3. Outline of the Plan and the allocation contract of the restricted stock (the “Allocation Contract”)
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| Eligible persons | | Members of the Board of Directors of TMC (excluding outside members of the Board of Directors) and the part of the Operating Officers of TMC who don’t serve as a Board of Director |
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| Amount of the share compensation payable to each Eligible Person | | Set each year considering factors such as corporate results, duties, and performance |
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Type of shares to be allotted and method of allotment | | Issue or disposal of common shares (with transfer restrictions under an allotment agreement) |
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| Amount to be paid for each share | | Determined by the Board of Directors of TMC based on the closing price of TMC’s common shares on the Tokyo Stock Exchange on the business day prior to each resolution of the Board of Directors, within a range that is not particularly advantageous to the Eligible Persons |
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| Transfer restriction period | | A period of between 3 and 50years, as determined by the Board of Directors of TMC |
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Conditions for removal of transfer restrictions | | Restrictions will be removed upon the expiration of the transfer restriction period. However, restrictions on all of the allotted shares which the eligible person have will also be removed in the case of resignation from any position as a Board of Director, an Operating Officer who don’t serve as a Board of Director, or an Audit & Supervisory Board member of TMC due to expiration of the term of office or other legitimate reasons |
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| Gratis acquisition by TMC | | TMC will naturally acquire at no cost all of the allotted shares for which the transfer restrictions have not been lifted at the time of the expiration of the transfer restriction period, or at the time of the lifting of the transfer restrictions stipulated. Other grounds for the gratis acquisition shall be stipulated by the Allocation Contract of the restricted stock based on a resolution of the Board of Directors of TMC |
This time, after the consideration of the objectives of the Plan, TMC’s business performance, the scope of duties of the Eligible Persons and various factors, TMC decided to pay a total amount of 911,487,400 yen in monetary compensation claims (the “Monetary Compensation Claims”) for the granting of 475,600 common shares of TMC.
Based on the Plan, the five Eligible Persons to whom disposal of shares is scheduled to be allotted will pay in as property contributed in kind all the Monetary Compensation Claims and receive the disposal of common shares of TMC (the “Allotted Shares”) upon the Disposition of Treasury Stock, and the transfer restriction period is 50 years (June 30, 2023~June 30, 2073).
To prevent the transfer, creation of a security interest on, or disposal of the allotted shares for as long as the restrictions are in effect, the Eligible Persons deposit the Allotted Shares in dedicated accounts with Nomura Securities Co., Ltd. for the administration during the transfer restriction period.
4. Basis for calculating the amount to be paid in for the disposal price and other specific details
The Disposition of Treasury Stock to the prospective recipients of the allotted shares will be made by way of in-kind contribution of the Monetary Compensation Claims paid for granting restricted shares under the Plan for the Company’s 119th business term. To avoid issuing the shares based on arbitrary decisions on price, the closing price of the common shares of TMC on the Prime of the Tokyo Stock Exchange of 1,916.5 yen on May 9, 2023 (the business day immediately prior to the Resolution Date), is taken to be the disposal price. Since this was the market price immediately before the date of the resolution of the Board of Directors, it is believed to be reasonable and not to be particularly advantageous.
In addition, the numbers of shares to be allotted were determined at the Executive Compensation Meeting held on April 28, 2023.
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