ASAHI GROUP HOLDINGS, LTD. FOR IMMEDIATE RELEASE
February 9, 2016
Company Name: Asahi Group Holdings, Ltd. Representative Name: Naoki Izumiya, President and Representative Director, CEO Securities Code: 2502
Stock Listings: Tokyo Stock Exchange, First Section Contact: Kazutomo Tamesada,
General Manager, Public Relations Section Phone: +81-3-5608-5126
The Company is pleased to announce that, at its meeting held on February 9, 2016, the Board of Directors passed the resolution to introduce a new Performance-Linked Stock Compensation Plan (hereinafter referred to as the "Plan") for the Directors (excluding Outside Directors) of the Company, and that the Company has decided to submit a proposal
for introduction of the Plan, whose detailed contents are provided below, to the 92nd Annual General Meeting of Shareholders to be held on March 24, 2016 (hereinafter referred to as the "Shareholders' Meeting").
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Purpose for Introduction of the Plan
Remuneration, etc. for the Directors of the Company comprises basic remuneration (a fixed monthly amount) and bonuses (yearly performance-linked amounts). In addition to the short-term performance-linked bonuses, the Asahi Group has now decided to introduce a new Performance-Linked Stock Compensation Plan as a long-term performance-linked scheme. This is to increase motivation to work toward the Group's continued medium- to long-term growth as well as increasing the value of the Company.
The Plan would not only motivate the Directors to strive harder to accomplish their performance goals but also help them share the benefits and risks of stock price fluctuations with the Shareholders because stock price movements will significantly impact the actual amount of remuneration to be received by the Directors under the Plan.
Introduction of the Plan is subject to approval at the Shareholders' Meeting; in addition, it must be noted that the Outside Directors will not be eligible for the Plan.
- Contents of the Plan
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Overview of the Plan
The Plan is a performance-lined stock compensation system for the Directors (excluding Outside Directors) of the Company whereby the Company will grant points according to the level of the achievements of the Directors' targeted performance benchmarks outlined in the "Medium-Term Management Plan" and, at the time of their
retirement, will distribute to them such number of shares of common stock of the Company as would be equivalent to the cumulative number of points theretofore granted to them.
In introducing the Plan, the Company will adopt a structure of a Stock Distribution Trust for Officers (hereinafter referred to as the "Trust") where the Company will create such Trust by contributing cash, the Trust will acquire shares of common stock of the Company and will then distribute such shares to eligible Directors.
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Persons eligible for the Plan
Directors of the Company (excluding Outside Directors)
(Note) Outside Directors are not eligible for the Plan, which is closely linked to business performance on the grounds that the role they should play is to exercise supervision of the Company's management from an objective perspective that is independent of business execution.
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Performance-linked benchmark
The Company will use earnings per share for the fiscal year ("EPS" (*)) as the performance-linked benchmark, which will be linked to the number of points to be granted. EPS is one of the major benchmarks set in its "Medium-Term Management Plan," and the Company finds EPS suitable as a benchmark for determining part of the remuneration for the Directors of the Company, each of whom bears a responsibility for the enhancement of the enterprise value of the Asahi Group as a whole.
(*) Earnings per share (EPS) = net income / average total number of shares outstanding during the term
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Method of calculating points to be granted to each Director
Pursuant to the Stock Distribution Regulations prescribed by its Board of Directors, on the date of the meeting of the Board of Directors convened for the purpose of approving financial results for each fiscal year during the period of the Trust , the Company will grant to each Director a certain number of points according to his/her executive rank and the level of achievement of the targeted EPS for the Company's fiscal year ended most recently, on the basis of the following calculation formula; provided, however, that the aggregate number of points to be granted by the Company to the eligible Directors shall be up to a limit of twenty one thousand (21,000) points for each fiscal year.
[Calculation formula]
Base points based on executive rank (*1) x performance-linked payment rate (*2)
(*1) Base points based on executive rank will be calculated by multiplying basic remuneration with a certain ratio assigned to each executive rank of the Director concerned, and by dividing the product by a per-share book value of the shares of common stock of the Company held by the Trust.
Basic remuneration x Ratio assigned to executive rank
Base points =
Per-share book value of shares held by the Trust
(*2) Performance-linked payment rate will be set within the range of 0% to 150% according to the level of achievement of targeted EPS.
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Timing for distributing shares of common stock of the Company
The timing for distributing shares of common stock of the Company to the eligible Directors will be when they retire from their office.
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Upper limit on the amount of Trust Money to be contributed to the Trust as a source of funds with which to acquire shares of common stock of the Company
During the period of the Trust (three years), the Company will create the Trust for the Directors fulfilling certain specific eligibility requirements as Beneficiaries by contributing cash of up to a limit of two hundred and twenty million yen (¥220,000,000) as funds for acquiring shares of common stock of the Company that need to be distributed to such eligible Directors under the Plan. The Trust will use the cash left in
trust by the Company (*) as the source of funds to acquire shares of common stock of the Company either through the stock market or by undertaking disposal of treasury
shares of the Company.
(*) The actual amount of cash to be left in trust by the Company will be equal to the sum of the abovementioned funds for acquisition of the shares of common stock of the Company and associated necessary expenses including trust fee and fee for the Trust Administrator.
At the time of expiration of the period of the Trust, the Board of Directors of the Company may resolve to keep the Plan in place by extending the period of the Trust every three years, in which case, with respect to each of the extended periods of the Trust, the Company will contribute cash of up to a limit of two hundred and twenty million yen (¥220,000,000) to the Trust as funds for acquiring additional shares of common stock of the Company that would need to be distributed to eligible Directors under the Plan; provided, however, that in cases where such an additional contribution is made and where any residual shares and/or cash exist within the trust property as of the last day of the period of the Trust prior to such extension(s), the upper limit of the amount of additional contributions will be ¥220,000,000 less an amount equivalent to such residual shares and/or residual cash. Furthermore, in such a case of extension, the Company will extend the Plan period in accordance with the length of continuation of the Plan and the relevant period of the Trust, and will continue to assign the points set forth in (4) above and distribute shares of its common stock as prescribed in (7) below within the extended period of the Trust. However, even where the Company does not continue to grant the points as above, if, at the time of expiration of the period of the Trust, there is any Director who is granted points but is not yet retired, the Company may decide to extend the period of the Trust until such time as he/she is retired and distribution of shares of common stock of the Company is completed.
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Distribution of shares of common stock of the Company to each Director
The number of shares of common stock of the Company to be distributed to each Director will be the number of points granted to him/her multiplied by a factor of one (1); provided, however, that if any share split, reverse share split or any other event for which it would be considered reasonable to adjust the number of shares occurs with respect to the shares of common stock of the Company, then the Company will make reasonable adjustments depending on the ratio of such stock split or reverse stock split.
Shares of common stock of the Company will be distributed from the Trust to each eligible Director after he/she performs the established beneficiary determination procedures at the time of his/her retirement. However, a certain specific portion of such shares will be sold and converted into cash within the Trust, and will be distributed in cash instead of the shares. If the shares of common stock of the Company left within the Trust are converted into cash such as when a tender offer is accepted and settled with respect to such shares, the Company may make a distribution in money instead of the shares.
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Overview of the Trust
Name: Stock Distribution Trust for Officers
Settlor: Asahi Group Holdings, Ltd.
Trustee: Sumitomo Mitsui Trust Bank, Limited
Beneficiaries: Eligible Directors fulfilling requirements of the Beneficiaries
Trust Administrator: The Company selects a third party who does not have any stake in the Company (scheduled)
Trust type: Trust of money other than money trust (third-party-benefit trust)
Date of Trust Agreement: May 2016 (scheduled)
Date on which cash will be entrusted: May 2016 (scheduled)
Trust period: From May 2016 (scheduled) to May 2019 (scheduled)
Creation of trust
[Settlor]
Asahi Group Holdings, Ltd.
(third-party-benefit trust) (cash trust)
Stock market
Disposal of
The Board of Directors of the Company will establish Stock Distribution Regulations intended for its Directors (excluding Outside Directors).
The Company will create a stock distribution trust (third-party-benefit trust) for Directors as Beneficiaries. When doing so, the Company will leave such amount of cash as to be equivalent to that for funds to acquire shares (limited to an amount within the purview approved by the Shareholders' Meeting) in trust with the Trustee.
The Trustee will acquire, in one lump, a sufficient enough number of shares of common stock of the Company that are expected to be distributed in future (either through the stock market or by disposing of treasury shares).
Throughout the period of the Trust, the Company will appoint a Trust Administrator (to be limited to be a party independent of the Company and its Directors and Corporate
A. Structure of the Trust
(3) Payment
(3-a) Purchase price
[Trustee] (scheduled)
(3-a) Purchase of shares
(5) Grant of points
treasury shares
(1) Establishment of stock distribution regulations
Sumitomo Mitsui Trust Bank, Limited Stock distribution trust
Shares of common stock of the Company
Cash
(4) Instruction not to exercise voting rights
Trust Administrator
(6) Sale of shares
(6) Sale proceeds
(6) Shares or cash
[Beneficiaries] Directors
(Note) Dotted lines denote the movements of shares.
Asahi Group Holdings Ltd. issued this content on 09 February 2016 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 09 February 2016 10:38:54 UTC
Original Document: http://www.asahigroup-holdings.com/en/ir/pdf/16pdf/160209_04.pdf
