Notice Regarding the Disposal of Treasury Stock for Restricted Stock Compensation
TOKYO, June 24, 2020 (GLOBE NEWSWIRE) -- Internet Initiative Japan Inc. (“IIJ”, the “Company”, TSE1: 3774) announced that at the IIJ’s Board of Directors meeting held on June 24, 2020, it resolved to dispose of its treasury stocks (the “Disposal of Treasury Stocks” or the “Disposal”), as the restricted stock compensation shown below.
1. Overview of the Disposal
2. Purpose and reason of disposal
The Company decided, at the Board of Directors meeting held on May 25, 2020, t provide a restricted stock compensation which is equivalent to performance-linked bonuses in FY2019 (the “Scheme”) for the Directors of the Company (excluding Part-time and Outside Directors, “Eligible Directors”) and Executive Officers of the Company (collectively, “Eligible Directors, etc.”), for the purpose of providing a mid- to long-term incentives to Eligible Directors, etc. and further promoting shared value with shareholders. In addition, at the 28th Ordinary General Meeting of Shareholders held on June 24, 2020, it was approved that monetary compensation claims shall be paid to the Eligible Directors, within the maximum aggregate amount of IIJ’s director compensation (500 million yen per year) which was approved at the 16th Ordinary General Meeting of Shareholders held on June 27, 2008, under the Scheme as monetary compensation to be contributed for the acquisition of restricted stocks and the total number of shares of common stock issued or disposed of by the Company to the Eligible Directors shall be 40,000 shares or less per year.
The Board of Directors decided to provide a total amount of 74,865,795 yen as monetary compensation claims (consequently 19,221 shares of the Company’s common stocks to be disposed) for Eligible Directors, etc., taking into consideration various factors including the purpose of the Scheme, the business conditions of the Company, the scope of duties of each Eligible Director, etc. and other circumstances, along with the disposal of treasury stocks for Eligible Directors, etc. Overviews of the Scheme are shown below.
?Overviews of the Scheme?
Eligible Directors, etc. shall pay in the entire amount of monetary compensation claims paid to them as a cash investment asset, and will receive shares of common stock issued or disposed of by the Company (the “Allotted Shares”). The Board of Directors will determine the amount to be paid in per share. This amount will be based on the closing price of the Company’s common stock on the Tokyo Stock Exchange on the business day immediately preceding the date of the Board of Directors resolution (the closing price on the most recent day on which trading has taken place if there is no trading on that day), and will be an amount that does not provide the Eligible Directors, etc. who receive the common stock with a particularly advantageous price.
Moreover, issuance or disposal of the Allotted Shares shall be conditional upon a restricted stock allocation agreement (the “Allotment Agreement”) concluded between the Company and each Eligible Directors, etc. An overview of the Allotment Agreement is described in 3. below.
4. Basis for calculating the amount to be paid and its specific details
To avoid arbitrary pricing, the disposal price for the disposal of treasury stocks shall be set at 3,895 yen, which is the closing price of a share of the Company’s common stock in the Tokyo Stock Exchange on June 23, 2020, the business day immediately before the Board of Directors made the resolution. This is the market share price immediately prior to the date of the resolution, and the Company believes that it is reasonable and not particularly advantageous price.
Founded in 1992, IIJ is one of Japan's leading Internet-access and comprehensive network solutions providers. IIJ and its group companies provide total network solutions that mainly cater to high-end corporate customers. IIJ's services include high-quality Internet connectivity services, systems integration, cloud computing services, security services and mobile services. Moreover, IIJ has built one of the largest Internet backbone networks in Japan that is connected to the United States, the United Kingdom and Asia. IIJ listed on the First Section of the Tokyo Stock Exchange in 2006.