Notice Regarding Issuance of Stock Acquisition Rights (Stock Options)

(2) Amount of assets to be contributed upon exercise of the Stock Acquisition Rights

The assets to be contributed upon exercise of the Stock Acquisition Rights shall be cash, and the amount of the assets to be contributed upon exercise of each of the Stock Acquisition Rights shall be an amount obtained by multiplying the price per share to be delivered upon exercise of the Stock Acquisition Rights hereafter defined (the “Exercise Price”), by the Number of Shares to be Allotted defined in (1) above.

The Exercise Price shall be an amount obtained by multiplying the average of the closing prices for regular trading of common stock of the Company on the Tokyo Stock Exchange (the “Closing Price”) for each day (excluding days on which there was no trading) of the month preceding the month to which the allotment date of the Stock Acquisition Rights belongs, by 1.05 (with any fraction of less than one yen rounded up). However, if the amount is lower than the Closing Price on the allotment date of the stock acquisition rights (if there was no trading on that day, the Closing Price on the day immediately preceding), the Closing Price on the allotment date of the stock acquisition rights shall be the Exercise Price.

In the event the Company conducts, with respect to the shares of its common stock, a stock split or a consolidation of shares, the Exercise Price shall be adjusted using the following formula with any fraction less than one yen arising from the adjustment rounded up.

In the event the Company newly issues shares of common stock or disposes of its treasury shares of common stock at a price below the current quotation (excluding the case upon exercise of the stock acquisition rights), the Exercise Price shall be adjusted using the following formula with any fraction less than one yen arising from the adjustment rounded up.

The “number of outstanding shares” provided in the above formula is derived by deducting the number of treasury shares of common stock of the Company from the total number of issued shares of common stock of the Company. In the event the Company disposes of its treasury shares of common stock, the “number of shares newly issued” shall be replaced by the “number of treasury shares to be disposed of.”

Other than the above, in the event it becomes necessary to adjust the Exercise Price for the Stock Acquisition Rights, the Exercise Price may be adjusted by the Company within the scope deemed reasonable.

(3) Period during which the Stock Acquisition Rights are exercisable

Period during which the Stock Acquisition Rights are exercisable (the “Exercise Period”) is from April 1, 2023 to March 31, 2028.

(4) Matters concerning the capital and capital reserve to be increased

1. 1)
   The amount of capital to be increased due to the issuance of shares upon exercise of the Stock Acquisition Rights shall be one half (1/2) of the maximum amount of increase in stated capital to be calculated according to Article 17, Paragraph 1 of the Corporate Accounting Regulations, with any fraction less than one yen arising from such calculation to be rounded up.
2. 2)
   The amount of capital reserve to be increased due to the issuance of shares upon exercise of the Stock Acquisition Rights shall be the amount obtained by deducting the amount of capital to be increased set forth in 1) above, from the maximum amount of increase in stated capital set forth in 1) above.

(5) Restriction on the acquisition of the Stock Acquisition Rights through transfer

Any acquisition of the Stock Acquisition Rights through transfer shall require the approval by resolution of the Board of Directors of the Company.

(6) Conditions for the exercise of the Stock Acquisition Rights

1. 1)-a
   
   The number of the Stock Acquisition Rights that the holder of the Stock Acquisition Rights (the “Right Holder”), whose total Number of Shares to be Allotted as the Stock Acquisition Rights allotted in the initial allocation is 3,000 shares or more and less than 12,000 shares may exercise during the period set forth in (ⅰ) to (ⅲ) below shall be limited to the number prescribed in these provisions. If there are any fractions less than one unit in the number of the exercisable Stock Acquisition Rights, the number shall be rounded down.

   1. ⅰ
      From April 1, 2023 to March 31, 2024: Up to 30% of the number of the Stock Acquisition Rights allotted
   2. ⅱ
      From April 1, 2024 to March 31, 2025: Up to 60% of the number of the Stock Acquisition Rights allotted, combined with the Stock Acquisition Rights exercised during the period described in (ⅰ) above
   3. ⅲ
      From April 1, 2025 to March 31, 2028: Up to 100% of the number of the Stock Acquisition Rights allotted, combined with the Stock Acquisition Rights exercised during the period described in (ⅰ) and (ⅱ) above
2. 1)-b
   
   The number of the Stock Acquisition Rights that the Right Holder, whose total Number of Shares to be Allotted as the Stock Acquisition Rights allotted in the initial allocation is 12,000 shares or more may exercise during the period set forth in (ⅰ) to (ⅴ) below shall be limited to the number prescribed in these provisions. If there are any fractions less than one unit in the number of the exercisable Stock Acquisition Rights, the number shall be rounded down.

   1. ⅰ
      From April 1, 2023 to March 31, 2024: Up to 20% of the number of the Stock Acquisition Rights allotted
   2. ⅱ
      From April 1, 2024 to March 31, 2025: Up to 40% of the number of the Stock Acquisition Rights allotted, combined with the Stock Acquisition Rights exercised during the period described in (ⅰ) above
   3. ⅲ
      From April 1, 2025 to March 31, 2026: Up to 60% of the number of the Stock Acquisition Rights allotted, combined with the Stock Acquisition Rights exercised during the period described in (ⅰ) and (ⅱ) above
   4. ⅳ
      From April 1, 2026 to March 31, 2027: Up to 80% of the number of the Stock Acquisition Rights allotted, combined with the Stock Acquisition Rights exercised during the period described in (ⅰ), (ⅱ) and (ⅲ) above
   5. ⅴ
      From April 1, 2027 to March 31, 2028: Up to 100% of the number of the Stock Acquisition Rights allotted, combined with the Stock Acquisition Rights exercised during the period described in (ⅰ),(ⅱ),(ⅲ) and (ⅳ) above
3. 2)
   A Right Holder may not exercise the Stock Acquisition Rights yet to be exercised if he/she loses all of his/her positions as a board director or employee (including that of an executive officer) of the Company or its subsidiaries (hereafter collectively referred to as the “Qualification for Exercise of Right”).
4. 3)
   Regardless of 2) above, in case that Right Holder loses the Qualification for Exercise of Right due to retirement or the like at the convenience of the Company or its subsidiaries, he/she may exercise the Stock Acquisition Rights which could have been exercised if the Qualification for Exercise of Right had not been lost, only until the day on which one year from the day he/she lost the Qualification for Exercise of Right has passed or the expiration of the Exercise Period, whichever is earlier, if the Company gives written approval, with due consideration of various facts, to exercise the Stock Acquisition Rights.
5. 4)
   Regardless of 2) and 3) above, in case that Right Holder loses the Qualification for Exercise of Right (excluding the case of the Right Holder’s death), he/she may exercise the Stock Acquisition Rights which could have been exercised if the Qualification for Exercise of Right had not been lost, if the Company approves gives written approval, with due consideration of various facts, to exercise the Stock Acquisition Rights.
6. 5)
   Regardless of 1), 2) and 3) above, in case that Right Holder loses the Qualification for Exercise of Right due to retirement or the like at the convenience of the Company or its subsidiaries, he/she may exercise the Stock Acquisition Rights which could have been exercised if the Qualification for Exercise of Right had not been lost, without being bound by 1) above, if the Company gives written approval, with due consideration of various facts, to exercise the Stock Acquisition Rights without being bound by 1) above.
7. 6)
   Regardless of 2) above, in case the Right Holder loses the Qualification for Exercise of Right due to his/her death, heirs of the Right Holder may exercise the Stock Acquisition Rights which the Right Holder could have exercised if he/she was alive, until the day on which one year has passed following the day of death of the Right Holder or the expiration of the Exercise Period, whichever is earlier.
8. 7)
   Regardless of 2) and 6) above, in case the Right Holder loses the Qualification for Exercise of Right due to his/her death, heirs of the Right Holder may exercise the Stock Acquisition Rights which the Right Holder could have exercised if he/she was alive if the Company gives written approval, after due consideration of the facts, with respect to the exercise of the Stock Acquisition Rights by the heirs of the Right Holder.
9. 8)
   Except as specified in 6) and 7) above, succession of the Stock Acquisition Rights by inheritance is not permitted. Inheritance of the Stock Acquisition Rights is also not permitted again in case of the death of the heir of the Right Holder.
10. 9)
    In case the exercise of the Stock Acquisition Rights results in the total number of issued shares of the Company exceeding the total number of authorized shares of the Company at that time, or the total number of issued shares of common stock of the Company exceeding the total number of authorized shares of common stock of the Company at that time, the Right Holder may not exercise the Stock Acquisition Rights.
11. 10)
    The Right Holder may not exercise the Stock Acquisition Rights yet to be exercised if he/she falls under any of sub-items (ⅰ) to (ⅵ).

    1. ⅰ
       In case the Right Holder who is an employee (including an executive officer) of the Company or its subsidiaries receives a demotion or severer disciplinary punishment stipulated in the working regulations (except in the event that the Company has given written approval for the exercise of all or part of the Stock Acquisition Rights by the Right Holder with due consideration of various facts).
    2. ⅱ
       In case the Right Holder who is a board director of the Company or its subsidiaries falls under any reason of disqualification stipulated in Article 331, Paragraph 1, Items 3 and 4 of the Companies Act.
    3. ⅲ
       In case the Right Holder, who is a board director of the Company or its subsidiaries carries out a transaction stipulated in Article 356, Paragraph 1, Item 1 of the Companies Act that competes with interests of the Company or its subsidiaries, without taking the procedures necessary under the Companies Act.
    4. ⅳ
       In case the Right Holder, who is a board director of the Company or its subsidiaries carries out a transaction stipulated in Article 356, Paragraph 1, Items 2 or 3 of the Companies Act that causes conflicts with the interests of the Company or its subsidiaries, without taking the procedures necessary under the Companies Act.
    5. ⅴ
       In case the Right Holder is sentenced to imprisonment or severer penalty.
    6. ⅵ
       In case the Right Holder carries out an act regarded as discreditable or disloyal to the Company or its subsidiaries or affiliates.

(7) Conditions for acquisition of the Stock Acquisition Rights by the Company

1. 1)
   The Company may acquire the Stock Acquisition Rights without compensation at the arrival of the day separately prescribed by the Board of Directors of the Company, in case an agenda for approval of one of the following is approved at the General Meeting of Shareholders of the Company (or, if approval of the General Meeting of Shareholders is not required, when resolved at the Board of Directors of the Company):
   • -
     a merger agreement, under which the Company shall be extinguished,
   • -
     an absorption-type company split agreement or an incorporation-type company split plan, under which the Company shall be split in such absorption-type company split or incorporation-type company split,
   • -
     a stock exchange agreement or a stock transfer plan, under which the Company shall become a wholly-owned subsidiary.
2. 2)
   The Company may acquire the Stock Acquisition Rights without compensation at the arrival of the day separately prescribed by the Board of Directors of the Company in case a Right Holder comes to be unable to exercise all or part of the Stock Acquisition Rights in accordance with (6) above.
3. 3)
   The Company may acquire the Stock Acquisition Rights without compensation at the arrival of the day separately prescribed by the Board of Directors of the Company in case a Right Holder renounces all or part of the Stock Acquisition Rights held by the Right Holder.
4. 4)
   The Company may acquire the Stock Acquisition Rights without compensation at the arrival of the day separately prescribed by the Board of Directors of the Company in case the General Meeting of Shareholders of the Company approves the acquisition of all of the class shares subject to wholly call by the Company in accordance with Article 171, Paragraph 1 of the Companies Act.
5. 5)
   The Company may acquire the Stock Acquisition Rights without compensation at the arrival of the day separately prescribed by the Board of Directors of the Company in case consolidation of shares regarding the class of shares to be issued upon exercise of the Stock Acquisition Rights (limited to those generating fractions less than one as the number obtained by multiplying the share unit number of said stock by the ratio of share consolidation) is approved at the General Meeting of Shareholders of the Company.
6. 6)
   The Company may acquire the Stock Acquisition Rights without compensation at the arrival of the day separately prescribed by the Board of Directors of the Company in case request for sale of shares by special controlling shareholder is approved by the Board of Directors of the Company.

(8) Treatment of the Stock Acquisition Rights upon Reorganization

In case the Company conducts a merger (limited to the case where the Company is to be extinguished as a result of the merger), an absorption-type company split, an incorporation-type company split, a stock exchange or a stock transfer (hereafter collectively referred to as the “Reorganization”), stock acquisition rights of the companies listed in (a) to (e) of Article 236, Paragraph 1, Item 8, of the Companies Act (the “Reorganized Company”) shall be delivered, in each of the above cases, to the Right Holders holding the Stock Acquisition Rights remaining at the effective time of the Reorganization (the “Remaining Stock Acquisition Rights”) according to the conditions described in 1) – 10) below. In such case, Remaining Stock Acquisition Rights shall be extinguished. Provided, however, that the foregoing shall be on the condition that delivery of stock acquisition rights of the Reorganized Company in accordance with the following conditions is stipulated in an absorption-type merger agreement, a consolidation-type merger agreement, an absorption-type company split agreement, an incorporation-type company split plan, a stock exchange agreement or a stock transfer plan.

1. 1)
   Number of stock acquisition rights of the Reorganized Company to be delivered
   The same number of stock acquisition rights as the number of the Remaining Stock Acquisition Rights held by the Right Holder shall be delivered respectively.
2. 2)
   Class of shares of the Reorganized Company to be issued or transferred upon exercise of stock acquisition rights
   Shall be shares of common stock of the Reorganized Company.
3. 3)
   Number of shares of the Reorganized Company to be issued or transferred upon exercise of stock acquisition rights
   Shall be determined in accordance with (1) above, based on the consideration of conditions for the Reorganization and other factors.
4. 4)
   Amount of assets to be contributed upon exercise of stock acquisition rights
   Shall be determined in accordance with (2) above, based on the consideration of conditions for the Reorganization and other factors.
5. 5)
   Period during which stock acquisition rights are exercisable
   Shall be from the commencement date of the Exercise Period stipulated in (3) above, or the effective date of the Reorganization, whichever is later, to the expiration of the Exercise Period stipulated in (3) above.
6. 6)
   Conditions for the exercise of stock acquisition rights
   Shall be determined in accordance with conditions for the exercise of the stock acquisition rights as stipulated in (6) above.
7. 7)
   Matters concerning the capital and capital reserve to be increased when shares are issued upon exercise of stock acquisition rights
   Shall be determined in accordance with (4) above.
8. 8)
   Restriction on acquisition of stock acquisition rights through transfer
   Acquisition of stock acquisition rights through transfer shall require the approval by the Reorganized Company.
9. 9)
   Conditions for acquisition of stock acquisition rights
   Shall be determined in accordance with (7) above.
10. 10)
    Treatment of stock acquisition rights upon the Reorganization
    Shall be determined in accordance with (8).
11. 11)
    In case the number of shares to be delivered to the Right Holders who have exercised stock acquisition rights includes any fraction less than one share, such fraction shall be rounded down.

(9) Handling of fractions less than one share to be delivered

In case the number of shares to be delivered to the Right Holders who have exercised the Stock Acquisition Rights includes any fraction less than one share, such fraction shall be rounded down.

(10) Matters concerning certificates of the Stock Acquisition Rights

Certificates of the Stock Acquisition Rights shall not be issued by the Company.