Mercari : Corporate Governance 2022.06.07

コーポレートガバナンス

CORPORATE GOVERNANCE

June 7, 2022

Mercari, Inc. Chief Executive Officer: Shintaro Yamada

Inquiries: Corporate Division 03-6804-6907 Securities Code: 4385 https://about.mercari.com/

The Company's corporate governance situation is as follows.

I. Our Basic Policy on Corporate Governance, Capital Structure, Company Attributes, and Other Basic Information

1. Our Principle

Under the mission "Create value in a global marketplace where anyone can buy & sell," Mercari, Inc. aims to build a society where finite resources are used sparingly and everyone can create new value.

The Company has set forth the mission of improving enterprise value through working to enhance its

monitoring management function and its internal control function while practicing strict compliance management as its basic policy of corporate governance. In order to meet the trust of all stakeholders, the Group upholds a policy of working to improve the efficiency and transparency of management, maximize enterprise value, and achieve sustainable growth and development under the aforementioned basic policy.

Rationale for Not Implementing Certain Principles of the Corporate Governance Code

The Company implements the Fundamental Principles of the Corporate Governance Code.

Principle 2.6

The Company has not adopted a corporate pension plan. Therefore, there is no phase in which the Company functions as an asset owner of a corporate pension plan.

Supplementary Principle 4.1.2

The Company is in the internet industry, where the environment and technologies change rapidly. Therefore, the Company believes that a detailed and concrete mid- to long-term business plan is not suitable. Instead, the Company explains its mid- to long-term management strategies through efforts such as IR activities to promote shareholder understanding.

Disclosure Based on the Principles of the Corporate Governance Code

Please refer to the "Basic Corporate Governance Policy" at the end of this report for disclosure under this item.

2. Capital Structure

Foreign Stock Ownership Ratio

More than 30%

Major Shareholders

Name or Title	Number of Shares Owned	Ratio (%)
Shintaro Yamada	37,612,530	24.09
Hiroshi Tomishima	8,975,000	5.75
MSIP CLIENT SECURITIES	8,540,859	5.47
suadd K.K.	6,567,000	4.21
UNITED, Inc.	5.250,000	3.36
GOLDMAN, SACHS & CO. REG	4,360,148	2.79
Morgan Stanley & Co. LLC	4,128,704	2.64
MSCO CUSTOMER SECURITIES	3,400,504	2.18
MLI FOR CLIENT GENERAL OMNI NON	2,843,178	1.82
COLLATERAL NON TREATY-PB
Japan Trustee Services Bank, Ltd. (trust acct.)	2,479,500	1.59
Controlling Shareholder Name	ー
Parent Company Name	ー
Stock Exchange on which Parent Company is Listed	ー

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コーポレートガバナンス

CORPORATE GOVERNANCE

Supplementary Explanation

ー

3. Company Attributes

Stock Exchange Section	Prime
End of Accounting Period	June
Sector	Information and Communication Technology
Consolidated Number of Employees as of Preceding	1000 or more employees
Year-end
Consolidated Revenue as of Preceding Year-end	10-100 billion JPY
Consolidated Number of Subsidiary Companies as of	Less than 10 companies
Preceding Year-end

4. Guidelines for Protection of Minority Shareholders in Transactions with Controlling Shareholders

－

5. Other Special Circumstances Significantly Affecting Corporate Governance

－

II. Business Management Organization and Other Corporate Governance Systems Regarding Decision Making, Execution of Business, and Supervision in Management

1. Organizational Composition and Operation

	Organizational Form	Company with a Supervisory Board
Executive Directors
	Maximum Number of Executive Directors Stipulated	No maximum number
	in Articles of Incorporation
	Term of Office Stipulated in Articles of	1 year
	Incorporation
	Chairperson of the Board	President
	Number of Executive Directors	5
	Appointment of Outside Directors	Appointed
	Number of Outside Directors	3
	Number of Independent Officers Designated from	3
	among Outside Directors

Outside Directors' Relationship with the Company (1)

Name

Attribute

Relationship with the Company (*1)

a

b

c

d

e

f

g

h

i

j

k

Ken Takayama

From another company

△

Masashi Namatame

From another company

2

g. h.

i. j. k.

コーポレートガバナンス

CORPORATE GOVERNANCE

Makiko Shinoda

From another company

*1 Categories for "Relationship with the Company"

*A hollow circle (◯) signifies the individual currently or recently having that relationship with the Company, whereas a hollow triangle (△) signifies the individual having that relationship with the Company in the past.

*A filled circle (●) signifies an immediate family member currently having that relationship with the Company, whereas a filled triangle (▲) signifies an immediate family member having that relationship with the Company in the past.

a. Executive of the Company or its subsidiary

b. Non-executive director or executive of a parent company of the Company c. Executive of a fellow subsidiary of the Company

d. Party whose major business partner is the Company or an executive thereof e. Major business partner of the Company or an executive thereof

f. Consultant, accounting professional, or legal professional who receives a large amount of monetary consideration or other property from the Company besides compensation as a director

Major shareholder of the Company (or an executive of the said major shareholder if the shareholder is a corporation) Executive of a business partner of the Company (which does not correspond to any of d., e., or f.) (the Director themself only)

Executive of a corporation to which outside officers are mutually appointed (the Director themself only) Executive of a corporation that receives donations from the Company (the Director themself only) Other

Outside Directors' Relationship with the Company (2)

Name	Design	Supplementary Explanation of the	Reasons for Appointment
	ation	Relationship
	as
	Indepe
	ndent
	Office
	r
Ken Takayama	○	Mr. Takayama was an executor of	Mr. Takayama possesses
		operations at Mizuho Bank, Ltd.	expert knowledge and
		Although the Company does not	extensive experience in the
		have any capital relationship with	management of finance- and
		Mizuho Bank, the Company does	Internet-related businesses.
		have loans with that bank, and that	The Company has appointed
		bank is a major business partner of	him as an Outside Director
		the Company. As Mr. Takayama left	for his advice and opinions
		Mizuho Bank more than 10 years	on management and
		ago in 1999, there is no particular	finances from a neutral
		conflict of interest in the relationship	standpoint.
		between Mr. Takayama and Mizuho	Furthermore, the Company
		Bank, and this meets the	has appointed Mr Takayama
		independence criteria set forth by	as an independent officer,
		Tokyo Stock Exchange, Inc.	having determined that his
			appointment meets the
			requirements for
			independent officers set
			forth by Tokyo Stock
			Exchange, Inc., and there is
			no likelihood of any
			conflicts of interest arising
			with general shareholders.
Masashi Namatame	○	−	Mr. Namatame possesses
			specialized knowledge and
			extensive experience in the
			banking, securities, and
			investment industries. The
			Company has appointed him
			as an Outside Director for
			his advice and opinions on
			management- and
			finance-related matters from
			a neutral standpoint.
			Furthermore, the Company

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CORPORATE GOVERNANCE

			has appointed Mr.
			Namatame as an
			independent officer, having
			determined that his
			appointment meets the
			requirements for
			independent officers set
			forth by Tokyo Stock
			Exchange, Inc., and there is
			no likelihood of any
			conflicts of interest arising
			with general shareholders.
Makiko Shinoda	○		Ms. Shinoda possesses
			extensive experience
			working in financial
			institutions and as a CFO, as
			well as specialized
			knowledge of governance,
			stocks, and finance. The
			Company has appointed her
			as an Outside Director for
			the advice and opinions on
			business management she
			can provide from a neutral
			standpoint.
			Furthermore, the Company
			has appointed Ms. Shinoda
			as an independent officer,
			having determined that her
			appointment meets the
			requirements for
			independent officers set
			forth by Tokyo Stock
			Exchange, Inc., and there is
			no likelihood of any
			conflicts of interest arising
			with general shareholders.

Voluntary Committee

Voluntary	Establishment	of	Committee(s)	Established
Corresponding to Nomination Committee or
Remuneration Committee

Committee's Name, Composition, and Attributes of Chairperson

Voluntary Establishment of Nomination Committee

	Committee's Name		Nomination and Remuneration Advisory Committee
All		Full-time		Inside	Outside	Inside	Other	Chairperson
Committee		Members		Directors	Directors	Experts
Members
3		1		1	2	－	－	Inside
								Director
Voluntary Establishment of Remuneration Committee
	Committee's Name		Nomination and Remuneration Advisory Committee

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コーポレートガバナンス

CORPORATE GOVERNANCE

All	Full-time	Inside	Outside	Inside	Other	Chairperson
Committee	Members	Directors	Directors	Experts
Members
3	1	1	2	－	－	Inside
						Director

Supplementary Explanation

As an advisory body to the Board of Directors, the Nomination and Remuneration Advisory Committee deliberates the following matters to create proposals for the Board.

1. Matters related to the appointment or dismissal of Directors and Senior Vice Presidents (matter requiring resolution at the General Meeting of Shareholders)
2. Matters related to the selection or removal of the Board's Representative Director
3. Matters related to the selection or removal of titled Directors
4. Matters related to remuneration systems/policies and individual remuneration for Directors and Senior Vice Presidents
5. Matters related to Directors' remuneration amounts (matter requiring resolution at the General Meeting of Shareholders)
6. Matters related to succession plans (including development)
7. Other important business matters which the Board recognizes as requiring the Nomination and Remuneration Advisory Committee's advice

Supervisory Board

Establishment of Supervisory Board	Established
Maximum Number of Supervisory Board Members	No maximum number
Number of Supervisory Board Members	4

Cooperation among the Supervisory Board, Accounting Auditors, and Internal Audit Department

The Internal Audit Office and Supervisory Board aim to mutually cooperate by holding meetings regularly and as necessary, and exchanging information and opinions regarding the audit structure, audit planning, audit status, etc. Additionally, the Internal Audit Office and Supervisory Board aim to mutually cooperate with the Company's Accounting Auditor, Ernst & Young ShinNihon LLC, by holding meetings regularly (quarterly) and as necessary, and exchanging information and opinions regarding the audit structure, audit planning, audit status, etc. Furthermore, the Internal Audit Office and Supervisory Board aim to organically cooperate with the divisions in charge of establishing and maintaining internal controls by regularly exchanging information, requesting investigations as necessary, etc.

Appointment of Outside Supervisory Board	Appointed
Number of Outside Supervisory Board Members	3
Number of Outside Supervisory Board Members	3
Designated Independent Officers

Outside Supervisory Board Members' Relationships with the Company (1)

Name	Attribute	Relationship with the Company (*1)
		a	b c d e f g h i j k	l m
Fumiyuki Fukushima	CPA
Toshihiro Igi	Attorney
Takahiro Shinozaki	From another company

*1 Categories for "Relationship with the Company"

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