Japan Lifeline : Announcement on Disposal of Treasury Stock by Third-party Allotment (15KB)

To whom it may concern,

July 28, 2017

Company name: Japan Lifeline Co., Ltd. Representative: Keisuke Suzuki, President and CEO

(Code: 7575 TSE 1st Section) Contact person: Shogo Takahashi, Executive Vice President,

Corporate Administration Department

(TEL. [phone])

Announcement on Disposal of Treasury Stock by Third-party Allotment

Japan Lifeline Co., Ltd. (hereinafter referred to as the "Company") announced the following resolution concerning the disposal of treasury stock by third-party allotment (hereinafter referred to as the "Disposal of Treasury Stock") was passed at the Board of Directors Meeting held on July 28, 2017.

1. Overview of the disposal

   (1) Disposal date	August 16, 2017
   (2) Number of shares to be disposed	Common stock: 57,900 shares
   (3) Disposal price	4,642 yen per share
   (4) Total disposal price	268,771,800 yen
   (5) Expected allottee	The Master Trust Bank of Japan, Ltd. (Executive Compensation BIP Trust Account)
   (6) Other	The Disposal of Treasury Stock is subject to the effectiveness of the registration statement to be filed under the Financial Instruments and Exchange Act.

2. Purpose and reason for disposal

   The Company has resolved to introduce the Executive Compensation BIP Trust for directors (excluding Chairman, Mr. Keisuke Suzuki as President & CEO, outside directors and those who are non-residents in Japan; hereinafter referred to collectively as the "Directors") for the purpose of enhancing the motivation of the Directors to contribute to improved business performance and increased corporate value over the long-and-medium term.

   For the outline of the Executive Compensation BIP Trust, please refer to the "Announcement concerning Abolition of the Directors' Retirement Benefits System and Introduction of Performance-Linked Stock Compensation Plan" released on May 24, 2017.

   The Disposal of Treasury Stock will be implemented through its disposal by third-party allotment to The Master Trust Bank of Japan, Ltd. (Executive Compensation BIP Trust Account), which is the co-trustee under the Executive Compensation BIP Trust Agreement to be executed between the Company and Mitsubishi UFJ Trust and Banking Corporation (hereinafter referred to as the "Trust Agreement"; a trust to be set under the Trust Agreement as the "Trust") in conjunction with the introduction of the BIP Trust.

   The number of shares to be disposed, 57,900 shares, represents the number of the Company's shares that are expected to be delivered to the Directors during the trust term in accordance with the share delivery rules and in comprehensive consideration of factors such as achievement of the maximum business target. The scale of dilution will be small at 0.13% of the total number of issued shares (rounded off to two decimal places; 0.16% of total number of voting rights of 372,009 as of March 31, 2017).

   As the shares of the Company allotted through the Disposal of Treasury Stock are to be delivered to the Directors pursuant to the share delivery rules, and it is not assumed that the shares allotted through the Disposal of Treasury Stock will be traded on stock markets at once, the Company determined that its impact on the secondary market shall be minimal and the number of shares to be disposed and the scale of dilution shall be reasonable.

   Particulars of the Trust Agreement

   Type of trust Pecuniary trust other than individually operated specified money trust(third-party-beneficiary trust)

   Purpose of trust Granting of incentive to directors

   Settlor The Company

   Trustee Mitsubishi UFJ Trust and Banking Corporation (Co-trustee: The Master Trust Bank of Japan, Ltd.)

   Beneficiary Those who meet beneficiary requirements for directors and have resigned from directorship

   Trust administrator A third person/party that has no interest in the Company Date of trust agreement August 14, 2017

   Trust term From August 14, 2017 through August 31, 2020 Commencement of the plan August 14, 2017

   Exercise of voting rights Voting rights shall not be exercised.

   Initial amount of trust money 300,000,000yen (including trust fees and trust expenses)

3. Calculation basis for the disposal price and specific details

   In order to determine the disposal price in a non-arbitrary manner, given the recent changes in share prices, the Company has set the disposal price per share at 4,642 yen (rounded down to the nearest yen), being the average closing price for the Company's shares traded on the Tokyo Stock Exchange, Inc. (hereinafter referred to as the "Tokyo Stock Exchange") for the one-month period (from June 28, 2017 to July 27, 2017) preceding the business day (July 27, 2017) prior to the date of resolution at the Board of Directors Meeting pertaining to the Disposal of Treasury Stock. The reason for using the average closing price for the Company's shares for the one-month period as the price to be paid is that adopting a smoothed price, i.e., the average share price over a set period of time rather than selecting a specific point in time as the standard, will make it possible to eliminate the impact of share price fluctuations and other special factors, and is deemed a more objective and rational basis for calculation. Also, the reason for using the one-month period preceding the business day prior to the date of resolution is that the Company determined that it would be more rational to use the average share price over the such period that is closer to the recent market price than to use the average price over the immediately preceding three- or six-month period.

   In addition, the said price represents 96.41% (a discount of 3.59%) of 4,815 yen, the closing price of the Company's shares traded on the Tokyo Stock Exchange on the day (July 27, 2017) preceding the date of resolution at the Board of Directors, 113.55% (a premium of 13.55%) of the average closing price of 4,088 yen (rounded down to the nearest yen) in the immediately preceding three-month period (from April 28, 2017 to July 27, 2017), or 150.62% (a premium of 50.62%) of the average closing price of 3,082 yen (rounded down to the nearest yen) in the immediately preceding six-month period (from January 30, 2017 to July 27, 2017). The Company therefore believes that the disposal price does not constitute a particularly favorable disposal price.

   All corporate auditors (three members, including two outside auditors) have expressed opinions to the effect that the calculation basis for the disposal price is rational and does not constitute a particularly favorable disposal price.

4. Procedures under the business code of conduct

Since the stock dilution resulting from this transaction is less than 25%, and since this disposal does not cause a change in a controlling shareholder, it is not necessary to obtain an opinion from an independent third party or to confirm the intentions of shareholders as set forth in Rule 432 of the Securities Listing Regulations established by the Tokyo Stock Exchange.