May 10, 2012
Minebea Co., Ltd.
Reintroduction of "Trust-type Employee Shareholding Incentive Plan (E-Ship®)"
The Company announces that it has resolved at its board of directors' meeting held on May 10, 2012, to reintroduce the "Trust-type Employee Shareholding Incentive Plan (E-Ship®)" (the "Plan") to the Company, in order to provide the Company group's employees with incentives to increase the enterprise value of the Company, and to promote the benefit and welfare of the employees of the Company group and others.
The Company previously introduced the Plan on November 2009, and the Plan expired on April 5, 2012. The Company has decided to reintroduce the Plan after comprehensive consideration regarding actual performance during the term of the Plan and other factors.
1. Purpose and Outline of the Reintroduction
The Plan is an incentive plan, in which all employees of the Company group who are members of the "Minebea Employee Stock Holding Partnership" ("Stock Holding Partnership") (a Company group employee who is a member of the Stock Holding Partnership is hereinafter referred to as an "Employee") may participate. In the Plan, the "Minebea Employee Stock Holding Partnership Exclusive Trust Account" ("Trust"), which is to be established for the purpose of securing the Company shares for the Stock Holding Partnership to effect purchases, will borrow money from banks for a considerable number of Company shares that are expected to be acquired by the Stock Holding Partnership during approximately the next five years, and acquire Company shares in a number equal to such borrowings from the market at the time the Plan is reintroduced. Subsequently, the Trust is to continuously transfer the Company shares to the Stock Holding Partnership in accordance with certain plans (conditions and methods) and terminate, e.g. if all of the Company shares belonging to the trust assets of the Trust are transferred. If any capital gains, such as gains on sale of the Company shares, accumulate within the Trust by the time of its termination, and if any money remains within the Trust after repaying all the debts such as borrowings to be borne by the Trust, then such money is to be distributed as residual assets to those Employees that fulfill the requirements for eligible beneficiaries.
In order to guarantee the Trust's borrowings for the acquisition of Company shares, if any amount equal to loss on sale of shares accumulates within the Trust due to decline in the price of Company shares, and if there are any remaining borrowings equivalent to such a loss on the sale of shares within the Trust at the time of the termination of the Trust, the Company is to repay the remaining borrowings pursuant to a guarantee agreement.
As the Company focuses on its stock price in its management policy, one of the objectives of reintroduction of the Plan is, similar to the last time, to provide the Employees with incentives for medium to long term growth of the Company's performance, and therefore, the Company's value by "being in the same boat" with its management and shareholders. At the same time, the plan supports Employees' asset accumulation as a benefit and welfare promoting measure. Furthermore, the Company is of the opinion that since a trust administrator, who represents the Employees' interests, gives instructions on the exercise of voting rights that reflect the Employee's intentions concerning the Company shares held within the Trust, the Employees will be better able to reflect their intentions regarding the operation of the Company and to monitor the operation of the Company as shareholders; therefore, the Plan also has the effect of furthering the progress of the Company's corporate governance. The Plan also enables the Stock Holding Partnership to effectively purchase the Company shares without being affected by market liquidity.
2. Structure of the Plan
Note: Solid lines (except for (6) ) show transfer of money and dotted lines show transfer of shares.
- (1) The Company establishes the Trust (a third party benefit trust) for those Employees that fulfill the requirements as eligible beneficiaries by leaving money in trust.
- (2) The Trust takes out a loan from a bank in the amount necessary for the acquisition of the Company shares. With respect to the loan, the Company, Trust, and bank, enter into a guarantee agreement. The Company guarantees the Trust's borrowings pursuant to the guarantee agreement and receives a guarantee charge from the Trust as consideration.
- (3) From the market, the Trust acquires a considerable number of Company shares the Stock Holding Partnership is expected to acquire within the trust period.
- (4) Throughout the trust period, the Trust continuously transfers the Company shares to the Stock Holding Partnership at the current market price in accordance with certain plans (conditions and methods).
- (5) The Trust appropriates the share transfer proceeds received as a result of the transfer of the Company shares to the Stock Holding Partnership, and the received dividends concerning the Company shares that it holds, for the repayment of the principal and interest of the borrowings from the bank.
- (6) A trust administrator, who is appointed for the beneficiaries, instructs the administration of the Trust assets, e.g., by exercising voting rights, throughout the trust period.
- (7) If there are any residual assets within the Trust at the time of the termination of the Trust, such assets are to be distributed to those Employees that fulfill the requirements as eligible beneficiaries.
- (8) If there remains any debt at the time of the termination of the Trust, the Company is to repay such debt pursuant to the guarantee agreement.
3. Outline of the Trust
|(1) Name:||The Nomura Trust and Banking Co., Ltd. (Minebea Employee Stock Holding Partnership Exclusive Trust Account)|
|(2) Truster:||The Company|
|(3) Trustee:||The Nomura Trust and Banking Co., Ltd.|
|(4) Beneficiaries:||Employees to be specified in the future pursuant to the requirements for eligible beneficiaries|
|(5) Beneficiary rights:||Share the interests from the trust assets of the Trust pursuant to the distribution ratio specified by the trust contract|
|(6) Trust administrators:||Representatives of employees (those who fulfill the certain requirements, e.g., having not been on the board of the Company or affiliates of the Company at present or in the past)|
|(7) Date of trust contract:||May 10, 2012|
|(8) Trust period:||From May 10, 2012 to May 9, 2017|
|(9) Purpose of trust:||Stable and continuous supply of shares to the Stock Holding Partnership and distribution of trust assets to those employees who fulfill the requirements for eligible beneficiaries|
4. Outline of the Acquisition of Company Shares by the Trust
|(1) Type of shares to be acquired:||Shares of common stock of the Company|
|(2) Aggregate amount of acquisition:||Up to a maximum of 2.17 billion yen
(If the aggregate amount of acquisition prices does not reach a certain amount during the acquisition period of shares, the Trust terminates at that time.)
|(3) Share acquisition period:||From May 15, 2012 to June 22, 2012|
|(4) Share acquisition method:||Acquire from the market of the Stock Exchange|
(Reference) The "Trust-type Employee Shareholding Incentive Plan" is a new incentive plan for employees developed by Nomura Securities Co., Ltd. and The Nomura Trust and Banking Co., Ltd., by applying the employee stock holding partnership system with reference to the Employee Stock Ownership Plan (ESOP), which has been adopted widely in the United States. E-Ship® is an abbreviation for the trust-type Employee Shareholding Incentive Plan, and it is a registered trademark of Nomura Securities Co., Ltd.
|Company Name:||Minebea Co., Ltd.|
President and Chief Executive Officer
(Code No. 6479 TSE Div. No. 1)
|Contact Person:||Yasunari Kuwano
Corporate Communications Office
Product information, contact and other context are subject to change without prior notice.