Shinsei Bank : Notice concerning Disposal of Treasury Shares for Restricted Stock Compensation

I N F O R M AT I O N

For Immediate Release

Company Name: Shinsei Bank, Limited

Name of Representative: Hideyuki Kudo

President and CEO

(Code: 8303, TSE First Section)

Notice concerning Disposal of Treasury Shares for Restricted Stock Compensation

Tokyo (Wednesday, June 23, 2021) --- Shinsei Bank, Limited (hereinafter, the "Bank") announced today that its Board of Directors resolved, at a meeting held on June 23, 2021, to dispose of treasury shares (hereinafter the "Disposal of Treasury Shares") as follows:

1. Outline of the disposal of treasury shares

(1)	Disposal Date	July 21, 2021
(2)	Class and number of shares	23,184 shares of common stock of the Bank
	to be disposed
(3)	Disposal value	1,530 yen per share
(4)	Total disposal value	35,471,520 yen
(5)	Recipients of allocation and	Full-Time Directors and Outside Directors (hereinafter referred to
	the numbers thereof; numbers	collectively, "Eligible Directors") 7 persons 22,095 Shares
	of shares to be disposed	The Group Headquarters (hereinafter, "Eligible Executive Officers,
		etc.", "Eligible Directors" and "Eligible Executive Officers, etc." to be
		referred to collectively, "Eligible Directors, etc.") 1 person 1,089
		Shares
(6)	Others	The Disposal of Treasury Shares is conditioned on the Securities
		Registration Statement taking effect in accordance with the
		Financial Instruments and Exchange Act.

2. Purpose of and reasons for the disposal

The Bank resolved to introduce a restricted stock compensation plan as a compensation plan for full-time Directors of the Bank (Directors excluding Outside Directors), for the purpose of granting a mid- to long-term incentive to Eligible Directors and promoting shared value with shareholders and it was approved that, pursuant to the said restricted stock compensation plan, monetary compensation not exceeding 20 million yen per year shall be paid to Eligible Directors at the 18th General Meeting of Shareholders held on June 20, 2018. The Bank resolved, to introduce a restricted stock compensation plan as a compensation plan for Outside Directors of the Bank , for the purpose of granting a mid- to long-term incentive to Outside Directors and promoting shared value with shareholders and it was approved that, pursuant to the said restricted stock compensation plan, monetary compensation not exceeding 15 million yen per year shall be paid to Outside Directors at the 20th General Meeting of Shareholders held on June 17, 2020. In accordance with the amendment of the Companies Act, the continuation of the Restricted Stock Compensation Plan for Directors was resolved at the 21st General Meeting of Shareholders held today. The Bank also resolved, as of September 19, 2018, to introduce a restricted stock compensation plan for Executive Officers of the Bank as well as Chief Officers and Senior Officers of the Group Headquarters at the meeting of the board of directors, as a compensation plan for Executive Officers of the Bank as well as Chief Officers and Senior Officers of the Group Headquarters, for the purpose of granting a mid- to long-term incentive and promoting shared value with shareholders, and to dispose of Treasury Shares.

This time, the Bank, as part of the Restricted Stock Compensation Plan for Eligible Directors, etc., has decided to provide the total sum of monetary compensation claims of 35,471,520 yen (hereinafter, the "Monetary Compensation Claims") and 23,184 shares of common stocks of the Bank to increase motivation of each of the Eligible Directors, etc.

The outline of the Restricted Stock Compensation Plan and other matters are as described below.

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[Outline of the Restricted Stock Compensation Plan and other matters]

Eligible Directors, etc. will make in-kind contributions of all monetary compensation claims to be provided by the Bank in accordance with the Restricted Stock Compensation Plan, and, in return, receive shares of common stock of the Bank that will be issued or disposed of by the Bank. The amount to be paid in per share of common stock to be issued or disposed of by the Bank for Eligible Directors, etc. under the Restricted Stock Compensation Plan shall be decided by the Board of Directors within a range that is not specially advantageous to Eligible Directors, etc. who will receive the common stock, based on the closing price of the common stock of the Bank on the First Section of the Tokyo Stock Exchange on the business day immediately preceding the date of each resolution of the Board of Directors (in the case that the transaction has not been established on that day, the closing price on the most recent trading day preceding that day).

For the purpose of issuing or disposing of common stock in the Bank based on the Restricted Stock Compensation Plan, the Bank shall enter into a restricted stock allotment agreement with Eligible Directors, etc., which includes the provisions that (1) Eligible Directors, etc. shall not, during a certain period, transfer, create a security interest on, or otherwise dispose of the common stock of the Bank which are allotted to them pursuant to the restricted stock allotment agreement, and (2) the Bank may acquire the relevant common stock without consideration if certain events occur.

In order to accomplish the purpose of introducing the Restricted Stock Compensation Plan which is to achieve shared value with shareholders over a mid- to long-term period, the Bank has decided the transfer restriction period to be three (3) years.

For the Disposal of Treasury Shares, 8 Eligible Directors, etc., who are the planned recipients of an allocation of shares, will make an in-kind contribution of all Monetary Compensation Claims to the Bank in accordance with the Restricted Stock Compensation Plan, and will receive the disposed shares of common stock of the Bank (hereinafter, "the Allotted Stocks"). The outline of a restricted stock allotment agreement to be entered into by and between the Bank and Eligible Directors, etc. in connection with the Disposal of Treasury Shares is as described in 3. below (hereinafter, "the Allotment Agreement").

3. Outline of the Allotment Agreement

1. Transfer restriction period: July 21, 2021 to July 20, 2024
2. Conditions for removal of transfer restrictions
   The Bank will remove the transfer restrictions on the entirety of the Allotted Stocks upon expiration of the transfer restriction period on the condition that the Eligible Directors, etc. continuously retain the position as any of Director, Auditor, Executive Officer, Chief Officer or Senior Officer of the Group Headquarters or employee of the Bank or its subsidiary during the transfer restriction period.
3. Treatment in case of resignation of Eligible Directors, etc. due to expiration of the term of office, attainment of retirement age or any other justifiable reasons during the transfer restriction period

(i) Timing of removal of transfer restrictions

If an Eligible Director resigns or retires from the position of Director, Auditor, Executive Officer, Chief Officer or Senior Officer of the Group Headquarters or employee of the Bank or its subsidiary due to expiration of the term of office, attainment of retirement age or any other justifiable reasons, the transfer restrictions will be removed at the time immediately after the resignation or retirement of the Eligible Director. If an Eligible Executive Officer, etc. resigns or retires from the position of Director, Auditor, Executive Officer, Chief Officer or Senior Officer of the Group Headquarters or employee of the Bank or its subsidiary due to expiration of the term of office, attainment of retirement age or any other justifiable reasons, the transfer restrictions will be removed at the time of expiration of the transfer restriction period (in case of resignation or retirement due to death, the removal shall be on the date of the resignation or retirement of the Eligible Executive Officer, etc.).

(ii) Number of shares subject to removal of transfer restrictions

The number of shares obtained by multiplying the number of Allotted Stocks held by an Eligible Directors, etc. at the time of his/her resignation or retirement set forth in (i) above by the value obtained as a result of dividing the period of service of the Eligible Directors, etc. during the transfer restriction period (on a monthly basis) by 12 (if the value is above 1, then 1 shall apply) (provided, however, that, any fraction less than one share as a result of the calculation shall be rounded off) shall be removed.

(4) Acquisition by the Bank without consideration

The Bank shall automatically acquire, without consideration, the Allotted Stocks for which transfer restrictions have not been removed at the time of expiration of the transfer restriction period. The Bank shall automatically acquire, without consideration, all the Allotted Stocks if certain events (if the Eligible

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Directors, etc. receives a prison sentence or a more severe punishment, etc.) occur during the transfer restriction period.

(5) Management of shares

The Allotted Stocks shall be managed in dedicated accounts at Nomura Securities Co., Ltd. opened by the Eligible Directors, etc. during the transfer restriction period in order to ensure that it is not possible to transfer, create any security interest on, or otherwise dispose of the shares during the transfer restriction period. The Bank has entered into an agreement with Nomura Securities Co., Ltd. in relation to the management of the accounts of the Allotted Stocks held by the Eligible Directors, etc. to ensure the effectiveness of the transfer restrictions on the Allotted Stocks. In addition, the Eligible Directors, etc. shall agree to the details of the management of the accounts.

(6) Treatment upon reorganization

If, during the transfer restriction period, a merger agreement in which the Bank is a disappearing company, a share exchange agreement or a share transfer plan in which the Bank becomes a wholly owned subsidiary, or any other matters concerning reorganization is approved by the General Shareholders' Meeting of the Bank (or by the Board of Directors of the Bank, if the approval by the General Shareholders' Meeting of the Bank is not required in relation to the relevant reorganizations), based on the resolution of the Board of Directors, the Bank will remove the transfer restrictions on the number of shares obtained by multiplying the number of shares of the Allotted Stocks held at the time being by the value obtained as a result of dividing the number of months from the commencement month of the transfer restriction period to the month including the date of the approval of reorganization by 12 (if the value is above 1, then 1 is applied) at the time immediately before the preceding business day of the effective date of reorganization (provided, however, that, any fraction less than one share as a result of the calculation shall be rounded off). The Bank shall automatically acquire, without consideration, the entire Allotted Stocks for which transfer restrictions are not removed at the time immediately after the removal of the transfer restrictions.

4. Basis for calculating the amount to be paid in and details thereof

The Disposal of Treasury Shares will be performed as an in-kind contribution based on the monetary

compensation claims which will be provided as the Restricted Stock Compensation for the 22nd term of the Bank based on the Restricted Stock Compensation Plan. To eliminate any arbitrariness in the disposal price, the closing price for common stock of the Banks on June 22, 2021 (which is the business day immediately before the date of resolution of the Board of Directors) on the First Section of the Tokyo Stock Exchange of 1,530 yen is used as the disposal price. As this is the market price of the shares the day immediately before the date of resolution of the Board of Directors, the Bank believes it is reasonable and does not constitute a particularly favorable price.

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Shinsei Bank is a leading diversified Japanese financial institution providing a full range of financial products and services to both institutional and individual customers. The Bank has a network of outlets throughout Japan and is committed in its pursuit of uncompromising levels of integrity and transparency in all of its activities in order to earn the trust of its customers, staff and shareholders. The Bank is committed to delivering long-term profit growth and increasing value for all its stakeholders. News and other information about Shinsei Bank is available at http://www.shinseibank.com/corporate/en/index.html

For further information, please contact:

Group Investor Relations & Corporate Communications Division

Shinsei Bank, Limited (www.shinseibank.com)

[e-mail]

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