Director compensation structures incorporating performance-linked compensation and restricted stock compensation

「Compensation for the Company's directors who are not Audit and Supervisory Committee members consisted of basic compensation as fixed compensation, performance-linked compensation (bonuses), and non-monetary compensation (restricted stock compensation). Subject to the approval and adoption of the proposal to introduce this plan at the upcoming Ordinary General Meeting of Shareholders, the Company will abolish the compensation framework for the restricted stock compensation plan, including the compensation framework for directors who are Audit and Supervisory Committee members, and introduce this plan for the Company's directors who are not Audit and Supervisory Committee members.」

「Net income before recording bonus expense Less than ¥50 million ¥50 million or more and less than ¥100 million ¥100 million or more and less than ¥300 million ¥300 million or more and less than ¥500 million ¥500 million or more Total payout ratio 0% 3% 5% 6% 7% The actual performance metric for the bonus, net income before recording the relevant bonus expense, was ¥850 million.」

「Net income before recording bonus expense Less than ¥50 million ¥50 million or more and less than ¥100 million ¥100 million or more and less than ¥300 million ¥300 million or more and less than ¥500 million ¥500 million or more Total payout ratio 0% 3% 5% 6% 7% The actual performance metric for the bonus, net income before recording the relevant bonus expense, was ¥597 million.」

「The total amount of performance-linked compensation (bonuses), including compensation for executive officers who are not directors, is paid in cash and limited to 5% or less of estimated net income for the fiscal year before recording the relevant bonus expense. The actual performance metric for the bonus was net income of ¥329 million before recording the relevant bonus expense. Non-monetary compensation, including restricted stock compensation, is limited to ¥15 million annually, and the total number of common shares is limited to 10,000 shares annually.」

「Performance-linked compensation (bonuses) is paid on the business day following the annual general meeting of shareholders. To raise awareness of improving performance in each fiscal year, the Company makes an overall assessment of its business conditions and other factors and pays cash compensation, including to executive officers who are not directors, with the total amount limited to 5% or less of estimated net income for the fiscal year before recording the relevant bonus expense. The actual performance metric for the bonus was net income of ¥514 million before recording the relevant bonus expense.」

「The Company’s basic policy is to establish a compensation structure that provides sufficient incentives for directors to achieve sustainable growth in corporate value, while setting appropriate compensation levels based on each director’s responsibilities when determining individual compensation. Directors’ compensation consists of basic compensation as fixed compensation, performance-linked compensation (bonuses), and non-monetary compensation, including restricted stock compensation. Performance-linked compensation (bonuses) is paid on the business day following the annual general meeting of shareholders. To raise awareness of improving performance in each fiscal year, the Company makes an overall assessment of its business conditions and other factors and pays cash compensation, including to executive officers who are not directors, with the total amount limited to 5% or less of estimated net income for the fiscal year before recording the relevant bonus expense.」