Announcement of Revision to Maximum Amount of Remuneration for Directors and Restricted Stock Unit (RSU) Plan

SHIFT Inc. (“SHIFT,” headquartered in Minato-ku, Tokyo, Japan; Masaru Tange, CEO and Representative Director) announced today at the meeting of the Board of Directors held today, it has resolved to submit a proposal to revise the maximum amount of remuneration for Directors and Restricted Stock Unit (RSU) Plan to the 17th Ordinary General Meeting of Shareholders to be held on November 25th, 2022.

1. Reason for proposal
The amount of remuneration for the Company’s Directors (excluding Directors who are Audit & Supervisory Committee Members; hereinafter “Eligible Directors”) was approved at the 14th Annual General Meeting of Shareholders held on November 27, 2019, as an annual amount of no more than 1,000 million yen (including no more than 100 million yen for Outside Directors). In addition, at the 16th Annual General Meeting of Shareholders held on November 26, 2021, the Company gained the approval of shareholders to set the total amount of its common stock to be issued or transferred to Eligible Directors and money to be paid to them under the Restricted Stock Unit Plan (hereinafter the “Plan”) as an annual amount of no more than 200 million yen (including no more than 50 million yen for Outside Directors).
In light of the need to provide Directors, etc., with incentives to sustainably increase corporate value and to further promote value sharing with shareholders, and in light of the Company’s objective of developing and securing excellent management personnel to contribute to sustainable development and to society in general as a publicly listed company, the Company requests approval at this Annual General Meeting of Shareholders to increase the total annual amount of its common stock to be issued or transferred to Eligible Directors and money to be paid to them under the Plan approved at the 16th Annual General Meeting of Shareholders held on November 26, 2021, and to increase the maximum number of shares to be delivered to Eligible Directors under the Plan. The purpose is to increase the proportion of remuneration linked to medium- to long-term business performance to ensure that the Company’s remuneration for Eligible Directors functions as an appropriate incentive for the creation of corporate value.
The Company established a basic policy regarding the content of remuneration, etc., for individual Directors at the Board of Directors meeting held on December 21, 2021, and plans to amend the said policy to be in line with this proposal, subject to the approval of this proposal. This proposal is necessary and reasonable in order to grant remuneration, etc. to individual Directors in line with the said revised policy, so the Company deems revision of the Plan to be appropriate.
There are currently six (6) Directors, including two (2) Outside Directors, and if Proposal 2 is approved as proposed, there will be no change in these numbers.

2. Detail of revision
At the 16th Annual General Meeting of Shareholders held on November 26, 2021, the total annual amount of common stock to be issued or transferred to Eligible Directors and money to be paid to them under the Plan was approved as no more than 200 million yen (including no more than 50 million yen for Outside Directors). The Company now proposes that this annual amount be raised to no more than 500 million yen for Eligible Directors (including no more than 50 million yen for Outside Directors) of the total annual remuneration of no more than 1,000 million yen (including no more than 100 million yen for Outside Directors; however, this does not include employee salaries for Directors who concurrently serve as employees).
In addition, the number of shares to be delivered to Eligible Directors under the Plan was approved as no more than 60,000 shares per annum (including no more than 15,000 shares for Outside Directors). The Company now proposes that this number be raised to no more than 89,000 shares per annum for Eligible Directors (including 15,000 shares for Outside Directors; however, if a stock split of the Company’s common stock [including gratis allotment of the Company’s common stock] or a reverse stock split of the Company’s common stock is conducted on or after the date of approval of this proposal, or if any other event occurs that requires adjustment of the total number of the Company’s common stock to be issued or disposed of, such total number shall be reasonably adjusted).

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Contact
Taichi Hattori
Director and CFO
ir_info@shiftinc.jp