Company name: JAPAN PURE CHEMICAL CO.,LTD.
Stock exchange listing: Tokyo
Stock code: 4973 URL https://www.netjpc.com
Representative: Representative Director and President Tomoyuki Kojima
May 20, 2025
Inquiries: Senior Director, General Manager of Corporate Planning Division and Finance Division
Motoki Watanabe TEL +81-3-3550-1048
Notice Regarding the Issuance of Stock Acquisition Rights as Stock Options
We hereby announce that, at the Board of Directors meeting held on May 20, 2025, based on the provisions of Articles 236, 238, and 239 of the Companies Act, it was resolved to issue stock acquisition rights as stock options free of charge to the directors of the company (excluding outside directors, hereinafter referred to as "Target Directors") and employees, and to delegate the determination of the details of the offering to the Board of Directors. This matter will be presented at the 54th Annual General Meeting of Shareholders scheduled to be held on June 20, 2025 (hereinafter referred to as "the General Meeting").
Please note that the free issuance of stock acquisition rights to the Target Directors constitutes non-monetary compensation to the directors, and as the amount of such compensation has not yet been determined, we also request approval of the method for calculating the stock acquisition rights to be allocated as compensation.
The number of stock acquisition rights to be allocated to Target Directors is limited to 120 rights, and the total amount of compensation, including the fair value of these stock acquisition rights, will be capped at the amount approved by the 42nd Annual General Meeting of Shareholders held on June 21, 2013, which is "up to 300,000 thousand yen annually (with 30,000 thousand yen for outside directors)." If the director election proposal to be separately presented at the General Meeting is approved as originally proposed, there will be three Target Directors.
Reason for the Need to Offer Stock Acquisition Rights Under Particularly Favorable Terms
The company plans to issue stock acquisition rights free of charge to Target Directors and employees in order to further enhance their motivation and morale toward improving performance, and to promote management that places greater emphasis on shareholders.
Details of the Stock Acquisition Rights Issuance
Recipients of Stock Acquisition Rights Target Directors and employees.
Type and Number of Shares Underlying the Stock Acquisition Rights
The underlying shares will be limited to a maximum of 30,000 shares of the company's common stock.
If the company conducts a stock split or reverse stock split, the number of shares underlying the stock acquisition rights will be adjusted according to the following formula upon the effectiveness of such event.
However, such adjustments will only apply to stock acquisition rights for which the rights have not been exercised as of the time of adjustment. Any fractional shares arising from such adjustments will be discarded.
Adjustment = Previous Number of Shares × Split or Reverse Split Ratio
Total Number of Stock Acquisition Rights to be Issued
The total number of stock acquisition rights to be issued will be capped at 300 rights. (One stock
acquisition right corresponds to 100 shares of common stock. If the adjustment of the shares as mentioned in (2) above is made, the same adjustment will be applied accordingly.)
Payment Requirement for the Stock Acquisition Rights
No payment is required in exchange for the issuance of the stock acquisition rights.
Value of the Property Contributed Upon Exercise of Stock Acquisition Rights (Exercise Price)
The value of the property contributed upon exercise of each stock acquisition right will be calculated by multiplying the exercise price per share by the number of shares underlying the stock acquisition right.
The exercise price will be the average closing price of the company's stock on the Tokyo Stock Exchange (excluding days when there is no transaction) during the month prior to the issuance date, multiplied by 1.03, rounded up to the nearest yen. However, if this amount is lower than the closing price on the issuance date (or the most recent closing price if no transaction occurred on that day), the closing price will be used.
In addition, if the company issues new shares at a price lower than the market price (except in the case of exercise of stock acquisition rights) or disposes of treasury stock, the exercise price will be adjusted according to the following formula, with any fractional amounts less than one yen being rounded up.
Adjustment = Previous Exercise Price × (Number of Existing Shares / (Number of Existing Shares + Number of New Shares Issued))
The "Existing Shares" refers to the total number of issued shares of the company, excluding the company's treasury shares. If the company disposes of treasury stock, the "Number of New Shares Issued" will be replaced with the "Number of Treasury Shares Disposed."
Furthermore, if the company conducts a stock split or reverse stock split after the issuance of stock acquisition rights, the exercise price will be adjusted according to the following formula upon the effectiveness of such event, with any fractional amounts less than one yen being rounded up.
Adjustment = Previous Exercise Price × Split or Reverse Split Ratio
Exercise Period for the Stock Acquisition Rights From July 1, 2027, to June 30, 2030.
Conditions for the Exercise of Stock Acquisition Rights
The recipient of the stock acquisition rights (hereinafter referred to as the "Right Holder") must be a director, auditor, or employee of the company at the time of exercise, but if the Right Holder's term ends due to retirement, normal retirement, or other legitimate reasons, this condition will not apply for one year after such termination.
Inheritance of stock acquisition rights is not allowed.
Pledging or any other disposal of stock acquisition rights is not allowed.
Acquisition of Stock Acquisition Rights by the Company and Conditions
The company may acquire the stock acquisition rights without charge in the event of a merger in which the company is the surviving company, a company split where the company is the splitting company, or a stock exchange in which the company becomes a wholly-owned subsidiary, as approved at a shareholders' meeting.
The company may acquire the stock acquisition rights without charge if the Right Holder no longer meets the conditions outlined in (7)(i) prior to exercising the stock acquisition rights.
Transfer Restrictions on the Stock Acquisition Rights
The transfer of stock acquisition rights is subject to the approval of the Board of Directors.