Tokyo, Japan—Tosoh Corporation’s Board of Directors resolved in a meeting held May 10, 2017, to propose changing the company’s number of shares per share unit and consolidating the company’s shares at the 118th general meeting of shareholders (the ordinary general meeting of shareholders) on June 28, 2017, and to amend the company’s articles of incorporation.
1. Change in share units
(1) Reason for change
Tosoh is responding to the decision by Japan’s stock exchanges to have all listed companies convert to 100-share units by a deadline of October 1, 2018.
(2) Details of change
Tosoh will change from 1,000-share units to 100-share units.
(3) Schedule for change
Tosoh intends for the change to be effective as of October 1, 2017.
(4) Conditions for change
The change is subject to the approval of the proposal for share consolidation at the ordinary general meeting of shareholders, as per “2. Share consolidation” below.
2. Share consolidation
(1) Goal of share consolidation
In changing its share units from 1,000 shares to 100 shares as indicated in “1. Change in share units,” Tosoh will consolidate 2 shares of its common stock into 1 share of common stock to maintain the pricing of each share unit of its stock at from 50,000 yen to 500,000 yen after the change, as is considered desirable by Japan’s stock exchanges.
(2) Details of share consolidation
i. Type of stock consolidated
Common stock will be consolidated.
ii. Method and ratio of consolidation
As of October 1, 2017, Tosoh will consolidate 2 shares into 1 share according to the holdings of shareholders recorded in its shareholder register at September 30, 2017.
iii. Decrease in the number of shares due to consolidation
Total number of outstanding shares before share consolidation (as of March 31, 2017)
| 650,161,912 shares |
Decrease in number of shares due to share consolidation
| 325,080,956 shares |
Total number of shares issued after share consolidation
| 325,080,956 shares |
Note: “Decrease in number of shares due to share consolidation” is a theoretical value calculated using the number of outstanding shares before share consolidation and the consolidation ratio.
iv. Impact of share consolidation
The number of shares held by a shareholder will be halved after the share consolidation, but Tosoh’s net assets, etc., will remain unchanged because there will be a two-fold increase in the amount of net assets per share and, barring changes in market trends, because there will be no change in the asset value of shareholders’ shares.
(3) Handling of fractional shares less than 1 share
All fractional shares of less than 1 share resulting from the share consolidation will be sold together in accordance with Japan’s Companies Act, and the proceeds will be distributed to shareholders who held the fractional shares in proportion to the number of fractional shares each shareholder held.
(4) Decrease in the number of shareholders due to consolidation
Following is a comparison of shareholders in the shareholder register at March 31, 2017.
| Number of Shareholders | % | Number of Shares Held | % |
| Shareholders having fewer than 2 shares | 408 | 1.5 | 408 | 0.0 |
| Shareholders having more than 2 shares | 27,188 | 98.5 | 650,161,504 | 100.0 |
| All shareholders | 27,596 | 100.0 | 650,161,912 | 100.0 |
Note: After the share consolidation, the assumption based on the shareholder composition is that 408 shareholders who hold fewer than 2 shares (the total number of shares held by those shareholders being 408) will lose their status as shareholders. Shareholders holding less than a single share unit can use procedures for the additional purchase of fractional shares or for the purchase of fractional shares. Please inquire of your securities firm or of the administrator of Tosoh’s shareholder register.
(5) Conditions for consolidation
The share consolidation slated to come into effect on October 1, 2017, is subject to approval at the ordinary general meeting of shareholders.
(6) Total number of authorized shares
The total number of authorized shares as of the date upon which the share consolidations comes into effect will be 900,000,000 shares, according to the consolidation ratio.
3. Amendment of articles of incorporation
(1) Goal of amendment
The amendment reflects aforementioned “1. Change in share units” and “2. Share consolidation.” Pursuant to Paragraph 2, Article 182, and to Paragraph 1, Article 195, of Japan’s Companies Act, the amendment of Tosoh’s articles of incorporation is not subject to approval at the ordinary general meeting of shareholders.
(2) Description of amendment
Tosoh’s articles of incorporation will be amended as follows effective October 1, 2017, subject to the approval at the ordinary general meeting of shareholders of the foregoing “2. Share consolidation.”
| Current Articles of Incorporation | Amended Articles of Incorporation |
| Article 6 (Total Number of Authorized Shares) The total number of authorized shares of the Company shall be 1.8 billion shares. Article 8 (Number of Shares Constituting One Unit)
1,000 shares of the Company shall constitute one unit. | Article 6 (Total Number of Authorized Shares) The total number of authorized shares of the Company shall be 900 million shares. Article 8 (Number of Shares Constituting One Unit)
100 shares of the Company shall constitute one unit. |
4. Schedule for changing the number of shares per share unit, for consolidating shares, and for amending the articles of incorporation
| Resolution at the Board of Directors Meeting | May 10, 2017 |
| Resolution of the ordinary general meeting of shareholders | June 28, 2017 (provisional) |
| Change in the number of shares per share unit | October 1, 2017 (provisional) |
| Consolidation of shares | October 1, 2017 (provisional) |
| Amendment of articles of incorporation | October 1, 2017 (provisional) |
| Payment for handling of fractional shares less than 1 share | Early December 2017 (provisional) |
Note: Although the effective date for changing the number of shares per share unit and for consolidating shares is given as October 1, 2017, the trading unit will be changed from 1,000 shares to 100 shares on the Tokyo Stock Exchange on September 27, 2017, because of the book-entry procedure following the trading of shares, and the effect of the consolidation will be reflected in the share price.
Reference: Q&A on Changing the Number of Shares per Share Unit and on Consolidating Shares
Q1. What is a change in the number of shares per share unit and share consolidation?
A1. A change in the number of shares per share unit means a change in the share units that are the basis for the number of voting rights at a general meeting of shareholders and for the number of trading units on stock exchanges. Tosoh will change its number of shares per share unit from 1,000 shares to 100 shares.
A share consolidation reduces the number of shares. Tosoh will consolidate 2 shares into 1 share.
Q2. What is the purpose of changing the number of shares per share unit and of consolidating shares?
A2. Japanese stock exchanges have instituted an Action Plan for Consolidating Trading Units whose aim is to standardize the trading units (the number of shares per share unit) for common stock issued by all listed domestic corporations at 100 shares. Tosoh thus decided to change its number of shares per share unit from 1,000 shares to 100 shares effective October 1, 2017. And in view of what then will be the price level per trading unit of its shares, Tosoh has chosen to consolidate its shares units into 1 share from 2 shares.
Q3. How will the number of shares and the voting rights held by shareholders be affected?
A3. The number of shares held by each shareholder after the share consolidation will be the number of shares obtained by multiplying the number of shares recorded in the latest shareholder register as of the end of the last day of September 2017 by one-half (rounded down to the nearest whole share). The number of voting rights will be 1 per 100 shares held after the share consolidation. Specifically, the number of shares held and the number of voting rights before and after the change in the number of shares per share unit and the share consolidation will be as follows:
| Before Effective Date | After Effective Date |
| Number of Shares Held | Number of Voting Rights | Number of Shares Held | Number of Voting Rights | Fractional Shares |
| Example 1 | 5,000 shares | 5 | 2,500 shares | 25 | None |
| Example 2 | 1,333 shares | 1 | 666 shares | 6 | 0.5 shares |
| Example 3 | 400 shares | None | 200 shares | 2 | None |
| Example 4 | 299 shares | None | 114 shares | 1 | 0.5 shares |
| Example 5 | 1 share | None | None | None | 0.5 shares |
• Shareholders can bundle and sell the fractional shares amounting to less than one share unit cited in examples 2, 4, and 5, and the Company will pay to shareholders whose shares become fractional because of the share consolidation proceeds in proportion to the number of each shareholder’s fractional shares. Payments for the disposal of fractional shares are scheduled for early December 2017.
• Shares held by shareholders who have fewer than 2 shares (as in example 5) prior to the effective date of the share consolidation will become fractional shares as a result of the share consolidation, and shareholders holding such fraction shares will therefore lose their status as shareholders, and their understanding of this point will be much appreciated.
Q4. Is there any way to ensure that there are no fractional shares?
A4. By requesting the sale or purchase of shares constituting less than one share unit prior to the share consolidation coming into effect, it is possible to avoid fractional shares. Your securities dealer will take requests for the sale or purchase of shares constituting less than 1 share unit. For shareholders who do not hold an account with a securities company, please direct inquiries to the administrator of Tosoh’s shareholder register as listed at the end of this document.
Q5. Will there be any impact on asset value because of the share consolidation?
A5. Barring factors associated with market trends, there will be no change in the asset value of shareholders’ shares because there will be no change in Tosoh’s assets or capital before or after the share consolidation. The number of shares held by shareholders will be reduced by half after the share consolidation, but the net asset amount per share will increase two-fold. Moreover, the theoretical price per share will likewise increase two-fold from prior to the share consolidation.
Q6. Will there be any impact on dividends received after the share consolidation?
A6. The number of shares held by shareholders will be halved after the share consolidation, and Tosoh intends to set the dividend per share after the effective date of that consolidation. So aside from changes in performance results or other factors, the total dividends of each shareholder after the share consolidation will not be affected. Dividends, however, will not be paid on fractional shares resulting from the share consolidation.
Contact information for inquiries
Should you have any questions about changes in the number of shares per share unit and the share consolidation, please contact your securities firm or the following administrator of Tosoh’s shareholder register:
Administrator of the shareholder register:
Sumitomo Mitsui Trust Bank Limited
Contact information:
Stock Transfer Agency Business Planning Department
Sumitomo Mitsui Trust Bank Limited
8-4, Izumi 2-chome, Suginami-ku, Tokyo
Telephone: 0120 782 031 (toll-free within Japan)
Operating hours: 9:00–17:00 (closed weekends and holidays)
TOSOH CORPORATION
WHO WE ARE
Tosoh is the parent of the Tosoh Group, which comprises over 100 companies worldwide and a multiethnic workforce of over 12,000 people and generated net sales of ¥743.0 billion (US$6.9 billion at the average rate of ¥108.35 to the US dollar) in fiscal 2017, ended March 31, 2017.
WHAT WE DO
Tosoh is one of the largest chlor-alkali manufacturers in Asia. The company supplies the plastic resins and an array of the basic chemicals that support modern life. Tosoh’s petrochemical operations supply ethylene, polyethylene, and functional polymers, while its advanced materials business serves the global semiconductor, display, and solar industries. Tosoh has also pioneered sophisticated bioscience systems that are used for the monitoring of life-threatening diseases. In addition, Tosoh demonstrates its commitment to a sustainable future in part by manufacturing a variety of eco-products.
Stock Exchange Ticker Symbol: 4042
DISCLAIMER
This document may contain forward-looking statements, including, without limitation, statements concerning product development, objectives, goals, and commercial introductions, which involve certain risks and uncertainties. Forward-looking statements are identified through the use of the word anticipates and other words of similar meaning. Actual results may differ significantly from the results expressed in forward-looking statements.