ºÚÁÏÍø

Listed Company Name:ºÚÁÏÍø., Ltd.
Representative:Haruo Naito
Representative Corporate Officer and CEO
Headquarters:4-6-10 Koishikawa,
Bunkyo-ku, Tokyo
Securities Code:4523
Listed Locations:First Section of the
Tokyo Stock Exchange
Inquiries:Sayoko Sasaki
Vice President,
Corporate Affairs
Phone 81-3-3817-5120

At the Board of Directors meeting held on May 13, 2016, ºÚÁÏÍø., Ltd. (Headquarters: Tokyo, Representative Corporate Officer and CEO: Haruo Naito, hereinafter “the Company”) resolved to dispose of treasury stock (by means of third-party allotment) in accordance with the continuation of performance-related stock compensation system (hereinafter the “System”) for its Corporate Officers to be determined by the Compensation Committee of the Company.

The Company is a company with a nominating committee, etc. and the Compensation Committee thereof determines the compensation, etc., of Directors and Corporate Officers. In the Compensation Committee meeting held on May 13, 2016, the Compensation Committee of the Company, with the purpose of achieving higher motivation for the Corporate Officers' execution of their duties and to increase the motivation of Corporate Officers to enhance medium to long-term corporate value, has decided to continue the System that has been introduced from the 2013 fiscal year.

With the above revision of the System, the compensation system for Corporate Officers will continue to be composed of “basic compensation,” a “bonus” (being performance-related), and “stock compensation.”

For a summary of the System, please refer to the “Notification Regarding the Continuation and Partial Revision of the Performance-Related Stock Compensation System,” which was announced today.

This disposal of treasury stock refers to the disposal thereof to The Master Trust Bank of Japan, Ltd. (Trust Account for Officers' Compensation Board Incentive Plan (BIP)), which is a joint trustee of the Officers' Compensation Board Incentive Plan (BIP) trust agreement executed by the Company with Mitsubishi UFJ Trust and Banking Corporation, by means of third-party allotment in accordance with the continuation of the System.

The Company believes that the planned use of the funds to be procured by disposal of the treasury stock is reasonable, as it will contribute to the operation of the Company's business.

(1) Basis for calculation of disposal price
In view of the recent fluctuations in the stock price, in order to determine the disposal price in a non-arbitrary fashion, the Company will determine the disposal price as being the higher of either (i) the closing price of the Company's shares traded on the Tokyo Stock Exchange on the business day immediately preceding the date of the Board of Directors meeting at which the resolution for this disposal has been made, or (ii) the average closing price of the Company's shares traded on the Tokyo Stock Exchange in the one-month period immediately preceding the date of the Board of Directors meeting at which the resolution for this disposal has been made (i.e., from April 13, 2016 to May 12, 2016).

As a result, the amount to be paid per share has been set at ¥ 6,939, being the average closing price of the Company's shares traded on the Tokyo Stock Exchange in the one-month period immediately preceding the date of the Board of Directors meeting (105% of the closing price (¥ 6,594) of the Company's shares traded on the Tokyo Stock Exchange on the business day immediately preceding the date of the Board of Directors meeting).

The reason for adopting the disposal price, by comparing (i) the closing price of the Company's shares traded on the Tokyo Stock Exchange on the business day immediately preceding the resolution at the Board of Directors meeting and (ii) the average closing price of the Company's shares traded on the Tokyo Stock Exchange in the one-month period immediately preceding the resolution at the Board of Directors meeting, is because the Company believes that adopting the disposal price by way of comparison with the average share price over a given period, rather than being based on the share price at one particular point in time, is a reasonable basis for calculation.

In addition, the relevant price per share represents a premium of +0% over the average closing price, rounded down to the nearest yen (¥ 6,921), on the Tokyo Stock Exchange in the three-month period immediately preceding the date of the resolution at the Board of Directors meeting (i.e., from February 13, 2016 to May 12, 2016), or a premium of -5% over the average closing price, rounded down to the nearest yen (¥ 7,304), on the Tokyo Stock Exchange in the six-month period immediately preceding the date of the resolution at the Board of Directors meeting (i.e., from November 13, 2015 to May 12, 2016). The Company therefore believes that the relevant disposal price is not especially favorable to the allottee.

The Audit Committee of the Company has expressed its opinion that the adoption of the disposal price, as the higher of either (i) the closing price of the Company shares traded on the Tokyo Stock Exchange on the business day immediately preceding the date of the resolution at the Board of Directors meeting, or (ii) the average closing price of the Company's shares traded on the Tokyo Stock Exchange in the one-month period immediately preceding the date of the resolution at the Board of Directors meeting (i.e., from April 13, 2016 to May 12, 2016), is a reasonable basis for calculating the disposal price, and that it is not especially favorable to the allottee.

(2) Basis of assessing that the number of shares being disposed of and level of share dilution are reasonable
The number of shares to be disposed of is the number of shares expected to be issued to the Corporate Officers of the Company during the trust period in accordance with the Basic Policy on Distribution of Shares (including paying the monetary amount equivalent to part of the shares converted to cash after the Company's shares are converted within the trust). The level of share dilution is equal to 0.01% of the issued and outstanding shares (rounded off to two decimal places, and 0.01% of the total voting right 2,856,134 units as of the end of March 2016), which is minimal.

In addition, as the shares of the Company allotted through this disposal of treasury stock shall in principle be issued to the Corporate Officers of the Company in accordance with the Basic Policy on Distribution of Shares, the Company believes that there will only be a minor effect on the secondary market.

Based on the above reasons, this is a reasonable decision as there will only be an extremely minor effect caused by the disposal of the treasury stock.

(2)Reason for selecting the allottee
In accordance with the continuation of the System, the shares will be disposed to The Master Trust Bank of Japan, Ltd. (Trust Account for Officers' Compensation Board Incentive Plan (BIP)), which is a joint trustee of the Officers' Compensation Board Incentive Plan (BIP) trust agreement executed by the Company with Mitsubishi UFJ Trust and Banking Corporation.

(3)Allottee's policy on holding shares
In accordance with the above-mentioned Trust Agreement, the allottee, The Master Trust Bank of Japan, Ltd. (Trust Account for Officers' Compensation Board Incentive Plan (BIP)), will possess the shares of the Company allotted by means of the disposal of treasury stock in order to distribute the shares of the Company to the Corporate Officers of the Company during the Trust Period in accordance with the Basic Policy on Distribution of Shares.
Furthermore, if the allottee, The Master Trust Bank of Japan, Ltd. (Trust Account for Officers' Compensation Board Incentive Plan (BIP)), transfers all or part of the disposed-of shares within a two-year period from the allotment, a confirmation letter is expected to be received with respect to concluding a pledge agreement with the Company, under which the allottee shall immediately report to the Company, in writing, the purchaser's name and address, the number of shares transferred, the transfer date, transfer price, transfer reason, transfer method, etc., thereof, and the Company shall report the details of such report to the Tokyo Stock Exchange, Inc., and the details of such report shall be made available for public inspection.

(4)Confirmation that the allottee has the funds required for payment
The Company has confirmed through the above-mentioned Trust Agreement that, with respect to the monetary equivalent to the funds required for payment by the allottee, the residual money in the trust and the trust money to be contributed by the Company to the System will exist within the trust assets as of the disposal date.

This transaction does not constitute a transaction with a controlling shareholder.

There will be no impact on either the current accounting term or thereafter.

Since the stock dilution resulting from this transaction is less than 25%, and since this disposal does not cause a change in a controlling shareholder, it is not required to obtain an opinion from an independent third party and to confirm the intention of the shareholders as set forth in Rule 432 of the Securities Listing Regulations established by the Tokyo Stock Exchange, Inc.

There are no applicable matters.

(However, the purchase portion of shares of less than one unit and the exercise portion of stock options after April 1, 2016 are not included in the above.)

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