Press Release

Notice of Disposal of Treasury Stock as Remuneration for Restricted Stock
March 25, 2022
Listed exchanges: Tokyo

Listed company name: Earth Corporation

Code: 4985

URL

: https://corp.earth.jp/en/index.html

Representative Director: Katsunori Kawabata, President & Representative Director

Contact: Tsuyoshi Mitsuzuka ,Senior Executive Officer
Director General
Group Management Headquarters

Tel: +81-3-5207-7458

Earth Corporation (the “Company”) hereby announces that its Board of Directors has resolved at a meeting
held on Mar. 25, 2022, it resolved to dispose of treasury stock ( the " Treasury Stock Disposal" or the"Disposal") as follows.
1.

Overview of the disposal

1

Payment date

2

Class and number ofshares for disposal

April 22, 2022
41,200 ordinary shares of the Company

3

Disposal price4

Total value of disposal ¥ 224,128,000

5Persons eligible forallotment of shares¥ 5,440 per share‐ Directors of the Company (excluding outside directors),
6 persons, 17,500sharesand number thereof, ‐ Executive officers who do not concurrently serve as directors
and number of sharesfor allotmentof the Company, 22 persons, 6,100 shares‐ Directors of the Company's subsidiaries, 14 persons, 17,600
shares6

Other

This disposition of treasury stock is subject to the effectiveness ofthe securities registration statement in accordance with theFinancial Instruments and Exchange Act.

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Purpose and reasons for disposal
At a meeting of the Board of Directors held on February 5, 2018, the Board of Directors of the Company
approved the following resolution to establish a remuneration system for the Company's directors,
excluding outside directors (the " Eligible Directors "), with the aim of providing medium- to long-term
incentives and promoting further value sharing with shareholders. The Company resolved at the 94thOrdinary General Meeting of Shareholders held on March 23, 2018 to introduce a restricted stockcompensation plan (the "Plan"), which was approved by the shareholders at the 94th Ordinary General
Meeting of Shareholders held on March 23, 2018, and to grant the total amount of monetary claims forthe grant of shares with transfer restrictions to the subject directors not exceeding 150 million yen peryear, and to issue new shares to be issued by the Company not exceeding 150 million yen per year.
The total number of shares of common stock to be issued or disposed of shall not exceed 20,000 shares
per year (provided, however, that the total number of shares to be issued or disposed of shall not exceed
20,000 shares per year if the Company splits its common stock (including gratis allotment of its commonstock) with an effective date on or after the date of resolution of this General Shareholders' Meeting.
(However, in the event of a stock split (including gratis allotment of shares of common stock of theCompany) or reverse stock split with an effective date on or after the date of resolution of this General
Meeting of Shareholders, such total number shall be adjusted as necessary to a reasonable extent
according to the split ratio, reverse stock split ratio, etc. after such effective date. The number of sharesof common stock shall be adjusted to the extent necessary and reasonable. Furthermore, the period tobe determined in advance by the Board of Directors of the Company between three to five years fromthe date of allotment (the " Transfer Restriction Period ") shall be determined in accordance with theRestricted Share Allotment Agreement to be individually executed between the subject director and theCompany (the " Allotment Agreement ").
At the Board of Directors meeting held on February 14, 2022, it was resolved to grant the same restricted
stock compensation to the Company's directors, executive officers who do not concurrently serve as
directors of the Company, and directors of the Company's subsidiaries as that to the subject directors.
In addition, at the 98th Ordinary General Meeting of Shareholders held on March 25, 2022, in order tofurther increase the motivation to contribute to the sustainable enhancement of the Company's corporate
value and to share value with shareholders for as long as possible, the Company resolved to set thetransfer restriction period as "from the date of allocation under the Allocation Agreement to the date of
the approval of the The Board of Directors of the Company has approved the revision of the above
provision to "during the period from the date on which a person loses his/her position as a director of
the Company or any other position determined by the Board of Directors of the Company. The outlineof the plan is as follows.

3.

Outline of the plan
The Company's directors, executive officers who do not concurrently serve as directors of the Company,and directors of the Company's subsidiaries (the " Eligible Directors, etc. ") shall be the directors of theCompany, executive officers who do not concurrently serve as directors of the Company, and directorsof the Company's subsidiaries (the " Eligible Directors, etc. "). The Company's directors, executiveofficers who do not concurrently serve as directors of the Company, and directors of the Company'ssubsidiaries (the "Subject Directors, etc.") will pay all of the monetary claims paid by the Company or its
subsidiaries under the Plan as assets contributed in kind and will be issued or disposed of with the-2-

Company's common shares. The amount to be paid per share shall be determined based on the closing
price of the Company's common stock on the Tokyo Stock Exchange on the business day immediately
preceding the date of each Board of Directors' resolution (or the closing price of the immediately
preceding trading day if no trading was effected on that date) and shall be determined in a manner thatis particularly favorable to the Subject Directors, etc. who subscribe for such common stock. The Boardof Directors will determine the amount of the stock acquisition rights to the extent that it does not exceed
the amount of the stock acquisition rights.
In addition, upon the issuance or disposal of shares of common stock of the Company under the Plan,
the Company shall enter into the Allotment Agreement, which shall include, among other things, (i) theEligible Directors, etc. shall be prohibited from transferring, granting security interests in or otherwise
disposing of the shares of common stock of the Company allotted under the Restricted Share Allotment
Agreement to any third party for a certain period, and (ii) the Company shall acquire such shares ofcommon stock without consideration upon the occurrence of certain events.
This time, in consideration of the purpose of this plan, the range of responsibilities of each eligible
director, etc., we have decided to grant a total of 224,128,000 yen in monetary claims (hereinafterreferred to as the "Monetary Claims") and allot 41,200 shares of common stock.
In the Treasury Stock Disposal, 42 eligible directors, etc., who are the allottees, will pay all of theMonetary Claims to the Company or its subsidiaries as assets contributed in kind, and the Company'scommon shares (the "Allotted Shares") will be allotted to them. In the Allotment, the 42 Subject Directors,etc. will pay all of the monetary claims against the Company or its subsidiaries as assets contributed inkind and will be issued common shares of the Company (the "Allotted Shares"). An outline of theAllotment Agreement to be executed between the Company and Eligible Directors, etc. in connection
with the Disposal of Treasury Stock is as described in 4. below.
4.

Outline of the allotment agreement
A.

Transfer restriction period
During the period from April 22, 2022 (the "Disposition Date") to the time immediately following theresignation or retirement from any of the positions of director, executive officer, executive officer notconcurrently serving as director, corporate auditor, advisor, counselor, employee, or other similar
position at the Company or its subsidiaries.

B.

Conditions for Lifting Transfer Restrictions
The period from the date of commencement of execution of duties to the time immediately
preceding the conclusion of the first ordinary general meeting of shareholders thereafter (" ServiceProvision Period "). During the period from the date of commencement of execution of duties to thetime immediately prior to the conclusion of the first Ordinary General Meeting of Shareholders tobe held thereafter (hereinafter referred to as the "Service Period"), the transfer restriction shall belifted with respect to all of the Allotted Shares upon expiration of the Service Restriction Period, on
the condition that the Subject Director, etc. continuously holds the position of director, executiveofficer, executive officer not holding the office of director, auditor, advisor, counselor or employee,or any other equivalent position of the Company or its subsidiary. In the case of an executive officer
who does not concurrently serve as a director of the Company, the Service Provision Period shallbe read as the period from the beginning of the fiscal year that includes the date of this disposition-3-

to the end of the current fiscal year. The same shall apply in the following cases.
C.

Treatment in the event that a director retires or resigns due to the expiration of his/her term of office,mandatory retirement age, or other justifiable reason during the term of provision of these services
1.

Time of lifting restrictions on transfers
If an eligible director, etc. resigns or retires from any of the positions of director, executiveofficer, executive officer not concurrently serving as director, corporate auditor, advisor,counselor, or employee or any other similar position at the Company or its subsidiary due toexpiration of his/her term of office, mandatory retirement age, or any other justifiable reason(including resignation or retirement due to death), the transfer restriction shall be cancelled asof the time immediately following such resignation or retirement of the eligible director, etc.

2.

Number of shares subject to cancellation of transfer restrictions
The number of shares shall be the number of shares obtained by multiplying the number ofthe Allotted Shares held by the Subject Director, etc. at the time of such retirement orresignation as provided in 1 above by the number of months from the month including theDisposition Date to the month including the date of retirement or resignation of the Subject
Director, etc. divided by the number of months for the Service Period (12) (if such number
exceeds 1, 1 shall be rounded down) (however, if the calculation results in a fraction of a share,such fraction shall be rounded down).

D.

Acquisition without consideration by the Company
At the expiration of the transfer restriction period or at the time of cancellation of the transfer
restriction stipulated in C above, the Company shall naturally acquire the Allotted Shares for no
consideration if the transfer restriction is not cancelled. In addition, if the Eligible Directors, etc. fallunder certain events stipulated in the Allotment Agreement, such as committing an act in violationof laws and regulations during the Transfer Restriction Period, the Company shall naturally acquire
all of the Allotted Shares without consideration at the relevant point in time.

E.

Treatment in Organizational Restructuring, etc.
If, during the transfer restriction period, a merger agreement under which the Company becomesa defunct company, a share exchange agreement under which the Company becomes a wholly
owned subsidiary, a share transfer plan, or other matters related to organizational restructuring, etc.
are approved at a general meeting of shareholders of the Company (however, if approval by ageneral meeting of shareholders of the Company is not required for such organizational
restructuring, the Board of Directors of the Company) In the event that the number of the Allotted
Shares held as of such time is less than the number of the Service Period, the Board of Directors
may, by a resolution of the Board of Directors, add to the number of the Allotted Shares held as ofsuch time the number obtained by dividing the number of months from the month containing theDisposition Date to the month containing the date of such approval by the number of months
pertaining to the Service Period (12) (if such number exceeds 1, the number is 1) The Restriction-4-

on Transfer of Shares shall be cancelled with respect to the number of shares obtained bymultiplying the number of shares to be transferred by the number of shares to be transferred (anyfraction of less than one share resulting from the calculation shall be rounded down) as of the time
immediately preceding the business day before the effective date of the Reorganization, etc. Inaddition, the Company shall naturally acquire without consideration all of the Allotted Shares forwhich the Restriction on Transfer has not been cancelled as of the time immediately following thecancellation of the Restriction on Transfer.
F.

Management of shares
The Allotted Shares shall be managed in an exclusive account opened by the Eligible Directors,etc. with Nomura Securities Co., Ltd. during the Restricted Transfer Period so that they cannot betransferred, pledged or otherwise disposed of during the Restricted Transfer Period. In order toensure the effectiveness of the restrictions on transfer, etc. of the Allotted Shares, the Company
has entered into an agreement with Nomura Securities Co., Ltd. in relation to the management ofthe account for the Allotted Shares held by each of the Subject Directors, etc. The Subject Directors,etc. shall agree to the details of the management of such account.

5.

Basis for calculation of the amount to be paid in and other details
This disposition of treasury stock to the Scheduled Subscriber will be made with the monetary claims
paid as restricted stock compensation for the Company's 99th fiscal year under this plan as the invested
assets. The disposal price is set at 5,440 yen, which is the closing price of the Company's common
stock on the First Section of the Tokyo Stock Exchange on March 24, 2022 (the business day before thedate of the Board of Directors' resolution), in order to eliminate arbitrariness. This is the market shareprice immediately prior to the date of the Board of Directors' resolution, and is considered to bereasonable and not a particularly favorable price.

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