Square Enix : Reissuance of Treasury Shares for Stock Compensation Plan with Restricted Stock Ownership

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]

Reissuance of Treasury Shares for Stock Compensation Plan with Restricted Stock Ownership

SQUARE ENIX HOLDINGS CO., LTD. (the "Company") has resolved to reissue treasury shares for a stock compensation plan with restricted stock ownership (the "Reissuance") at the Board of Directors meeting held on June 21, 2024.

1. Outline of Reissuance

(1)	Allocation date	July 18, 2024
(2)	Class and number of shares to be reissued	31,793 of the Company's common shares
(3)	Reissuance value per share & total reissuance value	The purpose of the Reissuance is to provide the
		Company's directors with common stock in the
		Company as compensation and no monetary
		payment or provision of property will be required
		in exchange for the common stock.
(4)	Recipients of allocation	Seven directors who are not Audit & Supervisory
		Committee members (31,793 shares)
(5)	Other	The Company has submitted an extraordinary
		report regarding the Reissuance in accordance with
		the Financial Instruments and Exchange Act.

2. Purpose and reasons for the Reissuance

At a meeting of the Board of Directors held on May 21, 2021, the Company resolved to introduce a stock compensation plan with restricted stock ownership (the "Plan") as a new compensation program for the Company's directors (excluding directors who are Audit & Supervisory Committee member; hereinafter "Eligible Directors") with the objective of incentivizing the Eligible Directors to enhance the Company's medium- and long-term corporate value and shareholder value, while also fostering a greater sense of shared value with shareholders. At the 41st Annual Shareholders' Meeting held on June 25, 2021, the Company received approval to provide restricted stock as compensation (no more than 90,000 shares per year [including no more than 7,200 shares per year for outside directors] and annual value of no more than 400 million yen [including no more than 32 million yen per year for outside directors]) for the Eligible Directors separate from existing monetary compensation in keeping with the Plan.

In addition, at the 42nd Annual Shareholders' Meeting held on June 23, 2022, the Company received approval to change the compensation limits under the Plan. The following outline of the Plan is based on compensation limits after the change.

Outline of the Plan

Restricted stock shall be granted under the Plan through the issuance or reissuance of common shares in the Company as compensation for Eligible Directors with no requirement for monetary or other payments in exchange.

The total number of the Company's common shares to be issued or reissued under the Plan shall be no more than 180,000 shares per year (including no more than 14,400 shares per year for outside directors), and the annual value shall be no more than 800 million yen (including no more than 64 million yen per year for outside directors).

In addition, in issuing or reissuing common stock in the Company under the Plan, the Company shall conclude a restricted stock allocation agreement with the Eligible Directors who are to be the recipients of the allocation, and the agreement shall include the following items:

1. The Eligible Directors may not transfer, create security interests in, or otherwise dispose of the common stock of the Company allocated to them under the restricted stock allocation agreement during the period from the date of the allocation of the stock to the date on which the Eligible Directors lose their positions as directors of the Company who are not Audit & Supervisory Committee members (except in the case of reappointment to such position upon loss thereof; same hereinafter).
2. If an event occurs that the Company's Board of Directors deems to be just cause for acquiring restricted stock without consideration, the Company shall, without consideration, acquire a number of restricted shares reasonably determined based on the nature of the event in question.

Based upon the foregoing, the Company resolved at the meeting of the Board of Directors held on June 21, 2024, to reissue 31,793 of the Company's common shares (the "Allocated Shares") to the seven Eligible

Directors, taking into account the purpose of the Plan, the scope of each Eligible Director's work responsibilities, and other relevant factors.

Overview of the restricted stock allocation agreement

In conjunction with the Reissuance, the Company and each Eligible Director shall individually conclude a restricted stock allocation agreement, the outline of which is as follows:

(1) Restricted period

The Eligible Director may not transfer, create security interests in, or otherwise dispose of the Allocated Shares during the period from July 18, 2024 (the allocation date) to the date on which the Eligible Director loses his or her position as a director of the Company who is not an Audit & Supervisory Committee member (unless this date precedes the date immediately following the passage of three months from the closure of the fiscal year containing the allocation date of the Allocated Shares [i.e. immediately following July 1, 2025], in which case the restricted period ends at the later date).

(2) Requirements for the lifting of restrictions

Provided that the Eligible Director remains constantly in the position of director of the Company during the period from the date of the Company's Annual Shareholders' Meeting immediately prior to the allocation date to the date of the Company's Annual Shareholders' Meeting held the following year (the "Service Provision Period"), the Company shall lift the restrictions on all of the Allocated Shares upon the expiration of the restricted period. However, should the Eligible Director lose the position of director of the Company during the Service Provision Period due to death, expiration of term of office, or any other reason deemed valid by the Company's Board of Directors, the Company shall, on the date of the loss of such position, lift the restrictions on a number of Allocated Shares arrived at by dividing by 12 the number of months from the month following the month including the start date of the Service Provision Period to the month including the date on which the position of director was lost and multiplying the result by the number of Allocated Shares (however, should the outcome of the calculation include a fraction of a share, the result shall be rounded down). In addition, should the Eligible Director lose the position of director of the Company after the Service Provision Period but prior to the date immediately following the passage of three months from the closure of the fiscal year containing the allocation date of the Allocated Shares due to death, expiration of term of office, or any other reason deemed valid by the Company's Board of Directors, the Company shall, on the date of the loss of such position, lift the restrictions on all of the Allotted Shares held by the Eligible Director.

(3) Acquisition without consideration by the company

The Company shall acquire without consideration the Allocated Shares for which restrictions have not been lifted immediately following expiry of the restricted period (unless the Eligible Director loses his or her position as a director of the Company prior to the expiry date, in which case, this will happen immediately following the date on which he or she loses the position).

(4) Management of the shares

In order to prevent the transfer, creation of securities interests in, or other forms of disposal of the Allocated Shares during the restricted period, the Allocated Shares shall be managed for the duration of the restricted period in a dedicated account for restricted shares that the Eligible Director has opened at Daiwa Securities Co., Ltd.

(5) Treatment in the event of organizational restructuring, etc.

If, during the restricted period, a merger agreement under which the Company would cease to exist, a stock swap agreement or stock transfer plan under which the Company would become a wholly owned subsidiary,

or other matter regarding organizational restructuring, etc. should be approved by a General Shareholders' Meeting of the Company (or by the Company's Board of Directors in instances in which the approval of a General Shareholders' Meeting of the Company is not required in regards to the relevant organizational restructuring, etc.), the Company shall, by resolution of its Board of Directors, lift the restrictions on all the Allocated Stock immediately before the business day prior to the date upon which the organizational restructuring, etc. is to take effect.

(EOD)