TOKYO, Japan, February 8, 2024 ― Renesas Electronics Corporation (“Renesas”, TSE:6723), a premier supplier of advanced semiconductor solutions, today announced that it has decided to dispose treasury shares (the “Disposal of Treasury Shares”) under the restricted stock units (“RSUs”) granted by the stock compensation plan, whereby shares of common stock will be delivered after vesting.
1. Summary of Disposal
| (1) Payment Date | March 1, 2024 (the Disposal of Treasury Shares for payment on March 1, 2024 is hereinafter referred to as the "March 1 payment”) March 11, 2024 (the Disposal of Treasury Shares for payment on March 11, 2024 is hereinafter referred to as the "March 11 payment”) |
| (2) Class and Number of Shares to be Disposed | <March 1 payment> 293,256 shares of Renesas’ common stock <March 11 payment> 133,300 shares of Renesas’ common stock |
| (3) Disposal Price | <March 1 payment> 2,374 yen per share <March 11 payment> 2,374 yen per share |
| (4) Total Disposal Price | <March 1 payment> 696,189,744 yen <March 11 payment> 316,454,200 yen |
| (5) Proposed Allottee | <March 1 payment> 5,600 shares will be allotted to 3 employees of Renesas <March 11 payment> 133,300 shares will be allotted to 6 employees of Renesas’ subsidiaries |
| (6) Others | For the purpose of the Disposal of Treasury Shares, Renesas will file a securities notification with respect to the offering of shares in Japan (5,600 shares for March 1 payment) and an extraordinary report with respect to the overseas offering of shares (420,956 shares in total: 287,656 shares for March 1 payment and 133,300 shares for March 11 payment), in accordance with the Financial Instruments and Exchange Act. |
2. Purpose and Reason of Disposal
In April 2021, Renesas revised its incentive plans for the directors, executive officers and employees of Renesas and its subsidiaries (“Eligible Grantees”) and introduced the new stock compensation plan (the “Plan”), whereby shares are delivered to the Eligible Grantees after vesting.
The Disposal of Treasury Shares will be implemented pursuant to the resolution of the Board of Directors of Renesas adopted on February 8, 2024, upon the vesting of certain RSUs which Renesas has granted to the Eligible Grantees under the Plan.
(Details of the Plan)
(1) Eligible Grantees
Directors, executive officers and employees of Renesas and its subsidiaries.
(2) Overview of RSU
The RSUs granted under the Plan are stock compensation in which Renesas grants the number of units predetermined by Renesas to the Eligible Grantees in advance, and then delivers shares of its common stock to the Eligible Grantees in accordance with the number of units that vest based on the service continuation period. In principle, in the case of Eligible Grantees other than outside directors, one-third of the number of units granted (corresponding to three years) will be vested for every one year has passed, and, in the case of outside directors, the total number of units granted (corresponding to one year) will be vested for one year has passed.
With respect to the RSUs that may be granted in connection with any special situation, such as when RSUs are granted to executives and employees of an acquired company where stock compensation granted by the acquired company are extinguished, or when RSUs are granted in connection with a reduction in the basic salary, Renesas may vest the units in a period different from above.
(3) Method and Timing of Delivery of Shares of Renesas
On each vesting date, Renesas, pursuant to a resolution of its Board of Directors, will allot to the Eligible Grantees the shares of Renesas’ common stock corresponding to the number of vested units (one share per unit) in exchange for the contribution in kind by such Eligible Grantees of all of the monetary compensation receivables provided to such Eligible Grantees, by way of issuance of new shares of Renesas’ common stock or disposal of treasury shares.
The payment amount per share delivered under RSUs under the Plan is the closing price of the shares of Renesas’ common stock on the Tokyo Stock Exchange on the business day immediately prior to the date of the resolution of the Board of Directors for the delivery of Renesas’ common stock (or, if no transaction is effected on the same day, the closing price on the most recent trading day prior thereto).
(4) Handling at the time of retirement
The vesting of the units shall be made, in principle, subject to the condition that the Eligible Grantees are directors, executive officers, or employees, etc., of Renesas or its subsidiaries at the time of the vesting. However, even if the Eligible Grantees lose their position prior to the vesting of the units, in the event of losses of positions due to causes predetermined by the Board of Directors of Renesas, the number of the shares of Renesas’ common stock to be delivered and the timing of the delivery may be adjusted by the method provided by its Board of Directors.
3. Basis for and Details of Calculation of the Payment Amount
The Disposal of Treasury Shares will be made in exchange for the contribution of the monetary compensation receivables provided to each proposed allottee. In order to exclude arbitrariness, Renesas determined that the payment amount be 2,374 yen, being the closing price of the shares of Renesas’ common stock on the Tokyo Stock Exchange on February 7, 2024 (the business day immediately prior to the date of the resolution of the Board of Directors of Renesas). The payment amount per share is the market share price immediately preceding the Board of Directors’ resolution date, and Renesas considers it is a reasonable price appropriately reflecting its corporate value without being particularly advantageous for any of the proposed grantees.
4． Procedures in accordance with the Corporate Code of Conduct
Renesas is not required to execute procedures to obtain an independent third-party opinion and confirm the intent of shareholders as prescribed in Article 432 of the Securities Listing Regulations of the Tokyo Stock Exchange because (i) the dilution resulting from the Disposal of Treasury Shares is below 25%, and (ii) does not involve any changes in controlling shareholders.
About Renesas Electronics Corporation
Renesas Electronics Corporation (TSE: 6723) empowers a safer, smarter and more sustainable future where technology helps make our lives easier. The leading global provider of microcontrollers, Renesas combines our expertise in embedded processing, analog, power and connectivity to deliver complete semiconductor solutions. These Winning Combinations accelerate time to market for automotive, industrial, infrastructure and IoT applications, enabling billions of connected, intelligent devices that enhance the way people work and live. Learn more at renesas.com. Follow us on LinkedIn, Facebook, Twitter, YouTube, and Instagram.
(FORWARD-LOOKING STATEMENTS)
The statements in this press release with respect to the plans, strategies and financial outlook of Renesas and its consolidated subsidiaries (collectively “we”) are forward-looking statements involving risks and uncertainties. Such forward-looking statements do not represent any guarantee by management of future performance. In many cases, but not all, we use such words as “aim,” “anticipate,” “believe,” “continue,” “endeavor,” “estimate,” “expect,” “initiative,” “intend,” “may,” “plan,” “potential,” “probability,” “project,” “risk,” “seek,” “should,” “strive,” “target,” “will” and similar expressions to identify forward-looking statements. You can also identify forward-looking statements by discussions of strategy, plans or intentions. These statements discuss future expectations, identify strategies, contain projections of our results of operations or financial condition, or state other forward-looking information based on our current expectations, assumptions, estimates and projections about our business and industry, our future business strategies and the environment in which we will operate in the future. Known and unknown risks, uncertainties and other factors could cause our actual results, performance or achievements to differ materially from those contained or implied in any forward-looking statement, including, but not limited to, general economic conditions in our markets, which are primarily Japan, North America, Asia, and Europe; demand for, and competitive pricing pressure on, products and services in the marketplace; ability to continue to win acceptance of products and services in these highly competitive markets; and fluctuations in currency exchange rates, particularly between the yen and the U.S. dollar. Among other factors, downturn of the world economy; deteriorating financial conditions in world markets, or deterioration in domestic and overseas stock markets, may cause actual results to differ from the projected results forecast.
This press release is based on the economic, regulatory, market and other conditions as in effect on the date hereof. It should be understood that subsequent developments may affect the information contained in this presentation, which neither we nor our advisors or representatives are under an obligation to update, revise or affirm.