記Announcements of individual stocks regarding the detailed determination of the 'Stock Grant ESOP Trust' and disposal of treasury stock by third-party allocation.
Announcements of individual stocks regarding the detailed determination of the 'Stock Grant ESOP Trust' and disposal of treasury stock by third-party allocation.
At the Board of Directors meeting on May 10, 2024, we decided to introduce the Employee Incentive Plan "Stock Grant ESOP Trust" (hereinafter referred to as "this plan") for our employees. Today, at the board of directors meeting, we have also decided on the details of acquisition of the total number of shares covered by this plan. We have also decided to dispose of treasury stock through third-party allocation (hereinafter referred to as "this disposition of treasury stock"), and we would like to inform you as follows:
Record
1. Disposal procedures
(1) Disposal date | August 30, 2024 |
(2) Type and number of shares to be disposed | 2,000,000 common shares |
(3) Disposal price | ¥2,181 per share |
(4) Total disposal price | ¥4,362,000,000 |
(5) Planned buyers of the shares to be disposed | 1. Japan Master Trust Bank of Japan Ltd. (executive compensation BIP trust account) 50,000 shares (¥109,050,000) 2. Japan Master Trust Bank of Japan Ltd. (Stock Grant ESOP Trust Account) 1,950,000 shares (¥4,252,950,000) (6) Other This disposition of treasury stock is subject to the effectiveness of the securities report under the Financial Instruments and Exchange Act. 2. Purpose and reason for the disposition |
We have decided to introduce this plan at the Board of Directors meeting held on May 10, 2024 for our targeted employees to enhance their awareness of management participation, which is intended to improve our company's long-term corporate value and to further promote value sharing with our shareholders. It is also designed to motivate employees to contribute to the improvement of our performance and raise their morale even higher. At some of our group companies, we have obtained approval at the shareholders' meetings of each group company to introduce an executive compensation BIP trust (hereinafter referred to as the "BIP trust"), an incentive plan for executives, similar to ESOP trust, not only for employees working in such group companies, but also for directors (hereinafter referred to as "system participants"), in addition to the Stock Grant ESOP trust (Employee Stock Ownership Plan) trust. This disposition of treasury stock is intended to dispose of the treasury stock through third-party allocation to Japan Master Trust Trust Bank, Ltd., a joint trustee of the executive compensation BIP trust agreement and the Stock Grant ESOP trust agreement that our company will conclude with Mitsubishi UFJ Trust Bank, Ltd., in connection with the introduction of BIP trust and ESOP trust. | This disposition of treasury stock is intended to dispose of the treasury stock through third-party allocation to Japan Master Trust Trust Bank, Ltd., a joint trustee of the executive compensation BIP trust agreement and the Stock Grant ESOP trust agreement that our company will conclude with Mitsubishi UFJ Trust Bank, Ltd., in connection with the introduction of BIP trust and ESOP trust. |
In order to improve the medium to long-term corporate value of our company and to increase the management participation awareness of the target employees, we have decided to introduce this system at the board of directors meeting on May 10, 2024, with the aim of further promoting value sharing with our shareholders and enhancing the motivation and morale towards contributing to business performance. Moreover, in some of our group companies, we have obtained approval at the shareholder meetings of each group company to introduce a director compensation BIP trust (hereinafter referred to as "BIP trust"), which is an executive incentive plan similar to the ESOP trust for employee stock ownership plan, not only for employees in each group company, but also for directors (hereinafter referred to as "system participants") in addition to the target employees.
This disposition of treasury stock is intended to dispose of the treasury stock through third-party allocation to Japan Master Trust Trust Bank, Ltd., a joint trustee of the executive compensation BIP trust agreement and the Stock Grant ESOP trust agreement that our company will conclude with Mitsubishi UFJ Trust Bank, Ltd., in connection with the introduction of BIP trust and ESOP trust.
The number of shares disposed of is the expected number of shares to be granted to the system participants during the trust period based on the share grant regulations, and the scale of dilution will be 0.83% (rounded to the third decimal place, 0.93% for the total voting rights of 2,148,827 as of March 31, 2024) against the total issued shares of 241,229,476 shares as of March 31, 2024.
The stocks allocated through our own stock disposal will be granted to the system participants in accordance with the share grant regulations, and it is not expected that the stocks from our own stock disposal will flow out to the stock market at once, so the impact on the stock market will be minor, and we have determined that the scale of disposal stocks and dilution is reasonable.
Contents of each trust agreement:
Type of trust. | Trust of money other than the monetary trust for specific independent operation (other trust benefits) |
Purpose of the trust. | (BIP trust) Incentives for directors of our group companies (ESOP trust) Incentives for target employees |
Trustor. | Our company. |
Trustee. | Mitsubishi UFJ Trust and Banking Corporation (co-trustee: Japan Master Trust Bank, Ltd.) |
Beneficiary. | Those who meet the beneficiary requirements of the system participants. |
Trust administrator. | Third parties who have no interest in our company. |
Trust contract date: December 13, 2017. | August 2024 (planned) |
Trust period. | August 2024 (planned) to September 2027 (planned) |
Start date of the system. | September 2024 (planned) |
Voting rights. | (BIP trust) Will not be exercised. (ESOP trust) The trustee will exercise the voting rights of our company's shares in accordance with the instructions of the trust administrator reflecting the exercising status of the voting rights by the beneficiary candidate. |
Type of acquired shares. | Common stock of our company. |
Total amount of acquired shares. | 4,362,000,000 yen |
Acquisition method: Acquired from our company (self-stock disposal). | |
Shareholders Residual assets Our residual assets that can be received as the holder of the right of assignment shall be within the range of the trust fee reserve for the trust expenses deducted from the stock acquisition funds from the trust funds. 3. Basis for Calculation of Disposal Price and its Specific Content With regard to the disposal price, in view of recent trends in stock prices, the end-of-day closing price of our shares on the Tokyo Stock Exchange on the previous business day of the board of directors' resolution (August 6, 2024), which is the objective and rational price that excludes arbitrariness, has been set at 2,181 yen. We have adopted the end-of-day closing price of our shares on the business day before the board of directors' resolution because we judged that it is highly objective and rational as a calculation basis and represents the market value just before the board of directors' resolution. Moreover, the audit and supervisory committee has expressed the opinion that the disposal price does not correspond to any particularly advantageous disposal prices. 4. Procedures under the Corporate Code of Conduct Since the dilution rate of our shares in this matter is less than 25% and there is no change in controlling shareholders, there is no need for an opinion from an independent third party designated by the Tokyo Stock Exchange under Article 432 of the Listing Regulations for Securities. (Reference) Mechanism of this System ① We will establish a stock award regulation when introducing this system in our company and group companies. ② We set up an ESOP trust that includes the monetary contributions received from our group companies, and the subject employees who satisfy the beneficiary requirements are the beneficiaries. ③ The ESOP trust acquires the expected number of our shares to be delivered to the beneficiaries during the trust period from the company (self-stock disposal) as a primary source of funding with the monetary contributions provided in step ②, following the instructions of the trustee. ④ Dividends are also paid on the shares of our company in the ESOP trust, just like other shares of our company. ⑤ The ESOP trust will exercise its shareholder rights in accordance with the instructions for exercising shareholder rights, such as voting rights, by the trustee throughout the trust period for the shares of our company in the ESOP trust, and will exercise certain functions as a shareholder. ⑥ During the trust period, subject employees will be granted a certain number of points based on the degree of achievement of performance targets set forth in the medium-term plan for the three-year target period stipulated in the stock grant regulation. Additionally, subject employees who meet certain requirements will receive a delivery of our shares corresponding to a certain percentage of the relevant points after the end of the three-year target period, and exchange the remaining shares of our company for cash equivalent to the value of the exchange disposal based on the provisions of the trust agreement. ⑦ After the termination of the ESOP trust, the residual assets distributed to the beneficiaries shall belong to our company within the range of the trust expenses reserve, which deducts the stock acquisition funds from the trust funds. (Note) If there is a shortage of the number of shares in the ESOP trust corresponding to the cumulative points granted to the subject employees during the trust period or if there is a shortage of money in the trust property for the payment of trust fees and expenses, additional money may be entrusted to the ESOP trust. | Our company. |
Please use your Futubull account to access the feature. | Shareholders who have the right to assign Residual assets |
Basis and Details of the Disposal Price Calculation
With regard to the disposal price, in view of recent trends in stock prices, the end-of-day closing price of our shares on the Tokyo Stock Exchange on the previous business day of the board of directors' resolution (August 6, 2024), which is the objective and rational price that excludes arbitrariness, has been set at 2,181 yen. We have adopted the end-of-day closing price of our shares on the business day before the board of directors' resolution because we judged that it is highly objective and rational as a calculation basis and represents the market value just before the board of directors' resolution. Moreover, the audit and supervisory committee has expressed the opinion that the disposal price does not correspond to any particularly advantageous disposal prices.
The audit and supervisory committee has expressed the view that the disposal price does not correspond to any particularly advantageous disposal prices.
Procedures under the Corporate Code of Conduct
Since the dilution rate of our shares in this matter is less than 25% and there is no change in controlling shareholders, there is no need for an opinion from an independent third party designated by the Tokyo Stock Exchange under Article 432 of the Listing Regulations for Securities.
(Reference) Mechanism of this System
① We will establish a stock award regulation when introducing this system in our company and group companies. ② We set up an ESOP trust that includes the monetary contributions received from our group companies, and the subject employees who satisfy the beneficiary requirements are the beneficiaries. ③ The ESOP trust acquires the expected number of our shares to be delivered to the beneficiaries during the trust period from the company (self-stock disposal) as a primary source of funding with the monetary contributions provided in step ②, following the instructions of the trustee. ④ Dividends are also paid on the shares of our company in the ESOP trust, just like other shares of our company. ⑤ The ESOP trust will exercise its shareholder rights in accordance with the instructions for exercising shareholder rights, such as voting rights, by the trustee throughout the trust period for the shares of our company in the ESOP trust, and will exercise certain functions as a shareholder. ⑥ During the trust period, subject employees will be granted a certain number of points based on the degree of achievement of performance targets set forth in the medium-term plan for the three-year target period stipulated in the stock grant regulation. Additionally, subject employees who meet certain requirements will receive a delivery of our shares corresponding to a certain percentage of the relevant points after the end of the three-year target period, and exchange the remaining shares of our company for cash equivalent to the value of the exchange disposal based on the provisions of the trust agreement. ⑦ After the termination of the ESOP trust, the residual assets distributed to the beneficiaries shall belong to our company within the range of the trust expenses reserve, which deducts the stock acquisition funds from the trust funds. |
(Note) If there is a shortage of the number of shares in the ESOP trust corresponding to the cumulative points granted to the subject employees during the trust period or if there is a shortage of money in the trust property for the payment of trust fees and expenses, additional money may be entrusted to the ESOP trust.
Above.