Introduction of Performance-Linked Share-Based Compensation

「This is a performance-linked stock compensation plan under which the Company delivers its shares through this trust to the Company's directors, excluding outside directors, in accordance with the stock benefit rules established by the Company, based on factors including position and achievement of performance targets. In principle, directors receive the shares upon retirement from the Board. The carrying amount and number of the Company's shares remaining in the trust were ¥125,994 thousand and 759 thousand shares, respectively, at the end of the previous consolidated fiscal year and at the end of the interim consolidated fiscal period.」

「Through the Trust, the Company operates a performance-linked stock compensation plan under which Company shares are delivered to the Company's directors, excluding outside directors, in accordance with the Company's share delivery rules, based on their positions, degree of performance achievement and other factors. In principle, directors receive the Company shares when they retire from the Board. The carrying amount and number of Company shares remaining in the Trust were ¥125.994 million and 759 thousand shares, respectively, as of the end of the previous interim consolidated accounting period and the end of the current interim consolidated accounting period.」

「Through the Trust, the Company operates a performance-linked stock compensation plan under which Company shares are delivered to the Company's directors, excluding outside directors, in accordance with the Company's share delivery rules, based on their positions, degree of performance achievement and other factors. In principle, directors receive the Company shares when they retire from the Board. The carrying amount and number of Company shares remaining in the Trust were ¥125.994 million and 759 thousand shares, respectively, as of the end of the first quarter of the previous consolidated accounting period and the end of the first quarter of the current consolidated accounting period.」

「Through the Trust, the Company operates a performance-linked stock compensation plan under which Company shares are delivered to the Company's directors, excluding outside directors, in accordance with the Company's share delivery rules, based on their positions, degree of performance achievement and other factors. In principle, directors receive the Company shares when they retire from the Board. The carrying amount and number of Company shares remaining in the Trust were ¥125.994 million and 759 thousand shares, respectively, as of the end of the third quarter of the current consolidated accounting period.」

「Through the Trust, the Company operates a performance-linked stock compensation plan under which Company shares are delivered to the Company's directors, excluding outside directors, in accordance with the Company's share delivery rules, based on their positions, degree of performance achievement and other factors. In principle, directors receive the Company shares when they retire from the Board. The carrying amount and number of Company shares remaining in the Trust were ¥125.994 million and 759 thousand shares, respectively, as of the end of the first quarter of the current consolidated accounting period.」

「This disposal of treasury shares is being conducted with respect to the trust account of Sumitomo Mitsui Trust Bank, Limited, the trustee of the trust established to introduce this plan (the "Trust"), with Japan Custody Bank, Ltd. serving as the re-trustee (trust account). Through the Trust, the Company operates a performance-linked stock compensation plan under which Company shares are delivered to the Company's directors, excluding outside directors, in accordance with the Company's share delivery rules, based on their positions, degree of performance achievement and other factors. In principle, directors receive the Company shares when they retire from the Board. The carrying amount and number of Company shares remaining in the Trust were ¥125.994 million and 759 thousand shares, respectively, as of the end of the third quarter of the current consolidated accounting period.」

「Stock compensation will be provided up to a maximum of ¥25.2 million and 160,000 shares per fiscal year, as resolved at the Annual General Meeting of Shareholders held on 25 May 2021.」

「This disposal of treasury shares is being conducted with respect to the trust account of Sumitomo Mitsui Trust Bank, Limited, the trustee of the trust established to introduce this plan (the "Trust"), with Japan Custody Bank, Ltd. serving as the re-trustee (trust account). Through the Trust, the Company operates a performance-linked stock compensation plan under which Company shares are delivered to the Company's directors, excluding outside directors, in accordance with the Company's share delivery rules, based on their positions, degree of performance achievement and other factors. In principle, directors receive the Company shares when they retire from the Board. The carrying amount and number of Company shares remaining in the Trust were ¥125.994 million and 759 thousand shares, respectively, as of the end of the second quarter of the current consolidated accounting period.」

「Compensation for the Company's directors consists of basic compensation and performance-linked stock compensation. The basic compensation for each director is proposed by the Nomination and Compensation Committee, which has been delegated authority by the Board of Directors and consists of at least 3 directors, at least 2/3 of whom are outside directors. The amount is proposed based on certain criteria established by the Company, as well as each director's role and level of contribution, and is determined by the Board of Directors. The performance indicator is consolidated operating profit, and compensation is calculated based on the degree of achievement of the plan established at the beginning of the year. The amount of long-term incentive compensation granted is set at approximately 9% of fixed compensation when the target performance is achieved.」