June 25, 2024
Corporate name:
Representative:
Listing:
Code number:Contact:

SHOFU INC.
Tetsuo Takami
Representative Director, President & COO
Tokyo Stock Exchange (Prime Market)
7979
Shigefumi Iwasaki
General Manager of General Affairs
Department(TEL: +81-75-561-1914)

Notice regarding disposal of treasury stock as restricted stockcompensation

SHOFU INC. (the “Company”) hereby announces that its Board ofDirectors at its meeting held on June 25, 2024, resolved to dispose oftreasury stock (“Disposal of Treasury Stock”) as restricted stockcompensation, the outline and details of which are shown as follows:
１．Outline of disposal of treasury stock（１）

Disposal date

（２）

Class and number ofshares to be disposed（３）

Disposal price（４）

Total value of sharedisposal（５）

July 16, 2024
13,187 shares of common stock of the Company¥4,420 per share¥58,286,540

Allottees and number

Directors (excluding outside directors): 5,

thereof, number ofsharesshares to be disposed

Executive Officers: 8, 4,614 shares

8,573

２．Purpose and reasons for Disposal of Treasury Stock
The Company, at the meeting of its Board of Directors held on May 15, 2019,resolved to introduce a restricted stock compensation plan (“Plan”) for theCompany’s directors (excluding outside directors, “Eligible Directors”) andexecutive officers (collectively “Eligible Directors, etc.”), to provide incentives
to Eligible Directors, etc, and sustainably enhance the Company’s corporate
value by promoting further value sharing between Eligible Directors, etc. and1

shareholders. At the 147th Ordinary Shareholders’ Meeting held on June 26,
2019, approval was given for the payment of monetary compensation of up to50 million yen (total amount) and the transfer of up to 50,000 shares (totalnumber) of restricted stock compensation to Eligible Directors.
Taking into consideration the purpose of the Plan, the performance of theCompany, the scope of responsibilities of each of the Eligible Directors, etc.
and various other circumstances, the company has resolved to pay a total of58,286,540 yen in monetary compensation claims to the Eligible Directors, etc.
on the condition that payment is made by Disposal of Treasury Stock as assets
contributed in kind. To realize the purpose of the introduction of the Plan,
which is to provide an incentive to achieve a sustainable enhancement ofcorporate value and share value gains, the period of restriction on transfer is
set at 30 years, as described in section 3 below.
３．Outline of the restricted share allotment agreement
Upon allotment through the Disposal of Treasury Shares, the Company andeach of the Eligible Directors, etc. will individually enter into a Restricted Stock
Allotment Agreement (“Allotment Agreement”), the outline of which is asfollows:（１）Transfer restriction period: July 16, 2024-July 15, 2054
During the above period, the Eligible Directors, etc. shall not be able totransfer, grant a security interest in or otherwise dispose of the commonshares of the Company allotted to them as a result of the Disposal of Treasury
Shares (“Allotted Shares”).
（２）Conditions for releasing transfer restriction
Subject to the condition that the Eligible Directors, etc. have continuously
held the position of either director or executive officer of the Company
during the transfer restriction period, the Company shall release therestriction on transfer of all the Allotted Shares held by the Eligible
Directors, etc at the time of the expiry of the transfer restriction period.
However, in the case where Eligible Directors, etc. lose their position as
either directors or executive officers due to legitimate circumstances suchas expiry of term of office or retirement age deemed justifiable by the Boardof Directors, the number of Allotted Shares for which the transfer
restriction is to be released and the timing of the releasing of the transfer
restriction shall be determined separately in the Allocation Agreement.

2（３）Acquisition without consideration by the Company
All of the Allotted Shares for which the transfer restriction has not beenreleased at the time of expiry of the transfer restriction period shall naturally
be acquired by the Company without consideration at the time immediately
following the said time.
In the event that certain events stipulated in the Allotment Agreement
occur, such as the resignation of Eligible Directors, etc. for reasons other thanthose deemed justifiable by the Board of Directors of the Company before theexpiry of the transfer restriction period, the Company shall acquire theAllotted Shares without consideration upon resolution of the Board ofDirectors of the Company.
（４）Administration of shares
To ensure that the Allotted Shares cannot be transferred, granted a security
interest in or otherwise disposed of during the restricted transfer period, theAllotted Shares shall be managed during the restricted transfer period in adedicated account opened by the Eligible Directors, etc. at Nomura
Securities Co., Ltd. To ensure the effectiveness of the restrictions on thetransfer of the Allotted Shares, the Company has concluded an agreementwith Nomura Securities Co., Ltd in relation to the management of theaccounts for the Allotted Shares held by each of the Eligible Directors etc.
（５）Treatment during reorganizations, etc.
If during the transfer restriction period, a proposal for a merger agreementin which the Company is the disappearing company, a share exchange
agreement or share transfer plan, or other matters concerning reorganization,etc., is approved by a general meeting of shareholders (or by the Company’sboard of directors if approval for reorganization, etc. by a general meeting ofshareholders is not required), the board of directors shall resolve to release
the transfer restrictions prior to the effective date of such reorganization,etc., for a number of the Allotted Shares reasonably determined by theperiod from the start of the transfer restriction period to the effective dateof such reorganization, etc. In such a case, the Company shall naturallyacquire the Allotted Shares without consideration for which the transferrestriction has not yet been released as of the time immediately after thetransfer restriction is released in accordance with the above.

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４．Basis of calculation and specific details for the payment amountTo ensure that the disposal price for the Disposal of Treasury Shares to theallottees is a price that eliminates arbitrariness, the closing price of thebusiness day immediately prior to the day of resolution at the meeting of theBoard of Directors is used as the disposal price.
As such, the disposal price for this Disposal of Treasury Shares, is the market
price on the day before the date of the resolution of the Board of Directors,
and is not particularly favourable to the allottees, and is therefore consideredreasonable.
In addition, all Auditors present at the meeting of the Board of Directors(four auditors, two of whom are Outside Auditors) expressed the opinion thatthe disposal price is not particularly favourable to the allottees.
(Note) This document has been translated from the Japanese original for reference
purposes only.
In the event of any discrepancy between this translated document and theJapanese original, the original shall prevail.

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