June 6, 2025
Company Name: Ateam Holdings Co., Ltd. Representative: Takao Hayashi, President (Code Number: 3662)
Contact: Mayuko Morishita, Corporate Officer, General Manager of Corporate Development Division (Tel: +81-52-747-5573)
Notice Regarding Issuance of Performance Target-linked Stock Options (Paid-in Stock Options)
Ateam Holdings Co., Ltd. (hereafter "Ateam HD") announces that it adopted a resolution to issue stock options to employees of the Company, and to directors and employees of the Company's subsidiaries as detailed below (hereafter, the "Stock Options") at the meeting of the Board of Directors held on June 6, 2025, in accordance with the provisions of Articles 236, 238, and 240 of the Companies Act. This case involves issuing stock options to the underwriters at fair value and without any particularly advantageous terms; therefore, it will be carried out without requiring approval at the general meeting of shareholders. The Stock Options are not being issued as compensation to those subject to issuance, but are instead underwritten based on the individual investment decisions of each of them.
Purposes and Reasons for Offering Stock Options
In order to expand our business performance and increase our corporate value over the medium to long term, we will issue the Stock Options to our employees, and to the directors and employees of the Company's subsidiaries for a fee in order to further increase motivation and morale and strengthen our unity.
An increase in the total number of common stocks of the Company is equal to 3.26% of the total number of shares issued when all Stock Options are executed. The Stock Options are exercised subject to the achievement of the predetermined performance targets and certain stock price targets, and we think that achievement of the targets contributes to an increase in the enterprise and shareholder value of the Company. Therefore, we think that the issuance of Stock Options will benefit the Company's existing shareholders, with a reasonable level of share dilution.
Guidelines for Issuance of Stock Options
Guidelines for Issuance of Stock Options No.10
Number of Stock Options 6,440 Stock Options
Total number of shares authorized for issue upon the exercise of the Stock Options shall be 644,000 shares of the Company's common stock. When the number of shares to be issued subject to the Stock Options is adjusted according to 3(1) below, the total number shall be the adjusted number of shares to be issued multiplied by the number of the Stock Options.
Amount to Be Paid in Exchange for Stock Options
The issuance price per share of the Stock Options shall be 300 JPY. It was determined in reference to the result arrived at by the third-party assessment organization Plutus Consulting Co., Ltd., calculated using the general option price calculation model Monte Carlo Simulation, taking into account the information on the stock price of the Company.
Details of Stock Options
Class and number of shares subject to Stock Options
The number of shares per the Stock Option (hereinafter "number of shares awarded") shall be
100 shares of Company common stock.
After the date of allocation of the Stock Options, the number of shares awarded shall be adjusted using the formula below in the event of a stock split (hereinafter, this includes free allocation of the shares of Company common stock) or a reverse stock split. However, such adjustment shall apply only to stocks subject to stock options that have not yet been exercised as of that point in time, and any remainders of less than one share arising as a result of such adjustment shall be rounded down to the nearest whole share.
Number of shares awarded after adjustment = number of shares awarded prior to adjustment x ratio of stock split (or reverse stock split)
In addition, if the Company conducts a merger, company split, share exchange or share delivery, or in any other case similar thereto where it is necessary to adjust the number of shares awarded after the allotment date of the Stock Options, the Company may appropriately adjust the number of shares awarded to a reasonable extent.
Payment price of Stock Options offered and calculation method thereof, or indication that no payment is required
The price of assets invested when exercising each Stock Option shall be the product of the price
paid per share (hereinafter "Exercise Price") multiplied by the number of shares assigned.
The Exercise Price shall be 1,098 JPY in cash.
The Exercise Price shall be adjusted through the formula below in the event that the Company has implemented a stock split or a reverse stock split after the date of allocation of the Stock
Options, with any remainder of less than one JPY resulting from such allocation being rounded up.
Adjusted Exercise Price = Exercise Price prior to adjustment x 1 / ratio of stock split (or reverse stock split)
In the event that, after the date of allocation of the Stock Options, the Company has issued new shares of common stock or sold treasury stock of common stock at a price below market value (excluding the issuance of new shares and the delivery of treasury stock due to the exercise of stock acquisition rights or due to mergers, company splits, share exchanges, and stock issuance and delivery), then the Exercise Price shall be adjusted using the formula below with any remainders of less than one JPY resulting from such adjustment to be rounded up.
Adjusted Exercise Price = Exercise Price prior to adjustment x (existing number of shares issued
+ (number of new shares issued x price paid per share)) / price per share prior to issue of new shares / existing number of shares issued + number of new shares
In the formula above, "existing number of shares issued" refers to the total number of shares of Company common stock issued and outstanding minus the number of shares of Company common stock held as treasury stock. When selling shares of Company common stock held as treasury stock, "number of new shares issued" shall be replaced by the "number of shares of treasury stock to be sold."
Furthermore, in addition to the cases above, when there is a need to adjust the Exercise Price due to a merger, company split, share exchange or share delivery or similar reasons after the allotment date of the Stock Options, the Company may adjust the Exercise Price as appropriate within the reasonable extent.
Period during which Stock Options may be exercised
The period during which the Stock Options may be exercised (hereinafter "Exercise Period") shall begin on November 1, 2027, and end on June 30, 2032 (if the last day is not a bank business day, the preceding bank business day shall be the last day).
Increase in capital and capital reserve
An increase in capital in the case where shares are issued upon exercise of the Stock Options shall be 50% of the upper limit on an increase in capital calculated according to Article 17, Paragraph 1, of the Corporate Accounting Rules. Any fractions less than 1 JPY resulting from the calculation shall be rounded up.,
.
An increase in capital reserve in the case where shares are issued upon exercise of the Stock Options shall be an upper limit on an increase in capital, which is stated in the abovenet of an increase in capital as stipulated in the above
Limit on acquisition of Stock Options by transfer
Transfer of the Stock Options shall require an approval based on a resolution at the Company's
Board of Directors meeting.
Conditions for exercise of Stock Options
A person to whom stock option have been allotted (hereinafter "Stock Option Holders") may exercise the number of Stock Options allotted to such Stock Option Holder at the ratio specified for each (hereinafter "Exercisable Ratio"), only if the adjusted EBITDA and the Company's stock price stated in the Company's financial results for the fiscal years ended July 31, 2027 through July 31, 2029 exceed the levels set forth in (a) and (b) below.If the adjusted EBITDA exceeds 3,000 million JPY at least once during the period from the fiscal years ended July 31, 2027 through July 31, 2029: Exercisable Ratio is 50%
During the period from the fiscal year ending July 31, 2027 through July 31, 2029, if the adjusted EBITDA exceeds 4,000 million JPY at any time therein, and the average closing price (amounts less than one JPY shall be rounded down) of the Company's shares at the Tokyo Stock Exchange during a one month period (21 trading days including the day of the transaction) from the allotment date until the end of the Exercise Period of the stock options exceeds 1,550 JPY at any time: Exercisable Ratio is 100%
Adjusted EBITDA shall be determined using the formula* stated in the Company's summary of financial results for the second quarter of the fiscal year ending July 31, 2025. In the event that the Company's Board of Directors determines that it is not appropriate to make a determination based on such figures, for example, in the event of a change in the accounting period, the application of International Financial Reporting Standards, a change in applicable accounting standards, or a corporate acquisition that has a significant impact on the Company's business performance, the Company may make an appropriate adjustment to eliminate such impact within a reasonable scope. In addition, in calculating the Exercisable Ratio, if there is a fraction of less than one in the number of the Stock Options exercisable by each Stock Option Holders, it shall be rounded down to the nearest whole number.
* Adjusted EBITDA=EBITDA (Operating income + Depreciation + Amortization of goodwill) + M&A related expenses ( M&A execution fees: Brokerage fees (including Financial Advisory fees), various due diligence fees, etc. Financing costs related to M&A (loan-related fees, public offering costs, etc.)) + Provision of allowance for sales promotion expenses (Expenses arising from the business of Paddle Inc.) + Sales promotion expenses (Expenses arising from the business of Paddle Inc.) - Crypto asset equivalent of points granted (Expenses arising from the business of Paddle Inc.)
Stock Option Holders must be directors, corporate auditors or employees of the Company or its affiliates (meaning as defined in the regulation on terminology, forms, and preparationmethods of Financial Statements, etc.) at the time of exercising their Stock Options. However, this shall not apply in the event of retirement due to expiration of term of office, mandatory retirement age, or other justifiable reasons deemed by the Board of Directors.
The Stock Options may not be exercised by the heirs of their holders.The Stock Options may not be exercised if doing so would cause the Company's total number of shares issued and outstanding as of that point in time to exceed its authorized number of shares.The Stock Options may not be exercised in units of less than one.
Allotment date of Stock Options
June 30, 2025
Acquisition of Stock Options
In the event that a General Meeting of Shareholders has approved a merger agreement under which the Company would be extinguished, a company split agreement or company split plan under which the Company would be spun off, or a share exchange agreement or share transfer plan under which the Company would become a wholly owned subsidiary (or the Board of Directors has passed a resolution on the approval thereof in a case that does not require the approval at a General Meeting of Shareholders), then the Company may, on a date to be specified separately by the Board of Directors, acquire all of the Stock Options free of charge.
In the case that the Stock Options do not become exercisable before exercise by Stock Option Holders according to the provisions stipulated in 3. (6) above, the Company may acquire the Stock Options without consideration.
Treatment of Stock Options at the Time of Acts of Organizational Restructuring
In case the Company enters into a merger (limited to the case resulting in the Company being absorbed), an absorption-type split, an incorporation-type split, a share exchange, or a share transfer (hereinafter collectively referred to as "acts of organizational restructuring"), in each case, the stock options of the stock companies stated in the Article 236, Paragraph 1, Item 8, a to e, of the Companies Act (hereinafter "Reorganized Company") shall be individually issued to Stock Option Holders on the effective date of acts of organizational restructuring according to the conditions below. However, this shall be limited to cases where there is a provision in the absorption-type merger agreement, incorporation-type merger agreement, absorption-type split agreement, incorporation-type split plan, share exchange agreement, or share transfer plan that the stock options of the Reorganized Company are issued according to the following conditions:
Number of stock options of the Reorganized Company to be issued
The same number of stock options as those owned by Stock Option Holders is individually issued.