Tokyo Century : Outline (Details of the Series 1 Bond-Type Class Shares)

[Translation]

Outline (Details of the Series 1 Bond-Type Class Shares)

The details of the Series 1 Bond-Type Class Shares are as follows.

A Preferred dividend

1. When the Company makes a dividend of surplus with March 31 as the record date, the Company shall pay a dividend in money in the following amount (the "Preferred Dividend to Series 1 Bond-Type Class Shares") to the holders of the Series 1 Bond-Type Class Shares (the "Series 1 Bond-Type Class Shareholders") or registered pledgees of the Series 1 Bond- Type Class Shares (collectively with the Series 1 Bond-Type Class Shareholders, the "Series 1 Bond-Type Class Shareholders, Etc.") recorded or registered in the last shareholder registry as of the record date of that dividend, in preference to the holders of the Company's common shares (the "Common Shares"; the holders thereof, the "Common Shareholders") and registered pledgees of the Common Shares (collectively with Common Shareholders,
   "Common Shareholders, Etc."); provided that if the Interim Preferred Dividend to Series 1
   Bond-Type Class Shares (as defined in B below) has been paid during the business year in which the record date of the Preferred Dividend to Series 1 Bond-Type Class Shares falls, the total amount of the Interim Preferred Dividend to Series 1 Bond-Type Class Shares shall be deducted from the Preferred Dividend to Series 1 Bond-Type Class Shares.
   With respect to one share, the product of the equivalent of the amount to be determined as the issue price per Bond-Type Class Share (the "Issue Price") multiplied by the annual dividend ratio (not exceeding 10%; the "Annual Dividend Ratio," which is as set out below) to be determined after the Issuance Resolution by the similar method to the book building method as prescribed in Article 25 of the Rules Concerning Underwriting, Etc. of Securities provided by the Japan Securities Dealers Association upon receipt of a valuation report on the fair value of the shares, while comprehensively taking into account the factors such as demand under the provisional conditions pertaining to the annual dividend ratio, after proposing the provisional conditions, and the market prices of bonds with subordination clauses issued by companies that have credit ratings similar to those of the Company
2. 1. The annual dividend ratio for the period from the business year in which the issuance date of the Series 1 Bond-Type Class Shares falls until the business year in which the date five years after that issuance date falls shall be the fixed base interest rate determined by the Issuance Resolution plus the initial spread to be determined by the similar method to the book building method stated above (the "Initial Spread") (*).
   2. The annual dividend ratio for the period on or after the date immediately following the end of the business year in which the date five years after the issuance date of the Series 1 Bond-Type Class Shares falls until the business year in which the date 25 years after that issuance date falls shall be the variable base interest rate determined by the Issuance Resolution plus the Initial Spread.

1. The annual dividend ratio for the period on or after the date immediately following the end of the business year in which the date 25 years after the issuance date of the Series 1 Bond-Type Class Shares falls shall be a variable base interest rate determined by the Issuance Resolution plus the Initial Spread and 1%.

1. • Under the market conditions as of May 14, 2024, the annual dividend ratio for the period from the business year in which the issuance date of the Series 1 Bond-Type Class Shares falls until the business year in which the date five years after that issuance date falls is anticipated to be from 2 to 4 %.
2. If the amount of dividends of surplus paid in money to the Series 1 Bond-Type Class Shareholders, Etc. per share of the Series 1 Bond-Type Class Share in a given business year in which the record date falls is less than the amount of the Preferred Dividend to Series 1 Bond-Type Class Shares for that business year, that shortfall amount shall be accumulated in subsequent business years by a simple interest calculation calculated by the method determined by the Issuance Resolution based on the annual dividend ratio to be determined by the similar method to the book building method stated above (such accumulated shortfall, the "Accumulated Dividends Payable to Series 1 Bond-Type Class Shares"). The Company shall pay dividends of surplus in money to the Series 1 Bond-Type Class Shareholders, Etc. until such payment reaches the amount of Accumulated Dividends Payable to Series 1 Bond- Type Class Shares per share of the Series 1 Bond-Type Class Share, in preference to the Preferred Dividend to Series 1 Bond-Type Class Shares and Interim Preferred Dividend to Series 1 Bond-Type Class Shares.
3. No dividends of surplus shall be paid to the Series 1 Bond-Type Class Shareholders, Etc. in excess of the total of the Preferred Dividend to Series 1 Bond-Type Class Shares and the Accumulated Dividends Payable to Series 1 Bond-Type Class Shares.

B Interim preferred dividend

When the Company makes a dividend of surplus with a date other than March 31 as the record date (the "Interim Dividend Record Date"), the Company shall pay a dividend in money in the amount of one-half of the amount of the Preferred Dividend to Series 1 Bond-Type Class Shares per share of the Series 1 Bond-Type Class Share (provided that, if the dividend of surplus is made in the business year in which the issuance date of the Series 1 Bond-Type Class Shares falls with the Interim Dividend Record Date as the record date, in the amount reasonably adjusted in accordance with the number of days during the period from (and including) the payment date until (and including) the Interim Dividend Record Date) (the "Interim Preferred Dividend to Series 1 Bond-Type Class Shares") to the Series 1 Bond-Type Class Shareholders, Etc. recorded or registered in the last shareholder registry as of the Interim Dividend Record Date of that dividend, in preference to the Common Shareholders, Etc.; provided that the total amount of Interim Preferred Dividend to Series 1 Bond-Type Class Shares for which the Interim Dividend Record Date falls in a given business year shall not exceed the amount of the Preferred Dividend to Series 1 Bond-Type Class Shares for which the record date falls in the same business year.

C Distribution of residual assets

1. When the Company makes a distribution of residual assets, the Company shall pay money in the following amount to the Series 1 Bond-Type Class Shareholders, Etc., in preference to the Common Shareholders, Etc.
   The amount calculated by the method determined by the Issuance Resolution as the sum of the equivalent of the Issue Price per share plus the amount of the Accumulated Dividends Payable to Series 1 Bond-Type Class Shares and the equivalent of the Preferred Dividend to Series 1 Bond-Type Class Shares pertaining to the period from the first day of the business year in which the date of the distribution of residual assets falls to the date of the distribution of residual assets.
2. No distribution of residual assets shall be made to the Series 1 Bond-Type Class Shareholders, Etc. other than the distribution provided for in (1) above.

D Order of priority

Payments of Preferred Dividends to shares of each series of Bond-Type Class Shares and Interim Preferred Dividends to shares of each series of Bond-Type Class Shares, and distribution of residual assets to shares of each series of Bond-Type Class Shares are ranked pari passu.

E Voting rights

The Series 1 Bond-Type Class Shareholders shall not be entitled to exercise their voting rights at the general shareholders meeting with respect to any matter.

F Resolutions of the general class shareholders meeting

1. The resolution at the general class shareholders meeting shall be made by the majority of the voting rights of the shareholders entitled to exercise their voting rights and present except as otherwise provided under the laws, ordinances or the Articles of Incorporation.
2. The resolution provided under Article 324(2) of the Companies Act shall be made by no less than two thirds of the voting rights of the shareholders entitled to exercise their voting rights and present at the meeting where the shareholders holding no less than one third of the voting rights of the shareholders entitled to exercise their voting rights are present.
3. No resolution of a general class shareholders meeting comprising the Series 1 Bond-Type Class Shareholders is required for the Company to conduct any of the acts provided under the items of Article 322(1) of the Companies Act, except as otherwise provided under the laws or ordinances.

1. If the Company performs any of the following acts and there is any likelihood of causing damage to the Series 1 Bond-Type Class Shareholders, that act shall not take effect without a resolution of the general class shareholders meeting comprising the Series 1 Bond-Type Class Shareholders, in addition to a resolution of the general shareholders meeting or the board of directors, unless there are no Series 1 Bond-Type Class Shareholders who would be able to vote at that general class shareholders meeting:
2. 1. a merger in which the Company will be the disappearing company or a share exchange or share transfer in which the Company will be the wholly owned subsidiary company (except for a sole-share transfer conducted by the Company); or
   2. an approval by the board of directors of a demand for a cash-out by a Special Controlling Shareholder against the other shareholders of the Company.

G Clause for acquisition by the Company in exchange for money

1. If an event provided for by the Issuance Resolution arises with respect to the Series 1 Bond- Type Class Shares, such as when five years have elapsed from (and including) the payment date (issuance date), the Company may acquire all or part of the Series 1 Bond-Type Class Shares upon the occurrence of a date separately determined by resolution of the board of directors. In such case, the Company shall deliver to the Series 1 Bond-Type Class Shareholders money in the amount determined by the Issuance Resolution based on the Issue Price per share of the Series 1 Bond-Type Class Share, in exchange for the acquisition of the Series 1 Bond-Type Class Shares. However, the Company may not make an acquisition where either the acquisition date or the Book-Entry Acquisition Date (as defined below) for the acquisition falls on any day between April 1 and June 30.
   "Book-Entry Acquisition Date" means the date on which an increase in the number of Series
   1 Bond-Type Class Shares pertaining to the acquisition is recorded or registered in the holding column of the Company's book-entry account pursuant to an application for book- entry transfer based on an acquisition as stated in this G, or the date on which the record or registration of the Series 1 Bond-Type Class Shares is cancelled pursuant to a notice of full cancellation based on such acquisition.
2. If the Company acquires part of the Series 1 Bond-Type Class Shares pursuant to (1) above, the Company shall determine the scope of the Series 1 Bond-Type Class Shares to be acquired from the Series 1 Bond-Type Class Shareholders by a reasonable method determined by the board of directors.

H Share consolidation, share split, etc.

1. The Company shall not conduct any share consolidation or share split with respect to the Series 1 Bond-Type Class Shares, unless otherwise provided under the laws or ordinances.
2. The Company shall not make any gratis allotment of shares or stock acquisition rights to the Series 1 Bond-Type Class Shareholders.
3. The Company shall not grant to the Series 1 Bond-Type Class Shareholders any right to receive allotment of shares offered for subscription or stock acquisition rights offered for subscription.
4. If the Company conducts a share transfer (limited to a sole-share transfer conducted by the Company), the Company shall deliver to the Series 1 Bond-Type Class Shareholders, Etc. shares issued by the wholly owning parent company incorporated in the share transfer that are of the same class as the Series 1 Bond-Type Class Shares in exchange for the Series 1 Bond-Type Class Shares, in the same ownership ratio. In such a case, the adjustment of the Preferred Dividend to Series 1 Bond-Type Class Shares and Accumulated Dividends Payable to Series 1 Bond-Type Class Shares shall be conducted by the method determined by the Issuance Resolution.

1. Absence of seller put options when the Company Acquires the Series 1 Bond-Type Class Shares

If the Company decides to acquire all or part of the Series 1 Bond-Type Class Shares held by any Series 1 Bond-Type Class Shareholder under an agreement with such Series 1 Bond-Type Class Shareholder pursuant to a resolution of the general shareholders meeting, and further decides to notify such Series 1 Bond-Type Class Shareholder of matters prescribed in any item of Article 157(1) of the Companies Act, the provisions of Article 160(2) and (3) of such act shall not apply.

J Listing

A listing application in respect of the Series 1 Bond-Type Class Shares for the Prime Market of the Tokyo Stock Exchange, Inc. is planned to be made.

Note:

This material has been prepared solely for the benefit of the holders of shares of common stock of the Company in exercising the voting rights with respect to the Bond-Type Class Shares at the Company's 55th annual general shareholders meeting planned to be held on June 24, 2024 and not for the purpose of soliciting investment or engaging in any other similar activities in Japan or any foreign country.

This material does not constitute an offer of securities in the United States or elsewhere. The securities referred to herein have not been, and will not be, registered under the U.S. Securities Act of 1933, as amended (the "Securities Act"), and may not be offered or sold in the United States absent registration thereunder or an applicable exemption from registration requirements under the Securities Act. The securities referred to above will not be publicly offered or sold in the United States.