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    2760   JP3571600000

TOKYO ELECTRON DEVICE LIMITED

(2760)
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Tokyo Electron Device : 「Delayed」Announcement of the Introduction of a Stock-based Remuneration Plan as Medium-term Incentive Remuneration

06/11/2021 | 02:32am EDT

May 18, 2021

Company name:

TOKYO ELECTRON DEVICE LIMITED

Representative:

Atsushi Tokushige

President & Representative Director

(TSE First Section, Stock Exchange Code: 2760)

Contact:

Noriaki Uchida

Director, General Affairs Department

TEL:

+81-45-443-4000

Announcement of the Introduction of a Stock-based Remuneration Plan as Medium-term Incentive

Remuneration for the Group's Officers and Employees

TOKYO ELECTRON DEVICE LIMITED (the "Company") announces that, at its Board of Directors Meeting held today, the Company resolved to introduce a new medium-termperformance-linkedstock-based remuneration plan (the "Plan"), as an incentive plan linked to the level of achievement of the Medium-term Management Plan VISION 2025 for Corporate Directors (excluding Outside Directors and part-time Corporate Directors; the "Eligible Corporate Directors") as well as for Vice Presidents and Managers (the "Eligible Employees", together with "Eligible Corporate Directors" referred to as "Eligible Persons") of the Company and Group companies (the "Eligible Companies") and to submit a proposal concerning the Plan to the 36th Annual General Meeting of Shareholders scheduled for June 22, 2021.

1. Purpose of the introduction of the Plan, etc.

  1. The Company set a vision to evolve into a manufacturer with technology trading company functions in its Medium-term Management Plan VISION 2025, announced on May 15, 2020, with targets to achieve this and the financial model (consolidated ordinary income ratio of 5% and consolidated ROE of 15%) in the target fiscal year of the plan (the fiscal year ending March 31, 2025). In other words, in order for the Company to compete in the field of semiconductors and IT, a business domain of increased attention and importance in a Society 5.0, we believe the four years from now will be a pivotal period in which the Company must achieve a transformation into a manufacturer that can create and offer products and services with higher added value, that is, higher profitability. This year is the first fiscal year of the plan and initiatives to ensure the Group's Corporate Directors as well as Vice Presidents and Managers have a shared sense of purpose from a management perspective is considered to be one of the keys to achieving this challenging Medium-term Management Plan. To this end, the Company will introduce the Plan, as an incentive plan linked to the level of achievement of financial targets in the Medium-term Management Plan for the Group's Eligible Persons who are

1

charged with central roles in realizing the Company's Vision, achieving the Medium-term Management Plan and hence, aiming to increase the Company's corporate value.

  1. The introduction of the Plan is subject to approval of the proposal for remuneration of Eligible Corporate Directors of Eligible Companies at each Eligible Company's general meeting of shareholders.
  2. The Plan for Eligible Corporate Directors has a mechanism called the Board Incentive Plan ("BIP") Trust (the "BIP Trust"). The BIP Trust is a plan for Corporate Directors similar to the "Performance Share" and "Restricted Stock" plans in the U.S. and Europe in which the Company's shares and money equivalent to the Company's shares converted into cash (the "Company's Shares, etc.") are delivered or provided to Corporate Directors (the "Delivery, etc."), in accordance with their position and level of achievement of the performance targets, etc.
    Note that the BIP Trust to be adopted is identical to the trust established as referred to in the "Announcement of the Renewal and Partial Amendments of the Performance-linkedStock-based Remuneration" announced today.
    In addition, the Plan for Eligible Employees has a mechanism called the Employee Stock Ownership Plan ("ESOP") Trust (the "ESOP Trust"). The ESOP Trust is an employee incentive plan based on ESOP schemes in the U.S. whereby there are Delivery, etc. of the Company's Shares, etc. to Eligible Employees according to their positions and level of achievement of performance targets, etc.

2. Overview of the Plan

consideration

without transfer or shares

residual of use Continued (viii)

assets residual of Provision (ix)

(iv) Company shares

Stock market

(iv) Payment

  1. Resolution of the general meeting of shareholders Resolution of the Board of Directors

[Trustor]

(iii) Contribute funds

Group companies

The Company

Dividends(v)

trustupSet (iii)

(ii) Establish share delivery rules

[Trustee]

(vii) Delivery of the

[Beneficiaries]

Each trust

Company's shares

Eligible Persons

The Company's shares and money

and provision of

money

(vi) Instruction on Non-exercise/exercise of voting rights, etc.

Trust

administrator

2

BIP Trust

ESOP Trust

1)

Each Eligible Company obtains a resolution of its

Each Eligible Company obtains a resolution of its

general meeting of shareholders and a resolution

Board of Directors for the introduction of the

of its Board of Directors concerning remuneration

Plan.

of Eligible Corporate Directors for the

introduction of the Plan.

2)

Each Eligible Company will establish share delivery rules relating to the Plan at its Board of

Directors.

3)

The Company shall set up a trust identical to the BIP Trust established as referred to in the

"Announcement of the Renewal and Partial Amendments of the Performance-linkedStock-based

Remuneration" announced today for the benefit of the Company's Corporate Directors and Corporate

Directors of Group companies who meet the beneficiary requirements. The Company will also set up

an ESOP Trust for the benefit of Eligible Employees who meet the beneficiary requirements ("Each

Trust"). Each Eligible Company contributes trust money within the scope resolved in (1).

4)

Each Trust will, in accordance with instructions from the trust administrator, acquire the Company's

shares from the stock market with the trust money.

5)

Dividends on the Company's shares in Each Trust will be distributed in the same way as other shares

of the Company.

6)

The voting rights of the Company's shares within

The voting right of the Company's shares within

the BIP Trust shall not be exercised.

the ESOP Trust shall be exercised in accordance

with instructions from the trust administrator.

7)

The points for stock delivery shall be calculated by multiplying the rights points granted to Eligible

Persons determined in advance based on their positions and other factors by the payment ratio by

achievement level calculated according to the level of achievement of the plan in each fiscal year

during the Management Plan, in accordance with the share delivery rules. If Eligible Persons meet the

beneficiary requirements, the Company's shares and cash conversion amount shall be delivered from

Each Trust according to the number of points for stock delivery.

8)

If there are any residual shares at the expiration of the trust period, Each Trust shall continue to use

such residual shares under the Plan or an equivalent stock delivering system, or Each Trust will

transfer the residual shares to the Company without consideration, and it is expected that the

Company would cancel such shares pursuant to a resolution of the Board of Directors.

  1. Residual assets at the expiration of Each Trust shall be vested in the Company within the extent of allowances for trust expenses calculated by deducting funds to acquire the Company's shares from the trust money.

3

3. Details of the Plan

  1. Outline of the Plan

  2. The Plan is a system for Delivery, etc. of the Company's Shares, etc. according to Eligible Persons' positions and other factors and level of achievement of the VISION 2025 target figures for the four fiscal years from the fiscal year ending March 31, 2022 to the fiscal year ending March 31, 2025 (the "Target Period").
  3. Resolutions of the General Meeting of Shareholders concerning the introduction of the Plan

  4. Each Eligible Company will, at its respective general meeting of shareholders, resolve the maximum amount of trust money to be contributed to the BIP Trust, the maximum number of shares, etc. for Delivery, etc. to Corporate Directors, and other necessary matters.
  5. Eligible Persons under the Plan (Beneficiary requirements)

    1. In principle, Eligible Persons may receive Delivery, etc., of the Company's Shares, etc., corresponding to the number of points for stock delivery by Each Trust, upon undergoing set procedures for confirming beneficiary rights, subject to meeting the beneficiary requirements outlined below after the end of the Target Period.
    2. A person is in a position and working as an Eligible Person at the end of the Target Period (A person who during the Target Period retires due to the expiration of that person's term of office or due to compulsory retirement age shall be deemed to be an Eligible Person at the end of the Target Period)
    3. The number of points for stock delivery set out in (5) below has been determined
    4. The person has not committed certain illegal acts while in a position or working
  6. Trust period

  7. Approximately four years from August 2, 2021 (scheduled) to August 31, 2025 (scheduled).
  8. The Company's Shares, etc. for Delivery, etc. to Eligible Persons

  9. The Company's Shares, etc. for Delivery, etc. to Eligible Persons shall be determined as one share of the Company's common stock per point according to the number of points calculated based on the calculation formula of the points for stock delivery below. If the Company's shares are subject to a split or consolidation, etc. during the trust period, the number of the Company's shares per point and the upper limit of shares shown in (7) below shall be adjusted according to the stock split ratio or the consolidation ratio, etc. for the Company's shares.

(Calculation formula of the points for stock delivery) Right points *1 × Payment ratio by achievement level *2

4

*1 Right points shall be calculated by dividing the base amount predetermined by position and other factors by the stock price at the time of acquisition of the Company's shares by the Trust necessary for the Plan. In the event of a change in position and other factors during the Target Period, adjustment shall be made on a proportional distribution of time base.

*2 Payment ratio by achievement level fluctuates within the range of 0% to 125% according to the level of achievement of consolidated ordinary income ratio and consolidated ROE, which are the target figures of VISION 2025 as determined by the Board of Directors. The payment ratio shall remain 0% unless a certain degree of achievement is attained.

  1. Timing and method of issuing the Company's Shares, etc. to Eligible Persons
    Eligible Persons who have met the beneficiary requirements shall receive the Delivery, etc. of the Company's Shares, etc. after the end of the Target Period.
    At this time, such Eligible Person shall receive delivery of the number of the Company's shares corresponding to a certain percentage of the points for stock delivery, and the remainder shall be received as money equivalent to the cash conversion amount following conversion within Each Trust.
  2. The upper limit of trust money contributions to the BIP Trust and the upper limit of Company Shares,

etc., delivered from the BIP Trust

For BIP Trust, the upper limit of trust money contributions to the Trust during the trust period and the upper limit of the Company's Shares, etc. for Delivery, etc. to Eligible Corporate Directors shall be subject to the following upper limit, subject to approval at each Eligible Company's general meeting of shareholders.

(i) Upper limit of trust money contributions to the BIP Trust

The Company portion: Total of ¥260 million during the Target Period

Group company portion: Total of ¥159 million during the Target Period

(The aggregate amount of stock acquisition funds used by the BIP Trust as well as trust fees and trust expenses during the trust period.)

    1. Upper limit of the Company's Shares, etc. for Delivery, etc. from the BIP Trust The Company portion: Total of 61,000 shares during the Target Period Group company portion: Total of 38,000 shares during the Target Period
  1. Method for acquiring the Company's shares through the BIP Trust
    Acquiring the Company's shares through the BIP Trust is expected to take place on the stock market within the availability of stock acquisition funds shown in (7) above and the upper limit of the Company's Shares, etc. for Delivery, etc. from the BIP Trust.

5

This is an excerpt of the original content. To continue reading it, access the original document here.

Disclaimer

TEL - Tokyo Electron Device Ltd. published this content on 11 June 2021 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 11 June 2021 06:31:06 UTC.


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Sales 2022 160 B 1 400 M 1 400 M
Net income 2022 5 400 M 47,3 M 47,3 M
Net Debt 2022 - - -
P/E ratio 2022 14,0x
Yield 2022 2,33%
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Nbr of Employees 1 247
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Atsushi Tokushige President & Representative Director
Koki Tanaka Manager-Finance
Noriyuki Kuga Chairman
Koji Nakajima Manager-Systems Technology
Yukio Saeki Director & Senior GM-Corporate Administration
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