August 12, 2021

For Immediate Release

Company name:

Relo Group, Inc.

Representative:

Kenichi Nakamura

President & Representative Director

(Code: 8876, First Section of TSE)

Contact:

Yasushi Kadota

Senior Managing Director

(Tel: +81-3-5312-8704)

Notice of Allotment of Stock Acqusition Rights as Stock Options

The Relo Group (the Group) announces that a meeting of its Board of Directors held on August 12, 2021 resolved to issue stock acquisition rights (the "Stock Acquisition Rights") to the auditors and employees of the Group, and its directors and employees of the subsidiaries (in accordance with the definition of Article 8, Paragraph 3 of the Rules on the Terminology, Forms, and Preparation Methods of Financial Statements, etc., the same shall apply hereinafter.) in accordance with the provisions of Articles 236, 238 and 240 of the Companies Act. Details are as follows.

The Stock Acquisition Rights will be issued with at fair value that is not particularly favorable to subscribers. Therefore, issuance will be carried out without the approval of the general shareholders' meeting.

I. Purpose and rationale in offering the Stock Acquisition Rights

The Group is aiming for long-term growth in the Second "Start-up" Stage, which started in April 2011. The Group has established "the Third Olympic Plan," a four-yearmedium-term business plan, which starts in the fiscal year ending March 2022, and has specified results targets for the final fiscal year, the year ending March 2025, of profit before income taxes of 35.5 billion yen on a consolidated basis. For details of "the Third Olympic Plan" please refer to "Notice of a Medium-term Business Plan, the Third Olympic Plan" announced on May 13, 2021.

To achieve "the Third Olympic Plan," the Group will issue the Stock Acquisition Rights at fair value, with the aim of further enhancing the motivation and morale of the directors and employees of the Group and Group's subsidiaries, to improve the performance of the Group.

The Stock Acquisition Rights are exercisable only when the pre-assigned criteria of the Group's consolidated profit before income taxes are met as stipulated in "II. Outline of the issuance of the Stock Acquisition Rights, 9. Conditions for the exercise of the Stock Acquisition Rights."

The Group also has a management philosophy of "Partnership management of all employees participating in management." The Group recommends the long-term holding of its stock to foster a sense of ownership among the directors and employees of the Group and to encourage them to participate in management and contribute to business growth and corporate value improvement. The Group seeks to encourage the directors and employees of the Group and Group's subsidiaries

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to work together to achieve the targets, to hold the stock for the long term, and to share value with shareholders, because of the issuance of the Stock Acquisition Rights.

Although the issuance of the Stock Acquisition Rights may result in a maximum dilution of approximately 0.20% of the number of issued and outstanding shares as of August 12, 2021, the Group believes that achieving the performance target attached to the Stock Acquisition Rights will help the Group increase corporate and shareholder value, such that the benefit to shareholders will be greater than the impact of dilution. For this reason, the Group considers the issuance of the Stock Acquisition Rights to be reasonable.

  1. Description of issuance of Stock Acquisition Rights 1Title of Stock Acquisition Rights
    Relo Group, Inc. 17th Stock Acquisition Rights

2Date of allotment of Stock Acquisition Rights September 29, 2021

3The number of Stock Acquisition Rights:

3,100 allotment units

4Monetary payment in exchange for stock acquision rights

The monetary payment amount in exchange for stock acquision rights shall be 1,200 yen per unit.

This amount is determined by the third-party evaluation agency Mizuho-DL Financial Technology Co., Ltd. to be the sum of 90 yen added to the evaluation result of 1,110 yen with reference to the result calculated using the Monte Carlo simulation, a general option price calculation model, based on conditions such as the closing price of the Group's stock, 2,418 yen per share, on the Tokyo Stock Exchange the day before August 12, 2021, which is the date on which the Company's Board of Directors resolved to issue the Stock Acquisition Rights, the stock price fluctuation rate 33.780%, the expected dividend per share, 19 yen, the risk-free rate of interest -0.042%, and other conditions (such as the period from the date of allotment to the final day of exercise period, and performance conditions) specified in the terms of issuance of the Stock Acquisition Rights.

5. Class and number of shares to be delivered upon exercise of Stock Acquisition Rights

The class of shares to be delivered upon exercise of the Stock Acquisition Rights shall be common stock and the number of shares to be delivered upon the exercise of one stock acquisition right (the "Number of Shares Granted") shall be 100.

Notwithstanding the foregoing, if the Group carries out a share split (including any allotment of shares without contribution; the same shall apply hereinafter) or a share consolidation of common shares of the Group, the Number of Shares Granted for Stock Acquisition Rights that are unexercised as of the time of the share split or share consolidation shall be adjusted according to the following formula. Any fraction of one share resulting from this adjustment shall be discarded.

Number of Shares Granted

=

Number of Shares Granted

×

Ratio of share split or

after adjustment

before adjustment

consolidation

2

In addition to the above, in the case of a gratis allocation of the Group's common stock or another event unavoidably requiring the adjustment of the Allotted Number of Shares, the Allotted Number of Shares shall be adjusted within a reasonable range.

At times when the Allotted Number of Shares is to be adjusted, notice of the required conditions shall be given by direct notification or public advertisement to each holder of Stock Acquisition Rights recorded in the Stock Acquisition Rights register (the "Stock Acquisition Rights holder") prior to the day before the date on which the post-adjustment allotted number of shares will be effective. However, if notice cannot be given prior to the day before the date on which the post-adjustment allotted number of shares will be effective, such notice shall be made soon afterward by direct notification or public advertisement.

6Value of asset to be contributed upon exercise of Stock Acquisition Rights

The value of the asset to be contributed upon exercise of one stock acquisition right shall be determined by multiplying the amount to be paid in per one share to be issued upon exercise of the Stock Acquisition Rights (the "Exercise Price"), by the Number of Shares Granted.

The Exercise Price shall be one yen.

Notwithstanding the foregoing, if the Group carries out a share split or share consolidation of common shares of the Group after the Resolution Date:

  • The Exercise Price for Stock Acquisition Rights that are unexercised as of the time of the share split or share consolidation shall be adjusted according to the following formula. Any fraction of one yen resulting from this adjustment shall be rounded up to the nearest yen.

Exercise Price after

Exercise Price before

1

×

Ratio of share split or

adjustment

adjustment

consolidation

  • If the Group issues new shares of common stock or disposes of its treasury shares of common stock at a price below the quotation of its common stock (excluding treasury stock sales based on Article 194 of the Companies Act (providing for a response to requests from holders of shares of less than one unit for the sale of shares of less than one unit), issuance of new stock upon the exercise of securities that are convertible into the Group's common shares, the issuance of new stock upon the exercise of Stock Acquisition Rights (including bonds with warrants), the Exercise Price shall be adjusted using the following formula, with any amount less than one yen arising from the adjustment rounded up to the nearest yen.

Number of

Number of

Amount to

new shares

× be paid per

outstanding

+

Exercise

Exercise

to be issued

share

shares

Price after

= Price before ×

market price per share

adjustment

adjustment

Number of outstanding

+

Number of new

shares

shares to be issued

In the formula above, the "market price" denotes the average value of the Tokyo Stock Exchange closing price (hereinafter, including nominally quaoted prices) on 30 trading days (excluding days with no closing price) beginning from 45 trading days prior to the "exercise price after the adjustment application date." The average price figure shall be calculated to

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the second decimal place and then rounded to the nearest single decimal place.

In the formula above, the "number of outstanding shares" denotes the number of shares of common stock of the Group already issued, less the number of treasury shares of common stock of the Group. If the Group disposes of its treasury shares of common stock, the "number of new shares to be issued" shall be replaced by the "number of treasury shares to be disposed of" and the "quotation per share before issuance" shall be replaced by the "quotation per share before disposal."

  • The exercise price after the adjustment application date shall be determined as follows:
    In the case of an exercise price adjustment in accordance with , above, the exercise price after the adjustment application date shall be on or after the stock-split basis date in the case of a stock split or on or after the effective date in the case of a stock consolidation. In the case of an adjustment in accordance with , above, the exercise price after adjustment shall be applied on or subsequent to the day after the payment date (if the payment term is set, the last date of such payment term) for the relevant stock issuance or disposal (if there is a basis date, then on or after the day after the basis date).
  • In addition to the case of and , above, at the time when the need for a change to the exercise price arises, the exercise price shall be adjusted within a reasonable range.
  • If the exercise price is adjusted, the Group shall make notification or advertisement of the required conditions to share acquisition rights holders prior to the day before the application of the adjustment. However, in the case that notice of the required conditions cannot be given to each Stock Acquisition Rights holder prior to two days before the application of the adjustment, such notice shall be made soon afterward by direct notification or public advertisement.

7Exercise period of the Stock Acquisition Rights (the "Exercise Period")

The Exercise Period of the 17th stock acquisition rights shall be from April 1, 2026, through March 31, 2030; provided, however, if the last day of the exercise period is not a business day of the Group's shareholder registry administrator (the shareholder registry administrator as stipulated in Article 123 of the Companies Act.), the previous business day shall be the last day.

8The amount of capital and capital reserve to be increased due to the issuance of shares upon exercise of the Stock Acquisition Rights

  • The amount of capital to be increased due to the issuance of shares upon exercise of the Stock Acquisition Rights shall be one half of the maximum amount of increase in the capital, etc. to be calculated pursuant to Article 17, paragraph 1 of the Corporate Accounting Regulations, with any amount less than one yen arising from such calculation to be rounded up to the nearest yen.
  • The amount of capital reserve to be increased due to the issuance of shares upon exercise of the Stock Acquisition Rights shall be the maximum number of increases in the capital, etc. stated in above, less the amount of capital to be increased as specified in above.

9Conditions for the exercise of the Stock Acquisition Rights

  • When the numerical target of 35.5 billion yen or more of profit before income taxes in the consolidated statement of income for the fiscal year ending March 31, 2025 in the annual

securities report filed for the said fiscal year pursuant to the Financial Instruments and 4

Exchange Act, (hereinafter the "Numerical Target") is achieved, the holders of the Stock Acquisition Rights may exercise their Stock Acquisition Rights up to the number of Stock Acquisition Rights allotted to each holder of the Stock Acquisition Rights.

  • A holder of the Stock Acquisition Rights must be in a position of a director, auditor or employee of the company, or a director, auditor or an employee of a subsidiary of the Group (hereinafter referred to collectively as the "Required Position") at the time of exercising the Stock Acquisition Rights; provided, however, that in the event that the holders of the Stock Acquisition Rights retire due to expiration of the term of office of a director, auditor or due to mandatory retirement of employees, or when the Group's Board of Directors finds that there is a justifiable reason, the Stock Acquisition Rights may be exercised without the holder being in the position of a director, auditor or employee of the company or a director, auditor or employee of a subsidiary of the Group.
  • Even if the conditions for the exercise of the Stock Acquisition Rights in the preceding paragraphs are met, the Company's Board of Directors may extinguish the right to exercise the stock acquisition rights of a holder of the Stock Acquisition Rights if the holder of the Stock Acquisition Rights violates any law or regulation, is subject to disciplinary punishment set forth in the rules of employment of the Group to which the holder belongs, or causes or could cause damage to the Group or its subsidiary before the date of exercising the stock acquisition rights, or if the Company's Board of Directors finds that it is unreasonable to permit the exercise of the stock acquisition rights in light of the purport given to the Stock Acquisition Rights.
  • When a holder of the Stock Acquisition Rights has died, his/her heir may exercise the Stock Acquisition Rights.

10Conditions for acquisition of the Stock Acquisition Rights by the Group

The Group may acquire the Stock Acquisition Rights without consideration when an agenda for a merger agreement (limited to one in which the Group will cease to exist due to the merger), a share exchange agreement or a share transfer plan (both limited to where the Group will become a wholly owned subsidiary) is approved at a general meeting of shareholders of the Group (or, in the case of a share exchange agreement where the Group will become a wholly owned subsidiary and the surviving company ("Surviving company" stipulated in Article 784, Paragraph 1 of the Companies Act, the same shall apply hereinafter) shall be the Group's special controlling company ("Special controlling company" stipulated in Article 468, Paragraph 1 of the Companies Act, the same shall apply hereinafter), where it is resolved by the Company's Board of Directors).

11Restriction on the transfer of Stock Acquisition Rights

Any transfer of the Stock Acquisition Rights shall be subject to the approval of the Board of Directors of the Group.

12Handling of Stock Acquisition Rights in relation to an act of structural reorganization

In the event that the Group carries out a merger (limited to cases where the Group will cease to exist due to the merger), an absorption-type or incorporation-type company split, or a share exchange or transfer (collectively, the "Act of Structural Reorganization"), except when the Group acquires the Stock Acquisition Rights pursuant to 9 above, the Group shall, in each of the above cases, deliver the Stock Acquisition Rights of any of the relevant companies set forth in Article 236, Paragraph 1, Items 8(a) to 8(e) of the Companies Act (hereinafter referred to as the "Reorganized Group") to the holders of the Stock Acquisition Rights remaining as of the effective

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Relo Group Inc. published this content on 12 August 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 August 2021 06:40:06 UTC.