June 7, 2022
Dear all,Company name:

SUNCORPORATIONName of representative: Ryusuke Utsumi,
CEO(Code No. 6736 TSE Standard)Contact:

Yoshimi Kimura,Senior Managing Director(Tel 052-756-5981)

Supplement to Proposal 6 of the 51st Annual General Meeting of Shareholders
With regard to “Proposal 6” of the 51st Ordinary General Meeting of Shareholders to be held on 23 June 2022,"Revision of remuneration in connection with the introduction of a post-delivery share remuneration system fordirectors (excluding directors who are members of the Audit Committee)", the following supplemental explanation
is provided in order to provide shareholders with correct information and to gain their understanding of theproposal.
Shareholders are kindly asked to refer to the "Notice of the 51st Ordinary General Meeting of Shareholders(pages 56-58)".
The proposal is to introduce Restricted Share Units ('RSUs') and Performance Share Units ('PSUs') in order toshare interests with shareholders and to strengthen incentives to improve performance in order to create mediumand long-term corporate value. In order to realise future global growth, human resources that can face risksappropriately and make management decisions with a sense of speed are essential. In order to effectively drawout the strengths of such human resources and grow the business, we considered it appropriate to place moreemphasis on stock-based compensation.
Particularly, PSUs, which represent 70% of share-based payments, are designed to provide a strong incentive
to achieve KPI targets, with a payout range of 0-150% depending on the degree of achievement of the target.
The KPIs are designed to prevent market misleading caused by gaps in Cellebrite's disclosures and to aim forthe resolution of more challenging business issues. Therefore, the KPIs are based on the consolidated mediumterm business plan excluding Cellebrite.
・KPI
Sales, operating profit and operating profit margin (raitio 40%, 30% and 30%)
・TargetYear ending
March 31, 2023
Year ending
March 31, 2024
Year ending
March 31, 2025

Sales

Operating Proft

Operating Profit margin（million yen）

（million yen）(%)

10,602579

5.5%

11,908989

8.3%

13,376

1,689

12.6%

・Determination of Payment Rate
Average achievement of KPI targets less than 75%: No payment
Please see the chart below for the payment rates between the various thresholds.

Determination of Payment Rate
Payment Rate

Average achievement rate of KPI targets
The following estimates of the number of shares to be granted and the dilution rate for the implementation of
the plan have been made for the three-year evaluation period of the PSUs. This estimate is the sum of grants
to the employees in addition to the directors.
Number of shares granted(shares) ※1

3 years

Total number ofshares issued

Cumulative
Dilution rate

Average burnrate for theperiod ※2RSUPSU

Total（share,2022/3）

abc=a+bde=c/de/period

134,145

134,994

269,140

23,992,328

1.12%

0.37%

※1 The number of shares is calculated based on the total of the maximum amount of share-based payment for eacheligible officer and the closing price of 1,611 yen as of 17 May 2022. Although the number of shares will vary depending on
the share price level at the time of grant, the calculation is based on the maximum number of shares that can be expected tobe granted.
※2 The burn rate, which represents the ratio of the number of shares granted to the total number of shares outstanding, is ameasure used mainly by European and US companies and is a dilution rate in relation to equity compensation.
For example, the voting advisory company ISS in the US attaches importance to the three-year average burn rate in addition
to the voting criteria, and its 2022 policy sets an average burn rate of 4.08% for technology companies, with a maximum
permissible burn rate of 7.26%.

As indicated in the chart, the impact of the maximum PSU payment of 150% is estimated at a cumulative dilution
rate of 1.12% over the three-year evaluation period and an average of 0.37% during the period, which isconsidered to be insignificant.
Many Japanese companies have adopted equity compensation as an alternative to retirement benefits
whereby the transfer restriction is lifted upon retirement, and the number of shares granted is accumulated overa long period of time, so the dilution rate may be calculated as a cumulative value over a 10-year period andconsidered important.
However, as we have designed the scheme as incentive remuneration where the transfer restriction is lifted
after a 3-year period, we consider it reasonable to use the dilution rate and burn rate for a 3-year period todetermine the appropriateness of the scheme.

Even if a 10-year estimate is made in the same way as in the preceding chart, the cumulative dilution rate is
3.74% and the average for the period is 0.37%, and the impact is as minor as in the three-year case.
We believe that the content of this remuneration system is reasonable, as it is designed to enable themanagement team to share with shareholders their interest in share price fluctuations and to raise awarenessof their contribution to improving performance and increasing corporate value over the medium to long term.
We would appreciate your understanding.