[Translation]
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 the Japanese original, the original shall prevail.

March 14, 2024
Company name: Lacto Japan Co., Ltd.
Representative: Motohisa Miura, President(Securities code: 3139 TSE Prime Market)
Contact: Yuko Ishiguro
General Manager of Investor & Public Relations(E-mail: lj-ir@lactojapan.com)

Notice Regarding Disposal of Treasury Shares as Restricted Stock
Compensation
Lacto Japan Co., Ltd. (the “Company”) hereby announces that, as described below, theCompany resolved to dispose of its treasury shares at a meeting of the Board of Directors
held on March 14, 2024.
1. Outline of disposal(1)

Disposal date

April 12, 2024

(2)Type and number of shares to bedisposed

11,861 shares of common stock(3)

Disposal price¥2,350 per share(4)

Total value of share disposal¥27,873,350(5)Grantees of shares and number thereof;
number of shares to be allotted

4 directors, 11,861 shares*Excluding Outside Directors and Audit
and Supervisory Committee Members

2. Purpose and reasons for disposal
At a meeting of the Board of Directors held on January 15, 2019, Lacto Japan resolved tointroduce a restricted stock compensation plan (hereinafter, the “Plan”) as a means ofcompensation for Directors other than Outside Directors (hereinafter “Eligible Directors”), withthe aim of providing incentives for the sustainable enhancement of the Company's corporate
value and further sharing of shareholder value. Furthermore, at the 21st Annual General
Meeting of Shareholders held on February 26, 2019, the Company obtained approval toprovide the Eligible Directors with monetary compensation claims of up to 100 million yen peryear as monetary compensation for the acquisition of restricted shares (hereinafter,“Restricted Stock Compensation”) based on the Plan. The total number of common shares tobe issued or disposed of was approved at 10,000 shares or less per year (provided, however,that the total number of common shares to be issued or disposed of is 20,000 shares or lessper year owing to the share split on May 1, 2019), and the transfer restriction period for
restricted shares was set by the Board of Directors to be from 3 to 30 years. In addition, inaccordance with the approval of the 23rd General Meeting of Shareholders held on February
25, 2021 for the transition to a company with an audit and supervisory committee, theCompany changed the claim for monetary compensation to an annual amount of 150 million

[Translation]
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 the Japanese original, the original shall prevail.

yen or less, with the total number of common shares issued or disposed of by the Companyto an annual amount of 30,000 shares or less.
The outline of the Plan is as follows.
Outline of the Plan
Eligible Directors will pay all monetary compensation claims provided by the Company under
this Plan as property contributed in kind, receiving common stock to be issued or disposed ofby the Company. In addition, the total number of common shares issued or disposed of by theCompany to the Eligible Directors under the Plan shall be no more than 30,000 shares per
year, and the amount to be paid per share shall be the closing price of the Company's
common shares on the Tokyo Stock Exchange on the business day immediately preceding
the date of resolution at the Board of Directors' meeting (or the closing price on theimmediately preceding trading day if no transaction has been effected on said day).
With respect to the issuance or disposal of the common stock under the Plan, Lacto Japanand the Eligible Directors shall conclude a restricted stock allotment agreement, the contentsof which shall include: (1) the Eligible Directors shall not transfer, create a security interest, orotherwise dispose of the Company's common stock that was allocated under the restricted
stock allocation agreement for a designated period; and (2) under certain circumstances, theCompany shall be entitled to acquire the relevant common stock without consideration.
Taking into account the purpose of the Plan, the Company’s business situation, the scope ofduties of each of the Eligible Directors, and various other circumstances, a total of
27,873,350 yen in monetary compensation claims (hereinafter, the “Monetary CompensationClaim”) and 11,861 shares of common stock has been granted. Additionally, in order to sharevalue among shareholders over the medium to long term, which is one of the objectives forintroducing the Plan, the transfer restriction period has been set at 30 years. The treasury
shares to be disposed of will be allocated with shares acquired through the treasury shares
repurchase resolved and announced separately on this day March 14, 2024. In this disposalof treasury shares, the 4 Eligible Directors to whom allotment is scheduled will, based on thePlan, pay in all of the Monetary Compensation Claim owed to the Company as assets
contributed in kind, and the common stock of the Company (hereinafter, “Allotted Shares”)
will be disposed of accordingly. A summary of the restricted stock allotment agreement(hereinafter, the “Allotment Agreement”) to be concluded between the Company and theEligible Directors in this disposal of treasury shares is set out in 3. below.
3. Outline of Allotment Agreement(1) Transfer restricted period
From April 12, 2024 to April 11, 2054
(2) Conditions for lifting transfer restriction
The transfer restriction shall be lifted at the expiration of the transfer restriction period
for all Allotted Shares on condition that the Eligible Directors continue to hold theposition of director, executive officer, auditor, employee, or other equivalent position ofthe Company or any of its subsidiaries during the transfer restriction period.
(3) Instances where an Eligible Director resigns or retires due to expiration of term of office,age of retirement, or other justifiable reason during the transfer restriction period(i) Timing for lifting transfer restriction
In the event that any Eligible Director resigns or retires due to the expiration ofhis/her term of office, retirement age, death, or other justifiable reason from any
position as a director, executive officer, corporate auditor, employee, or any otherposition equivalent thereto of the Company or any of its subsidiaries, the transfer

[Translation]
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 the Japanese original, the original shall prevail.

restriction shall be lifted immediately after the resignation or retirement of theEligible Director.
(ii) Number of shares subject to lifting of transfer restriction
The number of shares shall be obtained by multiplying the number of the Allotted
Shares held at the time of said resignation or retirement by the number obtained by
dividing the Eligible Director’s period of service (in months) pertaining to the transferrestriction period by 12 (if this number is greater than 1, it shall be 1). If, however,this calculation results in a fractional share, it shall be rounded down to the nearest
whole share.
(4) Acquisition without consideration by the Company
At the expiration of the transfer restriction period or at the time the transfer restriction islifted as specified in (3) above, the Company will, by rights, acquire, without
consideration, any Allotted Shares for which the transfer restriction has not been lifted.
(5) Administration of shares
To ensure that the Allotted Shares shall not be transferred, pledged, or disposed ofduring the transfer restriction period, the Allotted Shares shall be managed in a
dedicated account opened by the Eligible Director at Nomura Securities Co., Ltd.
during the transfer restriction period. Lacto Japan has entered into an agreement withNomura Securities with regard to the management of the accounts for the Allotted
Shares held by respective Eligible Directors to ensure the effectiveness of the transfer
restrictions and other matters. Additionally, the Eligible Directors shall consent to themanagement of the relevant dedicated account.
(6) Treatment in case of organizational restructuring, etc.
If, during the transfer restriction period, a proposal for a merger agreement in which
Lacto Japan is the disappearing company, or a share exchange agreement or sharetransfer plan by which the Company becomes a wholly-owned subsidiary of anothercompany, or any other form of reorganization, etc., is approved at a General Meetingof Shareholders (or, in cases where the reorganization, etc. does not require approvalat the Company's General Meeting of Shareholders, the Company's Board ofDirectors), the Board of Directors shall resolve to lift the transfer restriction
immediately prior to the business day preceding the effective date of thereorganization, etc, with respect to the number of Allotted Shares. The number ofAllotted Shares shall be calculated by multiplying the number of the Allotted Shares
held on the relevant date by the number obtained by dividing the number of months
from the starting month of the transfer restriction period to the month including the dateof approval by 12 (if this number is greater than 1, it shall be 1). If, however, thiscalculation results in a fractional share, it shall be rounded down to the nearest wholeshare. Moreover, at the time immediately after the transfer restriction has been lifted,
the Company shall by rights acquire, without consideration, all the Allotted Shares on
which the transfer restriction has not been lifted.
4. Basis for calculation and specific details of payment amountThis disposal of treasury shares to the scheduled grantees shall be funded as capital assets
by the monetary compensation claims provided as restricted stock compensation in theCompany's 27th fiscal year under the Plan. For the avoidance of doubt, the disposal price is
2,350 yen, which was the closing price of the Company's common stock on the Tokyo Stock
Exchange on March 13, 2024 (the business day prior to the date of the Board of Directors'resolution). From the viewpoint that it was the market share price on the day immediately
preceding the date of the resolution at the meeting of the Board of Directors, the above priceis deemed to be reasonable and not particularly favorable to the grantees.