DeNA : Notice Regarding Revision & Issuance of Stock Options (Stock Acquisition Rights) for Director Compensation

The following information was originally prepared and published by DeNA Co., Ltd. in Japanese as it contains timely disclosure materials to be submitted to the Tokyo Stock Exchange. This English translation is for your convenience only. To the extent there is any discrepancy between this English translation and the original Japanese version, please refer to the Japanese version.

	May 21, 2021
Company name:	DeNA Co., Ltd.
	(TSE First Section Stock Code: 2432)
Name of representative:	Shingo Okamura, President & CEO
Contact person:	Jun Oi, Managing Executive Officer, CFO,
	Head of Corporate Unit
Tel.:	03-6758-7200

Notice Regarding Revision & Issuance of Stock Options (Stock Acquisition Rights)

for Director Compensation

DeNA Co., Ltd. would like to announce that in a Board of Directors meeting held today, it passed a resolution to submit the proposal "Revision of the Stock Acquisition Rights as Stock Options for Directors" to the 23rd Ordinary General Meeting of Shareholders scheduled to be held on June 19, 2021. In addition, DeNA hereby announces that, subject to the approval of this proposal as originally proposed, DeNA has resolved to determine the matters for making available stock acquisition rights allocated as stock-linked compensation for its three (3) current directors (excluding outside directors), and make such rights available, pursuant to Article 236, Article 238, and Article 240 of the Companies Act.

Refer to the Notice of the Convocation of the Ordinary General Meeting of Shareholders to be subsequently disclosed for more information.

Reason for Proposal and Summary

At the 15th Ordinary General Meeting of Shareholders held on June 22, 2013, DeNA obtained approval to issue stock acquisition rights granted as compensation in the form of stock options as described in the attached document. For Directors (excluding Outside Directors), the amount shall not exceed 1.0% per year of the amount of profit attributable to owners of the parent as set forth in the consolidated income statement for the previous fiscal year (provided, however, such amount shall not exceed 1.0% of the amount of said profit when added to the performance-linked cash compensation amount per year), and not exceed 160,000 units per year. For Outside Directors, the annual amount shall not exceed ¥20 million, and not exceed 15,000 units per year.

With the enforcement of the Act Partially Amending the Companies Act (Act No. 70 of 2019) on March 1, 2021, when a stock company intends to prescribe that it can acquire stock acquisition rights as stock options on the condition that certain grounds arise, it is required to obtain approval at a General Meeting of Shareholders for an overview of the details of said grounds. Therefore, DeNA proposes during the 23rd Ordinary General Meeting of Shareholders to revise the details of stock acquisition rights as compensation in the form of stock options as described below. This proposal has been decided by the Board of Directors of DeNA upon deliberations and recommendations by the Compensation Committee, which was voluntarily established by DeNA with the majority of its members comprised of Independent Outside Directors.

Even in the event that this proposal is approved, the upper limit of the total amount and number of units for compensation-type stock options granted to Directors shall remain unchanged.

The purpose of issuing stock acquisition rights as compensation in the form of stock options to Directors is, by having Directors share with the shareholders the benefits of rising stock prices and the risks of falling stock prices, to motivate Directors to contribute to the enhancement of performance and corporate value, and provide them with the incentive to raise their awareness toward shareholder-oriented management, and DeNA has deemed this to be appropriate.

The policy to determine individual compensation for Directors of DeNA can be found in the Notice of the Convocation of the 23rd Ordinary General Meeting of Shareholders, and DeNA believes that the details of this policy will continue to be appropriate even after approval of this proposal. The policy to determine individual compensation for Directors of DeNA is to not grant compensation-type stock options to Outside Directors, and until now DeNA has no record of granting compensation-type stock options to Outside Directors.

Currently, the number of Directors is five (including two Outside Directors). If Proposal 2 (Appointment of Seven (7) Directors) for the 23rd Ordinary General Meeting of Shareholders is approved as originally proposed, the number of Directors will be seven (including three Outside Directors).

Details of changes

The following items will be added to the details of stock acquisition rights described in the attached document, as details of stock acquisition rights in item (8). As a result of this addition, the number of the item concerning stock acquisition rights shall be changed from "(8) Other details of the stock acquisition rights" to "(9) Other details of the stock acquisition rights."

(8) Items concerning acquisition of stock acquisition rights

1. The Company may acquire all of the stock acquisition rights without compensation at the arrival of the day separately determined by the Board of Directors, if approval is given by a General Meeting of Shareholders (or a resolution made by the Board of Directors if approval by a General Meeting of Shareholders is not required) for: a merger agreement in which the Company is absorbed; a company split agreement or company split plan in which the Company becomes a split company; or a stock exchange agreement or stock transfer plan in which the Company becomes a wholly owned subsidiary.
2. The Company may acquire stock acquisition rights without compensation at the arrival of the day separately determined by the Board of Directors if a holder of stock acquisition rights becomes unable to exercise stock acquisition rights in accordance with the previsions set forth in (7) above before exercising those rights.

(Attached document) Details of Stock Acquisition Rights

1. Total number of stock acquisition rights
   The total number of stock acquisition rights to be issued within each fiscal year, pursuant to the resolution of the Board of Directors of the Company, shall not exceed 1.0% of the amount of profit attributable to owners of the parent for the year as set forth in the consolidated income statement of the previous fiscal year for Directors excluding Outside Directors (provided, however, such amount shall not exceed 1.0% of the amount of said profit when added to the performance-linked cash compensation amount per year), and the annual amount for Outside Directors shall not exceed the number derived by dividing the total issue amount of each stock acquisition right that shall not exceed ¥20 million per year by the fair value per stock acquisition right, which is calculated using the Black-Scholes model based on the closing price of the Company shares in regular trading on the Tokyo Stock Exchange on the allotment date of stock acquisition rights (Under the condition that any fraction less than one share shall be rounded down, and the number shall not exceed 160,000 units per year for Directors excluding Outside Directors and shall not exceed 15,000 units per year for Outside Directors).
2. Class of shares to be issued upon the exercise of stock acquisition rights Common stock of the Company
3. Number of shares to be issued upon the exercise of stock acquisition rights
   The number of shares to be issued upon exercise of the stock acquisition rights ("Number of Shares Granted") shall be one share per stock acquisition right. However, the Number of Shares Granted may be adjusted within a

reasonable extent in the event that the adjustment of the Number of Shares Granted is appropriate including the cases that the Company carries out a share split, allotment of shares of common stock of the Company without compensation, or share consolidation.

1. Amount of assets to be contributed upon exercise of stock acquisition rights
   The amount of assets to be contributed upon exercise of each stock acquisition right shall be the amount to be paid in for each of the shares to be delivered upon exercise thereof, which shall be ¥1, multiplied by the Number of Shares Granted.
2. Exercise period of the stock acquisition rights
   The exercise period of the stock acquisition rights shall not exceed 30 years from the date following the allotment date of the stock acquisition rights. However, if the final date of the exercise period falls on a holiday of the Company, then the business day prior to that date shall be the final date.
3. Restriction on acquisition of the stock acquisition rights by transfer
   Any acquisition of the stock acquisition rights by transfer shall be subject to the approval by resolution of the Board of Directors of the Company.
4. Terms and conditions of the exercise of the stock acquisition rights
5. 1. The holder of stock acquisition rights may exercise his/her stock acquisition rights only from the date following the date he/she retired from Director until the date on which ten days have elapsed ("Exercise Deadline") within the period stated in (5) above.
   2. Notwithstanding paragraph 1) above, if a person serving as Outside Director on the allotment date remains as Outside Director on the date after three years have elapsed from the date following the allotment date, the said person may exercise his/her stock acquisition rights from that date (If he/she subsequently retired from Director, then he/she may exercise his/her stock acquisition rights until the Exercise Deadline).
   3. Other terms and conditions of the exercise of the stock acquisition rights shall be determined by the Board of Directors' meeting to determine the subscription requirements of the stock acquisition rights.
6. Other details of the stock acquisition rights
   Other details of the exercise of the stock acquisition rights shall be determined by the Board of Directors' meeting where the subscription requirements of the stock acquisition rights are decided.

Issuance of Compensation-Type Stock Options (Stock Acquisition Rights)

1. Reasons for the issuance of compensation-type stock options (stock acquisition rights)
   As stated above, these compensation-type stock options are issued to reflect the financial performance of the previous fiscal year as a part of the Director performance-linked compensation. The purpose of this compensation system is, by having Directors share with the shareholders the benefits of rising stock prices and the risks of falling stock prices, to motivate Directors to contribute to the enhancement of performance and corporate value, and provide them with the incentive to raise their awareness toward shareholder- oriented management.

1. Matters related to the offer of stock acquisition rights

1. Name of the new stock acquisition rights DeNA Co., Ltd. 21st Stock Acquisition Rights
2. Allocation date of the new stock acquisition rights June 21, 2021
3. Payment handling location for stock acquisition rights
   Mitsubishi UFJ Trust & Banking Corporation Main Branch, 1-4-5 Marunouchi, Chiyoda-ku, Tokyo

1. Eligibility
   Three (3) DeNA Directors (excluding Outside Directors)
2. Details of the stock acquisition rights

1. Class and amount of shares to be acquired upon exercise of the stock acquisition rights The maximum number of shares of common stock shall be 36,207.
   If DeNA carries out a share split or a share consolidation after the allotment date for the stock acquisition rights, then the number of shares to be allotted shall be adjusted using the following formula. The adjustment shall be made only to the number of shares to be allotted for the stock acquisition rights that have not yet been exercised at the time of the adjustment. Any amount less than one share arising from the adjustment shall be rounded down.
   Number of shares to be allotted after the adjustment = Number of shares to be allotted before the adjustment x Ratio of split (consolidation)
   In the event DeNA carries out a merger, company split, share exchange, or share transfer (hereinafter referred to collectively as "Merger, etc."), or in the event DeNA conducts a free allotment of shares, or another instance where it becomes necessary to adjust the number of shares, this adjustment may be made by DeNA within a reasonable scope, with consideration for the conditions, etc. of the Merger, etc. or free allotment of shares.
2. Total number of stock acquisition rights
   The maximum shall be 36,207 shares. (The number of shares issued for each stock acquisition right shall be one (1) share. However, if the number of shares above in (1) has been adjusted, then the same adjustment shall be performed.)
3. Amount of assets to be contributed upon exercise of the stock acquisition rights
   The object of the investment to be made upon the exercise of the stock acquisition rights shall be the money, and the value thereof shall be the amount per share to be paid in upon the exercise of the stock acquisition rights (hereinafter referred to as the "Exercise Price") multiplied by the number of shares to be issued upon the exercise of each stock acquisition right. The Exercise Price shall be 1 yen.
4. Period during which stock acquisition rights may be exercised
   The period where stock acquisition rights may be exercised shall be June 22, 2021 to June 21, 2051. If the final day of the exercise period is on a company holiday, then the final day shall be the preceding business day.
5. Matters related to increasing the stated capital and capital reserves when issuing shares due to the exercise of stock acquisition rights
6. 1. The amount of stated capital to be increased when issuing shares upon the exercise of stock acquisition rights shall be one-half of the maximum amount of stated capital increase calculated in accordance with Article 17, Paragraph 1 of the Regulation on Corporate Accounting, and any amount less than one yen resulting from the calculation will be rounded up to the nearest whole yen.
   2. The amount of capital reserve to be increased when issuing shares upon the exercise of the stock acquisition rights shall be the amount obtained by subtracting the amount of stated capital to be increased as set out in i. above from the maximum amount of increase of stated capital set out in i. above.
7. Conditions for exercising stock acquisition rights
8. 1. Holders of stock acquisition rights may only exercise stock acquisition rights from the day

following retirement as a director until the date after ten days have elapsed during the period described in (4) above.

1. 1. In the event of the death of the holder of the stock acquisition rights, then the heirs of the holder of the stock acquisition rights may exercise such rights regardless of the stipulations set out in i. above.
   2. Other conditions on the exercise of stock acquisition rights shall be as laid out in the stock acquisition rights allocation agreement concluded between DeNA and the holders of the stock acquisition rights, based on the Board of Directors resolution of May 21, 2021.
2. Conditions for the acquisition of stock acquisition rights
3. 1. In the event that the general meeting of shareholders approves a proposal for a merger agreement in which DeNA becomes a defunct company, or a proposal for a share exchange agreement or a share transfer plan in which DeNA becomes a wholly owned subsidiary, then DeNA may acquire all of the stock acquisition rights without compensation on a date separately determined by the Board of Directors.
   2. If the conditions for the exercise of stock acquisition rights no longer apply to the holders of the stock acquisition rights due to the provisions of (6) above, then DeNA may acquire the stock acquisition rights without compensation from a date separately determined by the Board of Directors.
4. Restrictions on the acquisition of stock acquisition rights through transfer
   The acquisition of stock acquisition rights through transfer shall require the approval of the DeNA Board of Directors through a resolution.
5. Handling of the stock acquisition rights upon reorganization
   In the event that the contract or proposal, etc., stipulated at the time of organizational restructuring stipulates that stock acquisition rights of the stock company specified below shall be delivered, stock acquisition rights of the stock company specified below shall be delivered in accordance with the ratio of said organizational restructuring.
6. 1. Merger (only in the case where DeNA ceases to exist)
      Stock company surviving the merger or stock company established by the merger
   2. Absorption-typecompany split
      Stock company conducting the absorption-type company split or stock company succeeding to the rights and obligations of the business held by the stock company in whole or in part
   3. Incorporation-typecompany split
      Stock company established by the incorporation-type company split
   4. Share exchange
      Stock company obtaining all the issued shares of the stock company conducting the share exchange
   5. Share transfer
      Stock company established by the share transfer
7. Rounding down of any amount less than one share arising when exercising stock acquisition rights Any amount less than one share arising when exercising stock acquisition rights shall be rounded down.
8. Amount of assets or calculation method for assets to be contributed upon exercise of the stock acquisition rights
   The amount shall be calculated by multiplying the option price per share, which is calculated based on the basic figures in i. through vii. below using the Black-Scholes model in the following formula, by