TOKYO, Japan, April 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”) and the performance share units (“PSUs”) granted by the stock compensation plan, whereby shares of common stock will be delivered after vesting.
1. Summary of Disposal
| (1) Payment Date | April 30, 2024 (the Disposal of Treasury Shares for payment on April 30, 2024 is hereinafter referred to as the "April 30 payment") May 1, 2024 (the Disposal of Treasury Shares for payment on May 1, 2024 is hereinafter referred to as the "May 1 payment") |
| (2) Class and Number of Shares to be Disposed | <April 30 payment> 5,944,841 shares of Renesas’ common stock <May 1 payment> 3,958,100 shares of Renesas’ common stock |
| (3) Disposal Price | <April 30 payment> 2,697 yen per share <May 1 payment> 2,697 yen per share |
| (4) Total Disposal Price | <April 30 payment> 16,033,236,177 yen <May 1 payment> 10,674,995,700 yen |
| (5) Proposed Allottee | <April 30 payment> 1,766,300 shares will be allotted to 923 persons (directors, an executive officer, executive corporate officers and employees of Renesas) 4,178,541 shares will be allotted to 2,318 persons (directors, executive corporate officers and employees of Renesas' subsidiaries (including 16 retired persons)) <May 1 payment> 496,100 shares will be allotted to 722 persons (directors, an executive officer, executive corporate officers and employees of Renesas) 3,462,000 shares will be allotted to 4,678 persons (directors, executive corporate officers and employees of Renesas' subsidiaries) |
| (6) Others | Of the Disposal of Treasury Shares, the offering in Japan (1,499,400 shares in total: 1,143,000shares for April 30 payment and 356,400 shares for May 1 payment) is conditioned upon the securities registration statement filed under the Financial Instruments and Exchange Act of Japan becoming effective. |
2. Purpose and Reason of Disposal
In April 2021, Renesas revised its incentive plans for the executives 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 April 8, 2024, upon the vesting of certain RSUs and PSUs which Renesas has granted to the Eligible Grantees under the Plan.
(Details of the Plan)
(1) Eligible Grantees
Directors, executive officers, executive corporate 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) Overview of PSU
The PSUs granted under the Plan are stock compensation in which Renesas provides the Eligible Grantees in advance with the units in a number determined by it; vests the units in a number determined in accordance with the extension rate of the total shareholder return of Renesas during three-year period from April 1 of the year in which the units are granted; and then delivers shares of Renesas’ common stock to such Eligible Grantees in accordance with the vested units.
On the basis of the number of units granted, Renesas will vest the PSUs in a number obtained by multiplying a certain coefficient determined in accordance with the extension rate of total shareholders return of Renesas for the period of three years from April 1 of the year in which the PSUs are provided.
(4) 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 transfer of existing shares.
The payment amount per share delivered under RSUs and PSUs 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).
(5) 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 2,697 yen, being the closing price of the shares of Renesas’ common stock on the Tokyo Stock Exchange on April 5, 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. A 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.