May 14, 2015 Notice of Disposal of the Treasury Shares by Allotment to a Third Party in Connection with Capital and Business Alliance with NIPPON STEEL & SUMITOMO METAL CORPORATION Company name: Unipres Corporation Representative: Masanobu Yoshizawa, President and Representative Director Securities code: 5949 (Tokyo Stock Exchange, First Section) Contact: Yoshio Ito, Director and Executive Vice President Tel. +81-45-470-8631 Website: http://www.unipres.co.jp/ UNIPRES CORPORATION (hereinafter the Company ) adopted a resolution at the board of directors meeting held on May 14, 2015 on capital and business alliance with NIPPON STEEL & SUMITOMO METAL CORPORATION (hereinafter the company ) and disposal of the treasury shares of the Company by allotment to a third party (hereinafter the Disposal ) and we hereby notify as follows. Ⅰ. Overview of Capital and Business Alliance 1. Objectives and Reasons for Capital and Business Alliance For the automotive industries and the environment surrounding the Company Group, markets have been rapidly expanding mainly in North America and China, although there are some such adverse impacts as slowing down of growth in emerging countries and the negative impact of consumption tax, and so on in the Japanese market. Under such circumstances, the Company Group has been actively promoting business expansion in step with the globalization of automobile manufacturers in addition to development of pressed products equipped with both safety and environmental capacity. With the company, to which the shares of the Company will be allotted, we have continued ongoing exchanges, including joint research, and so on for the purpose of improvement in technological capacity related to application of extra-high tension materials (extra-high strength steel plates) to body frame parts of automobiles. Through this alliance, by strengthening our relationships, we believe we will deepen joint research efforts which will result in synergistic effects for our press forming technology, including extra-high tension material forming and the technological development capacity for automotive steel plates of the company and lead to the realization of further development and expansion of our business, including alignment with the growing needs for lighter body vehicles and expansion of global sales, and so on. 2. Details of Business Alliance In order to meet growing needs for lighter body vehicles in the future and toward further strengthening of competiveness and business expansion, we will advance the following initiatives. (1) Deepening of joint technical research toward lighter and higher functioning body pressed parts and transmission products using extra-high tension materials, and so on. (2) Global sales expansion of extra-high tension material pressed parts, and so on, taking advantages of the technologies based on (1) written above.
3. Details of Capital Alliance The Company and the company agreed that the company would acquire 2,650,000 shares of treasury shares held by the Company in order to build up a relationship of trust between the companies and promote the business alliance smoothly. After the Disposal, the ratio of shares of the Company owned by the company will be 16.46% of the total issued shares of the Company, together with 5,181,000 shares of the Company already held by the company. 4. Summary of the Alliance Partner [1] Name NIPPON STEEL & SUMITOMO METAL CORPORATION [2] Address 2-6-1 Marunouchi, Chiyoda-ku, Tokyo [3] Title and Name of Representative Director, President: Kosei Shindo Representative [4] Business Line Each business of iron-making, engineering, chemicals, new materials and system solutions [5] Capital 419,524 million [6] Date of Incorporation April 1, 1950 [7] Number of Issued Shares 9,503,214,022 shares [8] Closing Period March 31 [9] Number of Employees 84,361 [10] Main Customers Metal One Corporation, Sumitomo Corporation, etc. [11] Main Banks Sumitomo Mitsui Banking Corporation, The Bank of Tokyo-Mitsubishi UFJ, Ltd. [12] Large Shareholders and Japan Trustee Services Bank, Ltd. (trust account): 3.9% Shareholding Ratio The Master Trust Bank of Japan, Ltd. (trust account): 3.2% Sumitomo Corporation: 2.8% Nippon Life Insurance Company: 2.7% [13] Relationships of the Parties Capital Relationship Personnel Relationship Translation Relationship Condition of Pertinence to Related Persons The partner company holds 5,181,000 shares of the common shares of the Company. On the other hand, there is no particular capital relationship between the related persons and affiliated companies of the Company and the related persons and affiliated companies of the partner company. No pertinent matter The Company is supplied with raw materials, etc., from the partner company and from the customers via trading companies. No pertinent matter
[14] Business Results and Financial Conditions Over the Past Three Years (unit: million yen, except for those subject to explanatory notes) Closing period Year ended March 31, 2012 Year ended March 31, 2013 Year ended March 31, 2014 Consolidated net assets 2,347,343 2,938,283 3,237,995 Consolidated total assets 4,924,711 7,089,498 7,082,288 Consolidated assets per share (yen) 290.77 263.81 294.10 Consolidated net sales 4,090,936 4,389,922 5,516,180 Consolidated operating income 79,364 20,110 298,390 Consolidated ordinary income 143,006 76,931 361,097 Consolidated net income 58,471 124,567 242,753 Consolidated net income per share (yen) 9.29 16.23 26.67 Dividend per share (yen) 2.50 1.00 5.00 (Note) 1. Capital, total number of issued shares, large shareholders and shareholding ratio are as of September 30, 2014. 2. Number of employees is as of March 31, 2014. 3. We believe the company, to which our shares are to be allotted, offers sufficient social credibility based on the information recognized by the Company obtained from the previous transaction relationships, and so on. The company, to which our shares are to be allotted, is listed on the 1 st Section of the Tokyo Stock Exchange and in the corporate governance report submitted to the Tokyo Stock Exchange, it set out in the Group Corporate Philosophy of Nippon Steel and Sumitomo Metal Group, that it is a group that continually looks to enhance its credibility and trust and in the Code of Conduct of Nippon Steel and Sumitomo Metal Group Companies that they shall not engage in any relationship whatsoever with antisocial forces, and so on, which would cause a threat to the order and safety of civil society and that they shall respond to any wrongful demand by a resolute attitude. Further, the company disclosed that it established the Regulations for Cutoff of the Relationship with Antisocial Forces and Prevention of Damages and has built up and reinforced an internal system. Based on the above, we have determined that the company and its officers or major shareholders are not specified organizations, and so on (individuals, corporations and any other organizations, which would gain financial benefit by use of violence or threat or commit fraud and any other criminal acts) and the company has no relationship with specified organizations, and so on. 5. Schedule (1) Resolution of the Board of Directors May 14, 2015 (2) Execution of an agreement on business and capital alliance May 22, 2015 (3) Date of payment for the allotment to a third party May 29, 2015
6. Prospects There will be no impact on the business results for the current year or thereafter by this business alliance and the Disposal, and we believe this will lead to development and expansion of business in the medium- and long-term through a further strengthening of the relationship with the partner company. Ⅱ. Disposal of Treasury Shares by Allotment to a Third Party 1. Summary of Disposal Date of Payment May 29, 2015 Number of disposed shares Disposal price Amount of funds financed Disposal method Disposal destination Other 2,650,000 shares 2,477 per share 6,564,050 thousand Disposal by allotment to a third party NIPPON STEEL & SUMITOMO METAL CORPORATION Each of the above items shall be on condition of effect of filing under the Financial Instruments and Exchange Act. 2. Purpose and Reasons for Disposal As stated in I. Summary of Capital and Business Alliance on page 1, the Company and the company agreed to a business and capital alliance in order to strengthen competitiveness and promote expansion of business, taking advantage of the strengths of both companies. In order to build up a relationship of trust between the companies and promote cooperation smoothly, we have decided to implement disposal of the treasury shares to the company. 3. Amount of Funds to be Financed, Purpose of Use and the Schedule of Expenditures (1) Amount of Funds to be financed [1] Total amount of payment 6,564,050 thousand [2] Rough estimate of issuing expenses 389 thousand [3] Rough estimate of receipt balance 6,563,661 thousand (2) Specific Purpose of Use of Funds to be Financed The purpose of the Disposal is to strengthen the relationship with the company, to which our shares are to be allotted and to smoothly promote a deepening of technical joint research and global sales expansion of extra-high tension material pressed parts, and so on which will result in synergistic effects for our press forming technology, including extra-high tension material forming and the technological development capacity for automotive steel plates of the company. Out of the above rough estimate of the receipt balance, about 3 billion will be appropriated to capital investment in production equipment in connection with model changes of automobiles in Japan during the year ending March 31, 2016 and the residual amount will be appropriated to investment in strengthening production capacity, including press equipment and assembly equipment, and so on of overseas affiliated companies. Funds shall be managed at the deposit account of the Company until expenditures.
4. Policy on the Rationality of the Use of Funds As the funds financed by disposal of the treasury shares contribute to improvement in the corporate value of the Company through investment in production equipment of automobiles stated above and also contribute to improvement in the financial structure, we believe the purpose of use of the funds are rational. 5. Rationality of Disposal Conditions, and so on (1) Grounds for calculation of the amount of payment and specific content Disposal price is 2,477 (rounded down for less than yen, -2.63% as compared with the closing price as of May 13, 2015 ( 2,544)), the average price of the closing prices of the shares of the Company on the Tokyo Stock Exchange for the immediately preceding one month (from April 14, 2015 to May 13, 2015) from the resolution of the board of directors on the Disposal in order to set the price, considering the recent changes in the share price and excluding discretion. The reason for adopting the average price of the closing prices of the shares of the Company for the immediately preceding one month is that we determined it would be more objective and rational as the calculation basis as it could exclude the impact of changes in share prices to adopt the equalized value of the average price for a certain period rather than setting at one specific time. As the share price is the amount multiplying 2,544 yen, the closing price on the Tokyo Stock Exchange of the previous business day (May 13, 2015) of the resolution of the board of directors by 97.37% (deviation rate -2.63%), we determined it does not fall under a particularly favorable disposal price (For reference, the deviation rate between the share price and the mount multiplying 2,414, which is the average of closing prices for the immediately preceding three months (from February 13, 2015 to May 13, 2015), is +2.54%, and the deviation rate between the share price and the amount multiplying 2,222, which is the mount multiplying six months (from November 14, 2014 to May 13, 2015), is +10.29%. On the above disposal price, all of four auditors (out of which two outside auditors) who were present at the board of directors meeting expressed their opinions that the price did not fall under a particularly favorable price and it was legal. (2) Grounds for determining that the disposed quantity and the size of dilution of shares are rational As the disposed quantity of 2,650,000 shares this time is 5.57% of 47,574,273 total issued shares of the Company (the ratio to the total number of voting rights of 421,963 as of March 31, 2015 was 6.28%), we believe the impact on dilution of shares and the secondary market will be insignificant. We believe it will contribute to improvement in corporate value and share value of the Company as it will lead to strengthening of competitiveness and expansion of business, utilizing the strengths of both companies through strengthening the relationship with the company to which our shares are to be allotted and determine the disposal quantity of the Disposal and size of dilution of shares are rational. 6. Reasons for Choosing the company to which our shares are to be disposed, and so on (1) Summary of the company to which our shares are to be disposed Refer to I. 4. Summary of the Alliance Partner on page 2. (2) Reasons for choosing the company to which our shares are to be disposed Refer to I. 1. Purpose and Reasons for Capital and Business Alliance on page 1. (3) Policy for holding of the company to which our shares are to be disposed We confirmed that the company to which our shares are to be allotted would hold the shares obtained by the Disposal for the medium- and long-term, considering the purpose of strengthening the
relationships based on capital and business alliance. We will obtain a written confirmation from the company to which our shares are to be allotted that the name or appellation, address of the transferee, the number of transferred shares, date of transfer, transfer price, reasons for transfer, method of transfer, and so on shall be immediately reported in writing to the Company, the contents of the report shall be reported to the Tokyo Stock Exchange by the Company and the contents of the report shall be made accessible to the public, if the company to which our shares are to be disposed transfers to any third party or the Company within two years from the payment date all or part of the common shares of the Company which were acquired by the company to which our shares are to be disposed through the Disposal. (4) The content regarding the existence of assets required for payment for our shares to be disposed We confirmed that the company to which the shares are to be allotted has cash and deposits necessary for payment of the disposed treasury shares by the status of cash and deposits on the balance sheet of the financial report (the 89 th term (from April 1, 2013 to March 31, 2014) and quarterly report (the 90 th third quarter term (from October 1, 2014 to December 31, 2014) of the company, to which our shares are to be allotted. 7. Large Shareholders and Shareholding Ratio After the Disposal Before the Disposal (As of March 31, 2015) After the Disposal UNIPRES CORPORATION 11.15% NIPPON STEEL & 16.46% SUMITOMO METAL CORPORATION NIPPON STEEL & 10.89% UNIPRES CORPORATION 5.58% SUMITOMO METAL CORPORATION The Master Trust Bank of 3.83% The Master Trust Bank of 3.83% Japan, Ltd. Japan, Ltd. JPMorgan Chase & Co. 3.24% JPMorgan Chase & Co. 3.24% 385632 385632 JPMorgan Chase & Co. 2.49% JPMorgan Chase & Co. 2.49% Luxemburg S.A. 385569 Luxemburg S.A. 385569 The Bank of New York 2.48% The Bank of New York GCM 2.48% GCM Client Account JPRD ISG FEAC Client Account JPRD ISG FEAC Japan Trustee Services Bank, 2.44% Japan Trustee Services Bank, 2.44% Ltd. (trust account) Ltd. (trust account) The Bank of New York 2.28% The Bank of New York Treaty 2.28% Treaty JASDEC Account JASDEC Account JPMorgan Chase & Co. 2.01% JPMorgan Chase & Co. 2.01% 385093 385093 State Street Bank and Trust Company 1.81% State Street Bank and Trust Company 1.81%
8. Prospects There is no impact on disposal of the treasury shares on the business results for the current year and thereafter. 9. Matters Concerning the Procedures under the Corporate Code of Conduct An allotment to a third party does not require obtaining the opinions of an independent third party and taking procedures for confirmation of the intention of the shareholders specified in Article 432 of the Listing Regulations provided by the Tokyo Stock Exchange, Inc. as [1] the dilution rate is less than 25% and [2] it does not accompany changes in the controlling shareholders. 10. Matters Concerning Transactions with Controlling Shareholders, and so on This transaction does not fall under transactions with controlling shareholders. 11.Business Results and Status of Equity Finance Over the Last Three Years (1) Business Results Over the Last Three Years (consolidation) 2012 2013 2014 Consolidated net sales 239,086 million 237,832 million 289,491 million Consolidated operating income 24,631 million 16,025 million 15,435 million Consolidated ordinary income 24,255 million 18,153 million 17,518 million Consolidated net income 14,529 million 11,218 million 8,208 million Consolidated net income per share 311.94 238.50 175.19 Dividend per share 25.00 25.00 25.00 Consolidated net assets per share 1,765.74 2,094.96 2,431.88 (2) Status of Number of Issued Shares and Dilutive Shares at Present (as of March 31, 2015) Number of shares Ratio to the number of issued shares Number of issued shares 47,574,273 shares 100.00% Number of dilutive shares at the conversion price (exercise price) at the present 485,100 shares 1.02% (Note) All new share subscription rights issued by the Company have the fixed exercise price and there are no modification clauses of the exercise price.
(3) Status of Recent Share Prices [1] Status over the last three years 2012 2013 Year ended March 31, 2014 Opening price 2,070 2,054 1,949 Highest price 2,103 2,083 1,973 Lowest price 2,037 2,024 1,921 Closing price 2,071 2,051 1,948 [2] Status over the last six months December January February March April Opening price 2,059 1,979 2,145 2,446 2,465 Highest price 2,079 2,008 2,179 2,480 2,497 Lowest price 2,034 1,959 2,121 2,416 2,434 Closing price 2,054 1,989 2,147 2,452 2,466 [3] Share price as of the business day preceding the date of resolution on issue May 13, 2015 Opening price 2,631 Highest price 2,654 Lowest price 2,538 Closing price 2,544 (4) Status of Equity Finance Over the Last Three Years No pertinent matter 12. Disposal Summary (1) Date of application: May 22, 2015 (2) Date of payment: May 29, 2015 (3) Number of disposed shares: 2,650,000 shares (4) Disposal price: 2,477 per share (5) Total disposal price: 6,564,050 thousand (6) Disposal method: to allot to the company (7) Number of treasury shares after the Disposal: 2,655,529 shares