Square Enix : Notice of Issuance of Share Options (Stock Options) to Group's Executives and Employees

June 21, 2024

Company: SQUARE ENIX HOLDINGS CO., LTD.

(Code: 9684, Tokyo Stock Exchange, Prime Market)

Representative: Takashi Kiryu, President and Representative Director

Contact:Yoshihiro Taguchi, General Manager of Legal & Intellectual Property Division

Tel [phone]

NOTICE OF ISSUANCE OF SHARE OPTIONS (STOCK OPTIONS) TO

GROUP'S EXECUTIVES AND EMPLOYEES

Based on the delegated resolution at the Board of Directors Meeting held on November 29, 2023, pursuant to Article 399-13, Paragraph 5 of the Companies Act, the President and Representative Director of SQUARE ENIX HOLDINGS CO., LTD. (the "Company") decided to issue a Share Options as a stock options (the "Share Options") pursuant to the provisions of Article 236, 238 and 240 of the Companies Act on June 21, 2024.

1. Reason for issuance of the Share Options

The Company will issue the Share Options to Group's Executives and employees as consideration for the performance of duties with the aim of giving incentives to enhance business performance, increase corporate value, and raise management awareness that emphasizes shareholders of the Company.

2. Terms and Conditions of Issuance of the Share Options

(1) Name of the Share Options

Share Options (Stock Options) of SQUARE ENIX HOLDINGS CO., LTD. for July 2024

1. Total Number of the Share Options 1,353 units
   The total number above is the scheduled number to be allotted and, in the case of a decrease in the total number of the Share Options to be allotted due to application not being made or other reasons, the total number of the Share Options to be issued will be equal to the total number of the Share Options to be allotted.
2. Persons Entitled to Allotment of the Share Options and Number Thereof, and Number of the Share Options to be allotted
   18 employees of the Company, Company subsidiary directors and employees (*)
   1,353 units
   (*) The Company subsidiary include the Company's subsidiaries and sub-subsidiaries.
3. Class and Number of Shares to be Delivered upon Exercise of the Share Options
   The number of shares to be delivered upon the exercise of each of the Share Options (the "Number of Granted Shares") shall be 100 shares of common stock in the Company (the initial total number of shares to be issued upon exercise of all the Share Options shall be up to135,300 shares of its common stock).
   If the Company makes a stock split (including a gratis allotment of shares of its common stock of the Company. Hereinafter the same shall apply in this paragraph for the description of stock split) or a stock consolidation for its common stock of the Company after the date on which the Share Options are allotted as set out in section 15 below (the "Allotment Date"), the Number of Granted Shares will be adjusted in accordance with the following formula, provided that the number of shares to be delivered upon exercise of the Share Options that have not been exercised at that time will be adjusted, and any fraction less than a share resulting from the adjustment will be rounded down.

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Number of	=	Number of Granted	x	Ratio of stock split or
Granted Shares	Shares prior to	stock consolidation
after adjustment
	adjustment

The Number of Granted Shares after adjustment will apply, in the case of a stock split, on or after the day immediately following the record date for such stock split (if a record date is not fixed, its effective date), and, in the case of a stock consolidation, on or after the effective date of the stock consolidation; provided, however, that if the stock split is made subject to the shareholders' approval of a proposal to increase the capital or capital reserve by decreasing the amount of surplus, and the record date for the stock split is prior to the closing date of that shareholders' meeting, the Number of Granted Shares after adjustment will apply on or after the day immediately following the closing date of that shareholders' meeting.

Except as provided above, if the Company performs a merger, company split, share exchange or share transfer (collectively, "Merger") after the Allotment Date or upon the occurrence of any unavoidable circumstances that otherwise necessitate an adjustment to the Number of Granted Shares set out above, the Company shall, to a reasonable extent, adjust the Number of Granted Shares, taking into consideration the terms and conditions of the Merger and other relevant factors.

When the Number of Granted Shares is adjusted pursuant to the terms and conditions set forth above, the Company shall give notice of necessary matters to each holder of the Share Options registered in the register of the Share Options (the "Grantee") or give public notice thereof, no later than the day immediately preceding the date on which the Number of Granted Shares after adjustment shall become effective; provided, however, that if the Company is unable to give such notice or public notice no later than the date immediately preceding such applicable date, the Company shall thereafter promptly give such notice or public notice.

(5) Amount of Payment for the Share Options

The Share Options are issued s compensation for performance of duties by the Grantee, and payment in cash in exchange for the Share Options is not required, but the issuance of the Share Options does not constitute a favorable issuance.

1. Cash to be Contributed at the Time of Exercising the Share Options
   Contributions when exercising the Share Options will be in cash, and the value per Share Option will be the amount per share to be issued at the time of exercising the Share Option (the "Exercise Price") multiplied by the Number of Granted Shares.
   The Exercise Price will be equal to the higher of (i) the average of the daily closing price of the Company's shares of common stock in regular trading on the Tokyo Stock Exchange (excluding days on which there are no transactions in relation to the Company's shares) for 6 months immediately prior to the month in which the Allotment Date falls multiplied by 1.05 (any fraction less than a yen is rounded up to the nearest whole yen) or (ii) the closing price of the Company's shares of common stock on the Allotment Date (or, if there are no transactions in relation to the Company's shares, the most recent closing price before the Allotment Date).
2. Adjustment of the Exercise Price

(A)If the Company performs (i) or (ii) described below for its common stock after the Allotment Date, the Exercise Price will be adjusted in accordance with the following formula (the "Exercise Price Adjustment Formula"), and any fraction of a yen resulting from the adjustment will be rounded up to the nearest whole yen.

1. If the Company makes a stock split or stock consolidation
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Exercise		Exercise Price prior					1
=		x
Price after	to adjustment
			Ratio		split or
adjustment
					stock consolidation

1. If the Company issues new shares or disposes of treasury stock of its common stock at a price less than the market value (including a gratis allotment of shares, but excluding any issuance of new shares or disposition of treasury stock by way of Merger, the sale of treasury stock in accordance with Article 194 of the Companies Act (demand for the sale of shares less than one unit by a holder of shares less than one unit), the conversion of securities to be, or that may be, converted to shares of common stock in the Company and the exercise of the Share Options for which delivery of shares of common stock in the Company may be requested (including those attached to bonds with Share Options))

				Number of		Number of	Paid-in amount
					shares	×
				shares	+ newly issued	per share
				already issued
Exercise Price		Exercise Price		Market value per share
after	=	before
× Number of shares			Number of shares
adjustment	adjustment	+
				already issued	newly issued

a)The "market value" used in the Exercise Price Adjustment Formula will be the average of the daily closing price (including quotation; hereinafter the same) of the Company's shares of common stock in the regular trading on the Tokyo Stock Exchange for 30 trading days (excluding days on which no closing price is quoted) commencing on the 45th trading day preceding "the day from which the Exercise Price after adjustment will be applicable (the "Applicable Date") prescribed in (B) below. The "average" will be calculated to the second decimal place and rounded to the first decimal place.

b)"Number of shares already issued" used in the Exercise Price Adjustment Formula is the total number of outstanding shares of common stock of the Company as of the record date, if any, and otherwise the day 1 month prior to the Applicable Date less the number of treasury stocks for shares of common stock of the Company held by the Company as of such date.

c)If treasury stock is disposed of, "Number of shares newly issued" will be read as "Number of treasury stock disposed of", and "Paid-in amount per share" will be read as "Disposition Amount per share" respectively.

(B)The Exercise Price after adjustment will be applicable from the date provided for below.

(i)The Exercise Price after adjustment, as made in accordance with (A)(i) above, will be applicable, (i) in the case of a stock split, as of the date immediately following the record date for the stock split (if no record date is fixed, the effective date thereof), and (ii) in the case of a stock consolidation, as of the effective date thereof; provided, however, that if a stock split is made subject to shareholders' approval of the proposal to increase the capital or capital reserve by decreasing the amount of surplus, and the record date for the stock split is prior to the closing date of such shareholders' meeting, then, the Exercise Price after adjustment will be applicable on or after the day immediately following the closing date of such shareholders' meeting. If the proviso of the foregoing paragraph applies, and the Grantee exercises his or her Share Options at any time between (i) the date immediately following the record date for the stock split and (ii) the closing date of the shareholders' meeting referred to in the proviso above, the Company shall deliver shares of common stock in the Company to the Grantee in accordance with the following formula

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(the number of shares available for delivery upon such exercise of the Share Options is hereinafter referred to as the "Number of Shares to be Delivered upon Exercise of the Share Options prior to the Stock Split"). Any fraction of a share resulting from the adjustment will be rounded down.

	Exercise	Exercise	Number of Shares	to	be
	Price prior to	-	Price after	x Delivered upon Exercise of the
Number of	adjustment		adjustment	Share Options prior	to	the
	Stock Split

shares	=
	Exercise Price after
		adjustment

(ii)The Exercise Price after adjustment, as adjustment made in accordance with (A)(ii) above, will be applicable as of the date immediately following the payment date (if payment term is fixed, the final date thereof) of such issuance or disposition of shares (if the record date is fixed, as of the date immediately following such date).

(C)In addition to (A)(i) and (A)(ii) above, upon the occurrence of any unavoidable circumstances that necessitate an adjustment in the Exercise Price after the Allotment Date, the Company shall, to a reasonable extent, adjust the Exercise Price.

1. Exercise Period of the Share Options From June 22, 2026 to June 21, 2029
2. Matters Regarding Increase in Capital and Capital Reserve When Issuing Shares by Exercising the Share

Options

1. The amount of increase in capital when shares are issued by exercising the Share Options is half of the maximum amount of increase in capital and capital reserve calculated in accordance with Article 17(1) of the Company Accounting Regulations. Any fraction less than one yen resulting from the calculation is rounded up.
2. The amount of increase in capital reserve when shares are issued by exercising the Share Options is the amount resulting when the amount of increase in capital and capital reserve set forth in (a) above is deducted from the maximum amount of increase in capital stated in (a) above.

1. Restrictions on Acquisition of the Share Options by Transfer
   The Share Options shall not be transferred to any other party or entity unless approved by a resolution of the board of directors' meeting.
2. Terms and Conditions for Exercising the Share Options

(A)The Grantee may exercise his or her Share Options only if the Grantee holds a position as a director, or employee of the Company or a subsidiary of the Company or any position equivalent to any of those at the time of exercising the Share Options. However, this does not apply if the Grantee loses his or her position as a director, or employee of the Company or a subsidiary of the Company or any position equivalent to any of those upon expiration of his or her term of office as a director of the Company or the subsidiary of the Company or retirement as an employee of the Company or the subsidiary of the Company due to reaching mandatory retirement age, or for any other legitimate

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cause. In addition, those who live outside Japan may exercise their Share Options to the extent permissible under the applicable legislation and the applicable laws and regulations of the country, state, or province where they live, only if the Share Options are allowed to be exercised after they have lost their positions.

(B)Provisions regarding exercise of rights by an Heir

(a)If the Grantee dies, his or her heir (the "Heir") inherits his or her Share Options and may exercise, pursuant to a Share Options Allotment Agreement entered into between the Company and the Grantee and the terms and conditions set out separately by the Company and under the condition that the Heir agrees to comply with the Share Options Allotment Agreement, the Share Options inherited by the Heir only for a year from the date of death of the Grantee.

(b)If the Grantee has no Heir, all of the unexercised Share Options held by the Grantee may no longer be exercised as of the time of the death of the Grantee.

(C)A part of a single unit of the Share Options may not be exercised.

1. Other terms and conditions for exercising Share Options will be provided in Share Options Allotment Agreement to be entered into between the Company and the Grantee.

1. Provisions for Acquisition of the Share Options

1. If the Grantee or the "Heir" is unable to exercise the Share Options or no longer satisfies the conditions for exercising the Share Options subject to 11.(A) or (B) above, the Company may acquire his/her Share Options without charge.
2. If any of following proposals is approved at a general meeting of shareholders of the Company (or, if resolution at a general meeting of shareholders is unnecessary, when any of the following is approved by resolution of the board of directors' meeting of the Company), the Company acquires gratis all of

the outstanding Share Options at the time of acquisition on the acquisition date set out separately by the board of directors of the Company (if any):

(i)approval of a merger agreement whereby the Company is extinguished;

(ii)approval of a split agreement or plan whereby the Company becomes a split company; (iii)approval of a share exchange agreement or share transfer plan whereby the Company becomes a

wholly-owned subsidiary;

(iv)approval of amendments to articles of incorporation to set out that acquisition by transfer of all shares issued by the Company requires approval of the Company; or

(v)approval of amendments to articles of incorporation to set out that acquisition by transfer of class shares to be delivered upon exercise of the Share Options requires approval of the Company or the Company acquires all of the shares in that class by resolution of a general meeting of shareholders.

(vi)approval of the consolidation of class shares to be delivered upon exercise of the Share Options (only when fractions result from multiplying the number of share units by the ratio of the consolidation)

(vii)approval of demand for a cash-out by a special controlling shareholder

1. Matters Regarding Delivery of the Share Options upon Reorganization
   If the Company performs a merger (limited to a merger whereby the Company is extinguished), absorption-type split or incorporation-type split (in each case, limited to a split whereby the Company becomes a split company), or share exchange or share transfer (in each case, limited to exchange or transfer whereby the Company becomes a wholly-owned subsidiary) (collectively, the "Reorganization"), in each case, the Share Options of the kabushiki kaisha (joint-stock company) listed in Article 236(1)(viii)(a) through (e) of the Companies Act (the "Reorganized Company") will be delivered respectively to the Grantee holding the outstanding Share Options (the "Outstanding Share Options") immediately before the effective date of the Reorganization (which means for an absorption- type merger, the effective date of the absorption-type merger, for an incorporation-type merger, the establishment date of a kabushiki kaisha incorporated by the incorporation-type merger, for an absorption-type split, the effective date of the absorption-type split, for an incorporation-type split, the

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establishment date of a kabushiki kaisha incorporated by the incorporation-type split, for a share exchange, the effective date of the share exchange, and for a share transfer, the establishment date of a wholly-owning parent company incorporated by the share transfer; the same applies hereafter). In this event, the remaining Share Options shall cease to exist, provided that an agreement for absorption-type merger, incorporation-type merger or absorption-type split, an incorporation-type split plan, a share exchange agreement or a share transfer plan sets out the delivery of the Reorganized Company's Share Options in accordance with the terms and conditions set out below.

(i)Number of the Reorganized Company's Share Options to be delivered

The Reorganized Company shall deliver the same number of the outstanding Share Options held by the Grantee.

(ii)Class of shares in the Reorganized Company to be delivered upon exercise of the Share Options The Reorganized Company shall deliver shares of common stock in the Reorganized Company.

(iii)Number of shares in the Reorganized Company to be delivered upon exercise of the Share Options The Reorganized Company determines the number of shares to be delivered in accordance with section (4) above, taking into consideration the terms and conditions and other matters of the Reorganization.

(iv)Cash to be contributed at the time of exercising the Share Options

Cash to be contributed at the time of exercising each of the Share Options to be delivered is the Exercise Price after the Reorganization resulting from adjustment of the Exercise Price set out in section (6) above, taking into consideration the terms and conditions and other matters of the Reorganization, multiplied by the number of shares of the Reorganized Company to be delivered upon exercise of each of the Share Options, which number is determined in accordance with (iii) above.

(v)Exercise period of the Share Options

From the later of the first day of the period in which the Share Options may be exercised as set out in section (8) above and the effective date of the Reorganization, to the expiration date of the period in which the Share Options may be exercised as set out in section (8) above.

(vi)Matters regarding increase in capital and capital reserve when issuing shares by exercising the Share Options

Any increase in capital and capital reserve is determined in accordance with section (9) above. (vii)Restrictions on acquisition of the Share Options by transfer

The Share Options shall not be transferred to any other party or entity unless approved by the Reorganized Company.

(viii)Terms and conditions for exercising the Share Options

The terms and conditions for exercising the Share Options are determined in accordance with section (11) above.

(ix)Provisions for acquisition by the Reorganized Company of the Share Options

The provisions for acquisition of the Share Options are determined in accordance with section (12) above.

1. Fractions of Share at Time of Exercising Share Options
   Any fraction of a share in the number of shares to be delivered to the Grantee who has exercised his or her Share Options is rounded down.
2. Allotment Date of the Share Options

July 10, 2024

(EOF)

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