Nippon Telegraph and Telephone Corp Implementation of the New Incentive Program (4678Z)
06 2월 2014 - 8:48PM
UK Regulatory
TIDMNPN
RNS Number : 4678Z
Nippon Telegraph and Telephone Corp
06 February 2014
February 6, 2014
Company Name: Nippon Telegraph and Telephone Corporation
Representative: Hiroo Unoura, President and Chief Executive Officer
(Code No.: 9432, First section of Tokyo Stock Exchange)
Implementation of the New Incentive Program Towards the
Promotion of Global Cloud Business
Implementation of a Performance-based Equity Compensation
Program
Using NTT Shares for Overseas Subsidiaries
Nippon Telegraph and Telephone Corporation ("NTT") announced
that it has decided to implement a performance-based equity
compensation program (the "Program") for its subsidiary, Dimension
Data Holdings plc ("Dimension Data"), using NTT shares. Dimension
Data plans to move the Program forward by making a decision
regarding the specific procedures relating to the implementation of
the Program.
1. Background of the Implementation of the Program:
Based on NTT's Medium-Term Management Strategy, "Towards the
Next Stage," NTT's business objective is to reach US$20 billion in
proceeds from overseas sales by the fiscal year ending March 31,
2017. NTT Group is proactively working to drive the development of
its global business forward and is projecting proceeds from
overseas sales to be US$13 billion for the fiscal year ending March
31, 2014. As companies with important responsibilities within NTT
Group's global cloud business, each Dimension Data group company is
expected to accelerate its development by further strengthening
collaboration efforts within NTT Group.
In light of the foregoing, NTT has decided to implement a
compensation program that distributes NTT shares to executives and
key talent of Dimension Data group companies worldwide through a
long-term incentive plan, with awards based on the business
performance of Dimension Data, in order to incentivize each
executive and key talent, as members of NTT Group, to conduct
business while being conscious of the corporate value of Dimension
Data and NTT Group, and to reward success.
2. Details of the Program:
The Program will distribute NTT shares(*1) to eligible persons
based on the business performance of Dimension Data, commencing
during its current fiscal year ending September 30, 2014 and
continuing for three years through the fiscal year ending September
30, 2016 ("Business Performance Measurement Period"). Eligible
persons will be designated each fiscal year, and the Program is
expected to be conducted in the same manner each fiscal year,
including and after the fiscal year ending September 30, 2015.
(1) Summary
Under the Program, each eligible person is given the right to
choose from either the Full Value Plan or the Option Plan. Under
the Full Value Plan, NTT shares are distributed at no charge, and
their exercise value is based on virtual shares whose value is
based on Dimension Data's enterprise value ("Units"). Under the
Option Plan, eligible persons receive the option to acquire NTT
shares, and upon the exercise of such option, they receive NTT
shares at no charge based on the increase in value of the Units.
Each eligible person may choose to participate in one or both of
these plans, and the rights under these plans vest when the
eligible person satisfies the continued service requirements
established by the Program. Under both plans, the number of Units
to be provided is initially determined based on the position of the
eligible person, and after the Business Performance Measurement
Period, assuming that the continued service requirements are
satisfied, the number of Units to be provided to each eligible
person is fixed based on the status of achievement of the
performance target predetermined by Dimension Data. Under the Full
Value Plan, a certain number of NTT shares, which number is
calculated using a predetermined method of calculation based on the
total value of the Units whose rights have vested, are distributed
to eligible persons. Under the Option Plan, a certain number of NTT
shares, which number is calculated using a pretermined method of
calculation based on the increase in the total value of Units for
which eligible persons exercised options after their rights vested,
are distributed to eligible persons. Options can be exercised at a
point in time established by the Program within two years after the
rights have vested.
(2) Eligible Persons
Eligible persons for purposes of the Program are scheduled to be
designated in advance by Dimension Data. Eligible persons will
consist of executives and key talent of Dimension Data group
companies (approximately 700 persons). Eligibility will be reviewed
every year.
(3) Establishment of the Trust
Under the Program, a Trust in which the eligible person is the
named trustee will be established ("Trust"). The Trust, under
instructions from the trust executor, will acquire NTT shares on
the open market and distribute a fixed number of such NTT shares to
eligible persons following predetermined procedures.
(4) Acquisition Method of NTT Shares
NTT shares are scheduled to be purchased by the Trust on the
Tokyo Stock Exchange or New York Stock Exchange.
(5) Acquisition Period and Acquisition Price of NTT Shares
After the Business Performance Measurement Period, the Trust
will acquire NTT shares over a predetermined two-year period and
distribute the shares to eligible persons. As a general rule,
Dimension Data is expected to pay the total purchase price of US$70
million(*2) , which is the acquisition price when using the
three-year period from the fiscal year ending September 30, 2014 as
the Business Performance Measurement Period.
*1: American Depositary Receipts (ADR) may be distributed
instead of NTT shares.
*2: Purchase price may vary depending on the business
performance of Dimension Data.
[Note]
The information in this material is based on certain current
assumptions, and is subject to change in the future.
For further inquiries, please contact:
Ken Katsuyama
General Affairs Department (HR)
Nippon Telegraph and Telephone Corporation
Phone: +81-3-6838-5538
Fax: +81-3-6838-5529
This information is provided by RNS
The company news service from the London Stock Exchange
END
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