T&D : 【T&D Holdings, Inc.】Notice regarding the Issuance of Stock-Compensation-Type Stock Options (Stock Acquisition Rights)(128 KB)

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June 28, 2016

T&D Holdings, Inc. Tetsuhiro Kida, President (Security Code: 8795)

Notice regarding the Issuance of Stock-Compensation-Type Stock Options (Stock Acquisition Rights)

T&D Holdings, Inc. (Tetsuhiro Kida, President; the "Company") of T&D Life Group hereby announces that at a meeting of the board of directors held on June 28, 2016, the Company resolved that stock acquisition rights are to be issued as stock-compensation-type stock options to directors (excluding outside directors) and executive officers of the Company, Taiyo Life, Daido Life, and T&D Financial Life, pursuant to articles 236, 238, and 240 of the Companies Act, as follows.

1. Reason for the Issuance of the Stock Acquisition Rights as Stock Options

   The Company is to issue the stock acquisition rights as stock-compensation-type stock options for directors (excluding outside directors) and executive officers of the Company, Taiyo Life, Daido Life, and T&D Financial Life, in order to boost their motivation to further contribute to the improvement of corporate value.

2. Terms and Conditions of the Stock Acquisition Rights

3. Name of the stock acquisition rights

   T&D Holdings, Inc. Stock Acquisition Rights (5th series)

4. Aggregated number of stock acquisition rights 5,500

   The aggregated number stated above is the number of the stock acquisition rights planned to be allotted. If the aggregated number of stock acquisition rights to be allotted is decreased (e.g., in the case where subscription applications for some of the stock acquisition rights are not made), the aggregated number of stock acquisition rights to be issued shall be equal to the aggregated number of stock acquisition right to be allotted.

5. Persons to be allotted stock acquisition rights and number of such persons, and number of stock acquisition rights to be allotted

   Directors and executive officers of the Company 1,221 for 10 persons Directors and executive officers of subsidiaries of the Company 4,279 for 48 persons

6. Class and number of shares underlying the stock acquisition rights

   The class of shares underlying the stock acquisition rights shall be common stock of the Company, and the number of shares underlying each stock acquisition right shall be 100 (the "Number of Shares Granted").

   In the event the Company carries out a share split or share consolidation of common stock of the Company after the date of the allotment of the stock acquisition rights as provided in Section (14) below (the "Allotment Date"), the Number of Shares Granted shall be adjusted according to the following formula, with the resulting fractions of less than one share occurring upon such adjustment being rounded down.

   Number of Shares Granted after = adjustment

   Number of Shares Granted before adjustment

   Ratio of share split or x share consolidation

   In the case of a share split, the Number of Shares Granted after adjustment shall apply from the day after the record date of the said share split (or the effective date, when no record date is specified). In the case of a share consolidation, the Number of Shares Granted after adjustment shall apply from the day the share consolidation becomes effective. However, in cases where the Company conducts a share split conditional on approval at a general meeting of shareholders of the Company of a proposal to reduce surplus and increase stated capital, additional paid-in capital or retained earnings reserve and where the record date for the share split is to be any day on or before the closing of the said shareholders' meeting, the Number of Shares Granted after adjustment shall apply from the day after the closing of the applicable shareholders' meeting.

   In addition to the above, in the case where the Company carries out a merger, company split, share exchange, share transfer, allotment of shares without contribution, or the like that makes it necessary to adjust the Number of Shares Granted after the Allotment Date, the Company shall appropriately adjust the Number of Shares Granted within a necessary and reasonable range.

7. Amount of assets to be contributed upon the exercise of the stock acquisition rights

   The amount of assets to be contributed upon the exercise of the stock acquisition rights shall be the amount obtained by multiplying the amount of assets to be contributed per share granted upon the exercise of each stock acquisition right, which shall be one (1) yen, by the Number of Shares Granted.

8. Method for calculating the amount to be paid in for the stock acquisition rights

   The amount to be paid in for each stock acquisition right shall be the option price per share calculated based on the following figures from 2) to 7) according to the following formula, multiplied by the Number of Shares Granted, with fractions of less than one yen rounded up the nearest yen.

   C Se t

   N d1

   e rt

   XN d 2

   Here,

   ln

   d1

   S r

   X

   t

   2

   t

   2

   , d 2 d1 t

9. Option price per share ( C)

10. Share price ( S): the closing price (base price for the next trading day when there is no closing price) of the common stock of the Company in regular trading on the Tokyo Stock Exchange on August 1, 2016.

11. Exercise price ( X ): ¥1

12. Expected remaining period ( t): 5.89 years

13. Volatility ( ): Calculated based on the closing price of the common stock of the Company in regular trading on each trading day for 5.89 years (from September 13, 2010 to August 1, 2016) .

14. Risk-free interest rate ( r ): The interest rate on Japanese government bonds with remaining years corresponding to the expected remaining period.

15. Dividend yield ( ): Dividend per share (the amount of dividend to be paid for the fiscal year ended March, 2016) divided by the share price as set forth 2) above.

16. Cumulative distribution function of the standard normal distribution ( N )

    The option price to be calculated as described above is a fair value of the stock acquisition rights. Accordingly, the issuance of the stock acquisition rights is not an issuance with favorable terms. The monetary remuneration claims of the person to be allotted the stock acquisition rights against the Company and the obligation to pay the aggregate amount to be paid in for the stock acquisition right will be offset.

17. Exercise period for stock acquisition rights From August 2, 2016 to August 1, 2046.

18. Terms and conditions for exercising stock acquisition rights

19. Holders of stock acquisition rights may exercise stock acquisition rights within 10 days (if the 10th day does not fall upon the business day of the Company, within the period up to the next business day) from the day after such holders of the stock acquisition rights are relieved of their positions either as directors or executive officers of the Company, Taiyo Life, Daido Life, or T&D Financial Life.

20. Notwithstanding 1) above, holders of stock acquisition rights may exercise their stock acquisition rights for a period of 30 days after the approval date in cases where a resolution for the approval of any proposed merger agreement under which the Company is to be a merged company, company split agreement or company split plan under which the Company is to be a split company, or share exchange agreement or share transfer plan under which the Company is to be a wholly-owned subsidiary is adopted at the General Meeting of Shareholders of the Company (or, if a resolution at a General Meeting of Shareholders is not required, a resolution of the Board of Directors of the Company or a decision by an executive officer delegated pursuant to the provisions of Article 416, Paragraph 4 of the Companies Act is made). However, the foregoing shall not apply to the cases where stock acquisition rights of the Restructured Company are granted to holders of stock acquisition rights in accordance with the stipulation concerning the grant of stock acquisition rights in relation to organizational restructuring as provided in Section (12) below.

21. Any other terms and conditions shall be governed by the "Stock Acquisition Rights Allocation Agreement" to be concluded between the Company and each holder of stock acquisition rights.

22. Matters concerning increases in stated capital and additional paid-in capital in the case of the issuance of shares upon the exercise of stock acquisition rights

23. The amount of increase in stated capital in the case of the issuance of shares upon the exercise of stock acquisition rights shall be half of the upper limit of the

    capital increase calculated pursuant to the provisions of Article 17, Paragraph 1 of the Ordinance for Corporate Accounting, with fractions of less than one yen occurring upon such calculation rounded up to the nearest yen.

24. The amount of increase in additional paid-in capital in the case of the issuance of shares upon the exercise of stock acquisition rights shall be the upper limit of the capital increase described in 1) above less the amount of increase in stated capital set out therein.

25. Conditions for the acquisition of stock acquisition rights

    If a resolution for the approval of any of proposals 1), 2), 3), 4), or 5) below is adopted at the General Meeting of Shareholders of the Company (or, if a resolution at a General Meeting of Shareholders is not required, a resolution of the Board of Directors of the Company or a decision by an executive officer delegated pursuant to the provisions of Article 416, Paragraph 4 of the Companies Act is made), the Company may acquire the stock acquisition rights as of the date specifically determined by the Board of Directors of the Company without compensation.

26. Proposal for approval of a merger agreement under which the Company is to be a merged company

27. Proposal for approval of a company split agreement or company split plan under which the Company is to be a split company

28. Proposal for approval of a share exchange agreement or share transfer plan under which the Company is to be a wholly-owned subsidiary

29. Proposal for approval of an amendment to the Articles of Incorporation to stipulate as terms and conditions of all shares issued by the Company that the Company's approval is to be required for the acquisition of such shares by transfer

30. Proposal for approval of an amendment to the Articles of Incorporation to stipulate as terms and conditions of the class of shares underlying the stock acquisition right that the Company's approval is required for the acquisition of such class of shares by transfer, or that the Company acquires all of such class of shares by a resolution at a General Meeting of Shareholders

31. Restriction on the acquisition of stock acquisition rights by transfer

    Any acquisition of stock acquisition rights by transfer shall be subject to approval by a resolution of the Board of Directors of the Company.

32. Matters concerning the grant of stock acquisition rights in relation to organizational restructuring

If the Company merges (limited to cases where the Company dissolves due to such mergers), performs an absorption-type company split or an incorporation-type company split (each is limited to cases where the Company becomes the split company), or conducts a share exchange or a share transfer (each is limited to cases where the Company becomes a wholly-owned subsidiary) (collectively, the "Organizational Restructuring"), the stock acquisition rights of a corporation described in (i) through (ho) of Article 236, Paragraph 1, Item 8 of the Companies Act (the "Restructured Company") shall be granted to holders of stock acquisition rights which remain outstanding immediately before the date when the Organizational Restructuring takes effect ("the date when the Organizational Restructuring take effect" means the date when absorption-type merger takes effect in the case of absorption-type merger,