CAJFF Canon Inc (PK)

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

*Print the name and title of the signing officer under his signature.

The following materials are included.

1. Notice Regarding Features of Issuance of Stock - Type Compensation Stock Options

				February 13, 2020
				Canon Inc.
				Chairman & CEO: Fujio Mitarai
				Securities code: 7751
				Tokyo (First Section) and other Stock Exchanges
				Inquiries:
				Sachiho Tanino
				General Manager
				Consolidated Accounting Div.
				Finance & Accounting Headquarters
				+81-3-3758-2111

Notice Regarding Features of Issuance of Stock - Type Compensation Stock Options

At a Board of Directors meeting held on February 13, 2020, Canon Inc. (the “Company”) passed a resolution regarding the specific details of issuance of stock acquisition rights as stock-type compensation stock options to an Executive Officer of the Company as follows.

The purpose of issuance of stock-type compensation stock options to its Executive Officer is to provide an incentive for the Executive Officer to contribute to the improvement of operating results and higher corporate value through sharing the benefits and risks of share price fluctuations with the Company’s shareholders.

March 25, 2020

1

The grantees of the stock acquisition rights, the number of the stock acquisition rights to be granted per grantee, and the total number of the stock acquisition rights to be allocated are as follows. The number of stock acquisition rights to be granted is subject to the grantee’s application for the subscription of the stock acquisition rights. If the applied number is less than the number to be granted, such applied number of share options shall be granted.

Stock Acquisition Rights of Canon Inc. Issued in March of 2020

The class of shares to be acquired upon exercise of the stock acquisition rights shall be shares of common stock of the Company, and the number of shares to be acquired upon exercise of each stock acquisition right (the “Number of Shares Acquired”) shall be 100 shares; provided, however, that in the case that the Company conducts a share split (including an allotment without consideration (musho-wariate) of shares of common stock of the Company; the same shall apply to all references to the share split herein) or share consolidation on and after the date on which the stock acquisition rights shall be allotted as set forth in (1) above (the “Allotment Date”), the Number of Shares Acquired shall be adjusted in accordance with the following formula, rounding down any fraction of less than one (1) share resulting from such adjustment.

In addition to the above, in any event that makes it necessary to adjust the Number of Shares Acquired, including a merger and company split, on and after the Allotment Date, the Company may make appropriate adjustment to the Number of Shares Acquired within a reasonable range.

2

The price to be paid in exchange for stock acquisition rights (the “Allotment Price”) shall be obtained by multiplying the fair value of stock acquisition right per share on the Allotment Date, and the total number of the stock acquisition rights allotted to the Executive Officer. The fair value of the stock acquisition rights shall be calculated by using the Black-Scholes Model based on some conditions to be applied on the Allotment Date.

The Allotment Price shall be the fair value of stock acquisition rights and the allotment of stock acquisition rights shall not fall under the category of an allotment of the stock acquisition rights at specially favorable conditions. The remuneration, the amount of which shall be equal to the price to be paid in exchange for stock acquisition rights as stated above, will be paid by the Company to the person to pay such price shall be offset by the rights of such person.

The value of assets to be contributed upon exercise of each stock acquisition right shall be one (1) yen per share to be acquired upon exercise of each stock acquisition right, multiplied by the Number of Shares Acquired.

From March 26, 2020 to March 25, 2050

The stock acquisition rights cannot be acquired through transfer, unless such acquisition is expressly approved by a resolution of the Board of Directors.

3

If a proposal for the approval of a merger agreement under which the Company will become an extinguishing company or a proposal for the approval for a share exchange agreement or a share transfer plan under which the Company will become a wholly owned subsidiary is approved by the Company’s shareholders at a Meeting of Shareholders (or by the Board of Directors if no resolution of a Meeting of Shareholders is required for such approval), the Company will be entitled to acquire the share options, without compensation, on a date separately designated by the Board of Directors.

If the Company conducts a merger (limited to the case where the Company is dissolved due to the merger), or a share exchange or transfer (both, limited to the case where the Company becomes a wholly-owned subsidiary) (collectively, the “Structural Reorganization”), the Company shall, in each of the above cases, allot stock acquisition rights of any of the relevant companies listed in “a” through “e” of Article 236, Paragraph 1, Item 8 of the Company Law (the “Reorganized Company”) to the Holders holding the stock acquisition rights remaining at the time immediately preceding the effective date of the relevant Structural Reorganization (the “Remaining Stock Acquisition Rights”) (the effective date of the relevant Structural Reorganization shall mean, in the case of a merger, the date on which the merger becomes effective; in the case of a consolidation; the date of establishment of a newly-incorporated company through consolidation; in the case of a share exchange, the date on which the share exchange becomes effective; and in the case of a share transfer, the date of establishment of a wholly-owning parent company through the share transfer; hereinafter the same shall apply). Provided, however, that the foregoing shall be on the condition that transfer of such stock acquisition rights by the Reorganized Company in accordance with each of the following items is stipulated in a merger agreement, a consolidation agreement, a share exchange agreement or a share transfer plan.

4

A number equal to the number of the Remaining Stock Acquisition Rights held by the Holder shall be transferred to such Holder.

Common stock of the Reorganized Company.

To be determined in accordance with (4) above, taking into consideration, among others, the conditions of Structural Reorganization.

The value of assets to be contributed upon exercise of each stock acquisition right to be allotted shall be the amount obtained by multiplying (x) the exercise price after reorganization set forth below by (y) the number of shares of the Reorganized Company to be acquired upon exercise of the relevant stock acquisition rights as determined in accordance with (iii) above. The “exercise price after reorganization” shall be one (1) yen per share of the Reorganized Company to be acquired upon exercise of each of its stock acquisition rights.

From and including whichever is the later of (x) the commencement date of the period during which the stock acquisition rights may be exercised as provided for in (7) above or (y) the effective date of the Structural Reorganization, to and including the expiration date of the period during which the stock acquisition rights may be exercised as provided for in (7) above.

To be determined in accordance with (8) above.

The stock acquisition rights cannot be acquired through transfer, unless such acquisition is expressly approved by a resolution of the Board of Directors of the Reorganized Company.

To be determined in accordance with (10) above.

To be determined in accordance with (11) above.

No certificates shall be issued for the stock acquisition rights.

5

Any fraction of a share (less than one (1) share) to be delivered to any Holder who has exercised the stock acquisition rights will be rounded down.

6