UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

 

 

Form CB

 

 

(Amendment No. 1)

TENDER OFFER/RIGHTS OFFERING NOTIFICATION FORM

Please place an X in the box(es) to designate the appropriate rule provision(s) relied upon to file this Form:

 

Securities Act Rule 801 (Rights Offering)		☐
Securities Act Rule 802 (Exchange Offer)		☒
Exchange Act Rule 13e-4(h)(8) (Issuer Tender Offer)		☐
Exchange Act Rule 14d-1(c) (Third Party Tender Offer)		☐
Exchange Act Rule 14e-2(d) (Subject Company Response)		☐
Filed or submitted in paper if permitted by Regulation S-T Rule 101(b)(8)		☐

 

 

Nippontsuun Kabushiki Kaisha

(Name of Subject Company)

 

 

Nippon Express Co., Ltd.

(Translation of Subject Company’s Name into English (if applicable))

Japan

(Jurisdiction of Subject Company’s Incorporation or Organization)

Nippon Express Co., Ltd.

(Name of Person(s) Furnishing Form)

Common Stock

(Title of Class of Subject Securities)

N/A

(CUSIP Number of Class of Securities (if applicable))

Nippon Express Co., Ltd.

Attn: Sadayuki Sano

1-9-3, Higashi-shimbashi, Minato-ku, Tokyo, 108-8322, Japan

+81-3-6251-1514

(Names, Addresses (including zip code) and Telephone Numbers (including area code) of Person(s)

Authorized to Receive Notices and Communications on Behalf of Subject Company)

Not Applicable

(Date Tender Offer/Rights Offering Commenced)

 

 

 

PART I – INFORMATION SENT TO SECURITY HOLDERS

Item 1. Home Jurisdiction Documents

a) The following documents are attached as exhibits to this Form:

 

Exhibit Number
99.1*		Notice Concerning the Commencement of Preparations to Transition to a Holding Company via Sole-Share Transfer, dated January 29, 2021.
99.2		English translation of a press release entitled Notice Concerning Transition to a Holding Company via Sole-Share Transfer, dated April 28, 2021.
99.3		English translation of the Share Transfer Plan, dated April 28, 2021.
99.4		English translation of the Articles of Incorporation, dated April 28, 2021.

 

*Previously furnished to the Commission under cover of Form CB on January 29, 2021.

b) Not applicable.

Item 2. Information Legends

A legend complying with Rule 802(b) under the U.S. Securities Act of 1933, as amended, is included in each of the exhibits to this Form.

PART II – INFORMATION NOT REQUIRED TO BE SENT TO SECURITY HOLDERS

Not applicable.

PART III – CONSENT TO SERVICE OF PROCESS

Nippon Express Co., Ltd. submitted to the Securities and Exchange Commission a written irrevocable consent and power of attorney on Form F-X dated January 29, 2021.

SIGNATURES

After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct.

 

Date:    April 28, 2021

Exhibit 99.2

 

English Translation

April 28, 2021

To whom it may concern

Company name: NIPPON EXPRESS CO., LTD

Representative: Mitsuru Saito

President and CEO

(Code No.9062, First section,

Tokyo Stock Exchange)

Notice Concerning Transition to a Holding Company via Sole-Share Transfer

At a meeting held today, the Nippon Express Co., Ltd. board of directors resolved to establish as its holding company NIPPON EXPRESS HOLDINGS, INC. (“Holding Company”) effective January 4, 2022 via sole-share transfer (“Share Transfer”), subject to approval at the Company’s ordinary general meeting of shareholders scheduled to be held June 29, 2021 and other prescribed procedures. As this Share Transfer is a sole transfer of shares by the Company, which is a publicly traded corporation, we have omitted certain items and details from disclosure.

1. Background behind start of review

The logistics business in Japan faces a challenging environment. Companies in this industry must deal urgently with labor shortages, laws related to work-style reform, digital transformation, and a variety of other changes. At the same time, overseas competitors in the form of mega forwarders have been expanding their businesses rapidly through M&A activities and other means in the global market, creating oligopolies.

Nippon Express Co., Ltd. (“Nippon Express” or the “Company’) strives in this environment to achieve the long-term vision of becoming a logistics company with a strong presence in the global market, as detailed in Nippon Express Group Business Plan 2023~ Dynamic Growth~. To achieve this vision, the Company must evolve group management from a medium- and long-term perspective, aiming to maximize value as a corporate group.

Given this background, the Company has investigated a restructuring of the group headquarters function. As announced in the “Notice Concerning the Commencement of Preparations to Transition to a Holding Company via Sole-Share Transfer” released on January 29, 2021, the Company has determined that the transition to a holding company structure that separates the Group’s management strategy function from its business execution function is optimal.

2. Purpose of the transition to a holding company structure and group management structure envisioned after the transition

A. Reinforce group management

By transitioning to a holding company structure, the holding company will be able to specialize in group management and formulate medium- to long-term policies for the group. In addition, the holding company will reallocate resources and design functions and systems to optimize the group and maximize value for the corporate group in pursuit of these policies. In this way, the holding company will drive our group growth strategy. Further, the holding company will provide support to group companies to encourage the creation of groupwide synergies and to optimize each group business. Based on a clear division of responsibilities and authority, group operating companies will pursue their businesses according to their respective roles, supported by speedy decision-making in line with group policies. With the support of the holding company, business divisions within each company will strive to enhance customer value through improved expertise and competitiveness in response to the changing times. In so doing, we expect to achieve sustainable growth as a corporate group. Through these efforts, we intend to maximize our value as a corporate group.

B. Strengthen global governance structure for greater overseas business growth

By clearly separating group management functions from the functions of operating companies in Japan, we intend to establish a global group management function that will not be tied to our domestic businesses in Japan. In addition to promoting further growth of global businesses originating from Japan, we will allocate more management resources to our overseas businesses, which we believe is a growth area for the group. At the same time, we will aim to expand businesses that originate from overseas. We will establish a global governance system by strengthening control functions that support global business growth. We intend to achieve this system through coordinated actions among the holding company and regional headquarters companies serving as the core of our operations and management overseas.

C. Enhance group corporate management system

The holding company will strive to optimize and enhance effectiveness at each group company. To this end, we will create greater visibility with each group business, establishing a management infrastructure that facilitates rapid and correct management decisions. To achieve overall group optimization and synergies that focus on the customer and provide greater customer value, we must look beyond the company and organizational indicators of sales and profit upon which we have relied to date. We will establish a structure that assesses performance through KPIs that encourage overall optimization. At the same time, we will take even greater advantage of marketing and information sharing within the group related to customer needs to strengthen our groupwide, one-stop account management system. Along the way, we will also improve systems that allow us to create new services within each business. Finally, we will build a groupwide database that facilitates the achievement of these plans as we accelerate the digitalization of our businesses.

3. Holding company structure post-transition

After the transition to a holding company structure, Nippon Express, the business holding company until this point in time, will continue to act as the core operating company of the group. The main role of Nippon Express, however, will be to drive the group’s logistics business in Japan and global businesses originating from Japan. Our overseas logistics businesses will be led by regional headquarters companies in cooperation with the holding company, which will provide global headquarters functions. The roles of the logistics support business companies will be separated into functional companies providing services within the group and logistics support operating companies that provide customer-facing logistics-related services. These logistics support operating companies will develop businesses that add new value in logistics and help the group advance to higher levels in logistics. Further, as announced in the “Notice Concerning Commencement of Consideration on Security Transportation Business Spin-Off” released on April 28, 2021, the security business is being considered to be spun off from Nippon Express as a specialized business. If, as a result of the deliberation, a spin-off is to be implemented, the timing, method, and other details will be announced as soon as they are determined.

4. Transition method and procedures

The company intends to transition to a holding company structure via the method as shown below.

A. Step 1: Establish holding company via share transfer

Establish a holding company effective January 4, 2022 via share transfer, making Nippon Express Co., Ltd. a wholly owned subsidiary of the holding company.

 

B. Step 2: Structure subsequent to establishment of holding company via share transfer (group business reorganization)

Subsequent to the share transfer taking effect, Nippon Express Co., Ltd. subsidiaries will become direct subsidiaries of the new holding company to form a group management structure to fully achieve the purpose of the transition to a holding company structure. Details of this restructuring are still under consideration with the option of company split, etc., and specific details and timing will be announced as soon as they are determined.

5. Share transfer overview

A. Schedule

 

Record date for ordinary general meeting of shareholders		March 31, 2021
Board of directors meeting for approval of the share transfer plan		April 28, 2021
Ordinary general meeting of shareholders for approval of the share transfer		June 29, 2021
Delisting date for the Company		December 29, 2021
Date of registration of establishment of the Holding Company (effective date)		January 4, 2022
Date of listing of the Holding Company		January 4, 2022

Note: The dates may be changed as necessary for the share transfer procedures or for other reasons.

B. Share transfer method

This is a sole share transfer method in which the company will become a wholly owned subsidiary of the holding company, and holding company will become the sole parent of the newly formed subsidiary via share transfer from subsidiary to parent.

C. Allocation of shares in connection with share transfer (share transfer ratio)

 

Company Name		NIPPON EXPRESS HOLDINGS, INC. (Sole parent company after share transfer)		NIPPON EXPRESS CO., LTD. (parent after share transfer)
Share transfer ratio		1		1

(Notes)

(1) Share transfer ratio

Shareholders owning Nippon Express Co., Ltd. common stock immediately preceding the point in time in which the holding company acquires all issued and outstanding shares of Nippon Express via the share transfer in question will receive one share of common stock in the holding company per share of common stock owned in Nippon Express.

(2) Number of shares constituting one trading unit

The holding company will adopt the trading unit system, under which one trading unit will consist of 100 shares.

(3) Basis share transfer ratio calculation

This share transfer will establish one sole parent company of a wholly owned subsidiary via share transfer by Nippon Express Co., Ltd. There will be no change in shareholder composition for Nippon Express Co., Ltd. or the holding company at the time of the share transfer. Therefore, placing the highest priority on avoiding any disadvantage to shareholders and to avoid confusion, each shareholder of Nippon Express Co., Ltd. will be allocated one share of common stock in the newly established holding company for every share of common stock owned in Nippon Express Co., Ltd.

(4) Results, methods of calculation, and basis of calculation conducted by a third-party entity

As described in (3) above, the share transfer in question is a sole-share transfer by Nippon Express Co., Ltd. Therefore, no calculations will be made by a third-party entity.

(5) Number of new shares to be issued via share transfer (scheduled)

Common stock: 96,000,000 shares

However, if the total number of shares issued and outstanding changes prior to the effective date of the share transfer, the number of new shares to be allocated by the holding company will vary. The handling of treasury stock held by the Company upon the effective date of the Share Transfer is currently under consideration. The handling of such shares will be announced as soon as the method has been determined.

D. Treatment of Stock Acquisition Rights and Bonds with Stock Acquisition Rights upon the Share Transfer

The Company has not issued any stock acquisition rights or bonds with stock acquisition rights.

E. Matters concerning application for listing of the holding company

As a result of the share transfer, Nippon Express Co., Ltd. will become a wholly owned subsidiary of the holding company. Therefore, the shares of Nippon Express will be delisted from public trading. However, the holding company will apply for a listing (technical listing) on the First Section of the Tokyo Stock Exchange for the shares of holding company stock allocated to shareholders of Nippon Express. The listing date is subject to review by the Tokyo Stock Exchange, but is scheduled to be January 4, 2022, which is the effective date of the share transfer.

6. Overview of companies involved in the share transfer

(as of March 31, 2021)

 

(1) Company name		Nippon Express Co., Ltd.
(2) Location		1-9-3, Higashi Shimbashi, Minato-ku, Tokyo 105-8322, Japan
(3) Representative name and title		Mitsuru Saito, president and chief executive officer
(4) Business lines		Road freight transportation Freight transportation Ocean freight transportation Marine and harbor transportation Railway freight transportation Warehousing Security Haulage, construction and installation of heavy equipment and related business Construction Customs clearance, etc.
(5) Paid-in capital		70,175 million yen
(6) Established		October 1, 1937
(7)  Number of shares issued and outstanding		96,000,000 shares
(8)  Fiscal year end		March 31
(9)  Major shareholders and ownership ratios (Total shares held to total number of shares issued (excluding treasury stock)		The Master Trust Bank of Japan, Ltd. (Trust Account)		11.0%
		Custody Bank of Japan, Ltd. (Trust Account)		8.9%
		Asahi Mutual Life Insurance Company		6.1%
		Nippon Express Employees’ Shareholding Association		4.1%
		Sompo Japan Inc.		3.9%
		Mizuho Trust & Banking Co., Ltd Retirement Benefit Trust Under Mizuho Bank, Ltd. (re-entrusted by Custody Bank of Japan, Ltd.)		3.1%
		Custody Bank of Japan, Ltd. (Trust Account No.4)		2.0%
		MUFG Bank, Ltd.		1.6%
		Custody Bank of Japan, Ltd. (Trust Account No.7)		1.4%
		STATE STREET BANK WEST CLIENT – TREATY 505234		1.2%

 

(10) Operating results and financial condition for the most-recent three fiscal years
Fiscal year end		March 2019				March 2020				March 2021
Consolidated net assets (million yen)			560,444				556,506				600,707
Consolidated total assets (million yen)			1,536,677				1,518,037				1,631,855
Consolidated net assets per share (yen)			5,749.60				5,805.12				6,355.02
Consolidated revenue (million yen)			2,138,501				2,080,352				2,079,195
Consolidated operating income (million yen)			79,598				59,224				78,100
Consolidated ordinary income (million yen)			85,802				57,434				81,276
Consolidated profit attributable to owners of parent (million yen)			49,330				17,409				56,102
Consolidated profit per share (yen)			515.13				185.06				604.79
Dividends per share (yen)			155.00				155.00				185.00

7. Overview of company established (tentative) via share transfer (sole parent company, holding company)

 

(1) Company name		Nippon Express Holdings, Inc.
(2) Location		Kanda Izumi-cho, Chiyoda-ku, Tokyo
(3) Representative name and title		Mitsuru Saito, president and chief executive officer
(4) Business lines		Management and related operations for corporate group companies
(5) Paid-in capital		70,175 million yen
(6) Established		January 4, 2022
(7) Fiscal year end		December 31
(8) Net assets		To be determined
(9) Total assets		To be determined

(Note 1) Of the above, the lot number in (2) Location will be announced as it is confirmed.

(Note 2) (8) Net assets and (9) Total assets will be announced as they are finalized.

8. Overview of share transfer accounting treatment

This transaction is regarded under corporate accounting as a transaction under common control. Therefore, the transaction will have no impact on profit or loss. No goodwill is expected to result from this share transfer.

9. Future outlook

Nippon Express Co., Ltd. will become a wholly owned subsidiary as a result of this share transfer. Accordingly, Nippon Express operating results will be reflected in the consolidated operating results of the holding company (sole parent). This share transfer will have only a minor impact on operating results.

End

 

Exhibit 99.3

 

Share Transfer Plan

Nippon Express Co., Ltd. has drafted the following stock transfer plan (“Plan”) with respect to the transfer of stock (“Share Transfer”) to establish a wholly owning parent company (“Holding Company”) with Nippon Express Co., Ltd. as the wholly owned subsidiary.

Article 1 (Share Transfer)

Pursuant to the provisions of the Plan, Nippon Express Co., Ltd. will conduct a share transfer in which all shares of Nippon Express Co., Ltd. issued and outstanding will be acquired by the Holding Company on the date of incorporation of the Holding Company (defined under Article 6) by way of sole-share transfer.

Article 2 (Purpose, Trade Name, Head Office Location, Total Number of Authorized Shares, and Other Matters Specified in the Holding Company Articles of Incorporation)

 

1.	The purpose, trade name, head office location, and total number of authorized shares of the Holding Company shall be as follows:

 

(1)

Purpose

The purpose of the Holding Company shall be as described in Article 2 of the Articles of Incorporation attached hereto.

(2)	Trade Name

The trade name of the holding company shall be NIPPON EXPRESS Horudeingusu Kabushiki Kaisha and, in English, NIPPON EXPRESS HOLDINGS, INC.

 

(3)	Head Office Location

The head office of the Holding Company shall be in Chiyoda-ku, Tokyo, located in Kanda-Izumicho, Chiyoda-ku, Tokyo.

 

(4)	Total Number of Authorized Shares

The total number of shares authorized to be issued by the Holding Company shall be 340 million shares.

 

2.	In addition to the preceding paragraphs, matters shall be as determined by the Holding Company’s Articles of Incorporation.

Article 3 (Names of the Directors and Members of the Audit & Supervisory Board of the Holding Company at the Time of Incorporation and Name of the Independent Auditor)

 

1.	The names of the directors and members of the Audit & Supervisory Board of the Holding Company at the time of incorporation shall be as follows:

Directors    Kenji Watanabe

Directors    Mitsuru Saito

Directors    Satoshi Horikiri

Directors    Tatsuya Suzuki

Directors    Takashi Masuda

Directors    Tatsuya Akama

Directors    Shigeo Nakayama

Directors    Sadako Yasuoka

Directors    Yojiro Shiba

 

2.	The names of members of the Audit & Supervisory Board of the Holding Company at the time of incorporation shall be as follows:

Audit & Supervisory Board Members    Shigeki Arima

Audit & Supervisory Board Members    Koji Mizota

Audit & Supervisory Board Members    Toshiaki Nojiri

Audit & Supervisory Board Members    Yoshio Aoki

Audit & Supervisory Board Members    Nobuko Sanui

 

3.	The name of the independent auditor of the Holding Company at the time of incorporation shall be as follows:

Independent Auditor    Deloitte Touche Tohmatsu LLC

Article 4 (Shares to be Delivered upon the Share Transfer and Allotment Thereof)

 

1.

Upon execution of the Share Transfer, the Holding Company will deliver shares of common stock of the Holding Company to the shareholders of Nippon Express Co., Ltd. who are registered or recorded in the shareholder registry of Nippon Express Co., Ltd. as of the time immediately prior to the time when the Holding Company acquires all of the issued shares of the Company through the Share Transfer (“Base Time”), in exchange for the shares of common stock of Nippon Express Co., Ltd. held by such shareholders.

 

2.

With respect to the allocation of Holding Company shares exchanged in accordance with the previous paragraph, the Holding Company will allot shares of Holding Company common stock at a ratio of one share for each share of Nippon Express Co., Ltd. held by Nippon Express Co., Ltd. shareholders as of the Basis Time.

Article 5 (Matters Concerning Capital and Reserves of the Holding Company)

The amount of capital and reserves as of the date of incorporation of the Holding Company shall be as follows:

(1) Capital

70,175 million yen

(2) Capital Reserves

26,908 million yen

(3) Legal Reserves

0 yen

Article 6 (Date of Holding Company Incorporation)

The date of incorporation of the Holding Company (the “Date of Incorporation of the Holding Company”) shall be January 4, 2022; provided, however, that such date may be changed if necessary related to the progress of the procedures of the Share Transfer or for any other reason.

Article 7 (General Meeting of Shareholders to Approve Plan)

Nippon Express Co., Ltd. shall seek a resolution of the general meeting of shareholders (including cases in which a resolution of the general meeting of shareholders is deemed to have been passed pursuant to the provisions of Article 319-1 of the Companies Act) regarding matters necessary for the approval of Plan and Share Transfer prior to the day before the incorporation of the Holding Company.

Article 8 (Shareholder Register Administrator)

The administrator of the Holding Company shareholder registry shall be Mitsubishi UFJ Trust and Banking Corporation.

Article 9 (Change in Conditions of the Share Transfer or Cancellation of the Share Transfer)

During the period from the date of formulation of the Plan to the date of incorporation of the Holding Company, in the event of a material change in the financial condition or business performance of Nippon Express Co., Ltd. the Company due to a natural disaster or other event, or in the event of a situation that could hinder the execution of the Share Transfer materially, the conditions or other details of the Share Transfer Plan may be changed or the Share Transfer may be canceled per resolution of the Nippon Express Co., Ltd. board of directors.

Article 10 (Plan Effectiveness)

 

This	Plan shall cease to be effective in the event of any of the following events:

 

(1)

If the Plan is not approved at a general meeting of shareholders of Nippon Express Co., Ltd. the Company by the day before the date of incorporation of the Holding Company

 

(2)

In the event that the approval, etc., of the relevant government agencies as provided for in domestic and foreign laws and regulations is not obtained by the date of incorporation of the Holding Company, or in the event that such approval, etc. is subject to conditions or restrictions, etc., that hinder the execution of the Share Transfer materially

 

April

28, 2021

9-3, Higashi-Shimbashi 1-chome, Minato-ku, Tokyo

Nippon Express Co., Ltd.

Mitsuru Saito, President and Chief Executive Officer

Exhibit 99.4

 

Articles of Incorporation

NIPPON EXPRESS HOLDINGS, INC.

Articles of Incorporation

Section I General Provisions

(Trade Name)

Article 1 The name of the company shall be NIPPON EXPRESS Horudeingusu Kabushiki Kaisha in Japanese and NIPPON EXPRESS HOLDINGS, INC. in English (hereinafter, the “Company”).

(Purposes)

Article 2 The purpose of the Company shall be to control and manage the business activities of companies (including overseas companies), partnerships (including the equivalent to partnerships overseas), and other equivalent business entities engaged in the following businesses through the ownership of shares or equity interests in said companies.

(1) Railroad freight forwarding business

(2) Truck transportation business

(3) Truck freight forwarding business

(4) Marine transportation business

(5) Coastal shipping business

(6) Harbor Transportation Business

(7) NVOCC marine transportation services

(8) Air freight forwarding business and air freight forwarding agency services

(9) Transportation business and freight forwarding other than as listed above

(10) Warehousing business

(11) Customs-clearance business

(12) Construction business

(13) Transportation, construction and installation of heavy goods and any incidental business thereto

(14) Security services business

(15) Waste disposal and waste collection and transportation businesses

(16) Specified correspondence delivery services business

(17) Sale of goods, import and export business, brokerage business, and related agency business

(18) Production, assembly, repair and processing related to the above

(19) Non-life insurance agency business and life insurance solicitation business

(20) Manufacture and sales of petroleum, oils and fats, and liquefied petroleum gas

(21) Packing business and other related businesses

(22) Sales, leasing, brokerage and appraisal of real estate

(23) Design, management, and consulting related to civil engineering and construction

(24) Comprehensive building management

(25) Business related to power generation and sales

(26) Acquisition, planning, development, and sales of intangible property rights, including industrial property right, copyrights, expert knowledge, systems engineering, and other software

(27) Information asset management business

(28) Temporary staffing and placement business

(29) Business contracting

(30) Investment in and financing of the businesses listed in the above items

(31) All businesses incidental and related to the above items

 

2	The Company may engage in each of the business described in the preceding paragraph and all businesses incidental or related thereto.

(Head Office Location)

Article 3 The head office of the Company shall be located in in Chiyoda-ku, Tokyo.

(Method of Public Notice)

Article 4 The method of public notice of the Company shall be via electronic public notice. Provided, however, in the event that electronic public notice cannot be given due to an accident or other unavoidable reason, public notices shall be made in the Tokyo edition of the Nihon Keizai Shimbun.

Section II Shares

(Total Number of Authorized Shares)

Article 5 The total number of authorized shares of the Company shall be 340 million shares.

(Number of Shares per Trading Unit)

Article 6 The number of shares per trading unit of the Company shall be 100 shares.

(Rights to Shares of Less Than One Trading Unit)

Article 7 Shareholders of the Company may not exercise rights with respect to shares owned of less than one trading unit other than as described below.

 

(1)

Rights enumerated under each item of Article 189-2 of the Companies Act

 

(2)

Rights to make a request pursuant to the provisions of Article 166-1 of the Companies Act

 

(3)

Rights to receive an allotment of shares for subscription and allotment of share options for subscription in proportion to the number of shares held by the shareholder

 

(4)

Rights to make a request pursuant to the following articles

(Additional Purchase of Shares of Less Than One Trading Unit)

Article 8 Any shareholder of the Company may, pursuant to Share Handling Regulations, request that the Company sell to him/her the number of shares that, together with the number of shares constituting less than one trading unit held by him/her, will constitute one trading unit of shares.

(Administrator of Shareholder Registry)

Article 9 The Company shall appoint a shareholder registry administrator.

 

2	The administrator of the shareholder registry and the place of handling the affairs thereof shall be specified by a resolution of the board of directors and published via public notice.

 

3

Preparation and keeping of the Company’s shareholder registry and/or registry of stock acquisition rights, as well as other administrative tasks related to the shareholder registry and register of stock acquisition rights shall be entrusted to the administrator of the shareholder registry and shall not be performed by the Company.

(Share Handling Regulations)

Article 10 Handling, etc., and fees concerning shares of the Company shall be governed by the Share Handling Regulations established by the Board of Directors, in addition to the provisions of laws and regulations or these Articles of Incorporation.

Section III General Meeting of Shareholders

(Convocation)

Article 11 The ordinary general meeting of shareholders of the company shall be convened within three months from the day following the conclusion of each business year, and any extraordinary general meetings of shareholders shall be called as necessary.

(Record Date of Ordinary General Meeting of Shareholders)

Article 12 The record date for voting rights at the Company’s ordinary general meeting of shareholders shall be December 31 of each year.

(Convener and Chairperson)

Article 13 Except as otherwise provided for in laws and regulations, general meetings of shareholders shall be convened by the president of the Company per resolution of the board of directors. In the event that the president is unable to attend to his/her duties, other directors, in the order appointed by the board of directors in advance, shall convene the general meeting of shareholders.

 

2	The president of the Company shall serve as chair the general meeting of shareholders. In the event that the president is unable to attend to his/her duties, other directors, in the order appointed by the board of directors in advance, shall chair the general meeting of shareholders.

(Provision Through Electronic Means)

Article 14 The Company shall take measures for electronic provision as provided in Article 325-2 of the Companies Act.

 

2.

The Company shall not be required to include in the document delivered pursuant to the provisions of Article 325-5.2 of the Companies Act all or part of the matters specified by the applicable Ordinance of the Ministry of Justice among the matters to be provided electronically as provided in Article 325-5.1 of the same act.

(Internet Disclosure as Deemed Provision of Reference Documents for General Meetings of Shareholders)

Article 14-2 The Company may, when convening a general meeting of shareholders, deem that it has provided information pertaining to matters to be stated or indicated in the reference documents for general meetings of shareholders, business reports, financial statements and consolidated financial statements to shareholders by disclosing such information by means of the internet in accordance with the applicable Ordinance of the Ministry of Justice.

(Exercise of Voting Rights by Proxy)

Article 15 Shareholders may exercise voting rights on behalf of one other shareholder who holds voting rights of the company.

 

2	In the case of the preceding paragraph, the shareholder or proxy shall submit to the Company a document evidencing the authority of proxy at each general meeting of shareholders.

(Method of Resolution)

Article 16 Excluding when otherwise provided for by laws, regulations and these Articles of Incorporation, the resolutions of a shareholders meeting shall be passed by a majority of the voting rights of shareholders able to exercise voting rights in attendance.

 

2

Except as otherwise provided in these Articles of Incorporation, resolutions of the general meeting of shareholders as provided for in Article 309-2 of the Companies Act shall be adopted by a resolution of the general meeting of shareholders at which shareholders holding one-third or more of the voting rights of shareholders who are entitled to exercise their voting rights are present and by a vote representing two-thirds or more of the voting rights of the shareholders present.

Section IV Directors and Board of Directors

(Establishment of Board of Directors)

Article 17 The Company shall establish a board of directors.

(Number of Directors)

Article 18 The number of directors on the Company’s board of directors shall not exceed 15.

(Election of Directors)

Article 19 Directors shall be elected by resolution of the general meeting of shareholders.

 

2	The election of company directors shall be undertaken by one-third or more of the voting rights of shareholders able to exercise voting rights in attendance and by a majority of the voting rights of shareholders in attendance.

 

3	Resolutions regarding the election of directors shall not be made by cumulative voting.

(Director Term of Office)

Article 20 The term of office for directors shall expire on the conclusion of the ordinary general meeting of shareholders related to the last fiscal year ending within one year of the election of the director in question.

(Representative Directors and Executive Directors)

Article 21 The Company’s board of directors shall appoint representative directors by board resolution.

 

2	Each representative director shall represent the Company.

 

3	The board of directors may, by resolution, select one president, and, if necessary, one chairman and several executive vice presidents, senior managing directors, and managing directors.

(Convener and Chairperson of Board of Director Meetings)

Article 22 Except as otherwise provided by laws and regulations, meetings of the board of directors shall be convened and chaired by a director previously determined by the board of directors. In the event that the director in question is unable to attend to his/her duties, another director, in the order appointed by the board of directors in advance, shall chair the board of directors meeting.

(Notice of Convocation of Board of Director Meetings)

Article 23 A notice of the convening of a meeting of the board of directors shall be sent to each director and member of the Audit & Supervisory Board no later than three days prior to the date of the meeting. Provided, however, that such period may be shortened in case of an emergency.

 

2	A board of directors meeting may be held without convocation procedures with the consent of all directors and members of the Audit & Supervisory Board.

(Board of Director Regulations)

Article 24 Matters related to the board of directors shall be determined according to laws and regulations, these Articles of Incorporation, and regulations as determined by the board of directors.

(Method of Resolutions by the Board of Directors)

Article 25 Resolutions at meetings of the board of directors shall be adopted by a majority of the directors present and voting.

(Omission of Resolutions of Board of Director Meetings)

Article 26 In the event that the requirements of Article 370 of the Companies Act are satisfied, the Company shall be deemed to have passed a resolution of the board of directors.

(Director Exemption From Liability)

Article 27 The Company may, by a resolution of the board of directors, exempt any director (including persons who were directors) from the liability for damages arising from a neglect of duty as provided for in Article 426-1 of the Companies Act and to the extent permitted by laws and regulations.

 

2

The Company may enter into an agreement with directors (excluding persons who are executive directors, etc.) to limit their liability for damages arising from a neglect of duty as provided for in Article start 427-1 of the Companies Act. Provided, however, that the maximum amount of liability based on said agreements shall be the amount stipulated by laws and regulations.

Section V Members of the Audit & Supervisory Board and the Audit & Supervisory Board

(Establishment of Members of the Audit & Supervisory Board and the Audit & Supervisory Board)

Article 28 The Company shall establish members of the Audit & Supervisory Board and an Audit & Supervisory Board.

(Number of Members of the Audit & Supervisory Board)

Article 29 The number of members on the Company’s Audit & Supervisory Board shall not exceed five.

(Election of Members of the Audit & Supervisory Board)

Article 30 Members of the Audit & Supervisory Board shall be elected by resolution of the general meeting of shareholders.

 

2	The election of Company members of the Audit & Supervisory Board shall be undertaken by one-third or more of the voting rights of shareholders able to exercise voting rights in attendance and by a majority of the voting rights of shareholders in attendance.

(Audit & Supervisory Board Member Term of Office)

Article 31 The term of office for members of the Audit & Supervisory Board shall expire on the conclusion of the ordinary general meeting of shareholders related to the last fiscal year ending within four years of the election of the member in question.

 

2

The term of office of a member of the Audit & Supervisory Board elected to fill a vacancy of a member of the Audit & Supervisory Board who retires before the expiration of his/her term of office shall expire at the time of the expiration of the term of office of the retired director who served as a member of the Audit & Supervisory Board.

(Full-Time Members of the Audit & Supervisory Board)

Article 32 The Audit & Supervisory Board shall select members from among the Audit & Supervisory Board to serve as full-time members.

(Notice of Convocation of Audit & Supervisory Board Meetings)

Article 33 A notice of the convening of a meeting of the Audit & Supervisory Board shall be sent to each member of the Audit & Supervisory Board no later than three days prior to the date of the meeting. Provided, however, that such period may be shortened in case of an emergency.

2	An Audit & Supervisory Board meeting may be held without convocation procedures with the consent of all members of the Audit & Supervisory Board.

(Audit & Supervisory Board Regulations)

Article 34 Matters related to the Audit & Supervisory Board shall be determined according to laws and regulations, these Articles of Incorporation, and regulations as determined by the Audit & Supervisory Board.

(Method of Resolutions by the Audit & Supervisory Board)

Article 35 Excluding where otherwise provided by laws and regulations, the resolutions of the Audit & Supervisory Board shall be passed by a majority of members of the Audit & Supervisory Board.

(Audit & Supervisory Board Member Exemption From Liability)

Article 36 The Company may, by a resolution of the board of directors, exempt any member of the Audit & Supervisory Board (including persons who were members of the Audit & Supervisory Board) from the liability for damages provided for in Article 426-1 of the Companies Act to the extent permitted by laws and regulations.

 

2

The Company may enter into an agreement with members of the Audit & Supervisory Board to limit their liability for damages arising from a neglect of duties as provided for in Article 427-1 of the Companies Act, if such agreement meets the requirements stipulated in laws and regulations. Provided however, that the maximum amount of liability based on said agreements shall be the amount stipulated by laws and regulations.

Section VI Independent Auditor

(Establishment of an Independent Auditor)

Article 37 The Company shall establish an independent auditor.

(Selection of Independent Auditor)

Article 38 An independent auditor shall be selected by resolution of the general meeting of shareholders.

(Independent Auditor Term of Service)

Article 39 The term of service for an independent auditor shall expire on the conclusion of the ordinary general meeting of shareholders related to the last fiscal year ending within one years of the selection of the independent auditor in question.

 

2	The independent auditor shall be deemed as having been reappointed at the ordinary general meeting of shareholders absent a resolution to the contrary at the ordinary general meeting of shareholders as provided in the preceding paragraph.

Section VII Accounts

(Business Year)

Article 40 The business year of the Company shall commence on January 1 end on December 31.

(Decision-Making Body for Dividends From Surplus)

Article 41 Unless otherwise provided for in laws and regulations, the Company may determine matters as described under each item in Article 459-1 of the Companies Act via board of director resolution.

(Record Date for Dividends From Surplus)

Article 42 The record date for year-end dividends of the Company shall be December 31 of each year.

 

2	The record date for interim dividends of the Company shall be June 30 of each year.

 

3	In addition to the preceding two paragraphs, dividends from surplus may be paid by setting a record date.

(Exclusion Period for Dividends)

Article 43 In cases in which if the dividends property is cash and the dividends have not been received after three full years from the date of commencement of payment, the Company shall be relieved of the obligation to pay such dividends.

 

2	No interest shall be paid on unpaid year-end or interim dividends.

Supplementary Provisions

(Inaugural Business Year)

Article 1 Notwithstanding the provisions of Article 40(Business Year), the inaugural business year of the Company shall be from the date of incorporation of the Company to December 31, 2022.

(Initial Remuneration, Etc., of Directors)

Article 2 The total amount of remuneration, etc., to be paid in cash to the directors of the Company from the date of incorporation of the Company to the close of the ordinary general meeting of shareholders related to the fiscal year ending on December 31, 2023 shall not exceed 660 million yen per year (not including employee salaries for directors who serve concurrently as employees). The Company may bear the cost of company housing and other expenses necessary for business within the scope of this total amount.

 

2.

Of the remuneration, etc., to be paid to Company directors (excluding outside directors and non-residents of Japan) and executive officers (excluding non-residents in Japan; “Company Directors, Etc.”), details of the stock-based compensation (“Plan”) to be paid as remuneration, etc., covering the period from the date of establishment of the Company to the fiscal year ending on December 31, 2023 are as described hereafter. Remuneration based on this Plan shall be separate from that provided under Paragraph 1 of this Article.

(1) Plan overview

This Plan is a performance-linked stock compensation plan under which Company stock shall be acquired by a trust (the trust established under this Plan to be referred to as “Trust,” below) using money contributed by Nippon Express Co., Ltd. (“Nippon Express”) before January 3, 2022, as a source of funds, delivered or paid to Company Directors, Etc. and Nippon Express directors, etc. (Nippon Express directors (excluding outside directors and non-residents of Japan) and executive officers (excluding non-residents of Japan); Company directors, etc. and Nippon Express directors, etc., collectively referred to as “Eligible Directors, Etc.” below) as Company stock or cash equivalent to the proceeds from the conversion of Company shares (“Share Delivery, Etc.”).

Further, this Plan is a stock-based compensation plan identical in content to the stock-based compensation plan approved at the 113th Ordinary General Meeting of Shareholders of Nippon Express. The Company shall, as of January 4, 2022, succeed the contractual status, rights, and obligations of Nippon Express related to the Director Stock Compensation Trust Agreement executed between Nippon Express and Mitsubishi UFJ Trust and Banking Corporation, etc., and dated August 31, 2016 (the trust period related to the trust agreement in question has been extended as of August 5, 2019).

(2) Maximum amount of funds to be contributed to the Trust

Nippon Express shall contribute funds up to a total of 800 million yen as remuneration for Directors, Etc. serving for the trust period, such funds representing the necessary funds covering the eligible evaluation period of five fiscal years from the fiscal year ending March 31, 2020 to the fiscal year ending March 31, 2024, and shall establish the Trust for Directors, Etc. who are beneficiaries fulfilling the beneficiary requirements. The Company shall succeed the contractual status, rights, and obligations of Nippon Express in relation to the Trust as described in (1) above (provided, however, that (i) if a resolution at the 115th Ordinary General Meeting of Shareholders of Nippon Express is approved that includes making December 31 that last day of the business year of Nippon Express, then promptly thereafter; and (ii) if such resolution is not approved, the conclusion of the evaluation period shall be changed to the fiscal year ending December 31, 2023, at which time the Company shall make the succession as provided in (1) above simultaneously.).

The Company may continue this Plan by establishing a new evaluation period of five fiscal years after the end of the fiscal year ending December 31, 2023, and the same shall apply thereafter. Upon continuation of the Plan, the Trust may be extended, rather than establishing a new trust, by amending the trust agreement and making additional monetary contributions. The maximum amount of funds to be contributed or added upon continuation of this Plan shall be 800 million yen per trust period, and the extended trust period shall be five years in principle. Provided, however, that when providing said additional contributions, if Company shares (excluding Company shares corresponding to points granted to Eligible Directors, Etc. for which delivery has not been completed) and cash remain in the trust as of the last day of the trust period prior to extension of the trust period (“Remaining Shares, Etc.”), the combined amount of such Remaining Shares, Etc. and additionally contributed funds shall be 800 million yen per trust period.

(3) Calculation method and maximum number of Company shares subject to Share Delivery, Etc. to Eligible Directors, Etc.

The number of Company shares subject to Share Delivery, Etc., to Eligible Directors, Etc., shall be calculated based on points granted in accordance with respective positions, achievement of performance targets, etc.

First, on the date established as the basis date of each fiscal year within the evaluation period, the number of base points (“Base Points”) for the fiscal year in question established according to position shall be granted to Eligible Directors, Etc., who have met the prescribed requirements. Base Points will increase or decrease in accordance with the degree of achievement of each performance target, including Company consolidated revenues and consolidated operating income for the fiscal year to which the Base Points in question relate, by means of which the number of points for the fiscal year in question (“Annual Points”) will be determined. (The process of determining Annual Points shall be referred to as “Annual Performance Evaluation” below.) Annual Points shall accumulate throughout the evaluation period that includes the fiscal year to which the points in question relate. Provided, however, that if Eligible Directors, Etc., commits an act in violation of the law, or in violation of Company or Nippon Express internal rules, or an act deemed inappropriate in light of the objectives of this Plan to improve Company Group corporate value and shareholder value over the medium to long term, the granting of points may be suspended, in part or in whole, or such points earned may be confiscated in part or in whole.

After the end of the evaluation period, the total number of Annual Points (including Annual Points for the year in question (or the fiscal year ending prior to December 31, 2021, in the event that a resolution is passed at the 115th ordinary general shareholders meeting of Nippon Express that includes a change of fiscal year end for Nippon Express to December 31) for persons among Eligible Directors, Etc., granted Annual Points related to the Nippon Express fiscal year ending prior to March 31, 2022) accumulated during the evaluation period in question shall be increased or decreased according to the degree of achievement of each performance target throughout the evaluation period, including Company or Nippon Express consolidated revenues, consolidated operating income, and consolidated return on equity (ROE), etc., by means of which the final number of points for the evaluation period in question shall be determined. (This process of determining the final number of points shall be referred to as “Medium-Term Performance Evaluation” below.)

The range of increase or decrease in accordance to the degree of achievement of performance targets shall be from 0% to 150%, using 100% established as a standard for the degree of achievement of performance targets for the Annual Performance Evaluation and Medium-Term Performance Evaluation overall.

Each point shall correspond to one share of common stock of the Company*, and Eligible Directors, Etc., who satisfy requirements as beneficiaries shall receive Share Delivery, Etc., corresponding to the number of points held by such Eligible Directors, Etc., after the end of the Evaluation Period (see (4) below).

The maximum number of Company shares (points) subject to Share Delivery, Etc. under this Plan for a single fiscal year shall be 23,000 shares (23,000 points). Therefore, the maximum number of Company shares attributable to the Trust for each trust period of five fiscal years shall be 115,000 shares (115,000 points), which is equivalent to the number obtained by multiplying the number of Company shares subject to Share Delivery, Etc. corresponding to a single fiscal year by five, which is the number of fiscal years of the evaluation period.

 

*	If a stock split or reverse stock split occurs during the trust period and it is deemed fair to adjust the number of points corresponding to Company shares, the corresponding number of Company shares per point shall be adjusted in accordance with the split ratio, reverse stock split ratio, etc.

(4) Timing and details of Share Delivery, Etc. to Eligible Directors, Etc.

As a rule, Eligible Directors, Etc. who satisfy requirements as a beneficiary shall receive Share Delivery, Etc. after the end of the evaluation period in question.

With respect to details of Share Delivery, Etc., to Eligible Directors, Etc., Company stock corresponding to half of the points held by said Eligible Directors, Etc. (rounded down for shares of less than one trading unit) shall be delivered, while the number of Company shares corresponding to remaining points shall be converted by the Trust and delivered in a converted cash equivalent for use in paying income taxes, etc. (The Company shall pay tax on the amount converted to cash, providing the remaining amount after tax payment to Eligible Directors, Etc.)

In the event that an individual Eligible Directors, Etc., retires during the evaluation period, the Company will provide Share Delivery, Etc., corresponding to the points held by such Eligible Directors, Etc. at the time of his or her retirement. The details of Share Delivery, Etc., shall be the same as in the case where Share Delivery, Etc., is conducted after the end of the evaluation period.

In the event of the death of individual Eligible Directors, Etc., during the trust period, the Trust will convert the number of Company shares corresponding to the number of points held by said Eligible Directors, Etc., at the time of his or her death into cash, providing cash equivalent to the value of the conversion to the surviving family members of the Eligible Directors, Etc., who meet the prescribed requirements.

(5) Exercise of voting rights related to Company shares in the Trust

To ensure the neutrality of the Trust in Company management, voting rights of Company shares held by the Trust shall not be exercised during the trust period.

(6) Other Plan details

Other details concerning this Plan shall be determined by the board of directors at the Trust is established, the trust agreement is amended, or additional contributions are made to the Trust.

(Initial Remuneration, Etc., of Members of the Audit & Supervisory Board)

Article 3 The total amount of remuneration, etc., to be paid the members of the Audit & Supervisory Board of the Company from the date of incorporation of the Company to the close of the ordinary general meeting of shareholders related to the fiscal year ending on December 31, 2023 shall not exceed 120 million yen per year. The Company may bear the cost of company housing and other expenses necessary for business within the scope of this total amount.

(Effective Date of Provision Through Electronic Means)

Article 4 Article 14 (Provision Through Electronic Means) shall come into effect as of the effective date (hereinafter “effective date”) of the provisions stipulated in Article 1 of Supplementary Provisions to the Act Partially Amending the Companies Act (Act No. 2019-70).

 

2.

The provisions of Article 14-2 (Internet Disclosure as Deemed Provision of Reference Documents for General Meetings of Shareholders) shall cease to be effective on the effective date. Provided, however, that the provisions shall remain in effect with respect to the convocation of a general meeting of shareholders to be held within six months from the effective date.

 

(Acquisition

of Treasury Shares)

Article 5 Pursuant to the provisions of Article 165-2 of the Companies Act, the Company may acquire treasury shares via market transactions, etc., pursuant to a resolution of the board of directors.

(Interim Dividends)

Article 6 The Company may, by resolution of the board of directors, pay an interim dividend of surplus in cash as provided in Article 454-5 of the Companies Act to shareholders or registered pledgees whose names appear or are recorded in the latest shareholder registry as of June 30 of each year.

(Deletion of Supplementary Provisions)

Article 7 Article 1 and Article 5 and Article 6 of these Supplementary Provisions shall be deleted at the conclusion of the first ordinary general meeting of shareholders after the formation of the Company.

 

2.	Article 2-1 and Article 3 of these Supplementary Provisions shall be deleted at the conclusion of the ordinary general meeting of shareholders of the Company for the fiscal year ending December 31, 2023.

3.	Article 2-2 of these Supplementary Provisions shall be deleted as of the termination of this Plan (or, if a resolution for amendment or continuation of this Plan is submitted to and approved at a general meeting of shareholders of the Company, upon said resolution).

 

4.	Article 14-2 (Internet Disclosure as Deemed Provision of Reference Documents for General Meetings of Shareholders) and Article 4 of these Supplementary Provisions shall be deleted after nine months have elapsed from the effective date.