trading volume divided by the daily trading volume for the common shares during each of the following periods: (i) two months prior to, but excluding, the grant date; (ii) one month prior to, but excluding, the grant date; and (iii) one week prior to, but excluding, the grant date.
(3) TRS of the three major competitors shall mean (the sum of each of the three major competitor’s Total Market Cap at the expected exercise price confirmation date less the sum of each of the three major competitor’s Total Market Cap at the grant date) divided by the sum of each of the three major competitor’s Total Market Cap at the grant date.
Total Market Cap at the expected exercise price confirmation date shall mean the “expected exercise price confirmation date closing price” multiplied by the number of outstanding shares as of the expected exercise price confirmation date. The “expected exercise price confirmation date closing price” shall be the arithmetic mean of the following three numbers: the sum of the daily closing price multiplied by the daily trading volume divided by the daily trading volume for the common shares during each of the following periods: (i) two months prior to, but excluding, the expected exercise price confirmation date; (ii) one month prior to, but excluding, the expected exercise price confirmation date; and (iii) one week prior to, but excluding, the expected exercise price confirmation date.
Total Market Cap at the grant date shall mean the “grant date closing price” multiplied by the number of outstanding shares as of the grant date. The “grant date closing price” shall be the arithmetic mean of the following three numbers: the sum of the daily closing price multiplied by the daily trading volume divided by the daily trading volume for the common shares during each of the following periods: (i) two months prior to, but excluding, the grant date; (ii) one month prior to, but excluding, the grant date; and (iii) one week prior to, but excluding, the grant date.
(4) Three major competitors shall mean the Shinhan Financial Group, Hana Financial Group and Woori Financial Group.
(5) In the event of (i) a grantee’s early retirement, the day before such retirement date or (ii) the expected exercise price confirmation date falling on a holiday, the day before such holiday, each such day shall be deemed the expected exercise price confirmation date.
(6) If the growth rate of the three major competitors’ Total Market Cap is negative, the exercise price shall be ( ) Won.
4. Method of Exercise
Kookmin Bank may respond to a grantee’s exercise of his or her stock options by choosing one of the following:
- issuing him or her new common shares,
- delivering him or her treasury shares (which will be common shares), or
- giving him or her cash or treasury shares, the value of which is equivalent to the difference between the exercise price and the market price.
5. Exercise Period: From March 24, 2010 to March 23, 2015
6. Adjustment to Exercise Price and Number of Stock Options
In the event that there is a capital increase, stock dividend, stock split, reverse stock split, merger or consolidation, or a decrease in number of outstanding shares due to capital reduction, redemption of stock using retained earnings or redemption of redeemable stock, and such event requires an adjustment in the exercise price or number of exercisable shares pursuant to these stock option grants, then such adjustment shall be made in accordance with a resolution passed by our board of directors.
7. Adjustment Following Resignation
If any grantee resigns or ceases his/her office before completing his/her term but after the conditions for exercising his/her stock options have been satisfied, such grantee may exercise his/her options, adjusted pursuant to the formula below and rounded down to the nearest whole share.
Formula
Exercisable number of shares shall mean the number of shares granted by the stock option grant multiplied by the number of days at work after the stock option grant divided by the number of days in the granting period(1 ~ 3 yrs).
8. Effective Date: March 23, 2007
1 The shares referenced are common shares.
2 If a non-executive director is appointed as the chairman of our board at a subsequent board meeting after the general meeting of shareholders, such director will be granted additional stock options entitling him or her to receive additional shares equal to the amount set forth opposite his or her name. Such additional amount will be adjusted pursuant to the tenure of non-executive directors. If the present chairman is reappointed, no additional stock options will be granted.
Exhibit
99.1 Non-consolidated Balance Sheet as of December 31, 2006 and 2005
99.2 Non-consolidated Income Statement for the Year Ended December 31, 2006 and 2005