REG-Mitsui & Co Ltd Notice Concerning the Issuance of New Shares under the Remuneration System of Share Performance-Linked Restricted Stock

Mitsui & CoAnnouncement

09/07/2021 09:40

For best results when printing this announcement, please click on link below:
http://newsfile.refinitiv.com/getnewsfile/v1/story?guid=urn:newsml:reuters.com:20210709:nBw4XHPXta&default-theme=true


Notice Concerning the Issuance of New Shares under the Remuneration System of
Share Performance-Linked Restricted Stock

 

This announcement is for our U.S.$5,000,000,000 Euro Medium Term Note
Programme.

July 9, 2021

To All Concerned:

Company name: Mitsui & Co., Ltd.

Representative: President and CEO, Kenichi Hori

(Code No.: 8031)

Head Office: 2-1, Otemachi 1-chome, Chiyoda-ku, Tokyo

Notice Concerning the Issuance of New Shares under the Remuneration System of
Share Performance-Linked Restricted Stock

According to the resolution of the Board of Directors on July 9, 2021 of
Mitsui & Co., Ltd. (the “Company”, Head Office: Tokyo, President and
CEO: Kenichi Hori), the Company hereby announce an issuance of new shares
under the remuneration system of share performance-linked restricted stock.
The details are as follows.

Details


 1. Summary of new share issue
 (1)      Pay-in date                                                                    July 30, 2021                                                                    
 (2)      Type and number of shares issued                                               Ordinary shares in Mitsui & Co., Ltd., 250,836 shares                            
 (3)      Issue price                                                                    2,421 yen per share                                                              
 (4)      Total value of issue                                                           607,273,956 yen                                                                  
 (5)      Categories and numbers of persons eligible for allocations, numbers of shares  Directors (excluding external director)  9 persons, 134,095 shares               
          allocated                                                                      
                                        
                                       
                                                                                         Managing Officers                        27 persons, 116,741 shares              
 (6)      Other details                                                                  This share issue is subject to the Securities Registration Statement taking      
                                                                                         effect as stipulated in the Financial Instruments and Exchange Act.              


Note: The number of new shares issued is equivalent to 0.01% of the total
number of shares issued by the Company prior to the time of the new share
issue.

2. Purpose of and Reasons for the Issuance

At its meeting on April 26, 2019, the Board of Directors of the Company,
adopted a resolution to introduce a remuneration system of Share
Performance-Linked Restricted Stock (hereinafter referred to as “the
System”) to provide an additional incentive to directors other than external
directors (hereinafter referred to as “Eligible Directors”) and managing
officers who are not also serving as Directors (excluding officers who are not
resident in Japan, hereinafter referred to collectively as “Eligible
Directors, etc.”) to achieve sustaining growth in the Company's medium to
long-term performance and corporate value, and to foster a heightened sense of
shared value with shareholders, by paying remuneration consisting of the
Company’s ordinary shares to Eligible Directors, etc., (shares allocated
under the System will be referred to below as the “Shares”). This new
compensation system is a share performance-linked remuneration system, since
the number of Shares held by Eligible Directors, etc., at the end of a certain
period (hereinafter referred to as the "number of Shares after valuation")
would vary based on a comparison of the growth rates of the Company's stock
price and the Tokyo Stock Price Index (TOPIX) over a specified period. By
taking into account not only movements in the Company's stock price, but also
the performance of the Company's stock compared with the stock market as a
whole, the System is intended to give Eligible Directors, etc., a heightened
awareness of the need to improve the Company's corporate value by amounts
greater than the growth of the stock market.

At the 100(th) Ordinary General Meeting of Shareholders held on June 20, 2019,
approval was given for the provision of an entitlement to monetary
remuneration not exceeding ¥500 million per year to Eligible Directors, as
monetary remuneration to be used as a subscription asset for the acquisition
of restricted stock under the System (hereinafter referred to as the
“Monetary Remuneration”). An outline of the System and other information
are provided in “Notice concerning the introduction of a remuneration system
of share performance-linked restricted stock), dated April 26, 2019.

Based on the purpose of the System, the performance of the Company, the scope
of professional responsibilities of each Eligible Director, etc., and various
other factors, it has been decided to provide an entitlement to Monetary
Remuneration totaling 607,273,956 yen, and to issue 250,836 shares. The new
shares under the System will be issued to 36 Eligible Directors, etc., on
payment of the full amount of the Monetary Remuneration entitlement as assets
subscribed in kind.

Outline, etc., of the System

The maximum limit for the total amount of the entitlement to receive monetary
remuneration that will be paid to Eligible Directors under the System will be
¥500 million per year, as a separate allocation from basic fixed remuneration
and results-linked bonuses based on the Company’s key indicators. The
specific time for, and amount of, payments to Eligible Directors, etc., would
be decided by the Board of Directors on the basis of deliberations by the
Remuneration Committee, which is chaired by an External (Independent) Director
and functions as an advisory body for the Board of Directors.

The total number of ordinary shares that would be newly issued or disposed of
by the Company under the System would be no more than 500,000 per year
(however, this number may be changed within reasonable limits if the Company's
ordinary shares are affected by a stock split (including a free allotment of
new ordinary shares in the Company) or a reverse stock split, or if other
circumstances arise that require adjustments to the total number of the
Company's ordinary shares that are issued or disposed of as restricted
shares). The paid-in amount per Share will be decided by the Board of
Directors based on the average daily closing price for the Company's ordinary
shares on the Tokyo Stock Exchange (excluding days on which there is no
closing price, the price will be rounded up to the nearest whole yen) in the
three months immediately prior to the month containing the date on which the
Board of Directors made a resolution concerning the issuance or disposal of
the shares (hereinafter referred to as the “date of the Board of Directors'
resolution”), and within a range that is not especially advantageous to
Eligible Directors, etc.

The issuance of Shares is conditional on the entry into, between the Company
and Eligible Directors, etc., of allocation agreements for the granting of the
Shares (hereinafter referred to as the "Allocation Agreements"). To ensure
that Eligible Directors, etc., would not be able to transfer, pawn, or
otherwise dispose of the Shares during the period of transfer restriction
stipulated in Item 3.(2) below, the Shares will be managed in dedicated
accounts established with a securities company nominated by the Company.

3. Outline of the Allocation Agreement

(1) Conditions for Linkage to the Share Performance

If the growth rate of the Company’s share price in the three years after the
date of the Board of Directors’ resolution (July 9, 2021) (if an Eligible
Director, etc. retires as a Director or Managing Officer of the Company before
the elapse of three years, the period up to the date of retirement,
hereinafter referred to as the “Valuation Period”) is equal to or greater
than 150% of the growth rate of the TOPIX, the entire number of Shares will be
deemed to be the number after valuation. However, if the growth rate of the
Company’s share price is lower than 150% of the TOPIX growth rate, the
number of the Shares after valuation will be a percentage calculated using the
formula in the attachment entitled “Details of Share Performance Linkage
Conditions”. The remainder of Shares will be acquired by the Company without
compensation at the end of the Valuation Period.

(2) Restriction on Transfer

Eligible Directors, etc., will be unable to transfer, pawn, or otherwise
dispose of the Shares (hereinafter referred to as “Restriction on
Disposal”) for a period of 30 years from the pay-in date (July 30, 2021)
(hereinafter referred to as the “Transfer Restriction Period”).

(3) Lifting of Restriction on Disposal

Irrespective of the provisions of (2) above, the Restriction on Disposal will
be lifted if an Eligible Director, etc., retires as a director or managing
officer of the Company before the end of the Restriction on Transfer Period.

(4) Grounds for Acquisition without Compensation (Claw-back clause)

In addition to the condition that there will be an acquisition without
compensation under the conditions for linkage to the share performance in (1)
above, the Company will acquire all or part of the Shares during the
Restriction on Transfer Period if an Eligible Director, etc., engages in
actions that contravene laws and regulations, or on other grounds as
stipulated in the Allocation Agreement.

(5) Procedures in the Event of Organizational Restructuring, etc.

Irrespective of the provisions of (2) above, the Company would make reasonable
adjustments to the number of Shares to be acquired without compensation or the
time when the Restriction on Disposal will be lifted, by resolution of the
Board of Directors, if the Company enters into a merger agreement resulting in
the absorption of the Company, or a share swap agreement or share transfer
plan under which the Company becomes a wholly owned subsidiary, or otherwise
undertakes organizational restructuring, etc., during the Restriction on
Transfer Period, pursuant to a resolution of a General Meeting of Shareholders
(or a resolution of the Board of Directors in the case of a matter for which a
resolution of a General Meeting of Shareholders is not required).

4. Basis for and Specific Content of Issue Price Calculations

Restricted shares will be issued in exchange for the subscription of assets in
the form of the entitlement to monetary compensation provided under the System
in the fiscal year ending March 2022. To prevent arbitrariness, the issue
price per share was set at 2,421 yen, which is the average daily closing price
of the Company’s ordinary shares on the first section of the Tokyo Stock
Exchange in the three months prior to the month in which the date of the Board
of Directors’ resolution (July 9, 2021) falls. The Board of Directors
believes that this price is reasonable and not especially favorable to
Eligible Directors, etc.

In addition, according to the resolution of the Board of Directors on July 9,
2021, the Company will pay Managing Officers who are not resident in Japan and
who are not also serving as Directors monetary remuneration linked to the
share price under conditions equivalent or similar to the System, mutatis
mutandis.

For further information, please contact:

Mitsui & Co., Ltd.

Investor Relations Division Tel: +81-3-3285-7657

Corporate Communications Division Tel: +81-80-5912-0321

Notice:

This announcement contains forward-looking statements. These forward-looking
statements are based on Mitsui's current assumptions, expectations and beliefs
in light of the information currently possessed by it and involve known and
unknown risks, uncertainties and other factors. Such risks, uncertainties and
other factors may cause Mitsui's actual results, financial position or cash
flows to be materially different from any future results, financial position
or cash flows expressed or implied by these forward-looking statements. These
risks, uncertainties and other factors referred to above include, but are not
limited to, those contained in Mitsui's latest Annual Securities Report and
Quarterly Securities Report, and Mitsui undertakes no obligation to publicly
update or revise any forward-looking statements.

This announcement is published in order to publicly announce specific facts
stated above, and does not constitute a solicitation of investments or any
similar act inside or outside of Japan, regarding the shares, bonds or other
securities issued by us.

Attachment

Details of Share Performance Linkage Conditions

(1) If the growth rate of the Company's share price(*1) is equal to or greater
than 150% of the growth rate of the Tokyo Stock Price Index (TOPIX)(*2), the
number after valuation will be deemed to be the entire number of Shares
issued(*3).

(2) If the growth rate of the Company's share price is lower than 150% of the
TOPIX growth rate, the number of Shares after valuation will be a number
calculated using the following formula, and the remainder of the Shares will
be acquired by the Company without compensation at the end of the valuation
period.

(*1) This is the growth rate of the Company's share price during a valuation
period defined as three years from the date of the Board of Directors'
resolution (or the period to the date of retirement if an Eligible Director,
etc., retires from their role as a director or managing officer of the Company
before the elapse of three years. The same applies to (*2)). The growth rate
will be specifically calculated as follows:

A: The average closing price of the Company's stock on the Tokyo Stock
Exchange during the three months immediately prior to the month in which the
final day of the valuation period falls

B: The total dividend per share for the Company's ordinary shares during the
valuation period

C: The average closing price of the Company's stock on the Tokyo Stock
Exchange during the three months immediately prior to the month in which the
date of the Board of Directors' resolution falls

Growth rate of the Company's share price = (A+B) / C

(*2) This is the growth rate of the TOPIX during a period of three years from
the date of the Board of Directors' resolution. It will be specifically
calculated using the following formula.

D: The average TOPIX closing price on the Tokyo Stock Exchange during the
three months immediately prior to the month in which the final day of the
valuation period falls

E: The average TOPIX closing price on the Tokyo Stock Exchange during the
three months immediately prior to the month in which the date of the Board of
Directors' resolution falls

TOPIX growth rate = D/E

(*3) Number of Shares = Entitlement to monetary compensation determined
according to rank / Paid-in amount per Share

For diagrams omitted, please see our web site
https://www.mitsui.com/jp/en/release/2021/1241621_12165.html
(https://cts.businesswire.com/ct/CT?id=smartlink&url=https%3A%2F%2Fwww.mitsui.com%2Fjp%2Fen%2Frelease%2F2021%2F1241621_12165.html&esheet=52457514&newsitemid=20210709005114&lan=en-US&anchor=https%3A%2F%2Fwww.mitsui.com%2Fjp%2Fen%2Frelease%2F2021%2F1241621_12165.html&index=1&md5=2140cbcbe5b18a19ce58272956cf6b08)



View source version on businesswire.com:
https://www.businesswire.com/news/home/20210709005114/en/
(https://www.businesswire.com/news/home/20210709005114/en/)

Mitsui & Co Ltd


Copyright Business Wire 2021