With regard to the Disposal of Treasury Shares, the Company has
submitted a Written Notice of Securities in accordance with the
Financial Instruments and Exchange Act.
2. Purpose and Reasons for the Disposal
At the Board of Directors Meeting held on May 8, 2020, for the purpose of providing an incentive for the Company's Directors (excluding Outside Directors, the "Eligible Directors") to sustainably increase the Company's corporate value and further promoting shared value with shareholders, the Directors decided to introduce a restricted stock compensation plan (the "Compensation Plan") , and at the Annual General Meeting of Shareholders held on June 19, 2020, based on the Compensation Plan, as the monetary compensation to serve as invested assets to acquire the restricted stocks (the "Restricted Stock Compensation"), it was approved that the amount of the Restricted Stock Compensation for the Eligible Directors shall not exceed 60 million yen per year (excluding the employee salary of directors who are also employees of the Company), and that the Eligible Directors shall be subject to a transfer restriction period of 30 years from the date of allotment under this Allotment Agreement.
In today's Board of Directors Meeting, it was resolved that 11,200 shares of the Company's Common stock will be allotted to the restricted stock through the arrangement in which the amount of monetary compensation claims in total of 19,342,400 yen ('the "Monetary Compensation Claims'') will be paid to 5 Directors of the Company, followed by contribution in kind of all of the Monetary Compensation Claims paid to the Eligible Directors. The amount of Monetary Compensation Claims for the Eligible Directors is determined by comprehensively taking into consideration the Company's business performance, the responsibilities of each Eligible Directors, and other various factors. In addition, the Monetary Compensation Claim will be provided to the Eligible Directors subject to conditions including the one that the Eligible Directors execute an agreement with the Company for allocation of restricted stock that contains the following details.
Overview of the Allotment Agreement
Transfer Restriction Period: August 11, 2021 - August 10, 2051
Acquisition of Restricted Stock without Considerations
The Company will naturally acquire the allotted shares without compensation if the Eligible Director who has been allotted the restricted shares resigns from the Company's board of directors before the expiration of the transfer restriction period, unless there is a reason that the Company's board of directors deems justifiable.
In addition, the Company will naturally acquire the allotted shares for which the restrictions on transfer have not been terminated pursuant to (3) below at the time of expiration of the transfer restriction period in (1) above without compensation
Release of Restrictions on Transfer
On the condition that the Eligible Directors who has been allotted the restricted shares maintain their positions continuously during the transfer restriction period, the Company will release the restrictions on transfer of all of the allotted shares at the expiration of the transfer restriction period.
However, if the Eligible Director resigns from the above-mentioned position before the expiration of the transfer restriction period for reasons that the Board of Directors of the Company deems justifiable, adjustments will be reasonably made to the timing of releasing restriction on transfer and the number of shares subject to release.
Treatment in Case of Organization Restructuring
If, during the transfer restriction period, matters relating to a merger agreement in which the Company is the dissolving company, a share exchange agreement or share transfer plan in which the Company becomes a wholly owned subsidiary, or other reorganization are approved at the Company's General Meeting of Shareholders (or in the case where the approval at the Company's General Meeting of Shareholders is not required, in relation to the reorganization in question, a meeting of its Board of Directors of the Company), based on the resolution of the Board of Directors of the Company, the number of shares that is reasonably calculated considering the period from the start date of the transfer restriction period to the date of approval of the reorganization, etc. shall be released prior to the date the reorganization becomes effective. In such case, immediately subsequent to the termination of the restrictions on transfer, the Company will naturally acquire the allotted shares for which the restrictions on transfer have not been terminated without compensation.
Management of the Allotted Shares
To ensure compliance with the transfer restriction during the transfer restriction period, the allotted shares shall be managed in a dedicated account at Mitsubishi UFJ Morgan Stanley Securities Co., Ltd., opened by the Eligible Directors.
Basis of Calculation and Specific Details for the Payment Amount
The Disposal price shall be 1,727 yen which is the closing price of the Company's Common stock at Tokyo Stock Exchange on July 15, 2021 (the business day prior to the day of resolution of the Board of Directors Meeting) to exclude any arbitrariness. As this is the market price immediately prior to the day of resolution in the Board of Directors Meeting, we believe this is reasonable and does not represent a particularly favorable price.