Freee K K : Announcement regarding Issuance of New Restricted Shares to freee Employees

	August 12, 2020
Company Name	freee K.K.
Representative	Daisuke Sasaki,
	CEO and Representative Director
Code No.	4478,Tokyo Stock Exchange
	Mothers
Contact	Sumito Togo, CFO and Director
	(TEL. [phone])

Announcement regarding Issuance of New Restricted Shares to freee Employees

freee K.K. announces that, at the Board of Directors' meeting held today, our Board of Directors decided to issue new restricted shares (hereinafter the "New Share Issue") as follows.

1. Overview of the Share Issuance

(1)	Pay-in date	September 1, 2020
(2)	Type and number of shares to be	7,205 common shares of freee K.K.
issued
(3)	Issue price of shares	JPY 5,290 per share
(4)	Total issue price	JPY 38,114,450
(5)	Allottees	7,205 shares to be allocated to 26 employees of freee
		K.K.
(6)	Other	For the New Share Issue, a securities notice has been
		submitted as required under the Financial Instruments and
		Exchange Act.

2. Purposes and reasons of the New Share Issue

Pursuant to a resolution at a Board of Directors meeting held today, freee K.K. granted 26 of our employees who satisfy certain requirements (hereinafter the "Eligible Employees") monetary receivables of JPY 38,114,450 in total, for the purpose of motivating our employees to work for sustainable growth of freee's corporate value and strengthening the sense of values shared with our shareholders. On this basis, we, at the Board of Directors meeting, further decided to allocate 7,205 common shares of free K.K. through the New Share Issuance (hereinafter "Allocated Shares") for the purpose of the total monetary receivables of JPY 38,114,450 to be paid as property contributed in kind (the amount of the monetary receivables paid per share: JPY 5,290). In order to encourage medium-/long-term continuous service of the Eligible Employees, Allocated Shares are subject to a transfer restriction for a period defined by the Board of Directors within the range from 6 months to about 2.5 years (hereinafter the "Transfer Restriction Period").

The Eligible Employees will pay-in all of the monetary receivables paid as property contributed in kind and take up common shares allocated by freee K.K. through the New Share Issue. The New Share Issue is subject to a restricted share allocation agreement signed between freee K.K. and the Eligible Employees. Overview of the restricted share allocation agreement is as provided below.

Allocated Shares will be allocated only to Eligible Employees who wish to take up the shares.

Overview of the Restricted Share Allocation Agreement

(1) Transfer Restriction Period

The Eligible Employees shall not transfer, pledge as collateral, or otherwise dispose of Allocated Shares during the Transfer Restriction Period.

(2) Conditions subsequent

The transfer restriction of Allocated Shares will be lifted as of expiration of the Transfer Restriction Period upon condition that the Eligible Employees continue to serve in the status of officers or employees at freee K.K.

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(3) Uncompensated acquisition by free K.K.

Upon expiration of the Transfer Restriction Period, freee K.K. may automatically acquire all Allocated Shares for which the transfer restriction has not been lifted without providing compensation.

(4) Management of Shares

Allocated Shares shall be managed in a dedicated account for restricted shares established by the Eligible Employees at Daiwa Securities Co. Ltd. in order to prevent the Allocated Shares from being transferred, pledged as collateral, or otherwise disposed of during the Transfer Restriction Period.

(5) Reorganizations

In the event a merger agreement in which freee K.K. becomes a dissolved company, or a share exchange agreement, share transfer plan, or any other matters of reorganization with which freee

1. becomes a wholly owned subsidiary is approved by the General Meeting of Shareholders (or the Board of Directors where approval of the General Meeting of Shareholders is not required in a relevant reorganization case), the Board of Directors of freee K.K. shall lift the transfer restriction on the number of Allocated Shares reasonably calculated as of the moment immediately prior to the business day prior to the effective date of such reorganization.

3. Basis and Details of Calculation of the Pay-in Amount

The New Share Issue will be funded by monetary receivables paid to the allottees as property contributed in kind. In order to exclude arbitrariness with regard to the pay-in amount, the closing price of the common shares of freee K.K. on Tokyo Stock Exchange on August 11, 2020 (the business day before the resolution at the Board of Directors), which is JPY 5,290, is taken as the pay-in amount. The amount is the market price immediately prior to the date of the Board of Directors meeting resolution and we believe it appropriately and reasonably reflects the company's corporate value and is not a price particularly favorable to the Eligible Employees unless there is any special circumstance suggesting that dependence on the latest stock price is inappropriate.

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