(Translated)
July 20, 2018
To whom it may concern
Itoham Yonekyu Holdings Inc.
President and Representative Director: Isao Miyashita(Tokyo Stock Exchange Securities Code: 2296)
Inquiries: Akira Kotake
Manager Investor Relations Section
Tel: +81-3-5723-6889

Notice Regarding the Disposal of Treasury Stockas Restricted Stock Compensation
Itoham Yonekyu Holdings Inc. (“the Company”) hereby announces that its Board of Directors
resolved at a meeting held today to implement the disposal of treasury stock as restricted
stock compensation (“the Disposal of Treasury Stock”), as outlined below.
1.

2.

Outline of the Disposal(1) Date of disposal

August 9, 2018(2)

Class and number ofshares to be disposed

137,417 shares of common stock(3)

Disposal value¥903 per share(4)

Total disposal value(5)

Planned allottees

(6)

Other

¥124,087,551
Directors(*): 6 persons, 54,039 shares
Executive officers: 20 persons, 83,378 shares* Excludes outside directors.
The Disposal of Treasury Stock is subject to thesecurities registration statement taking effect inaccordance with the Financial Instruments and ExchangeAct.

Purpose and Reasons for the Disposal
At a meeting of the Company’s Board of Directors held on May 22, 2018, the Company
passed a resolution to introduce a stock compensation plan (the “Plan”) to grant
restricted shares to the Company’s directors (excluding outside directors) andexecutive officers, for the purpose of providing further incentive to the Company’sdirectors (excluding outside directors) and executive officers to increase the stock priceand the corporate value of the Company by further sharing the benefits and risks ofstock price fluctuations with shareholders. Moreover, at the Second Ordinary General
Meeting of Shareholders held on June 26, 2018, approval was given for the total
amount of monetary compensation claims to be paid as remuneration in connection
with the restricted shares to the Company’s directors (excluding outside directors)
based on the Plan to be set at no more than 80 million yen per year, and for themaximum amount of the total number of restricted shares to be allocated to theCompany’s directors (excluding outside directors) in each fiscal year to be set at
100,000 shares. Approval was also given for setting the restricted period for therestricted shares at a period between 20 to 30 years, with the exact period to bedetermined by the Company’s Board of Directors.
At a meeting of the Company’s Board of Directors held today, the Company passed aresolution to pay monetary compensation claims of 124,087,551 yen as remuneration
to the planned allottees, specifically the Company’s six directors (excluding outsidedirectors) and 20 executive officers (the “Allottees”), and to allocate 137,417 shares of
the Company's common shares as specified restricted shares to be paid for by theAllottees using all the monetary compensation claims as contributed assets. Theshares are provided as restricted share compensation to the Company’s directors(excluding outside directors) for the period from the Second Ordinary General Meetingof Shareholders to the Third Ordinary General Meeting of Shareholders scheduled tobe held in June 2019 and as restricted share compensation to the Company’s executive
officers for the Company’s third fiscal year (April 1, 2018 to March 31, 2019). The
amount of monetary compensation claims granted to each Allottee is determined bycomprehensively taking into consideration a wide range of factors, such as the extent of
the contribution of each Allottee to the Company. The monetary compensation claims
will be granted provided that each Allottee enters into a Restricted Stock Compensation
Agreement (the “Stock Compensation Agreement”) with the Company, as summarized
below.
The purpose of introducing the Plan is to provide further incentive to the Allottees toincrease the stock price and the corporate value of the Company by further sharing thebenefits and risks of stock price fluctuations with shareholders. In order to realize thispurpose of the Plan over the longest period possible, the restricted period has been set
as a period of 30 years.
3.

Overview of the Stock Compensation Agreement(1) Restricted Period
August 9, 2018 to August 8, 2048
During the restricted period specified above (the “Restricted Period”), the Allottees
may not dispose of the restricted shares allocated to each Allottee (the “AllocatedShares”) in any way including through transfers, pledges, mortgages,advancements or bequests to third parties (the “Restrictions”).
(2)

Free of Charge Acquisition of the Restricted SharesIf, prior to the day before the date of the first Ordinary General Meeting ofShareholders of the Company following the beginning of the Restricted Period (ifthe Allottee is an executive officer of the Company, the day before the date of theCompany’s first fiscal year-end following the beginning of the Restricted Period),an Allottee loses his or her position as a director or executive officer of theCompany, with the exception of cases recognized as legitimate by the Board ofDirectors such as the expiration of his or her term of office, the Company shall, as amatter of course, acquire all of the allocated shares free of charge upon the loss ofposition.
In addition, any Allocated Shares that did not have their restrictions lifted basedon the grounds for the lifting of restrictions set forth in (3) below when theRestricted Period expires (the “Expiry of the Restricted Period”). The Company

shall, as a matter of course, acquire such Allocated Shares free of charge
immediately after the Expiry of the Restricted Period.
(3)

Lifting of Restrictions
Upon the Expiry of the Restricted Period, the Company shall lift the restrictions on
all Allocated Shares held by an Allottee at that time provided that the Allottee hasretained the position of director or executive officer of the Company from thebeginning of the Restricted Period through to the date of the first Ordinary General
Meeting of the Shareholders of the Company following the beginning of theRestricted Period (if the Allottee is an executive officer of the Company, theCompany’s first fiscal year-end following the beginning of the Restricted Period).
However, if an Allottee loses the position of either director or executive officer ofthe Company prior to the expiry of the Restricted Period for reasons recognized as
legitimate by the Board of Directors, such as the expiration of his or her term ofoffice, then the Company shall lift the restrictions immediately after the loss of theposition for a number of Allocated Shares computed by multiplying the number ofAllocated Shares by a factor determined by dividing the number of months counted
from July 2018 (if the Allottee is an executive officer of the Company, from April2018) to the month that includes the date on which the Allottee loses the position ofeither director or executive officer, by 12 (however, if the computed factor is greaterthan 1, then the factor shall be 1 and any figures less than one share arising fromthe calculation shall be rounded down).

(4)

Provisions Concerning the Administration of Shares
The Allottees shall complete the process of opening accounts with SMBC Nikko
Securities Inc. to register and record the Allocated Shares through the methods
designated by the Company, and hold and maintain the Allocated Shares in theseaccounts until the restrictions are lifted.

(5)

Treatment of Allocated Shares Upon Reorganization of the Company
If, during the Restricted Period, a merger agreement in which the Company
becomes a non-surviving company, a share exchange agreement or a sharetransfer plan under which the Company becomes a wholly-owned subsidiary ofanother company or any other matters related to reorganization, etc. are resolved
at a General Meeting of Shareholders of the Company (or by the Board of
Directors of the Company, if the approval of the General Meeting of Shareholdersof the Company is not required) (however, only when the effective date of thereorganization, etc. falls before the Expiry of the Restricted Period, hereinafter,“when the Reorganization, etc. is approved”), and if the Allottees will lose thepositions of either director or executive officer in connection with the reorganization,etc., the Company shall lift the restrictions for a number of Allocated Sharescomputed by multiplying the number of Allocated Shares held by the Allottee on
the approval date by a factor determined by dividing the number of months
counted from July 2018 (if the Allottee is an executive officer of the Company, fromApril 2018) to the month that includes the approval date, by 12 (however, if thecomputed factor is greater than 1, then the factor shall be 1, and any figures less

than one share arising from the calculation shall be rounded down), with therestrictions to be lifted on the business day before the effective date of thereorganization, etc.
In addition, when the reorganization, etc. is approved, on the business day
before the effective date of the reorganization, etc., the Company shall, as a matterof course, acquire free of charge all of the Allocated Shares for which restrictions
have not been lifted on the aforementioned business day.
4.

Basis for the Calculation of the Amount Paid in Per Share and Related Specific Details
The disposal value for the Disposal of Treasury Stock has been set at 903 yen pershare, the closing price of the common shares of the Company on the Tokyo Stock
Exchange on the business day (July 19, 2018) immediately preceding the date ofresolution of the Board of Directors of the Company. The disposal value has been set inthis manner to remove any arbitrariness from the valuation. This disposal value
represents the fair stock price immediately preceding the resolution of the Board ofDirectors of the Company. Therefore, the Company believes that the disposal value isreasonable and has not been set at a particularly advantageous amount.