Press Releases 2020
Notice Regarding Disposal of Treasury Stock
as Restricted Stock Compensation
June 24, 2020
SoftBank Corp.
SoftBank Corp. (hereinafter the “Company”) hereby announces that at the meeting of the Board of Directors held on June 24, 2020, its Board of Directors resolved to dispose of its treasury stock as restricted stock compensation (hereinafter the “Disposal of Treasury Stock” or “Disposal”) as follows.
1. Overview of Disposal of Treasury Stock
| (1) Disposal date | July 20, 2020 |
|---|---|
| (2) Class and number of shares to be disposed of | 565,800 shares of common stock of the Company |
| (3) Disposal price | JPY 1,500 per share |
| (4) Total value of share disposal | JPY 848,700,000 |
| (5) Grantees of shares and number thereof; number of shares to be allotted | Directors of the Board of the Company: 5 Directors, 418,800 shares Executive Officers of the Company: 3 Executive Officers, 147,000 shares |
| (6) Other | The Disposal of Treasury Stock is conditioned on the effectuation of the securities registration statement in accordance with the Financial Instruments and Exchange Act. |
2. Purpose and reasons for Disposal
On May 21, 2020, the Company, pursuant to Article 370 of the Companies Act of Japan and Article 23 of the Articles of Incorporation (Written Resolution), resolved to introduce a restricted stock compensation plan (hereinafter the “Plan”) targeting the Company's directors (excluding outside directors, directors receiving restricted stock are hereinafter referred to as the “Eligible Director(s)”) and Executive Officers (collectively, hereinafter the “Eligible Director(s) and (or) Officer(s)”) in order to provide an incentive to continuously improve the Company's corporate value and to promote further shared value with shareholders. At the 34th Ordinary General Meeting of the Shareholders held today, the Company has acquired approval on providing monetary compensation claims to the Eligible Directors by granting restricted stocks based on the Plan within 1.5 billion yen per year (excluding the portion of employee's salary for directors who concurrently serve as employees). The Company has also acquired approval that the total number of common shares to be issued or disposed of by the Company to the Eligible Directors in this Plan shall be 1 million or less per year.
This time, based on the Plan, after the consideration of the purpose of the Plan, the Company's business performance, the scope and nature of the performance of duties of each of the Eligible Directors and Officers, and various circumstances, the Company decided to grant a total amount of 848,700,000 yen in monetary compensation claims and allot 565,800 shares of the common stock of the Company by way of in-kind contribution of the said monetary compensation claim. The transfer restriction period is between the date the Eligible Directors and Officers are allotted the Company's common shares (hereinafter the “Allotted Shares”) based on the Restricted Stock Allotment Agreement (hereinafter the “Allotment Agreement”) and the date the Eligible Directors and Officers retire from all of the posts of directors, corporate officers, executive officers, or employees (hereinafter the “Posts of Officers”) (hereinafter the “Transfer Restriction Period”).
For the Disposal of Treasury Stock, the Eligible Directors and Officers to whom the stock is scheduled to be allotted will pay in all the said monetary compensation claim as property contributed in kind, and receive the common stock of the Company to be disposed of by the Company. In regards to the Disposal of Treasury Stock, the Company and Eligible Directors shall conclude an Allotment Agreement which includes the contents mentioned in “3. Overview of the Allotment Agreement”.
3. Overview of the Allotment Agreement
(1) Transfer restriction period
Eligible Directors and Officers shall not transfer, create a security interest on, or dispose of (hereinafter the “Transfer Restrictions”) the Allotted Shares between the date the Eligible Directors and Officers are allotted the Allotted Shares based on the Allotment Agreement and the date the Eligible Directors and Officers retire from all of the Posts of Officers.
(2) Treatment in cases of retirement or resignation
If an Eligible Director or Officer has retired or resigned from all of the Posts of Officers prior to the expiration of the Transfer Restriction Period, the Company shall, as a matter of course, acquire the Allotted Shares without compensation unless there are justifiable reasons for the retirement or resignation, such as expiration of the term of office, reaching the mandatory retirement age, death, resignation at the convenience of the company, or voluntary resignation (excluding the cases falling within changing jobs to competitors of the Company, unless such change is approved by, or at the request of the Company).
(3) Lift of the Transfer Restrictions
During the Transfer Restriction Period, the Company shall lift the Transfer Restrictions of all Allotted Shares upon the expiration of the Transfer Restriction Period provided that the Eligible Directors and Officers continuously hold the Posts of Officers during the Transfer Restriction Period.
(4) Acquisition without compensation at the expiration of the Transfer Restriction Period
The Company shall, as a matter of course, acquire the Allotted Shares without compensation for which the Transfer Restrictions has not been lifted pursuant to (3) above at the time of expiration of the Transfer Restriction Period.
(5) Administration of shares
To prevent the Eligible Directors and Officers from transferring, creating a security interest on, or disposing of the Allotted Shares during the Transfer Restriction Period, each of the Eligible Directors and Officers opens a dedicated account with Mizuho Securities Co., Ltd. for administration of the Allotted Shares. To enforce the Transfer Restrictions, etc. on the Allotted Shares, the Company has concluded a contract with Mizuho Securities Co., Ltd. for the administration of the accounts of the Allotted Shares held by the Eligible Directors and Officers In addition, the Company has obtained consent from the Eligible Directors and Officers as to the details of the Transfer Restrictions, etc.
(6) Procedure in the event of organizational restructuring, etc.
During the Transfer Restriction Period, if matters related to a merger agreement in which the Company will be the absorbed company, a share exchange agreement or a share transfer plan in which the Company will become a wholly-owned subsidiary, or other organizational restructuring, etc. are approved at the Company's General Meeting of the Shareholders (or by the Board of Directors of the Company, where such organizational restructuring, etc. does not require approval of the General Meeting of Shareholders of the Company) during the Transfer Restriction Period, the Company shall, by the resolution of the Board of Directors, lift the Transfer Restrictions for all Allotted Shares, prior to the effective date of such organizational restructuring, etc.. In such case, immediately subsequent to the lifting of the Transfer Restrictions, the Company shall, as a matter of course, acquire the Allotted Shares without compensation for which the Transfer Restrictions has not been lifted.
4. Basis of calculating the amount to be paid in for the Allotted Shares and other specific details
The Disposal of Treasury Stock shall be funded by the monetary compensation claim provided as a restricted stock compensation by the Company under the Plan. The disposal price is 1,500 yen per share. This is based on the offering price at the time the Company was listed on the First Section of the Tokyo Stock Exchange on December 19, 2018, and is greater than the closing price of the Company's common stock on the Tokyo Stock Exchange of 1,403 yen on June 23, 2020 (the business day before the date of Board of Directors' resolution). Therefore, the Company believes that this is reasonable and is not particularly favorable.
5. Items regarding transactions, etc., with controlling shareholders
The Disposal of Treasury Stock qualifies in part as transactions, etc. with controlling shareholders because one of the Eligible Directors and Officers who will be allotted concurrently serves as board director of SoftBank Group Corp., the parent company of the Company.
(1) Measures to ensure fairness and to prevent conflict of interest
The Disposal of Treasury Stock is being made in accordance with rules and procedures, as specified in the relevant laws, regulations and rules, etc. In addition, the method of determining the amount to be paid-in and other issuing details and conditions, etc., is being carried out properly with no deviations from normal details and conditions for restricted stock compensation, as indicated above in “2. Purpose and reasons for Disposal” and “3. Overview of the Allotment Agreement.” In addition, in order to avoid a conflict of interest, the said director did not participate in the deliberations and resolution of the Board of Directors meeting related to this Disposal of Treasury Stock.
(2) Opinions relating to not being disadvantageous to minority shareholders
The content of the Disposal of Treasury Stock and the appropriateness of the conditions have been discussed and resolved in the Company's Board of Directors meeting held today. At the said Board of Directors meeting, all of the external directors and external Audit & Supervisory Board Members whom have no interest with controlling shareholders have expressed their opinions that this Disposal of Treasury Stock is being made to the extent of the matters approved at the 34th Annual General Meeting of Shareholders, the measures to ensure fairness and to prevent conflict of interest have been taken as described above in “(1) Measures to ensure fairness and to prevent conflict of interest”, is being carried out properly with no deviations from normal details and conditions for restricted stock compensation as described above in “3. Overview of the Allotment Agreement”, the Company believes that the disposal price of this Disposal of Treasury Stock is reasonable and is not particularly favorable as described above in “4. Basis of calculating the amount to be paid in for the Allotted Shares and other specific details”, this Disposal of Treasury Stock provides incentives to the Eligible Directors and Officers to continuously increase the corporate value of the Company and is aimed to further promote shared values with the shareholders, and its content and conditions are appropriate, and therefore, is not disadvantageous to minority shareholders.
(3) Applicability of transactions, etc. with controlling shareholders and compliance with the policy on measures to protect minority shareholders
The “Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling Shareholder” stated in the Company's corporate governance report, disclosed on November 1, 2019 is as follows. The Disposal of Treasury Stock was determined based on this policy, and this Disposal of Treasury Stock provides incentives to the Eligible Directors and Officers to continuously increase the corporate value of the Company and is aimed to further promote shared values with the shareholders. Therefore, the Company believes that the Disposal of Treasury Stock for one of the Eligible Directors and Officers who concurrently serves as board director of the parent company of the Company will be in the interests of minority shareholders and is in accordance with the following policy.
The Company recognizes that related party transactions including transactions with the parent company group are transactions that may have an impact on the financial position or the results of operations by using the advantageous position of the related party. As such, in implementing related party transactions, the Company carries out especially important transactions upon approval of the board of directors each time, by paying particular attention to whether such transactions are rational from a managerial standpoint of the Company and its subsidiaries and whether the terms and conditions of the transactions are appropriate compared to external transactions, in accordance with the Related Party Regulations and Related Party Transactions Management Manual.
Even with regards to related party transactions that do not fall under especially important transactions, the Finance and Accounting Division monitors the aggregate amount and details of such transactions once a year in principle.