July 29, 2022

For Immediate Release
Ryosan Company, Limited
Representative: Kazuhiko Inaba
Representative Director, President
Listing Code No.: 8140
Listing: Prime Market, Tokyo Stock Exchange
Inquiries: Norihiko Takahashi
Executive Officer
General Manager, Corporate Planning
Headquarters
TEL: +81-3-3862-3816

Notice Concerning Determination of Details of the Performance-Based StockRemuneration System and Disposal of Treasury Shares
Through Third-Party Allocation
At a May 13, 2022 meeting of the Board of Directors, Ryosan Company, Limited (“the Company”) resolved tointroduce a performance-based stock remuneration system (hereinafter “the System”), using a trust established forthe purpose of introducing the System (hereinafter “the Trust”). At today’s meeting of the Board of Directors, theBoard decided the details of the System. This decision includes the method by which the Trust acquires Companyshares, namely the disposal of treasury shares by third-party allocation (hereinafter “the Treasury-Share Disposal”).
The Company hereby gives notice of the details of the System as follows.
1. Details of the System(1) Overview of the System using introduction of the Trust
1) Name of the Trust
Share Issuance Trust for Officers2) Consignor
The Company
3) Consignee
Sumitomo Mitsui Trust Bank, Ltd.
(Trust re-consignee: Custody Bank of Japan, Ltd.)
4) Beneficiaries
Directors (not including Directors who are Audit and Supervisory
Committee Members or Outside Directors) and Executive Officers of theCompany who satisfy the conditions for beneficiaries
5) Trustee
A third party to be nominated, who is independent of the Company and its
officers6) Exercise of voting The voting rights of the Company shares in the Trust may not be exercisedrights
at any time during the trust period.
7) Type of trust
Trust of money other than money trust (third-party benefit trust)8) Dateoftrust August 18, 2022
agreement
9) Date of entrustment of August 18, 2022
money10) End date of trust August 31, 2024 (to be confirmed)
period1(2) Details of acquisition of Company shares by the Trust
1) Type of shares acquired2) Funds entrusted by the Company to acquire theshares3) Total number of shares acquired4) Method of acquisition of shares
5) Period of acquisition of shares

Common shares
63,448,000 yen
28,000 shares
Acquisition by disposal of treasury shares
August 18, 2022

2. Disposal of Treasury Shares by Third-Party Allocation(1) Overview of disposal
1) Disposal date2) Type and number ofshares disposed of3) Disposal price4) Total expenditure ondisposal
Expected recipient of5)
disposal
6)

Other

August 18, 2022
28,000 common shares of the Company
2,266 yen per share
63,448,000 yen
Sumitomo Mitsui Trust Bank, Ltd. (trust account)(Trust re-consignee: Custody Bank of Japan, Ltd. (trust account)
The Company has submitted a Marketable Securities Notice regarding theTreasury-Share Disposal, in accordance with the Financial Instruments andExchange Act.

(2) Purpose of and reason for disposal
At the May 13, 2022 meeting of the Board of Directors, the Company resolved to introduce the System for theCompany’s Directors and Executive Officers (hereinafter collectively “Directors, etc.”). The System aims toclarify further the interconnectedness of remuneration for the Directors, etc., the Company’s business results andshare value. It is hoped that, by ensuring that Directors, etc. share with shareholders the benefits and risks offluctuations in the share price, Directors, etc. will be made more fully aware of their contributions to theimprovement of business results and expansion of corporate value over the medium-to-long term. Moreover, inprinciple the degree to which Directors, etc. can transfer the shares issued to them before their retirement islimited. This measure is aimed at incentivizing Directors, etc. to strive toward sustainable improvement incorporate value even after their shares have been issued to them. The agenda item regarding introduction of theSystem for the Company’s Directors was approved at the 66th Ordinary General Shareholders’ Meeting, held on
June 24, 2022.
For an overview of the System, please refer to “Notice Concerning Introduction of a Performance-Based
Stock Remuneration System for Officers,” published May 13, 2022.
The recipient of Treasury-Share Disposal is the consignee of the Trust, Sumitomo Mitsui Trust Bank, Ltd.
(trust account) (Trust re-consignee: Custody Bank of Japan, Ltd. (trust account)).
The number of shares disposed is equivalent to the number of shares expected to be transferred to theDirectors, etc., based on the rules for issuance of shares established by the Company when the System isintroduced and in consideration of changes in the positions and composition of Company Directors, etc. during
the trust period. The scale of dilution with respect to the currently issued number of shares, which is 25,000,000
shares as of March 31, 2022, is 0.11% (0.12% of total voting rights of 234,047 votes as of March 31, 2022). All
figures are rounded to the second digit after the decimal point.

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Reference: Overview of the trust agreement governing the Trust
The Company
Consignor
Consignee
Sumitomo Mitsui Trust Bank, Ltd.
(Trust re-consignee: Custody Bank of Japan, Ltd.)
Beneficiaries
Directors, etc. who satisfy the conditions for beneficiaries
TrusteeA third party to be nominated, who is independent of the Company and its officers
Exercise ofThe voting rights of the Company shares in the Trust may not be exercised at any
voting rights
time during the trust period.
Type of trust
Trust of money other than money trust (third-party benefit trust)
Date of trust
August 18, 2022
agreement
Trust period
From August 18, 2022 to August 31, 2024 (to be confirmed)
Purpose of theIssuance of Company Shares to beneficiaries based on the rules for issuance of shares
Trust(3) Grounds for and details of calculation of disposal priceTo eliminate arbitrariness and reflect the most recent trends in share prices in the assignment of disposal price ofshares, the disposal price was fixed as the final price of the shares on the Tokyo Stock Exchange on July 28, 2022
(the business day immediately preceding the date of the decision of the Board of Directors). The reason forchoosing the business day immediately preceding the date of the decision of the Board of Directors is to capture
the market value immediately preceding the date of the decision of the Board of Directors, which the Directors
judged to be the most reasonable and objective grounds for calculation.
This price deviates 3.47% from the average closing price in the most recent one-month period as of thebusiness day immediately preceding the date of the decision of the Board of Directors (June 29 to July 28, 2022),
which was ¥2,190 (rounded to the nearest yen); deviates –0.40% from the average closing price in the most recent
three-month period as of the business day immediately preceding the date of the decision of the Board of Directors(May 2 to July 28, 2022), which was ¥2,275 (rounded to the nearest yen); and deviates 0.31% from the averageclosing price in the most recent six-month period as of the business day immediately preceding the date of thedecision of the Board of Directors (January 31 to July 28, 2022), which was ¥2,259 (rounded to the nearest yen;in each case the deviation rate is rounded to the second digit after the decimal).
As a result of the above consideration, the disposal price of the Treasury-Share Disposal is fixed at a levelthat is considered reasonable and not unduly advantageous to the expected recipient of disposal.
Moreover, the Audit and Supervisory Committee (a committee of three people, two of whom are OutsideDirectors) has expressed its opinion that the grounds for calculation of the above disposal price are reasonable
and that it is lawful, the disposal price being not unduly advantageous to the expected recipient of disposal.
(4) Matters related to procedures on norms of corporate activity
The Treasury-Share Disposal (1) represents a dilution rate of less than 25% and (2) is not accompanied by achange of controlling shareholder(s). As such, this disposal of treasury shares does not require obtaining theopinion of an independent third party or procedures for confirming the will of shareholders, as stipulated in Article
432 of the Securities Listing Regulations of the Tokyo Stock Exchange.

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