TOKYO - Astellas Pharma Inc. (TSE: 4503, President and CEO: Kenji Yasukawa, Ph.D., 'the Company') today announced that the meeting of the Board of Directors held today passed a resolution of the details of the incentive plan ('Plan') to be implemented in fiscal year 2020 based on the Performance-linked Stock Compensation Scheme ('Scheme') for the Company's Directors (excluding outside Directors and Directors who are Audit & Supervisory Committee Members; hereinafter 'Directors') as described below.
Objective for the Scheme
The Scheme is a medium- to long-term-based incentive plan, for the Directors that is highly transparent and objective, and closely linked with the Company's enterprise and shareholder value with the aim of promoting management focused on increasing enterprise and shareholder value over the medium- to long-term.
The Scheme adopts a structure called the executive compensation BIP (Board Incentive Plan) trust ('BIP Trust'). BIP Trust is an executive incentive plan modeled on Performance Share and Restricted Stock systems in the U.S.The BIP Trust acquires the Company's shares and conducts a 'delivery of the Company's shares' (as set forth in 3. (5) below; hereinafter the same) to the Directors based on the level of growth of enterprise and shareholder value, etc.
The Structure of the BIP Trust
Based on the Scheme, the Company shall resolve on the implementation and content of the Plan for fiscal year 2020 at the meeting of the Board of Directors.
The Company will put money in trust, to establish the BIP Trust, which will be the trust in which the beneficiaries shall be the Directors who have satisfied the beneficiary conditions ('Trust'). The money entrusted in the Trust shall be within the scope of approval of the 14th Term Annual Shareholders Meeting.
The Trust, in accordance with the instructions of the trust administrator, will use the money entrusted in 2) to acquire the Company's shares on the stock market.
Dividends for the Company's shares in the Trust will be paid in the same way as with other shares of the Company.
Voting rights are not to be exercised on the Company's shares within the Trust throughout the trust period.
During the trust period, beneficiaries will receive delivery of the Company's shares in accordance with the Company's Share Delivery Policy.
In the event that residual shares remain at the expiration of the trust period mainly due to the extent to which enterprise and shareholder value have achieved growth during the trust period, the Trust will continue to be used as an incentive plan based on the Scheme by making changes to the trust agreement and additional entrustments (1), or otherwise a gratis transfer of these residual shares will be made from the Trust to the Company, and upon acquiring these shares the Company plans to implement the cancellation of them by resolution of the Board of Directors.
Upon conclusion of the Trust, the residual assets remaining after allocation to the beneficiaries are to belong to the Company within the scope of the reserve fund for trust expenses after deductions for stock purchases from trust money. In the event that there remain residual assets beyond the scope of the reserve fund for trust expenses, such assets are to be donated to an organization having no relationship of interest with the Company or Directors and Corporate Executives of the Company.
Details of the Plan
Overview of the Plan
The Plan is an incentive plan, under which delivery of the Company's shares will be conducted during the three-year period from the fiscal year ending March 31, 2021 to the fiscal year ending March 31, 2023 ('Applicable Period'), based on the level of growth of enterprise and shareholder value, etc. The Company intends to continue implementing incentive plans which are similar to the Plan in each year in and after the following fiscal year by establishing new BIP Trusts, or by making changes or additional entrustments to the existing BIP Trusts that have expired. The details of incentive plans put into effect next fiscal year or later shall be determined at the appropriate time by resolution of the Board of Directors.
Individuals eligible under the Plan (Beneficiary Conditions)
The Directors who are in office as of July 1, 2020 ('Eligible Individuals') will, in principle, receive delivery of a certain number of the Company's shares based on the points provided for below in (4) subject to the condition that the Beneficiary Conditions set forth below are satisfied.
Astellas Pharma Inc., based in Tokyo, Japan, is a company dedicated to improving the health of people around the world through the provision of innovative and reliable pharmaceutical products.
In this press release, statements made with respect to current plans, estimates, strategies and beliefs and other statements that are not historical facts are forward-looking statements about the future performance of Astellas. These statements are based on management's current assumptions and beliefs in light of the information currently available to it and involve known and unknown risks and uncertainties. A number of factors could cause actual results to differ materially from those discussed in the forward-looking statements. Such factors include, but are not limited to: (i) changes in general economic conditions and in laws and regulations, relating to pharmaceutical markets, (ii) currency exchange rate fluctuations, (iii) delays in new product launches, (iv) the inability of Astellas to market existing and new products effectively, (v) the inability of Astellas to continue to effectively research and develop products accepted by customers in highly competitive markets, and (vi) infringements of Astellas' intellectual property rights by third parties. Information about pharmaceutical products (including products currently in development) which is included in this press release is not intended to constitute an advertisement or medical advice.