Sansan, Inc. (“the Company”) announces today that, in accordance with the provisions of Articles 236, 238 and 240 of the Companies Act, a resolution has been passed to issue Stock Acquisition Rights to the directors of the company following the approval of Proposal No. 4 “Determination of Content of Share Acquisition Rights as Stock Remuneration-Type Stock Options with Share Price Conditions for Directors (Excluding Those Who Are Audit & Supervisory Committee Members)” at the 16th Annual General Meeting of Shareholders held on August 29, 2023, as proposed. Details of the resolution, which was passed at a Board of Directors’ meeting held on August 29, 2023, are as set out below.
Aiming to provide the Company’s Directors, employees of the Company and its subsidiaries, and others with an incentive to improve its corporate value over the medium to long term and in order to retain talented professionals, the Company issued trust-type stock options (“the Trust SO”) on January 31, 2019 based on a resolution approved at the Extraordinary General Meeting of Shareholders held on January 9, 2019 and the Companies Act. However, the Company has granted stock remuneration-type stock options with stock price condition (stock acquisition rights with an exercise price of JPY1 per share; “the Stock Options”) to Directors (excl. Directors serving on the Audit & Supervisory Committee) as a new incentive as it found that the Trust SO would not provide the initially expected incentive following the publication of “Taxation of Stock Options (Q&A)” by the National Tax Agency. See “Notification Regarding Trust-Type Stock Options Introduced by the Company” released on July 13, 2023 for details.
With the aim of providing further value sharing with its shareholders while improving the medium- to long-term shareholder value and corporate value of the Company, the Company grants the Stock Options to Directors (excl. Directors serving on the Audit & Supervisory Committee) as non-monetary remuneration in order to further raise their motivation and enthusiasm and secure talented professionals.
If all of the Stock Acquisition Rights are exercised, the total number of issued shares as of the end of May 2023 will be diluted by up to 0.12%. We do recognize, however, that the achievement of the exercise conditions set for the Stock Acquisition Rights will contribute to the improvement of the Company’s shareholder value and corporate value as well as contribute to the interests of existing shareholders, and thus we believe the scale of the issuance to be reasonable. Due to the issuance of the Stock Acquisition Rights, share-based payment expenses will be recorded annually for accounting purposes from the granting of the exercise of rights. If the conditions for exercising the rights are achieved, as mentioned above, improved shareholder value and corporate value can be shared with existing shareholders. In the event that the conditions for exercising the rights are not achieved, the shares will lapse without being issued and recorded share-based payment expenses will conversely be added back. We thus believe that existing shareholders are unlikely to suffer any serious disadvantage.
（1）Name of Stock Acquisition Rights
Sansan Inc. Series 12 Stock Acquisition Rights
（2）Persons to Whom Stock Acquisition Rights Are to Be Allotted, Number of Those Persons, and Number of Stock Acquisition Rights to Be Allotted
（3）Class and Number of Shares to Be Acquired upon Exercise of Stock Acquisition Rights
The class of shares to be issued upon exercise of the Stock Acquisition Rights shall be common stock of the Company, and the number of shares to be issued upon exercise of each of the Stock Acquisition Rights (“the Number of Granted Shares”) shall be one hundred (100). The Number of Granted Shares shall be adjusted according to the following formula in the event that, after the allotment date of the Stock Acquisition Rights, the Company conducts a stock split (including the gratis allotment of common stock of the Company; the same shall apply hereinafter) or a stock consolidation.
In addition, the Number of Granted Shares shall be appropriately adjusted to the extent reasonable in the event that, after the allotment date of the Stock Acquisition Rights, the Company conducts a merger, company split or share exchange, or share transfer (“merger, etc.”) that require adjustment of the Number of Granted Shares. Provided, however, that such adjustment shall be made only with respect to the number of shares underlying the Stock Acquisition Rights that have not been exercised at the time of such adjustment, and any fraction less than one share arising from the adjustment shall be rounded down.
（4）Total Number of Stock Acquisition Rights
The total number of shares that are to be issued upon exercise of the Stock Acquisition Rights shall be 144,800 shares of common stock of the Company, and in the event the number of shares to be issued upon exercise of the Stock Acquisition Rights is adjusted pursuant to Paragraph (3) above, the number shall be obtained by multiplying the number of shares to be issued upon exercise of the Stock Acquisition Rights after adjustment by the number of the Stock Acquisition Rights.
（5）Amount to Be Paid in Exchange for Stock Acquisition Rights
The payment of money in exchange for the Stock Acquisition Rights is not needed. Since as stock options the Stock Acquisition Rights are issued in consideration for the execution of duties, they do not fall under the category of “Favorable Issue.”
（6）Value or Calculation Method of Assets to Be Contributed upon Exercise of Stock Acquisition Rights
The purpose of the investment in exercising the Stock Acquisition Rights shall be deemed monetary, and the price shall be the amount of JPY1 per share to be paid when exercising the Stock Acquisition Rights multiplied by the number of shares granted for the Stock Acquisition Rights.
（7）Exercise Period of Stock Acquisition Rights
The period during which Stock Acquisition Rights are exercisable (“the Exercise Period”) is from August 30, 2026, to August 29, 2033 (provided, however, that if the last day is not a Bank Business Day, it shall be the Previous Bank Business Day).
（8）Conditions of Exercise of Stock Acquisition Rights
（9）Amount of Stated Capital and Capital Reserve to Be Increased Due to Issuance of Shares upon Exercise of Stock Acquisition Rights
（10）Matters Relating to Acquisition of Stock Acquisition Rights
（11）Restrictions on Assignment of Stock Acquisition Rights
Any acquisition of the Stock Acquisition Rights through transfer shall require approval by resolution of the Company’s Board of Directors.
（12）Handling of Stock Acquisition Rights upon Reorganization
If the Company is to engage in a merger (limited to cases where the Company is to be dissolved as a result of the merger), separated and absorbed, separated and newly incorporated, or subject to a share exchange or share transfer (all of which are collectively referred to as “the Act of Structural Reorganization”), the New Stock Acquisition Rights in the entity specified under Article 236, Paragraph 1, Items 8 (a) through (e) of the Companies Act (such entity hereafter referred to as the “Reorganized Company”) are, in accordance with applicable items below, to be issued to Holders of the Stock Acquisition Rights that remain in effect as of the time of the Act of Structural Reorganization (hereinafter “the remaining New Stock Acquisition Rights”). In such a case, the remaining New Stock Acquisition Rights will be extinguished. Provided, however, that this shall be limited to the cases where it is stipulated in the absorption-type merger agreement, consolidation-type merger agreement, absorption-type company split agreement, incorporation-type company split plan, share exchange agreement, or share transfer plan that the Stock Acquisition Rights of the Reorganized Company shall be delivered in accordance with the following conditions:
（13）Allotment Date of Stock Acquisition Rights
September 13, 2023
（14）Due Date for Application
September 6, 2023
（15）Matters Related to Stock Acquisition Right Certificates
The Company shall not issue certificates for the Stock Acquisition Rights.